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Notes to Accounts of Century Textiles & Industries Ltd.

Mar 31, 2017

1. Property plant and equipment

(a) The Company has elected to measure certain items of property, plant and equipment, capital work in progress and intangible assets at fair value at the date of transition to Ind AS. Hence an increase of '' 121.70 crores as at 1 April 2015 and Rs, 136.13 crores as at 31 March 2016 has been recognized in property, plant and equipment, decrease of Rs, 38.31 crores as at 1 April 2015 and Rs, 46.27 crores as at 31 March 2016 has been recognized in capital work in progress and decrease of Rs, 1.02 crores as at 1 April 2015 and Rs, 0.46 crores as at 31 March 2016 has been recognized in intangible assets.

(b) Reclassification of spares parts that meets the definition of property, plant and equipment amounting to Rs, 1.88 crores as at 1 April 2015 and Rs, 2.43 crores as at 31 March 2016 has been recognized in property, plant and equipment net of accumulated depreciation.

(c) Amortization of the carrying value of mining land based on the units of production method resulting in to a decrease of Rs, 7.00 crores as at 1 April 2015 and Rs, 7.59 crores as at 31 March 2016 has been recognized in property, plant and equipment.

For the year ended on 31 March 2016, on account of the above adjustments there is decrease in depreciation, cost of material consumed and other expenses by Rs, 6.99 crores.

2. Government grant

Under Indian GAAP, the Company had adjusted the Government Grant related to Export Promotion Capital Goods (EPCG) scheme availed by the Company to the cost of fixed assets and the exports obligation was disclosed in the notes to financial statements whereas under Ind AS, the Company has recognized the Grant as a deferred revenue which is amortized to statement of profit and loss on the basis of actual exports made by the Company. The net impact on account of the same is increase in property, plant and equipment by Rs, 284.32 crores as at 1 April 2015 and Rs, 273.50 crores as at 31 March 2016, increase in Deferred Revenue by Rs, 209.27 crores as at 1 April 2015 and Rs, 187.62 crores as at 31 March 2016, increase in financial liability by Rs, 92.05 crores as at 1 April 2015 and Rs, 110.08 crores as at 31 March 2016 and decrease in retained earnings by Rs, 17.00 crores as at 1 April 2015 and Rs, 24.20 crores as at 31 March 2016.

There is a consequent increase in other operating income amounting to Rs, 21.06 crores, finance cost amounting to Rs, 17.60 crores and depreciation amounting to Rs, 10.82 crores for the year ended 31 March 2016.

3. Financial assets and liability

a. Under Indian GAAP, the Company had accounted for financial assets (primarily Government Grants receivable) at the undiscounted amount whereas under Ind AS, such financial assets are recognized at present value. The net impact on account of the same is decrease in financial assets by Rs, 40.13 crores as at 1 April 2015 and Rs, 94.03 crores as at 31 March 2016 and decrease in retained earnings by Rs, 40.13 crores as at 1 April 2015 and Rs, 94.03 crores as at 31 March 2016.

Hence a decrease in other operating income by Rs, 49.08 crores, increase in cost of material consumed by Rs, 22.31 crores and increase in other income by Rs, 17.49 crores has been recognized in the statement of profit or loss for the year ended 31 March 2016.

b. Under Indian GAAP, the Company had accounted for financial liability (primarily security deposit) at the undiscounted amount whereas under Ind AS, such financial liability are recognized at present value. The net impact on account of the same is decrease in financial liability by Rs, 0.07 crores as at 1 April 2015 and Rs, 0.14 crores as at 31 March 2016 and decrease in retained earnings by Rs, 0.07crores as at 1 April 2015 and Rs, 0.14 crores as at 31 March 2016.

Hence in increase in other operating income by Rs, 1.24 crores and increase in finance cost by Rs, 1.61 crores has been recognized in the statement of profit or loss for the year ended 31 March 2016.

4. Investments in quoted and unquoted equity instruments

Under Indian GAAP, the Company accounted for long term investments in unquoted and quoted equity shares as Investment measured at cost less provision for other than temporary diminution in the value of investments.

Under Ind AS, the Company has designated such investments as FVTOCI investments. The difference between the instruments fair value and Indian GAAP carrying amount of Rs, 94.10 crores as at transition date and Rs, 82.85 crores as at 31 March 2016 has been recognized as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes.

5. Derivative instruments

The fair value gain of foreign exchange forward contracts and interest rate swap is recognized under Ind AS, which was not recognized under Indian GAAP. The corresponding adjustment of Rs, 7.39 crores has been credited to reserves as on the transition date and Rs, 0.12 crores debited to reserves as at 31 March 2016.

There is a consequent decrease in other income amounting to Rs, 7.52 crores for the year ended 31 March 2016.

6. Borrowings

Under Indian GAAP, unamortized transaction costs relating to borrowings is recognized separately in assets, whereas under Ind AS such cost is netted off against the borrowings. Unamortized transaction cost of Rs, 21.18 crores as at 1 April 2015 and Rs, 14.22 crores as at 31 March 2016 is netted off against the borrowings resulting into the decrease of current and noncurrent assets of Rs, 15.79 crores as at 1 April 2015 and Rs, 9.45 crores as at 31 March 2016, capital work in progress of Rs, 0.35 crore as at 1 April 2015 and Rs, 0.14 crore as at 31 March 2016.

There is a consequent increase in finance cost and other expense amounting to Rs, 0.50 crore for the year ended 31 March 2016.

7. Proposed dividend

Under Indian GAAP, proposed dividends including dividend distribution tax are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of Rs, 67.20 crores as at 1 April 2015 and Rs, 73.93 crores as at 31 March 2016 recorded for dividend has been derecognized against retained earnings.

8. Defined benefit liabilities

Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to the statement of profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses and the return on plan assets excluding amounts included in net interest on the net defined benefit liability are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Actuarial loss of Rs, 9.04 crores as at 1 April 2015 and Rs, 8.99 cores as at 31 March 2016 is recognized in OCI net of deferred tax.

9. Deferred tax

Under Indian GAAP, deferred tax is accounted using the income statement approach as per timing differences between taxable profits and accounting profits for the period. IND AS 12 requires accounting for deferred taxes using the balance sheet approach as per temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitional adjustments lead to temporary differences as on the transition date. The net impact of Rs, 37.24 crores as at 1 April 2015 and Rs, 58.81 crores as at 31 March 2016 on deferred tax liabilities on the transitional adjustments debited to equity.

10. Excise duty

Excise duty of Rs, 778.23 crores on account of sale of goods has been included in revenue as it is on own account because it is liability of the manufacturer which forms part of the production, irrespective of whether goods are sold or not.

11. Inventory

On account of capitalization of spares, revaluation of Inventory consequent to change in depreciation and other adjustments, inventory is reduced by Rs, 29.23 crores as at 1 April 2015 and Rs, 29.23 crores as at 31 March 2016.

12. Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

13. Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

1. During the year ended on 31 March 2017 and 31 March 2016, there is no impairment loss determined at each level of CGU.

The recoverable amount was based on value in use and was determined at the level of CGU.

