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Notes to Accounts of Ramco Industries Ltd.

Mar 31, 2017

(a) The Company has opted to use previous GAAP carrying amount as Deemed cost as at the date of transition to Ind AS (i.e As on 1-4-2015). However, as per the FAQ issued by Accounting Standard Board of ICAI, the above information regarding gross block of assets, accumulated depreciation and provision for impairment under Previous GAAP is an additional disclosure and the same is not considered for subsequent recognition and/or measurement purposes.

(b) No Borrowings cost have been capitalized for both current and previous year.

(c) As per Ind AS, the Company reclassify land at Gaziabad, 2 Numbers of commercial properties at Mumbai, a commercial property at Kolkatta and Pipe plant Building at Maksi as investment properties. These amount are adjusted in the opening balance as at 01.04.2015

a. The Company’s investment property consists of a commercial property at Mumbai, a commercial property at Kolkatta and Pipe plant Building at Maksi. Out of these, property at Mumbai was sold on 15.06.2016.

b. The Company has no restrictions on the disposal of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.

c. The fair valuation of these investment properties are determined by an internal technical team, measured using the technique of quoted prices for similar assets in the active markets and further moderated by market corroborated inputs.

a. Trade receivables are non-interest bearing and are generally on terms of 30 to 45 days.

b. No trade receivable are due from directors or other officers of the company either severally or jointly with any other person.

c. Trade receivable from related parties is royalty receivable from our subsidiaries and are due not more than 6 months.

d. The total carrying amount of trade receivables has been pledged as security for Borrowings.

Capital Reserve

Represents the difference between the shares allotted to the Share Holders of Transferor Company and Net Worth acquired from Transferor Company as per scheme of Amalgamation.

Securities Premium Reserve

Represents excess of share subscription money received over par value of shares.

General reserve

The general reserve is used from time to time to transfer profits from retained profits. There is no policy of regular transfer.

Retained earnings

Represents that portion of the net income of the Company that has been retained by the Company.

FVTOCI Reserve

Fair Value through Other Comprehensive Income Reserve represents the balance in equity for items to be accounted in Other Comprehensive Income (OCI). The Company has opted to recognize the changes in the fair value of certain investments in equity instruments and remeasurement of defined benefit obligations in OCI. The Company transfers amounts from this reserve to Retained Earnings in case of actuarial loss / gain and in case of fair value recognition of equity instrument, the same will be transferred when the respective equity instruments are derecognised.

Industrial Promotion Assistance (IPA) provided by Department of Industries of Government of Bihar [Rs. 134.31 lakhs] and Government of West Bengal [Rs. 150.00 lakhs] towards creation of infrastructure facilities is recognized as ‘Industrial Promotion assistance’ over the useful life of the underlying PPE.

a. Trade payables are non-interest bearing and are normally settled on 10 to 30 days, except where credit term as per contractual is more than 30 days.

b. There are no dues to micro and small enterprises as at 31-03-2017 (PY: Rs.NIL). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

a. Foreign exchange forward contracts are purchased to mitigate the risk of changes in foreign exchange rates with certain payables / receivables in foreign currencies.

b. The Company has recognized financial guarantee obligation at fair value towards the corporate guarantees issued to the bankers on behalf of Related parties, and the same is recognized as other income over the tenure of the corporate guarantee.

a. The Company provides for expenses towards compensated absences provided to its employees. The expense is recognized at the present value of the amount payable determined based on an independent external actuarial valuation as at the Balance sheet date, using Projected Unit Credit method.

b. The company maintains Gratuity fund account in LIC of India. The Company provides for expenses towards Gratuity to its employees. The expense is recognized at the present value of the amount payable determined based on an independent external actuarial valuation as at the Balance sheet date, using Projected Unit Credit method.

a. Sale Revenue include Excise Duty

b. Industrial Promotion Assistance from:

- Government of Bihar - Rs.824.04 lakhs [Previous year - Rs.605.27 lakhs]

- Government of Rajasthan - NIL [ Previous year- Rs.10.33 lakhs]

- Deferred Grant recognized as income - Rs.11.70 lakhs [Previous year Rs.11.70 lakhs]

c. Out of 326.07 lakhs units [Previous year - 222.21 lakhs units] generated by our windmills, 54.50 lakhs units [Previous year - 58.19 lakhs units] were sold to concerned state Electricity Board, 237.97 lakhs units [Previous year - 145.94 lakhs units] were consumed at our plant and 33.60 lakhs units [Previous year - 18.08 lakhs units] remain unadjusted.

1. Income Tax Assessment has been completed up to the accounting year ended 31st March, 2013 and 31st March 2014 i.e. Assessment Year 2013-14 & 2014-15 and demand raised by the Income Tax department amounting to Rs.478.87 lakhs for the Assessment year 2013-14 and there is no demand for the Assessment year 2014-15. With this, the total demand received up to the Assessment year 2012-13 is Rs.2,658.08 lakhs (As at 31-03-2016: Rs.5,453.52 lakhs; As at 01-04-2015: 3,971.06 lakhs). The total demand has been disputed by the company and the company has preferred appeals before appellate authorities in respect of various disallowances in assessments and the appeals are pending. In the opinion of the Management, there may not be any further tax liability with regard to the said disallowances. Based on the nature of claim disputed pending, no provision has been considered necessary.

2. Sales Tax demands amounting to Rs.412.73 lakhs (As at 31-03-2016: Rs.455.62 lakhs; As at 01-04-2015: Rs.428.20 lakhs) have been disputed by the Company and necessary appeals have been filed. Based on the nature of claim disputed pending, no provision has been considered necessary.

3. Central Excise demands amounting to Rs.52.55 lakhs (As at 31-03-2016: Rs.59.17 lakhs; As at 01-04-2015: Rs.66.40 lakhs) have been disputed by the Company and necessary appeals have been filed. Based on the nature of claim disputed pending, no provision has been considered necessary.

4. In respect of the electricity matters relating to our Textile Division, the Company has filed appeals / writ petition for Rs.291.87 lakhs (As at 31-03-2016: Rs.291.87 lakhs; As at 01-04-2015: Rs.305.81 lakhs) against various subject to the matter of the appeal and the same is pending with Tamilnadu Electricity Regulatory Commission (TNERC) / Honourable High Court / Honourable Supreme Court for resolution. The Company is confident of resolving the matter in its favour and hence no provision is made in the books of accounts.

5. The Company had received two letters from Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) in the year 2000 and 2003 respectively claiming an amount totalling to Rs.27.41 lakhs towards alleged violation of the terms and conditions of supply of electricity. The Company has deposited a sum of Rs.16.87 lakhs on various dates under protest and filed writ petition before the Honourable High Court of Madras in the year 2003 and the same has been disposed of vide order dated 30.09.2003, hence both impugned orders are quashed and the matter is remitted to the responded Board for a fresh de novo enquiry. During the year, there was no development in the matter. The management is confident of resolving the matter in its favour and hence no provision is made in the books of account.

6. The Company had received a letter dated 04.11.2009 from Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) withholding an amount of Rs.46.54 lakhs pending resolution of Power Tariff Concession applicability to fibre cement sheet plant at Arakonam. This amount was withheld against our dues towards power sold to Tamil Nadu Electricity Board covered under the power purchase agreement. The Company preferred an appeal against TANGEDCO in the year 2009 and the matter is pending with the Honourable High Court of Madras. During the year, there was no development in the matter. The management is confident of collecting the withheld amount and no provision is made in the books of account.

7. Under Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligations) Regulations 2010, consumers owning grid connected captive power generating plants and open access consumers with a sanctioned demand of more than 2 MVA are obligated to consume a minimum of 0.5% of their energy requirements from solar sources. The non-complainants are required to purchase Renewable Energy Certificates (REC) from markets @ 1 REC per 1,000 units of shortage or deposit an equivalent amount in a separate designated fund. Even though the Company is consuming wind energy generated from its own wind farms, it has been excluded for reckoning the obligatory consumption, since the Company has wheeling and banking arrangement with TNEB. Aggrieved, the Company including other affected producers have approached the Honourable Madras High Court and obtained an interim stay against the implementation of the said regulation.

8. The Company had put up a plant in Silvassa in The Union Territory of Daman, Diu, Dadra and Nagar Haveli in the year 1998 and availed VAT and CST exemption for the period of 15 years ending on March 2013 based on a certificate of exemption given by appropriate authority in exercise of powers conferred on it by relevant provision of the CST Act, 1956. This power of granting exemption was withdrawn with retrospective effect by an amendment in Finance Act 2002 and the sales tax department has followed it up by issuing a circular for compulsory production of concessional sales tax forms for availing CST exemption. The differential sales tax liability for the year 1998 to the year 2002 works out to Rs.37 Crores. However, the Company was not in receipt of any demand from the appropriate authority. Aggrieved by the department circular and as an additional precaution, the Company had filed an appeal with Bombay High Court and the Bombay High Court has quashed the circular issued by the Commercial tax department, Silvassa, The Union Territory of Daman, Diu, Dadra and Nagar Haveli thereby allowing continuance of CST exemption even after amendment of relevant provision of CST Act, 1956 by the Finance Act, 2002. But the department of Commercial Tax, Silvassa has preferred an appeal against the Bombay High Court order before the Honourable Supreme Court and the adjudication and the court hearing is in process pending final disposal by the Honourable Supreme Court.

Based on the decision of Bombay High Court and interpretations of other relevant provisions, the Company has been legally advised that there will not be any demand likely to be raised or if the demand is raised it is likely to be deleted or substantially reduced and accordingly no provision is considered necessary

9. The Company received a notice from the Department of Revenue Intelligence (DRI) for an amount of Rs.41.23 lakhs excluding interest and penalty pertaining to the year 2009-10 for short payment of customs duty to the extent of utilization of DEPB Scrips purchased in the open market by the Company and which were originally obtained by the ultimate export firms fraudulently as alleged by the DRI. The Company had denied the allegations made in the notice in so far as they relate to the Company’s role is concerned and also the obligation to pay the duty demanded in the notice v''de its letter dated August 4, 2014. We attended the personal hearing before the assistant commissioner of customs JNPT Mumbai during October 2016 and awaiting for the favorable order. The Management is confident of resolving the matter in favour of the Company and hence no provision is considered necessary.

