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Notes to Accounts of Shree Cements Ltd.

Jun 30, 2015

1.The Company has only one class of equity shares having a par value of '10 per share. Each holder of equity share is entitled to one vote per share.

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

3. The Board of Directors, in its meetings held on 25th August, 2014 declared interim dividend of Rs. 10 per equity share. The Final Dividend of Rs. 14 per equity share proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

4. As no fresh issue of shares or reduction in capital was made during the current year as well as during the previous year, hence there is no change in the opening and closing capital. Accordingly, reconciliation of share capital has not been given.

5. The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the annual listing fees has been paid for the year.

6. There are disputes raised by various statutory authorities related to taxes, legal and other matters, which are under various stages of litigation. As a measure of prudence, the management has created a special reserve to meet any eventuality that may arise in the future.

7. Demand loans and suppliers credit from banks are secured by hypothecation of inventories of stock-in-trade, stores & spares, book- debts and all other current assets of the Company on First charge basis and on whole of movable fixed assets of the Company on second charge basis and also secured by joint equitable mortgage on all the immovable assets of the Company on second charge basis.

8. Bank Overdraft is secured against pledge of Fixed Deposits and payable on demand. (Refer Note 16)

9. Trade Payables are based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the said Act.

10.Other Payables include the liability related to Employees, Rebate and Discount to customers etc.

11. Deposits of Rs. 19.00 crore (Previous year Rs. 17.02 crore) are pledged with banks against overdraft facilities.

12. Rs. 53.19 crore (Previous year Rs. 49.75 crore), given as security to Government department and others.

13. Rs. 30.00 crore are earmarked against debentures due for redemption in next 12 months as per provisions of Companies Act, 2013.

14. CONTINGENT LIABILITIES (CLAIMS/DEMANDS NOT ACKNOWLEDGED AS DEBT):

a) Custom duty ?56.56 crore (Previous year ?56.56 crore).

b) The Competition Commission of India (CCI) has, vide its order dated 30th July, 2012, imposed penalty of Rs. 397.51 crore on the Company, which has been challenged before the Competition Appellate Tribunal (COMPAT). COMPAT has granted stay on CCI Order on the condition that the Company deposits 10% of the penalty amounting to ?39.75 Crore. The same stands deposited in the form of bank fixed deposit with lien in favour of COMPAT. The fixed deposit has been renewed periodically on maturity along with interest of ?3.44 crore.

15. Estimated amount of contracts remaining to be executed on capital account (net of advances) ?249.60 crore (Previous Year ?528.26 crore).

16. Capital Work-in-Progress includes pre-operative expenses of ?36.87 crore (Previous Year ?69.08 crore) which includes depreciation of ?2.46 crore (Previous Year ?8.93 crore) on assets during construction period.

17. Excise duty on sales amounting to ?723.27 crore (Previous year ?657.00 crore) has been reduced from sales in the Statement of Profit and Loss and excise duty on increase / decrease in stock amounting to ?5.20 crore (Previous year ?2.54 crore) has been considered as other expenses.

18. Defined Benefit Plans:

(A) Gratuity - The Company has defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India.

a) The estimates of future salary increases have been considered in actuarial valuation after taking into consideration the impact of inflation, seniority, promotion and other relevant factors such as supply and demand situation in the employment market.

b) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, which is used for calculating returns over the entire life of the related obligation. The Gratuity Scheme is invested in group Gratuity-Cum-Life assurance cash accumulation policy offered by Life Insurance Corporation of India.

19. Provident fund managed by a trust set up by the Company:

In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumption provided below, there is no short fall as at 30.6.2015.

20. RELATED PARTY DISCLOSURE (AS PER AS-18 "RELATED PARTY DISCLOSURES" SPECIFIED UNDER SECTION 133 OF THE COMPANIES ACT, 2013):

Relationships:

(a) Parties where control exists:

(i) Shree Global Pte. Ltd. Subsidiary Company

(ii) Katni Industries Private Ltd. Subsidiary Company (up to 15.03.15)

(b) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence with whom there were transactions during the year:

(i) The Kamla Company Limited

(ii) Shree Capital Services Ltd.