2. Capitalized borrowing cost : No borrowing costs are capitalized on property, plant and equipment under construction.

3. Title deeds:

(a) In respect of Manikgarh Cement Division, land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Provisional Authority has since observed that approx. 17 hectares of land fall within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. The Bombay High Court Nagpur Bench on 3 April 2014 upheld the order passed by the Government of Maharashtra and directed collector Chandrapur to complete the documentation of land within six months with a right to Manikgarh Cement division to challenge the forest notification issued in the year 1953, if such occasion arises. Adjustments, if any, will be made, in the year in which the matter will be settled.

(b) Includes 1.45 hectares of land at Manikgarh cement division at a cost of Rs, 0.01 crore (31 March 2016 Rs, 0.01 crore) (1 April 2015 Rs, 0.01 crore) for which Sale & Conveyance deeds & other transfer formalities are yet to be executed. Stamp duty and other incidental expenses will be capitalized on execution of the same.

(c) Includes land measuring 29 acres and 15 guntha at a cost of Rs, 4.03 crores (31 March 2016 Rs, 4.03 crores) (1 April 2015 Rs, 4.03 crores) at Century Rayon division pending to be transferred in the name of the Company.

(d) Refer note 14 and note 18 for details of pledge and securities.

13. The Company''s investment properties consist of two commercial properties in India including land on which properties have been constructed, which are leased to third parties.

14. Out of the total land under Investment Properties, 6.31 acres of land amounting to Rs, 0.01 crore, which was allotted to the company on lease under the Poorer Class Accommodation Scheme 1898 as amended by 1913 Act and 1925 Act, which stated that in the event of no default being made in complying with the conditions of the lease, then on expiry of the lease all the right, title and interest shall vest with the company. The lease expired in the year 1955 and the company has filed a petition for execution of formal deed of conveyance.

15. Refer note 14 and note 18 for details of pledge and securities.

16. Capitalized borrowing cost : Borrowing costs of Rs, 3.73 crores (31 March 2016 Rs, 60.28 crores) is capitalized on Investment property under development.

17. Contractual Obligations : The Company is developing its mill land at Worli, Mumbai in terms of redevelopment plans submitted to the municipal authorities under the Integrated Development Scheme (IDS) of the "Development Control Regulation of Greater Bombay, 1991" Regulation 58 i.e. DCR 58. As per the said IDS, the Company is required to fulfill certain commitment in accordance with and in the manner required by the regulations prevailing at the time of issue such as surrender of land, alternate accommodation to existing residential occupants, etc. against which the Company is entitled to benefits. The Company is in process of fulfilling its commitment pending certain claims including those under the said schemes which are expected to be fulfilled as the work progresses.

18. Leasing arrangements : Certain investment properties are leased to tenants under long term operating leases with rentals payable monthly. (See Note 37).

Note:

The above valuation of the investment properties are in accordance with the Ready Reckoner rates prescribed by the Government of Maharashtra for the purpose of levying stamp duty. The Independent Valuer has referred to the publications and government website for Ready Reckoner rates. Suitable adjustments have been made to account for availability of FSI in land parcels in Mumbai in accordance with the guidelines prescribed by the Department of Registrations and Stamps. The adjustments related to floors, lifts and other factors are not considered for valuation of commercial property. Since the valuation is based on the published Ready Reckoner rates, the company has classified the same under Level 2.

The Company is holding 35.28% of equity shares in Industry House Limited (IHL). As the company does not have significant influence over Industry House Limited, the company has not considered it as an associate as per Ind AS 28 "Investments in Associates and Joint Ventures" and hence not consolidated. The company''s share of profit for the year of Industry House Limited is Rs, 0.30 crores on 31 March 2017 (31 March 2016 : Rs, 0.33 crores and 1 April 2015 : Rs, 0.33 crores).

(The Company has only one class of equity share. Each shareholder is eligible for one vote per share. The dividend proposed by the Board is subject to the approval of shareholders except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts in proportion to their shareholding.)

(e) Equity shares reserved for issue at a later date:

In terms of the shareholder approval obtained at the extra ordinary general meeting held on 4 June, 2014, the Company issued and allotted 1,86,50,000 preferential warrant to the Promoter Group at a price of Rs, 354.89 per warrant, entitling the holder of such warrant to apply for and obtain one equity share of face value of Rs, 10/ each fully paid up against each warrant on or before the expiry of 18 months from the date of allotment.

On 30 March, 2015, the warrant holders had partially exercised their entitlement to convert 84,70,000 warrant into equivalent number of equity shares as per the terms of issue. Further on 18 December, 2015 warrant holders exercised the balance entitlement and converted 1,01,80,000 warrants into equivalent number of equity shares by paying the balance 75% of the price thereon.

(f) The company has not issued any equity shares as bonus or for consideration other than cash and has not bought back any shares during the period of five years immediately preceding 31 March 2017.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability (including dividend distribution tax thereon) as at 31 March 2017.

(d) General Reserves

General Reserves is used from time to time to transfer profits from Retained earnings for appropriation purpose. This reserve will be utilized in accordance with the provision of the Companies Act, 2013.

(e) FVOCI equity investments

The company has elected to recognize changes in the fair value of certain investments in equity securities in OCI. These changes are accumulated within the FVOCI equity investment reserve within equity. The company transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognized.

Details of Security :

19. Loans covered in Sr. No. 1 and 2 above :

First pari passu charge on Plant and Machineries present and future of Birla Century, Pulp & Paper, Cement, Rayon Divisions and Freehold land admeasuring 25323.78 Sq. Meters and Greenspan Building thereon (excluding Esplanade Building) situated at Worli, Lower Parel Divisions, District Mumbai bearing C.S. No.794 (Part) of Lower Parel Divisions, G/S ward and excluding Furniture & Fixtures and Vehicles of all above Divisions.

20. Loans covered in Sr. No. 3 and 4 above :

First pari passu charge over the property plant and equipment, present and future, of the Company''s Textile (Birla Century), Rayon, Cement (including proposed expansion at Manikgarh Cement, Maharashtra and Sonar Bangla Cement Plant in West Bengal), Pulp and Paper divisions and Phase I of Real Estate Development (excluding leasehold land at Birla Century, Pulp & Paper, Sonar Bangla Cement and land & buildings thereon of Maihar Cement Unit I & II divisions and mines, furniture, fixtures, vehicles and other miscellaneous assets of all the divisions).

21. Loans covered in Sr. No. 6 to 8 above :

First pari passu charge over the entire property plant and equipment, present and future, of the Company''s Birla Century, Rayon, Century Cement, Maihar Cement I & II, Manikgarh Cement, Pulp and Paper divisions and Phase I of Real Estate Development including those acquired/to be acquired for the expansion project of paper division (excluding leasehold land of Birla Century and Pulp and Paper divisions).

22. Loans covered in Sr. No. 9 to 17 above :

First pari passu charge over the property plant and equipments, present and future, of the Company''s Textile (Birla Century), Rayon, Cement (including expansion at Manikgarh Cement, Maharashtra and Sonar Bangla Cement Plant in West Bengal), Pulp and Paper divisions and Phase I of Real Estate Development (excluding leasehold land at Birla Century, Pulp & Paper, Sonar Bangla Cement and furniture, fixtures and other miscellaneous assets of all above divisions).

23. Loans covered in Sr. No. 18, 20 and 21 above :

First pari passu charge of all immovable/moveable property plant and equipments of the Company''s Textile (Birla Century), Rayon, Cement and Pulp & Paper divisions (excluding the leasehold land at Birla Century, Pulp and Paper and Sonar Bangla Cement divisions) and also a portion or land at Worli at Phase I Project and building thereon.