10. The Company received a notice from Gangaikondan Sub-Registrar office demanding a short payment of stamp duty of Rs.2.57 lakhs in connection with registration of Company’s land at Gangaikondan, Tirunelveli district, Tamil Nadu and has appropriately recorded the deficiency of the stamp duty payment in the encumbrance certificate of the Land records maintained by Sub-Registrar office. The Company has represented the matter with the Sub-Registrar citing payment of stamp duty correctly as per the guide line rate prevailing then. Based on the representation, they reduced the Stamp Duty to the tune of Rs.1.21 lacs. The Company filed the appeal against the order of Deputy Collector. The IG, Registration (Appellate Authority) quashed the order of Deputy Collector (stamps) in favor of the company.

11. The Government of West Bengal enacted “The West Bengal Tax on Entry of goods into Local Areas Act, 2012” and writ petitions were filed by others challenging the validity of the said Act. The Calcutta High Court held that the said Act was unconstitutional. Aggrieved, the Government has preferred an appeal before the Division Bench and obtained an interim direction to continue the Assessment proceedings only. Though the company has not received any demand, it has filed a petition to join in the case.

12. The company is eligible for incentives under the “Bihar Industrial Incentive Policy 2006” in respect of its Fibre Cement Plant at Bihiya in the State of Bihar. During the year under review,

- A sum of Rs.824.04 lakhs ( As at 31-03-2016: Rs.605.27 lakhs; As at 01-04-2015: Rs.559.79 lakhs) accrued as Industrial Promotion Assistance is credited to Profit and Loss account. Out of this Rs.571.93 lakhs has been received before 31.03.2017.

- We have received a sum of Rs.11.70 lakhs due to fair valuation of Govt Grants as per Ind AS

The company is eligible for incentive under the “Rajasthan Investment Promotion Scheme 2010” in respect of its Calcium silicate Board Plant at Kotputli in the state of Rajasthan, during the year under rev''ew,

- No amount was received as Incentive grant during the year (As at 31-03-2016: Rs.10.33 lakhs; As at 01-04-2015: Rs.0.00 lakhs) as Industrial Promotion Assistance.

1. It includes bonus, sitting fees, and value of perquisites.

2. It includes contribution to Provident fund and Superannuation fund

3. As the liability for gratuity and compensated absences are provided on actuarial basis for the Company as a whole, amounts accrued pertaining to key managerial personnel are not included above.

13. Disclosure of Fair value measurements

The fair values of financial assets and liabilities are determined at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial instruments approximate their carrying amounts largely due to their short term maturities of these instruments.

Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 : Quoted (Unadjusted) prices in active markets for identical assets or liabilities

Level 2 : Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3 : Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

14. Financial Risk Management

The Board of Directors (BOD) has overall responsibility for the establishment and oversight of the Company’s risk management framework and thus established a risk management policy to identify and analyse the risk faced by the Company. Risk Management systems are reviewed by the BOD periodically to reflect changes in market conditions and the Company’s activities. The Company through its training and management standards and procedures develop a disciplined and constructive control environment in which all employees understand their roles and obligations. The Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the risk management framework. The Audit committee is assisted in the oversight role by Internal Audit. Internal Audit undertakes reviews of the risk management controls and procedures, the results of which are reported to the Audit Committee.

The Board of Directors regularly reviews these risks and approves the risk management policies, which covers the management of these risks:

Credit Risk

Credit Risk is the risk of financial loss to the Company if the customer or counterparty to the financial instruments fails to meet its contractual obligations and arises principally from the Company’s receivables, treasury operations and other operations that are in the nature of lease.

Receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer. The Company extends credit to its customers in the normal course of business by considering the factors such as financial reliability of customers. The Company evaluates the concentration of the risk with respect to trade receivables as low, as its customers are located in several jurisdictions and operate in largely independent markets. The Company maintains adequate security deposits from its customers in case of wholesale and retail segment. The exposures with the Government are generally unsecured but they are considered as good. However, unsecured credits are extended based on creditworthiness of the customers on case to case basis.

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the company and where there is a probability of default, the company creates a provision based on Expected Credit Loss for trade receivables under simplified approach as below:

Note: Provision amount of receivables relating to legal case Rs.46.54 lakhs

Other disputed Rs.27.23 lakhs Total Rs.73.77 lakhs

Financial instruments and cash deposits

Investments of surplus funds are made only with the approved counterparties. The Company is presently exposed to counter party risk relating to short term and medium term deposits placed with banks, and also investments made in mutual funds. The Company places its cash equivalents based on the creditworthiness of the financial institutions.

Liquidity Risk

Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. In the management of liquidity risk, the Company monitors and maintains a level of cash and cash equivalents deemed adequate by the management to finance the company’s operations and to mitigate the effects of fluctuations in cash flows. Due to the dynamic nature of the underlying business, the Company aims at maintaining flexibility in funding by keeping both committed and uncommitted credit lines available. The Company has laid well defined policies and procedures facilitated by robust information system for timely and qualitative decision making by the management including its day to day operations.

Foreign Currency Risk

The Company’s exposure in USD and other foreign currency denominated transactions in connection with import of raw material, capital goods and spares, besides exports of finished goods and borrowings in foreign currency, gives rise to exchange rate fluctuation risk. The Company has following policies to mitigate this risk:

Decisions regarding borrowing in Foreign Currency and hedging thereof, (both interest and exchange rate risk) and the quantum of coverage is driven by the necessity to keep the cost comparable. Foreign Currency loans, imports and exports transactions are hedged by way of forward contract after taking into consideration the anticipated Foreign exchange inflows/ outflows, timing of cash flows, tenure of the forward contract and prevailing Foreign exchange market conditions.

Cash flow and fair value interest rate risk

Interest rate risk arises from long term borrowings with variable rates which exposed the company to cash flow interest rate risk. The Company’s fixed rate borrowing are carried at amortized cost and therefore are not subject to interest rate risk as defined in Ind AS 107 since neither the carrying amount nor the future cash flows will fluctuate because of the change in market interest rates. The Company is exposed to the evolution of interest rates and credit markets for its future refinancing, which may result in a lower or higher cost of financing, which is mainly addressed through the management of the fixed/ floating ratio of financial liabilities. The Company constantly monitors credit markets to strategize a well-balanced maturity profile in order to reduce both the risk of refinancing and large fluctuations of its financing cost. The Company believes that it can source funds for both short term and long term at a competitive rate considering its strong fundamentals on its financial position. Sensitivity on interest rate fluctuation

15. Capital Management

For the purpose of the Company’s capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholders’ wealth.

The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus Debt.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any interest-bearing loans/borrowing. The Company has been consistently focusing on reduction in long term borrowings. There are no significant changes in the objectives, policies or processes for managing capital during the years ended 31-03-2017 and 31-03-2016.

16. Details of Specified Bank Notes (‘SBN’) held and transacted during the period 8-11-2016 to 30-12-2016

As per the amendments notified on 30-3-2017 to Ind AS Schedule III, Clause K of Note 6 to General Instructions for Preparation of Balance Sheet, the details of Specified Bank Notes (‘SBN’) held and transacted during the period 8-11-2016 to 30-12-2016 is given in the below table:

Explanatory Notes on preparation and presentation of financial statements upon transition to Ind AS

In preparing these financial statements, the Company’s Opening Balance Sheet was prepared as at 1-4-2015, which is the Company’s date of transition to Ind AS. The following note explains the nature of adjustments made by the Company read with Note No. 3 in restating its previous GAAP Financial Statements including its Balance Sheet as at 1-4-2015 and the financial statements as at and for the year ended 31-3-2016.

A. Depreciation and Amortization expense

Under previous GAAP, the carrying value of significant components of Property, Plant and Equipment which have completed their useful life, have been charged off against opening balance of Retained Earnings for the financial year 2015-16 as permitted by Schedule II to the Companies Act, 2013. However, under Ind AS, this has been taken through profit and loss for the year ended 31-3-2016 as it not a GAAP difference.

B. Leasehold Land

Lease prepayments made for Leasehold land were classified as Leasehold Land under previous GAAP. However, under Ind AS, prepayments made for leasehold land should be classified as lease prepayments under operating lease and the same should be amortized over the tenure of the lease. Accordingly, lease prepayments as at 1-4-2015 are reclassified from Property, Plant and Equipment into Prepaid expenses. The subsequent amortization of lease prepayments for the year ended 31-3-2016 is recognized as ‘Rent’ under classification of ‘Other Expenses’ in the Statement of Profit and Loss.

C. Investment Properties

Under previous GAAP as well as Ind AS, Investment Properties are required to be stated at cost net of accumulated depreciation and impairment loss, if any. Under previous GAAP, it was grouped under fixed assets whereas under Ind AS, the same is required to be disclosed as a separate line item in the Balance Sheet. Accordingly, investment properties are reclassified.

D. Investments

Under previous GAAP, investments in mutual funds were measured at the lower of cost or fair value. Under Ind AS, the Company is required to measure the investments in mutual funds at fair value through profit & loss and accordingly recognized the fair value gain/loss in Opening Equity or in the Statement of Profit and Loss for the year ended 31-3-2016. Under previous GAAP, long term equity instruments were measured at cost less provision for permanent diminution. In respect of investments in companies other than in Subsidiary and Associates, the Company is required to designate such investments necessarily at fair value. Therefore, the Company has designated such investments as FVTOCI Investments. At the date of transition to Ind AS, the excess /deficit of fair value of equity instruments over the previous GAAP carrying amount is recognized as fair value gain/loss, in the FVTOCI reserve/Other Comprehensive Income for the year ended 31-3-2016.

