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Notes to Accounts of Mukand Ltd.

Mar 31, 2016

(1) STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES ADOPTED BY THE COMPANY

(1) Basis of preparation:

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by Companies (Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 2013 read with Rule 7 of The Companies (Accounts) Rules, 2014. These standards shall be deemed to be accounting standards until accounting standards are specified by the Central Government under section 133. The financial statements have been prepared under the historical cost convention on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Company and except for the changes in accounting policy discussed more fully below, are consistent with those used in the previous year.

(2) Use of Estimates:

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could defer from those estimated and actual materialized results and estimates are recognized in the period, in which the results are known.

(3) Fixed Assets:

(a) Tangible Assets

Fixed Assets are stated at cost of acquisition or construction. However, fixed assets, which are revalued by the Company, are stated at their revalued book values.

Cost of acquisition comprise all costs incurred to bring the assets to their location and working condition up to the date assets are put to use. Cost of construction comprise of those costs that relate directly to specific assets and those that are attributable to the construction activity in general and can be allocated to specific assets up to the date the assets are put to use.

(b) Intangible Assets

Intangible Assets are stated at their cost of acquisition less accumulated amortization and impairment losses. An asset is recognized, where it is possible that future economic benefits attributable to the assets will flow to the enterprise and where its cost can be reliably measured. The depreciable amount on intangible assets is allocated over the best estimate of its useful life on a straight line basis or the period of agreement whichever is lower.

(c) Depreciation / Amortization

(i) The Company provides depreciation on all its assets on the “Straight Line Method” in accordance with the provisions of Section 123 (2) of the Companies Act, 2013 which was made effective from 01.04.2014. Company has reworked depreciation with reference to the estimated useful life of fixed assets as prescribed under schedule II to the act or useful life of fixed assets as per technical evaluation.

(ii) Software is amortized over a period of 3 years.

(iii) Depreciation in respect of assets used for long term engineering contracts is provided on the estimated useful life of the assets.

(iv) Assets costing less than Rs.5,000/- are fully depreciated at the rate of 100% in the year of purchase.

(v) Depreciation on addition to assets or on sale / discernment of assets is calculated pro-rata from the month of such addition or up to the month of such sale / discernment, as the case may be.

(vi) Cost of Leasehold land is amortized over the period of lease.

(vii) Technical know-how is amortized over the period of agreement or six years, whichever is lower.

(4) Impairment of Assets :

An asset is considered as impaired in accordance with Accounting Standard 28 on “Impairment of Assets”, when at balance sheet date there are indications of impairment and the carrying amount of the assets or where applicable the cash generating unit to which the assets belong, exceeds its recoverable amount (i.e. the higher of the asset’s net selling price and value in use). The carrying amount is reduced to the recoverable amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss.

(5) Investments :

Investments are classified as current or long term in accordance with Accounting Standard 13 on “Accounting for Investments”. Long term Investments are stated at cost of acquisition. Provision for diminution is made to recognize a decline, other than temporary, in the value of such investments. Current investments are stated at lower of cost of acquisition and fair value. Any reduction in carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

(6) Inventories :

Inventories are valued at lower of cost or net realizable value. Materials-in-transit are valued at cost-to-date. Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition including excise duty payable on goods produced. The cost formulae used for determination of cost are either ‘First in First Out’ or ‘Average Cost’, as applicable.

(7) Foreign currency translations :

(i) All transactions in foreign currency, are recorded at the rates of exchange prevailing as at the date of the transaction.

(ii) Monetary assets and liabilities in foreign currency, outstanding at the close of the year, are converted in Indian currency at the appropriate rates of exchange prevailing at the close of the year. The resultant gain or loss is accounted for during the year.

(iii) In respect of forward exchange contracts entered into towards hedge of foreign currency risks, the difference between the forward rate and the exchange rate at the inception of the contract is recognized as income or expenditure over the life of the contract. The outstanding forward contracts in case of firm commitments and highly probable forecast transactions are marked to market and its effect is recognized as income / expenditure. Further, the exchange differences arising on such contracts are recognized as income or expenditure along with the exchange differences on the underlying assets/liabilities. Profit or Loss on cancellations/renewals of forward contracts is accounted for during the year.

(iv) Non monetary items such as investments are carried at historical costs using the exchange rates on the date of the transactions.

(8) Revenue Recognition :

(i) Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection.

(ii) Revenue from sale of goods is recognized when all significant contractual obligations have been satisfied, the property in the goods is transferred for a price, significant risks and rewards of ownership are transferred to the customers and no effective ownership is retained. Sales are net of Sales Tax/ Value Added Tax. Excise Duty recovered is presented as a reduction from gross turnover. Sales are net of returns, discounts and rebates.

(iii) Liability for Excise Duty and Customs Duty payable on goods held in bond at the year end is provided for.

(iv) Export benefits under Duty Drawback Scheme is estimated and accounted in the year of export.

(v) Accounting for Long Term Engineering Contracts:

Revenue from construction/project related activity for supply/commissioning of Plant & Equipment is recognized on the percentage of completion method, in proportion that the contract costs incurred for the work performed up to the reporting date bear to the estimated total contract costs. Provision for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the current estimates.

At each reporting date, the contracts in progress (progress work) is valued and carried in the Balance Sheet under Current Assets.

(vi) Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable. Dividend income is recognized when the right to receive dividend is established.

Working Capital Facilities from banks are against hypothecation of stock and book debts. Finance costs include interest on inventory and book debts. Company sells goods on credit on interest to customers to compensate it for such finance costs. Interest income generated from book debts is netted against same source of interest expense under finance costs.

(vii) Share / Debenture Issue expenses and premium on redemption of debentures are charged, first against available balance in securities premium account. This is in accordance with Section 52 of the Companies Act, 2013.

