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

Notes to Accounts of Saurashtra Cements Ltd.

Mar 31, 2015

1. The accumulated arrears of preference dividend unprovoked for the period from November 2000 till the balance sheet date amounted to Rs. 1281.78 lacs (Previous year Rs. 1192.39 lacs), including Rs. 89.39 lacs, (Previous year Rs. 89.39 lacs) for the year.

2. Considering the implementation of the scheme formulated and sanctioned for a sick company and that the net worth of the Company is positive, it no longer being a Sick Industrial Company, the accounts of the Company are prepared on a going concern basis.

i. The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors, including supply and demand in the employment market.

ii. The Company expects to contribute a sum of Rs. 110.75 lacs (Previous year Rs. 103.96 lacs) towards gratuity during the year ended March 31, 2016.

iii. The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held and historical return on the plan assets. The same are disclosed hereunder to the extent available.

i. Subsidiary Companies :

a. Agrima Consultants International Limited d. Ria Holdings Limited

b. Pranay Holdings Limited e. Reeti Investments Limited

c. Prachit Holdings Limited f. Concorde Cement P. Limited

iii. Key Management Personnel :

a. Mr. Jay M Mehta – Executive Vice Chairman

b. Mr. M S Gilotra - Managing Director

iv. Relatives of Key Management Personnel with whom Transactions have taken place:

a. Mr. Mahendra N Mehta - Father of Mr. Jay M Mehta

b. Mrs. Narinder Kaur - Wife of Mr. M S Gilotra

c. Mr. Amandeep Singh Gilotra - Son of Mr. M S Gilotra

3 Previous Year's figures have been regrouped / reclassified to conform to the current year's presentation.


Mar 31, 2014

1. RIGHTS, PREFERENCES AND RESTRICTIONS

a. Equity Shares

i. The Company has only one class of equity shares referred to as equity shares having a par value of Rs. 10. Each holder of equity shares is entitled to one vote per share.

ii. Dividends, if any, is declared and paid in Indian rupees. The dividend, if any, 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. However, in view of the carried forward losses, no dividend is / was declared on the equity shares for the year ended March 31, 2014 / March 31, 2013.

iii. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b. Preference Shares :

i. The Company has only one class of preference shares referred to as 13% Optionally Convertible Cumulative Preference Shares (OCCPS) having a par value of Rs. 100. The preference shares do not carry any voting right. In terms of Section 87 of the Companies Act, 1956, the holders of cumulative preference shares get entitled to vote on every resolution placed by the Company at any meeting, if the dividend due on such shares or any part thereof has remained unpaid in respect of an aggregate period of not less than two years preceding the date of commencement of the meeting.

ii. OCCPS carried a fixed cumulative dividend of 13% p.a. from the date of issue. The holders of OCCPS carry a right to dividend ahead of equity share holders.

iii. In the event of liquidation, the holders of OCCPS carry preference over equity shareholders in respect of repayment of capital.

iv. OCCPS were redeemable at par on March 31, 2003. Of the total Preference Share Capital of Rs. 687.60 lacs, the holders of 1,74,557 OCCPS of Rs. 100 par value, aggregating to Rs. 174.56 lacs, have surrendered their right in the redemption, including the preference dividend thereon for the benefit of the Company. Based on the advise received, pending the availability of funds / distributable profits for the redemption of capital, the beneficial ownership of these OCCPS has already been transferred in favour of a trust of which the Company is the beneficiary. The accounting effect of such waiver (only in respect of these OCCPS) shall be made as and when such shares will be redeemed. For the balance of OCCPS, the right of conversion lapsed on August 22, 2003.

II. Security:

a. Borrowings at part I (a) above is secured by way of pari-passu second mortgage in favour of the Trustees on the Company''s immovable and movable properties, both, present and future, situated at Ranavav (Gujarat), save and except on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific and first charge holders. The said debentures are also secured by personal guarantee of two Directors of the Company.

b. Borrowings at part I (b), (c), (e), (f) and (h) above are secured by way of pari-passu first mortgage in favour of the Trustees / lenders on the Company''s immovable and movable properties, both, present and future, situated at Ranavav (Gujarat), save and except on stocks, spares and book debts for securing borrowings for working capital (on which they have a second charge) and on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific charge holders. These borrowings [except I (h)] are also secured by personal guarantee of two Directors of the Company.

c. Borrowings at part I (d) and (g) are generally repayable in 36 equated monthly instalments carrying varied interest from 10% to 12% p.a. These loans are secured by hypothecation of vehicles financed there under.

d. All the aforementioned borrowings except part I (d) and (g) are further secured by hypothecation of ''Hathi'' brand on pari-passu first charge basis and pledge of promoter shares in favour of the Trustees.

III. Repayment Terms:

a. For Part I (a), (b), (c), (e) and (f), interest is payable by the Company on ballooning basis ranging from 2% p.a. to 12% p.a. resulting into an average rate of interest of 8.5% p.a. For the current year, such interest is payable and provided at 12% p.a. The first year interest @ 2% has been funded as Funded Interest Term Loan (FITL-II). The repayment of outstanding principal is to be made over a period of 10 years including the initial moratorium of first three years. (i.e. payable from July 14, 2007 till April 14, 2015 on the 14th date after the end of each calendar quarter on ballooning basis ranging from 7.50% to 20% p.a.). 50% of the unpaid simple interest on all the loans was converted into FITL-I. Both, FITL I and II, do not carry interest and are repayable 25% in the 9th and 75% in the 10th year (i.e. payable from July 14, 2013 till April 14, 2015).

b. The amount outstanding as at March 31, 2012, in respect of Part I (h) is repayable in 12 quarterly instalments of 5% each, commencing from June 30, 2012 and 4 quarterly instalments of 10% each, commencing from June 30, 2015.

c. For Part I (a), (b), (c), (e) and (f);

i. The Company has an option to prepay all the loans without premium on pro-rata basis to all the lenders.

ii. The restructured loans including FITL are subject to recompense clause as may be approved by CDR Cell.

iii. In the event of default in compliance of restructuring package, after the approval of CDR, the lenders have a right to convert 100% of the defaulted amount of the restructured debt into Equity Shares of the Company, at any time during the currency of assistance, at a price to be determined as per SEBI Guidelines.

iv. The lenders have the right to convert 20% of the loan outstanding (including FITL and WCTL) into Equity Shares of the Company, at a price to be determined as per SEBI Guidelines in one or more occasions after 7 years from the date of approval. As regards zero coupon FITL, remaining outstanding beyond 7 years, such conversion right of lenders would be applicable to the entire amount and the conversion shall be at a price as per SEBI GUIDELINES.

2. Security:

The Working capital facilities are secured by first charge by way of hypothecation of current assets, namely, stocks of raw materials, semi finished and finished goods, consumable stores and spares, bills receivables, book debts and all other movables, both, present and future. It is also secured by second mortgage and charge on the Company''s immovable and movable properties both present and future. They are also secured by personal guarantee of two Directors of the Company. Of the above, a cash credit facility from a bank aggregating to Rs. 0.82 lacs (Previous Year Rs. 11.39 lacs), is further secured by shares of Gujarat Sidhee Cement Limited held by subsidiary companies.

