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Notes to Accounts of HIL Ltd.

Mar 31, 2022

(i) Fair valuation hierarchy

The fair value of investment property has been determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of the property being valued. The valuer is a registered valuer as defined under Rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017

The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on the inputs to the valuation technique used (see note 2(E)).

(ii) Valuation technique

The Company follows discounted cash flows technique. The valuation model considers the present value of net cash flows to be generated from the property, taking into account the expected rental growth rate, vacant periods, occupancy rate, lease incentive costs such as rent-free periods and other costs not paid by tenants, if any. The expected net cash flows are discounted using risk-adjusted discount rates. Among other factors, the discount rate estimation considers the quality of a building and its location (prime vs secondary), tenant credit quality and lease terms.

(ii) Terms and rights attached to the equity shares

The Company has only one class of equity shares having a face value of INR 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

Dividends paid during the year ended 31 March 2022 include an amount of INR 25.00 per equity share towards final dividend for the year ended 31 March 2021 and an amount of INR 20.00 per equity share towards interim dividends for the year ended 31 March 2022. Dividends paid during the year ended 31 March 2021 include an amount of INR 10.00 per equity share towards final dividend for the year ended 31 March 2020 and an amount of INR 15.00 per equity share towards interim dividends for the year ended 31 March 2021.

The Board of Directors of the Company have recommended a final dividend of INR 25.00 per share (250%) on 06 May 2022 for the financial year ended 31 March 2022. The Board also declared an additional final dividend of INR 20.00 (200%) per share to commemorate the celebration of Platinum Jubilee on completion of 75 years of incorporation. This, together with an interim dividend of INR 20.00 per share (200%) declared in the previous quarter, the total dividend for the financial year ended 31 March 2022 works out to INR 65.00 per share (650%) on Equity Shares of INR 10/- each. Final dividend and additional final dividend are subject to approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately INR 3381.26 Lacs.

(a) During the previous year, the Company availed a term loan of INR 4500.00 lacs from Hongkong and Shanghai Banking Corporation Limited secured by way of exclusive charge on moveable assets identified. The outstanding of INR 3825.00 lacs was completely repaid during the year. The said loan carried an interest rate in the range of 6.00% p.a. during the year (31 March 2021: 6:00% p.a to 8.25% p.a.). Satisfaction of charges in respect of this loan has been filed with Registrar of Companies.

(b) Represents interest free sales tax loan taken from a financial institution, is repayable after 7 years from the date of its respective disbursement. The last instalment is falling due in August 2024. As per the agreement, these loans are secured by way of first charge on its entire assets of Sathariya unit, first charge on plant and machinery of its Balasore unit and collateral security of Corporate office building of the Company located at Gachibowli, Hyderabad.

(c) Deferred sales tax loan was sanctioned towards the sales tax dues relating to Thimmapur unit. The loan is interest free and repayable on yearly basis having last instalment due in financial year 2023-24.

(d) The Company availed a working capital loan of INR 4500 lacs from The Federal Bank Limited. The loan is repayable on demand and carried an interest rate as linked to Repo Rate spread which has been in the range of 4.00% p.a. to 4.25% p.a during the year (31 March 2021: 4.00% p.a. to 9.00% p.a.).

(e) The Company has not availed any specific borrowings during the year.

(f) In respect of the following borrowings, the Company is in the process of collecting no due certificate from the respective parties and the same is expected to get closed in the next financial year. The charges on these loans are open with Registrar of Companies (ROC) Hyderabad.

1. Indian Oil Corporation Limited amounting to INR 4 lacs.

2. Trustees of Birla Brothers Private Limited amounting to INR 1.33 lacs.

3. The Housing Development Finance Corporation Limited amounting to INR 400 lacs.

33. Discontinued operations

Refer accounting policy in note 3(v)

During the previous year, the Board of Directors at their meeting held on 16 January 2020 approved the sale and transfer of the Company''s calcium silicate insulation products division operated under the brand "HYSIL'' to Calderys India Refractories Limited through a slump sale arrangement on a going concern basis, subject to completion of certain conditions precedent set out in the BusinessTransfer Agreement ("BTA"). Accordingly, the sale and transfer of business was completed on 10 July 2020 with a purchase consideration of INR 7764 lacs as per the terms of BTA.

This division was classified as discontinuing operations in the earlier year. The statement of profit and loss has been represented to show the discontinued operations separately from continuing operations.

35. Operating segments

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of paragraph 3 of Ind AS 108 ''Operating Segments'', no disclosures related to segment are presented in these standalone financial statements.

36. Employee benefits

The Company has the following post-employment benefit plans:

(b) Defined benefit plan

In accordance with the ''The Payment of Gratuity Act, 1972'', the Company provides for Gratuity, the Employees'' Gratuity Fund Scheme (the Gratuity Plan), covering eligible employees. Liabilities with regard to such Gratuity Plan are determined by an actuarial valuation as at the end of the year and are charged to the standalone statement of profit and loss. This defined benefit plans expose the Company to actuarial risks, such as liquidity risk, interest rate risk, investment risk, etc.

Interest Rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability.

Liquidity Risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non availability of enough cash / cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.

Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

The Gratuity plan managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India ("LIC"). Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The Company has determined that, in accordance with the terms and conditions of the gratuity plan, and in accordance with statutory requirements (including minimum funding requirements) of the plan of the relevant jurisdiction, the present value of refund or reduction in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined benefit asset is necessary at 31 March 2022 (31 March 2021: no decrease in defined benefit asset).

The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields / rates available on applicable bonds as on the current valuation date.

The salary growth rate indicated above is the Company''s best estimate of an increase in salary of the employees in future years, determined considering the general trend in inflation, seniority, promotions, past experience and other relevant factors such as demand and supply in employment market, etc.

Attrition rate indicated above represents the Company''s best estimate of employee turnover in future (other than on account of retirement, death or disablement) determined considering various factors such as nature of business, retention policy, industry factors, past experience, etc.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13 November 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

39. Contingent liabilities A. Contingent liabilities (not provided for) in respect of:
Particulars	31 March 2022	31 March 2021
(a) Demand raised by the Income-tax authorities, being disputed by the Company* (b) Demands raised by sales tax authorities, being disputed by the Company (c) Demands (including penalties) raised by excise authorities, being disputed by the Company* (d) Appeal filed by the Company before the High Court of Judicature of Andhra Pradesh against the decision of appeal in favour of the Income-tax department pertaining to wealth tax matter. (e) Pending cases with High Court where Income-tax department has preferred appeals (f) Demand for property tax, being disputed by the Company (g) Other claims against the Company not acknowledged as debts ****	1873.04	803.61
	1953.45	2258.15
	689.21	731.58
	56.98	56.98
	1535.22	146769
	1083.00	252.15
	286.64	286.64

(h) There are other civil matters against the Company of which one such case is pertaining to certain mining activity performed by the Company in the past. The National Green Tribunal ("NGT"), New Delhi, disposed off the above case in the earlier year, directing that the restoration of mine to be carried out by State of Jharkhand; and filing of claims by the victims before the District Judge, Chaibasa for adjudication. Aggrieved by some of the findings in the aforesaid Orders and subsequent Orders passed by NGT, the Company filed a Civil Appeal before the Honourable Supreme Court of India. The Honourable Supreme Court of India directed to issue notice to the other parties and maintain Status Quo in the meantime. During the previous year, the District Mining Officer, Chaibasa, has sought payment of environment compensation of INR 1344 lacs from the Company which is in wilful disobedience of the aforesaid order passed by the Honourable Supreme Court. The Company has responded accordingly. In view of the aforesaid Status Quo Order, the further proceedings before NGT are being adjourned from time to time. Management believes that the final outcome of the above matter is not expected to be material on the financial statements.

* Income-tax demand comprises of demand from the Indian tax authorities upon completion of their assessment. The tax demands are mainly on account of disallowance of the benefit on research & development expenses, depreciation expenses on wind mill, other expenses not allowed.

** The demands raised by the sales tax authority are mainly towards enhancement of turnover due to certain disallowances, entry tax on stock transfers and local sales tax demand upon completion of assessment and various other miscellaneous cases raised by the respective state authorities.

*** The demand raised by the excise authority is mainly towards excise duty demand including interest and penalty towards disallowance of availment of CENVAT credit and wrong classification of products as taxable versus exempt product.

**** Other claims against the Company not acknowledged as debt mainly includes liability towards fuel surcharge adjustment disputed with electricity board for the financial year 2008-09 and 2009-10.

The Company is contesting the demands and the Management believe that its position will likely be upheld in the appellate process and accordingly no expense has been accrued in the standalone financial statements for the demand raised / show cause notice received as the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s standalone financial statements.

B. On 28 February 2019, the Hon''ble Supreme Court of India has delivered a judgment clarifying the principles that need to be applied in determining the components of salaries and wages on which Provident Fund (PF) contributions need to be made by establishments. However, considering that there are numerous interpretative issues relating to retrospective application of this judgement, the Company has made a provision for provident fund contribution based on the best estimate during the earlier year. The Company will evaluate its position and update its provision, if required, on receiving further clarity on the subject.

# During earlier year, the Company made provision for the dividend receivable amounting to INR 9.01 lacs from Supercor Industries Limited ("Supercor") as the receipt of same is considered to be doubtful. Further, the Company has also made provision for value of investment in Supercor in the books of account amounting to INR 142.60 lacs.

* As the future liabilities for gratuity, compensated absences and other long-term employee benefit plans are provided on an actuarial basis and payment of insurance costs are made for the Company as a whole, the amount pertaining to the key management personnel is not ascertainable, therefore, not included above.

All related party transactions entered during the year were in ordinary course of business and are on arm''s length basis.

** The related party loan given to HIL International GmbH, Germany was for the purpose of partly financing the acquisition of 100% shareholding of Parador Holding GmbH, Germany. The outstanding loan amount is repayable in three installments starting 16 August 2027 upto 16 August 2029. The said loan carries an interest rate of 8% p.a. (31 March 2021: 8% p.a.).

*** The remuneration paid / payable by the Company to its Managing Director and Chief Executive Officer during the current year is INR 1627.70 lacs. The limit on such remuneration prescribed under Section 197 read with Schedule V to the Companies Act, 2013 ("the Act") is INR 1205.63 lacs. The excess remuneration is primarily attributable to the value of perquisites relating to employee stock options exercised by the Managing Director and Chief Executive Officer during the current year. The Company is in the process of obtaining approval from its shareholders at the forthcoming Annual General Meeting for the same by way of special resolution in accordance with the requirements of the Act, in addition to ratification of appointment as per Section 196(4) of the Act. As per management''s assessment the approval from shareholders for excess remuneration is probable.

(a) The wage agreement at two of the manufacturing locations (31 March 2021: at five) of the Company are pending as at 31 March 2022.

(b) Provision for litigations represents provision towards potential liability against various ongoing indirect tax cases based on Company''s internal assessment.

(c) Provision - others represents provision towards possible obligation against certain past events for which the expected outflow is certain.

43 Share based paymentsA. Description of share-based payment arrangements

Employee stock option scheme (equity-settled)

The Company provides share-based payment schemes to its eligible employees as identified in the employee stock option schemes. The relevant details of these schemes and the grants are as below:

On 12 May 2015, the Nomination and Remuneration cum Compensation Committee of the Board of Directors of the Company approved the HIL Employees Stock Option Scheme 2015 (ESOP scheme 2015) for issue of stock options to identified employees of the Company.

On 12 August 2019, the Nomination and Remuneration cum Compensation Committee of the Board of Directors of the Company approved the HIL Employees Stock Option Scheme 2019 (ESOP scheme 2019) for issue of stock options to identified employees of the Company.

45. Service concession arrangement

On 21 March 2011, the Company entered into a service concession agreement with Gujarat Urja Vikas Nigam Limited (the grantor) to provide the service of generation of electricity and selling the same to grantor. The Power Plant was commissioned and available for use on 18 April 2011. Under the terms of the agreement, the Company will sell all available capacity of electricity generated from the 1.8 MW wind power plant at village Vandhiya, Gujarat for a period of 25 years at a fixed rate of INR 3.56 per kwh for delivered energy as certified by state electricity authority of Gujarat state load dispatch center ("SLDC"), starting from 18 April 2011 (commercial operation date). The Company will be responsible for any maintenance services required during the concession period. The Company does not expect major repairs to be necessary during the concession period.

On 24 September 2014, the Company entered into a service concession agreement with Ajmer Vidyut Vitran Nigam Limited (the grantor) to provide the service of generation of electricity and selling the same to grantor. The Power Plant was commissioned and available for use on 30 September 2014. Under the terms of the agreement, the Company will sell all available capacity of electricity generated from the 2 MW wind power plant at village Rajgarh, district Jaisalmer for a period of 25 years at a fixed rate of INR 5.31 per kwh for the delivered energy conforming the standards as approved by Rajasthan Electricity Regulatory Commission ("RERC"), starting from 30 September 2014 (commercial operation date). The Company will be responsible for any maintenance services required during the concession period. The Company does not expect major repairs to be necessary during the concession period.

The Company recognised service concession arrangement with Gujarat Urja Vikas Nigam Limited and Ajmer Vidyut Vitran Nigam Limited under intangible asset model, on the basis that the Company will receive variable amount of revenue from the respective DISCOMs in Gujarat and Rajasthan depending upon the actual amount of electricity generated and supplied to the respective discoms. The discoms has not assured any minimum amount of proceeds to the Company. The Company bears the demand risk and the right to receive cash from the DISCOMs is not unconditional i.e. it depends upon the actual amount of electricity generated and supplied to the DISCOMs.