(9) Leases :

Operating lease:

Lease, where the lesser effectively retain substantially all the risks and benefits of ownership of the leased assets, are classified as operating lease. Operating lease receipts and payments are recognized as income or expense in the Statement of Profit and Loss on a straight line basis over the lease term.

(10) Employee benefits :

Employee benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident fund and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the Statement of Profit and Loss in the period in which the service is rendered.

Employee benefits under defined benefit plans, such as compensated absences and gratuity which fall due for payment after a period of twelve months from rendering service or after completion of employment, are measured by the project unit cost method, on the basis of actuarial valuation carried out by third party actuaries at each balance sheet date. The Company’s obligations recognized in the balance sheet represent the present value of obligations as reduced by the fair value of plan assets, where applicable. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss.

(11) Borrowing cost :

(i) Borrowing cost attributable to the acquisition or construction of qualifying assets, as defined in Accounting Standard 16 on “Borrowing Costs” are capitalized as part of the cost of such assets up to the date when the asset is ready for its intended use. Other borrowing costs are expensed as incurred.

(ii) Front-end fees/ other ancillary costs paid on borrowings are amortized over the period of loans/debentures or over a period of three years whichever is shorter.

(12) Taxation :

Tax expense comprises of current and deferred. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

At each balance sheet date the Company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternate tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

(13) Segment Reporting Policies :

Identification of segments :

The Company’s operating businesses are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter segment Transfers :

The Company generally accounts for inter segment transfers at cost. However, in case of its captive power plant of Steel Division at Ginigera, Karnataka, the inter segment transfers are accounted at the per unit comparable cost of energy purchased from the supplier of energy at that plant.

Allocation of common costs :

Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated items :

Includes general corporate income and expense items which are not allocated to any business segment.

Segment Policies :

The company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the company as a whole.

(14) Earnings per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(15) Provisions and Contingent Liabilities :

Provisions involving a substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Financial Statements.

(16) Cash Flow Statement :

The Cash Flow Statement is prepared by the “indirect method” set-out in Accounting Standard 3 on “Cash Flow Statement” and presents the Cash Flows by operating, investing and financing activities of the Company.

Cash and cash equivalents presented in the Cash Flow Statement consist of cash on hand and unencumbered, highly liquid bank balances.

(ii) The Company expects to contribute Rs.4.34 crore (Previous year Rs.4.16 crores) to its gratuity plan for the next year. In assessing the Company’s post retirement liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the IALM - Mortality -Tables (2006-08) ultimate (Previous year LIC, 1994-96 ultimate tables).

(iii) Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations. The estimates of future salary increase considered in actuarial valuation take account of inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market.

(iv) The composition of the plan assets, by category from the insurers, LIC are on the basis of overall investment by them for all such insured entities and hence, the disclosures as required by Accounting Standard 15 in ‘Employee Benefits’ have not been given, and Auditors have relied upon the same.

(c) In respect of certain employees of Road Construction Division, liability for gratuity is provided at actual on the basis of amount due as at 31st March,

2016, since the projects are for shorter duration. Such liability as at 31st March, 2016 (including Rs.0.0004 crore for the year) aggregate Rs.0.0004 crore (Previous Year Rs.0.004 crore)

(d) An amount of Rs.7.48 crore (Previous year Rs.6.84 crore) as contribution towards defined contribution plans [including Rs.0.93 crore (Previous year Rs.0.66 crore) in terms of strategic alliance referred in (b) above] is recognized as expense in the Statement of Profit and Loss.

(17) RELATED PARTY DISCLOSURES

(a) Relationship :

(i) Subsidiaries:

Mukand Global Finance Ltd., Mukand International Ltd. (MIL),

Vidyavihar Containers Ltd. (VCL), Mukand International FZE (MIFZE), Mukand Sumi Metal Processing Ltd. (MSMPL), Mukand Alloy Steels Pvt. Ltd.

(ii) Other related parties where control exists :

Mukand Engineers Ltd. (MEL), Bombay Forgings Ltd. (BFL), Stainless India Ltd. (SIL), Hospet Steels Ltd. (HSL),

(iii) Joint Ventures :

Mukand Vini Mineral Ltd. (MVML).

(iv) Key Management Personnel:

Niraj Bajaj, Rajesh V. Shah, Suketu V. Shah

(v) Other related parties where significant influence exists or where the related party has significant influence on the Company :

Kalyani Mukand Ltd. , Jamnalal Sons Pvt. Ltd. (JSPL), Adonis Laboratories Pvt. Ltd.

(b) (i) Details of transactions with the related parties referred in (a) above :

ncludes only Audit and Stakeholders Relationship Committee.

P: Promoter; CMD: Chairman & Managing Director; CCMD : Co-Chairman & Managing Director; I: Independent; NED: Non-Executive Director; Jt.MD: Joint Managing Director

Shri Rajesh V. Shah and Shri Suketu V. Shah are related to each other as brothers.

None of the directors is a member of more than ten committees or acting as Chairman of more than five committees across all companies in which he/she is a Director. As per declarations received, none of the directors serves as an independent director in more than 7 listed companies.

18. Information supplied to the Board

In advance of each meeting, the Board is presented with relevant information on various matters related to the working of the Company, especially those that require deliberation at the highest level. Presentations are also made to the Board by different functional heads on important matters from time to time. Directors have separate and independent access to officers of the Company. In addition to items which are required to be placed before the Board for its noting and /or approval, information is provided on various significant items. The information supplied by management to the Board of the Company is in accordance with Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI LODR, 2015].

