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Notes to Accounts of Ashapura Minechem Ltd.

Mar 31, 2023

C. Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in foreign currency exchange rates, interest rates, credit, liquidity and other market changes.

The Company has several balances in foreign currency and consequently, the Company is exposed to foreign exchange risk. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies, to the extent possible.

a) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings, wherever possible.

b) Exposure in foreign currency:

The Company deals with foreign currency loan given, trade payables, trade receivables etc. and is therefore exposed to foreign exchange risk associated with exchange rate movement.

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through its sales in overseas and purchases from overseas suppliers in various foreign currencies.

Note 32

Capital management

For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.

The Company''s capital management objective is to maximise the total shareholder returns by optimising cost of capital through flexible capital structure that supports growth. Further, the Company attempts to ensure optimal credit risk profile to maintain/enhance credit rating.

The Company determines the amount of capital required on the basis of annual operating plan and long-term strategic plans. The funding requirements are met through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Note 34 Contingent Liabilities			( Indian '' in lacs )
No.	Particulars	31st March 2023	31st March 2022
1	Guarantees to banks against credit facilities extended to subsidiary companies	3,135.00	4,181.15
2	Guarantees to banks and others against credit facilities extended to associate/joint venture companies	3,700.00	3,200.00
3	Guarantees given by the Company to various Government Authorities	4,252.40	4,246.63
4	In respect of Taxation Matters	2,701.63	2,701.63
5	In respect of disputed VAT and service tax matters	-	278.37
6	Shipping claims against the Company not ackowledged as debt	6,194.17	6,038.01
7	Other claims against the Company not acknowledged as debt	4,812.51	4,553.85
8	In respect of other matters	18.68	18.68
	Total...	. 24,814.39	25,218.32

The title deeds of all immovable properties (other than properties where the Company is the lessee and the lease agreements are duly b. executed in favour of the lessee), disclosed in the financial statements included under property, plant and equipment are held in the name of the Company as at the balance sheet date.

The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

d. The Company has not traded or invested in crypto currency or virtual currency during the financial year.

The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved.

f. Based on the information furnished to us, the Company does not have any transactions with struck-off companies.

g. The Company has used the borrowings from financial institutions and others for the specific purpose for which it was obtained.

h The Company has compiled with the number of layers prescribed under clause (87) of section 2 of the Companies Act 2013 read with

Companies (Restrictions on number of Layers) Rules, 2017.

The company has not advanced or loaned or invested funds to any other person(s) or entity(is), including foreign entities(intermediaries), with the understanding that the intermediary shall;

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries), or

ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company has not received any funds from any person(s) or entity(ies), including foreign entities (Funding Party) with the

^j. understanding (whether recorded in writing or otherwise) that the Company shall;

i. Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate beneficiaries), or

ii. Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

The Company does not have any transactions which is not recorded in the books of accounts but has been surrendered or disclosed as

k. income during the year in the tax assessments under the Income Tax Act, 1961 ( such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

l The Company has not been sanctioned working capital limits in excess of '' 5 crore, in aggregate, at any points of time during the year, from banks or financial institutions on the basis of security of current assets.

The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond the statutory period.

39. Pursuant to the approval of the members, the Company has, on 14th February, 2023 issued 40,40,000 equity share warrants on preferential basis to the promoters @ ''95.96 per warrant. Each warrant will be converted into one equity share of the Company within a period of eighteen months from the date of the issue.

41. Balances for trade payables, trade receivables, for loans and advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

42. Certain immovable and movable assets of the Company at Kutch, Gujarat as well as Thiruvananthapuram, Kerala, are under charge by way of mortgage/hypothecation with Bank of India pending settlement of one claim.

43. All the amounts have been stated in Indian '' in lacs, unless otherwise stated.

44. Previous year''s figures has regrouped and rearranged, wherever necessary.

Mar 31, 2018

COMPANY INFORMATION

Ashapura Minechem Limited (the ''Company'') is a public limited company domiciled in India and incorporated on 19^th February, 1982 under the provisions of the Companies Act applicable in India. The Company is engaged in the mining, manufacturing and trading of various minerals and its derivative products. The registered office of the Company is located at Jeevan Udyog Building, 3^rd Floor, D N Road, Fort, Mumbai - 400 001. The equity shares of the Company are listed on Bombay Stock Exchange (BSE) as well as National Stock Exchange (NSE).

The standalone financial statements (''the financial statements") were authorized for issue in accordance with the resolution of the Board of Directors on 28^th May, 2018.

1 BASIS OF PREPARATION, MEASUREMENT AND SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of preparation and measurement:

These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 and the Companies (Indian Accounting Standards) Rules, 2015, as applicable.

The financial statements for the year ended 31^st March, 2018 are the first financial statements prepared by the Company under Ind AS. For all periods up to and including the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as ''Previous GAAP'') used for its statutory reporting requirement in India immediately before adopting Ind AS. The financial statements for the year ended 31^st March, 2017 and the opening Balance Sheet as at 1^st April, 2016 have been restated in accordance with Ind AS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Company''s balance sheet, statement of profit and loss and statement of cash flows are provided in note 1.3 d.

The financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1^st April, 2016 being the date of transition to Ind AS. All assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. The Company considers 12 month as normal operating cycle.

The Company''s financial statements are reported in Indian Rupees, which is also the company''s functional currency, and all values are rounded to the nearest lakh except otherwise indicated.

Notes to reconciliation of equity and statement of profit and loss

1. Compensation for premises rights is fully amortized in the opening balance sheet.

2. Under Ind AS, investments in certain equity instruments (other than of subsidiaries, associates and joint ventures) are carried at fair value through OCI as compared to being carried at cost under previous GAAP. The adjustment represents the difference in the fair value and cost of investments in equity instruments.

3. Under Ind AS, security deposits are valued at present value as compared to being carried at cost in the previous GAAP. This adjustment includes the difference between the book value and the present value of an interest free security deposits or security deposits below market rate given to subsidiary companies. The interest on the present value of this loan is recognized over the tenure of the loan using the EIR method.

4. The Company recognizes the cost related to its post employment defined benefit plan on an actuarial basis both under previous GAAP and Ind AS. Under previous GAAP entire cost including actuarial gains and losses and return on planned assets are charged to profit or loss. Under Ind AS, the actuarial gains and losses and returns on planned assets are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through other comprehensive income.