(iii) Aqua Infra Project Limited

(iv) Asish Creations Pvt. Ltd.

(v) Alfa Buildhome Pvt. Ltd.

(vi) Rajasthan Forum

(vii) The Bengal

(viii) Sant Parmanand Hospital

21. RELATED PARTY DISCLOSURE (contd...)

(c) Key Management Personnel:

(i) Shri H. M. Bangur Managing Director

(ii) Shri Prashant Bangur Whole Time Director

(iii) Shri Mahendra Singhi Executive Director (upto 6.12.2013)

(d) Relatives to Key Management Personnel:

(i) Shri B. G. Bangur Father of Shri H. M. Bangur

22. OPERATING LEASE:

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are cancellable and are renewable by mutual consent on mutually agreed terms.

23. During the year, the Company has acquired 1.50 MTPA cement grinding unit of Jaiprakash Associates Limited situated at Panipat in the State of Haryana on going concern basis with effect from 27th April, 2015 for an aggregate consideration of Rs. 358.22 crore which, based on expert valuer's report, has been apportioned as under-

24. Previous year figures have been regrouped and rearranged wherever necessary.

25. Figures less than 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lac.


Jun 30, 2014

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

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

1.3 The Board of Directors, in its meetings held on 27th January, 2014 and 25th August, 2014 declared interim dividend of Rs.10 and Rs.12 per equity share respectively.

1.4 As no fresh issue of shares or reduction in capital was made during the current year as well as during the previous year, hence there is no change in the opening and closing capital. Accordingly, reconciliation of share capital has not been given.

1.5 The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the annual listing fees has been paid for the year.

1.6 Demands raised by various statutory authorities related to taxes, legal and other matters, which are under various stages of litigation, are reflected under contingent liabilities. As a measure of prudence, the management has created a special reserve to meet any eventuality that may arise in the future with respect to these contingent liabilities.

1.7 Demand loans and suppliers credit from banks are secured by hypothecation of inventories of stock-in-trade, stores & spares, book-debts and all other current assets of the Company on First charge basis and on whole of movable fixed assets of the Company on second charge basis and also secured by joint equitable mortgage on all the immovable assets of the Company on second charge basis.

1.8 Bank Overdraft is secured against pledge of Fixed Deposits and payable on demand. (Refer Note 16)

1.9 Trade Payables are based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the said Act. This has been relied upon by the Auditors.

1.10 Other Payables include the liability related to Employees, Rebate and Discount to customers etc.

1.11 NABARD Bhavishya Nirman Bonds and NHB Zero Coupon Bonds are held as Capital Assets under Section 2(48) of the Income Tax Act, 1961.

1.12 Deposits ofRs. 17.02 crore (Previous year Rs. 15.22 crore) are pledged with banks against overdraft facilities.

1.13 Rs. 51.73 crore (Previous year Rs. 11.73 crore), given as security to Government department and others.

2 Contingent liabilities (claims/demands not acknowledged as debt):

a. Custom duty Rs. 56.56 crore (Previous year Rs. 56.56 crore).

b. The Competition Commission of India (CCI) has, vide its order dated 30th July, 2012, imposed penalty of Rs. 397.51 Crore on the Company, which has been challenged before the Competition Appellate Tribunal (COMPAT).COMPAThas granted stay on CCI Order on the condition that the Company deposits 10% of the penalty amounting to Rs. 39.75 Crore. The same stands deposited in the form of bank fixed deposit with lien in favour of COM PAT.

3 Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 528.26 crore (Previous Year Rs. 772.06 crore).

4 Other Exceptional items include the following:

a. Write off of Pre-operative expenses incurred on certain capital projects amounting to Rs. 11.24 Crore.

b. Provision towards Statutory Liabilities amounting to Rs. 29.62 crore on account of disallowances by assessing authorities though appeal(s) have been filed in these matters.

c. Provision towards tax exemption availed as per relevant notifications amounting to Rs. 32.87 crore for which assessing authorities have taken contrary stand. Company has however, filed appeals in these matters.