19. Orderly succession to Board and Senior Management

The Board of the Company satisfied itself that plans are in place for orderly succession for appointments to the Board and to senior management


Mar 31, 2015

(1) (a) CONTINGENT LIABILITIES NOT PROVIDED FOR : 31st March, 2015 31st March, 2014 Rs.in crore Rs.in crore

(i) Disputed matters in appeal/ contested in respect of:

- Income Tax * 22.12 22.40

- Excise Duty, Customs Duty etc. 3.89 3.95

- Sales Tax, Works Contract Tax etc. ** 4.90 4.90

- Other matters 0.24 0.24

* included in this amount (not provided in the Accounts) is the liability under Sec 115JB of the Income Tax Act, 1961 for Assessment Year 2005-06 as the Company''s appeal is pending disposal. Company places reliance on certain jud icial pronouncements and has also obtained a legal opinion on the matter.

** In the matter of certain ex-parte assessments completed by Commercial Tax Officer in the State of Uttar Pradesh, Company is advised that liability if any, that may arise will be determined after the matter is remanded to the Assessing Officer and on completion of reassessment proceedings and therefore, the same is not included herein.

(ii) Claims against the Company not acknowledged as debt as these are disputed and pending disposal at 16.93 15.50 various fora.

For items (i) & (ii)

The Company has taken legal and other steps to protect its interest in respect of these matters, which is based on legal advice and/or precedents in its own/other cases. It is not possible to make any further determination of the liability which may arise in these matters.

(iii) Bills discounted with the Bankers and others

Sale Bills discounted 1.53 3.91

(iv) Guarantees and Counter guarantees given by the Company on behalf of :-

- Other Companies 99.95 70.15

(v) Bonds / Undertakings given by the Company under concessional duty/ exemption to Customs / Excise 0.66 0.66 Authorities (Net of redemption applied for)

(vi) Bonds given by the Company against import of machinery under EPCG Scheme (Net of redemption - 14.30 applied for)

(vii) Demand for Annual Bonus for the financial years 1995-96 to 2006-07 by Staff and Officers'' Association is pending at different stages in proceedings under The Industrial Disputes Act, 1947. Bulk of these employees are statutorily not covered by The Payment of Bonus Act, 1965 and many of the employees are also not covered by The Industrial Disputes Act, 1947. Liability arising there from cannot therefore be determined at present.

(viii) Government of Maharashtra had served a Demand Notice on the Company for payment of electricity duty for power generated during the period 01.04.2000 to 30.04.2005 and penal interest thereon in Company''s Captive Power Plant amounting to Rs.14.27 crore. The Writ Petition filed by the Company was disposed by the Hon''ble Bombay High Court on 7th November, 2009 quashing the said Demand Notice. Government of Maharashtra has however, filed an appeal in the Supreme Court of India against the aforesaid judgment of High Court.

(ix) There have been delays in payment of tax deducted at source in earlier years and also in FY2014-15. Interest payable on delays has been accounted for in respect of cases where appropriate orders have been received from Income Tax authorities or at the time of Filing the Quarterly TDS Returns.

(x) A claim towards difference in price of calibrated iron ore for the period 1st April, 2006 to 28th February, 2007 amounting to Rs.33.07 crore has been raised by a supplier in March 2007. The Company has been legally advised that the supplier cannot seek this price revision under a concluded agreement and hence no provision is made in the Accounts for the same. The issue along with method of review and re-fixing of price of calibrated iron ore effective on 1st of April each year in terms of agreement is referred to an arbitral tribunal whose award was pronounced on 28th February 2014. In terms of the said award, the supplier is directed to re-compute amount payable by the Company. Pending receipt of the revised claim, the final liability arising there from is not ascertainable. Moreover, the said supplier has also unilaterally increased the price of calibrated iron ore w.e.f. 1st April, 2007 and thereafter w.e.f. 1st April, every year. This issue too was settled by the aforesaid arbitral tribunal. In terms of the said award, the Company is required to submit certain details to the supplier for re-computing its claim in terms of the award. However, pending such determination of final price, the supplier has raised invoices at an ad-hoc interim mutually agreed price on the marketing contractor who in turn, has billed the Company at the same price and which liability, has been fully accounted for. An appeal has been preferred for challenging the said arbitration award.

(b) The Company in previous years executed road construction projects in the state of Uttar Pradesh for National Highway Authority of India (NHAI) along with Centrodorstroy (CDS), Russia. The exposure on this account as at the end of the financial year aggregate Rs.126.80 crore (Previous Year: Rs.134.78 crore). The management has, keeping in view the accounting policy A(8)(v) adopted by the Company, technically determined the realisable value of Contracts in Progress compared to relatable revenues and claims raised on NHAI by CDS. The outcome of the Road Construction activity cannot be estimated with certainty at present. Pending claims as at 31.03.2015 aggregate Rs.223.36 crore (Previous Year: Rs.225.28 crore). Bulk of these claims are now being processed at the level of Tribunal as against the level of consulting engineers in the previous year. It is the opinion of the management that in view of the substantially large claims for incremental jobs executed, escalations and time over-runs to be settled progressively over a period of 2 to 3 years, losses currently expected are already recognized till the close of the year. Since realization of these amounts is a judgmental matter, the auditors have placed reliance on the Management''s judgment of the losses currently expected in the contract considering reliasability of amounts.

Note :

During the previous year, the Company arrived at settlement with the Corporate Debt Restructuring members for an adhoc amount of Rs.24.90 crores payable in monthly installments till the maturity of the loans without any further interest thereon. This settlement was arrived at to compensate the Lenders for the lower interest charged by them during the period FY 2002-03 to FY 2011-12. A proportionate charge of Rs.12.45 crores has been made in the current year. An amount of Rs 1.89 crores being differential interest for FY 2012-13 was also charged in FY 2013-14.

(2) RELATED PARTY DISCLOSURES (a) Relationship :

(i) Subsidiaries:

Mukand Global Finance Ltd., Mukand International Ltd. (MIL),

Vidyavihar Containers Ltd. (VCL), Mukand Vijayanagar Steel Ltd. upto March 30, 2015, Mukand International FZE (MIFZE), Mukand Sumi Metal Processing Ltd. (MSMPL), Mukand Alloy Steels Pvt. Ltd. w.e.f. January 27, 2015.