E. Classification of Financial Instruments

The company has evaluated the facts and circumstances on date of transition to Ind AS for the purpose of classification and measurement of financial assets/financial liabilities. Accordingly, bifurcation of assets/liabilities as financial/Non-financial is identified and reclassified. However, this reclassification is not presented as transition adjustments.

F. Financial Guarantee Contracts

The Company has issued Corporate Guarantee to Banks for the loans availed by Subsidiary, Associates and other related parties. Where guarantees in relation to loans are provided for no compensation, the fair values are accounted for as contributions and recognized as part of the cost of the investment if the loan is given to Associate/Subsidiary, and recognized as Other expenses if the loan is given to other related parties. The carrying amount of financial guarantee obligation is recognized as other income over the tenure of the corporate guarantee.

G. Presentation of MAT Credit Entitlement as ‘Deferred Tax Assets''

Under previous GAAP, MAT credit entitlement was presented under the head ‘Loans and advances’ since there being a convincing evidence of realization of the asset. As per Ind AS 12 on Income Taxes, Deferred Tax Assets include the amounts of income taxes recoverable in future periods in respect of the carry forward of unused tax credits. Accordingly, MAT Credit Entitlement classified as Loans and Advances under previous GAAP, are netted against Deferred Tax Liability under Ind AS.

H. Dividend

Under previous GAAP, dividends proposed by the Board of Directors are recognized as proposed dividend in the financial statements even though it is approved by the shareholders in the AGM. However, under Ind AS, dividend has to be recognized upon approval by the shareholders in the Annual General Meeting. Accordingly, Proposed Dividend (including Dividend Distribution Tax recognized as liability in the financial year 2014-15 as per previous GAAP has been reversed with corresponding credit to Equity as at the date of transition i.e. 1-4-2015 and recognized in the Equity during the year ended 31-3-2016 as declared and paid.

I. Transaction cost on Borrowings

Under previous GAAP, transaction costs (loan processing fees) incurred in connection with borrowings is charged to profit or loss up front. Under Ind AS, transaction cost is to be included in the initial recognition and charged to profit or loss using the effective interest method. Accordingly, transaction cost on borrowings is reversed to Equity, for the loans outstanding as at 1-4-2015 and additional interest expense is recognized in the Opening Equity for the period up to 1-4-2015, using Effective Interest Rate method (EIR). For the year ended 31-3-2016, the Company has reversed the transaction cost pertaining to the Borrowings availed during the year 2015-16 and the additional Interest impact computed using EIR method is recognized as Finance cost.

J. Recognition and Measurement of Forward Contracts on Mark To Market (MTM)

Under previous GAAP, in respect of forward contracts, the difference between the forward rate and the exchange rate at the inception of the forward exchange contract is recognized as income/expenses over the tenure of such contract. Under Ind AS, the fair value of forward foreign exchange contracts has to be recognized. Accordingly, the assets and liabilities related to forward contracts recognized under previous GAAP are reversed and Mark to Market (MTM) gain/loss is recognized as other expenses in the Statement of Profit and Loss.

K. Deferred Tax

Deferred tax is accounted using income statement approach by computing the differences between taxable profits and accounting profits for the period under previous GAAP. As per Ind AS 12, the deferred tax is to be computed using the balance sheet approach, which is based on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Deferred tax adjustments are recognized either in retained earnings or a separate component of equity.

L. Security Deposits from Customers & Service Providers

The company has presented the Security deposits from Customers & Service providers as Non-current liability under previous GAAP as per the FAQ on Schedule III to the Companies Act 2013 issued by ICAI based on the fact that company’s past record shows that these deposits are not generally claimed and hence it was appropriate to treat it as non-current liability. However, as per Educational material issued by ICAI on Ind AS 1 Presentation of Financial Statements, such deposits have to be classified under Current Financial Liability only in view of the fact that the Company does not have the unconditional right to defer settlement of the liability. Accordingly, the Company has reclassified Security Deposits from Customers/Service providers from non-current liability to other current financial liabilities.

M. Defined Benefit Plan

Under previous GAAP, actuarial gains and losses are charged to profit or loss. Under Ind AS re-measurements of net defined benefit asset/liability comprising of actuarial gains or losses are arising from experience adjustments and changes in actuarial assumption are charged/credited to other comprehensive income. There is no impact on the total equity as at 31-3-2016. However for the period up to the date of transition, the Company has transferred all re-measurement costs recognized in the past periods within accumulated profits or loss (a component of equity), in accordance with provisions of Para 122 of Ind AS 19.

N. Excise Duty

Under previous GAAP, Sale of goods and scraps was presented as net of excise duty. However, under Ind AS, sale of goods and scraps includes excise duty. Excise duty on sale of goods and scraps is separately shown as a line item in the Statement of Profit and Loss as part of expenses. However, there is no impact on the total equity and profit.

O. Dealer Awards

Under previous GAAP, Dealer awards were recognized as part of Sales Promotion Expenses. However, under Ind AS, the same has to be netted against Revenue. Accordingly, dealer awards have been netted against Revenue from Operations in the Statement of Profit and Loss.

P. Other Comprehensive Income (OCI)

This is a new classification under Ind AS. Any income or expense that are not required to be recognized in profit or loss are shown under a new category namely OCI in the Statement of Profit and Loss namely re-measurements of defined benefit plans, gains and losses from investments in equity instruments designated at fair value through other comprehensive income, gains and losses on financial assets measured at fair value through other comprehensive income, gain or loss on financial instruments that qualify for hedge accounting, changes in revaluation surplus and gains and losses arising from translating the financial statements of a foreign operation.

Q. Bank Overdraft

Under previous GAAP, bank overdrafts were considered as part of borrowings and movements in the same were shown as part of financing activities. Under Ind AS, Bank overdrafts repayable on demand are to be treated as an integral part of the cash management process. Accordingly, Bank overdraft is included in Cash and Cash equivalents for the purpose of presentation of Statement of Cash Flows.

17. There are no dues to Micro and Small Enterprises as at 31.03.2017 (Previous Year : Rs. Nil). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties having been identified on the basis of information available with the company.


Mar 31, 2016

II. Income Tax Assessment has been completed up to the accounting year ended 31st March, 2012 i.e. Assessment Year 2012-13 and demand raised by the Income Tax department amounting to Rs, 740.98 lakhs. With this, the total demand received up to the Assessment year 2012-13 is Rs, 5,453.52 lakhs (previous year Rs, 3,971.06 lakhs). The total demand has been disputed by the company and the company has preferred appeals before appellate authorities in respect of various disallowances in assessments and the appeals are pending. In the opinion of the Management, there may not be any tax liability with regard to the said disallowances. Based on the nature of claim disputed, no provision has been considered necessary.

III. Sales Tax and Central Excise demands amounting to Rs, 514.78 lakhs (Previous year Rs, 494.60 lakhs) have been disputed by the Company and necessary appeals have been filed. Based on the nature of claim disputed, no provision has been considered necessary.

IV In respect of the electricity matters relating to our Textile Division, the Company has filed appeals / writ petition for Rs, 291.87 lakhs (previous year Rs, 305.81 lakhs) against various subject matter of the appeal and the same is pending with Tamilnadu Electricity Regulatory Commission (TNERC) / Honourable High Court / Honourable Supreme Court for resolution. The Company is confident of resolving the matter in its favour and hence no provision is made in the books of accounts.

V The Company had received two letters from Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) in the year 2000 and 2003 respectively claiming an amount totaling to Rs, 27.41 lakhs towards alleged violation of the terms and conditions of supply of electricity. The Company has deposited a sum of Rs, 16.87 lakhs on various dates under protest and filed writ petition before the Honourable High Court of Madras in the year 2003 and the same has been admitted. During the year, there was no development in the matter. The management is confident of resolving the matter in its favour and hence no provision is made in the books of account.

VI The Company had received a letter dated 04.11.2009 from Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) withholding an amount of Rs, 46.54 lakhs pending resolution of Power Tariff Concession applicability to fibre cement sheet plant at Arakonam. This amount was withheld against our dues towards power sold to Tamil Nadu Electricity Board covered under the power purchase agreement. The Company preferred an appeal against TANGEDCO in the year 2009 and the matter is pending with the Honorable High Court of Madras. During the year, there was no development in the matter. The management is confident of collecting the withheld amount and no provision is made in the books of account.

VII Under Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligations) Regulations 2010, consumers owning grid connected captive power generating plants and open access consumers with a sanctioned demand of more than 2 MVA are obligated to consume a minimum of 0.5% of their energy requirements from solar sources. The non-complainants are required to purchase Renewable Energy Certificates (REC) from markets @ 1 REC per 1,000 units of shortage or deposit an equivalent amount in a separate designated fund. Even though the Company is consuming wind energy generated from its

own wind farms, it has been excluded for reckoning the obligatory consumption, since the Company has wheeling and banking arrangement with TNEB. Aggrieved, the Company including other affected producers have approached the Honorable Madras High Court and obtained an interim stay against the implementation of the said regulation.

VIII The Company had put up a plant in Silvassa in The Union Territory of Daman, Diu, Dadra and Nagar Haveli in the year 1998 and availed VAT and CST exemption for the period of 15 years ending on March 2013 based on a certificate of exemption given by appropriate authority in exercise of powers conferred on it by relevant provision of the CST Act, 1956. This power of granting exemption was withdrawn with retrospective effect by an amendment in Finance Act 2002 and the sales tax department has followed it up by issuing a circular for compulsory production of concessional sales tax forms for availing CST exemption. The differential sales tax liability for the year 1998 to the year 2002 works out to '' 37 Crores. However, the Company was not in receipt of any demand from the appropriate authority. Aggrieved by the department circular and as an additional precaution, the Company had filed an appeal with Bombay High Court and the Bombay High Court has quashed the circular issued by the Commercial tax department, Silvassa, The Union Territory of Daman, Diu, Dadra and Nagar Haveli thereby allowing continuance of CST exemption even after amendment of relevant provision of CST Act, 1956 by the Finance Act, 2002. But the department of Commercial Tax, Silvassa has preferred an appeal against the Bombay High Court order before the Honorable Supreme Court and the adjudication and the court hearing is in process pending final disposal by the Honorable Supreme Court.