The service concession agreements with the Gujarat Urja Vikas Nigam Limited and Ajmer Vidyut Vitran Nigam Limited does not contain a renewal option. The standard rights of the grantor to terminate the agreement in both the arrangements include poor performance by the Company and the event of a material breach of the terms of the agreement by the Company. The standard rights of the Company to terminate the agreement in both the arrangements include failure of the grantor to make payment under the agreement and a material breach by the grantor of the terms of the agreement.

During the year, the Company has recorded revenue of INR 216.40 lacs (31 March 2021: INR 171.06 lacs) on generation of power, and recorded profit of INR 6730 lacs (31 March 2021: INR 41.62 lacs).

46. Investmenta) Interest in subsidiary

The Company incorporated a wholly owned subsidiary "HIL International GmbH" at Germany on 04 July 2018 which acquired 100% shareholding of Parador Holding GmbH, Germany through sale and purchase agreement dated 11 July 2018 and completed the acquisition on 27 August 2018.

During the year ended 31 March 2022 and 31 March 2021, the Company did not receive any dividend from Supercor Industries Limited.

c) The Company in financial year 1979-80 had invested in Supercor Industries Limited, Nigeria ("Supercor"). Supercor suspended its operations from November 2015 and closed its offices because of which it has not prepared any financial statements since then. Therefore, the Company has been unable to incorporate the requisite financial information, if any, of Supercor in its consolidated financial statements as required under Section 129(3) of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company''s investment in Supercor as at 31 March 2022 amounts to INR NIL (31 March 2021: INR NIL), after considering the provision for diminution in value of investments amounting to INR 142.60 lacs (31 March 2021: INR 142.60 lacs). During the period, on the basis of the request filed by the Company, an intimation was received from Reserve Bank of India for suspension of the Unique Identification Number allotted to Supercor. The Management does not foresee any future liability on account of any claim, with respect to Supercor over and above the amount invested in Supercor.

48. Capital management

The Company aims to maintain a strong capital base so as to maintain the confidence of all stakeholders and to sustain future development of the business.

In order to maintain the capital structure, the Company monitors the return on capital, as well as the level of dividends to equity shareholders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as going concern and to optimise returns to all its shareholders. For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves and debt represents non-current borrowings and current borrowings.

49. Expenditure incurred on research and development

Revenue expenditure debited to respective heads of accounts includes expenditure incurred on Research and Development during the year amounting to INR 525.38 lacs (31 March 2021: INR 443.60 lacs) and assets / equipment purchased for research activities of INR 85.98 lacs (31 March 2021: INR 23.49 lacs) disclosed under Property, plant and equipment.

The above loan given to HIL International GmbH, Germany was for the purpose of partly financing acquisition of 100% shareholding of Parador Holding GmbH, Germany. The outstanding loan amount is repayable in three installments starting 16 August 2027 upto 16 August 2029. The said loan carries an interest rate of 8% p.a. (31 March 2021: 8% p.a.).

52. The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act, 1961. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprise during the financial year and expects such records to be in existence latest by 31 October 2022, as required by law. The Management confirms that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

53. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law / accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.

As at balance sheet date, the Company is not exposed to future cash flows for extension / termination options, residual value guarantees and leases not commenced to which lessee is committed.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

The fair value of investments in other securities, trade receivables, loans, other financial assets, cash and cash equivalents, other bank balances, borrowings, trade payables, lease liabilities and other financial liabilities approximate their carrying amount largely due to short-term nature of these instruments.

Investments in mutual funds, which are classified as FVTPL are measured using net assets value at the reporting date multiplied by the quantity held.

B. Measurement of fair values

i. Valuation technique and significant unobservable inputs

Derivative assets / liabilities: The fair value is determined using forward exchange rates at the reporting date.

Investment in equity instruments: The fair value is determined based on the average of value determined as per discounted cash flows approach and intrinsic value per share as on the reporting date.

ii. Transfer between Level 1 and 2

There have been no transfers from Level 2 to Level 1 or vice-versa in 2021-22 and no transfers in either direction in 2020-21.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) Liquidity risk

b) Market risk

c) Credit risk

Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and deployment of risk management framework. The Board of Directors has adopted a Risk Policy, which empowers the management to access and monitoring the risk management parameters along with action taken and the same is updated to Board of Directors.

The Company''s risk management policies are established to identify and analyse the risks being faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risk faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the result of which are reported to the audit committee.

a) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities (other than trade payables). The Company also monitors the level of expected cash inflows on trade receivables and loans together with expected cash outflows on trade payables and other financial liabilities.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts reflect the principal amounts that are gross and undiscounted, and exclude the impact of netting agreements.

Market risk is the risk that results from changes in market prices - such as foreign exchange rates, interest rates and others - will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivatives to manage market risks.

a) Foreign currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated. The functional currency for the Company is Indian Rupees. The currencies in which these transactions are primarily denominated is US dollars and Euros. The Company does not enter into any derivative instruments for trading or speculative purposes.

a) Foreign currency risk (Contd..)

Currency risks related to the principal amounts of the Company''s US dollar trade payables and Euro loan and interest receivables have been hedged using forward contracts that mature on or before the same dates as the payables and receivables are due for repayment. These contracts are designated as derivatives.

Generally, borrowings are denominated in currencies that matter the cash flows generated by the underlying operations of the Company. In addition, interest on borrowings is denominated in the currency of the borrowing.This provides an economic hedge without derivatives being entered into and therefore, hedge accounting is not applied in these circumstances.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.

Trade receivables :

Customer credit risk is managed by the respective department subject to Company''s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on individual credit limits as defined by the Company. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses.

Mar 31, 2019

1. Operating segments

The Company has presented segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of paragraph 3 of Ind AS 108 ''Operating Segments'' no disclosures related to segment are presented in this standalone financial statements.

2. Employee benefits

The Company has the following post-employment benefit plans:

(a) Defined contribution plan

The following amount has been recognized as an expense in standalone statement of profit and loss on account of contribution to provident fund and other funds. There are no other obligations other than the contribution payable to the respective authorities.

3. Employee benefits (Continued)

b) Defined benefit plan

In accordance with the ''The Payment of Gratuity Act, 1972'' of India, the Company provides for Gratuity, the Employees'' Gratuity Fund Scheme (the Gratuity Plan), covering eligible employees. Liabilities with regard to such Gratuity Plan are determined by an actuarial valuation as at the end of the year and are charged to the standalone statement of profit and loss. This defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

The Gratuity plan managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India ("LICâ). Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The Company has determined that, in accordance with the terms and conditions of the gratuity plan, and in accordance with statutory requirements (including minimum funding requirements) of the plan of the relevant jurisdiction, the present value of refund or reduction in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined benefit asset is necessary at 31 March 2019 (31 March 2018: no decrease in defined benefit asset).

i) Reconciliation of the net defined benefit (asset)/ liability

The following tables summarizes the components of net benefit expense recognized in the standalone statement of profit and loss, the funded status and amount recognized in the standalone balance sheet for the gratuity plan:

The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields/ rates available on applicable bonds as on the current valuation date.

iii. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation and current service cost by the amounts shown below:

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

Expected contributions to the plan for the next annual reporting period

The Company expects to contribute a sum of H 355.78 lacs to the plan for the next annual reporting period.

(h) There are other civil matters against the Company of which one such case is pertaining to certain mining activity performed by the Company in the past. During the year, Tribunal has referred the case to concerned state authorities to evaluate the cost of restoration of the affected area and submit the report to recover the cost from the parties involved. Further, claims from other affected parties, if any, would have to be examined. Considering no action has been taken with respect to the above and no demand for cost of the aforesaid has been made to the Company, Management believes it is not possible to

ascertain the financial impact on the Company._

* Income-tax demand comprises of demand from the Indian tax authorities upon completion of their assessment for the financial years 2008-09 to 201415. The tax demands are mainly on account of disallowance of the benefit on research & development expenses, depreciation expenses on wind mill, other expenses not allowed and capital gain on relinquishment of right on leasehold land.

**** Other claims against the Company not acknowledged as debt mainly includes liability towards fuel surcharge adjustment disputed with electricity board for the financial year 2008-09 and 2009-10.

The Company is contesting the demands and the Management believe that its position will likely be upheld in the appellate process and accordingly no expense has been accrued in the standalone financial statements for the demand raised/ show cause notice received as the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s standalone financial statements.

4. B. On 28 February 2019, the Hon''ble Supreme Court of India has delivered a judgment clarifying the principles that need to be applied in determining the components of salaries and wages on which Provident Fund (PF) contributions need to be made by establishments. However, considering that there are numerous interpretative issues relating to retrospective application of this judgement, the Company has made a provision for provident fund contribution based on the best estimate. The Company will evaluate its position and update its provision, if required, on receiving further clarity on the subject.

Name of the related party Nature of relationship

Key Management personnel

Mr. Dhirup Roy Choudhary Managing Director and Chief Executive Officer ("CEO")

Mr. KR Veerappan Chief Financial Officer

Mr. G Manikandan Company Secretary and Financial Controller Non-Executive Directors and Independent Directors

Mr. CK Birla Chairman (Non-Executive Director)

Mr. Desh Deepak Khetrapal Non-Executive Director

Mrs. Gauri Rasgotra Independent Director

Mr. V.V. Ranganathan Independent Director (joined on 19 March 2019)

Mr. Arvind Sahay Independent Director (joined on 08 February 2019)

Mr. P. Vaman Rao Independent Director (resigned w.e.f. 08 February 2019)

Mr. Yash Paul Independent Director (resigned w.e.f. 19 March 2019)

#During previous year, the Company made provision for the dividend receivable amounting to H 9.01 lacs from Supercor Industries Limited (''''Supercor'''') as the receipt of same is considered to be doubtful. Further, the Company has also made provision for value of investment in Supercor in the books of account amounting to H 142.60 lacs.

*As the future liabilities for gratuity and leave encashment is provided on an actuarial basis and payment of insurance costs are made for the Company as a whole, the amount pertaining to the key management personnel is not ascertainable, therefore, not included above.

All related party transactions entered during the year were in ordinary course of business and are on arm''s length basis.

5. Details of dues to Micro Enterprises and Small Enterprises as per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

The information as required under the MSMED Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company and has been relied upon by the auditors.

(a) The wage agreements at one of the manufacturing locations (31 March 2018: at four) of the Company are pending as at 31 March 2019. It is expected that agreement will be entered in next year and arrears would be paid based on the agreement. The provision for wage arrears have been made on the basis of expected outflows.

(b) Provision for litigations represents provision towards potential liability against various ongoing indirect tax cases based on Company''s internal assessment.

(c) Provision- others represents provision towards possible obligation against certain past events for which the expected outflow is certain.

6. Share based payments

A. Description of share-based payment arrangements

Employee stock option scheme (equity-settled)

The Company provides share-based payment schemes to its eligible employees as identified in the "HIL Employees Stock Option Scheme 2015 (HIL ESOS)". The relevant details of the scheme and the grant are as below:

On 12 May 2015 the Nomination and Remuneration cum Compensation Committee of the Board of Directors of the Company approved the HIL Employees Stock Option Scheme 2015 ("HIL ESOSâ) for issue of stock options to identified employees of the Company.

7. Service concession arrangement

On 21 March 2011, the Company entered into a service concession agreement with Gujarat Urja Vikas Nigam Limited (the grantor) to provide the service of generation of electricity and selling the same to grantor. The Power Plant was commissioned and available for use on 18 April 2011. Under the terms of the agreement, the Company will sell all available capacity of electricity generated from the 1.8 MW wind power plant at village Vandhiya, Gujarat for a period of 25 years at a fixed rate of H 3.56 per kwh for delivered energy as certified by state electricity authority of Gujarat state load dispatch center ("SLDCâ), starting from 18 April 2011 (commercial operation date). The Company will be responsible for any maintenance services required during the concession period. The Company does not expect major repairs to be necessary during the concession period.

On 24 September 2014, the Company entered into a service concession agreement with Ajmer Vidyut Vitran Nigam Limited (the grantor) to provide the service of generation of electricity and selling the same to grantor. The Power Plant was commissioned and available for use on 30 September 2014. Under the terms of the agreement, the Company will sell all available capacity of electricity generated from the 2 MW wind power plant at village Rajgarh, district Jaisalmer for a period of 25 years at a fixed rate of H 5.31 per kwh for the delivered energy conforming the standards as approved by Rajasthan Electricity Regulatory Commission ("RERCâ), starting from 30 September 2014 (commercial operation date). The Company will be responsible for any maintenance services required during the concession period. The Company does not expect major repairs to be necessary during the concession period.

The Company recognized service concession arrangement with Gujarat Urja Vikas Nigam Limited and Ajmer Vidyut Vitran Nigam Limited under intangible asset model, on the basis that the Company will receive variable amount of revenue from the respective discoms in Gujarat and Rajasthan depending upon the actual amount of electricity generated and supplied to the respective discoms. The discoms has not assured any minimum amount of proceeds to the Company. The Company bears the demand risk and the right to receive cash from the Discoms is not unconditional i.e. it depends upon the actual amount of electricity generated and supplied to the discoms.

During the year, the Company has recorded revenue of RS, 260.74 lacs (31 March 2018: RS, 282.04 lacs) on generation of power, and recorded profit of RS, 123.89 lacs (31 March 2018: RS, 182.29 lacs).

8. Investment

a) Interest in subsidiary

The Company incorporated a wholly owned subsidiary "HIL International GmbHâ at Germany on 04 July 2018 which acquired 100% shareholding of Parador Holding GmbH, Germany through sale and purchase agreement dated 11 July 2018 and completed the acquisition on 27 August 2018.