3. NOTES:

i. Gross Block includes Rs. 4061.10 lacs (Previous year Rs. 4345.89 lacs) added on revaluation of the Company''s free-hold and leasehold land, buildings, plant and machinery situated at Ranavav in order to reflect a realistic position of the net replacement cost of such assets, on the basis of valuation made by an external valuer, which had resulted in a net increase of Rs. 5722.61 lacs, as at June 30, 1993.

ii. Besides the land specified above, the Company holds other leasehold land for which the company pays only ground rent.

iii. Buildings exclude cost of shares held in a Co-operative Society included under Note 12 of Non-current Investments.

iv. Plant and equipments include cost of service line of Rs. 33.20 lacs (Previous Year Rs. 33.20 lacs), ownership of which is vested with Paschim Gujarat Vij Company Limited.

v. Plant and equipments include cost of assets of Rs. 206.69 lacs (Previous Year Rs. 206.69 lacs), acquired under lease purchase agreements.

vi. Vehicles include assets financed under hire purchase agreements.

viii. Impairment of Assets :

The Company had incurred an aggregate sum of Rs. 7838.15 lacs (Previous Year Rs. 7901.66 lacs) towards Expansion Project Assets, and reflected under Capital Work-in-progress (CWIP). The expenditure includes cost of an imported plant purchased, civil work carried out and pre-operative expenses (including interest capitalised) as shown in Note 11 (vii) above. However, later on in the year 2005, due to several adversities, the project was suspended. At the year end, based on the assessment of the recoverable amount (net selling price) of the said suspended Project and civil works reflected under CWIP carried out by M/s Shinde Engineering Services, project consultants, the aggregate provision for impairment of Rs. 2490.08 lacs (Previous Year Rs. 1983.01 lacs), including Rs. 507.07 lacs (Previous Year Rs. 1326.32 lacs) for the year, is recognised as required under Accounting Standard 28 on "Impairment of Assets".

4. ACCOUNTING FOR TAXES ON INCOME

In terms of paragraph 26 of Accounting Standard 22 on "Accounting for Taxes on Income", the Company has reviewed its Deferred Tax Asset (DTA) recognised till last year.

In terms of AS 22, the Company recognised DTA on the basis of prudence only to the extent it would have sufficient future taxable income (by way of reduction in unabsorbed depreciation and / or carried forward business losses) against which the aggregate DTA recognised as on the Balance Sheet date would be realised. The Company also recognized DTA in respect of the unabsorbed depreciation to the extent of deferred tax liability (DTL) for timing difference for depreciation.

At the year end, the Company has recognised DTA of Rs. 1096.09 lacs (Previous Year Rs. 1332.36 lacs), i.e. to the extent of DTL for the timing difference on account of depreciation.

5. Note:

Write back is in respect of One Time Settlement (OTS) with the Government of Gujarat (GOG), of the outstanding dues as per Option II of the Government Resolution for OTS applicable to sick units under BIFR. Accordingly, the amounts lying as outstanding dues were written back in terms of remission given under OTS during the year ended March 31, 2013. The settlement covering a period of 18 months as per letter Ref IC/IM/BIFR/9351275/699695 dated May 17, 2012 of GOG, 2012 was successfully completed during the current financial year.

6. In view of the carried forward losses and unabsorbed depreciation available, the Company is not liable to tax as per the normal provisions of the Income-tax Act, 1961. Further, as per the provisions of Minimum Alternate Tax (MAT) under Section 115JB of the Income-tax Act, 1961, the Company has provided for MAT during the year and to the extent of convincing evidence the same has been included under MAT Credit Entitlement and shown under "Short- term Loans and Advances" in Note 19.

As at As at March 31, 2014 March 31, 2013 Rs. in lacs Rs. in lacs

7. CONTINGENT LIABILITIES AND COMMITMENTS

i. Contingent liabilities: (to the extent not provided for)

a. Estimated amount of contracts remaining to be executed on capital 709.49 332.79 account (net of advances of Rs. 432.57 lacs, previous year Rs. 388.69 lacs).

b. Matters under disputes / appeals : Sales Tax liabilities 435.67 435.67

Excise Duty 296.71 296.71

Service Tax 105.00 106.16

Royalty 15.12 15.12

Customs Duty 269.89 4.05

Road Tax 26.54 26.54

Claims filed by workmen or their union against the Company 145.39 373.89

On account of Power Supply 440.99 440.99

Other demands and claims against the Company not acknowledged as debts 20.55 20.55

The amounts stated are including interest and penalty, to the extent demanded.

c. The operation of a show cause notice dated August 20, 2002 issued by the Jute Commissioner, stipulating the Company to fulfill the obligation of packing a minimum of 50% of cement in jute bags from March 15, 1995 or pay penalty under Section 3 (1) of the Jute Packing Materials (Compulsory use in Packing Commodities) Act, 1987 is presently stayed by Calcutta High Court, the amount of which is not ascertainable.

ii. Commitments:

The Company has guaranteed a minimum cargo handling of 500,000 M.T from April to March each year at its jetty at Porbander, under the license agreement entered with Gujarat Maritime Board for a period of 15 years from the day Jetty became operational. The failure of such commitment shall make the Company liable to pay the wharfage charges for the remaining cargo at the prevailing wharfage rates. During the year (as also in the previous year) the Company has handled cargo in excess of the minimum requirement.

8. The accumulated arrears of preference dividend unprovided for the period from November 2000 till the balance sheet date amounted to Rs. 1192.39 lacs (Previous year Rs. 1103.91 lacs), including Rs. 89.39 lacs, (Previous year Rs. 89.39 lacs) for the year.

9. The Company was registered as a Sick Industrial Company with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). BIFR, vide its order dated June 1, 2012 has formulated and circulated a Sanctioned Rehabilitation Scheme (SS-12) for revival of the Company, inter-alia providing relief and concessions from various agencies including reduction / waivers of interest (including default interest, penal interest and penalties). The Scheme as approved is presently under implementation. The Sanctioned Scheme envisages the following;

i. Lenders covered under Scheme of Compromise and Arrangement u/s 391 to 394 of Companies Act, 1956 to be paid as per the CDR Scheme / Scheme of Compromise u/s 391 to 394 of Companies Act, 1956.

ii. For loans from India Debt Management Private Limited not covered in (i) above, the interest rate has been reset to 12% simple interest with effect from April 1, 2010 and the entire amount outstanding as on March 31, 2012 to be repaid over a period of four years.

iii. Promoters and their associates to infuse fresh equity of Rs. 1800 lacs.

Since the net worth of the Company is positive, it is no longer a Sick Industrial Company, and implementation of sanctioned Corporate Debt Restructuring (CDR) Scheme, the accounts of the Company are prepared on a going concern basis.

10. Expenses on maintenance, etc. incurred during the year for a guest house at Mumbai amounting to Rs. 7.71 lacs (Previous year Rs. 5.99 lacs) have been presently borne by the Company. The guesthouse was under the unauthorised occupation of relatives of the ex-chairman. The Company had filed a suit for recovery of the possession of the guest house, which also includes recovery of expenses incurred. The said suit was decided against the Company by declaring legal heirs of the ex-chairman as tenants. The Company has preferred an appeal before the Division Bench against the said order, which is pending.