(ii) Other related parties where control exists :

Mukand Engineers Ltd. (MEL), Bombay Forgings Ltd. (BFL), Stainless India Ltd. (SIL), Hospet Steels Ltd. (HSL),

(iii) Joint Ventures :

Mukand Vini Mineral Ltd. (MVML).

(iv) Key Management Personnel :

Niraj Bajaj, Rajesh V. Shah, Suketu V. Shah.

(v) Other related parties where significant influence exists or where the related party has significant influence on the Company Kalyani Mukand Ltd., Jamnalal Sons Pvt. Ltd. (JSPL), Adonis Laboratories Pvt Ltd.

(3) Shareholders by way of a postal ballot have approved a transfer of Alloy Steel business as a going concern on slump sale basis on 18th February 2015 to a prospective subsidiary of the Company. Accordingly, Company has signed business transfer agreement dated 14th March 2015 for the said business with Mukand Alloy Steels Pvt. Ltd. a subsidiary of the Company. This agreement will be effective after approval of Lenders, release of charge by lenders, other authorities and fulfillment of conditions precedent as stipulated in the agreement. Company is in various stages of obtaining these approvals/ consents. Even after such approvals, the amount of consideration receivable is to change on account of debt to be transferred and changes in net working capital. In view of this, no further disclosures are deemed necessary in terms of Accounting Standard - 24 Discontinued Operations.

(4) In accordance with Accounting Standard - 17 "Segment Reporting", segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment information is given in these financial statements.

(5) Previous years''s figures have been regrouped / recast wherever necessary


Mar 31, 2014

As at As at 31-3-2014 31-3-2013 Un-Audited Audited

ii) Contingent liabilities in respect of Joint Venture.

a) Directly incurred by the Company. - 4.90

b) Share of the Company in contingent liabilities incurred by jointly controlled entity (to the extent ascertainable)

Based on the terms of the Letter of Intent dated 5th August, 2008 from the Ministry of Coal (MOC), Government of India, allocating the Rajhara North (Central and Eastern) Non Coking Coal Block in Jharkhand to the Company and Vini Iron & Steel Udyog Ltd.(VISUL), the Company formed a JV Company viz., Mukand Vini Mineral Pvt. Ltd. (now known asMukand Vini Mineral Ltd.) for captive mining of the coal block. The JV Company was in the process of obtaining various statutory permissions / approvals and clearances for development of the coal block. Meanwhile, the Company received a letter dated February 17, 2014 from the MOC conveying de-allocation of the aforesaid coal block. The Company has filed a writ petition before the Hon''ble High Court of Jharkhand at Ranchi challenging the de-allocation. The Hon''ble Court has ordered that no coercive steps betaken against the Petitioner Company. Hearing of the Petition is pending. The investment made by the Company in this JV Company is of long term nature and therefore does not require any provision for diminution in value there against.

2 Previous year''s figures include business of cold finished bars & wires upto 30th September, 2012 which was subsequently transferred to a subsidiary, Mukand Sumi Metal Processing Ltd. and hence the figures are not comparable.

3 In accordance with Accounting Standard - 17 "Segment Reporting", segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment information is given in these financial statements.

4 Previous years''s figures have been regrouped / recast wherever necessary


Mar 31, 2013

(1) (a) Contingent liabilities not provided for :

31st March, 2013 31st March, 2012 Rs.in crore Rs.in crore

(i) Disputed matters in appeal/ contested in respect of:

- Income Tax * 21.79 20.10

- Excise Duty, Customs Duty etc. 3.80 4.53

- Sales Tax, Works Contract Tax etc. ** 5.63 2.83

- Other matters 0.24 0.24

* included in this amount (not provided in the Accounts) is the liability under Sec 115JB of the Income

Tax Act, 1961 for Assessment Year 2005-06 as the Company''s appeal is pending disposal. Company

places reliance on certain judicial pronouncements and has also obtained a legal opinion on the matter.

** In the matter of certain ex-parte assessments completed by Commercial Tax Offcer in the State of Uttar Pradesh, Company is advised that liability if any, that may arise will be determined after the matter is remanded to the Assessing Offcer and on completion of reassessment proceedings and therefore, the same is not included herein.

(viii) The Company has implemented the award given by the Industrial Tribunal in the matter relating to emoluments of staff and offcers. The said award was under challenge in the High Court of Bombay by way of a Writ Petition. High Court has upheld the Award and dismissed the Writ Petition against the said Award.

Demand for Annual Bonus for the fnancial years 1995-96 to 2006-07 by Staff and Offcers'' Association is pending at different stages in proceedings under The Industrial Disputes Act, 1947. Bulk of these employees are statutorily not covered by The Payment of Bonus Act, 1965 and many of the employees are also not covered by The Industrial Disputes Act, 1947. Liability arising there from cannot therefore be determined at present.

(ix) Government of Maharashtra had served a Demand Notice on the Company for payment of electricity duty for power generated during the period 01.04.2000 to 30.04.2005 and penal interest thereon in Company''s Captive Power Plant amounting to Rs.14.27 crore. The Writ Petition fled by the Company was disposed by the Hon''ble Bombay High Court on 7th November, 2009 quashing the said Demand Notice. Government of Maharashtra has however, fled an appeal in the Supreme Court of India against the aforesaid judgment of High Court.

(x) There have been delays in payment of tax deducted at source in earlier years and also in FY2012-13. Interest payable on delays has been accounted for in respect of cases where appropriate orders have been received from Income Tax authorities.