During the year ended 31 March 2019 and 31 March 2018, the Company did not receive any dividend from Supercor Industries Limited.

c) The Company holds 33% stake in Supercor Industries Limited ("Supercorâ) and its investment in Supercor as at 31 March 2019 amounts to H Nil (31 March 2018: H Nil), after considering the provision for diminution in value of investments amounting to H 142.60 lacs (31 March 2018: H 142.60 lacs). Supercor suspended its operations from November 2015, none of the employees of Supercor are attending office and the power connection at the office of Supercor has also been discontinued. On account of this reason, Supercor has been unable to prepare its year end accounts. Therefore, due to non-availability of any information from Supercor and the unusual circumstances mentioned above, which is beyond the control of the Company, the Company is unable to present the required information.

During earlier years, the Company had filed a winding up petition in Nigeria for Supercor and made 100% provision against the investment value and outstanding receivable balances. As informed by Management, the winding-up petition filed by the Company in 2016 has been dismissed in Nigerian Court. An interim Board has been set up by the Nigerian Government for assessing the revival of the operations. However, detailed plan of action from the interim Board of Supercor is awaited. The Management does not foresee any future liability on account of any claim, with respect to Supercor over and above the amount invested in Supercor.

ii. Operating lease in the capacity of lessee

a) The Company has certain operating leases for office facilities and residential premises (cancellable leases). Such leases are generally with the option of renewal against increased rent and premature termination of agreement. Rental expenses of RS, 498.81 lacs (31 March 2018: RS, 446.00 lacs) in respect of obligation under operating leases have been recognized in the standalone statement of profit and loss.

b) The Company had certain cancellable arrangements with the parties (which conveys a right to use an asset in return for a payment or a series of payments) identified to be in the nature of lease and have been classified as operating lease arrangements. Rental expense of H Nil (31 March 2018: H 1921.06 lacs) in respect of obligation under operating leases have been recognized in the standalone statement of profit and loss. It includes payment for non-lease elements in the arrangement as the same is impracticable to separate the payments reliably.

9. Capital management

The Company aims to maintain a strong capital base so as to maintain the confidence of all stakeholders and to sustain future development of the business.

In order to maintain the capital structure, the Company monitors the return on capital, as well as the level of dividends to equity shareholders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as going concern and to optimize returns to all its shareholders. For the purpose of the Company''s capital management, capital includes issued capital and all other equity reserves and debt includes long-term borrowings (including current maturities) and short-term borrowings.

10. Expenditure incurred on research and development

Revenue expenditure debited to respective heads of account includes expenditure incurred on Research and Development during the year amounting to RS, 357.83 lacs (31 March 2018: RS, 329.87 lacs) and assets/ equipment purchased for research activities of RS, 108.61 lacs (31 March 2018: RS, 79.00 lacs) disclosed under Property, plant and equipment.

11. The Company has entered into transactions amounting to RS, 439.70 lacs (31 March 2018: RS, 377.65 lacs) during the year ended 31 March 2019 and having outstanding payable balance amounting to RS, 18.50 lacs as at 31 March 2019 (31 March 2018: RS, 71.89 lacs) with CK Birla Corporate Services Limited. As the Company and CK Birla Corporate Services Limited use the same ''CK Birla'' brand and are disclosed as being part of the same ''group'' on the website operated by CK Birla Corporate Services Limited, from a good governance perspective the transaction and outstanding payable balances are disclosed in the standalone Ind AS financial statements.

12. The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of accounts.

13. Change in significant accounting policies:

Ind AS 115 has impact on customer loyalty programme. Under Ind AS 18, revenue was allocated between the loyalty programme and the Company''s products using the residual value method i.e., consideration was allocated to the loyalty programme based on the fair value of the loyalty points and the remainder of the consideration was allocated to the Company''s products. Under Ind AS 115, this allocation is based on the relative stand-alone selling prices. Accordingly, a lower proportion of the consideration is allocated to the loyalty programme, and therefore less revenue is deferred. The impact of these changes on items other than revenue is that revenue which was presented as deferred income earlier is now included, at a lower amount, in a new balance -

i.e. contract liability against performance obligation.

For additional information about the Company''s accounting policies relating to revenue recognition, see note 3(i).

The following table summarizes the impact, net of tax, of transition to Ind AS 115 on retained earnings (cumulative effect) as on 01 April 2018.

The following tables summaries the impacts of adopting Ind AS 115 on the Company''s standalone statement of financial position as at 31 March 2019 and its standalone statement of profit and loss and OCI for the year then ended for each of the line items affected. There was no material impact on the Company''s standalone statement of cash flows for the year ended 31 March 2019.

14. Financial instruments - fair values and risk management (Continued)

B. Measurement of fair values

i. Valuation technique and significant unobservable inputs

Derivative assets/ liabilities: The fair value is determined using forward exchange rates at the reporting date.

Investment in equity instruments: The fair value is determined based on the average of value determined as per discounted cash flows approach and intrinsic value per share as on the reporting date.

ii. Transfer between Level 1 and 2

There have been no transfers from Level 2 to Level 1 or vice-versa in 2018-19 and no transfers in either direction in 2017-18.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) Liquidity risk

b) Market risk

c) Credit risk

i) Risk management framework

15. Financial instruments - fair values and risk management (Continued)

C. Financial risk management (Continued)

ii) Liquidity risk

Exposure to liquidity risk

31 March 2019

(H in lacs)

iii) Market risk

The Company uses derivatives to manage market risks.

a) Foreign currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated. The functional currency for the Company is INR (H). The currencies in which these transactions are primarily denominated is US dollars and Euros. The Company does not enter into any derivative instruments for trading or speculative purposes.

Currency risks related to the principal amounts of the Company''s US dollar trade payables and EURO loan receivables have been partially hedged using forward contracts that mature on or before the same dates as the payables and receivables are due for repayment. These contracts are designated as derivatives.

Generally, borrowings are denominated in currencies that matter the cash flows generated by the underlying operations of the Company. In addition, interest on borrowings is denominated in the currency of the borrowing. This provides an economic hedge without derivatives being entered into and therefore, hedge accounting is not applied in these circumstances.

16. Financial instruments - fair values and risk management (Continued)

C. Financial risk management (Continued)

Sensitivity analysis

A reasonably possible strengthening (weakening) of the INR (H), US dollar or Euro against all other currencies at 31 March would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

The interest rate sensitivity is based on the closing balance of term loans from banks.

iv) Credit risk

17.Financial instruments - fair values and risk management (Continued)

Trade receivables:

An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses.

The ageing analysis of the receivables has been considered from the date the invoice falls due.

Mar 31, 2018

1 Corporate information

HIL Limited (the âCompanyâ) is a Company domiciled in India, with its registered office situated at SLN Terminus, Gachibowli, Hyderabad -500032, Telangana. The Company has been incorporated under the provisions of Companies Act, 2013 and its equity shares are listed on the National Stock Exchange (NSE) and BSE Limited in India.

The Company operations are classified into Roofing Solutions, Building Solutions and Others segments.

Roofing Solutions consists of manufacturing, selling and distribution of Fibre Cement Sheets, Colored Steel Sheets and Cement based Non-Asbestos Corrugated Sheets with manufacturing facilities located at Faridabad, Jasidih, Kondapally, Wada, Sathariya and Balasore.

Building Solutions broadly classified into Wet-Walling Solutions, Dry-Walling Solutions and Thermal Insulation , which includes manufacturing and distribution of Fly Ash Blocks, Smart Fix, Wall Putty, Smart Plaster, Smart Bond, Panels and Boards with manufacturing facilities located at Hyderabad, Thimmapur, Faridabad, Golan, Jhajjar and Dharuhera.

Other products manufactured and distributed by the Company are UpVC, CpVC, SWR pipes & fittings, Material Handling and Processing Plant and Equipment with manufacturing facilities at Hyderabad, Faridabad and Thimmapur The Company also owns Wind Turbine Generators in Gujarat, Tamil Nadu and Rajasthan.

2 Basis of preparation

A. Statement of compliance

a) Financial statements have been prepared in accordance with Indian Accounting Standards (âInd ASâ) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Companies Act, 2013 (âthe Actâ) and other relevant provision of the Act under the historical cost convention on an accrual basis except for certain financial instruments which are measured at fair values, notified under the Act and Rules prescribed thereunder

b) These are the Companyâs first financial statements prepared in accordance with Ind AS, and hence, Ind AS 101, First-time Adoption of Ind AS has been applied.

c) For all periods up to and including the year ended March 31, 2017, the Company had prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ). An explanation on how the transition from previous GAAP to Ind AS has affected the reported balance sheet, statement of profit and loss and cash flows of the Company is provided in note 50.

d) The financial statements were authorised for issue by the Companyâs Board of Directors on April 26, 2018.

e) Details of the Companyâs accounting policies are included in note 3.

B. Functional and presentation currency

These financial statements are presented in Indian Rupees (H), which is also the Companyâs functional currency. All financial information presented in Indian rupees have been rounded-off to two decimal places to the nearest lacs except share data or as otherwise stated.

C. Basis of measurement

The financial statements have been prepared on the historical cost basis except for the following items:

D. Use of estimates and judgment

In preparing these financial statements, Management has made judgment, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively.

Judgements

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes:

- Note 45 - leases: whether an arrangement contains a lease;

- Note 45 - lease classification

Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

- Note 34 - measurement of defined benefit obligations: key actuarial assumptions;

- Note 20 - recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;

- Note 11 - impairment of non-financial assets;

- Note 49 - impairment of financial assets;

- Note 11 - determining the fair value less costs to sell off the non-current assets held for sale on the basis of significant observable inputs.

E. Measurement of fair values

A number of the Companyâs accounting policies and disclosures require measurement of fair values, for both financial and non-financial assets and liabilities.

Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Further information about the assumptions made in measuring fair values is included in the following notes:

Note 5 - investment property;

Note 41 - share based payment arrangements;

Note 49 - financial instruments;

Note 11 - non-current assets held for sale.

Note:

a) Pending settlement of dispute regarding external development charges with Haryana Urban Development Authority, Faridabad, Freehold Land of the value of RS.1.27 lacs (March 31, 2017 and April 1, 2016: RS.1.27 lacs) is pending for registration in the Companyâs name.

b) Depreciation for the year ended March 31, 2018 includes accelerated depreciation aggregating to RS.625 lacs charged on certain plant and machineries of Fibre Cement Sheets business of Roofing Solutions segment whose balance useful life as re-estimated by the Management is Nil.

c) During the year ended March 31, 2017, a building premises was reclassified as investment property (refer note 5), because it was no longer used by the Company and it was decided that the building would be leased to third party.

d) Refer note 47 for details of assets held for Research and development.

e) Refer note 17 for details of assets pledged against borrowings.

B. Measurement of fair values

(i) Fair valuation

The fair value measurement for all of the investment property has been categorised as a Level 3 fair value based on the inputs to the valuation technique used (see note 2(E)).

(ii) Valuation technique

C. Investment property comprises

(i) The Company along with other co-owners, has developed a plot of land at 25 Barakhamba Road, New Delhi, where the Companyâs share is 15%. The registration of the said plot of the value of J 427.60 lacs (March 31, 2017: J 427.60 lacs and April 1, 2016: J 427.60 lacs) in the name of the Company is pending.

(ii) The Company has given the investment properties located in New Delhi and Hyderabad on operating lease to some parties. Certain lease agreements are cancellable and some are non-cancellable in nature. There are no contingent rents in the lease agreements. The lease terms are mainly for 3-9 years and are renewable at the option of the lessee. There are no restrictions imposed by lease agreements. Although there are sub-lease rights given to the lessees, there no subleases as on the reporting date.

D. Refer note 45 for details of minimum lease payments.

(a) Equity shares designated as at fair value through other comprehensive income

At April 1, 2016, the Company designated the investments shown below as equity shares at FVOCI because these equity shares represent investments that the Company intends to hold long-term for strategic purposes.

* Management committed to sell plant and machinery of one of the manufacturing facility within the Roofing Solution segment in October 2017 and certain buildings of unallocated segment in January 2018. Accordingly, that part of the facilities are presented as non-current assets held for sale. Efforts to sell the assets have started and sales are expected by May 2018.

(ii) Terms and rights attached to the equity shares

The Company has only one class of equity shares having a face value of J 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

As per records of the Company, including its register of shareholders/ members, the above shareholding represents both legal and beneficial ownerships of shares.

(iv) Shares reserved for issue under Option

For details of shares reserved for issue under Employee Stock Option (ESOS) plan of the Company, refer note 41.

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.

Capital redemption reserve was created for redemption of preference shares and the balance represents the unutilised amount after complete redemption of the same.

The Company has estabilised an equity-settled share-based payment plan for certain categories of employees of the Company. Refer to note 41 for further details on this plan.

Dividends

After the reporting dates, the following dividends on equity shares (excluding corporate dividend tax) were proposed by the Board of Directors subject to the approval at the Annual General Meeting; the dividends have not been recognised as liabilities. Dividends would attract dividend distribution tax when declared or paid.

(a) Represents interest free sales tax loan taken from a financial institution and is repayable after 7 years from the date of its respective disbursment. The last installment is falling due in August 2024. As per the agreement, these loans are secured by way of first charge on its entire assets of Sathariya unit, first charge on plant and machinery of its Balasore unit and collateral security of Corporate office building of the Company located at Gachibowli, Hyderabad.