Based on the decision of Bombay High Court and interpretations of other relevant provisions, the Company has been legally advised that there will not be any demand likely to be raised or if the demand is raised it is likely to be deleted or substantially reduced and accordingly no provision is considered necessary.

IX The Company received a notice from the Department of Revenue Intelligence (DRI) for an amount of '' 32.4 lakhs excluding interest and penalty pertaining to the year 2009-10 for short payment of customs duty to the extent of utilization of DEPB Scrips purchased in the open market by the Company and which were originally obtained by the ultimate export firms fraudulently as alleged by the DRI. The Company had denied the allegations made in the notice in so far as they relate to the Company’s role is concerned and also the obligation to pay the duty demanded in the notice vide its letter dated August 4, 2014. There has been no development further to our letter dated August 4, 2014. The Management is confident of resolving the matter in favour of the Company and hence no provision is considered necessary.

X The Company received a notice from Gangaikondan Sub-Registrar office demanding a short payment of stamp duty of Rs, 2.57 lakhs in connection with registration of Company’s land at Gangaikondan, Tirunelveli district, Tamil Nadu and have appropriately recorded the deficiency of the stamp duty payment in the encumbrance certificate of the Land records maintained by Sub-Registrar office. The Company has represented the matter with the Sub-Registrar citing payment of stamp duty correctly as per the guide line rate prevailing then. Based on the representation, they reduced the Stamp Duty to the tune of Rs, 1.21 lakhs. The Company filed the appeal against the order of Deputy Commissioner and the Company is confident of resolving the matter in its favour and hence no provision is considered necessary.

1. The Exceptional items in the Statement of Profit and Loss Account is net off the following:- Profit on Sale of Investment in Shares - Rs, 1,049.35 lakhs (Previous Year Rs, 1,349.91 lakhs)

- Expenditure on Voluntary Retirement Scheme - NIL lakhs (Previous Year Rs, 336.64 lakhs)

- Profit on Sale of Assets (Land and Building) Rs, 183.57 lakhs (Previous year NIL)

2. The Company has entered into an agreement with the group company M/s. The Ramco Cements Limited to share the cost of development of the facilities and accordingly debited Rs, 0.38 crores during the year (previous year Rs, 1.94 crores) and shown as a deduction from the gross block of its fixed assets.

3. The Government of West Bengal enacted “The West Bengal Tax on Entry of goods into Local Areas Act, 2012” and writ petitions were filed by others challenging the validity of the said Act. The Calcutta High Court held that the said Act was unconstitutional. Aggrieved, the Government has preferred an appeal before the Division Bench and obtained an interim direction to continue the Assessment proceedings only. Though the company has not received any demand, it has filed a petition to join in the case.

4. Trade receivables include due from Overseas Subsidiary Company viz., Sri Ramco Lanka (Private) Limited, Sri Lanka to the extent of Rs, 244.83 lakhs (previous year Rs, 194.61 lakhs) and Sri Ramco Roofing Lanka (Private) Limited (wholly owned subsidiary of Sri Ramco Lanka (Private) Limited) to the extent of Rs, 272.40 lakhs (previous year 175.45 lakhs). Maximum amount outstanding during the year from Sri Ramco Lanka (Private) Ltd is Rs, 579.86 lakhs (previous year Rs, 175.45 lakhs) and Sri Ramco Roofing Lanka (Private) Limited is Rs, 568.75 lakhs (previous year Rs, 564.11 lakhs)

5. Pursuant to the mandatory requirement of notification of schedule II to the Companies Act 2013 with effect from 01.04.2015 for computation of depreciation based on useful life of significant components of Plant, Property and Equipment’s, the company determined the useful life and value of such components and computed depreciation amounting to Rs, 1960.79 lakhs for the year. Accordingly the carrying values of significant components of plant, property and equipment’s which have completed their useful life as on 01.04.2015, have been charged off against the Retained Earnings amounting to Rs, 18 lakhs after netting off deferred tax of Rs, 9.53 lakhs as per the transitional provisions of the said notification.

Due to this change in accounting policy, the depreciation for the year ended 31.03.2016 is higher by Rs, 84.69 lakhs when compared to the calculation of depreciation prior to the componentization of assets.

6. The Company’s Shares are listed in National Stock Exchange of India Ltd and BSE Ltd and the listing fees in respect National Stock Exchange of India Ltd and BSE Ltd for the Financial year 2016-2017 have been paid.

7. a. The breakup of Secured long term borrowings are as under:

Rs, 4,287.99 lakhs (Previous year Rs, 6973.82 lakhs) is secured by pari-passu first charge on the fixed assets and pari-passu second charge on the current assets of the company.

Rs, 9,316.03 lakhs (Previous year Rs, 3,933.63 lakhs) is secured by pari-passu first charge on movable fixed assets of the company.

b. The breakup of Secured short term borrowings from banks are as under:

Rs, 5,862.64 lakhs (previous year Rs, 11,709.64 lakhs) secured by pari-passu first charge on stocks of raw materials, work-in-progress, stores, spares and finished goods and book debts and second charge on fixed assets.

Rs, 4,430.53 lakhs (previous year Rs, 9,005.60 lakhs) secured by pari-passu first charge on stocks of raw materials, work-in-progress, stores, spares and finished goods and book debts.

The premium of forward exchange contracts not intended for trading or speculative purpose is amortized and charged as expense over the period of the contract. During the year under review, a sum of Rs, 7.25 lakhs (Previous year Rs, 17.88 lakhs) has been amortized for adjustment in the subsequent period and a sum of Rs, 185.38 lakhs (Previous year Rs, 440.23 lakhs) has been charged off and debited to the Statement of Profit and Loss under “exchange rate variation” and disclosed under “finance costs”.

The Company has not utilized Short Term Loans for Long Term purposes

8. The company is eligible for incentives under the “Bihar Industrial Incentive Policy 2006” in respect of its Fibre Cement Plant at

Bihiya in the State of Bihar. During the year under review,

- A sum of Rs, 605.27 lakhs (previous year Rs, 559.79 lakhs) accrued as Industrial Promotion Assistance is credited to Profit and Loss account.

- No amount was received as Incentive grant for investment in Plant and Machinery, Land and Diesel Generating Set (Previous year Rs, 15 lakhs on investment in Land) received as Capital Subsidy Investment.

The Company is eligible for incentives under the “Rajasthan Investment Promotion Scheme 2010” in respect of its Calcium Silicate

Board Plant at Kotputli in the State of Rajasthan, during the year under review

A sum of Rs, 10.33 lakhs (previous year NIL) that has accrued as Industrial Promotion Assistance has been credited to Profit and Loss

Account

9. A total of 222.31 lakhs units (PY 255.64 lakhs units) has been generated (net of wheeling and banking) at wind farms -

a) 58.19 lakhs units (Previous year 70.32 lakhs units) were sold to concerned State Electricity Board for Rs, 219.30 lakhs (Previous year Rs, 229.29 lakhs), shown under “Income from Wind Power generation”.

b) 145.94 lakhs units (Previous year 177.38 lakhs units) were consumed at our plants. The monetary value of such units for Rs, 979.61 lakhs (Previous year Rs, 1,100.95 lakhs) is not recognized as it is inter-divisional transfer.

c) 18.18 lakhs units (Previous year 7.94 lakhs units) remain unadjusted and eligible for adjustment in the subsequent periods and its monetary value of Rs, 52.73 lakhs (PY:Rs, 31.06 lakhs) has been included in “Other Current Assets”.

10. The Company has taxable income for the year computed under section 115BBD of the Income Tax Act, 1961. Accordingly, provision for income tax has been made for the year.

11 The Company is required to spend gross CSR expenditure of Rs, 46.68 lakhs for the year 2015-16 in accordance with Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy ) Rules, 2014. As against this, the company has spent Rs, 38.03 lakhs in the following categories :

12. There are no dues to Micro and Small Enterprises as at 31.03.2016 (Previous Year : Rs, Nil). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties having been identified on the basis of information available with the company.

13. Previous year’s figures have been regrouped/restated wherever necessary so as to make them comparable with that of the current year.

14. Figures have been rounded off in lakhs with two decimal.


Mar 31, 2015

1. NOTES ON ACCOUNTS: As at As at 31.03.2015 31.03.2014 Rs. in lakhs Rs. in lakhs

1. I. Contingent Liabilities and commitments

a. Contingent Liabilities

i. Claims against the Company / disputed liabilities not acknowledged as debts 4,845.42 2,000.44 (Refer to notes II to VI below)

ii. Guarantees given to Banks to avail loan facilities by Group Companies :

a. Ramco System Ltd 3,550.00 6,550.00

b. Sri Harini Textiles Ltd 3.629.00 3,629.00

b. Commitments

i. Guarantees given by Bankers on behalf of Company 374.09 344.05

ii. Capital Contracts:

a. Estimated amount of contracts remaining to be executed on capital account and not provided for: 914.06 438.41

b. Unexpired Letters of Credit for purchase of Capital goods and raw materials 58.42 181.45

II. Income Tax Assessment has been completed up to the accounting year ended 31st March, 2011 i.e. Assessment Year 2011-12 and demand raised by the Income Tax department amounting to Rs. 256.64 lakhs. With this, the total demand received up to the Assessment year 2011-12 is Rs. 3,971.06 lakhs (previous year Rs. 1,751.40 lakhs). The total demand has been disputed by the company and the company has preferred appeals before appellate authorities in respect of various disallowances in assessments and the appeals are pending. In the opinion of the Management, there may not be any tax liability with regard to the said disallowances. Based on the nature of claim disputed, no provision has been considered necessary.

III. Sales Tax and Central Excise demands amounting to Rs. 494.60 lakhs (Previous year Rs. 249.04 lakhs) have been disputed by the Company and necessary appeals have been filed. Based on the nature of claim disputed, no provision has been considered necessary.