However, since the date of the Balance Sheet, under the process of sale through tender, on as is where is basis, a letter of acceptance to the successful bidder for the said guest house has been issued.

i. The estimate of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors, including supply and demand in the employment market.

ii. The Company expects to contribute a sum of Rs. 103.96 lacs (Previous year Rs. 88.75 lacs) towards gratuity during the year ended March 31, 2015.

iii. The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held and historical return on the plan assets.


Mar 31, 2013

1 ACCOUNTING FOR TAXES ON INCOME

In terms of paragraph 26 of Accounting Standard 22 on "Accounting for Taxes on Income", the Company has reviewed its Deferred Tax Asset (DTA) recognised till last year.

In terms of AS 22, the Company recognised DTA on the basis of prudence only to the extent it would have sufficient future taxable income (by way of reduction in unabsorbed depreciation and / or carried forward business losses) against which the aggregate DTA recognised as on the Balance Sheet date would be realised. The Company also recognized DTA in respect of the unabsorbed depreciation to the extent of deferred tax liability (DTL) for timing difference for depreciation. Accordingly, upto March 31, 2012, DTA of X 3204.68 lacs was recognised.

In view of the profits during the year, to the extent it sets off the unabsorbed depreciation and business losses, DTA of Rs. 3204.68 lacs so recognised, is reversed.

Upto March 31, 2013, the Company has recognised DTA of Rs. 1332.36 lacs, i.e. to the extent of DTL for the timing difference on account of depreciation.

2 In view of the carried forward losses and unabsorbed depreciation available, the Company is not liable to tax as per the normal provisions of the Income-tax Act, 1961. Further, since the Company is registered under BIFR, though the net worth of the Company is positive as at March 31, 2013, as per the provisions of Minimum Alternate Tax under Section 115JB of the Income-tax Act, 1961, the Company is not liable for tax for the year in which its net worth has turned positive.

3 The accumulated arrears of preference dividend unprovided for the period from November 2000 till the balance sheet date amounted to Rs. 1103.91 lacs (Previous year Rs. 1014.52 lacs), including Rs. 89.39 lacs, (Previous year Rs. 89.39 lacs) for the year.

4 The Company is registered as a sick Industrial Company with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). BIFR, vide its order dated June 1, 2012 has formulated and circulated a Sanctioned Rehabilitation Scheme (SS-12) for revival of the Company, inter-alia providing relief and concessions from various agencies including reduction / waivers of interest (including default interest, penal interest and penalties). The scheme as approved is presently under operation. Based on overall growth in the cement Industry barring any unforeseen circumstances, the continuation of sanctioned Corporate Debt ¦ Restructuring (CDR) Scheme and with One Time Settlement of GoG, the accounts of the Company are prepared on a going concern basis.

5 Expenses on maintenance, etc. incurred during the year for a guest house at Mumbai amounting to Rs. 5.99 lacs (Previous year Rs. 5.38 lacs) have been presently borne by the Company. The guesthouse was under the unauthorised occupation of relatives of the ex-chairman. The Company had filed a suit for recovery of the possession of the guesthouse, which also includes recovery of expenses incurred. The said suit was decided against the Company by declaring legal heirs of the ex-chairman as tenants. The Company has preferred an appeal before the Division Bench against the said order, which is pending.

6 RELATED PARTY DISCLOSURES List of related parties:

i. Enterprises under control, or are controlled by, or under common control, with the reporting enterprise are;

a. Jagmi Investment Limited

b. Fawn Trading Co. Pvt. Limited

c. Fern Trading Co. Pvt. Limited

d. Willow Trading Co. Pvt. Limited

e. Tejashree Trading Co. Pvt. Limited

f. Pallor Trading Co. Pvt. Limited

g. The Mehta International Limited h. Mehta Private Limited

i. Sameta Exports Pvt. Limited

j. Glenn Investments Limited

k. Sunnidhi Trading Private Limited

I. Sumaraj Holdings Private Limited

m. Clarence Investments Limited

n. TransAsia Investment & Trading Limited

o. Hopgood Investments Limited

p. Sampson Limited

q. Villa Trading Co. Pvt. Ltd.

r. Aber Investments Limited

s. Galaxy Technologies Private Limited

t. Mehta Sports Private Limited

u. The Sea Island Investments Limited

ii. Subsidiary Companies :

a. Agrima Consultants International Limited

b. Pranay Holdings Limited

c. Prachit Holdings Limited

d. Ria Holdings Limited

e. Reeti Investments Limited

f. Concorde Cement R Limited

iii. Key Management Personnel:

a. Mr. Jay M Mehta - Executive Vice Chairman

b. Mr. M S Gilotra - Managing Director

iv. Relatives of Key Management Personnel with whom Transactions have taken place:

a. Mrs. Narinder Kaur - Wife of Mr. M S Gilotra

b. Mr. Amandeep Singh Gilotra - Son of Mr. M S Gilotra

c. Mr. Mahendra N Mehta - Father of Mr Jay M Mehta

v. Enterprise having Key Management Personnel in common:

a. Gujarat Sidhee Cement Limited


Mar 31, 2012

RIGHTS, PREFERENCES AND RESTRICTIONS

a. Equity shares

i. The Company has only one class of equity shares referred to as equity shares having a par value of Rs 10. Each holder of equity shares is entitled to one vote per share.

ii. Dividends, if any, is declared and paid in Indian rupees. The dividend, if any, 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. However, in view of the losses, no dividend is / was declared on the equity shares for the year ended March 31, 2012 / March 31, 2011.

iii. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b. Preference shares :

i. The Company has only one class of preference shares referred to as 13% Optionally convertible cumulative preference shares (OCCPS) having a par value of Rs100. The preference shares do not carry any voting right. In terms of Section 87 of the Companies Act, 1956, the holders of cumulative preference shares get entitled to vote on every resolution placed by the Company at any meeting, if the dividend due on such shares or any part thereof has remained unpaid in respect of an aggregate period of not less than two years preceding the date of commencement of the meeting.

ii. OCCPS carried a fixed cumulative dividend of 13% per annum from the date of issue. The holders of OCCPS carry a right to dividend ahead of equity share holders.

iii. In the event of liquidation, the OCCPS holders carry preference over equity share holders in respect of repayment of capital.

iv. OCCPS were redeemable at par on March 31, 2003. Of the total Preference share capital of Rs 687.60 lacs, the holders of 1,74,557 OCCPS of Rs 100 par value, aggregating to Rs 174.56 lacs, have surrendered their right in the redemption, including the preference dividend thereon for the benefit of the Company. Based on the advise received, pending the availability of funds / distributable profits for the redemption of capital, the beneficial ownership of these OCCPS has already been transferred in favour of a trust of which the Company is the beneficiary. The accounting effect of such waiver (only in respect of these OCCPS) shall be made as and when such shares will be redeemed. For the balance of OCCPS, the right of conversion lapsed on August 22, 2003.