24. Loans covered in Sr. No. 19 above :

First pari passu charge on the present and future movable and immovable property plant and equipment, of the Phase I of Real Estate Development at Worli, Mumbai , Sonar Bangla Cement, Century Cement, Maihar Cement I & II, Manikgarh Cement (including expansion), Birla Century, Century Rayon and Century Pulp & Paper divisions, (excluding leasehold land and building on such leasehold land of all the divisions and furniture, fixtures, vehicles and other miscellaneous assets of all the divisions).

25. Loans covered in Sr. No. 22 above :

Exclusive mortgage of Land and Buildings situated at final plot no. 1080 on Town Planning Scheme at Dr. Annie Besant Road, Worli, Mumbai.

26. Loans covered in Sr. No. 23 to 27 and 29 to 35 and 49 to 52 above :

First pari passu charge over the present and future property plant and equipments of Birla Century, Rayon, Cement (including the property plant and equipments of expansion plant at Manikgarh, Maihar and Sonar Bangla Cement Plant at West Bengal), Pulp & Paper Divisions and Phase I of Real Estate Development at Worli excluding leasehold land at Pulp & Paper, Sonar Bangla Cement and Birla Century, furniture and fixtures, vehicles and other miscellaneous assets of all divisions and land & building thereon of Maihar Cement Unit I & II divisions.

27. Loans covered in Sr No. 36 above :

First pari passu charge on the plant and machineries of Birla Century, Pulp & Paper, Cement and Rayon Divisions of the Company and Land & Buildings thereon (which are already mortgaged to existing Lenders) of Birla Estates (Freehold land admeasuring 25,323.78 Mtrs. and Greenspan Building thereon (excluding Esplande Building) situated at Worli, Mumbai, Century Rayon and Manikgarh Cement Divisions of the Company (excluding Furniture & Fixtures and vehicles of all divisions.

28. Loans covered in Sr. No. 28 above :

First pari passu charge on the present and future movable and immovable property plant and equipments of the Phase I of the Real Estate Development at Worli, Mumbai, Sonar Bangla Cement, Century Cement, Maihar Cement I & II, Manikgarh Cement I & II, Birla Century, Century Rayon and Century Pulp & Paper divisions of the Borrower, excluding leasehold land and building on such leasehold land of all the divisions and land & buildings thereon of Maihar Cement I & II Divisions and furniture, fixtures, vehicles and other miscellaneous assets of all the divisions.

29. Loans covered in Sr. No. 38 to 44 above :

First pari passu charge on entire property plant and equipments of Textiles, Rayon, Cement and Pulp & Paper divisions of the Company including those acquired / to be acquired for the new project excluding the leasehold land of Pulp and Paper division, assets exclusively charged to term lenders, furniture and fixtures and vehicles.

30. Loans covered in Sr. No. 45 and 46 above :

First pari passu charge over the property plant and equipments, present and future, of the Company''s Textile (Birla Century), rayon, Cement, Pulp and paper divisions and Phase I of Real Estate Development (excluding leasehold land at Birla Century, Pulp & Paper, Sonar Bangla Cement and Maihar Cement Unit I & II and furniture and fixtures, vehicle and other miscellaneous assets of all the above divisions are excluded).

31. Loans covered in Sr. No. 47 and 48 above :

First pari passu charge over the property plant and equipments, present and future, of the Company with FACR of 1.33 (excluding leasehold land at Birla Century, Pulp & Paper, Sonar Bangla Cement and Maihar Cement Unit I & II divisions, 1.35 acres out of the 544 acres situated at Cement Plant at Raipur and furniture and fixtures, vehicle and other miscellaneous assets of all the above divisions are excluded).

(i) Unclaimed dividend amounting to Rs, 0.03 crore (31 March 2016 Rs, 0.02 crore) (1 April 2015 Rs, 0.05 crore) is pending on account of litigation among claimants / notices from the tax recovery officer.

(ii) There is no amount due and outstanding to be credited to Investors Education and Protection Fund as at the balance sheet date other than cases under litigation among claimants regarding beneficial ownership / notices from the tax recovery officer.

The tax rate used for the 31 March 2017 and 31 March 2016 reconciliations above is the corporate tax rate of 34.608% payable by corporate entities in India on taxable profits under Indian Income Tax Laws.

(e) During previous year, the increase of the Corporate income tax rate from 33.99% to 34.608% was substantively enacted on 28 February 2015 and will be effective from 1 April 2015. As a result, the relevant deferred tax balances have been premeasured. During the previous year, deferred tax liability as at 31 March 2015 has been measured at 34.608%.

The impact of the change in tax rate has been recognized in tax expense in previous year profit or loss, except to the extent that it relates to items previously recognized outside profit or loss. For the Company, such items include in particular remeasurements of post-employment benefit liabilities and the fair value of investments.

In the past, under the Export Promotion Capital Goods (EPCG) Scheme, the Company had received government grant for the purchase of certain items property, plant and equipment. As per the EPCG scheme the Company has an obligation to export up to 8 times of grant amount. As and when the Company fulfils the export obligation, proportionate grant is released to the Statement of profit and loss (See Note 37).

(i) Working capital loans from banks are secured against a first and pari passu charge over the current assets (including documents, of title to goods/related receivables) and 2nd charge on a pari-passu basis over the present and future property plant and equipment (plant and machinery) of Birla Century (Gujarat), Century Rayon, Maihar Cement Unit I & II, Manikgarh Cement Unit I & II, Sonar Bangla Cement, Century Pulp and paper and Phase 1 of Real Estate Development, Worli (excluding furniture, fixtures, vehicles and other miscellaneous assets) and mortgage of freehold immovable property(ies) of Century Cement, Century Pulp and Paper on pari-passu 2nd charge basis with other WC lenders.

(ii) The charge created as per para (i) also extends to the guarantees given by the banks on behalf of the Company to other banks, aggregating Rs, 243.11 crores (31 March 2016 Rs, 199.79 crores) (1 April 2015 Rs, 203.77 crores).

(a) The above information has been provided as available with the company to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSMED Act.

(b) Trade payables are non interest bearing and are normally settled on 60 days terms. Acceptances are interest bearing and have an average term of six months. There are no other amounts paid / payable towards interest / principal under the MSMED.

32. Revenue expenditure on research and development activities relating to Government recognized in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs, 2.53 crores (31 March 2016: Rs, 2.97 crores). During the year Rs, 0.05 crore (31 March 2016: Rs, 0.90 crore) capital expenditure on research and development has been incurred.

33. TRADE PAYABLE

(i) Rs, 2.48 crores (31 March 2016 - Rs, 0.51 crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) There are no other amounts paid / payable towards interest / principal under the MSMED; and

(ii) The above information has been determined to the extent such parties have been identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

34. DISCLOSURES PURSUANT TO - "EMPLOYEE BENEFITS”

(a) Defined Contribution Plans:

The Company''s contribution to Provident Fund and Superannuation Fund aggregating Rs, 22.82 crores (2016 : Rs, 19.26 crores) has been recognized in the Statement of Profit and Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans:

(i) Gratuity

The company has a defined benefit gratuity plan (funded).The company''s defined benefit gratuity plan is a final salary plan for employees, which requires contributions to be made to a separately administered fund. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees, which consists of an equal number of employer and employee representatives. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the investment strategy.