(xi) A claim towards difference in price of calibrated iron ore for the period 1st April, 2006 to 28th February, 2007 amounting to Rs.33.07 crore has been raised by a supplier in March 2007. The Company has been legally advised that the supplier cannot seek this price revision under a concluded agreement and hence no provision is made in the Accounts for the same. The issue along with method of review and re-fxing of price of calibrated iron ore effective on 1st of April each year in terms of agreement is referred to an arbitral tribunal whose award is awaited. Moreover, the said supplier has also unilaterally increased the price of calibrated iron ore w.e.f. 1st April, 2007 and thereafter w.e.f. 1st April, every year. This issue too is to be settled by the aforesaid arbitral tribunal. However, pending such determination of fnal price, the supplier has raised invoices at an ad-hoc interim mutually agreed price on the marketing contractor who in turn, has billed the Company at the same price and which liability, has been fully accounted for.

(2) Related Party Disclosures

(a) Relationship :

(i) Subsidiaries:

Mukand Global Finance Ltd. (MGFL), Mukand International Ltd. (MIL),

Vidyavihar Containers Ltd. (VCL), Mukand Vijayanagar Steel Ltd.,

Mukand International FZE (MIFZE),

Mukand Sumi Metal Processing Ltd. (MSMPL) w.e.f. 29.10.2012 (ii) Other related parties where control exists :

Mukand Engineers Ltd. (MEL), Bombay Forgings Ltd. (BFL), Stainless India Ltd. (SIL), Hospet Steels Ltd. (HSL), (iii) Joint Ventures :

Mukand Vini Mineral Ltd. (MVML). (iv) Key Management Personnel :

Niraj Bajaj, Rajesh V. Shah, Suketu V. Shah.

(v) Relatives of key management personnel and enterprises in which signifcant infuence can be exercised by persons at (iv) above or their relatives where transactions have taken place : Viren J. Shah upto 09.03.2013.

(vi) Other related parties where signifcant infuence exists or where the related party has signifcant infuence on the Company :

Kalyani Mukand Ltd., Lineage Investments Ltd. (upto 29.03.2013), Catalyst Finance Ltd. (upto 29.03.2013), Econium Investments & Finance Ltd. (upto 29.03.2013), Fusion Investments & Financial Services Ltd. (upto 29.03.2013), Primus Investments & Finance Ltd. (upto 29.03.2013), Conquest Investments & Finance Ltd. (upto 29.03.2013), Jamnalal Sons Pvt. Ltd. (JSPL), Adonis Laboratories Pvt Ltd.

Note : Related party relationship is as identifed by the Company and relied upon by the Auditors.

(3) Company has during the year transferred the business of cold fnished bars & wires to a subsidiary - Mukand Sumi Metal Processing Limited (MSMPL). The Company has invested an amount of Rs.118.09 crore in MSMPL under its Agreement with Sumitomo Corporation (Group).

(4) In accordance with Accounting Standard – 17 "Segment Reporting", segment information has been given in the consolidated fnancial statements of the Company, and therefore, no separate disclosure on segment information is given in these fnancial statements.

(5) Previous years''s fgures have been regrouped / recast whereever necessary


Mar 31, 2012

A. Terms / rights attached to equity shares

The Company has only one class of equity share having a par value of Rs. 10/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.

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

During the year ended 31st March 2012, the amount of dividend per share recognized as distribution to equity shareholders was Rs. Nil (31 March 2011 : Re. 1/-).

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

b. Terms of redemption of CRPS

Pursuant to the order of the Hon'ble High Court of Judicature at Bombay dated October 14, 2003, the Company had cancelled 22 1/2 equity shares issued and unallotted and reduced 20% of the outstanding equity shares amounting to 5,626,320 equity shares. In lieu of cancelled shares, the Company has issued 5,626,320 0.01% Cumulative Redeemable Preference Shares of Rs.10/- each entitled for cumulative Preference dividend of 0.01% p.a. and redeemable in five equal annual installments starting from September 2019. In the event of liquidation of the Company before redemption, the holders of CRPS will have priority over equity shares in the payment of dividend and repayment of capital.

c. The Company does not have any holding company.

d. There are no bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.

(I) Effect and Progress of Restructuring Package

In terms of the Financial Restructuring Package (FRP) approved by the Corporate Debt Restructuring (CDR) Cell in July 2003 and April 2009, the terms of security, redemption and conversion have been rescheduled. A separate disclosure is made hereunder to explain the same, as also the progress made so far :

(i) Promoters/Associates have pledged 11,426,514 equity shares and 546,652 cumulative redeemable preference shares out of their share-holding in the Company.

(ii) Pledge of Promoters' holding of shares of Bajaj Auto Limited is to the tune of Rs.14.65 crore.

(iii) The Company shall ensure balance realization of non-core assets and investments aggregating Rs.82.73 crore (net of amounts realized till 31.03.2012) over a specified time schedule ending on 30th September, 2012.

(iv) Lenders shall have a right of recompense upto 12% per annum in excess of the effective IRR charge / credit in FRP for 8 years commencing from the date of approval.

(v) In the event of default, as defined in the restructuring package, the lenders have the right to cancel, suspend, reduce or modify all or any of the relief and concessions or vary the terms and conditions thereof.

(II) For details of loans received from related parties, please refer Note No. 33.

(III) Deferred sales tax liability is to be paid in 5 annual instalments commencing from FY2012-13 to FY 2016-17.

(a) Working Capital Facilities from the Banks and other non-funded facilities are secured/to be secured by hypothecation of stocks (excluding machinery spares) and book debts excluding stocks, book debts and movable assets of Road Construction Division. The said facilities are also secured by way of second and subservient pari passu charge against the same assets as given to Trustees for Debentures as shown at Note No.3. The said charge shall be second and subservient to all other first charges created in favour of Trustees for all the series of Debentures and Lenders for their term loans at (i) and (ii) at Note No.3(I).