C REPAYMENT TERMS AND SECURITY :

a. Debentures:

i. Public debentures aggregating to Rs 2456.07 lacs, together with interest thereon, remuneration of the Trustees, and other amounts payable in respect thereof, are secured by way of pari-passu second mortgage in favour of the Trustees on the Company's immovable and movable properties, both, present and future, situated at Ranavav (Gujarat), save and except on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific and first charge holders. It is also secured by personal guarantee of two Directors of the Company.

ii. Private debentures aggregating to Rs 573.75 lacs, together with interest thereon, remuneration of the Trustees, and other amounts payable in respect thereof, are secured by way of pari-passu first mortgage in favour of the Trustees on the Company's immovable and movable properties, both, present and future, situated at Ranavav (Gujarat), save and except on stocks, spares and book debts for securing borrowings for working capital (on which they will have second charge) and on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific charge holders. It is also secured by personal guarantee of two Directors of the Company.

b. Term loans:

i. From Banks:

a. Those under CDR are secured by way of pari-passu first mortgage on the Company's immovable and movable properties, both, present and future, situated at Ranavav (Gujarat), save and except on stocks, spares and book debts for securing borrowings for working capital (on which they will have second charge) and on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific charge holders. It is also secured by personal guarantee of two Directors of the Company. The term loan from Rajkot Nagarik Sahakari Bank Limited of Rs 16.24 lacs, is further secured by shares of Gujarat Sidhee Cement Limited held by Company's subsidiary.

b Those other than CDR are Vehicle loans which are generally repayable in 36 equated monthly installments carrying varied interest from 10% to 12% p.a. These loans are secured by hypothecation of vehicles financed thereunder and are further secured by personal guarantee by one of the directors of the Company.

ii. From Financial Institutions - Under CDR:

These loans with funded interest term loans, are secured by way of pari-passu first mortgage on the Company's immovable and movable properties, both present and future situated at Ranavav (Gujarat), save and except on stocks, spares and book debts for securing borrowings for working capital (on which they will have second charge) and on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific charge holders. It is also secured by personal guarantee of two Directors of the Company.

iii. From others - Under CDR:

a. Term Loans from India Debt Management Pvt. Limited (assigned by IFCI to IDM) together with Funded Interest Term Loans and accrued interest thereon, are secured by way of pari-passu first mortgage on the Company's immovable and movable properties, both present and future situated at Ranavav (Gujarat), save and except on stocks, spares and book debts for securing borrowings for working capital (on which they will have second charge) and on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific charge holders. It is also secured by personal guarantee of two Directors of the Company.

b. Other Funded Interest Term Loans amounting to Rs 1109.65 lacs, are secured as mentioned above in para C (a) (i) above.

c. Other Loans - Not under CDR

i. Vehicle loans from Reliance Capital Financial Services Limited of Rs 1.61 lacs, carrying interest @ 11% p.a., is repayable in 36 equated monthly installments and is secured by hypothecation of vehicles financed by them and personal guarantee by one of the directors of the Company.

ii. Hire purchase equipment Loans from SREI Infrastructure Finance Limited are repayable in 60 equated monthly installments carrying interest @ 11% p.a., and are secured by hypothecation of assets financed by them and personal guarantee by one of the directors of the Company.

iii. Terms of repayment of secured loans taken from India Debt Management Pvt. Ltd. (IDM) - other than CDR

Term Loans from India Debt Management Pvt. Limited, together with redemption premium due and accrued interest thereon, amounting to Rs 14007.70 lacs, are secured by way of pari-passu first mortgage on the Company's immovable and movable properties, both present and future situated at Ranavav (Gujarat), save and except on stocks, spares and book debts for securing borrowings for working capital (on which they will have second charge) and on the equipment / movable assets secured by specific charge of such other lenders financing them and shall rank subservient to existing charges created / to be created in favour of specific charge holders. These amounts have fully matured as on the balance sheet date. The repayment terms thereof are given hereunder:

a. Term loan of Rs 6705 lacs taken vide loan agreement dated August 20, 2007 was repayable in three annual installments of Rs 2235 lacs, commencing from July 15, 2008. It carries interest @ 12% p.a. till repayment and repayment premium of 10% of the principal value of loan payable alongwith each principal installment.

b. Term loan of Rs 10753.70 lacs (including funded interest) taken vide loan agreement dated November 2, 2006 was payable 20% on July 15, 2008 and 40% each on July 15, 2009 and July 15, 2010. It carries interest @ 10% p.a. from the date of disbursement till January 15, 2007, 11% p.a. till January 15, 2008 and 12% p.a. from thereafter till repayment and redemption premium of 10% of the principal value of loan payable alongwith each principal installment.

c. Bridge loan of Rs 3500 lacs taken vide loan agreement dated September 19, 2008 was payable in 2 equal annual installments commencing from July 15, 2010. It carries interest @ 16% p.a. from the date of disbursement till June 30, 2010 and 18% p.a. from July 1, 2010 till repayment.

d. Debentures included in para C(a)(i) and term loan mentioned under para C(b) (iii) (a) and all the term loans mentioned at C(c)(iii) carries interest for the defaulted periods @ 19% p.a. The rate of interest may undergo change on sanction of the Rehabilitation Scheme referred to in Note 33 (i).

d. All the aforementioned borrowings except vehicle loans from HDFC Bank of Rs 112.09 lacs, vehicle loans from Reliance

Capital Financial Services Limited of Rs 1.61 lacs and hire purchase creditors, are further secured by hypothecation of

'Hathi' brand on pari-passu first charge basis and pledge of promoter shares in favour of the Trustees.

e. Terms of repayment of Loans - Under CDR [Referred to in C(a), C(b)(i)(a), C(b)(ii) and C(b)(iii)]

i. In an earlier year, relief and concessions were granted by Banks, Financial Institutions and others, sanctioned under the Corporate Debt Restructuring (CDR) Scheme for debts outstanding as on July 1, 2005, being the cut off date, including waiver of principal and interest on One Time Settlement under Series A of the CDR Scheme pursuant to the letter no. BY CDR (Ag) /No.1127/2005-06 dated December 26, 2005 of the CDR Cell. Subsequently settlement was also entered into with other lenders which was approved by the Hon'ble High Court of Gujarat vide its order dated December 24, 2007, in the proceedings of the Company u/s 391 and 394 of the Companies Act, 1956 approving the restructuring scheme sanctioned by CDR. All these relief and concessions aggregating to Rs 11501.61 lacs were waived by the respective lenders.

ii. As per the CDR Scheme, interest is payable by the Company on ballooning basis ranging from 2% p.a. to 12% p.a. resulting into an average rate of interest of 8.5% per annum. For the current year, such interest is payable and provided at 12% per annum. The first year interest @ 2% has been funded as Funded Interest Term Loan (FITL-II). The repayment of outstanding principal is to be made over a period of 10 years including the initial moratorium of first three years. (i.e. payable from July 14, 2007 till April 14, 2015 on the 14th date after the end of each calendar quarter on ballooning basis ranging from 7.50% to 20% p.a.) 50% of the unpaid simple interest on all the loans was converted into FITL-I. Both, FITL I and II, do not carry interest and are repayable in the 9th and 10th year.

iii. The Company has an option to prepay all the loans without premium on pro-rata basis to all the lenders.

iv. All the restructured loans including FITL are subject to recompense clause as may be approved by CDR Cell.

v. In the event of default in compliance of restructuring package, after the approval of CDR, the lenders have a right to convert 100% of the defaulted amount of the restructured debt into Equity Shares of the Company, at any time during the currency of assistance, at a price to be determined as per SEBI Guidelines.

vi. The lenders have the right to convert 20% of the loan outstanding (including FITL and WCTL) into Equity Shares of the Company, at a price to be determined as per SEBI Guidelines in one or more occasions after 7 years from the date of approval. As regards zero coupon FITl, remaining outstanding beyond 7 years, such conversion right of lenders would be applicable to the entire amount and the conversion shall be at a price as per SEBI guidelines.

f. The amount of loans referred to for repayment and security are including those reflected in Short-term borrowings and Other current liabilities.