5. There are no material adjustments of transition to the statement of cash flows to conform to Ind AS presentation for the year ended 31st March, 2017.

ii) Contractual obligations

There are no contractual obligations to purchase, construct or develop investment property.

iii) Fair Value

The fair value of the Company''s investment properties at the end of the year have been determined on the basis of valuation carried out by the management based on the transacted prices near the end of the year in the location and category of the properties being valued. The fair value measurement for all of the investment properties has been categoried as a level 2 fair value based on the inputs to the valuation techniques used. The total fair value of investment Properties is Rs. 3141.61 Lakhs ( 31st March, 2017 : Rs. 3198.97 Lakhs, 1st April, 2016 : Rs.853.83 Lakhs).

Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a face value of Rs.2 each ranking pari pasu in all respect including voting rights and entitlement to dividend. Each holder of equity shares is entitled to one vote per share. Dividend proposed by the board of directors and approved by the shareholders in the annual general meeting is paid to the shareholders.

Capital redemption reserve: The Company has created capital redemption reserve from distributable profit upon redemption of preference shares in the past years.

Securities premium account: Amount received in excess of face value of the equity shares is recognized in securities premium account. The reserve is utilised in accordance with the provisions of the Companies Act.

Retained earnings: Retained earnings are the profits/loss of the Company till date, less transfers to general reserve, dividends or other distributions paid to shareholders.

Net gain/(loss) on fair value of defined benefit plans: The Company has recognised remeasurement gains/(loss) on defined benefit plans in OCI. These changes are accumalated within the OCI reserve within other equity. The Company transfers amount from this reserve to retained earning when the relevant obligations are derecognized.

Gain/(loss) on investment in equity instruments: The Company has elected to recognise changes in the fair value of certain investments in equity securities in OCI. These changes are accumalated within the FVTOCI equity investment reserve within equity. The Company transfers amount from this reserve to retained earning when the relevant equity securities are derecognized.

Note: Term loans and working capital finance from banks and others are against hypothecation of plant & equipment and vehicles, inventories and book debts and further secured by equitable mortgage of certain immovable assets of the company and also against personal gurantees of some of the directors.

Working capital finance from banks and financial institution are against hypothication of inventories, book debts and discounting of export bills and further secured by equitable mortgage of fixed assets of the company.

** Amount of default: Current borrowings aggregating to Rs.2,540.00 have been classified by the respective lenders as non-standard.

ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair value are disclosed in the financial statements. To provide an indication about the realiasbility of the inputs used in determining fair value, the Company has classified its financial instruments into the following three levels prescribed under Ind AS -113 "Fair Value Measurements".

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in active markets. Quotes would includes rates/values/ valuation references published periodically by stock exchanges on basis of which trades take place in a linked or unlinked active market. This includes traded bonds and mutual funds, as the case may be.

Level 2: The fair value of financial instruments that are not traded in an active market are determined using valuation techniques which maximise the use of observable market data (either directly as prices or indirectly derived from prices) and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contigent consideration and indetermination asser included in level 3.

The Board provides guiding principles for overall risk management as well as policies covering specific areas such as foreign exchange risk, credit risk and investment of surplus liquidity.

A. Credit risk

Credit risk refers to the risk of a counter party default on its contractual obligation resulting into a financial loss to the Company. The maximum exposure of the financial assets represents trade receivables, work in progress and receivables from group companies and others.

In respect of trade receivables, the Company uses a provision matrix to compute the expected credit loss allowances for trade recivables in accordance with the excepcted credit loss (ECL) policy of the Company. The Company regulary reviews trade receivables and necessary provisions, whenever required, are made in the financial statements.

B. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet its commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial assets quickly at close to its fair value.

The Company, to the best extent possible, attempts to manage liquidity risk by maintaining adequate liquid assets and banking facilities by continuously monitoring forcast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

C. Market risk

a) Interest rate risk

d) Foreign currency sensitivity

The Company is mainly exposed to changes in USD and EURO. The below table demostrates the sentivity to a 5% increase or decrease in the USD and EURO against INR, with all other variables held constant. The sensitivity analysis is prepared on the the net unhedged exposure of the Company as at reporting date. 5% reprents management''s assessment of reasonably possible change in foreign exchange rate.

Note 2 Capital management

However, due to the business losses for the past few years, the net worth of the company remains negative and in view of the fact that the current liabilities of the Company are much higher than the current assets as on the balance sheet date, the Company may find it difficult to meet its financial obligations unless long-term funds are generated by the Company.

Note 3 Disclosure as required by the ind AS 17, "Leases" as specified in the Companies (Accounting Standards) Rules 2015 (as amended) are given below :

a) The aggregate lease rentals payable are charged to the statement of profit & loss as rent in note no. 27.

b) The Company has taken properties on operating lease. The lease rentals are payable by the Company on a monthly or quarterly basis.

c) The Leasing arrangements, which are non-cancellable over the period of the arrangements, the disclosures in respect of the same:

4. One shipping company by virtue of arbitration award passed in its favour under section 34 of the Arbitrations & Conciliation Act, 1996 arising out of the Contract of Affreightment, had raised claims aggregating to US $ 65.55 millions (Rs. 42,738.27 Lakhs) against the Company. Since the award was heavily exaggerated, the Company had challenged the said arbitration awards before the Hon. Supreme Court of India. The Hon. Supreme Court of India vide order dated 13th May, 2016 held that the said awards are enforceable.

As a result, the Company is suitably defending a decree execution petition filed before Honourable Bombay High Court. The Company is also in the process of negotiating the said claim with the shipping company as suggested by the Honourable Bombay High Court.

5. The liability as stated above in 38 above has been duly provided for in the books of the Company. However, interest on this claim as specified in the arbitration award aggregating to Rs.17,358.77 Lakhs is not provided for in the books of the Company. As a result, the loss for the year is understated and reserves as at the balance sheet date are overstated to that extent.

6. As directed by the Security and Exchange Board of India (SEBI), the Company has, during the financial year 2014-15, made provisions of unprovided disputed loss/liability aggregating to Rs.21,101.37 Lakhs in respect of foreign currency derivative contracts, which were the subject matter of the qualification in the Auditors'' Report in the earlier years. The Company, however, based on the legal advice received, maintains that that these financial derivatives contracts are void and unenforceable.