Note : Security given for the debentures, term loans at Note No.3(I) and working capital facilities mentioned above exclude :

48 acres of grant land at Kalwe and Dighe, Dist. Thane in the State of Maharashtra.

Leasehold land at Dighe, Thane, as it is mortgaged to Lenders covered at Note No.3(I) (iv) and (ix).

Freehold land acquired for Coke Oven Plant at Ginigera / Kankapura, District Ginigera in the State of Karnataka.

Plant and Machinery of Captive Power Plant at Ginigera / Kankapura, District Ginigera in the State of Karnataka is given as security to lenders covered at Note No.3(I) (vi).

1.1 acres leasehold land at Lonand, Dist. Satara in the State of Maharashtra, for Company's project of expansion of finishing facilities for steel products.

2.1 acres of leasehold land at Sinnar, Dist. Nasik, in the State of Maharashtra, for Company's project of expansion of its Industrial Machinery Division.

3.1 acres of freehold land in the State of Jharkhand, for Company's projects in that State.

(b) Working capital and other facilities from a Bank to M/s. JSC Centrodorstroy, Russia with whose co-operation Company executed a Road Construction Project in the State of Uttar Pradesh are secured by stocks, book debts and movable assets of Road Construction Division and second charge against a residential flat at Mumbai.

(c) Company has defaulted in repayment of current maturity of Long Term Debt to a bank to extent of Rs.17.50 crore out of which Rs.8.75 crore has been paid after close of the year.

(a) 'Trade Payables' include (i) Rs.1.02 crore (Previous year Rs.1.63 crore) due to creditors registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME) (ii) Rs. 373.69 crore (Previous year Rs. 251.83 crore) due to other creditors.

(b) Disclosure in respect of creditors registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSME).

(i) Revaluation :

Free-hold land at Kalwe / Dighe, Thane as at 30.6.1983 was revalued as at 30.6.1984 and the addition to assets on account of this revaluation, aggregating Rs.12.27 crore was correspondingly credited to the Revaluation Reserve during the year ended 30th June, 1984. To reflect the current fair market value, the Company further revalued the freehold land at Kalwe as at 31.3.2001 during November, 2001. The registered valuer had carried out the valuation on the basis of the then market values of these lands. The addition to assets on account of this revaluation, aggregating Rs.114.36 crore was correspondingly credited to the Revaluation Reserve during the year ended 31st March, 2002. Company has further revalued the aforesaid land as at 31.03.2009 and an amount aggregating Rs.1,212.37 crore has been added to assets and correspondingly credited to the Revaluation Reserve as at 31.03.2009.

Leasehold land at Dighe, Thane as at 31.03.2011 has been revalued to reflect the current Fair Market Value of this land. The valuation was carried out by a Registered Valuer. The addition to assets on account of this revaluation, aggregating Rs.334.34 crore has been correspondingly credited to the revaluation reserve as at 31.03.2011. An amount of Rs.4.39 crore has been transferred from the revaluation reserve to the statement Profit & Loss towards charge of amortization of the said land for the year.

(ii) Gross Block of Buildings as at 31st March, 2012 includes value of offices, residential flats and garages in co-operative societies/proposed co-operative societies/association of apartment owners aggregating Rs.6.39 crore at cost (Previous Year Rs.6.39 crore) [including cost of shares in co-operative societies Rs.7,500/- (Previous Year Rs.7,500/-)].

(iii) Fixed assets include net book value of assets at Ginigera Steel Plant aggregating Rs.1.40 crore which have been retired from active use and are held for disposal as tabulated hereunder. The said net book value is on the basis of realisable value as per valuation report of an approved valuer.

Assets held for disposal

(iv) Fixed Assets include borrowing costs of Rs.5.86 crore capitalised during the year (Previous Year Rs.5.74 crore).

(v) As lessee: Future Rental obligations in respect of premises taken on lease - Operating Lease.

These premises comprise office premises and a residential flat given on lease for tenure of two years with a provision for renewal in case of office premises. Gross carrying amount of assets: Rs.2.40 crore.

Accumulated depreciation upto 31.03.2012: Rs.0.65 crore.

Depreciation for the year: Rs.0.04 crore.

Short Term Loans and Advances, Trade Receivables, non-current investments etc.

(a) The Company has investments of Rs. 0.19 crore (Previous Year Rs. 0.19 crore) in equity shares of Bombay Forgings Limited (BFL), and has trade receivables due from BFL / advances recoverable which stood at Rs. 70.66 crore as at 31.03.2012 (Previous Year Rs. 66.98 crore) (collectively referred to as 'Exposures'). Net worth of BFL has turned positive and BFL is no longer a sick industrial company. BIFR has discharged BFL from the purview of provisions of SICA. The management, considering its long term view on the 'Exposures' relies upon on the valuation of unencumbered assets of BFL as at 31st March, 2012 which is at Rs. 79.92 crore (Previous Year Rs. 75.57 crore) and barring any significant uncertainties in future, relies upon the earnings from the ongoing business of BFL. The management considers the balance 'Exposures' to be 'Good' at the close of the year and adequately covered and expects full realisability of the same in future, upon which, the Auditors, being unable to make an informed judgement, have placed their reliance.

(b) The Company has an investment of Rs. 61.63 crore (Previous Year Rs. 61.63 crore) in equity shares of Vidyavihar Containers Ltd. (VCL) a wholly owned subsidiary. The Company has outstanding balances of loans amounting to Rs. 33.23 crore (net of amount received during the year Rs. 33.39 crore) (Previous Year Rs. 66.62 crore) (collectively referred to as 'Exposures'). Although the Net Worth of VCL has eroded, the management considers it appropriate to recognise diminution in value of investments only upto an amount of Rs.18.49 crore and consider no further provision necessary. Management, barring any significant uncertainties in future, relies upon the VCL management's estimation of realizable values of financial assets of VCL and expected additional realization from its real estate development agreement with a developer to be able to recover its exposures. The management considers the balance 'Exposures' to be 'Good' at the close of the year and adequately covered, and expects full realisability of the same in future, upon which, the Auditors, being unable to make an informed judgement, have placed their reliance.