Security:

The working capital facilities from Central Bank of India, Dena Bank and Rajkot Nagarik Sahakari Bank Limited, are secured by first charge by way of hypothecation of the current assets namely, stocks of raw materials, semi finished and finished goods, consumable stores and spares, bills receivables, book debts and all other movables, both present and future. It is also secured by second mortgage and charge on the Company's immovable and movable properties both present and future. They are also secured by personal guarantee of two Directors of the Company. The facility from Rajkot Nagarik Sahakari Bank Limited is further secured by shares of Gujarat Sidhee Cement Limited held by subsidiary companies.

Note:

The Company's request for One Time Settlement (OTS) of Dues payable by sick units under BIFR as per the Government of Gujarat (GoG) GR BFR/(HPC)/102003/3537/P dated May 12, 2004 was under consideration. The Scheme, inter-alia, provided for waiver of interest, penalties, etc. on Sales Tax, Royalty and Electricity Duty. Based on the directions of GoG, the Company had unconditionally deposited a sum of Rs 7000 lacs with Gujarat State Financial Services Limited towards aforesaid settlement. Pending the settlement, dues payable to GoG of Rs18417.16 lacs (Previous year Rs 17022.16 lacs) have been shown net of such deposit, in Statutory dues. The GoG has introduced a new Scheme, in place of its earlier schemes, for relief to the Sick Industrial Units registered with the BIFR vide GR BFR/(HPC)/102009/435690/P dated July 15, 2010. The Company has applied for OTS under the said scheme which is under process.

NOTES

i. Gross Block includes Rs 4602 lacs, added on revaluation of the Company's land, buildings, plant and machinery situated at Ranavav in order to reflect a realistic position of the net replacement cost of such assets, on the basis of valuation made by an external valuer, which had resulted in a net increase of Rs 5722.61 lacs, as at June 30, 1993.

ii. Besides the land specified above, the Company holds other leasehold land in respect of which only ground rent is paid.

iii. Buildings excludes cost of shares held in a Co-operative Society included under note 12 of non-current investments

iv. Plant and equipments include cost of service line of Rs 33.20 lacs (previous year Rs 33.20 lacs), ownership of which is vested with Paschim Gujarat Vij Company Limited.

v. Plant and equipments include cost of assets of Rs 206.69 lacs (Previous year Rs 206.69 lacs), acquired under hire purchase agreements.

vi. Vehicles includes equipment and vehicles financed under hire purchase agreements.

vii. During the year ended March 31, 2012, certain assets which were old and not in use, having gross book value of Rs 548.75 lacs (Net book value Rs 57.99 lacs) and shown as assets discarded, were retired and are included under the head deductions / adjustments above.

viii. During the year ended March 31, 2012, while adopting the Revised Schedule VI formats, computer softwares having a gross book value of Rs 137.07 lacs were transferred from plant and equipments, and included under the head deductions / adjustments above and shown as intangible assets.

x. Impairment of assets

The aggregate sum of Rs 8036.81 lacs spent towards Expansion Project Assets, and reflected under Capital Work- in-progress (CWIP) inter alia, includes cost of an imported plant purchased, civil work carried out and pre-operative expenses (including interest capitalised). However, later on, due to several adversities, the project was suspended in 2005. Since the Project is suspended, based on the assessment of the current value (net selling price) of the said Project and civil works under CWIP by Holtec Consulting Private Limited, an impairment loss of Rs 656.69 lacs, as required under Accounting Standard 28 on "Impairment of Assets" was recognised upto March 31, 2011, and reflected as a separate line item. However, there is no further impairment to the same.

1 ACCOUNTING FOR TAXES ON INCOME

In terms of paragraph 26 of Accounting Standard 22 on "Accounting for Taxes on Income", the Company has reviewed its Deferred Tax Asset (DTA) recognised till last year, and has also, in terms of paragraph 15 to 18 of AS 22, examined the issue of recognising DTA arising during the year on account of unabsorbed depreciation and carried forward busi- ness losses.

Based on the expected waivers on one time settlement scheme with the Government of Gujarat (as referred to in Note to the financial statements), and also considering legal advice from an expert, with regard to the recognition of DTA in terms of AS 22, the Company recognised DTA on the basis of prudence only to the extent it will have sufficient future taxable income (by way of reduction in unabsorbed depreciation and / or carried forward business losses) against which the aggregate DTA recognised as on the Balance Sheet date would be realised. The DTA Company has also been advised that DTA in respect of the unabsorbed depreciation to the extent of deferred tax liability for timing dif- ference for depreciation may be recognised. Accordingly, the Company has not recognised any further DTA than what was recognised upto March 31, 2011. DTA of Rs 203.49 lacs (Previous year Rs 765.63 lacs) is reversed due to reduction in DTL for timing difference for depreciation for the like amount. Details of deferred tax is as under:

2 In view of the carried forward losses and unabsorbed depreciation available the Company is not liable to tax as per the normal provisions of the Income-tax Act, 1961. Further, in view of the book losses for the current year, provision for Minimum Alternate Tax under Section 115 JB of the Income-tax Act, 1961, would also not apply. Therefore, no provision is made for current tax. As at As at March 31, 2012 March 31, 2011 Rs in lacs Rs in lacs

3 CONTINGENT LIABILITIES AND COMMITMENTS

i Contingent liabilities: (to the extent not provided for)

a) Estimated amount of contracts remaining to be executed on capital account 106.06 352.11 (net of advances of Rs 481.50 lacs, previous year Rs 318.31 lacs).

b) Matters under disputes / appeals :

Sales tax liabilities 650.16 329.01

Excise duty 174.05 174.05

Service tax 106.16 62.06

Royalty 66.10 66.10

Customs duty 625.55 625.70

Public Premises (Eviction of unauthorised Occupants) Act, 1971 966.05 919.93

Road tax 26.54 26.54

Claims filed by workmen or their union against the Company 354.52 224.80

On account of power supply 440.99 665.26

Other demands and claims against the Company not acknowledged as debts 46.25 47.25

c) The operation of a show cause notice dated August 20, 2002 issued by the Jute Commissioner, stipulating the Company to fulfill the obligation of packing a minimum of 50% of cement in jute bags from March 15, 1995 or pay penalty under Section 3 (1) of the Jute Packing Materials (Compulsory use in Packing Commodities) Act,w 1987 is presently stayed by Calcutta High Court, the amount of which is not ascertainable.

d) The amounts stated are including interest and penalty, to the extent demanded.

ii. Commitments:

The Company has guaranteed a minimum cargo handling of 500,000 M.T on a yearly basis (from April to March each year) at its jetty at porbander, under the license agreement entered with Gujarat Maritime Board on January 17, 1997 for a period of 15 years from the date Jetty became operational i.e. till 2015. The failure of such commitment shall make the Company liable to pay the wharfage charges for the remaining cargo at the prevailing wharfage rates. During the year (as also in the previous year) the Company has handled cargo in excess of the minimum requirement.