(b) Deferred sales tax loan was sanctioned towards the sales tax dues relating to Thimmapur, Kondapally and Chennai unit. The loans are interest free and repayable at the end of 8 to 14 years from the month of deferral. The repayment of the deferral scheme has already commenced for all units. The Company has paid the last installment for Chennai and Kondapally during the current year. Last installment for Thimmapur unit is due during 2023-24.

(c) Cash credit facilities and demand loan from banks are secured by hypothecation of inventories and book debts and are further secured by second equitable mortgage of the Companyâs immovable properties and hypothecation of other property, plant and equipment, both present and future, other than assets exclusively charged in favour of a financial institution for interest free sales tax loan as disclosed above. These borrowings carries interest Nil p.a. (March 31, 2017: 9.50% to 11.80% p.a. and April 1, 2016: 7.55% to 13.50%).

(d) Loan repayable on demand from a financial institution represents bill discounting facility availed from a NBFC towards discounting of receivable of one of the major customer. It carried interest @ 11.75% p.a.

(e) Buyersâ credit facilities were used as an alternate for working capital loans and the same were availed against the import of raw materials. It carries interest rate linked to LIBOR of respective currency and effective rates were in the range of 0.53% to 1.20% p.a.

(i) Deferred revenue

The deferred revenue related to loyalty credits granted has been estimated with reference to the fair value of products for which they could be redeemed. This is because the fair value of loyalty credits is not directly observable. The fair value of the customersâ right to buy products at a discount for which the loyalty credits can be redeemed takes into account the amount of discount available to customers that have not earned the loyalty credits and the expected forfeiture rate.

The Company is liable to Goods and Service Tax (âGSTâ) with effect from July 1, 2017. The revenues for the year ended March 31, 2018 is net of such GST. However, the revenues for the year ended March 31, 2017 are inclusive of excise duty.

3. Operating segments

A. Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Companyâs other components, and for which discrete financial information is available. All operating segments results are reviewed regularly by the Companyâs Chief Executive Officer (CEO) to make decisions about resources to be allocated to the segments and assess their performance.

The Company has two reportable segments, as described below, which are the Companyâs strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the business units, the Companyâs CEO reviews internal management reports on regular basis.

The following summary describes the operations in each of the Companyâs reportable segments:

B. Information about reportable segments

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), as included in the internal management reports that are reviewed by the Companyâs CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an armâs length basis.

C. Geographical information

The geographical information analyses the Companyâs revenues and non-current assets by the Companyâs Country of Domicile (i.e. India) and other countries. In presenting the geographical information, segment revenue has been based on the geographic market, regardless of where the goods were produced and segment assets presentation is based on the geographical location of the assets.

D. Major customer

Revenue from any customer of the Companyâs Roofing Solutions, Building Solutions and other segments does not exceed 10% of the total revenue reported and hence, the Management believes there are no major customers to be disclosed.

4. Employee benefits

The Company has the following post-employment benefit plans:

a) Defined contribution plan

The following amount has been recognised as an expense in statement of profit and loss on account of provident fund and other funds. There are no other obligations other than the contribution payable to the respective authorities.

b) Defined benefit plan

In accordance with the âThe Payment of Gratuity Act, 1972â of India, the Company provides for Gratuity, the Employeesâ Gratuity Fund Scheme (the Gratuity Plan), covering eligible employees. Liabilities with regard to such Gratuity Plan are determined by an actuarial valuation as at the end of the year and are charged to the statement of profit and loss. This defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

The Gratuity plan managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India (LIC). Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The Company has determined that, in accordance with the terms and conditions of the gratuity plan, and in accordance with statutory requirements (including minimum funding requirements) of the plan of the relevant jurisdiction, the present value of refund or reduction in future contributions is not lower than the balance of the total fair value of the plan assets less the total present value of obligations. As such, no decrease in the defined benefit asset is necessary at March 31, 2018 (March 31, 2017: no decrease in defined benefit asset).

i) Reconciliation of the net defined benefit (asset)/ liability

The following tables summarises the components of net benefit expense recognised in the statement of profit and loss, the funded/ non-funded status and amount recognised in the balance sheet for the gratuity plan:

The discount rate indicated above reflects the estimated timing and currency of benefit payments. It is based on the yields/ rates available on applicable bonds as on the current valuation date.

The salary growth rate indicated above is the Companyâs best estimate of an increase in salary of the employees in future years, determined considering the general trend in inflation, senority, promotions, past experience and other relevant factors such as demand and supply in employment market, etc.

Attrition rate indicated above represents the Companyâs best estimate of employee turnover in future (other than on account of retirement, death or disablement) determined considering various factors such as nature of business, retention policy, industry factors, past experience, etc.

iii. Sensitivity analysis

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

Expected contributions to the plan for the next annual reporting period

The Company expects to contribute a sum of J 307.05 lacs to the plan for the next annual reporting period.

* Income-tax demand comprises of demand from the Indian tax authorities upon completion of their assessment for the financial years 2008-09 to 2014 -15. The tax demands are mainly on account of disallowance of the benefit on research & development expenses, depreciation expenses on Wind mill, other expenses not allowed and capital gain on relinquishment of right on leasehold land.

**** Other disputes represent various civil matters against the Company with regard to environment pollution and various other matters which is pending at appropriate authority.

***** Other claims against the Company not acknowledged as debt mainly includes liability towards fuel surcharge adjustment disputed with Electricity board for the financial year 2008-09 and 2009-10.

The Company is contesting the demands and the Management believe that its position will likely be upheld in the appellate process and accordingly no expense has been accrued in the financial statements for the demand raised / show cause notice received as the ultimate outcome of these proceedings will not have a material adverse effect on the Companyâs financial statement.

5. Details of dues to Micro and Small Enterprises as per Micro, Small and Medium Enterprises Development (MSMED) Act, 2006

(a) The wage agreements at four of the manufacturing locations (March 31, 2017: at three) of the Company are pending as at March 31, 2018. It is expected that agreement will be entered in next year and arrears would be paid based on the agreement. The provision for wage arrears have been made on the basis of expected outflows.

(b) Provision for litigations represents provision towards potential liability against various ongoing indirect tax cases based on Companyâs internal assessment.

(c) Provision- others represents provision towards possible obligation against certain past events for which the expected outflow is certain.

6. Share based payments

A. Description of share-based payment arrangements

At March 31, 2018, the Company has the following share-based payment arrangements:

Employee stock option scheme (equity-settled)

The Company provides share-based payment schemes to its eligible employees as identified in the âHIL Employees Stock Option Scheme 2015 (HIL ESOS)â. The relevant details of the scheme and the grant are as below:

On May 12, 2015 the Nomination and Remuneration cum Compensation Committee of the Board of Directors of the Company approved the HIL Employees Stock Option Scheme 2015 (âHIL ESOSâ) for issue of stock options to identified employees of the Company.

According to the scheme, eligible employees identified by the Nomination and Remuneration cum Compensation Committee entitled to options, subject to satisfaction of the prescribed vesting conditions viz, continuing employment on the rolls of the Company as on April 1, 2015 as well as new employees who replaces the old eligible employee and joins the employment of the Company before June 30, 2017. The relevant terms of the grant as mentioned in the ESOP scheme 2015 are as below;

B. Measurement of fair values

The fair value of the options and the inputs used in the measurement of the grant-date fair values of the equity-settled share based payment plans measured based on the Black Scholes valuation model are as follows:

The expected life of the stock is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. The weighted average remaining contractual life for the stock options outstanding is 6 years (March 31, 2017: 6 years).

D. Expense recognised in statement of profit and loss

For details on the employee benefits expense, see note 27.

7. Particulars of hedged foreign currency as at the balance sheet date

The details of forward contracts outstanding at the year end are as follows

8. Service concession arrangement

On March 21, 2011, the Company entered into a service concession agreement with Gujarat Urja Vikas Nigam Limited (the grantor) to provide the service of generation of electricity and selling the same to Grantor. The Power Plant was commissioned and available for use on April 18, 2011. Under the terms of the agreement, the Company will sell all available capacity of electricity generated from the 1.8 MW Wind power plant at Village Vandhiya, Gujarat for a period of 25 years at a fixed rate of RS.3.56 per kwh for delivered energy as certified by state electricity authority of Gujarat state load dispatch center (âSLDCâ), starting from April 18, 2011 (commercial operation date). The Company will be responsible for any maintenance services required during the concession period. The Company does not expect major repairs to be necessary during the concession period.

On September 24, 2014, the Company entered into a service concession agreement with Ajmer Vidyut Vitran Nigam Limited (the grantor) to provide the service of generation of electricity and selling the same to Grantor. The Power Plant was commissioned and available for use on September 30, 2014. Under the terms of the agreement, the Company will sell all available capacity of electricity generated from the 2 MW Wind power plant at Village Rajgarh, district Jaisalmer for a period of 25 years at a fixed rate of RS.5.31 per kwh for the delivered energy conforming the standards as approved by Rajasthan Electricity Regulatory Commission (âRERCâ), starting from September 30, 2014 (commercial operation date). The Company will be responsible for any maintenance services required during the concession period. The Company does not expect major repairs to be necessary during the concession period.

The Company recognised service concession arrangement with Gujarat Urja Vikas Nigam Limited and Ajmer Vidyut Vitran Nigam Limited under intangible asset model, on the basis that the Company will receive variable amount of revenue from the respective discoms in Gujarat and Rajasthan depending upon the actual amount of electricity generated and supplied to the respective discoms. The discoms has not assured any minimum amount of proceeds to the Company. The Company bears the demand risk and the right to receive cash from the Discoms is not unconditional i.e. it depends upon the actual amount of electricity generated and supplied to the discoms.

During the year, the Company has recorded revenue of RS.282.04 lacs (March 31, 2017: RS.311.73 lacs) on generation of power, and recorded profit of RS.182.29 lacs (March 31, 2017: RS.213.67 lacs).

9. Interest in joint venture company

a) The Companyâs interest in a joint venture company is as follows:

b) The Company holds 33% stake in Supercor Industries Limited (âSupercorâ) and its investment in Supercor as at March 31, 2018 amounts to Nil (after considering the provision for diminution in value of investments amounting to RS.142.60 lacs). Supercor suspended its operations from November 2015, none of the employees of Supercor are attending office and the power connection at the offices of Supercor has also been discontinued. On account of this reason, Supercor has been unable to prepare its year end accounts. Therefore, due to non-availability of any information from Supercor and the unusual circumstances mentioned above, which is beyond the control of the Company, the Company is unable to prepare consolidated financial statements as required under section 129(3) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. To this effect, the Company has made applications to the Ministry of Corporate Affairs on February 23, 2018 seeking specific exemption from the requirement to prepare consolidated financial statements, which has been approved. Further, the Company has also intimated to stock exchange on March 26, 2018 for its inability to prepare consolidated financial statements.

10. Leases

i. Operating lease in the capacity of lessor

The Company has given certain properties under non-cancellable operating leases to various parties. Following are the details of future minimum lease payments under the agreement:

ii. Operating lease in the capacity of lessee

a) The Company has certain operating leases for office facilities and residential premises (cancellable leases). Such leases are generally with the option of renewal against increased rent and premature termination of agreement. Rental expenses of RS.446.00 lacs (March 31, 2017: RS.429.98 lacs) in respect of obligation under operating leases have been recognised in the statement of profit and loss.

b) The Company has certain cancellable arrangements with the parties (which conveys a right to use an asset in return for a payment or a series of payments) identified to be in the nature of lease and have been classified as operating lease arrangements. Rental expense of RS.1921.06 lacs (March 31, 2017: RS.2452.08 lacs) in respect of obligation under operating leases have been recognised in the statement of profit and loss. It includes payment for non-lease elements in the arrangement as the same is impracticable to separate the payments reliably.

11. Capital management

The Company aims to maintain a strong capital base so as to maintain the confidence of investors, creditors and market and to sustain future development of the business.

The Company monitors capital using a ratio of âadjusted net debtâ to âadjusted equityâ. For this purpose, adjusted net debt is defined as total liabilities, including interest-bearing loans and borrowings, less cash and cash equivalents. Adjusted equity comprises all components of equity other than amounts accumulated in the effective portion of cash flow hedges and cost of hedging, if any.

12. Expenditure incurred on research and development

Revenue expenditure debited to respective heads of account includes expenditure incurred on Research and Development during the year amounting to J 329.87 lacs (March 31, 2017: J 280.56 lacs) and assets / equipments purchased for research activities of RS.79.00 lacs (March 31, 2017: J 5.86 lacs and April 1, 2016: J 6.93 lacs) disclosed under Property, plant and equipment.

A. Measurement of fair values

i. Valuation techinque and significant unobservable inputs

Derivative assets/ liabilities: The fair value is determined using forward exchange rates at the reporting date.

Investment in equity instruments: The fair value is determined based on the average of value determined as per discounted cash flows approach and intrinsic value per share as on the reporting date.

ii. Transfer between Level 1 and 2

There have been no transfers from Level 2 to Level 1 or vice-versa in 2017-18 and no transfers in either direction in 2016-17.

Sensitivity analysis

For the fair values of FVOCI equity securities, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

a) liquidity risk

b) market risk

c) credit risk

i) Risk management framework

The Companyâs board of directors has overall responsibility for the estabilishment and deployment of risk management framework. The board of directors has adopted a Risk Policy, which empowers the managment to access and monitoring the risk managment parameters along with action taken and the same is updated to Board of Directors.

The Companyâs risk management policies are estabilished to identify and analyse the risks being faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the companyâs activities. The Company, through its training and managment standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Companyâs audit committee oversees how management monitors compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framwork in relation to the risk faced by the company. The audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk managment controls and procedures, the result of which are reported to the audit committee.

ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Exposure to liquidity risk

iii) Market risk

Market risk is the risk that results from changes in market prices - such as foreign exchange rates, interest rates and others - will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivatives to manage market risks.

a) Foreign currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales and purchases are denominated. The functional currency for the Company is H. The currencies in which these transactions are primarily denominated is US dollars, Euros and Nigerian Naira. The Company does not enter into any derivative instruments for trading or speculative purposes.

Currency risks related to the principal amounts of the Companyâs US dollar trade payables, taken out by Company, have been fully hedged using forward contracts that mature on the same dates as the payables are due for repayment. These contracts are designated as derivatives.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Companyâs policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

Exposure to currency risk

The summary of data about the Companyâs exposure to unhedged currency risk (based on notional amounts) as reported to the management is as follows.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the INR, US dollar, Euro or Nigerian Naira against all other currencies at March 31, would have affected the measurement of financial instruments denominated in a foreign currency and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

b) Interest rate risk

The exposure of the Companyâs borrowing to interest rate changes at the end of the reporting period are as follows:

The interest rate sensitivity is based on the closing balance of term loans from banks.

iv) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet it contractual obligations, and arises principally from the Companyâs receivables from customers.

Trade receivables :

Customer credit risk is managed by the respective department subject to Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on individual credit limits as defined by the Company. Outstanding customer receivables are regularly monitored.

An impairment analysis is performed at each reporting date on an individual basis. The calculation is based on historical data of credit losses.

13. Explanation of transition to Ind AS

As stated in the accounting policies set out in note 3, these are the Companyâs first financial statements prepared in accordance with Ind AS. For the year ended March 31, 2017, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (âprevious GAAPâ).

The accounting policies set out in note 3 have been applied in preparing these financial statements for the year ended March 31, 2018 including the comparative information for the year ended March 31, 2017 and the opening Ind AS balance sheet on the date of transition i.e. April 1, 2016.

In preparing the Ind AS balance sheet as at April 1, 2016 and in presenting the comparative information for the year ended March 31, 2017, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.

Optional exemptions availed and mandatory exceptions

In preparing these financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.

A. Optional exemptions availed

1. Property plant and equipment, capital work-in-progress and intangible assets As per Ind AS 101 an entity may elect to:

i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date.

ii) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to

- fair value;

- or cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); investment property that meets the recognition criteria in Ind AS 40, Investment property; and criteria in Ind AS 38 for revaluation (including the existence of an active market).

iii) use carrying values of property, plant and equipment, intangible assets and investment properties as on the date of transition to Ind AS (which are measured in accordance with previous GAAP and after making adjustments relating to decommissioning liabilities prescribed under Ind AS 101, if any) if there has been no change in its functional currency on the date of transition.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of capital work-in-progress, investment property and intangible assets also.

2. Investment in Joint ventures:

If a first-time adopter measures such an investment at cost, it can measure that investment at one of the following amounts in its separate opening Ind AS balance sheet:

i) Cost determined in accordance with Ind AS 27

ii) Deemed cost, defined as

- Fair value determined in accordance with Ind AS 113 at the date of transition to Ind AS, or

- Previous GAAP carrying amount at the transition date.

A first-time adopter may choose to use either of these bases to measure investment in joint venture, where it elects to use a deemed cost. Accordingly, the Company has opted to carry the investment in joint ventures, at the Previous GAAP carrying amount at the transition date.

3. Determining whether an arrangement contains a lease

Ind AS 101 includes an optional exemption that permits an entity to apply the relevant requirements in Appendix C of Ind AS 17 for determining whether an arrangement existing at the date of transition contains a lease by considering the facts and circumstances existing at the date of transition (rather than at the inception of the arrangement).

The Company has elected to avail of the above exemption.

4. Designation of previously recognised financial instruments

Ind AS 101 permits an entity to designate particular equity investments (other than equity investments in subsidiaries, associates and joint arrangements) as at fair value through other comprehensive income (FVOCI) based on facts and circumstances at the date of transition to Ind AS (rather than at initial recognition). Other equity investments are classified at fair value through profit or loss (FVTPL).

The Company has opted to avail this exemption to designate investment in equity shares of Birla Buildings Limited at FVTOCI on the basis of facts and circumstances that existed at the transition date.

5. Appendix C to Ind AS 18, service concession arrangements (wind power plant)

As per Ind AS 101 an entity may elect to:

i) Apply Appendix C to Ind AS 18 retrospectively;

ii) If impracticable to determine fair value voluntary exemption to apply the following treatment

- recognise financial assets and intangible assets that existed at the date of transition to Ind AS;

- Use the previous GAAP carrying amount at that date and

- Test the financial and intangible assets recognised at that date for impairment.

The Company, considering the impracticability to determine fair value retrospectively after making every reasonable effort to do so, applied the Previous GAAP carrying value and re-classed it as Intangible asset.

B. Mandatory exceptions

1. Estimates

As per Ind AS 101, an entityâs estimates in accordance with Ind AS at the date of transition to Ind AS at the end of the comparative period presented in the entityâs first Ind AS financial statements, as the case may be, should be consistent with estimates made for the same date in accordance with the previous GAAP unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

The Companyâs estimates under Ind AS are consistent with the above requirement. Key estimates considered in preparation of the financial statements that were not required under the previous GAAP are listed below:

a) Fair valuation of financial instruments carried at FVTPL and/ or FVOCI.

b) Determination of the discounted value for financial instruments carried at amortised cost.

c) Impairment of financial assets based on the expected credit loss model.

2. Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively except where the same is impracticable.

3. Government loans

The Company has applied the requirements in Ind AS 109, Financial Instruments, and Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, prospectively to Government loan existed as at the date of transition to Ind AS i.e. April 1, 2016.

F Notes to reconciliation

1. Investment property

Based on Ind AS 40, the Company has reclassified certain property, plant and equipment to investment property. Under the previous GAAP, this was disclosed as an investment.

2. Fair valuation of investments

In accordance with Ind AS, financial assets representing investment in equity shares of entities other than subsidiaries, associates and joint ventures as well as debt securities have been fair valued. The Company has designated investment in equity shares of Birla Buildings Limited designated as at fair value through other comprehensive income as permitted by Ind AS 109. Under the previous GAAP, the application of the relevant accounting standard resulted in all these investments being carried at cost. Under the previous GAAP, current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognised in retained earnings as at the date of transition April 1, 2016 and subsequently in the profit or loss for the year ended March 31, 2017.

3. Service concession arrangement- intangible asset model

In accordance with the para D22 of Ind AS 101, the Company recognised the intangible assets that existed at the transition date at previous GAAP carrying value. Under previous GAAP it was disclosed under Property, plant and equipment.

4. Derivatives

In accordance with Ind AS 109, derivative instruments have been measured at fair value using the mark-to-market method.

5. Customer loyalty programme

The Company grants credit points to the customers as part of a sales transactions which allows customers to accumulate the credit points and these points can be redeemed by the customers. Under the previous GAAP, the Company had created a provision towards its liability under the programme. Under Ind AS, sales consideration received has been allocated between the goods sold and the credit points granted. The consideration allocated to the customer credit points has been deferred and will be recognised as revenue when the reward points are redeemed or lapsed. Accordingly, the Company has recognised deferred revenue with corresponding adjustment to retained earnings.

6. Proposed dividend

Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

7. Lease arrangement

Under previous GAAP, arrangements that did not take the legal form of lease were accounted for based on the legal form of such arrangements e.g. job work arrangement. Under Ind AS, any arrangement (even if not legally structured as lease) which conveys a right to use an asset in return for a payment or series of payments are identified as leases provided certain conditions are met. In case such arrangements are determined to be in the nature of leases, such arrangements are required to be classified into finance or operating leases as per the requirements of Ind AS 17, Leases.

The Company has entered into certain job work arrangements which have been identified to be in the nature of lease and have been classified as operating lease arrangements.

8. Actuarial gain and loss

Under Ind AS, all actuarial gains and losses are recognised in other comprehensive income. Under previous GAAP, the Company recognised actuarial gains and losses in profit or loss. However, this has no impact on the total comprehensive income and total equity as on April 1, 2016 and as on March 31, 2017.

9. Excise duty

Under previous GAAP, revenue from sale of goods was presented net of the excise duty on sales. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. Excise duty is presented in the statement of profit and loss as an expense. This has resulted in an increase in the revenue from operations and expenses for the year ended March 31, 2017. The total comprehensive income for the year ended and equity as at March 31, 2017 has remained unchanged.

10. Cash discount

Under previous GAAP, cash discount extended to the customers has been estimated at the inception and charged as an expense under the head Other expenses. Under Ind AS, cash discount extended to the customers shall be estimated at inception and adjusted from the transaction price as âVariable Considerationâ. This has resulted in an decrease in the revenue from operations and expenses for the year ended March 31, 2017. The total comprehensive income for the year ended and equity as at March 31, 2017 has remained unchanged.

11. Reversal of revaluation reserve

Under previous GAAP, during the period ended March 31, 2017, the Company has reversed the revaluation reserve outstanding in the books amounting to RS.433.99 lacs in accordance with the revised Accounting Standard 10. Under Ind AS, the Company has elected the option of deemed cost as on the date of transition to Ind AS. This has resulted in reclassing the revaluation reserve outstanding as on the transition date to retained earnings. Accordingly, reversal of revaluation reserve under previous GAAP

12. Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP

13. Deferred tax assets/ (liabilities)

The decrease/ (increase) in the deferred tax liabilities are on account of adjustments made on transition to Ind AS.

14. Retained earnings

Reconciliaton of total equity as at March 31, 2017 and April 1, 2016:

14. Exceptional items

During the previous year, with a view to rationalise the workforce at its Faridabad and Thrissur units, the Company had announced Voluntary Early Retirement Scheme (VERS). In response to the VERS, workmen opted for the same and an expenditure of RS.688.05 lacs on VERS was charged to the statement of profit and loss as an exceptional item.

Mar 31, 2017

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a face value of H10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March, 2017, the amount of dividend per share recognized as distributions to equity shareholders is H10/-, including interim dividend of H10/- (Previous Year: H17.50/-, including interim dividend of H7.50/-).

1. Share capital (Contd..)

(d) Shares reserved for issue under Option

For details of shares reserved for issue under Employee Stock Option (ESOP) plan of the Company, refer note 37.

(e) Proposed dividend on Equity Shares (refer note 2.1(a)(ii))

The Board of Directors have proposed dividend on equity shares after the balance sheet date i.e. 31st March, 2017. The amount of dividend proposed is H10/ per share aggregating to RS,898.18 lacs ( including dividend distribution tax of RS,151.92 lacs), which is not accrued.

a) Interest free sales tax loan from a financial institution is secured by way of first charge on the entire assets of the Sathariya Unit, Corporate Office Building situated at Gachibowli, Hyderabad and Balasore Unit of the Company, both present and future, repayable after 7 years from the date of disbursement. Accordingly RS,792 lacs is due in March 2018, RS,606.72 lacs is due in July 2019, RS,920.74 lacs is due in November 2019, RS,1107.53 lacs is due in March 2022, RS,1084.06 lacs is due in June 2022 and RS,1800.76 lacs is due in December 2022.

b) Deferred Sales Tax loan was sanctioned towards the sales tax dues relating to Thimmapur, Kondapalli and Chennai unit. The loans are interest free and repayable at the end of 7 years from the month of deferral. The repayment of the deferral scheme has already commenced for all Units. The last installment is due during 2017-18 for Chennai & Kondapalli and during 202324 for Thimmapur . The yearly repayment varies from RS,5 lacs to RS,400 lacs due to varying amount of availment in the earlier years as per deferral scheme.

Note:

a) Pending settlement of dispute regarding external development charges with Haryana Urban Development Authority, Faridabad, Freehold Land of the value of RS,1.27 lacs (Previous Year RS,1.27 lacs) is pending for registration in the Company''s name.

b) Plant and Machinery of the value of RS,30.60 lacs (Previous Year: RS,30.60 lacs) are held in joint ownership with others.

c) Freehold Land, Leasehold Land and Buildings include Hnil (Previous Year: RS,945.23 lacs), WDV Hnil (Previous Year: RS,433.99 lacs) on account of additions on revaluation during the year ended 31st December, 1983 as per valuation carried out by an approved valuer (refer note 2.1(a)(i)).

Note :

(i) The Company along with other co-owners, has developed a plot of land at 25 Barakhamba Road, New Delhi, where the Company''s share is 15%. The registration of the said plot of the value of RS,427.60 lacs (Previous Year : RS,427.60 lacs) in the name of the Company is pending.

(ii) The Company has given the investment properties located in New Delhi and Hyderabad on operating lease to some parties. There are no contingent rents in the lease agreements. The lease terms are mainly for 3-5 years and are renewable at the option of the lessee. There are no restrictions imposed by lease agreements. There are no subleases.

b) Government Securities for RS,0.50 lacs (Previous Year : RS,0.50 lacs) lodged with Government Departments.

26. Gratuity and other post-employment benefit plans

The Employees'' Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss, the funded/ non-funded status and amount recognized in the balance sheet for the gratuity plan:

Statement of profit and loss

b) The Company holds 33% stake in Supercor Industries Limited ( " Supercor") and its investment in Supercor as at 31st March, 2017 amounts to H142.60 lacs. Supercor suspended its operations from November 2015, none of the employees of Supercor are attending office and the power connection at the offices of Supercor has also been discontinued. On account of this reason, Supercor has been unable to prepare its year end accounts. Therefore, due to non-availability of any information from Supercor and the unusual circumstances mentioned above, which is beyond the control of the Company, the Company is unable to prepare consolidated financial statements as required under section 129(3) of the Companies Act, 2013 and the SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015. To this effect, the Company has made applications to the Ministry of Corporate Affairs on 14th February, 2017 seeking specific exemption from the requirement to prepare consolidated financial statements, which has been approved. Further, the Company has also intimated to stock exchange on March 22, 2017 for its inability to prepare consolidated financial statement.