7. Balances with some of the banks as well as balances for trade payables, trade receivables, for loans and advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

8. All the amounts have been stated in Indian Rupees, unless otherwise stated, and all values are rounded to nearest lakh except otherwise indicated.

9. Previous year''s figures has regrouped and rearranged, wherever necessary.

Mar 31, 2016

Notes:

Term Loans / WCTL from banks and others are against hypothecation of plant & equipment and vehicles, Inventory and Books debts and further secured by equitable mortgage of certain immovable assets of the company and also against personal guarantees of some of the directors.

Hire purchase finance is against hypothecation of vehicles.

Working capital finance from banks and financial Institution are against hypothecation of inventories, book debts and discounting of export bills and further secured by equitable mortgage of fixed assets of the company.

Exports packing credit finance and post-shipment finance from banks and financial Institution are against hypothecation of inventories, book debts and discounting of export bills and further secured by equitable mortgage of certain fixed assets of the company.

Amount of default: Of the above, accounts with aggregate balances of Rs, 254,000,000 (614,282,956) have been classified by the respective lenders as non-standard.

1. Based on the audited annual accounts for the year ended 31^st March 2011, the company became a sick industrial company within the meaning of section 3(1)(O) of the Sick Industrial Companies (Special Provisions) Act, 1985 and pursuant the proviso to section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The Board of Industrial & Financial Restructuring (BIFR) on considering the material on their record, declared the company as a sick company vide its order dated 20th March 2012. Further, in terms of the order passed and the powers available u/s 17(3) of SICA, the Bench has appointed Bank of India as Operating Agency with directions to submit Draft Rehabilitation Scheme which is under consideration and discussion.

2. As directed by the Security and Exchange Board of India (SEBI), the Company has, during the financial year 2014-15, made provisions of unprovoked disputed loss/liability aggregating to Rs, 21,101.37 lacs in respect of foreign currency derivative contracts, which were the subject matter of the qualification in the Auditors'' Report in the earlier years. The Company, however, based on the legal advice received, maintains that that these financial derivatives contracts are void and unenforceable.

3. The company had entered into Contract of Affreightment (COA) with four shipping companies viz. (i) British Marine, (ii) IHX Pacific (UK), (iii) Eitzen Bulk A/S and (iv) Armada (Pte) Singapore.

The company has settled the claim of British Marine Pic, for Rs, 22.64 crore as against award passed for Rs, 553.41 crores, which was initially claimed by British Marine Plc.

Since the award of claims of each of the three shipping companies were heavily exaggerated. the Company had, much prior in time to filing of the application for enforcement of the award, initiated legal proceedings against the alleged arbitration awards under Section 34 of the Arbitration& Conciliation Act, 1996.

The Hon. Supreme Court of India vide order dated 13^th May, 2016 has held that the award under Section 34 of the Arbitration and Conciliation Act, 1996 cannot be challenged and is enforceable. Aggrieved by the said order, the Company is in the process of filing a review petition before the Hon. Supreme Court.

Pending the final outcome of the proceedings, no further adjustments have been made in the above provisions made for - 562.03 crores in the books.

4. Balances with some of the banks as well as balances for trade payables, trade receivables, for loans and advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

5. The management of the Company has, during the year, carried out technological valuation for identification of impairment of assets, if any, in accordance with the Accounting Standard (AS) - 28. Based on the judgment of the management and as certified by the directors, no provision for impairment is found to be necessary in respect of any of the assets.

6. As the company''s main business activity, in the opinion of the management, falls within a single primary segment i.e. bulk minerals for industrial consumption and its derivatives and other activities incidental thereto, which are subject to the same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting", in the opinion of the management, are not applicable.

7. In the opinion of the directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provision of all known liabilities is adequate and not in excess of the amount reasonably required.

8. In accordance with Accounting Standard (AS) 13, the long-term investments held by the company are carried at cost. All the investments of the company in subsidiaries, joint ventures and associate companies have been considered by the management to be of a long-term nature and diminution in the value of investments, being considered by the management to be for a temporary period is not provided for.

9. Based on the principles of prudence and in view of the uncertainty, deferred tax assets arising out of the carried forward business losses are not accounted for in accordance with the provisions of Accounting Standard (AS) - 22 "Accounting for Taxes on Income."

10.. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures relating to amounts unpaid as at the year-end together with interest paid/payable under this Act have not been given.

11. RELATED PARTY TRANSACTIONS: Subsidiaries:

- Ashapura Aluminium Limited - Ashapura Minechem (UAE) FZE

- Ashapura Claytech Limited - Bombay Minerals Limited

- Ashapura Consultancy service Pvt. Ltd. - Penisula Property Developers Pvt. Ltd.

- Ashapura International Limited - PT Ashapura Resources

- Ashapura Holdings (UAE) FZE - Prashansha Ceramics Limited

- Ashapura Maritime FZE - Sharda Consultancy Pvt. Ltd.

Associates and Joint Ventures:

- Altage Stone Crushing Industries - Kutch Navnirman Trust

- Ashapura Amcol NV - Manico Resources Pvt. Ltd.

- Ashapura Arcadia Logistic Private Ltd. - Minologistic Corporation

- Ashapura Exports Pvt. Limited - Minotrans Logistic Corporation

- Ashapura Mineral Company - Orient Abrasives Limited

- Ashapura Overseas Pvt. Ltd. - Sharda Industrial Corporation

- Ashapura Perfoclay Ltd. - Sohar Ashapura Chemicals LLC

- Emo Ashapura Energy and Mining

- Hudson MPA SDN BHD

Key Managerial Personnel:

- Mr. Chetan Shah - Mr. Ajay Phalod

- Mr. Rajnikant Pajwani - Ms. Surekha Sathe

- Mr. Sachin Polke - Ms. Harsha Joshi

- Mr. Ashish Desai - Mr. Vipul Saxena

Relatives of Key Managerial Personnel:

- Mr. Manan Shah

12 Figures in the brackets are the figures for the previous year, unless otherwise stated.

13 All the amounts have stated in Indian Rupees, unless otherwise stated.

14 Previous year''s figures has regrouped and rearranged, wherever necessary. Signatures to Notes No. 1 to 44

Represents only Membership/Chairmanship of the Audit Committee and the Stakeholders'' Relationship Committee of Indian Public Companies.