4 The accumulated arrears of preference dividend unprovided for, as at the balance sheet date amounted to Rs 1014.52 lacs (Previous year Rs 925.13 lacs), including Rs 89.39 lacs for the year.

5 i The Company is registered as a sick Industrial Company with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). BIFR, vide its order dated February 23, 2012 has formulated and circulated a Draft Rehabilitation Scheme (DRS) for revival of the Company, inter-alia envisaging relief and concessions from various agencies including reduction / waivers of interest (including default interest, penal interest and penalties).

ii Considering the overall growth in the Cement Industry barring any unforeseen circumstances, the management is confident that the continuation of sanctioned Corporate Debt Restructuring (CDR) Scheme and other factors like One Time Settlement proposed with GoG, the Company would be able to generate sufficient returns to make its net worth positive in the future. Accordingly, the accounts of the Company are prepared on a going concern basis.

6 Expenses on maintenance, etc. incurred during the year for a guest house at Mumbai amounting to Rs 5.38 lacs (Previous year Rs 4.11 lacs) have been presently borne by the Company. The guesthouse was under the unauthorised occupation of relatives of the ex-chairman. The Company had filed a suit for recovery of the possession of the guesthouse, which also includes recovery of expenses incurred. The said suit was decided against the Company by declaring legal heirs of the ex-chairman as tenants. The Company has preferred an appeal before the Division Bench against the said order, which is pending.


Mar 31, 2011

As at As at March 31, 2011 March 31, 2010

Rs. In lacs Rs. In lacs

1. Contingent liabilities not provided for:

i. Matters under disputes / appeals :

a. Sales Tax Liabilities 329.01 329.01

b. Excise Duty 174.05 174.05

c. Service Tax 62.06 60.89

d. Royalty 66.10 66.10

e. Customs Duty 631.50 625.47

f. Public Premises (Eviction of unauthorised Occupants) Act, 1971 919.93 1,336.53

g. Road Tax 26.54 26.54

h. Claims filed by workmen or their union against the Company 224.80 211.85

i. On account of Power supply 665.26 440.99

The amounts stated herein above are including interest and penalty, to the extent demanded.

ii. Other demands and claims against the Company not acknowledged as debts 47.25 79.66

2. The operation of a show cause notice dated August 20, 2002 issued by the Jute Commissioner, stipulating the Company to fulfill the obligation of packing a minimum of 50% of cement in jute bags from March 15, 1995 or pay penalty under Section 3 (1) of the Jute Packing Materials (Compulsory use in Packing Commodities) Act, 1987 is presently stayed by Calcutta High Court, amount of which is not ascertainable.

3. i. The Company is registered as a sick Industrial Company with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985. BIFR, on receipt of directions from its Appellate Authority to reconsider its earlier order, vide its record of the proceedings of the hearing held on March 15, 2011, directed -

a. the Company to submit a revised Draft Rehabilitation Scheme (DRS) taking March 31, 2010, as a cut off date.

b. Operating Agency (OA) to submit a fully tied up DRS.

c. Government of Gujarat (GoG) to expedite its decision on the One Time Settlement.

ii. Considering the overall growth in the Cement Industry barring any unforeseen circumstances, the management is confident that considering the continuation of sanctioned Corporate Debt Restructuring (CDR) Scheme and other factors like One Time Settlement proposed with GoG, the Company would be able to generate sufficient returns to make its net worth positive in the future. Accordingly, the accounts of the Company are prepared on a going concern basis.

4. Of the total Preference Share Capital of Rs. 687.60 lacs, the holders of 1,74,557 Optionally Convertible Cumulative Preference Shares (OCCPS) of Rs. 100 each, aggregating to Rs. 174.56 lacs, have surrendered their right in the redemption, including the preference dividend thereon for the benefit of the Company. Based on an advise received, pending the availability of funds / distributable profits for the redemption of capital, the beneficial ownership of these OCCPS has been transferred in favour of a trust of which the Company is the beneficiary. The accounting effect of such waiver (only in respect of these OCCPS) shall be made as and when such shares will be redeemed. For the balance of OCCPS, the right of conversion lapsed on August 22, 2003.

ii. As per the restructuring package, interest is payable by the Company on ballooning basis ranging from 2% p.a. to 12% p.a. resulting into an average rate of interest of 8.5% per annum. For the current year, such interest is payable and provided at 12% per annum. The first year interest @ 2% is been funded as Funded Interest Term Loan (FITL) II. The repayment of outstanding principal is to be made over a period of 10 years including the initial moratorium of first three years. 50% of the unpaid simple interest on all the loans was converted into FITL-I. Both. FITL I and II, do not carry interest and are repayable in the 9th and 10th year.

iii. The Company has an option to prepay all the loans without premium on pro-rata basis to all the lenders.

iv. All the restructured loans including FITL are subject to Recompense Clause as may be approved by CDR.

v. In the event of default in compliance of restructuring package, after the approval of CDR, the lenders have a right to convert 100% of the defaulted amount of the restructured debt into Equity Shares of the Company, at any time during the currency of assistance, at a price to be determined as per SEBI Guidelines.

vi. The Lenders have the right to convert 20% of the loan outstanding (including FITL and WCTL) into Equity Shares of the Company, at a price to be determined as per SEBI Guidelines in one or more occasions after 7 years from the date of approval. As regards zero coupon FITL, remaining outstanding beyond 7 years, such conversion right of lenders would be applicable to the entire amount and the conversion shall be at a price as per SEBI guidelines.

5. The Companys request for One Time Settlement (OTS) of Dues payable by sick units under BIFR as per the Government of Gujarat (GoG) GR BFR/(HPC)/102003/3537/P dated May 12, 2004 was under consideration. The Scheme, inter-alia, provided for waiver of interest, penalties, etc. on Sales Tax, Royalty and Electricity Duty. Based on the directions of GoG, the Company had unconditionally deposited a sum of Rs. 70 Crores with Gujarat State Financial Services Limited towards aforesaid settlement. Pending the settlement, dues payable to GoG ofRs. 170.22 Crores (Previous Period Rs. 161 Crores) have been shown net of such deposit, in Other Liabilities under Schedule 7. The GoG has introduced a new Scheme, in place of its earlier schemes, for relief to the Sick Industrial Units registered with the BIFR vide GR BFR/(HPC)/102009/435690/P dated July 15, 2010. The Company has applied for OTS under the said scheme which is under process.

6. Expenses on maintenance, etc. incurred during the year for a guest house at Mumbai amounting to Rs. 4.11 lacs (Previous year Rs. 5.05 lacs) have been presently borne by the Company. The guesthouse was under the unauthorised occupation of relatives of the ex-chairman. The Company had filed a suit for recovery of the possession of the guesthouse, which also includes recovery of expenses incurred. The said suit was decided against the Company by declaring legal heirs of the ex-chairman as tenants. The Company has preferred an appeal before the Division Bench against the said order, which is pending.