2. Segment information

Business segments

As of 31st March, 2017, the Company has organized its operations into three major businesses: Building Products, Thermal Insulation Products (Refractories) and Wind Power. A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, Aerocon Panels, Fly Ash Bricks (AAC) , Advanced Polymer Products & Coloured Steel Sheets. The said products are used in construction activity. The Company also trades in allied products like GC Sheets, CC Sheet, Fly Ash Bricks (AAC), Upvc & Cpvc pipes & fittings etc.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Wind Power : The Company installed few Wind Turbine Generators as a part of Green initiative, part of which is used for captive consumption and the excess power to be sold to the respective state electricity board.

Geographical segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

a. Primary segment information (by business segments)

The following table presents revenue and profit information regarding business segments for the years ended 31st March, 2017 and 31st March, 2016 and certain assets and liabilities information regarding business segments as at 31st March, 2017 and 31st March, 2016.

*Total other income as per the statement of Profit and Loss is H 2427.99 lacs (Previous year : H 1221.81 lacs) which includes H 1705.03 lacs (Previous year: H 583.27 lacs) pertaining to Corporate Office.

The Company has entire fixed assets situated within India for producing goods/providing services to domestic as well as overseas markets. Hence, separate figures for fixed assets/ addition to fixed assets have not been furnished.

3. Related Party Disclosure

Name of related parties

a) Joint Venture Supercor Industries Limited, Nigeria.

b) Key Management Personnel Mr. Dhirup Roy Choudhary (Managing Director)

(Joined on 16th January, 2017)

Mr. Prashant Vishnu Vatkar (Managing Director)

(Resigned effective 20th September, 2016)

Mr. KR Veerappan (Chief Financial Officer)

Mr. Manikandan G (Company Secretary)

(w.e.f. 19th August, 2015)

Mr. P Rajesh Kumar Jain (Company Secretary)

(Resigned effective 18th August, 2015)

4. Contingent liabilities (not provided for) in respect of (Contd..)

* Income tax demand comprises of demand from the Indian tax authorities upon completion of their assessment for the financial years 2008-09 to 2013 -14. The tax demands are mainly on account of disallowance of the benefit on research & development expenses, depreciation expenses on Wind mill, other expenses not allowed and capital gain on relinquishment of right on leasehold land.

** The demands raised by the Sales tax authority are mainly towards enhancement of turnover due to certain disallowances, entry tax on stock transfers and local sales tax demand upon completion of assessment and various other miscellaneous cases raised by the respective state authorities.

*** The demand raised by the excise authority is mainly towards excise duty demand including interest and penalty towards disallowance of a ailment of CENVAT credit and wrong classification of products as taxable versus exempt product

**** With respect to Income Tax, mainly represents appeal preferred by Indian Tax Authorities in High Court against favorable order of Tribunal for not considering certain amounts under âLong Term Capital Gain". With respect to others, mainly represents case preferred by local consumers against the Company with regard to environment pollution and compensation which is pending at appropriate authority.

***** Other claims against the Company not acknowledged as debt mainly includes liability towards fuel surcharge adjustment disputed with Electricity board for the financial year 2008-09 and 2009-10.

The Company is contesting the demands and the Management believe that its position will likely be upheld in the appellate process and accordingly no expense has been accrued in the financial statements for the demand raised / show cause notice received as the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial statement.

Note: (i) In addition to above, the Company has provided RS,515.81 lacs (including RS,1.08 lacs written off in current year). All these cases are under litigations and are pending with various authorities, expected timing of resulting outflow of economic benefits cannot be specified.

Note: The wage agreements at three of the manufacturing locations of the Company are pending as at March, 31 2017. It is expected that agreement will be entered in next year and arrears would be paid based on the agreement. The provision for wage arrears have been made on the basis of expected outflows.

5. Employee stock option scheme

The Company provides share-based payment schemes to its eligible employees as identified in the âHIL Employees Stock Option Scheme 2015 (HIL ESOS)". The relevant details of the scheme and the grant are as below:

On 12th May, 2015, the Nomination and Remuneration cum Compensation committee of the board of directors of the Company approved the âHIL Employees Stock Option Scheme 2015 (HIL ESOS)" for issue of stock options to the identified employees of the Company. According to the scheme, eligible employees identified by the Nomination and Remuneration cum Compensation committee entitled to options, subject to satisfaction of the prescribed vesting conditions viz, continuing employment on the rolls of the Company as on 1st April, 2015 as well as new employees who replaces the old eligible employee and joins the employment of the Company before 30th June, 2017 provided that they have been with the Company at least for 6 (six) months prior to 30th June, 2017. The other relevant terms of the grant are as below:

The weighted average remaining contractual life for the stock options outstanding as at 31st March, 2017 is 6 year.

* - includes 50,850 options lying at pool account due to resignation of an eligible employee which is to be re-allotted.

The Black Scholes valuation model has been used for computing the weighted average fair value of the stock granted considering the following inputs:

6. With a view to rationalize the workforce at its Faridabad and Thrissur units, (Previous Year: Hyderabad unit) the Company had announced Voluntary Early Retirement Scheme (VERS). In response to the VERS, workmen opted for the same and expenditure of H688.05 lacs (Previous Year: H275.57 lacs) on VERS is charged to the statement of profit and loss as an exceptional item.

7 Previous year figures have been regrouped/rearranged wherever necessary to confirm to current years classification.

Mar 31, 2016

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a face value of '' 10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2016, the amount of dividend per share recognized as distributions to equity shareholders is '' 17.50, including Interim dividend of '' 7.50 (Previous Year: '' 20/-, including interim dividend of '' 10/-).

a) Cash credit facilities and demand loan from banks are secured by hypothecation of inventories and book debts and are further secured by second equitable mortgage of the Company''s immovable properties and hypothecation of other fixed assets, both present and future, other than assets exclusively charged in favour of a Financial Institution for Interest Free Sales Tax Loan as disclosed in note 5. These borrowings carries interest @7.55% to 13.50% p.a.

Note:

a) Pending settlement of dispute regarding external development charges with Haryana Urban Development Authority, Faridabad, Freehold Land of the value of Rs, 1.27 lacs (Previous Year Rs, 1.27 lacs) is pending for registration in the Company''s name.

b) Plant and Machinery of the value of Rs, 30.60 lacs (Previous Year: Rs, 30.60 lacs) are held in joint ownership with others.

c) Freehold Land, Leasehold Land and Buildings include Rs, 945.23 lacs (Previous Year: Rs, 945.23 lacs), WDV Rs, 433.99 lacs (Previous Year: Rs, 433.99 lacs) on account of additions on revaluation during the year ended December 31, 1983 as per valuation carried out by an approved valuer

Note :

a) The Company along with other co-owners, has developed a plot of land at 25 Barakhamba Road, New Delhi, where the Company''s share is 15%. The registration of the said plot of the value of Rs, 427.60 lacs (Previous Year : Rs, 427.60 lacs) in the name of the Company is pending. The Company has given the said property on operating lease to some parties. There are no contingent rents in the lease agreements. The lease terms are mainly for 3-5 years and are renewable at the option of the lessee. There are no restrictions imposed by lease agreements. There are no subleases.

b) Government Securities for Rs, 0.50 lacs (Previous Year : Rs, 0.50 lacs) lodged with Government Departments.

* Employee stock options are not considered for calculation of diluted earnings per share as it will have an anti-dilutive effect.

1. Gratuity and other post-employment benefit plans

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss, the funded/ non-funded status and amount recognized in the Balance Sheet for the gratuity plan:

2. Expenditure incurred on research and development

Revenue expenditure debited to respective heads of account includes expenditure incurred on Research and Development during the year amounting to Rs, 285.65 lacs (Previous Year: Rs, 345.66 lacs) and assets/ equipments purchased for research activities of Rs, 6.93 lacs (Previous Year: Rs, 9.34 lacs) disclosed under fixed assets.

3. Segment information

Business segments

As of March 31, 2016, the Company has organised its operations into three major businesses: Building Products, Thermal Insulation Products (Refractories) and wind power. A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets Fibre Cement Sheets, Aerocon Panels, AAC Blocks, Advanced Polymer Products & Coloured Steel Sheets. The said products are used in construction activity. The Company also trades in allied products like GC Sheets, CC Sheet, AAC Blocks, Upvc & Cpvc pipes & fittings etc.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Wind Power : The Company installed few Wind Turbine Generators as a part of Green initiative, part of which is used for captive consumption and the excess power sold to the respective state electricity board.

Geographical segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

a. Primary segment information (by business segments)

The following table presents revenue and profit information regarding business segments for the years ended March 31, 2016 and March 31, 2015 and certain assets and liabilities information regarding business segments as at March 31, 2016 and March 31, 2015.

* Sales as per the statement of Profit and Loss is Rs, 109627.71 lacs (Previous Year: Rs, 110779.14 lacs) which includes Rs, Nil (Previous Year: Rs, 0.48 lacs) pertaining to Corporate Office.

** Total other income as per the statement of Profit and Loss is Rs, 1221.81 lacs (Previous year : Rs, 1762.07 lacs) which includes Rs, 583.27 lacs (Previous year: Rs, 1474.72 lacs) pertaining to Corporate Office.

b. Geographical segments

The following is the distribution of the Company''s consolidated sales by geographical market, regardless of where the goods were produced:

4. Related party disclosure

Name of related parties

Joint Venture Supercor Industries Limited, Nigeria.

Key Management Personnel Mr Prashant Vishnu Vatkar (Managing Director)

(Joined on 20^th April 2015)

Mr Abhaya Shankar (Managing Director)

(Resigned effective 22^nd September 2014)

Mr KR Veerappan ( Chief Financial Officer)

Mr G Manikandan (Company Secretary & Financial Controller) (w.e.f. 19^th August 2015)

Mr P Rajesh Kumar Jain (Company Secretary)

(Resigned effective 18^th August 2015)

* '' 11.73 lacs and Rs, 352.52 lacs towards trade receivables and other receivables has been provided during the year

** As the future liabilities for gratuity and leave encashment is provided on an actuarial basis for the company as a whole, the amount pertaining to the key management personnel is not ascertainable, therefore, not included above.

* Income tax demand comprises of demand from the Indian tax authorities upon completion of their assessment for the financial years 2008-09 to 2012 -13. The tax demands are mainly on account of disallowance of the benefit on research & development expenses, depreciation expenses on Wind mill and other expenses not allowed.

*** The demand raised by the Excise authority is mainly towards excise duty demand including interest and penalty towards disallowance of a ailment of CENVAT credit and wrong classification of products as taxable versus exempt product.

**** With respect to Income Tax, mainly represents appeal preferred by Indian Tax Authorities in High Court against favorable order of Tribunal for not considering certain amounts under "Long Term Capital Gainâ. With respect to others, mainly represents case preferred by local consumers against company with regard to environment pollution and compensation which is pending at appropriate authority.

***** other claims against the Company not acknowledged as debt mainly includes liability towards fuel surcharge adjustment disputed with Electricity board for the financial year 2008-09 and 2009-10.

The Company is contesting the demands and the Management believe that its position will likely be upheld in the appellate process and accordingly no expense has been accrued in the standalone financial statements for the demand raised/show cause notice received as the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s standalone financial statement.

Note: (i) In addition to above, the Company has provided Rs, 516.88 lacs (including Rs, 84.60 lacs provided in current year and Rs, Nil reversed during the current year). All these cases are under litigations and are pending with various authorities, expected timing of resulting outflow of economic benefits cannot be specified.

Note: The wage agreements at four of the manufacturing locations of the Company are pending as at March, 31 2016. It is expected that agreement will be entered in next year and arrears would be paid based on the agreement. The provision for wage arrears have been made on the basis of expected outflows.

5. Employee stock option scheme

The Company provides share-based payment schemes to its eligible employees as identified in the "HIL Employees Stock Option Scheme 2015 (HIL ESOS)â during the year ended March 31, 2016. The relevant details of the scheme and the grant are as below:

On May 12, 2015, the Nomination and Remuneration cum Compensation committee of the board of directors of the Company approved the "HIL Employees Stock Option Scheme 2015 (HIL ESOS)â for issue of stock options to the identified employees of the Company. According to the scheme, eligible employees identified by the Nomination and Remuneration cum Compensation committee entitled to options,

The weighted average remaining contractual life for the stock options outstanding as at March 31, 2016 is

7 years.

* - includes 9,100 options lying at pool account due to resignation of an eligible employee which is to be re-allotted.

6. With a view to rationalize the workforce at its Hyderabad units, (Previous Year: Hyderabad and Dharuhera units) the Company had announced Voluntary Early Retirement Scheme (VERS). In response to the VERS, workmen opted for the same and expenditure of Rs, 275.57 lacs (Previous Year: Rs, 332.91 lacs) on VERS is charged to the statement of profit and loss as an exceptional item.