5 Capital Work-in-Progress includes pre-operative expenses ofRs. 69.08 crore (Previous Year Rs. 29.91 crore) which includes depreciation of Rs. 8.93 crore (Previous Year Rs. 1.13 crore) on assets during construction period.

6 Excise duty on sales amounting to Rs. 657.00 crore (Previous year Rs. 578.83 crore) has been reduced from sales in the Statement of Profit and Loss and excise duty on increase / decrease in stock amounting to Rs. 2.54 crore [Previous year Rs. (0.08) crore] has been considered as other expenses.

7 Employee Benefits:

(ii) Defined Benefit Plans:

(A) Gratuity - The Company has defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India.

8 Related Party Disclosure :

Relationships:

(a) Parties where control exists:

(i) Shree Global Pte. Ltd. Subsidiary Company

(ii) Katni Industries Private Ltd. Subsidiary Company

(b) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence:

(i) The Kamla Company Limited

(ii) Shree Capital Services Ltd.

(iii) Aqua Infra Projects Limited

(iv) Asish Creations Pvt. Ltd.

(v) Alfa Buildhome Pvt. Ltd.

(vi) Rajasthan Forum

(vii) The Bengal

(c) Key Management Personnel:

(i) Shri H.M. Bangur Managing Director

(ii) Shri Prashant Bangur Wholetime Director (From 23.8.2012)

(iii) Shri Mahendra Singhi Executive Director (upto 6.12.2013)

(d) Relatives to Key Management Personnel:

(i) Shri B.G. Bangur Father of Shri H.M. Bangur

(ii) Shri Prashant Bangur Son of Shri H.M. Bangur

9 Operating lease:

The Company has taken various residential premises, office premises and warehouses under operating lease agreements. These are cancellable and are renewable by mutual consent on mutually agreed terms.

10 Previous year figures have been regrouped and rearranged wherever necessary.

11 Figures less than 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lac.


Jun 30, 2013

1 Related Party Disclosure :

Relationships:

(a) Parties where control exists:

(i) Raipur Cement Company Private Limited Subsidiary Company (From 4.5.2012 to 21.6.2012)

(ii) Shree Global Pte. Ltd. Subsidiary Company (w.e.f 8.10.2012)

(iii) Katni Industries Private Ltd. Subsidiary Company (w.e.f 11.9.2012)

(b) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence :

(i) The Kamla Company Limited

(ii) Shree Capital Services Ltd.

(iii) Aqua Infra Project Limited

(iv) Shri Venkatesh Ayurvedic Aushadhalaya

(v) Asish Creations Pvt. Ltd.

(vi) Alpha Buildhome Pvt. Ltd.

(vii) Rajasthan forum

(c) Key Management Personnel :

(i) Shri B.G. Bangur Executive Chairman (upto 23.01.2012)

(ii) Shri H.M. Bangur Managing Director

(iii) Shri Mahendra Singhi Executive Director

(iv) Shri Prashant Bangur Wholetime Director (From 23.08.2012)

(d) Relatives to Key Management Personnel :

(i) Shri B.G. Bangur Father of Shri H.M. Bangur

(iI) Shri Prashant Bangur Son of Shri H.M. Bangur

2 Purchases of stock-in-trade represent cement.

3 Previous year figures have been regrouped and rearranged wherever necessary.

4 The figures of current year are for twelve months whereas that of previous period are for fifteen months.

5 Figures less than 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest Lac.


Jun 30, 2012

1.1 The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share.

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

1.3 The Board of Directors, in its meetings held on 23rd January, 2012 and 15th May, 2012 declared two interim dividend of Rs. 6 each per equity share. The Final dividend proposed by Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting.

1.4 As no fresh issue of shares or reduction in capital was made during the current year as well as during the previous year, hence there is no change in the opening and closing capital. Accordingly, reconciliation of capital has not been given.

1.5 The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the annual listing fee has been paid for the year.

2.1 Demand loans from banks are secured by hypothecation of inventories of stock-in-trade, stores & spares, book-debts and other current assets of the Company on First charge basis and on whole of movable fixed assets of the Company on second charge basis and also secured by joint equitable mortgage on all the immovable assets of the company on second charge basis.

3.1 Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the said Act. This has been relied upon by the Auditors.