7. i. In view of the carried forward losses and unabsorbed depreciation available under the Income [ax Act. 1961, no provision for income-tax is made.

ii. in view of the book losses for the current year no provision for Minimum Alternate Tax liability under Section 115 JB of the Income-tax Act, 1961 is made.

8. Related Party Disclosures pursuant to Accounting Standard 18:

A. List of related parties:

i. Promoters, Promoter Companies, its Subsidiaries and Associate companies together holding more than 20% of equity capital, having control are:

a. Jagmi Investment Limited

b. Fawn Trading Co. Pvt. Limited

c. Fern Trading Co. Pvt. Limited

d. Willow Trading Co. Pvt. Limited

e. Tejashree Trading Co. Pvt. Limited

f. Pallor Trading Co. Pvt. Limited

g. The Mehta International Limited

h. Mehta Private Limited

i. Sameta Exports Pvt. Limited

j. Clarence Investments Limited

k. Transasia Investment & Trading Limited

I. Hopgood Investments Limited

m. Sampson Limited

n. Villa Trading Co. Pvt. Ltd.

o. Aber Investments Limited

p. Glenn Investments Limited

q. Mr. Mahendra N Mehta

r. Mr. Jay M Mehta

s. Mr. Hemang D Mehta

t. Mrs. Medhaviniben D Mehta

u. Ms. Uma D Mehta

v. Ms. Kamalakshi D Mehta

w. Mrs. Juhi Jay Mehta

x. Ms. Radha M. Mehta

ii. Subsidiary Companies :

a. Agrima Consultants International Limited

b. Pranay Holdings Limited

c. Prachit Holdings Limited

d. Ria Holdings Limited

e. Reeti Investments Limited

f. Concorde Cement (Pvt.) Limited

iii. Key Management Personnel :

a. Mr. Jay M. Mehta - Executive Vice Chairman

b. Mr. M. S. Gilotra - Managing Director

c. Mr. R. K. Poddar - Deputy Managing Director (Resigned in September 2010)

iv. Relatives of Key Management Personnel with whom Transactions have taken place:

a. Mrs. Narinder Kaur - Wife of Mr. M S Gilotra

b. Mr. Amandeep Singh Gilotra - Son of Mr. M S Gilotra

v. Name of a company in which policies are controlled by common Key Management Personnel :

a Gujarat Sidhee Cement Limited

9. i. In terms of paragraph 26 of Accounting Standard 22 on "Accounting for Taxes on Income", the Company has reviewed its Deferred Tax Asset (DTA) recognised till last year, and has also, in terms of paragraph 15 to 18 of AS 22, examined the issue of recognising DTA arising during the year on account of unabsorbed depreciation and carried forward business losses.

10. The aggregate sum of Rs. 8036.81 lacs spent towards Expansion Project Assets, and reflected under Capital Work- in-progress (CWIP) inter alia, includes cost of an imported plant purchased, civil work carried out and pre-operative expenses (including interest capitalised), (Refer Note 8 to this Schedule). However, later on, due to several adversities, the project was suspended in 2005. Since the Project is suspended, based on the assessment of the current value (Net Selling Price) of the said Project and civil works under CWIP by an independent consultant, an impairment loss of Rs. 656.69 lacs, as required under Accounting Standard 28 on "Impairment of Assets" is recognised in the Profit and Loss Account and reflected as a separate line item.

11. Current years figures have been rearranged, regrouped and / or reclassified, wherever necessary. The figures of the current year are for the twelve months, and hence are not comparable with those of previous period, which is for fifteen months.


Mar 31, 2010

1. Durins the period, the Company has settled disputes for claims made in earlier years for rate differences by the then jute bags supplier, based on the report of a mediator. Accordingly, the Company has provided for a consolidated sum of Rs. 650 lacs, in full and final settlement of claims of the principal amount in the civil suit filed in this connection and damages and compensation for unilateral termination / cancellation of contracts. This amount is reflected as Damages and Compensation Claim Settlement under Schedule "9" on Manufacturing and other expenses. The report also provided for withdrawal of all suits against the Company as also by the Company. Since the1 date of the Balance Sheet, these suits have been withdrawn and the aforesaid payment has been made.

2. The operation of a show cause notice dated August 20, 2002 issued by the Jute Commissioner, stipulating the Company to fulfill the obligation of packing a minimum of 50% of cement in jute bags from March 15,1995 or pay penalty under Section 3 (1) of the Jute Packing Materials (Compulsory use in Packing Commodities) Act, 1987 is presently stayed by Calcutta High Court, amount of which is not ascertainable.

3. i. The Company is registered as a sick Industrial Company with the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985. However, BIFR had passed an order declaring the Company as not a sick company. The Company appealed against the said order before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), which has directed BIFR to reconsider its order, which is pending.

ii. Considering the overall growth in the Cement Industry barring any unforeseen circumstances, the management is confident that considering the continuation of sanctioned Corporate Debt Restructuring (CDR) Scheme and other factors, the Company would be able to generate sufficient returns to make its net worth positive in the future. Accordingly, the accounts of the Company are prepared on a going concern basis.

4. Of the total Preference Share Capital of Rs. 687.60 lacs, the holders of 1,74,557 OCCPS of Rs. 100 each, aggregating to Rs. 174.56 lacs, have surrendered their right in the redemption, including the preference dividend thereon for the benefit of the Company. Based on an advise received, pending the availability of funds / distributable profits for the redemption of capital, the beneficial ownership of these OCCPS has been transferred in favour of a trust of which the Company is the beneficiary. The accounting effect of such waiver (only in respect of these OCCPS) shall be made as and when such shares will be redeemed. The right of conversion on these OCCPS lapsed on August 22, 2003.

5. In earlier years, provision for the diminution in value of investments and other doubtful loans and advances, aggregating to Rs. 2,260.98 lacs were adjusted against Revaluation Reserve (RR). Due to such adjustment, to the extent RR was not available in any year, the additional depreciation on the revalued amounts was charged to the Profit and Loss account; accordingly, the aggregate sum of Rs. 875.63 lacs was so charged. During the period ended on December 31, 2008, those provisions of Rs. 2,260.98 lacs were reversed and charged to the Profit and Loss account, and to that extent RR was reinstated. In terms of the Guidance Note on Treatment of Reserve Created on Revaluation of Fixed Assets, issued by the Institute of Chartered Accountants of India, due to such reinstated RR, during the period, the Company has decided to withdraw from RR the said sum of Rs. 875.63 lacs being the additional depreciation on the revalued amounts and adjusted the same against the brought forward debit balance in Profit and Loss account.