IV. In respect of the electricity matters relating to our Textile Division, the Company has filed appeals / writ petition for Rs. 305.81 lakhs against various subject matter of the appeal and the same is pending with Tamilnadu Electricity Regulatory Commission (TNERC) / Honourable High Court / Honourable Supreme Court for resolution. The Company is confident of resolving the matter in its favour and hence no provision is made in the books of accounts.

V The Company had received two letters from Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) in the year 2000 and 2003 respectively claiming an amount totalling to Rs. 27.41 lakhs towards alleged violation of the terms and conditions of supply of electricity. The Company has deposited a sum of Rs. 16.87 lakhs on various dates under protest and filed writ petition before the Honourable High Court of Madras in the year 2003 and the same has been admitted. During the year, there was no development in the matter. The management is confident of resolving the matter in its favour and hence no provision is made in the books of account.

VI The Company had received a letter dated 04.11.2009 from Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) withholding an amount of Rs. 46.54 lakhs pending resolution of Power Tariff Concession applicability to fibre cement sheet plant at Arakonam. This amount was withheld against our dues towards power sold to Tamil Nadu Electricity Board covered under the power purchase agreement. The Company preferred an appeal against TANGEDCO in the year 2009 and the matter is pending with the Honourable High Court of Madras. During the year, there was no development in the matter. The management is confident of collecting the withheld amount and no provision is made in the books of account.

VII Under Tamil Nadu Electricity Regulatory Commission (Renewable Energy Purchase Obligations) Regulations 2010, consumers owning grid connected captive power generating plants and open access consumers with a sanctioned demand of more than 2 MVA are obligated to consume a minimum of 0.5% of their energy requirements from solar sources. The non-complainants are required to purchase Renewable Energy Certificates (REC) from markets @ 1 REC per 1,000 units of shortage or deposit an equivalent amount in a separate designated fund. Even though the Company is consuming wind energy generated from its own wind farms, it has been excluded for reckoning the obligatory consumption, since the Company has wheeling and banking arrangement with TNEB. Aggrieved, the Company including other affected producers have approached the Honourable Madras High Court and obtained an interim stay against the implementation of the said regulation.

VIII The Company had put up a plant in Silvassa in The Union Territory of Daman, Diu, Dadra and Nagar Haveli in the year 1998 and availed VAT and CST exemption for the period of 15 years ending on March 2013 based on a certificate of exemption given by appropriate authority in exercise of powers conferred on it by relevant provision of the CST Act, 1956. This power of granting exemption was withdrawn with retrospective effect by an amendment in Finance Act 2002 and the sales tax department has followed it up by issuing a circular for compulsory production of concessional sales tax forms for availing CST exemption. The differential sales tax liability for the year 1998 to the year 2002 works out to Rs. 37 Crores. However, the Company was not in receipt of any demand from the appropriate authority. Aggrieved by the department circular and as an additional precaution, the Company had filed an appeal with Bombay High Court and the Bombay High Court has quashed the circular issued by the Commercial tax department, Silvassa, The Union Territory of Daman, Diu, Dadra and Nagar Haveli thereby allowing continuance of CST exemption even after amendment of relevant provision of CST Act, 1956 by the Finance Act, 2002. But the department of Commercial Tax, Silvassa has preferred an appeal against the Bombay High Court order before the Honourable Supreme Court and the adjudication and the court hearing is in process pending final disposal by the Honourable Supreme Court.

Based on the decision of Bombay High Court and interpretations of other relevant provisions, the Company has been legally advised that there will not be any demand likely to be raised or if the demand is raised is likely to be deleted or substantially reduced and accordingly no provision is considered necessary.

IX The Company received a notice from the Department of Revenue Intelligence (DRI) for an amount of Rs. 32.4 lakhs excluding interest and penalty pertaining to the year 2009-10 for short payment of customs duty to the extent of utilization of DEPB Scrips purchased in the open market by the Company and which were originally obtained by the ultimate export firms fraudulently as alleged by the DRI. The Company had denied the allegations made in the notice in so far as they relate to the Company''s role is concerned and also the obligation to pay the duty demanded in the notice vide its letter dated August 4, 2014. There has been no development further to our letter dated August 4, 2014. The Management is confident of resolving the matter in favour of the Company and hence no provision is considered necessary.

X The Company received a notice from Gangaikondan Sub-Registrar office demanding a short payment of stamp duty of Rs. 2.57 lakhs in connection with registration of Company''s land at Gangaikondan, Tirunelveli district, Tamil Nadu and have appropriately recorded the deficiency of the stamp duty payment in the encumbrance certificate of the Land records maintained by Sub-Registrar office. The Company has represented the matter with the Sub-Registrar citing payment of stamp duty correctly as per the guide line rate prevailing then. The Company is confident of resolving the matter in its favour and hence no provision is considered necessary.

2. The Company had announced Voluntary Retirement Scheme (VRS) for the employees of Arakonam Manufacturing Division during the year under review. A sum of Rs. 336.34 (Previous year Rs. nil ) has been paid during the year and debited to the Profit and Loss Statement under the head "Employee Benefit Expense" and shown under "Exceptional item" in the Profit and Loss Statement.

3. The Exceptional items in the Statement of Profit and Loss Account is net off the following:-

- Profit on Sale of Investment in Shares – Rs. 1,349.91 lakhs (Previous Year Rs. Nil)

- Expenditure on Voluntary Retirement Scheme – Rs. 336.64 lakhs (Previous Year Rs. Nil)

4. The Company has entered into an arrangement to enter into an agreement with the group company M/s. The Ramco Cements Limited to share the cost of development of the facilities and accordingly debited Rs. 1.94 crores during the year (previous year Rs. Nil) and shown as a deduction from the gross block of its fixed assets on provisional basis. Final adjustments, if any, in this regard will be accounted for as and when the costs are determined.

5. The Government of West Bengal enacted "The West Bengal Tax on Entry of goods into Local Areas Act, 2012" and writ petitions were filed by others challenging the validity of the said Act. The Calcutta High Court held that the said Act was unconstitutional. Aggrieved, the Government has preferred an appeal before the Division Bench and obtained an interim direction to continue the Assessment proceedings only. Though the company has not received any demand, it has filed a petition to join in the case.

6. Trade receivables include due from Overseas Subsidiary Company viz., Sri Ramco Lanka (Private) Limited, Sri Lanka to the extent of Rs. 194.61 lakhs (previous year Rs. 191.68 lakhs) and Sri Ramco Roofing Lanka (Private) Limited (wholly owned subsidiary of Sri Ramco Lanka (Private) Limited) to the extent of Rs. 175.45 lakhs (previous year Rs. 177.28 lakhs). Maximum amount outstanding during the year from Sri Ramco Lanka (Private) Ltd is Rs. 324.84 lakhs (previous year Rs. 1,109.32 lakhs) and Sri Ramco Roofing Lanka (Private) Limited is Rs. 564.11 lakhs (previous year Rs. 1,016.32 lakhs)

7. Pursuant to the notification of Schedule II to the Companies Act, 2013 for computation of depreciation with effect from 1st April 2014, the Company revised the useful life of its assets to align the useful life with those specified in Schedule II of the Act. Accordingly, the carrying values of the fixed assets which has completed their useful life as on 1st April, 2014 have been charged off against the General reserve amounting to Rs. 191.01 Lakhs after netting off deferred tax of Rs. 64.93 lakhs. Due to this change in accounting policy, the depreciation for the year ended 31st March, 2015 is lower by Rs. 3,041.17 lakhs when compared to the calculation of depreciation under the Companies Act, 1956.

8. The Company''s Shares are listed in Madras Stock Exchange Ltd*, National Stock Exchange of India Ltd and BSE Ltd and the listing fees in respect National Stock Exchange and BSE for the Financial year 2015-2016 have been paid.

* Listing in MSE had been delisted as MSE ceased to be a stock exchange with effect from 14th May, 2015.

9. a. The breakup of Secured long-term borrowings are as under:

Rs. 6,973.82 lakhs (Previous year Rs. 15,432.27) is secured by pari-passu first charge on the fixed assets and pari-passu second charge on the current assets of the company.

Rs. 3,933.63 lakhs (Previous year Rs. Nil) is secured by pari-passu first charge on movable fixed assets of the company.

b. The breakup of Secured short-term borrowings from banks are as under:

Rs. 11,709.64 lakhs (previous year Rs. 9,324.35 Lakhs) secured by pari-passu first charge on stocks of raw materials, work-in-progress, stores, spares and finished goods and book debts and second charge on fixed assets.

Rs. 9,005.60 lakhs (previous year Rs. 7,999.60 Lakhs) secured by pari-passu first charge on stocks of raw materials, work-in-progress, stores, spares and finished goods and book debts.

10. The Company is eligible for Incentive under the "West Bengal Incentive Scheme 2000" in respect of its Fibre Cement Plant and Clinker Grinding Unit at Kharagpur in the State of West Bengal. No amount was received as incentive during the year under review . (Previous year Rs. 99.02 lakhs)

The company is eligible for incentives under the "Bihar Industrial Incentive Policy 2006" in respect of its Fibre Cement Plant at Bihiya in the State of Bihar. During the year under review,

- A sum of Rs. 559.79 lakhs (previous year Rs. 501.66 lakhs) accrued as Industrial Promotion Assistance is credited to Profit and Loss account.

– A sum of Rs. 15 lakhs (Previous year Rs. 100 lakhs on investment in Plant and Machinery) received as Capital Subsidy on Investment in Land and credited to Capital Reserve Account.