3.2 Other Payables includes the liability of employees and rebates to customers etc.

4. The Competition Commission of India (CCI) has, vide its order dated 30.07.2012, alleged contravention of provisions of the Competition Act, 2002 and imposed penalty of Rs. 397.51 crore on the Company. The company is contesting the same & accordingly, no provision has been made as on 30.06.2012.

5. Hitherto the revenue from Traded Power and corresponding purchase cost of power trading activities was recorded as sales and purchase separately. For better presentation, Company has now shown these sale and purchase with their net result as revenue from power trading operation. Accordingly, the corresponding numbers of previous year have been regrouped and rearranged. There is no effect on the profits of the Company.

6. Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs. 220.35 crore (Previous Year Rs. 198.18 crore).

7. Capital Work-in-Progress includes pre-operative expenses of Rs. 17.60 crore (Previous Year Rs. 18.31 crore) which includes depreciation of Rs. 0.36 crore (Previous Year Rs. 0.46 crore) on assets during construction period.

8. The grants / subsidies given by government for promoting industrialization, being capital in nature, have been credited to capital reserve in the current accounting period (Refer accounting policy on government grants). Consequently, the profit for the period ended 30th June, 2012 is lower by Rs. 210.23 crore.

9. Till the year ended 31st March 2011, Leasehold Land was shown at cost. During the current financial year, the company has changed amortization policy to provide that Leasehold Land not containing mineral reserve is amortized over the period of lease. (Refer Note No. 1 - XIII (b)).

It has been decided to give retrospective effect to this change. Accordingly amortization of Rs. 0.40 crore has been provided during the period. This change will give a systematic basis of amortization charge, representative of the time pattern in which the economic benefits flow to the company. Current period profit is therefore lower by Rs. 0.40 crore, due to this change.

10. Till the year ended 31st March 2011, Mineral Bearing Land was being shown at cost. During the current financial year the company has changed the amortization policy to provide that "Mineral Reserve" forming part of Land is valued at cost and is amortized over its estimated commercial life based on the unit of production method. (Refer Note No. 1 - XIII (c)).

It has been decided to give retrospective effect to this change also. Accordingly an amortization of Rs. 2.24 crore has been provided during the period. This change will give a systematic basis of amortization charge, representative of pattern of utilization of minerals in which the economic benefits flow to the company. Current period profit is therefore lower by Rs. 2.24 crore due to this change.

11. Excise duty on sales amounting to Rs. 679.25 crore (Previous year Rs. 425.92 crore) has been reduced from sales in statement of profit and loss and excise duty on increase / decrease in stock amounting to Rs. (1.07) crore (Previous year Rs. 1.21 crore) has been considered as other expenses.

12. Previous year figures have been regrouped and rearranged wherever necessary as also to bring the same in conformity with the current year classification under Revised Schedule VI.

13. In view of extended financial year, the figures for the current year are for fifteen months period.

14. Figures less than 50,000 have been shown at actual, wherever statutorily required to be disclosed, as the figures have been rounded off to the nearest lac.


Mar 31, 2011

1. Contingent liabilities not provided for : Counter-guarantees in favour of banks: Rs. 8103.88 Lac (Previous Year Rs. 15595.50 Lac).

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs 19817.77 Lac (Previous Year Rs. 69313.03 Lac).

3. Installments of Secured Loans falling due for repayment in next 12 months amounting to Rs. 19301.43 Lac (Previous Year Rs. 5668.11 Lac).

4. Capital Work-in-Progress includes:

a) Rs. 29880.88 Lac (Previous Year Rs. 29824.66 Lac) paid towards capital advances.

b) Pre-operative expenses of Rs. 1831.33 Lac (Previous Year Rs. 1968.39 Lac) which includes depreciation of Rs 45.87 Lac (Previous Year Rs. 140 Lac) on assets during construction period.

5. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006” and there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the said Act. This has been relied upon by the Auditors.

(c) The estimates of future salary increases have been considered in actuarial valuation after taking into consideration the impact of inflation, seniority, promotion and other relevant factors such as supply and demand situation in the employment market.