34. DISCLOSURES PURSUANT TO - "EMPLOYEE BENEFITS” (Contd.)

Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. This includes employing the use of annuities and longevity swaps to manage the risks. The Board of Trustees decides its contribution based on the results of this annual review. Generally, it aims to have a portfolio mix of equity instruments, property and debt instruments. The Board of Trustees aim to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.

38. RELATED PARTY DISCLOSURE AS PER IND AS 24 1 Relationships :

a) Where significant influence exists:

M/s Pilani Investment and Industries Corporation Limited (As a Shareholder of the Company directly and indirectly)

b) Key Management Personnel (KMP):

Shri D. K. Agrawal (Whole-time Director) (w.e.f 1 April 2016)

Shri B. L. Jain (Whole-time Director) (Retired on 31 March 2016)

List of Independent Directors

Shri Pradip Kumar Daga

Shri Yazdi P. Dandiwala

Shri Rajan A. Dalal

Shri Sohanlal K. Jain

List of Non Executive Directors

Shri B. K. Birla

Shri Kumar Mangalam Birla

Smt. Rajashree Birla

c) Relative of KMP

Dr. Sandip Jain (Ceased to be a related party on 31 March 2016)

38. RELATED PARTY DISCLOSURE AS PER IND AS 24 (contd.)

d) Other Related Parties

(i) Pension & Provident Fund of Century Textiles & Industries Limited

- Pension And Provident Fund Of Century Textiles And Industries Limited

- Century Rayon Employees Provident Fund Trust No. 1

- Century Rayon Employees Provident Fund Trust No. 2

- Maihar Cement Employees Provident Fund

(ii) Gratuity Fund of Century Textiles & Industries Limited

- Century Textiles And Industries Limited Employees Gratuity Fund

(iii) Superannuation Fund of Century Textiles & Industries Limited

- Century Textiles And Industries Limited (Textiles Division) Superannuation Scheme

- The Century Rayon And Associated Concerns Superannuation Scheme

- Century Textiles And Industries Ltd. (Cement Division) Superannuation Fund

- Manikgarh Cement Employees Superannuation Welfare Trust

Composition of the business segment

For management purposes, the company is organized into business divisions based on its products and services and has five reportable segments, as follows:

Name of the Segment Types of products / services Comprises of :

i. Textiles Yarn, cloth and denim cloth, viscose filament yarn and tyre yarn.

ii. Pulp and Paper Pulp, writing & printing paper, tissue paper and multilayer packaging board

iii. Cement Cement and clinker.

iv. Real Estate Leased Properties

v. Others Salt works and Chemicals

No operating segments have been aggregated to form the above reportable operating segments.

F. The Board of Director monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

G. No single customer contributed 10% or more to the Company''s revenue for the year ended 31 March 2017 and 31 March 2016.

H. The accounting policies of the reportable segments are the same as the Company''s accounting policies described in note 2A. Segment profit represents the profit before finance cost and tax earned by each segment without allocation of central administration costs and directors'' salaries, investment income and finance costs. This is the measure reported to the chief operating decision maker for the purposes of allocation and assessment of segment performance.

40. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, equity includes issued equity capital, convertible preference shares, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s Capital Management objectives are to maintain equity including all reserves to protect economic viability and to finance any growth opportunities that may be available in future so as to maximize shareholders'' value. The Company is monitoring capital using debt equity ratio as its base, which is debt to equity. The company''s policy is to keep debt equity ratio below three and infuse capital if and when required through issue of new shares and/or better operational results and efficient working capital management.

In order to achieve the aforesaid objectives, the Company has not sanctioned any major capex on new expansion projects in last two to three years. However, modernization, up gradation and marginal expansions have been continued to remain competitive and improve product quality through efficient machinery. There is constant Endeavour to reduce debt as much as feasible and practical by improving operational and working capital management.

41. FINANCIAL RISK MANAGEMENT FRAMEWORK

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management provides assurance that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the company''s policies and risk objectives. All derivative activities for risk management purposes are carried out by teams that have the appropriate skills, experience and supervision. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

A. CREDIT RISK

Credit risk is the risk that counter party will not meet it obligation under a financial instrument or customer contract leading to a financial loss. The Company expose to credit risk mainly from trade receivables and other financial assets.

(i) Trade receivables.

Customer credit is managed by each business division subject to the Company''s established policy procedures and control related to customer credit risk management.

Export customers are mainly against Letter of Credit and insurance cover on export outstanding is also taken. Generally deposits are taken from domestic debtors. Apart from deposit there is a commission agent area wise. In case any customer defaults the amount is first recovered from deposits, then from the agent''s commission. Each outstanding customer receivables are regularly monitored and if outstanding is above due date the further shipments are controlled and can only be released if there is a proper justification. The carrying amount and fair value of security deposit amounts to Rs, 249.64 crores (31 March 2016: Rs, 218.65 crores) (1 April 2015: Rs, 212.69 crores) as it is payable on demand.

The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets and their credit worthiness are monitored at periodical intervals. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

(ii) Other Financial Assets

Credit risk from balances with banks is managed by Company''s treasury department in accordance with the Company policy. Investment of surplus funds are made only in approved Mutual Fund. As soon as the fund reaches to a reasonable level the Company repay its working capital borrowing by redeeming the liquid fund. The other financial assets are from various forum of Government authorities and are released by Government authorities on completion of relevant terms and conditions for the release of outstanding.

B. MARKET RISK

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risks - interest rate risk, currency risk and other price risk in a fluctuating market environment. Financial instrument affected by market risks includes loans and borrowings, deposits, FVTOCI Investments, derivatives and other financial assets.

The Company has designed risk management frame work to control various risks effectively to achieve the business objectives. This includes identification of risk, its assessment, control and monitoring at timely intervals.

(i) Currency Risk

This is the risk that the Company may suffer losses as a result of adverse exchange rate movement during the relevant period. As a policy, Company is covering all foreign exchange risk on account of import and loans so that Company may not be put to any loss situation due to adverse fluctuations in currency rates. There is periodical review of foreign exchange transactions and hedging by the Company''s executives.

Foreign Currency Sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD and EUR exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives. The Company''s exposure to foreign currency changes for all other currencies is not material.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

(ii) Interest rate risk

The Company manages interest rate risk by having a balanced portfolio of fixed and variable rate of interest on loans and borrowings. To manage this, Company has issued fixed rate bonds and loans taken from banks are linked to MCLR rate of the bank, which are variable.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

(iii) Equity Price Risk

The Company is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Company does not actively trade these investments. Profit for the year ended 31 March 2017 and 31 March 2016 would have been unaffected as the equity investments are FVTOCI and no investments were disposed of or impaired.

C. LIQUIDITY RISK

(i) Liquidity risk management

The Company manages liquidity risk by continuously monitoring forecast and actual cash flows on daily, monthly and yearly basis. The Company ensures that there is a free credit limit available at the start of the year which is sufficient for repayments getting due in the ensuing year. Loan arrangements, credit limits with various banks including working capital and monitoring of operational and working capital issues are always kept in mind for better liquidity management

(ii) Maturities of financial liabilities

The following tables detail the Company''s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. To the extent that interest flows are floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the Company may be required to pay.