7. Previous year figures have been regrouped/rearranged wherever necessary to confirm to current years classification.

Mar 31, 2015

1. Corporate Information

The Company is engaged in the production and distribution of Building products, Thermal insulation products (Refractories) and generation of Wind Power. Building products includes Fibre Cement Sheets Aerocon Panels, AAC Blocks, Material Handling and Processing Plant and Equipment and Advanced Polymer Products. The Company presently has manufacturing facilities at Hyderabad, Faridabad, Jasidih, Dharuhera, Thimmapur, Jhajjar, Kondapalli, Chennai, Thrissur, Wada, Sathariya, Balasore and Golan. The Wind Turbine Generators has been setup in Gujarat, Tamil Nadu and Rajasthan.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for freehold land, lease hold land and building acquired before December 31,1983 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year except for the change in accounting policy explained below.

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs.10/- each. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended March 31, 2015, the amount of dividend per share recognized as distributions to equity shareholders is Rs.20/-, including Interim dividend of Rs.10/- (Previous Year: Rs.5/-, including interim dividend of Rs.nil)

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

a) Interest free sales tax loan from a financial institution is secured by way of first charge on the entire assets of the Sathariya Unit and Balasore Unit of the Company, both present and future, repayable after 7 years from the date of disbursement. Accordingly Rs. 427 lacs due on July 2016, Rs. 301 lacs due on January 2017, Rs. 792 lacs due on March 2018, Rs. 606.72 lacs due on July 2019, Rs. 920.74 lacs due on September 2019 and Rs. 1107.53 lacs due on March 2022.

b) Deferred Sales Tax loan was sanctioned towards the sales tax dues relating to Thimmapur, Kondapalli and Chennai unit. The loans are interest free and repayable at the end of 7 years from the month of deferral. The repayment of the deferral scheme has already commenced for all Units. The last installment is due during 2017-18 for Chennai & Kondapalli and during 2023-24 for Thimmapur . The yearly repayment varies from Rs. 5 lacs to Rs. 4 crores due to varying amount of availment in the earlier years as per deferral scheme.

a) Cash credit facilities and demand loan from banks are secured by hypothecation of inventories and book debts and are further secured by second equitable mortgage of the Company's immovable properties and hypothecation of other fixed assets, both present and future, other than assets exclusively charged in favour of a Financial Institution for Interest Free Sales Tax Loan as disclosed in note 5. These borrowings carries interest @10% to 13.75% p.a.

b) Buyers credit carries interest @ 0.50% to 0.80% p.a.

a) Pending settlement of dispute regarding external development charges with Haryana Urban Development Authority, Faridabad, Freehold Land of the value of Rs. 1.27 lacs (Previous Year Rs. 1.27 lacs) is pending for registration in the Company's name.

b) Plant and Machinery of the value of Rs. 30.60 lacs (Previous Year: Rs. 30.60 lacs) are held in joint ownership with others.

c) Freehold Land, Leasehold Land and Buildings include Rs. 945.23 lacs (Previous Year: Rs. 945.23 lacs), WDV Rs. 433.99 lacs (Previous Year: Rs. 433.99 lacs) on account of additions on revaluation during the year ended December 31, 1983 as per valuation carried out by an approved valuer.

Note :

a) The Company alongwith other co-owners, has developed a plot of land at 25 Barakhamba Road, New Delhi, where the Company's share is 15%. The registration of the said plot of the value of Rs. 427.60 lacs (Previous Year : Rs. 427.60 lacs) in the name of the Company is pending. The Company has given the said property on operating lease to some parties. There are no contingent rents in the lease agreements. The lease terms are mainly for 3-5 years and are renewable at the option of the lessee. There are no restrictions imposed by lease agreements. There are no subleases.

b) Government Securities for Rs. 0.50 lacs (Previous Year : Rs. 0.50 lacs) lodged with Government Departments.

3. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Employees' Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss, the funded/non-funded status and amount recognised in the balance sheet for the gratuity plan:

Statement of profit and loss

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

4. EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

Revenue expenditure debited to respective heads of account includes expenditure incurred on Research and Development during the year amounting to Rs. 345.66 lacs (Previous Year: Rs. 333.72 lacs) and assets/ equipments purchased for research activities of Rs. 9.34 lacs (Previous Year: Rs. 418.46 lacs) disclosed under Tangible Assets.

The Company's share of the assets, liabilities, income and expenses of the jointly controlled entity as at and for the years ended December 31,2014 and 2013 are as follows:

5. SEGMENT INFORMATION

Business segments

As of March 31,2015 the Company has organised its operations into three major businesses: Building Products, Thermal Insulation Products (Refractories) and wind power. A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, Aerocon Panels, AAC blocks and Advanced Polymer Products. The said products are used in construction activity. The Company also trades in allied products like GC Sheets, CC Sheet, AAC Blocks, UCPVC& CPVC pipes & fittings etc.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Wind Power : The Company installed few Wind Turbine Generators as a part of Green initiative, part of which is used for captive consumption and the excess power to be sold to the respective state electricity board.

Geographical segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

a. Primary segment information (by business segments)

The following table presents revenue and profit information regarding business segments for the years ended March 31.2015 and March 31,2014 and certain assets and liabilities information regarding business segments as at March 31.2015 and March 31,2014.

* Sales as per the statement of Profit and Loss is Rs. 110779.14 lacs (Previous Year: Rs. 86947.41 lacs) which includes Rs. 0.48 lacs (Previous Year: Rs. 0.28 lacs) pertaining to Corporate Office. **

** Total other income as per the statement of Profit and Loss is Rs. 1762.07 lacs (Previous year : Rs. 799.93 lacs) which includes Rs. 1474.72 lacs (Previous year: Rs. 437.73 lacs) pertaining to Corporate Office.

The Company has entire fixed assets situated within India for producing goods/providing services to domestic as well as overseas markets. Hence, separate figures for fixed assets/ addition to fixed assets have not been furnished.

No amount has been provided as doubtful receivable or advance written off or written back in the year in respect of receivable due from/to above related parties. *

*As the future liabilities for gratuity and leave encashment is provided on an actuarial basis for the company as a whole, the amount pertaining to the managing director for previous year is not ascertainable, therefore, not included above.

6. CONTINGENT LIABILITIES (Not provided for) in respect of:

a. Demand raised by the Income tax authorities, being disputed by the Company 904.03 804.17

b. Demands raised by Sales tax authorities, being disputed by the Company [refer note below] 1117.05 971.56

c. Demands (Including penalties) raised by Excise authorities, being disputed by the Company 2310.85 2093.97

d. Appeal filed by the Company before the High Court of Judicature of Andhra Pradesh against the decision of appeal in favour of the Income tax department pertaining to wealth tax matter. 56.98 56.98

e. Pending cases with Income Tax Appellate Authorities where Liability not Liability not Income Tax Department has ascertainable ascertainable preferred appeals

f. Demand for Property Tax, being disputed by the Company 561.86 561.86

g. Other claims against the Company not acknowledged as debts 313.10 353.61

Income tax demand comprises of demand from the Indian tax authorities upon completion of their assessment for the financial years 2008-09 to 2011 -12. The tax demands are mainly on account of disallowance of the benefit on research & development expenses, depreciation expenses on Wind mill and other expenses not allowed.

The demands raised by the Sales tax authority are mainly towards enhancement of turnover due to certain disallowances, entry tax on stock transfers and local sales tax demand upon completion of assessment and various other miscellaneous cases raised by the respective state authorities.

The demand raised by the excise authority is mainly towards excise duty demand including interest and penalty towards disallowance of availment of CENVAT credit and wrong classification of products as taxable versus exempt product.

Mainly represents appeal preferred by Indian Tax Authorities in High Court against favourable order of Tribunal for not considering certain amounts under "Long Term Capital Gain"

f Other claims against the Company not acknowledged as debt mainly includes liability towards fuel surcharge adjustment disputed with Electricity board for the financial year 2008-09 and 2009-10.

The Company is contesting the demands and the Management believe that its position will likely be upheld in the appellate process and accordingly no expense has been accrued in the financial statements for the demand raised / show cause notice received as the ultimate outcome of this proceeding will not have a material adverse effect on the Company's financial statement.

- In addition to above, the Company has provided Rs. 432.28 lacs (including Rs. 82 lacs provided in current year and Rs. Nil reversed during the current year). All these cases are under litigations and are pending with various authorities, expected timing of resulting outflow of economic benefits cannot be specified.

Note: The wage agreements at three of the manufacturing locations of the Company are pending as at March, 31 2015. It is expected that agreement will be entered in next year and arrears would be paid based on the agreement. The provision for wage arrears have been made on the basis of expected outflows.

7. With a view to rationalize the workforce at its Hyderabad and Dharuhera units, (Previous Year: Faridabad and Jasidih units) the Company had announced Voluntary Early Retirement Scheme (VERS). In response to the VERS, workmen opted for the same and expenditure of Rs. 332.91 lacs (Previous Year: Rs. 355.42 lacs) on VERS is charged to the statement of profit and loss as an exceptional item.

8. Previous year figures have been regrouped/rearranged wherever necessary to confirm to current years classification.

Mar 31, 2014

1. CORPORATE INFORMATION

The Company is engaged in the production and distribution of Fibre Cement Sheets and other building products, viz., Aerocon Panels, AAC Blocks, Material Handling and Processing Plant and Equipment, Thermal Insulation Products (Refractories) and Advanced Polymer Products. The Company presently has manufacturing facilities at Hyderabad, Faridabad, Jasidih, Dharuhera, Thimmapur, Kondapalli, Chennai, Thrissur, Wada, Sathariya, Balasore and Golan. The Company has set up Wind Turbine Generators in Gujarat, Tamil Nadu and Rajasthan.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956, read with General Circular 8/2014 dated 4th April 2014, issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for freehold land, lease hold land and building acquired before December 31, 1983 which are carried at re valued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Employees'' Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary ( last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss, the funded/non-funded status and amount recognised in the balance sheet for the gratuity plan:

Statement of Profit and Loss

4. EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

Revenue expenditure debited to respective heads of account includes expenditure incurred on Research and Development during the year amounting to Rs.333.72 lacs (Previous Year: Rs.320.74 lacs) and assets/equipments purchased for research activities of Rs.418.46 lacs (Previous Year: Rs.77.21 lacs) disclosed under Tangible Assets.

5. SEGMENT INFORMATION

Business Segments

As of March 31, 2014 the Company has organised its operations into three major businesses: Building Products, Thermal Insulation Products (Refractories) and wind power. A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, Aerocon Panels, AAC blocks and Advanced Polymer Products. The said products are used in construction activity. Company also trades in allied products like GC Sheets, CC Sheet, AAC Blocks, Upvc & Cpvc pipes & fittings etc.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Wind Power: The Company installed few Wind Turbine Generators as a part of Green initiative, part of which is used for captive consumption and the excess power to be sold to the respective state electricity board.

Geographical Segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

a. Primary segment information (by Business segments)

The following table presents revenue and profit information regarding business segments for the years ended March 31, 2014 and March 31, 2013 and certain assets and liabilities information regarding business segments as at March 31, 2014 and March 31, 2013.

6. CONTINGENT LIABILITIES (Rs.in lacs) (NOT PROVIDED FOR) IN RESPECT OF 2013-14 2012-13

a. Demand raised by the Income Tax authorities, being disputed by the Company 804.17 1107.70

b. Demands raised by Sales tax authorities, being disputed by the Company. 971.56 1244.32

c. Demands (Including penalties) raised by Excise authorities, being disputed by the Company. 2093.97 1565.79

d. Appeal filed by the Company before the High Court of Judicature of Andhra Pradesh against the decision of appeal in favour of the Income tax department pertaining to wealth tax matter. 56.98 56.98

e. Pending cases with Income Tax Appellate Authorities where Liability Liability not not Income Tax Department has preferred appeals. ascerta -inable ascertai -nable

f. Demand for Property Tax, being disputed by the Company 561.86 305.86

g. Other claims against the Company not acknowledged as debts 353.61 353.61

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed above and hence no provision has been considered necessary against the same.

7. CONTRIBUTIONS TO POLITICAL PARTIES

Information in respect of Section 293A (4) of Companies Act. 1956 pertaing to contribution to political parties (included in note 22-Donations) Rs.Nil. (Previous Year: Rs.50.00 lacs each to All India Congress Committee & Bhartiya Janata Party)

8. The Company is in the process of applying to the Central Government for approval of excess managerial remuneration amounting to Rs.116.90 lacs paid to Managing Director during the year beyond the limits specified in Part II of Section II (B) and Section III of Schedule XIII of the Companies Act, 1956. The Company believes that such approval will be obtained in due course and would not have any material impact upon the financial statements.

9. With a view to rationalize the workforce at its Faridabad and Jasidih units, the Company had announced a voluntary early retirement scheme (VERS) during September 2013. In response to the VERS, 86 workmen opted for the same. Expenditure of Rs.355.42 lacs on VERS is charged to the statement profit and loss for the year ended 31 March 2014.

10. Previous year figures have been regrouped/rearranged wherever necessary to confirm to current years classification.

Mar 31, 2013

1. CORPORATE INFORMATION

The Company is engaged in the production and distribution of Fibre Cement Sheets and other building products, viz., Aerocon Panels, AAC Blocks, Material Handling and Processing Plant and Equipment, and Thermal Insulation Products (Refractories). The Company presently has manufacturing facilities at Hyderabad, Faridabad, Jasidih, Dharuhera, Thimmapur, Kondapalli, Chennai, Thrissur, Wada , Sathariya, Balasore, Golan and Derabassi. The Company has set up Wind Turbine Generators in Gujarat, Tamil Nadu and Rajasthan.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for freehold land, lease hold land and building acquired before December 31, 1983 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The Employees'' Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss, the funded/non-funded status and amount recognised in the balance sheet for the gratuity plan:

4. EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

Revenue expenditure debited to respective heads of account includes expenditure incurred on Research and Development during the year amounting to Rs.320.74 lacs (Previous Year: Rs.228.67 lacs) and assets/equipments purchased for research activities of Rs.77.21 lacs (Previous Year: Rs.4.92 lacs) disclosed under Tangible Assets.