(d) In terms of the Guidance Note on implementing the Accounting Standard 15 (revised 2005), issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, the provident fund set up by the company is treated as defined benefit plan since the Company has to meet the interest shortfall, if any. However, as at the end of the year no shortfall remains unprovided for. As advised by an independent actuary, it is not feasible to actuarially value the liability considering that the rate of interest as notified by the Government can vary annually. Further the pattern of investments for investible funds is as prescribed by the Government.

Accordingly other related disclosures in respect of provident fund have not been made.

(e) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligations. The Gratuity Scheme is invested in a Group Gratuity-cum-Life Assurance cash accumulation policy offered by Life Insurance Corporation (LIC) of India. The information on the allocation of the fund into major asset classes and expected return on each major class are not readily available. We understand that LICs overall portfolio of assets is well diversified and the long term return on the policy is expected to be higher than the rate of return on Central Government Bonds. Historically too, the returns declared by LIC on such policies have been higher than Government Bond yields.

(g) Amount recognized as an expense in respect of leave encashment and compensated absences is Rs. 617.25 Lac (Previous Year Rs. 484.71 Lac).

6. Revenue expenditure on Research and Development amounting to Rs. 830.97 Lac (Previous Year Rs. 638.70 Lac) is included under relevant heads of expenditure. Capital expenditure relating to Research and Development amounting to Rs. 123.07 Lac (previous year Rs. 1787.83 Lac) has been included in fixed assets.

7. Balance with non scheduled bank represents balance in current account with Sir M. Vishweshwaraiah Sahakar Bank Niyamitha, Gulberga. Maximum balance outstanding during the year Rs. 104.78 Lac (previous year Rs. 247.36 Lac). None of the directors or their relatives are interested in the bank.

8. Segment Reporting:

The Company has two primary business segments, namely Cement and Power. There is no reportable secondary segment as the Company operates only in one geographical area.

9. Related Party Disclosure (AS-18):

Relationships:

(a) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence

(i) The Kamla Company Limited

(ii) Aqua Infra Project Limited

(iii) Shri Venkatesh Ayurvedic Aushadhalaya

(iv) Asish Creations Pvt. Ltd.

(v) Alpha Buildhome Pvt. Ltd.

(b) Key Management Personnel

(i) Shri B.G. Bangur Executive Chairman

(ii) Shri H.M. Bangur Managing Director

(iii) Shri M.K. Singhi Executive Director

(c) Relatives to key Management Personnel (i) Shri Prashant Bangur

10. The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the

annual listing fee has been paid for the year

11. Information pursuant to provisions of paragraphs 3, 4-C and 4-D of Part-II of Schedule VI to the Companies Act, 1956.

12. The figures of previous year have been regrouped and rearranged wherever necessary.


Mar 31, 2010

1. Contingent liabilities not provided for :

Counter.guarantees in favour of banks: Rs. 15595.50 Lac (Previous Year Rs.10500.88 Lac).

2. Estimated amount of contracts remaining to be executed on capital account (net of advances) Rs 69313.03 Lac (Previous Year Rs.43800.21 Lac).

3. Fixed Assets include Rs.9864.58 lac (Previous Year Rs.5563.38 lac) paid towards cost of land in respect of which conveyance deeds are pending execution in favour of the Company.

4. Installments of Secured Loans falling due for repayment in next 12 months amounting to Rs.5668.11 Lac (Previous Year Rs.13184.01 Lac).

5. Capital Work.in.Progress includes Pre.operative expenses of Rs. 1968.39 lac (Previous Year Rs.1878.37 Lac) which includes depreciation of Rs 140 lac on assets during construction period (Previous Year Rs. 47.68 Lac).

6. The revision in the entitlement of various subsidies provided under Rajasthan Investment promotion Scheme, 2003 with retrospective effect has been challenged by the Company in the

Honble High Court of Rajasthan.Consequently, the subsidy entitlement certificates for interest of Rs.3407.69 lac and wages of Rs.916.13 lac for the year has not been issued to the Company by the Government authorities.The Company, as a matter of conservative accounting policy, has not recognized said amount in the current year and accordingly, employee expenses and interest and financial expenses are higher as compared to last year.