(c) The Company has an investment of Rs.13.09 crore (Previous Year Rs.13.09 crore) in equity shares of Stainless India Limited (SIL), has trade receivables recoverable Rs. 1.12 crore (Previous Year Rs. 0.85 crore), loans and interest receivable outstanding aggregating Rs. Nil (Previous Year Rs. 0.47 crore) and has trade advances, aggregating Rs. 39.16 crore (Previous Year Rs. 38.34 crore).

The Net-worth of SIL has eroded. The management has recognised fully the diminution in value of investments. The management, barirng any significant uncertainties, relies upon the estimated realisable values of unencumbered assets of SIL, as at 31st March, 2012 estimated at Rs. 45.35 crore (Previous Year Rs. 49.50 crore). The management considers the balance 'Exposures' to be 'Good' at the close of the year and adequately covered and expects full realisability of the same in future, upon which, the Auditors, being unable to make an informed judgement, have placed their reliance.

(d) The Company has an investment of Rs. 26.25 crore (Previous Year Rs. 26.25 crore) in equity shares of Mukand Global Finance Limited (MGFL), a wholly owned subsidiary, whose recovery is dependent upon realisation of the financial assets that MGFL stands invested into at the close of the year. The management considers the 'Exposure' to be 'Good' and adequately covered since it is in the process of disposing off this investment. As the negotiated price is yet undecided, any ultimate shortfall in the realization is not determinable at present, the Auditors being unable to make an informed judgment have placed reliance on the judgment of the management.

(e) For details of loans and advances given to related parties, please refer Note No. 33

Other current assets represent an amount of Rs.2.94 crore due from Ispat Group of Companies. The Company had entered into an agreement dated 31st March, 1998 to sell 500,000 Equity shares of Rs.10/- each of Kalyani Mukand Ltd., for an aggregate consideration of Rs.6.94 crore. Under the terms of the said agreement, the sale of shares was based on certain conditions to be complied with subsequent to sale, and which conditions have been fulfilled.

Since the sale and transfer of the shares were considered to be legally complete upon execution of the Agreement of Sale of shares, the Company had taken credit for the consideration aggregating Rs.6.94 crore, during the Accounting Year 1997-98. The Company has, upto the close of the accounting year 2011-12, received amounts aggregating Rs.4.00 crore against the aggregate consideration of Rs.6.94 crore, and management considers the balance amount to be good and recoverable in due course and this has been relied upon by the Auditors.

(4) (a) Contingent Liabilities not provided for :

31-Mar-12 31-Mar-11

Rs.in crore Rs.in crore

(i) Disputed matters in appeal/ contested in respect of:

- Income Tax * 20.10 20.83

- Excise Duty, Customs Duty etc. 4.53 2.76

- Sales Tax, Works Contract Tax etc. ** 4.90 2.83

- Other matters 0.24 0.24

* included in this amount (not provided in the Accounts) is the liability under Sec 115JB of the Income Tax Act, 1961 for Assessment Year 2005-06 as the Company's appeal is pending disposal. Company places reliance on certain judicial pronouncements and has also obtained a legal opinion on the matter.

** In the matter of certain ex-parte assessments completed by Commercial Tax Officer in the State of Uttar Pradesh, Company is advised that liability if any that may arise will be determined after the matter is remanded to the Assessing Officer and on completion of reassessment proceedings and therefore, the same is not included herein.

(ii) Claims against the Company not acknowledged as debt as these are disputed and pending disposal at 20.89 17.26 various fora.

For items (i) & (ii)

The Company has taken legal and other steps to protect its interest in respect of these matters, which is based on legal advice and/or precedents in its own/other cases. It is not possible to make any further determination of the liability which may arise in these matters.

(iii) Bills discounted with the Bankers and others

Sale Bills discounted 9.80 17.27

(iv) Guarantees and Counter guarantees given by the Company on behalf of :-

- Other Companies 22.75 18.96

(v) Bonds / Undertakings given by the Company under concessional duty/ exemption to Customs / Excise 0.66 0.66 Authorities (Net of redemption applied for)

(vi) Bonds given by the Company against import of machinery under EPCG Scheme. 30.02 19.37 (Net of redemption applied for)

(vii) Lenders shall have a right of recompense upto 12% per annum in excess of the effective IRR charged in FRP for 8 years commencing from the date of approval.

(viii) The Company has implemented the award given by the Industrial Tribunal in the matter relating to emoluments of staff and officers. The said award is under challenge in the High Court of Bombay by way of a Writ Petition, and is pending disposal.

Demand for Annual Bonus for the financial years 1995-96 to 2006-07 by Staff and Officers' Association is pending at different stages in proceedings under The Industrial Disputes Act, 1947. Bulk of these employees are statutorily not covered by The Payment of Bonus Act, 1965 and many of the employees are also not covered by The Industrial Disputes Act, 1947. Liability arising there from cannot therefore be determined at present.

(ix) Government of Maharashtra had served a Demand Notice on the Company for payment of electricity duty for power generated during the period 01.04.2000 to 30.04.2005 and penal interest thereon in Company's Captive Power Plant amounting to Rs. 14.27 crore. The Writ Petition filed by the Company is disposed by the Hon'ble Bombay High Court on 7th November, 2009 quashing the said Demand Notice. Government of Maharashtra has however, filed an appeal in the Supreme Court of India against the aforesaid judgment of High Court.