5. SEGMENT INFORMATION Business Segments

As of March 31, 2013 the Company has organised its operations into three major businesses: Building Products, Thermal Insulation Products (Refractories) and Wind Power. A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, Aerocon Panels and AAC blocks. The said products are used in construction activity. Company also trades in allied products like GC Sheets, CC Sheet etc.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Wind Power: The Company installed few Wind Turbine Generators as a part of Green initiative, part of which is used for captive consumption and the excess power to be sold to the respective state electricity board.

Geographical Segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

a. Primary segment information (by Business segments)

The following table presents revenue and profit information regarding business segments for the years ended March 31, 2013 and March 31, 2012 and certain assets and liabilities information regarding business segments as at March 31, 2013 and March 31, 2012.

6. LOANS AND ADVANCES IN THE NATURE OF LOANS GIVEN TO COMPANY IN WHICH DIRECTORS ARE INTERESTED

Hindustan Motors Limited

Balance as at March 31, 2013 Rs. Nil (Previous Year: Rs.Nil)

Maximum amount outstanding during the year Rs.Nil (Previous Year: Rs.1000.00 lacs)

7. CONTRIBUTIONS TO POLITICAL PARTIES

Information in respect of Section 293A (4) of Companies Act, 1956 pertaing to contribution to political parties (included in note 22-Donations) Rs.50 lacs each to All India Congress Committee and Bharthiya Janata Party.

8. Previous year figures have been regrouped/rearranged wherever necessary to confirm to current years classification.

Mar 31, 2012

1. CORPORATE INFORMATION

The Company is engaged in the production and distribution of Fibre Cement Sheets, other building products, viz., Aerocon Panels, AAC Blocks, Material Handling and Processing Plant and Equipment, and Thermal Insulation Products (Refractories). The Company presently has manufacturing facilities at Hyderabad, Faridabad, Jasidih, Dharuhera, Thimmapur, Kondapalli, Chennai, Thrissur, Wada, Satharya, Balasore and Golan. The Company has set up Wind Turbine Generators in Gujarat and Tamil Nadu.

2. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for freehold land, lease hold land and building acquired before December 31, 1983 which are carried at revalued amounts.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

3. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

The EmployeesÃ Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summaries the components of net benefit expense recognised in the statement of profit and loss, the funded/non-funded status and amount recognised in the balance sheet for the gratuity plan:

Statement of Profit and Loss

Net employee benefit expense (recognised as personnel expenses) in the statement of Profit and Loss

4. EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

Revenue and Capital expenditure debited to respective heads of account include expenditure incurred on Research and Development during the year amounting to Rs. 228.67 lacs and Rs. 4.92 lacs respectively (Previous Year Rs. 155.62 lacs and Rs. 8.40 lacs respectively).

5. SEGMENT INFORMATION Business Segments

As of March 31, 2012 the Company has organised its operations into two major businesses: Building Products and Thermal Insulation Products (Refractories). A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, Aerocon Panels and AAC blocks. The said products are used in construction activity. Company also trades in allied products like GC Sheets, CC Sheet etc.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Wind Power: The Company installed few Wind Turbine Generators as a part of Green initiative, part of which is used for captive consumption and the excess power to be sold to the respective state electricity board.

Geographical Segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

Rs. in lacs 2011-12 2010-11

6. CONTINGENT LIABILITIES

(NOT PROVIDED FOR) IN RESPECT OF

a. Demand raised by the Income Tax authorities, being disputed by the Company 1057.27 592.41

b. Demands raised by Sales tax authorities, being disputed by the Company. 822.76 1654.36

c. Demands (Including penalties) raised by Excise authorities, being disputed by the Company. 1376.38 1139.44

d. Appeal filed by the Company before the High Court of Judicature of Andhra Pradesh against the decision of appeal in favour of the Income tax department pertaining to wealth tax matter. 56.98 56.98

e.Pending cases with Income Tax Appellate Authorities where Liability not Liability not Income Tax Department has preferred appeals. ascertainable ascertainable

f. Demand for Property Tax, being disputed by the Company 401.68 401.68

g. Other claims against the Company not acknowledged as debts 161.73 246.00

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed above and hence no provision has been considered necessary against the same.

7. LOANS AND ADVANCES IN THE NATURE OF LOANS GIVEN TO COMPANY IN WHICH DIRECTORS ARE INTERESTED

Hindustan Motors Limited

Balance as at March 31, 2012 Rs. Nil (Previous Year Rs. Nil)

Maximum amount outstanding during the year Rs. 1000.00 lacs (Previous Year Rs. 500.00 lacs)

Mar 31, 2011

1 Nature of Operations

The Company is engaged in the production and distribution of Fibre Cement Sheets, Aerocon Panels, AAC Blocks, Material Handling and Processing Plant and Equipment and Thermal Insulation Products (Refractories). The Company presently has manufacturing facilities at Hyderabad, Faridabad, Jasidih, Dharuhera, Thimmapur, Vijayawada, Chennai, Thrissur, Wada , Sathariya Balasore and Golan. During the year the Company has commenced generating power by setting up Wind Turbine Generator at Vandhiya village in Gujarat.

2. Segment Information

Business Segments

As of March 31, 2011 the Company has organised its operations into two major businesses: Building Products and Thermal Insulation Products (Refractories). A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, Aerocon Panels and AAC blocks. The said products are used in construction activity.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Geographical Segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

3. Related Party Disclosure

No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

Name of related parties

Joint Venture Supercor Industries Limited, Nigeria.

Key Management Personnel Mr. Abhaya Shankar (Managing Director)

4. Interest in Joint Venture Company

The Companys share of the assets, liabilities, income and expenses of the jointly controlled entity as at and for the years ended December 31, 2010 and 2009 are as follows:

5. Contingent Liabilities (not provided for) in respect of :

(Rs. In Lacs) 2010-11 2009-10

a) Demand raised by the Income Tax authorities, being disputed by the Company 592.41 289.26

b) Demands raised by Sales tax authorities, being disputed by the Company. 1654.36 1155.83

c) Demands (Including penalties) raised by Excise authorities,being disputed by the Company. 1139.44 1012.80 d) Appeal filed by the Company before the High Court of Judicature of Andhra Pradesh against the decision of appeal in favour of the Income tax department pertaining to wealth tax matter. 56.98 56.98

e) Pending cases with Income Tax Appellate Authorities where Income Tax Department has preferred appeals. Liability Liability not not ascertainable ascertainable

f) Demand for Property Tax, being disputed by the Company 401.68 401.68

g) Other claims against the Company not acknowledged as debts. 246.00 182.60

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed above and hence no provision has been considered necessary against the same.

6. Employee Benefit Plans (AS 15 revised)

The Employees Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary ( last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summaries the components of net benefit expense recognised in the profit and loss account, the funded/ non-funded status and amount recognised in the balance sheet for the gratuity plan:

7. a) Interest free sales tax loan from a financial institution is secured by way of first charge on the entire assets of the Sathariya Unit of the Company, both present and future.

b) Cash Credit facilities from banks are secured by hypothecation of inventories and book debts and are further secured by second equitable mortgage of the Companys immovable properties and hypothecation of other fixed assets, both present and future, other than assets as disclosed in (a) above.

8. Revenue and Capital expenditure debited to respective heads of account include expenditure incurred on Research and Development during the year amounting to Rs. 155.62 lacs and Rs. 8.40 lacs respectively (Previous Year Rs. 108.10 lacs and Rs. Nil respectively).

9. Provision for employee related other costs and loss on onerous contracts

a) The wage agreements at three of the manufacturing locations of the Company are pending as at March, 31 2011. The provision for wage arrears have been made on the basis of expected outflows. It is expected that agreement will be entered in next year and arrears would be paid based on the agreement.

b) The Company is executing one supply and erection contract entered with a party. The estimated unavoidable future cost of meeting the obligations under the contract exceed the expected future economic benefits to be received under it by Rs.103.73 lacs (Previous Year Rs. 154.63 lacs). Accordingly, provision for loss on onerous contract has been made for Rs.103.73 lacs. The contract is expected to be completed in next year.

10. In accordance with Explanation below para 10 of Notified Accounting Standard 9: Revenue Recognition, excise duty on sales amounting to Rs. 7760.69 lacs (Previous Year Rs. 5285.50 Lacs) has been reduced from sales in profit and loss account and expenditure during construction period. Excise duty income on decrease in stocks amounting to Rs. 204.35 lacs (Previous Year excise duty expense of Rs. 732.92 lacs) has been considered in Schedule 17 of the financial statements and excise duty on closing stock out of trial run production amounting to Rs. 13.50 lacs (Previous Year Rs. 29.97 lacs) has been debited to expenditure during construction period.

11. Previous year figures have been regrouped/ rearranged wherever necessary to conform with current years classification.

Mar 31, 2010

1 Nature of Operations

The Company is engaged in the production and distribution of Fibre Cement Sheets, Aerocon Panels, AAC Blocks, Material Handling and Processing Plant and Equipment and Thermal Insulation Products (Refractories). The Company presently has manufacturing facilities at Hyderabad, Faridabad, Jasidih, Dharuhera, Thimmapur, Vijayawada, Chennai, Thrissur, Wada, Sathariya and Balasore. The Company has started trial production of AAC Blocks at its new manufacturing facility set up at Golan in the State of Gujarat.

2. Segment Information

Business Segments

As of March 31, 2010 the Company has organised its operations into two major businesses: Building Products and Thermal Insulation Products (Refractories). The other two businesses viz Heavy Engineering Division (transferred on July 8, 2005) and other representing Jointing were discontinued during the previous year. A description of the types of products and services provided by each reportable business segment is as follows:

Building Products: The Company manufactures and markets fibre cement sheets, aerocon panels and AAC blocks. The said products are used in construction activity.

Thermal Insulation Products (Refractories): The Company manufactures and markets insulation products used in Cement, Fertilizers and Power Sector in the Kilns, furnaces and boilers.

Heavy Engineering: The Company till the date of transfer manufactured material handling and processing plant and equipment. It also manufactured heavy engineering equipment used in mining, industrial and construction activities and undertook projects on turnkey basis.

Other: The operations of this residual segment represented jointing.

Geographical Segments

The analysis of geographical segments is based on the location of the customers i.e. domestic and overseas.

a) Primary segment information (by Business segments)

The following table presents revenue and profit information regarding business segments for the years ended March 31, 2010 and March 31, 2009 and certain assets and liabilities information regarding business segments as at March 31, 2010 and March 31, 2009.

b) Geographical Segments

The following is the distribution of the CompanyÃs consolidated sales by geographical market, regardless of where the goods were produced:

3. Contingent Liabilities (not provided for) in respect of :

(Rs. In Lacs)

2009-10 2008-09

a)Additions made by the Income Tax authorities, being disputed by the Company 289.26 1789.54

b)Demands raised by Sales tax authorities, being disputed by the Company. 1155.83 1218.65

c)Demands (Including penalties) raised by Excise authorities,being disputed by the Company. 1012.80 Ã

d)Appeal filed by the Company before the High Court of Judicature of Andhra Pradesh against the decision of appeal in favour of the Income tax department pertaining to wealth tax matter. 56.98 56.98

e)Pending cases with Income Tax Appellate Authorities where Income Tax Department has preferred appeals. Liability not Liability not ascertainable ascertainable

f)Demand for Property Tax, being disputed by the Company 401.68 401.68

g)Other claims against the Company not acknowledged as debts. 182.60 145.25

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors, etc., the Company believes that there is fair chance of decisions in its favour in respect of all the items listed above and hence no provision has been considered necessary against the same.

4 Employee Benefit Plans (AS 15 revised)

The EmployeesÃ Gratuity Fund Scheme managed by a trust is a defined benefit gratuity plan which is administered through Group Gratuity Scheme with Life Insurance Corporation of India. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary ( last drawn salary) for each completed year of service or part thereof in excess of six months.

The following tables summarise the components of net benefit expense recognised in the profit and loss account, the funded/ non-funded status and amount recognised in the balance sheet for the gratuity plan:

5. a. Interest free sales tax loan from a financial institution is secured by way of first charge on the entire assets of the Sathariya Unit of the Company, both present and future.

b. Cash Credit facilities from banks are secured by hypothecation of inventories and book debts and are further secured by second equitable mortgage of the Companys immovable properties and hypothecation of other fixed assets, both present and future, other than assets as disclosed in (a) above.

18. In accordance with Explanation below para 10 of Notified Accounting Standard 9: Revenue Recognition, excise duty on sales amounting to Rs. 5285.50 lacs (Previous Year Rs. 4521.04 Lacs) has been reduced from sales in profit and loss account and expenditure during construction period. Excise duty expense on increase in stocks amounting to Rs. 732.92 lacs (Previous Year excise duty reversal of Rs. 454.82 lacs) has been considered in Schedule 17 of the financial statements and excise duty on closing stock out of trial run production amounting to Rs. 29.97 lacs (Previous Year Rs. 37.19 lacs) has been debited to expenditure during constrution period.

19. Information in respect of Section 293A (4) of Companies Act, 1956 pertaining to Contributions to political parties (included in donations in schedule 17) Rs. 25 lacs each to All India Congress Committee and Bhartiya Janata Party.

20. Previous year figures have been regrouped/ rearranged wherever necessary to conform with current yearsÃ classification.

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