7. The Company has claimed certain tax concessions/exemptions as per the relevant notifications issued by the Government authorities amounting to Rs.4367.62 lac. However, the assessing authorities have taken contrary stand for these claims for which appeals have been filed.The Company, as a matter of conservative accounting policy, has recognized said amount in books as exceptional item.

8. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and there are no delays in payments to Micro, Small and Medium Enterprises as required to be disclosed under the said Act.This has been relied upon by the Auditors.

9. Unhedged Foreign Currency Exposure:

(c) The estimates of future salary increases have been considered in actuarial valuation after taking into consideration the impact of inflation, seniority, promotion and other relevant factors such as supply and demand situation in the employment market.

(d) In terms of the Guidance Note on implementing the Accounting Standard 15 (revised 2005), issued by the Accounting Standard Board of the Institute of Chartered Accountants of India, the provident fund set up by the company is treated as defined benefit plan since the Company has to meet the interest shortfall, if any. However, as at the end of the year no shortfall remains unprovided for.As advised by an independent actuary, it is not feasible to actuarially value the liability considering that the rate of interest as notified by the Government can vary annually.Further the pattern of investments for investible funds is as prescribed by the Government. Accordingly other related disclosures in respect of provident fund have not been made.

(e) Basis used to determine expected rate of return on assets:

The expected return on plan assets is based on market expectation, at the beginning of the period, for returns over the entire life of the related obligations.The Gratuity Scheme is invested in a Group Gratuity.cum.Life Assurance cash accumulation policy offered by Life Insurance Corporation (LIC) of India.The information on the allocation of the fund into major asset classes and expected return on each major class are not readily available.We understand that LICs overall portfolio of assets is well diversified and the long term return on the policy is expected to be higher than the rate of return on Central Government Bonds.Historically too, the returns declared by LIC on such policies have been higher than Government Bond yields.

(f) Amount for the current and previous two years are as follows:

(g) Amount recognized as an expense in respect of leave encashment and compensated absences is Rs. 484.71 lac (Previous Year Rs.370.28 Lac)

10. Revenue expenditure on Research and Development amounting to Rs. 638.70 Lac (Previous Year Rs.864.18 Lac) is included under relevant heads of expenditure.Capital expenditure relating to Research and Development amounting to Rs.1787.83 Lac (previous year Rs.12.34 Lac), which includes expenditure incurred on pilot project of Synthetic gypsum, has been included in fixed assets.

11. Balance with non scheduled bank represents balance in current account with Sir M Vishweshwaraiah Sahakar Bank Niyamitha, Gulberga. Maximum balance outstanding during the year Rs.247.36 lac (previous year Rs.176.84 lac).None of the directors or their relatives are interested in the bank.

12. Segment Reporting :

The Company has two primary business segments, namely Cement and Power. There is no reportable secondary segment as the Company operates only in one geographical area.

13. Related Party Disclosure (AS.18):

Relationships:

(a) Enterprises over which Key Management Personnel (KMP) are able to exercise significant influence (i) The Kamla Company Limited

(ii) Ramgopal Holding Private Limited

(iii) Aqua Infra Project Limited

(iv) Shri Venkatesh Ayurvedic Aushadhalaya

(b) Key Management Personnel

(i) Shri B.G.Bangur Executive Chairman

(ii) Shri H.M.Bangur Managing Director

(iii) Shri M.K.Singhi Executive Director

(c) Relatives to key Management Personnel (i) Shri Prashant Bangur

14. Movement of Provisions during the year as required under Accounting Standard .29 Mines Reclamation Expenses:

15. Payment made to Auditors :

16. (a) The Break.up of remuneration to the Wholetime Directors is as under:

(b) Computation of Net Profit in accordance with Section 198 read with Section 349 of the Companies Act, 1956:

17. The Equity Shares of the Company are listed at Bombay Stock Exchange Limited and National Stock Exchange of India Limited and the annual listing fee has been paid for the year.

18. Information pursuant to provisions of paragraphs 3, 4.C and 4.D of Part.II of Schedule VI to the Companies Act, 1956. (A) Licensed, Installed Capacity and Production:

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