(x) There have been delays in payment of tax deducted at source in earlier years and also in FY2011-12. Interest payable on delays has been accounted for in respect of cases where appropriate orders have been received from Income Tax authorities.

(xi) A claim towards difference in price of calibrated iron ore for the period 1st April, 2006 to 28th February, 2007 amounting to Rs. 33.07 crore has been raised by a supplier in March 2007. The Company has been legally advised that the supplier cannot seek this price revision under a concluded agreement and hence no provision is made in the Accounts for the same. The issue along with method of review and re-fixing of price of calibrated iron ore effective on 1st of April each year in terms of agreement is referred to an arbitral tribunal whose award is awaited. Moreover, the said supplier has also unilaterally increased the price of calibrated iron ore w.e.f. 1st April, 2007 and thereafter w.e.f. 1st April, every year. This issue too is to be settled by the aforesaid arbitral tribunal. However, pending such determination of final price, the supplier has raised invoices at an ad-hoc interim mutually agreed price on the marketing contractor who in turn, has billed the Company at the same price and which liability, has been fully accounted for.

(b) The management has, keeping in view the accounting policy 31(8)(v) adopted by the Company, technically determined the realisable value of Contracts in Progress (including incidental income by way of disposal of plant and equipment at the end of the contract) compared to relatable revenues and claims raised by the Company in respect of its Road Construction Contracts. Although the outcome of the Road Construction activity cannot be estimated with reliability at present, it is the opinion of the management that in view of the substantially large claims by the Company aggregating Rs.113.27 crore (Previous Year Rs.114.73 crore) for incremental jobs executed, escalations and time over-runs, losses currently expected are already recognized till the close of the year. Since realization of these claims is a judgmental matter, on which auditors are not able to make an informed judgment, the auditors have placed reliance on the Management's judgment of the losses currently expected, reliasability of claims which is expected to be settled progressively by 31st March, 2013, and further losses if any, would be entirely recognized and fully expensed by that date.

(e) The Company had, during the Financial Year 1998-99, entered into a strategic alliance with Kalyani Steels Limited to set-up a steel plant to be operated by a Company - Hospet Steels Limited.

Expenses and liabilities arising out of this alliance to Hospet Steels Limited are shared on the basis stipulated in the relevant Agreements, and its accounting in the books of the Company is carried out, accordingly.

Wherever, due to the terms of the alliance, estimations are required to be made in respect of expenses, liabilities, production, etc., the same have been relied upon by the auditors, being technical matters.

(ii) The Company expects to contribute Rs.1.68 crores to its gratuity plan for the next year. In assessing the Company's post retirement liabilities, the Company monitors mortality assumptions and uses up-to-date mortality tables, the base being the LIC, 1994-96 ultimate tables.

(iii) Expected return on plan assets is based on expectation of the average long term rate of return expected on investments of the fund during the estimated term of the obligations. The estimates of future salary increase considered in actuarial valuation take account of inflation, seniority promotion and other relevant factors, such as supply and demand in the employment market.

(iv) The composition of the plan assets, by category from the insurers, LIC are on the basis of overall investment by them for all such insured entities and hence, the disclosures as required by Accounting Standard 15 in 'Employee Benefits' have not been given, and Auditors have relied upon the same.

(b) In terms of the strategic alliance with Kalyani Steels Limited, the Company has accounted for its share towards gratuity in respect of employees of Hospet Steels Ltd. amounting to Rs. 0.20 crore (Previous Year Rs. 0.19 crore) on the basis of an actuarial valuation.

(c) In respect of certain employees of Road Construction Division, liability for gratuity is provided at actuals on the basis of amount due as at 31st March, 2012, since the projects are for shorter duration. Such liability as at 31st March, 2012 (including Rs. 0.14 crore for the year which has been paid) aggregate Rs. 0.05 crore (Previous Year Rs. 0.05 crore)

(d) An amount of Rs. 3.70 crore as contribution towards defined contribution plans [including Rs. 0.74 crore in terms of strategic alliance referred in (b) above] is recognised as expense in the Profit and Loss Account.

(33) Related Party Disclosures

(a) Relationship :

(i) Subsidiaries:

Mukand Global Finance Ltd., Mukand International Ltd. (MIL),

Vidyavihar Containers Ltd. (VCL), Mukand Vijayanagar Steel Ltd.,

Mukand International FZE (MIFZE) w.e.f. 09.01.2011

Step-down Subsidiary: Mukand International FZE (MIFZE) upto 08.01.2011.

(ii) Other related parties where control exists :

Mukand Engineers Ltd. (MEL), Bombay Forgings Ltd. (BFL), Stainless India Ltd. (SIL), Hospet Steels Ltd. (HSL),

(iii) Joint Ventures :

Mukand Vini Mineral Ltd. (MVML), Bekaert Mukand Wire Industries Pvt. Ltd. (upto 28.03.2011).

(iv) Key Management Personnel :

Niraj Bajaj, Rajesh V. Shah, Suketu V. Shah.

(v) Relatives of key management personnel and enterprises in which significant influence can be exercised by persons at (iv) above or their relatives where transactions have taken place : Viren J. Shah

(vi) Other related parties where significant influence exists or where the related party has significant influence on the Company :

Kalyani Mukand Ltd., Lineage Investments Ltd., Catalyst Finance Ltd., Econium Investments & Finance Ltd., Fusion Investments & Financial Services Ltd., Primus Investments & Finance Ltd., Conquest Investments & Finance Ltd., Jamnalal & Sons Pvt. Ltd. (JSPL).

Note : Related party relationship is as identified by the Company and relied upon by the Auditors.

(5) In accordance with Accounting Standard - 17 "Segment Reporting", segment information has been given in the consolidated financial statements of the Company, and therefore, no separate disclosure on segment information is given in these financial statements.

(6) As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

 
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