Mar 31, 2015

1. Based on the audited annual accounts for the year ended 31st March 2011, the company became a sick industrial company within the meaning of section 3(1)(O) of the Sick Industrial Companies (Special Provisions) Act, 1985 and pursuant the proviso to section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The Board for Industrial & Financial Reconstruction (BIFR) on considering the material on their record, declared the company as a sick company vide its order dated 20th March 2012. Further, in terms of the order passed and the powers available u/s 17(3) of SICA, the Bench has appointed Bank of India as Operating Agency with directions to submit Draft Rehabilitation Scheme which is under consideration and discussion.

2. The Security and Exchange Board of India (SEBI) vide its letter no. CFD/DIL/ HB/OW/35705/ 2014 dated 12th December 2014, has directed the Company to make the necessary provisions of unprovided disputed losses/liabilities in respect of foreign currency derivative contracts, which were the subject matter of qualification in the Auditors' Report in the previous year. Accordingly, the Company has, during the year, provided for such disputed liabilities aggregating to Rs. 21,101.37 lacs under exceptional items. The Company, however, based on the legal advice received, maintains that these financial derivative contracts are void and unenforceable.

3. The company had entered into Contract of Affreightment (COA) with four shipping companies viz. (i) British Marine, (ii) IHX Pacific (UK), (iii) Eitzen Bulk A/S and (iv) Armada (Pte) Limited, Singapore.

The company has settled the claim of British Marine Plc, for 7 22.64 crore as against award passed for 7 553.41 crore, which was initially claimed by British Marine Plc.

Since the award of claims of each of the three shipping companies were heavily exaggerated. the company has, much prior in time to filing of the application for enforcement of the award, initiated legal proceedings against the alleged arbitration awards by filing an Application under Section 34 of the Arbitration & Conciliation Act, 1996 against each of the three shipping companies in the Court of Civil Judge at Jamkhambaliya on the ground of opposed to the public policy of India.

By an order dated 26th June 2013, Jam Khambhaliya District Court refused to pass any order on the ground of the jurisdiction issue.

Aggrieved by the above order, the company has preferred an appeal before the Honourable Gujarat High Court, which has been admitted.

In view of the above, the company has "strictly without prejudice and without admitting the claims of the shipping companies" made the provision of Rs. 562.03 cr. in the earlier years against the shipping claims.

The company has been declared as a sick company by the BIFR as stated in note no. 24 above and the matter is sub-judice.

4. Depreciation for the year has been aligned to comply with requirement of Part C of Schedule II of the Companies Act, 2013. Consequently, depreciation for the year is higher by Rs. 38,564,540. Further, Rs. 19,489,142 in the respect of the fixed assets where the useful lives as specified in Schedule II is already expired, has been adjusted to the opening balances of the retained earnings.

5. Balances with some of the banks as well as balances for trade payables, trade receivables and loans and advances in many cases are subject to confirmations from the respective parties and reconciliations, if any. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

6. The management of the Company has, during the year, carried out technological valuation for identification of impairment of assets, if any, in accordance with the Accounting Standard (AS) Â 28. Based on the judgment of the management and as certified by the directors, no provision for impairment is found to be necessary in respect of any of the assets.

7. As the company's main business activity, in the opinion of the management, falls within a single primary segment i.e. bulk minerals for industrial consumption and its derivatives and other activities incidental thereto, which are subject to the same risks and returns, the disclosure requirements in accordance with the Accounting Standard (AS) Â 17 "Segment Reporting" in the opinion of the management, are not applicable.

8. In the opinion of the directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provisions of all known liabilities are adequate and not in excess of the amount reasonably required.

9. In accordance with Accounting Standard (AS) 13, the long-term investments held by the company are carried at cost. All the investments of the company in subsidiaries, joint ventures and associate companies have been considered by the management to be of a long-term nature and diminution in the value of investments, being considered by the management to be for a temporary period is not provided for.

10. Based on the principles of prudence and in view of the uncertainty, deferred tax assets arising out of the carried forward business losses are not accounted for in accordance with the provisions of Accounting Standard (AS) Â 22 "Accounting for Taxes on Income."

11. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures relating to amounts unpaid as at the year-end together with interest paid/payable under this Act have not been given.

12. Figures in the brackets are the figures for the previous year, unless otherwise stated.

13. All the amounts have been stated in Indian Rupees, unless otherwise stated.

14. Previous year's figures has regrouped and rearranged, wherever necessary. Signatures to notes no. 1 to 44

Mar 31, 2013

1 Based on the audited annual accounts for the year ended 3 Ist March 201 I, the company became a sick industrial company within the meaning of section 3(l)(0) of the Sick Industrial Companies (Special Provisions) Act, 1985 and pursuant to the proviso to section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The Board for Industrial & Financial Reconstruction (BIFR) on considering the material on their record, declared the company as a sick company vide its order dated 20th March 20 12. Further, in terms of the order passed and the powers available u/s 17(3) of SICA, the Bench has appointed Bank of India as Operating Agency to which the company has submitted Draft Rehabilitation Scheme which is under consideration and discussion.

2 i. Certain foreign currency derivatives contracts entered into by the Company with the various bankers are under litigation at various stages. Based on the legal opinion obtained by the Company, these contracts are void in nature and cannot be legally enforced.

ii. The Company has, in the earlier years, written back liabilities of t 15,334.50 lacs on account of the provision for such foreign currency derivatives losses; and not provided for foreign currency derivatives losses of t 26,508.05 lacs in the earlier years, (net of settlement with some of the banks and financial institutions for certain secured loans and unprovided disputed foreign currency contracts t 27,779.75 lacs )

iii. Apart from the above, the Company has also not provided for the losses arising during the year on foreign currency derivatives contracts aggregating to t 61 1.49(3,972.19) lacs including mark to market (MTM) valuation as on the balance sheet date ^ Nil (previous year ^ 3,131.20 lacs )

iv. As a result of the above, net profit for the year as well as reserves and surplus are overstated by t 61 1.49 (3,972.19) lacs and t 28,391.24 (43,408.95) lacs respectively.

3 The company had entered into Contract of Affreightment (COA) with four shipping companies viz. (i) British Marine, (ii) IHX Pacific (UK), (iii) Eitzen Bulk A/S and (iv) Armada (Pte) Singapore.

The company has settled the claim of British Marine Pic, for t 22.64 crore as against award passed for ^ 553.41 crore, which was initially claimed by British Marine Pic.