The management assessed that cash and cash equivalents, trade receivables, trade payables, cash credit and all other current financial assets and liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

(i) Receivables are evaluated by the company based on parameters such as interest rates and individual credit worthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

(ii) The fair value of loans from banks and other financial liabilities, security deposit, as well as other financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

(iii) The fair values of the unquoted equity instruments have been estimated using a net adjusted fair value method. The valuation requires management to make certain assumptions about the assets, liabilities, investments of Investee Company. The probabilities of the various assumptions can be reasonably assessed and are used in management''s estimate of fair value for these unquoted equity investments based on the best information available to the Company.

(iv) The fair values of quoted equity instruments are derived from quoted market prices in active markets.

(v) The Company enters into foreign exchange forward contracts are valued using valuation techniques, which employs the use of market observable inputs.

(vi) The fair value of floating rate borrowings are determined by using DCF method using discount rate that reflects the issuer''s borrowing rate at the end of the reporting period. The own non performance risk as at 31 March 2017 was assessed to be insignificant.


Mar 31, 2014

1. (a) Trade payables include (i) Rs. Nil (31.03.2013 - Rs. 0.41 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act); and (ii) Rs. 503.53 Crore (31.03.2013 - Rs. 359.17 Crore) due to other creditors.

(b) Trade payables include acceptances of Rs. 138.62 Crore (31.03.2013 Rs. 107.12 Crore).

(c) The amount due to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 CMSMED Acf) towards principal Rs. Nil (31.03.2013 - Rs. 0.41 Crore). There are no other amounts paid / payable towards interest / principal under the MSMED Act.

(d) The above information has been provided as available with the Company to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSMED Act.

2. Provision for disputed matters in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR

31.03.2014 31.03.2013 (Rs. in Crore) (Rs. in Crore)

(a) (i) Claims against the Company not acknowledged as debts in respect of:

- Custom Duty and Excise Duty 14.77 18.53

- Sales Tax and Entry Tax 111.46 105.32

- Power Charges 25.94 12.48

- Royalty 345.32 310.98

- Others 29.85 13.88

(ii) Claims not acknowledged as debts jointly with other members of "Business Consortium of Companies" in which the Company had an interest (proportionate) 20.84 20.02

(b) Disputed income tax matters under appeal 15.65 14.26

(c) Registration and Road Tax on Dumper of Cement Division Amount not determinable

(d) Liability on account of Jute packaging obligation upto 30th June, 1997 under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987 - Amount not Determinable

(e) The Competition Commission of India (CCI) has imposed a penalty of Rs. 274.02 Crore on the Company based on the complaint filed by the Builders Association of India alleging cartelisation by the Company along with other cement manufacturing companies. Based on the legal opinion, the Company believes that it has a good case and has filed an appeal against the order before the Competition Appellate Tribunal (COMPAT). Accordingly no provision has been made in the accounts. During the year, the Company was directed to deposit 10% of this demand pending disposal of the appeal by COMPAT. Consequently, an amount of Rs. 27.40 Crore was deposited by the Company as Fixed Deposit with its bankers in the name of the "Registrar, Competition Appellate Tribunal A/c Century Textiles and Industries Ltd." 274.02 274.02

The amounts shown in respect of item No.32 (a) to (e) represent the best possible estimates arrived at on the basis of available information. The uncertainties are dependent on the outcome of the different legal processes. The timing of future cash flows will be determinable only on receipt of judgements / decisions pending with various forums / authorities. The Company does not expect any reimbursements against the above.

(f) Guarantees given by the Company''s bankers 13.29 22.48 Guarantees have been given by the Company''s bankers in the normal course of business and are not expected to result in any liability on the Company.

(g) Undertaking given by the Company under confessional duty / exemption scheme to 553.03 632.08 government authorities (net of obligation fulfilled) 4. Revenue expenditure on research and development activities relating to Government recognised in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs. 0.82 Crore (2012-2013 Rs. 0.74 Crore). No capital expenditure on research and development has been incurred during the year (2012-13 Rs. Nil).

5. RELATED PARTY INFORMATION A Relationships:

(a) Where significant influence exists :

(i) M/s Pilani Investment and Industries Corporation Limited

(ii) M/s Kesoram Insurance Broking Services Limited

(iii) M/s Vasavadatta Services Limited

(iv) M/s Industry House Limited

(v) M/s Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties :

(1) Shri B.K. Birla

(2) M/s Kesoram Industries Limited

(3) M/s Century Enka Limited

(4) M/s Jayshree Tea & Industries Limited

Note : The parties listed under 1(c) above, are strictly not "related parties'' as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

C. Other Disclosures

1. Segments have been identified taking into account the organisation structure as well as the differing risks and returns.

2. The Company has disclosed business segment as the primary segment.

3. Composition of the business segments

Name of the Segment Types of products / services Comprises of:

a. Textiles Yarn, cloth and denim cloth, viscose filament yarn and tyre yarn.

b. Pulp and Paper Pulp, writing & printing paper, tissue paper and multilayer packaging board.

c. Cement Cement and clinker.

d. Others Salt works, chemicals, floriculture and real estate.

4. Inter segment revenues are recognised at works / factory costs of the transferor unit / division or at sales price.

5. The Segment revenue, results, assets and liabilities include the respective amounts identifiable to each segment and amounts allocated on a reasonable basis.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund Liability :

In case of certain employees, the Provident fund contribution is made to trusts administered by the Company. In terms of guidance note Issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2014.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 9 to 18 years

Expected guaranteed interest rate - 8.75%

Discount rate for the remaining term to maturity of interest portfolio - 9.10%

6. The Company has created a debenture redemption reserve to the extent of available profits for the year, for the purpose of redemption of its secured redeemable non convertible debentures.

7. Unclaimed fixed deposits amounting to Rs. 22,500 [31.03.2013 (Rs. 22,500)] and Rs. 3,150 [31.03.2013 (Rs. 3,150)] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

8. Figures less than Rs. 50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

9. prevjOUS year''s figures have been regrouped / recast wherever necessary.

10- Significant Accounting Policies followed by the Company are as stated in the statement annexed to this Schedule as Annexure I.


Mar 31, 2013

1. (a) Trade payables include (i) Rs. 0.41 Crore (31.03.2012 - Rs.1.82 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 359.46 Crore (31.03.2012 - Rs. 305.73 Crore) due to other creditors.

(b) The amount due to suppliers registered under Micro, Small and Medium Enterprise Development Act, 2006 (''MSMED Act''), based on information available with the Company.

2. Provision for disputed matters in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

3. Revenue expenditure on research and development activities relating to Government recognised in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs.0.74 Crore (2011-2012 Rs. 0.60 Crore). No capital expenditure on research and development has been incurred during the year (2011-12 Rs.Nil)

4. RELATED PARTY INFORMATION 1 Relationships :

(a) Where significant influence exists :

(i) M/s Pilani Investment and Industries Corporation Limited

(ii) M/s Kesoram Insurance Broking Services Limited

(iii) M/s Vasavadatta Services Limited

(iv) M/s Industry House Limited

(v) M/s Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties :

(1) Shri B.K. Birla

(2) M/s Kesoram Industries Limited

(3) M/s Century Enka Limited

(4) M/s Jayshree Tea & Industries Limited

Note : The parties listed under 1(c) above, are strictly not ''related parties'' as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund Liability :

In case of certain employees, the Provident fund contribution is made to trusts administered by the Company. In terms of guidance note Issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2013.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 11 to 18 years

Expected guaranteed interest rate - 8.5%

Discount rate for the remaining term to maturity of interest portfolio - 8.02%

5. In view of loss during the year, the Company has not created debenture redemption reserve in respect of secured redeemable non convertible debentures.