- No amount was received as Incentive grant for investment in Diesel Generating Set (Previous year Rs. 19.31 lakhs)

11. Out of units of 255.64 Lakhs units (PY 264.95 Lakhs units) generated net of wheeling and banking at wind farms –

a) 70.32 Lakhs units (Previous year 74.60 Lakhs units) were sold to concerned State Electricity Board for Rs. 229.29 Lakhs (Previous year Rs. 257.41 Lakhs), shown under "Income from Wind Power generation".

b) 177.38 Lakhs units (Previous year 178.36 Lakhs units) were consumed at our plants. The monetary value of such units for Rs. 1,100.95 Lakhs (Previous year Rs. 1,069.92 Lakhs) is not recognised as it is inter-divisional transfer.

c) 7.94 lakhs units (Previous year 11.99 lakhs units) remain unadjusted and eligible for adjustment in the subsequent periods and its monetary value of Rs. 31.06 lakhs (PY: Rs. 53.01 lakhs) has been included in "Other Current Assets".

12. The Company has taxable income for the year computed under section 115JB of the Income Tax Act, 1961 (Minimum Alternate Tax). Accordingly, provision for income tax has been made for the year.

13. Previous year''s figures have been regrouped / restated wherever necessary so as to make them comparable with that of the current year.

14. Figures have been rounded off in Lakhs with two decimal.


Mar 31, 2014

As at As at 31.03.2014 31.03.2013 Rs. in lakhs Rs. in lakhs

1. I. Contingent Liabilities and commitments not provided for

A. Claims against the Company / disputed liabilities not acknowledged as debts

a. In respect of Joint ventures NIL NIL

b. In respect of others 2,000.44 2,927.84

B. Guarantees

Guarantees to Banks/Financial institutions against credit facilities extended to third parties

a. In respect of Joint ventures NIL NIL

b. In respect of others 10,179.00 10,949.00

II. Commitments

A. Estimated amount of contracts remaining to be executed on capital account and not provided for:

a. In respect of Joint ventures NIL NIL

b. In respect of others 438.41 1,739.84

B. Other Commitments

a. Letters of Credit 181.45 NIL

b. Bank Guarantees 344.05 259.01

III. Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) has raised the demand towards alleged violation of the terms and conditions of supply of electricity for Rs. 27.41 lakhs. The Company has deposited a sum of Rs. 16.87 lakhs under protest and filed writ petition before the Honourable High Court of Madras and the same has been admitted. The management is confident of resolving the matter in its favour and hence no provision is made in the books of account.

IV TANGEDCO has withheld an amount of Rs. 46.54 lakhs pending resolution of Power Tariff Concession applicability to fibre cement sheet plant at Arakkonam. This amount was withheld against our dues towards power sold to Tamil Nadu Electricity Board covered under the power purchase agreement. The Company preferred an appeal against TANGEDCO and the matter is pending with the Honourable High Court of Madras. The management is confident of collecting the withheld amount and no provision is made in the books of account

2. The Company has not utilized Short-term Loans for Long-term purposes.

3. Income Tax Assessment has been completed upto the Accounting Year 2010-2011 (i.e. Assessment Year 2011-12) and demands raised by the Income Tax Department amounting to Rs. 256.64 lakhs (upto the Assessment year 2010.11-Rs. 1,494.76 lakhs) which have been disputed by the Company and necessary appeals have been filed. Based on the nature of the claim disputed, no provision has been considered necessary.

4. Sales Tax and Central Excise demands amounting to Rs.1A9.Q4 lakhs (Previous year Rs. 46.94 lakhs) have been disputed by the Company and necessary appeals have been filed. Based on the nature of claim disputed, no provision has been considered necessary.

5. Trade receivables include due from Overseas Subsidiary Company viz., Sri Ramco Lanka (Private) Limited, Sri Lanka to the extent of Rs. 191.68 lakhs (Previous Year Rs.664.23 lakhs) and Sri Ramco Roofing Lanka (Private) Limited (wholly owned subsidiary of Sri Ramco Lanka (Private) Limited) to the extent of Rs.11.28 lakhs (Previous Year Rs. 474.11 lakhs). Maximum amount outstanding during the year from Sri Ramco Lanka (Private) Ltd is Rs.1,109.32 (Previous Year Rs. 664.23 lakhs) and Sri Ramco Roofing Lanka (Private) Limited is Rs. 1,016.32 (Previous Year Rs. A1AM lakhs)

6. The Company''s Shares are listed in Madras Stock Exchange Ltd, National Stock Exchange of India Ltd and BSE Ltd and the listing fees in respect of all the three exchanges for the Financial year 2014-2015 have been paid.

7. a. i. Long-term Loans of Rs. 15,432.27 lakhs borrowed from banks are secured by pari-passu first charge on the fixed assets and pari-passu second charge on current assets of the Company.

b. Short-term Loans of Rs. 9,324.35 lakhs borrowed from banks are secured by hypothecation of Stocks of raw materials, work-in- progress, stores, spares and finished goods and book debts and second charge on fixed assets.

c. i) External Commercial Borrowing Loan of USD 1.25 million amounting to Rs. 748.50 lakhs borrowed from DBS Bank Ltd.,

Singapore is secured by pari-passu first charge on the fixed assets and pari-passu second charge on current assets in favour of Security Trustee DBS Bank, Chennai.

As per requirements of Accounting Standard 11 (revised 2005 " The Effects of changes in Foreign Exchange Rates"), ECB loan has been valued at Rs. 59.88 per USD, as the closing rate on 31 /03/2014. This has resulted in a notional loss of Rs. 69.88 lakhs which has been capitalised as per Notifications dated 31 /03/2009 and 09th Aug 2012.

The premium on forward exchange contracts not intended for trading or speculative purpose is amortised as expense over the life of the contract, During the current year X 259.69 lakhs (Previous Year:Rs. 123.02 lakhs) has been amortised and the same is included in interest and finance charges.

12. The Company is eligible for Incentive under the "West Bengal Incentive Scheme 2000" in respect of its Fibre Cement Plant and Clinker Grinding unit at Kharagpur in the State of West Bengal. A sum of Rs. 99.02 lakhs (Previous Year: Rs. 394.35 lakhs) accrued as Industrial Promotion Assistance is credited to Profit and Loss Account.

The company is eligible for incentives under the " Bihar Industrial Incentive Policy 2006" in respect of its Fibre Cement Plant at Bihiya in the State of Bihar . During the year under review ,

- Asum of Rs. 501.66 lakhs (Previous Year Rs. 481.53 lakhs) accrued as Industrial Promotion Incentive and credited to Profit and Loss account.

A sum of Rs. 100 lakhs (Previous Year Rs. Nil) received as capital subsidy on investment in Plant and Machinery and credited to Capital Reserve Account.

A sum of Rs. 19.31 lakhs (Previous Year Rs. Nil) received as incentive grant for investment in Diesel Generating set and credited to Capital Reserve Account.

8. Out of units of 264.95 lakhs units (Previous Year 336.40 lakhs units) generated net of wheeling and banking at wind farms -

a) 74.60 lakhs units (Previous Year 81.57 lakhs units) were sold to concerned State Electricity Board for X 245.63 lakhs (Previous Year Rs. 280.51 lakhs), shown under "Power generated from windmills".

b) 178.36 lakhs units (Previous Year 242.44 lakhs units) were consumed at the plants and f. 1069.92 lakhs (Previous Year Rs. 1446.11 lakhs), which is not recognised in the financial statements.

c) 11.99 lakhs units (Previous Year 12.39 lakhs units) remain unadjusted and its monetary value of Rs. 53.01 lakhs (Previous Year: Rs. 41.24 lakhs) has been included in " Other Current Assets".

9. The Company does not have taxable income for the year, both under the conventional method of computation of income and under section 115JBof the Income Tax Act, 1961 (Minimum Alternate Tax). Accordingly, no provision for income tax has been made for the year.

10. Related Party Disclosure

As per Accounting Standard (AS 18) issued by the Institute of Chartered Accountants of India, the Company''s related parties are given below:

a. Subsidiary Companies:

1. Sudharsanam Investments Ltd

2. Sri Ramco Lanka (Private) Ltd., Srilanka

3. Sri Ramco Roofings Lanka (Private) Ltd., Srilanka (Wholly owned subsidiary of Sri Ramco Lanka (Private) Limited)

b. Key Management Personnel and relatives: P.R. Ramasubrahmaneya Rajha, Chairman

P.R. Venketrama Raja, Vice Chairman and Managing Director

c. Enterprises over which the above persons exercise significant influence and with which the Company has transactions during the year.

Rajapalayam Mills Ltd

The Ramco Cements Ltd

Ramco Systems Ltd

The Ramaraju Surgical Cotton Mills Ltd

Sri Vishnu Shankar Mills Ltd

Sandhya Spinning Mills Ltd

Thanjavur Spinning Mills Ltd

Sri Harini Textiles Ltd

Public Trust

Raja Charity Trust

- P A C R Educational & Charitable Trust P A C R Sethurammal Charities

- Shri Abinava Vidyatheertha Seva Trust

11. During the year under review, The Company has paid Rs. 343.95 lakhs (Previous Year Rs. 423.61 lakhs) as sole selling agency commission to a related company M/s. Raja Charity Trust pending approval for re-appointment of M/s. Raja Charity Trust from Ministry of Corporate Affairs, Government of India as required under sub-section (3) of Section 294AA of the Companies Act, 1956. The Company has filed relevant application for renewal of appointment of M/s. Raja Charity Trust as sole selling agent which is pending as on reporting date.

12. In respect of the electricity matters relating to our Textile Division, the company has filed appeals/ writ petition for Rs. 281.07 lakhs against various subject matter of the appeal and the same is pending with Tamilnadu Electricity Regulatory Commission (TNERC) / Honourable High Court / Honourable Supreme Court for resolution. The company is confident of resolving the matter in its favour and hence no provision is made in the books of account

13 (a). During the year, the Company made an investment of Rs. 100.00 lakhs in the Equity Shares of Cauvery Power Generation Chennai Private Limited in order to enable the company to purchase electricity from them under Group Captive arrangement for the period from October 2013 to March 2014 for our Textile Division namely Sri Ramco Spinners and Ramco Textile Mill. The Company has not renewed the power purchase agreement beyond March 2014 and hence sold the above investment for Rs. 100.00 lakhs during March 2014

14. There are no dues to Micro and Small Enterprises as at 31.03.2014 (Previous Year : Rs. Nil). This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

15. Previous year''s figures have been regrouped / restated wherever necessary so as to make them comparable with that of the current year.