The quantum of awards in respect of the other three companies are as under:

Since the award of claims of each of the three shipping companies were heavily exaggerated, the company has, much prior in time to filing of the application for enforcement of the award, initiated legal proceedings against the alleged arbitration awards by filing an Application under Section 34 of the Arbitration & Conciliation Act, 1996 against each of the three shipping companies in the Court of Civil ludge at lamkhambaliya on the ground of opposed to the public policy of India.

By an order dated 20th December, 2010, passed in the Petition filed by IHX Pacific (UK) Ltd. (a) under Section 9 (being arbitration petition No.25 of 2010) and (b) Section 44 to 47 (being arbitration petition No.24 of 2010) of the Arbitration and Conciliation Act, 1996, the company has been allowed to contest the proceedings including Application under Section 34 provided the company furnishes security to an extent of ^ 107.73 crore.

Aggrieved by the above order, the company has preferred an appeal before the divisional bench of Bombay High Court, wherein the matter got stayed.

IHX (UK) Ltd. moved to the Supreme Court and at present matter is pending before the Supreme Court.

In view of the above, the company has "strictly without prejudice and without admitting the claims of the shipping companies" made the provision of t 562.03 cr. in the earlier years against the shipping claims.

The company has been declared as a sick company by the BIFR as stated in note no. 24 above and the matter is sub-judice.

4 Balances for trade payables, trade receivables, for loans and advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

5 The management of the Company has, during the year, carried out technological valuation for identification of impairment of assets, if any, in accordance with the Accounting Standard (AS) - 28 prescribed under the Companies (Accounting Standards) Rules, 2006. Based on the judgment of the management and as certified by the Directors, no provision for impairment is found to be necessary in respect of any of the assets.

6 As the company''s main business activity, in the opinion of the management, falls within a single primary segment i.e. bulk minerals for industrial consumption and its derivatives and other activities incidental thereto, which are subject to the same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting" prescribed under the Companies (Accounting Standards) Rules, 2006, in the opinion of the management, not applicable.

7 In the opinion of the Directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provision of all known liabilities is adequate and not in excess of the amount reasonably required.

8 In accordance with Accounting Standard (AS) I 3 prescribed under the Companies (Accounting Standards) Rules, 2006, the long- term investments held by the company are carried at cost. All the investments of the company in subsidiaries, joint ventures and associate companies have been considered by the management to be of a long-term nature and diminution in the value of investments, being considered by the management to be for a temporary period, and hence, is not provided for.

9 The company has during the year issued 4,000,000 Equity Shares as well as 4,000,000 convertible equity warrants of Rs. 2 each to Ashapura Industrial Finance Limited, a body corporate under the promoters group on preferential basis at a premium of t 34.83 per share/warrant. These warrants are convertible into one Equity Share against each warrant within a period of 18 months from the date of the issue.

10 Of total loans granted to other bodies corporate, including subsidiary companies, (excluding trade advances) loans aggregating to t 1,992.33 (^ 1,979.06) lacs are granted free of interest.

11 Based on the principles of prudence and in view of the uncertainty, deferred tax assets arising out of the carried forward business losses are not accounted for in accordance with the provisions of Accounting Standard (AS) - 22 "Accounting for Taxes on Income."

12 The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures relating to amounts unpaid as at the year-end together with interest paid/ payable under this Act have not been given.

13 Necessary documents in respect of purchase of land at Baraya plant of the company are yet to be executed.

14 Contingent Liabilities:

(Rs.in lacs)

Particulars 31st March 2013 2012 Guarantees to banks against credit facilities

extended to Subsidiary Companies 5,271.20 3,100.00

Guarantees to banks against c redit facilities extended to joint Venture and Associate Companies 7,827.00 7,827.00

Guarantees given by the Company to various

Government Authorities 4,569.22 4,432.94

In respect of contracts remaining to be executed 150.89 31.99

In respect of disputed Income Tax Matters 138.53

In respect of Other Matters 183.21 568.16

15 In view of the inadequacy of net profit in accordance with section 198 read with section 349 and 350 of the companies Act, 1956, remuneration of ^. 1,800,000 each to two of the directors is paid as per Schedule XIII to the Companies Act, 1956.

16 RELATED PARTY TRANSACTIONS:

a. Subsidiaries:

- Ashapura International Limited

- Ashapura Claytech Limited

- Bombay Minerals Limited

- Prashansha Ceramics Limited

- Penisula Property Developers Pvt. Ltd.

- Sharda Consultancy Pvt. Ltd.

- PT Ashapura Resources

- Ashapura Consultancy Service Pvt. Ltd.

- Ashapura Aluminium Limited

- Ashapura Minechem (UAE) FZE

- Ashapura Holdings (UAE) FZE

- Ashapura Maritime FZE

- Asha Prestige Company

b. Associates and Joint Ventures:

- Ashapura Volclay Ltd

- Ashapura Volclay Chemical Pvt Ltd.

- Hudson MPA SDN BHD, Malaysia

- Ashapura Arcadia Logistic Private Ltd.

- Emo Ashapura Energy and Mining

- Ashapura Amcol NV

- Ashapura Infin Pvt. Limited

- Minologistc Corporation

- Ashapura Mineral Company

- Sohar Ashapura Chemicals LLC

- Prabhudas Vithaldas

- Kantilal Mohanlal Mehta

- Sharda Industrial Corporation

- Ashapura Exports Pvt Limited

- Gem Ashapura Granite Pvt Limited

- Minotrans Logistic Corporation

c. Key Managerial Personnel:

- Mr. Navnitlal R Shah

- Mr. Chetan Shah

17 Figures in the brackets are the figures for the previous year, unless otherwise stated.

18 All the amounts have stated in Indian Rupees, unless otherwise stated.

19 Previous year''s figures has regrouped and rearranged, wherever necessary. Signatures to notes no. I to 46

Mar 31, 2012

1. Based on the audited annual accounts for the year ended 31st March, 2011, the company became a sick industrial company within the meaning of section 3( I )(0) of the Sick Industrial Companies (Special Provisions) Act, 1985 and pursuant the proviso to section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The Board of Industrial & Financial Restructuring (BIFR) on considering the material on their record, declared the company as a sick company vide its order dated 20th March, 2012. Further, in terms of the order passed and the powers available u/s 17(3) of SICA, the Bench has appointed Bank of India as Operating Agency with directions to submit Draft Rehabilitation Scheme within three months in terms of the guidelines for preparation of Rehabilitation Scheme.