6. Unclaimed fixed deposits amounting to Rs.22,500 [31.3.2012 Rs.22,500] and Rs. 3150 [31.3.2012 Rs.3,150] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

7. Trade payable includes acceptances of Rs. 107.12 Crore (31.03.2012 Rs. 72.39 Crore).

8. Figures less than Rs.50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

9. Previous year''s figures have been regrouped / recast wherever necessary.

10. Significant Accounting Policies followed by the Company are as stated in the statement annexed as Annexure I.


Mar 31, 2012

1 Loans covered in S.No. 1 to 6 and 11 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement, Pulp and paper divisions and phase I of Real Estate Development (excluding lease hold land of Birla Century and Pulp and Paper Divisions).

2 Loans covered in S.No. 7 to 10 above :

First pari passu charge over the entire fixed assets, present and future of the Company's Textile (Birla Century), Rayon, Cement, Pulp and Paper Divisions and phase I of Real Estate Development (excluding leasehold land at Birla Century, Pulp & Paper, Sonar Bangla Cement and Maihar Cement Unit I & II Divisions).

3 Loans covered in S.No. 12 and 18 to 19 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile, Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development (excluding the lease hold land of the Birla Century, Pulp and Paper and Maihar Cement I & II Divisions).

4 Loans covered in S.No. 13 to 17 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development of the Company including those acquired/ to be acquired for the new project (excluding the lease hold land of Birla Century, Pulp & Paper & Sonar Bangla Cement Divisions).

5 Loans covered in S.No. 20 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile, Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development including those acquired/to be acquired for the new project (excluding the lease hold land of all Divisions).

6 Loans covered in S.No. 21 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement & Pulp and Paper Divisions and phase I of Real Estate Development including expansion project of Denim Division (excluding the lease hold land of the Pulp and Paper Division).

7 Loans covered in S.No. 22 to 31 above :

First pari passu charge over the entire fixed assets, present and future, of the Company's Textile (Birla Century), Rayon, Cement and Pulp & Paper Divisions and phase I of Real Estate Development including those acquired/to be acquired for the new project (excluding the lease hold land of Pulp & Paper Division).

The Board has recommended dividend @ Rs. 5.50 (Rupees five and paise fifty only) per equity share of Rs. 10 each on 9.30.45.680 equity shares for the year ended 31st March, 2012 (Previous year Rs. 5.50 per equity share of Rs. 10 each on 9.30.45.680 equity shares.)

Nature of Security

(i) Working capital loans from banks are secured against the hypothecation of the whole of the Company's raw materials, finished goods, material-in-process, stores and spares, present and future book debts, receivables, etc. and second charge created over movable and immovable fixed assets of Company's Divisions viz. Birla Century, Cement, Pulp & Paper and Rayon Divisions (excluding leasehold land at Birla Century, Pulp & Paper and Sonar Bangla Cement Division) and also a portion of the land at Worli, Mumbai.

(ii) The charge created as per para (i) also extends to the guarantees given by the banks on behalf of the Company, aggregating Rs. 228.64 Crore (31.3.2011 Rs. 175.78 Crore).

Note:

(i) Unclaimed dividend amounting to Rs.0.03 Crore (31.3.2011 Rs. 0.03 Crore) is pending on account of litigation among claimants / notices from the tax recovery officer.

(ii) There is no amount due and outstanding to be credited to Investors Education and Protection Fund as at the balance sheet date other than cases under litigation among claimants regarding beneficial ownership.

(a) Includes Rs. 5.20 Crore (Previous year Rs. 5.44 Crore) for which sale and conveyance deeds and other transfer formalities are yet to be executed. Stamp duty and other incidental expenses will be capitalised on execution of the same.

(b) Includes premises on ownership basis Rs. 2.67 Crore (Previous year Rs. 2.67 Crore), leasehold premises Rs. O.OlCrore (Previous year Rs. 0.01 Crore) and cost of shares in co-operative societies (Rs. 750/-) [Previous year (Rs.750/-)].

(c) Wagons acquired under "Own Your Wagon" scheme have been given on lease to railways.

(d) Land Development at Worli, Mumbai - Construction of two commercial building with car parking spaces etc. has commenced on the Company's freehold land at Worli, Mumbai as permitted by the relevant regulations. The buildings will cover a constructed area of about 13 lac square feet and are expected to be completed by late 2012-13.

(e) Includes adjustment for Revaluation Reserve (Refer Note 44)

(f) i) 44 hectares of land were acquired at Manikgarh Cement Division and were subsequently surrendered to the Forest Department, Government of India, pursuant to the provisions of the Forest Conservation Act, 1980. The amount of compensation payable will be accounted for when determined by the Collector.

ii) In respect of Manikgarh Cement Division, Land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Revisional Authority has since observed that approx. 17 hectares of land falls within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. Adjustments, if any will be made, in the year in which the matter is finally settled.

8 (a) Trade payables include (i) Rs. 1.82 Crore (31.03.2011 - Rs.0.95 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 309.85 Crore (31.03.2011 - Rs. 410.79 Crore) due to other creditors.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

8.Provision for disputed matters in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

10. Contingent Liabilities not provided for

31.3.2012 31.3.2011 (Rs.in Crore) (Rs. in Crore)

(a) (i) Claims against the Company not acknowledged as debts in respect of :

- Custom Duty and Excise Duty 17.98 15.17

- Sales Tax and Entry Tax 94.46 40.49

- Power Charges 15.10 12.48

- Royalty 281.52 202.93

- Others 17.57 33.10

(ii) Claims not acknowledged as debts jointly with other members of "Business Consortium of Companies" in which the Company had an interest (proportionate) 19.19 18.59

(b) Disputed income tax matters under appeal 13.18 11.71

(c) Registration and Road Tax on Dumper of Cement Division Amount not determinable

(d) Liability on account of Jute packaging obligation upto 30th June, 1997 under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act,1987 - Amount not determinable

(Future cash flows in respect of item No.32 (a) to (d) above are determinable only on receipt of judgments/decisions pending with various forums/authorities.)

e) Guarantees given by the Company's bankers 2.41 4.49 Guarantees have been given by the Company's bankers in the normal course of business and are not expected to result in any liability on the Company

(f) Undertaking given by the company under concessional duty/exemption scheme to government authorities (net of obligation fulfilled) 696.79 746.42

11. Revenue expenditure on research and development activities relating to Government recognised in-house research and development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs.0.60 Crore (2010-2011 Rs. 0.57 Crore). No capital expenditure on research and development has been incurred during the year (2010-11 Rs.Nil)

12. RELATED PARTY INFORMATION 1 Relationships :

(a) Where significant influence exists :

(i) Pilani Investment and Industries Corporation Limited

(ii) Kesoram Insurance Broking Services Limited

(iii) Vasavadatta Services Limited

(iv) Industry House Limited

(v) Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties :

(1) Shri B.K. Birla

(2) Kesoram Industries Ltd.

(3) Century Enka Ltd.

(4) Jayshree Tea & Industries Ltd.

Note : The parties listed under 1(c) above, are strictly not 'related parties' as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

The estimate of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors.