16. Figures have been rounded off in lakhs with two decimal.


Mar 31, 2013

1. The Company has not utilized Short Term Loans for Long Term purposes

2. Income Tax Assessment has been completed upto the Accounting Year 2009-2010 (i.e. Assessment Year 2010-11) Demand''s raised by the Income Tax Department amounting to Rs..701.90 lacs (For Assessment year 2009-10-Rs..2179 lacs) which have been disputed by the Company and necessary appeals have been fi led. Based on the nature of the claim disputed, no provision has been considered necessary

3. Sales Tax and Central Excise demands amounting to Rs..46.94 lacs have been disputed by the Company and necessary appeals have been fi led. Based on the nature of claim disputed, no provision has been considered necessary

4. Trade receivables include Dues from Overseas Subsidiary Company viz., Sri Ramco Roofi ngs Lanka (Private) Ltd., Sri Lanka to the extent of Rs..474.11 lacs and Sri Ramco Lanka (Private) Ltd, Sri Lanka to the extent of Rs.. 664.23 lacs. Maximum amount due during the year is - Rs..664.23 lacs and Rs..474.11 lacs respectively

5. The Company''s Shares are listed on Madras Stock Exchange Ltd, National Stock Exchange of India Ltd and BSE Ltd and the isting fees in respect of all the three exchanges for the Financial year 2013-2014 have been paid

6. The Company is eligible for Incentives under the "West Bengal Incentive Scheme 2000" in respect of its Fibre Cement Plant and Clinker Grinding unit at Kharagpur in the State of West Bengal. A sum of Rs..394.35 lacs (Previous Year: Rs.. 728.86 lacs) accrued as Industrial Promotion Assistance is credited to Profi t and Loss Account

The Company is eligible for Incentives under the "Bihar Industrial Policy 2006" in respect of its Fibre Cement Plant at Bihiya in the State of Bihar. A sum of Rs..481.53 lacs (Previous Year: Rs..185.50 lacs) accrued as Industrial Promotion Incentive is credited to Profi t and Loss Account

7. Out of units of 332.62 Lacs units (PY 301.59 Lacs units) generated net of wheeling and banking at wind farms -

a) 81.57 Lacs units (PY 92.06 Lacs units) were sold to concerned State Electricity Board for Rs.. 280.51 Lacs (PY Rs.. 307.66 Lacs), shown under "Power generated from windmills"

b) 242.44 Lacs units (PY 210.24 Lacs units) were consumed at the plants and Rs.. 1446.11 Lacs (PY Rs.. 916.67 Lacs), which is not recognised in the fi nancial statements

c) 12.39 Lacs units (PY 3.78 Lacs units) remain unadjusted and its monetary value of Rs..41.24 Lacs (PY: Rs..27.69 Lacs) has been included in "Other Current Assets"

8. Related Party Disclosure

As per Accounting Standard (AS 18) issued by the Institute of Chartered Accountants of India, the Company''s related parties are given below:

a. Subsidiary Companies

1. Sudharsanam Investments Ltd

2. Sri Ramco Lanka (Private) Ltd., Srilanka

3. Sri Ramco Roofi ngs Lanka (Private) Ltd., Srilanka

b. Key Management Personnel and relatives P.R. Ramasubrahmaneya Rajha

P.R. Venketrama Raja

c. Enterprises over which the above persons exercise signifi cant infl uence and with which the Company has transactions during the year.

Rajapalayam Mills Ltd

Madras Cements Ltd

Ramco Systems Ltd

Ramaraju Surgical Cotton Mills Ltd

Sri Vishnu Shankar Mill Ltd

Sandhya Spinning Mill Ltd

Thanjavur Spinning Mill Ltd

Sri Harini Textiles Ltd

Rajapalayam Spinners Ltd

9. Previous year''s fi gures have been regrouped / restated wherever necessary so as to make them comparable with that of the current year.

10. Figures have been rounded off" in Lacs with two decimale


Mar 31, 2012

As at As at

31.03.2012 31.03.2011

Rs.in Lacs Rs.in Lacs

1. I. Contingent Liabilities not provided for :

A. Claims against the company / disputed liabilities not acknowledged as debts:

a. In respect of Joint ventures NIL NIL

b. In respect of others 9.89 89.00

B. Guarantees

Bank Guarantees to Banks/Financial institutions against credit facilities extended to third parties:

a. In respect of Joint ventures NIL NIL

b. In respect of others 9,899.00 8,629.00

II. Commitments

A. Estimated amount of contracts remaining to be executed on capital account and not provided for:

a. In respect of Joint ventures NIL NIL

b. In respect of others 377.81 831.77

B. Other Commitments

a. Letter of Credits NIL 791.79

b. Bank Guarantees 258.12 255.94

2. Audit, Accountancy and Legal Charges include fees (inclusive of service tax) paid to Statutory Auditors towards:

Statutory Audit Fees 7.87 6.62

Tax Audit Fees 0.44 0.44

Fees for certification 0.67 0.66

Expenses of Audit 2.85 2.24

Cost Audit Fees 2.25 -

3. The breakup of Deferred tax liability as at 31.03.2012 of Rs 2,288.56 lacs is as under:

Timing Difference on account of Tax effect on difference between 2,411.74 2,501.35 book depreciation and depreciation under the Income Tax Act, 1961

Tax effect of provision for Leave Encashment (120.97) (86.51)

Tax effect of provision for Bad and Doubtful debts (2.21) (6.28)

4. The Company has not utilized Short Term Loans for Long Term purposes.

5. Demand raised by the Income Tax Department amounting to Rs 2,179 lacs which have been disputed by the company and necessary appeals have been filed. Based on the nature of the claim disputed, no provision has been considered necessary.

6. Sales Tax demand amounting to Rs 9.89 lacs have been disputed by the company and necessary appeals have been filed. Based on the nature of claim disputed, no provision has been considered necessary.

7. Trade receivables include dues from Overseas Subsidiary Company viz., Sri Ramco Roofings Lanka (Private) Ltd., Sri Lanka to the extent of Rs 54.41 lacs and Sri Ram co Lanka (Private) Ltd, Sri Lanka to the extent of Rs 694.11 lacs. Maximum amount due during the year is Rs 697.26 and Rs 694.11 lacs respectively.

8. The Company's Shares are listed on Madras Stock Exchange Limited, National Stock Exchange of India Limited and Bombay Stock Exchange Limited and the listing fees in respect of all the three exchanges for the Financial year 2012-2013 have been paid.

a. External Commercial Borrowing Loan of USD 6.00 million amounting to Rs 3,052.50 lacs borrowed from DBS Bank Ltd., Singapore is secured by paripasu first charge on the fixed assets and paripasu second charge on current assets in favour of Security Trustee DBS Bank Ltd., Chennai.

As per requirements of Accounting Standard 11, ECB loan has been valued at Rs 50.875 per USD, as the closing rate on 31/03/2012.

This has resulted in a notional loss of X 375.50 lacs which has been accounted as per Notifications dated 31/03/2009 and 11th May 2011 amending the Accounting Standard AS 11 relating to the Effects of Foreign Exchange Rates as Rs 79.85 lacs towards Interest and Rs 295.65 lacs towards Fixed Assets.

b. The Working Capital Borrowings of the Company are secured by hypothecation of Stocks of raw materials, work-in progress, stores, spares and finished goods and book debts and second charge on fixed assets.

9. The premium on forward exchange contracts not intended for trading or speculative purpose is amortized as expense over the life of the contract. During the current year Rs 4.80 lacs (PY: Rs 29.02 lacs) has been amortized and the same is included in interest and finance charges.

10. The Company is eligible for Incentives under the "West Bengal Incentive Scheme 2000 in respect of its Fibre Cement Plant and Clinker Grinding unit at Kharagpur in the State of West Bengal. A sum of Rs 728.86 lacs (Previous Year: Rs 564.12 lacs) accrued as Industrial Promotion Assistance is credited to Profit and Loss Account.

The Company is eligible for Incentives under the "Bihar Industrial Policy 2006" in respect of its Fibre Cement Plant at Bihiya in the State of Bihar. A sum of Rs 185.50 lacs (Previous Year: Rs NIL) accrued as Industrial Promotion Incentive is credited to Profit and Loss Account.

Interest subsidy under Technology Up gradation Fund (TUF) is credited to interest.

11. Previous year's figures have been regrouped / restated wherever necessary so as to make them comparable with that of the current year.

12. Figures have been rounded of in lacs with two decimals.


Mar 31, 2011

As at As at 31.03.2011 31.03.2010 Rs. Rs.

1. Contingent Liabilities not provided for: -

a. Estimated amount of contracts remaining to be executed on Capital accounts 8,31,77,495 1,19,55,000

b. Bank Guarantees 2,55,93,673 18,20,23,938

c. Letters of Credit 7,91,78,751 1,47,08,148

d. Corporate Guarantee furnished by the Company for Ramco Systems Limited to support their credit facilities to their bankers. 50,00,00,000 35,00,00,000

Corporate Guarantee furnished by the Company for Sri Harini Textiles Ltd., to support their credit facilities to their bankers. 36,29,00,000 36,29,00,000

e. Sales Tax 89,00,000 89,00,000

2. Audit, Accountancy and Legal Charges include fees (inclusive of service tax) paid to Statutory Auditors towards:

Statutory Audit Fees 6,61,800 6,61,800

Tax Audit Fees 44,120 44,120

Fees for certification 66,180 33,090

Expenses of Audit 2,24,468 3,18,501

3 The Company has not utilized Short Term Loans for Long Term purposes.

4. Income Tax assessment has been completed upto the Accounting year 2007–2008 (i.e. Assessment year 2008-09). Demands raised by the Department amounting to Rs.21.79 Crs which have been disputed by the company and necessary appeals have been filed. Based on the nature of the claim disputed, no provision has been considered necessary.