2. Certain foreign currency derivatives contracts entered into by the Company with the various bankers are under litigation at various stages. Based on the legal opinion obtained by the Company, these contracts are void in nature and cannot be legally enforced.

In view of the above,

((i) The Company has, in the previous year, written back liabilities of Rs. 15,334.50 lacs on account of the provision for such foreign currency derivatives losses; and not provided for foreign currency derivatives losses of Rs. 24,102.26 lacs in the earlier year.

(ii) Apart from the above, the Company has also not provided for the losses arising during the year on foreign currency derivatives contracts aggregating to Rs. 3,925.27 lacs.

(iii) The mark to market (MTM) valuation of foreign currency derivatives outstanding as on the balance sheet date in accordance with the announcement dated 29th March, 2008 by the Institute of Chartered Accountants of India, indicates loss of Rs. 3,131.20 (previous year: 3,084.28) lacs, which is not provided for by the company.

As a result of the above, net profit for the year is overstated by 13,972.19 lacs whereas reserves and surplus are overstated by t 43,408.95 lacs.

3. The company had entered into Contract of Affreightment (COA) with four shipping companies viz. (i) British Marine, (ii) IHX Pacific (UK), (iii) Eitzen Bulk A/S and (iv) Armada (Pte) Singapore.

The company has settled the claim of British Marine Pic, for X 22.64 crore as against award passed for % 553.41 crore, which was initially claimed by British Marine Pic.

Since the award of claims of each of the three shipping companies were heavily exaggerated, the company has. much prior in time to filing of the application for enforcement of the award, initiated legal proceedings against the alleged arbitration awards by filing an Application under Section 34 of the Arbitration & Conciliation Act, 1996 against each of the three shipping companies in the Court of Civil Judge at Jamkhambaliya on the ground of opposed to the public policy of India.

By an order dated 20th December, 2010, passed in the Petition filed by IHX Pacific (UK) Ltd. (a) under Section 9 (being arbitration petition No.25 of 2010) and (b) Section 44 to 47 (being arbitration petition No.24 of 2010) of the Arbitration and Conciliation Act, 1996, the company has been allowed to contest the proceedings including Application under Section 34 provided the company furnishes security to an extent of Rs. 107.73 crore.

Aggrieved by the above order, the Company has preferred an appeal before the divisional bench of Bombay High Court, wherein the matter got stayed.

IHX (UK) Ltd. moved to the Supreme Court and at present matter is pending before the Supreme Court.

In view of the above, the Company has "strictly without prejudice and without admitting the claims of the shipping companies" made the provision of Rs. 562.03 cr. in the previous year against the shipping claims.

The Company has been declared as a sick company by the BIFR as stated in note no. 24 above and the matter is sub-judice.

4. Balances for trade payables, trade receivables, for Loans and Advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

5. The management of the Company has, during the year, carried out technological valuation for identification of impairment of assets, if any, in accordance with the Accounting Standard (AS) - 28 prescribed under the Companies (Accounting Standards)

Rules, 2006. Based on the judgment of the management and as certified by the Directors, no provision for impairment is found to be necessary in respect of any of the assets.

6. As the company's main business activity, in the opinion of the management, falls within a single primary segment i.e. bulk minerals for industrial consumption and its derivatives and other activities incidental thereto, which are subject to the same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting" prescribed under the Companies (Accounting Standards) Rules, 2006, in the opinion of the management, not applicable.

7. In the opinion of the Directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provision of all known liabilities is adequate and not in excess of the amount reasonably required.

8. In accordance with Accounting Standard (AS) 13 prescribed under the Companies (Accounting Standards) Rules, 2006, the long- term investments held by the company are carried at cost. All the investments of the company in subsidiaries, joint ventures and associate companies have been considered by the management to be of a long-term nature and diminution in the value of investments, being considered by the management to be for a temporary period, and hence, is not provided for.

9. Employees Stock Option:

The Employee Stock Option Scheme - 2004, introduced by the Company pursuant to the members' approval at their meeting held on 31st May, 2001, expired on 14th June, 2011. Outstanding options 110,451 aggregating to 17,108,918 are transferred to surplus account.

Options outstanding as on the balance sheet date: Nil (110,451)

10. Of total loans granted to other bodies corporate, including subsidiary companies, (excluding trade advances) loans aggregating to Rs. 197,906,356 (% 193,987,008) are granted free of interest.

11. Based on the principles of prudence and in view of the uncertainty, deferred tax assets arising out of the carried forward business losses are not accounted for in accordance with the provisions of Accounting Standard (AS) - 22 'Accounting for Taxes on Income."

12. One of the manufacturing units of the company at Dharur was shifted to another unit of the company at Baraya. Loss on account of dismantling of certain assets aggregating to Rs. 22,639,593 is stated as an exceptional items

13. Extra ordinary items in the previous year Rs. 21,473,027 are losses suffered at various locations of the Company due to natural calamities.

14. The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures relating to amounts unpaid as at the year-end together with interest paid/ payable under this Act have not been given.

15. Contingent Liabilities: (Rs. in lacs)

Particulars 31st March

2011-2012 2010-2011

Guarantees to banks against credit facilities 'extended to Subsidiary Companies 3,100.00 3,100.00

Guarantees to banks against credit facilities extended to Joint Venture and Associate Companies 7,827.00 7,827.00

Guarantees given by the Company to various Government Authorities 4,432.94 4,469.11

In respect of contracts remaining to be executed 31.99 222.67

In respect of disputed Income Tax Matters Ã 269.78

In respect of Other Matters 568.16 410.85

16. In view of the inadequacy of net profit in accordance with section 198 read with section 349 and 350 of the companies Act, 1956, remuneration of Rs. 1,800,000 each to two of the directors is paid as per Schedule XIII to the Companies Act, 1956.

17. RELATED PARTY TRANSACTIONS:

a. Subsidiaries:

- Ashapura International Limited

- Ashapura Claytech Limited

- Bombay Minerals Limited

- Prashansha Ceramics Limited

- Penisula Property Developers Pvt. Ltd.

- Sharda Consultancy Pvt. Ltd.

- PT Ashapura Resources

- Ashapura Consultancy Service Pvt. Ltd.