Provident Fund Liability :

In case of certain employees, the Provident fund contribution is made to trusts administered by the Company. In terms of guidance note Issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Provident fund liability based on the assumptions listed and determined that there is no shortfall as at 31st March, 2012.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 11 to 18 years Expected guaranteed interest rate - 8.25%

Discount rate for the remaining term to maturity of interest portfolio - 8.50%

13. Remuneration has been paid to the whole time director for the year ended 31st March, 2012 in terms of the resolution passed by the shareholders at the Annual General Meeting of the Company held on 28th July, 2009. In the absence of adequate profits for the said year, the remuneration paid, in accordance with the provisions of Revised Schedule XIII to the Companies Act, 1956, is proposed to be ratified at the ensuing Annual General Meeting of the Company.

14. Unclaimed fixed deposits amounting to ( Rs.22,500 ) [31.3.2011 (Rs.22,500)] and (Rs. 3150) [31.3.2011 (Rs.3,150)] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

15. The Company had, during the year 1983, carried out a revaluation of certain assets viz. Land, Buildings and Plant and Machinery, at some of its divisions, the residual value of which, as at 31st March, 2012, aggregate Rs.16.73 Crore. Since the revalued amounts do not reflect values which are relevant at present, the Board of Directors, at their meeting dated 2nd May, 2012, has decided to reverse the aforesaid amount which would result in these assets being stated at their historical cost less accumulated depreciation. The above accounting treatment does not have any impact on the Statement of Profit and Loss for the current or subsequent years.

16. Figures less than Rs.50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

17. The Financial statements for the year ended 31st March, 2011 had been prepared as per the applicable pre- revised Schedule - VI to the Companies Act 1956. Consequent to the notification under the Companies Act 1956 , the financial statements for the year ended 31st March, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to confirm to this year's classification.

18. Significant Accounting Policies followed by the Company are as stated in the statement annexed as Annexure I.


Mar 31, 2011

1. Secured Loans :

(a) Rupee term loans from banks are secured by first pari passu mortgage / hypothecation of all the immovable / movable fixed assets, present and future of the Companys Birla Centur/, Cement, Pulp & Paper and Rayon Divisions (excluding Leasehold Land at Birla Century, Pulp & Paper and Soner Bangla Cement Division ) and also a portion of land at Worli, Mumbai and second charge created in favour of certain term lenders on the current assets of the Company. Loans for the Companys Century Denim Division are also secured by mortgage / hypothecation of all the immovable / movable fixed assets of the Denim Division (Due within one year Rs. 385.17 Crore).

(b) Pre-shipment, Post-shipment, Cash Credits, Working Capital Demand Loans and Export Bills Discounting facilities are secured against the hypothecation of the whole of the Companys Raw Materials, Finished Goods, Material in process, Stores and Spares, present and future Book Debts, Receivables, etc. and second charge created over movable and immovable fixed assets Companys divisions viz. Birla Century, Cement, Pulp & Paper and Rayon Divisions ( excluding Leasehold Land at Birla Century, Pulp & Paper and Sonar Bangla Cement division) and also a portions of the land at Worli, Mumbai.

(c) The charge created as per para (b) also extends to the guarantees given by the banks on behalf of the Company, aggregating Rs. 175.78 Crore (31.3.2010 Rs. 149.68 Crore).

2. (a) 44 hectares of land were acquired at Manikgarh Cement Division and were subsequently surrendered to the Forest Department, Government of India, pursuant to the provisions of the Forest Conservation Act, 1980. The amount of compensation payable will be accounted for when determined by the Collector.

(b) In respect of Manikgarh Cement Division, Land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Revisional Authority has since observed that approx. 17 hectares of land falls within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. Adjustments, if any will be made, in the year in which the matter is finally settled.

3. (a) Sundry Creditors in Schedule 8 to the Accounts include (i) Rs. 0.95 Crore (31.03.2010 - Rs. 0.20 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs. 866.40 Crore (31.03.2010 - Rs. 794.68 Crore) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under the MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. (a) Unclaimed Fixed deposits amounting to (Rs. 22500) [31.3.2010 (Rs. 22500)] and (Rs. 3150) [31.3.2010 (Rs.3150)] being interest accrued and due thereon remain unpaid in view of the internal disputes between the claimants which has been referred to the Court whose decision is awaited.

(b) Unclaimed Dividends amounting to Rs. 0.03 Crore (31.3.2010 Rs. 0.02 Crore) is pending on account of litigation among claimants / Notices from Tax Recovery Officer.

31.3.2011 31.3.2010

(Rs.in Crore) (Rs. In Crore)

5. Contingent Liabilities not

provided for :

(a) Guarantees given by Companys

bankers [Guarantees have been given

by the Companys bankers in the normal

course of business and are not expected

to result in any liability on the 4.49 1.89

Company)

8. Sales are net of cash discounts Rs. 45.29 Crore (2009-2010 Rs. 45.11 Crore).

11. LAND DEVELOPMENT AT WORLI, MUMBAI:

Construction of two commercial buildings with car parking spaces etc. has commenced on the Companys freehold land at Worli, Mumbai as permitted by the relevant regulations. The buildings will cover a constructed area of about 13 lac square feet and are expected to be completed by late 2011-12.

12. The Company has, retrospectively, with effect from 1st April, 2007, opted to recognise exchange differences arising on reporting of long term foreign currency monetary items in line with paragraph 46 of Accounting Standard 11 inserted vide Notification No. GSR 225E dated 31st March, 2009 as per Companies (Accounting Standards) Amendment Rules, 2009.

Pursuant to the above, the effect of exchange differences on long term foreign currency monetary items, so far as they relate to acquisition of depreciable capital assets, have been adjusted to the cost of such assets and depreciated over their remaining useful lives. Accordingly net exchange gain relating to the financial year 2010-2011 amounting to Rs. Nil (Previous year Rs. 0.73 Crore), has been adjusted to the cost of fixed assets.

There are no long term foreign currency monetary items which require exchange differences to be amortised.

13. Revenue expenditure on Research and Development activities relating to Government recognised in-house Research and Development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs. 0.57 Crore (2009-2010 Rs. 0.48 Crore). No Capital expenditure on Research and Development has been incurred during the year.

C. Other Disclosures

1. Segments have been identified in line with the Accounting Standard, AS-17 "Segment Reporting" (AS-17), taking into account the organisation structure as well as the differing risks and returns.

2. Company has disclosed Business Segment as the primary segment.

3. Composition of the Business Segment.

Name of the Segment Types of products / services comprises of:

a. Textiles Yarn, Cloth and Denim Cloth, Viscose Filament

Yarn and Tyre Yarn.

b. Pulp and Paper Pulp, Writing & Printing paper, Tissue paper,

Multilayer packaging Board and Fibre line.

c. Cement Cement and Clinker.

d. Others Salt Works, Chemicals, Floriculture

and Real Estate.

4. Inter segment revenues are recognised at works / factory costs of the transferor unit / division or at Sales Price.

5. The Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each segment and amounts allocated on a reasonable basis.

24. Sundry Creditors include amounts provided in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

27. Figures less than Rs.50000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

28. Previous years figures have been regrouped/recast wherever necessary.


Mar 31, 2010

1. Secured Loans:

(a) Sales Tax Interest Free Loan from Madhya Pradesh Audyogik Vikas Nigam is secured by hypothecation and mortgage on the movable and immovable properties of Century Cement at Raipur and Maihar Cement at Maihar, present and future and such charge to remain subsequent to the charges created / to be created by the Company in favour of Rupee/ Foreign Currency Term Loans from Banks. (Due within one year Rs. 0.01 Crore).