5. Sales Ta x demands amounting to Rs.89 lacs have been disputed by the company and necessary appeals have been filed. Based on the nature of claim disputed, no provision has been considered necessary.

6. Sundry Debtors include Dues from Overseas Subsidiary Company viz., Sri Ramco Lanka (Private) Ltd., Sri Lanka to the extent of Rs.3,17,49,064/-. Maximum amount due during the year – Rs.7,55,81,346/-.

7. Current Liabilities:- There are no dues to Micro and Small Enterprises as at 31-3-2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

8. The Companys Shares are listed on Madras Stock Exchange, National Stock Exchange of India Ltd and The Stock Exchange, Mumbai and the listing fees in respect of all the three exchanges for the Financial year 2011 – 2012 have been paid.

9. a. Term Loans of Rs.5587.41 Lacs borrowed from banks for expansion of Textile and Wind Mill division under TUF Scheme are secured by paripasu first charge on the fixed assets and paripassu second charge on current assets of the Company.

b. Term Loans of Rs.8700.00 Lacs borrowed from banks are secured by paripasu first charge on the fixed assets and paripasu second charge on current assets.

c. External Commercial Borrowing Loan of USD.4.25 Million amounting to Rs.2118.50 lacs borrowed from DBS Bank Ltd, Singapore is secured by paripasu first charge on the fixed assets and paripasu second charge on current assets in favour of Security Trustee DBS Bank, Chennai.

d. The Working Capital Borrowings of the Company are secured by hypothecation of Stocks of raw materials, work-in- progress, stores, spares and finished goods and book debts and second charge on fixed assets.

10. The premium on forward exchange contracts not intended for trading or speculative purpose is amortized as expense over the life of the contract, During the current year Rs.29.02 lacs (PY:Rs.42.39 lacs) has been amortized and the same is included in Interest and finance charges.

11. The Company has availed Incentives of Rs.111.14 Lacs during the year under the "Kutch Development Scheme 2001” in respect of its Fibre Cement Plant at Anjar, Bhuj in the State of Gujarat. The Scheme, inter-alia, stipulates investment of the amount equivalent to 50% of the Incentives availed in the new project in the State of Gujarat within a period of 10 years from the date of commencement of commercial production. The Company had obtained a Legal Opinion on the manner of treatment of these subsidies. During the year incentives amounting to Rs.55.57 lacs has been capitalized (PY:Rs.654.42 lacs) together with Rs.1205.14 lacs capitalized upto 31.03.2010, the incentives capitalized so far is Rs.1260.71 lacs, being 50% of the total incentives of Rs.2521.42 lacs availed upto 31.03.2011.

The Company is eligible for Incentives under the "West Bengal Incentive Scheme 2000” in respect of its Fibre Cement Plant and Clinker Grinding unit at Kharagpur in the State of West Bengal. A sum of Rs.564.12 lacs (Previous Year: Rs.446.72 lacs) accrued as Industrial Promotion Assistance is credited to Profit and Loss Account.

Interest subsidy under Technology Upgradation Fund (TUF) is credited to interest and finance charges account.

12. The Company has capitalized borrowing cost amounting to Rs.0.35 Crs for Gangaikondan Plant and Rs.0.66 Crs for Bihiya Plant.

13. RELATED PARTY DISCLOSURE

As per Accounting Standard (AS 18) issued by the Institute of Chartered Accountants of India, the Companys related parties are given below:

a. Subsidiary Companies:

1. Sudharsanam Investments Ltd

2. Sri Ramco Lanka (Private) Ltd., Sri Lanka

3. Sri Ramco Roofings Lanka (Private) Ltd., Sri Lanka

b. Key Management Personnel and relatives: P.R. Ramasubrahmaneya Rajha

P.R. Venketrama Raja

c. Enterprises over which the above persons exercise significant influence and with which the company has transactions during the year.

Rajapalayam Mills Ltd

Madras Cements Ltd

Ramco Systems Ltd

The Ramaraju Surgical Cotton Mills Ltd

Sri Vishnu Shankar Mill Ltd

Sandhya Spinning Mill Ltd

Thanjavur Spinning Mill Ltd

Sri Harini Textiles Ltd

Rajapalaiyam Spinners P Ltd

14. Previous years figures have been regrouped/restated wherever necessary so as to make them comparable with that of the current year.


Mar 31, 2010

As at As at 31.03.2010 31.03.2009 Rs. Rs.

1. Contingent Liabilities not provided for:- a. Estimated amount of contracts remaining to be executed on Capital accounts 1,19,55,000 6,63,05,446

b. Bank Guarantees 18,20,23,938 22,11,75,826

c. Letters of Credit 1,47,08,148 --

d. Corporate Guarantee furnished by the Company for Ramco Systems Limited:

To support their credit facilities to AXIS Bank Ltd 8,00,00,000 13,75,00,000

To support their credit facilities to IDBI Bank Ltd 7,00,00,000 20,00,00,000

To support their credit facilities to Punjab & Sind Bank 20,00,00,000 --

Corporate Guarantee furnished by the Company to AXIS Bank Ltd for Sri Harini Textiles Ltd., to support their credit facilities 36,29,00,000 --

e. Sales Tax 89,00,000 89,00,000

2. The Company has not utilized Short Term Loans for Long Term purposes.

3. Income Tax assessment has been completed upto the Accounting year 2006 - 2007 (i.e. Assessment year 2007-08). Demand raised by the Department amounting to Rs.120.19 lacs (Previous year Rs.72.75 lacs) have been fully adjusted against the refund due for the Asst. Year 2008-09 as per provisional assessment u/s 143(1) of the Income Tax Act.

4. Sales Tax demands amounting to Rs. 89 lacs have been disputed by the Company and necessary appeals have been filed. Based on the nature of claim disputed, no provision has been considered necessary.

5. Sundry Debtors include Dues from Overseas Subsidiary Company viz., Sri Ramco Lanka (Private) Ltd., Sri Lanka to the extent of Rs. 2,38,01,609/- - Maximum amount due during the year – Rs. 2,38,01,609/- 8. Current Liabilities:- There are no dues to Micro and Small Enterprises as at 31-3-2010. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

6. The Companys Shares are listed on Madras Stock Exchange, National Stock Exchange of India Ltd and The Stock Exchange, Mumbai and the listing fees in respect of all the three exchanges for the Financial year 2010-2011 have been paid.

7. a. Term Loans of Rs.6512.04 Lacs borrowed from banks for expansion of Textile and Wind Mill division under TUF Scheme are secured by paripassu first charge on the fixed assets and paripassu second charge on current assets of the company.

b. Term Loans of Rs.6400 Lacs borrowed from banks are secured by paripassu first charge on the fixed assets and paripasu second charge on current assets.

c. The Working Capital Borrowings of the Company are secured by hypothecation of Stocks of raw materials, work-in- progress, stores, spares and finished goods and book debts and second charge on fixed assets.

8. In Sept.2009, the Equity Shares of Rs.10/- each were sub-divided into 10 shares of Re.1/- each and 4,33,31,530 Equity Shares of Re.1/- each were issued as Bonus Shares by capitalization of General Reserves

9. The premium on forward exchange contracts not intended for trading or speculative purpose is amortized as expense over the life of the contract, During the current year Rs.42.39 lacs (PY: Rs. 7.31 lacs) has been amortized and the same is included in Interest and Finance charges.

10. The Company has availed Incentives of Rs.747.44 Lacs during the year under the "Kutch Development Scheme 2001" in respect of its Fibre Cement Plant at Anjar, Bhuj in the State of Gujarat. The Scheme, inter-alia, stipulates investment of the amount equivalent to 50% of the Incentives availed in the new project in the State of Gujarat within a period of 10 years from the date of commencement of commercial production. The Company had obtained a Legal Opinion on the manner of treatment of these subsidies. During the year incentives amounting to Rs.654.42 lacs has been capitalized (PY: Rs.291.81 lacs) together with Rs.550.71 lacs capitalized upto 31.03.2009, the incentives capitalized so far is Rs.1205.13 lacs, being 50% of the total incentives of Rs.2410.26 lacs availed upto 31.03.2010.

The Company is eligible for Incentives under the "West Bengal Incentive Scheme 2000" in respect of its Fibre Cement Plant and Clinker Grinding unit at Kharagpur in the State of West Bengal. A sum of Rs.446.72 lacs (Previous Year: Rs.287.58 lacs) accrued as Industrial Promotion Assistance is credited to Profit and Loss Account. A sum of Rs.1.76 lacs accrued as State Capital Investment Subsidy for the year (Previous Year: Rs.57.51 lacs) is treated as Capital Receipt. With this, the total incentive capitalized is Rs.150 lacs as on 31st March, 2010.

Interest subsidy under Technology Upgradation Fund (TUF) is credited to Interest and Finance Charges account.

11. RELATED PARTY DISCLOSURE

As per Accounting Standard (AS 18) issued by the Institute of Chartered Accountants of India, the Companys related parties are given below:

a. Subsidiary Companies:

1. Sudharsanam Investments Ltd

2. Sri Ramco Lanka (Private) Ltd., Sri Lanka

b. Key Management Personnel and relatives: P.R. Ramasubrahmaneya Rajha

P.R. Venketrama Raja

c. Enterprises over which the above persons exercise significant influence and with which the company has transactions during the year.

Rajapalayam Mills Ltd Madras Cements Ltd Ramco Systems Ltd Ramaraju Surgical Cotton Mills Ltd Sri Vishnu Shankar Mill Ltd Sandhya Spinning Mill Ltd Thanjavur Spinning Mill Ltd Sri Harini Textiles Ltd Rajapalaiyam Spinners P Ltd

12. Previous years figures have been regrouped/restated wherever necessary so as to make them comparable with that of the current year.

13. Figures have been rounded off to the nearest rupee.

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