- Ashapura Aluminium Limited

- Ashapura Minechem (UAE) FZE

- Ashapura Holdings (UAE) FZE

- Ashapura Maritime FZE

- Asha Prestige Company

b. Associates and Joint Ventures:

- Ashapura Volclay Ltd

- Ashapura Volclay Chemical Pvt Ltd.

- Hudson MPA SDN BHD, Malaysia

- Ashapura Arcadia Logistic Private Ltd.

- Emo Ashapura Energy and Mining

- Ashapura Amcol NV

- Ashapura Infin Pvt. Limited

- Ashapura Mineral Company

- Sohar Ashapura Chemicals LLC

- Prabhudas Vithaldas

- Kantilal Mohanlal Mehta

- Sharda Industrial Corporation

- Ashapura Exports Pvt Limited

- Gem Ashapura Granite Pvt Limited

c. Key Managerial Personnel:

- Mr. Navnitlal Shah - Mr. Chetan Shah

19. Figures in the brackets are the figures for the previous year, unless otherwise stated.

20. All the amounts have stated in Indian Rupees, unless otherwise stated.

21. Previous year's figures has regrouped and rearranged, wherever necessary.

Mar 31, 2011

A. Figures in the brackets are the figures for the previous year, unless otherwise stated.

b. All the amounts have stated in Indian Rupees, unless otherwise stated.

c. Previous year's figures has regrouped and rearranged, wherever necessary.

1 Balances with Debtors, Creditors and for Loans and Advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

2 Advance Payment of Taxes is shown net of provisions of 145.87 lacs (Rs.81.89 lacs) including current year's advance tax payments of Rs. 81.73 lacs (RS. 310.97 lacs).

3 Based on the certain developments as stated in the note no. 3 above and on the principle of prudence, the management felt it proper not to provide for deferred tax assets arising out of the carried forward business loss under the Income Tax Act, and also to reverse the deferred tax assets accounted for in the earlier years in accordance with the Accounting Standard (AS) - 22 prescribed under the Companies (Accounting Standards) Rules, 2006. Accordingly, deferred tax assets of Rs. 91.00 crores are charged to the profit & loss account for the year.

4 Extra Ordinary Items 121,473,027 are losses suffered at various locations of the company due to natural calamities.

5 The management of the Company has, during the year, carried out technological evaluation for identification of impairment of assets, if any, in accordance with the Accounting Standard (AS) - 28 prescribed under the Companies (Accounting Standards) Rules, 2006. Based on the judgment of the management and as certified by the Directors, no provision for impairment is found to be necessary in respect of any of the assets.

6 As the company's main business activity, in the opinion of the management, falls within a single primary segment i.e. bulk minerals for industrial consumption and its derivatives and other activities incidental thereto, which are subject to the same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting" prescribed under the Companies (Accounting Standards) Rules, 2006, in the opinion of the management, not applicable.

7 In the opinion of the Directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provision of all known liabilities is adequate and not in excess of the amount reasonably required.

8 In accordance with Accounting Standard (AS) 13 prescribed under the Companies (Accounting Standards) Rules, 2006, the long-term investments held by the company are carried at cost. All the investments of the company in subsidiaries, joint ventures and associate companies have been considered by the management to be of a long-term nature and diminution in the value of investments, being considered by the management to be for a temporary period, and hence, is not provided for.

9 The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures relating to amounts unpaid as at the year-end together with interest paid / payable under this Act have not been given.

10 Of total loans granted to other bodies corporate, including subsidiary companies, (excluding trade advances) loans aggregating to 1193,987,008 (1181,015,103) are granted free of interest.

11 Sundry Debtors include:

a. Due from subsidiaries: 11,208,656 (Rs. 28,112,557) including for more than six months Rs. Nil (Nil)

b. Due from joint venture and associate companies : Rs 114,580,474 (Rs.167,807,752) including for more than six months Rs. 90,029,301 Rs. 92,372,144)

c. Due from afirm or company in which some of the directors are interested: t. 3,162,306 (t. 2,693,433) including for more than six months 11,239,603 (Rs.2,144,376)

12 Trade Advance to Suppliers includes t. 25,068,911 (Rs.25,062,011) to firms in which some of the directors are interested.

13 CONTINGENT LIABILITIES: (other than those stated in note no. 2)

(Rs. in lacs)

Particulars 2010-2011 2009-2010

In respect of guarantees given by the bank and counter guaranteed by the Company 1, 178.73 1,376.16

Guarantees to banks against credit facilities extended to Subsidiary Companies 3,100.00 3,100.00

Guarantees to banks against credit facilities extended to Joint Venture and Associate Companies 7,827.00 5,431.00

Guarantees given by the Company to various Government Authorities 4,469.11 4,348.48

In respect of Contracts remaing to be executed 222.67 177.97

In respect of disputed Income Tax Matters 269.78 26.46

In respect of Other Matters 410.85 173.07

14 In view of the inadequacy of net profit in accordance with section 198 read with section 349 and 350 of the companies Act, 1956, remuneration of Rs. 4,800,000 each to two of the directors is paid as per Schedule XIII to the Companies Act, 1956.

15 RELATED PARTY TRANSACTIONS:

a. Subsidiaries:

- Ashapura International Limited

- Ashapura Claytech Limited

- Bombay Minerals Limited

- Prashansha Ceramics Limited

- Penisula Property Developers Pvt. Ltd.

- Sharda Consultancy Pvt. Ltd.

- PT Ashapura Resources

- Ashapura Consultancy Service Pvt. Ltd.

- Ashapura Aluminium Limited

- Ashapura Minechem (UAE) FZE

- Ashapura Holdings (UAE) FZE

- Ashapura Maritime FZE

- Asha Prestige Company

b. Associates and Joint Ventures:

- Ashapura Volclay Ltd

- Ashapura Volclay Chemical Pvt Ltd.

- Hudson MPA SDN BHD, Malaysia

- Shantilal Multiport Infrastructure R Ltd. (for part of the year)

- Ashapura Arcadia Logistic Private Ltd.