(b) Rupee loans from Banks are secured / to be secured by first pari passu mortgage / hypothecation of all the immovable / movable fixed assets, present and future, of the Companys Birla Century, Cement, Pulp & Paper (excluding leasehold land) and Rayon Divisions and second charge created / to be created in favour of certain term lenders on the current assets of the Company. Loans for the Companys Century Denim Division are also secured by mortgage / hypothecation of all the immovable / movable fixed assets of the Denim Division. Short Term Rupee Loan is secured by way of second and subservient charge on movable current assets of the Company (Due within one year Rs. 394.56 Crore).

(c) Pre-shipment, Post-shipment, Cash Credits, Working Capital Demand Loans and Export Bills Discounting facilities are secured against the hypothecation of the whole of the Companys Raw Materials, Finished Goods, Materials- in-process, Stores and Spares, present and future Book Debts, Receivables, etc. and second charge created / to be created over movable and immovable fixed assets of Birla Century, Cement, Pulp & Paper (excluding leasehold land) and Rayon Divisions of the Company. Inland Bills discounting facilities from Banks are secured against Railway Receipts, Lorry Receipts, etc.

(d) The charge by way of hypothecation of Raw Materials, Finished and Semi-finished goods and Stores and Spares in favour of banks, also extends to the guarantees given by the banks on behalf of the Company, aggregating Rs. 149.68 Crore (31.3.2009 Rs. 125.70 Crore).

2. (a) 44 hectares of land were acquired at Manikgarh Cement Division and were subsequently surrendered to the Forest Department, Government of India, pursuant to the provisions of the Forest Conservation Act, 1980. The amount of compensation payable will be accounted for when determined by the Collector.

(b) In respect of Manikgarh Cement Division, Land measuring 41.20 hectares occupied by the Forest Department and disputed by the Company was adjudicated by the Collector and the Divisional Commissioner (Appeals) in favour of the Company. The Government of Maharashtra on a reference made by the Forest Department directed the Collector for a fresh demarcation of the site boundaries and has also directed the Forest Department to refund the compensation paid by the Company along with interest for the land falling within their boundary. The Revisional Authority has since observed that approx. 17 hectares of land falls within the boundaries of the reserved forest. The Company has filed a writ petition before the Bombay High Court, Nagpur bench against the said order. Adjustments, if any will be made, in the year in which the matter is finally settled.

3. (a) Sundry Creditors in Schedule 8 to the Accounts include (i) Rs.0.20 Crore (31.3.2009 - Rs.0.02 Crore) due to micro and small enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME); and (ii) Rs.807.23 Crore (31.3.2009- Rs. 673.30 Crore) due to other creditors.

(b) No interest is paid / payable during the year to any enterprise registered under the MSME.

(c) The above information has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the MSME.

4. (a) Unclaimed Fixed deposits amounting to (Rs.22,500) [31.3.2009 (Rs. 22,500)] ant (Rs. 3,150) [31.3.2009

(Rs. 3,150)] being interest accrued and due thereon remain unpaid in view of the inte nal disputes between the claimants which has been referred to the Court whose decision is awaited.

(b) Unclaimed Dividends amounting to Rs.0.02 Crore (31.3.2009 Rs. 0.02 Crore) is pendi g on account of litigation among claimants / Notices from Tax Recovery Officer.

31.3.2010 31.3.2009 (Rs, in Crore) (Rs. In Crore) 5. Contingent Liabilities not provided for: -- --

(a) Guarantees given by the Companys bankers

[Guarantees have been given by the Companys bankers in the normal course of business and are not expected to result in any liability on the Company) 1.89 1.89

(b) (i) Claims against the Company not acknowledged as debts in respect of:

- Custom Duty and Excise Duty 37.89 24.24

- Sales Tax and Entry Tax 35.96 28.78

- Power Charges 23.72 276.41

- Royalty 168.80 143.31

- Others 18.60 36.07

(ii) Claims against members of a "Business Consortium of Companies" in which the Company had an interest not acknowledged as debts. (proportionate) 17.48 17.19

(c) Registration and Road Tax on Dumper of the Cement Division Amount not determinable

(d) Disputed tax matters in appeal 2.81 0.46

(e) Liability on account of Jute packaging obligation upto 30th June, 1997 under the Jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987 Amount not determinable

Note : Item No.5(b) to 5(e)

(The Company has taken legal and other steps necessary to protect its position in respect of these claims, which based on legal advice are not sustainable. It is not possible to make any further determination of the liabilities which may arise or the amounts which may be refundable in these respects).

6. Sales are net of cash discounts Rs.45.11 Crore (2008-2009 Rs. 28.91 Crore).

7. The arrears of depreciation for the accounting years 1999-2000 and 2000-2001 in respect of assets of certain divisions have, as a matter of prudence and in accordance with relevant accounting standards, supported by a legal opinion, been charged off over two accounting years viz. 2007-2008 and 2008-2009.

8. The Company has recognised exchange differences arising on long term foreign currency monetary items in line with Accounting Standard 11 inserted vide Notification No. GSR 225E dated 31st March, 2009 as per Companies (Accounting Standards) Amendment Rules, 2009.

Pursuant to the above, the effect of exchange differences on long term foreign currency monetary items, so far as they relate to acquisition of depreciable capital assets, have been adjusted to the cost of such assets and depreciated over their remaining useful lives. Accordingly net exchange gain relating to the financial year 2009-2010 amounting to Rs. 0.73 Crore, has been adjusted to the cost of fixed assets.

There are no long term foreign currency monetary items which require exchange differences to be amortised.

9. Revenue expenditure on Reasearch and Development activities relating to Government recognised in-house Reasearch and Development laboratories incurred and charged out during the year through the natural heads of account, aggregate Rs. 0.48 Crore (2008-2009 Rs. 0.51 Crore). No Capital expenditure on Research and Development has been incurred during the year.

10. Related Party Information

1 Relationships:

(a) Where significant influence exists :

(i) M/s Pilani Investment and Industries Corporation Limited.

(ii) M/s Kesoram Insurance Broking Services Limited.

(iii) M/s Vasavadatta Services Limited.

(iv) M/s Industry House Limited

(v) M/s Bander Coal Company Private Limited

(b) Key Management Personnel :

Shri B.L. Jain (Whole-time Director)

(c) Other Related Parties : (i) Shri B.K. Birla

(ii) M/s Kesoram Industries Ltd.

(iii) M/s Century Enka Ltd.

(iv) M/s Jayshree Tea & Industries Ltd.

NOTES : (i) The parties listed under 1(c) above, are strictly not "related parties as per the requirements of AS-18, but are being included herein for making the Financial Statements more transparent.

(ii) Related party relationship is as identified by the Company and relied upon by the Auditors.

11. Sundry Creditors include amounts provided in respect of known contractual risks, litigation cases and pending assessments in respect of taxes, duties and other levies / claims, the actual outflow on which will depend on the outcome of the respective proceedings.

12. Figures less than Rs.50,000 have been shown at actuals in brackets, since the figures are rounded off to the nearest lac.

13. Previous years figures have been regrouped/recast wherever necessary.

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