6. Financial Restructuring

i. Reliefs and concessions availed from Banks, Financial Institutions and others under the Corporate Debt Restructuring (CDR) Scheme for debts outstanding as on July 1, 2005, being the cut off date, including waiver of principal and interest on One Time Settlement under Series A of the CDR Scheme pursuant to the letter no. BY CDR (AG) /No.1127/2005-06 dated December 26,2005 of the CDR Cel I and subsequent settlement with other lenders and as approved by the Honble High Court of Gujarat vide its order dated December 24, 2007, in the proceedings of the Company u/s 391 and 394 of the Companies Act, 1956 approving the restructuring scheme sanctioned by CDR were duly accounted upto December 31,2008.

ii. As per the restructuring package, the interest is payable by the Company on ballooning basis ranging from 2% p.a. to 12% p.a. resulting into an average rate of interest of 8.5% per annum. For the current period, the interest is payable and provided at 12% per annum. The first year interest @ 2% is to be funded as Funded Interest Term Loan (FITL) II. The repayment of outstanding principal is to be made over a period of 10 years including the initial moratorium of first three years. 50% of the unpaid simple interest on all the loans was converted into FITL-I. Both FITL I and II do not carry interest and are repayable in the 9th and 10th year.

iii. The Company has an option to prepay all the loans without premium on pro-rate basis to all the lenders.

iv. All the restructured loans including FITL are subject to recompense clause as may be approved by CDR.

v In the event of default in compliance of restructuring package, after the approval of CDR, the lenders have a right to convert 100% of the defaulted amount of the restructured debt into Equity Shares of the Company, at any time during the currency of assistance into Equity Shares, at a price to be determined as per SEBI Guidelines.

vi. The Lenders have the right to convert 20% of the loan outstanding (including FITL and WCTL) into Equity Shares of the Company, at a price to be determined as per SEBI Guidelines in one or more occasions after 7 years from the date of approval. As regards zero coupon FITL, remaining outstanding beyond 7 years, such conversion right of lenders would be applicable to the entire amount and the conversion shall be at a price as per SEBI guidelines.

7. The Companys request for One Time Settlement (OTS) of Dues payable by sick units under BIFR as per the Government of Gujarat (GoG) GR BFR/(HPC)/102003/3537/P dated May 12, 2004 was under consideration. The Scheme, inter-alia, provided for waiver of interest, penalties, etc., on Sales Tax, Royalty and Electricity Duty. Based on the directions of GoG, the Company had unconditionally deposited a sum of Rs. 70 Crore with Gujarat State Financial Services Limited towards aforesaid settlement. Pending the settlement, dues payable of Rs. 161 Crore, to GoG have been shown net of such deposit, in Other Liabilities under Schedule 7. Subsequent to the Balance Sheet date, the GoG has introduced a new Scheme, in place of its earlier schemes, for relief to the Sick Industrial Units registered with the BIFR vide GR BFR/(HPC)/102009/435690/P dated July 15, 2010.

8. Expenses on maintenance, etc. incurred during the period for a guest house at Mumbai amounting to Rs. 5.05 lacs (Previous year Rs. 4.07 lacs) have been presently borne by the Company. The guesthouse was under the unauthorised occupation of relatives of the ex-chairman. The Company had filed a suit for recovery of the possession of the guesthouse, which also includes recovery of expenses incurred. The said suit was decided against the Company by declaring legal heirs of the ex-chairman as tenants. The Company has preferred an appeal before the Division Bench against the said order, which is pending.

ii. In the absence of availability of profits as per section 198 and in terms of Schedule XIII of the Companies Act, 1956, the aforesaid remuneration is payable based on Central sovernment approval. The requisite shareholders approval for this remuneration is already received. Applications to the Central Government for approval of the remuneration payable to Mr. R K Poddar, the Deputy Managing Director for the period January 1,2009 to March 31,2010 and to Mr. Jay Mehta, the Executive Vice Chairman and Mr. M S Gilotra, the Managing Director for the period January 1, 2010 to March 31, 2010 have been made for which the approvals are awaited.

9. i. In view of the carried forward losses.and unabsorbed depreciation available under the Income-tax Act, 1961, no provision for income tax is made.

ii. In view of the deduction available of amount of profits of a sick company under Section 115JB2(viii), there is no Minimum Alternate Tax liability under Section 115 JB of the Income tax Act, 1961.

10. Related Party Disclosures under Accounting Standard -18:

i. List of related parties:

Promoters, Promoter Companies, its Subsidiaries and Associate companies holding more than 20% of equity capital:

a. Jagmi Investments Limited

b. Fawn Trading Co. Pvt. Limited

c. Fern Trading Co. Pvt. Limited

d. Willow Trading Co. Pvt. Limited

e. Tejashree Trading Co. Pvt. Limited

f. Pallor Trading Co. Pvt. Limited

g. The Mehta International Limited h. Mehta Private Limited

i. Sameta Exports Pvt. Limited

j. Clarence Investments Limited

k. TransAsia Investment & Trading Limited

I. Sampson Limited

m. Villa Trading Co. Pvt. Ltd.

n. Aber Investments Limited

o. Mr. Mahendra N. Mehta

p.. Mr. Jay M. Mehta

q. Mr. Hemang D Mehta

r. Mrs. Medhaviniben D. Mehta

s. Ms. Uma D. Mehta

t. Ms. Kamalakshi D Mehta

u. Mrs. Juhi Jay Mehta

v. Ms. Radha M. Mehta

ii. Subsidiary Companies:

a. Agrima Consultants International Limited

b. Pranay Holdings Limited

c. Prachit Holdings Limited

d. Ria Holdings Limited

e. Reeti Investments Limited

f. Concorde Cement (Pvt) Limited

iii. Key Management Personnel:

a. Mr. Jay M. Mehta - Executive Vice Chairman

b. Mr. M. S. Gilotra - Managing Director

c. Mr. R. K. Poddar - Deputy Managing Director

iv. Relatives of Key Management Personnel where Transactions have taken place:

a. Mrs. Narinder Kaur - Wife of Mr. M. S. Gilotra

b. Mr. Amandeep Singh Gilotra - Son of Mr. M. S. Gilotra

v. Name of a Company in which policies are controlled by common Key.Management Personnel:

a. Gujarat Sidhee Cement Limited

11. i. In terms of paragraph 26 of Accounting Standard 22 on "Accounting for Taxes on Income", the Company has reviewed its Deferred Tax Asset (DTA) recognised till last year, and has also, in terms of paragraph 15 to 18 of AS 22, examined the issue of recognising DTA arising during the period on account of unabsorbed depreciation and carried forward business losses.

ii. Based on the projections, outlook for the cement industry, continuing revenues generated out of commissioning of Thermal Power Plant and expected waivers on one time settlement scheme with Government of Gujarat and also considering legal advice, from an expert, with regard to the recognition of DTA in terms of AS 22, the Company is virtually certain that it will have sufficient future taxable income against which the aggregate DTA recognised as on the Balance Sheet date would be realised. Further the Company has also been advised that DTA in respect of the unabsorbed depreciation to the extent of deferred tax liability for timing difference for depreciation can be recognised. Even during the current period, there has been a reversal of DTA recognised earlier. Accordingly DTA as detailed herein below has been recognised as at the fifteen months period ended March 31, 2010.

12. Previous periods figures have been rearranged, regrouped and/or reclassified, wherever necessary. The figures of the current period are for the fifteen months, and hence are not comparable with those of previous period, which is for eighteen months.



 
Subscribe now to get personal finance updates in your inbox!