- Emo Ashapura Energy and Mining

- Ashapura Amcol NV

- Ashapura Infin Pvt. Limited

- Ashapura Mineral Company

- Prabhudas Vithaldas

- Kantilal Mohanlal Mehta

- Sharda Industrial Corporation

- Ashapura Exports Pvt Limited

- Sohar Ashapura Chemicals LLC

- Gem Ashapura Granite (Guj.) Pvt. Ltd.

c. Key Managerial Personnel:

- Mr. Navnitlal Shah

- Mr. Chetan Shah

16 The Ministry of Corporate Affairs, Government of India, vide Genera! Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the companies Act, 1956, subject to fulfillment of certain conditions as stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

17 The Ministry of Corporate Affairs, Government of India, vide its General Notification No. S. O. 301 (E) dated 8th February 2011 issued under section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their profit & loss account. The Company being an 'export oriented company' is entitled to the exemption. Accordingly, disclosures specified under 3 (i)(a), 3 (ii)(a), 3(ii)(b) and 3(ii)(d) of part II of Schedule VI to the Companies Act, 1956 have not been prvided.

Mar 31, 2010

1 Balances with Debtors, Creditors and for Loans and Advances are subject to confirmations from the respective parties and reconciliations, if any, in many cases. In absence of such confirmations, the balances as per books have been relied upon by the auditors.

2 Advance Payment of Taxes is shown net of provisions of Rs.81.89 lacs (12,255.12) lacs including current years advance tax payments of Rs. 310.97 lacs (1,015.69) lacs.

3 Based on the review of the order books, business plans for the future and other circumstances, the directors believe that the Company would have sufficient taxable income in the future years which, in the opinion of the management will adequately absorb the deferred tax assets of Rs. 91.00 crores arising out of the carried forward business loss under the Income Tax Act, to the extent of expected set-off, as accounted for in accordance with the Accounting Standard (AS)-22 prescribed under the Companies (Accounting Standards) Rules, 2006.

4 The Management of the Company has, during the year, carried out technological evaluation for identification of impairment of assets, if any, in accordance with the Accounting Standard (AS) - 28 prescribed under the Companies (Accounting Standards) Rules, 20Q6. Based on the judgment of the Management and as certified by the Directors, no provision for impairment is found to be necessary in respect of any of the assets.

5 As the Companys main business activity, in the opinion of the Management, falls within a single primary segment i.e. bulk minerals for industrial consumption and its derivatives and other activities incidental thereto, which are subject to the same risks and returns, the disclosure requirements of Accounting Standard (AS) - 17 "Segment Reporting" prescribed under the Companies (Accounting Standards) Rules, 2006, in the opinion of the Management, not applicable.

6 In the opinion of the Directors, the current assets, loans and advances are approximately of the value as stated in the balance sheet, if realized in the ordinary course of the business. The provision of all known liabilities is adequate and not in excess of the amount reasonably required.

7 In accordance widi Accounting Standard (AS) 13 prescribed under the Companies (Accounting Standards) Rules, 2006, the long-term investments held by the Company are carried at cost. All the investments of the Company in subsidiaries, joint ventures and associate companies have been considered by the Management to be of a long-term nature and diminution in the value of investments, being considered by the Management to be for a temporary period, and hence, is not provided for.

8 The Company has not received information from vendors regarding their status under Micro, Small and Medium Enterprises Development Act. 2006 and hence disclosure relating to amounts unpaid as at the year-end together with interest paid/payable under this account have not been given.

9 Of total loans granted to other bodies corporate, including subsidiary companies, (excluding trade advances) loans aggregating to Rs. 181,015,103/- (Rs. 697,025,398/-) are granted free of interest.

10 Sundry Debtors Include:

a. Due from subsidiaries: Rs. 28,112,557/- (Rs. 163,426,122/-) including for more than six months Rs. Nil (Nil)

b. Due from joint venture and associate companies: Rs. 167,807,752/- (Rs. 186,529,956/-) including for more than six months Rs. 92,372,144/- (Rs. 62,452,120/-)

c. Due from a firm or company in which some of the directors are interested: Rs. 2,693,433/- (Rs. 2,979,374/-) including for more than six months Rs. 2,144,376/- (Rs. 2,399,915/-)

11 Trade Advance to Suppliers includes Rs. 25,062,011/- (Rs. 39,556,906/-) to firms in which some of the directors are interested.

12 CONTINGENT LIABILITIES : (other than those stated in note no. 2) (Rs. in lacs)

Particulars 2009-2010 2008-2009

In respect of guarantees given by the bank and counter guaranteed by the Company 1,376.16 1,258.86

Guarantees to banks against credit facilities extended to Subsidiary Companies 3,100.00 1,665.00

Guarantees to banks against credit facilities extended to Joint Venture and Associate Companies 5,431.00 1,100.00

Guarantees given on behalf of Subsidiary Companies - 47.92

Guarantees given by the Company to various Government Authorities 4,348.48 4,304.47

Claims Against the Company not acknowledged as debt 2,271.77 8,919.75

In respect of Contract remaining to be executed 177.97 314.43

In respect of Taxation Matters 26.46 26.46

In respect of Other Matters 173.07 412.50

Further to the above, legal proceedings against the company by three shipping companies for claiming potential damages aggregating to Rs. 56,632.43 lacs for non-performance of Contract of are under litigations. The claims are being contested with appropriate legal responses on the basis of invalidity and frustration of contracts along with simultaneous efforts to arrive at amicable settlement.

13 RELATED PARTY TRANSACTIONS:

a.Subsidiaries:

- Ashapura International Limited - Ashapura Consultancy Service Pvt. Ltd.

- Ashapura Claytech Limited - Ashapura Aluminium Limited

- Bombay Minerals Limited - Ashapura Minechem (UAE) FZE

- Prashansha Ceramics Limited - Ashapura Holdings (UAE) FZE

- Penisula Property Developers Pvt. Ltd. - Ashapura Maritime FZE

- Sharda Consultancy Pvt. Ltd. - Asha Prestige Company

b. Associates and Joint Ventures:

- Ashapura Volclay Ltd - Ashapura Infin Pvt. Limited

- Ashapura Volclay Chemical Pvt Ltd. - Ashapura Mineral Company

- Hudson MPA SDN BHD, Malaysia - Prabhudas Vithaldas

- Shantilal Multiport Infra- structure P. Ltd. - Kantilal Mohanlal Mehta

- Ashapura Arcadia Logistic Private Ltd. - Sharda Industrial Corporation

- Emo Ashapura Energy and Mining - Ashapura Exports Pvt Limited

- Ashapura Amcol NV - Ashapura Shipping Limited

c. Key Managerial Personnel:

- Mr. Navnitlal Shah - Mr. Chetan Sh

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