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Notes to Accounts of Udaipur Cement Works Ltd.

Mar 31, 2017

I. The Company Overview : Corporate & General Information.

Udaipur Cement Works Limited (“the Company’’) is domiciled and incorporated in India and its shares are publicly traded on the Bombay Stock Exchange (BSE). The Registered Office of the Company is situated at Shripatinagar, P.O.: CFA, Dist.: Udaipur - 313 021 (Rajasthan)

The Company is a manufacturer and supplier of Cement and Cementitious products with manufacturing facilities in the State of Rajasthan. The Company’s Technical Service Cell provides construction solutions to its customers & carries out regular & innovative contact programmes with Individual House Builders, Masons and other Business Associates to keep in tune with their needs and requirements.

These Financial Statements were approved and adopted by the Board of Directors of the Company in their meeting held on 10th May, 2017.

II. Basis of Preparation of Financial Statements.

(i) Statement of Compliance :

The Financial Statements have been prepared in accordance with Indian Accounting Standards (IND AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.

(ii) Basis of Preparation :

These financial statements have been prepared in accordance with IND AS 101, “First Time Adoption of IND AS”, as these are the Company’s first IND AS compliant Financial Statements for the year ended 31st March, 2017.

The Financial Statements correspond to the classification provisions contained in IND AS-1 (Presentation of Financial Statements). The transition to IND AS has been carried out from the Accounting Principles generally accepted in India (Indian GAAP), which is considered as the “Previous GAAP”, for purpose of IND AS - 1.

The preparation of these Financial Statements resulted in changes to the Company’s Accounting Policies as compared to the most recent Annual Financial Statements prepared under Previous GAAP, wherever necessary. All Accounting Policies and applicable IND AS have been applied consistently and retrospectively to all periods, including the previous financial year presented and the IND AS opening balance sheet as at 1st April, 2015 (Transition Date). The resulting difference between the carrying amounts under IND AS and Previous GAAP as on the Transition Date has been recognised directly in Equity. An explanation of the effect of the transition from Previous GAAP to Ind AS on the Company’s equity and profit is provided in Note No. 59.

In preparing these Financial Statements, the Company has availed certain exemptions and exceptions from retrospective application of certain requirements under IND AS, as explained below:

a) Exemptions from Retrospective Application:

- Deemed cost of Property, Plant and Equipment : The Company has adopted optional exception under IND AS 101 to measure Property, plant and equipment at fair value (Refer Note No. 59) . Consequently, the fair value has been assumed to be deemed cost of Property, plant and equipment at the transition date to IND AS (i.e. 1st April, 2015).

- Deemed cost of Investment Properties : The Company has adopted optional exception under IND AS 101 to measure Investment Properties at fair value (Refer Note No. 59). Consequently, the fair value has been assumed to be deemed cost at the transition date to IND AS (i.e. 1st April, 2015).

b) Exceptions from full Retrospective Application:

Estimates: Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under IND AS, except where revision in estimates was necessitated as required by IND AS . The estimates used by the Company to present the amounts in accordance with IND AS reflect conditions existing as at 1st April, 2015, the date of transition to IND AS and as at 31st March, 2016 and 31st March, 2017.

(iii) Basis of Measurement.

The standalone financial statements have been prepared on accrual basis and under the historical cost convention except for the following :

- Certain Financial assets and liabilities (including derivative financial instruments) are measured at fair value.

- Defined benefit plans - plan assets measured at fair value.

- Asset held for sale-measured at fair value less cost to sell.

The standalone financial statements are presented in Indian Rupees (‘), which is the Company’s functional and presentation currency and all amounts are rounded to the nearest Lacs & two decimals thereof.

(iv) Fair Value Measurement.

The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non- financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy in which they fall.

(v) Current & Non-Current Classifications.

All Assets and Liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(vi) Accounting Estimates and Assumptions.

The preparation of the Financial Statements requires management to make certain estimates and assumptions. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to Accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period or in the period of the revision and future periods if the revision affects both current and future years on critical accounting estimates, assumptions and judgments.

1. Financial Risk Management Objectives and Policies.

The Company’s Financial Risk Management is an integral part of how to plan and execute its Business Strategies. The Company’s Financial Risk Management Policy is set by the Board. The Company’s activities are exposed to a variety of financial risks from its operations. The key financial risks include market risk (including foreign currency risk, interest rate risk and commodity risk etc.), credit risk and liquidity risk.

1.1 Market Risk:

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from change in the price of a financial instrument. The value of a financial instrument change may change as a result of change in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments and deposits, foreign currency receivables, payables and loans and borrowings. Market risk comprises mainly three types of risk: interest rate risk, currency risk and other price risk such as equity price risk and commodity risk.

The Company has an elaborate risk management system to inform Board Members about risk management and minimization procedures.

a) Foreign Currency Risk : Foreign Currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company makes certain imports in foreign currency & therefore is exposed to Foreign Exchange Risk.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Foreign Currency Sensitivity.

During the year, the Company transacted its operations only in INR. Certain project payments for imports were made in foreign currencies which were settled during the year. Hence, the Company is not exposed to foreign risk and sensitivity.

Further, there is no impact on the Company’s profit before tax and other comprehensive income due to changes in the fair value of monetary assets & liabilities and there is no exchange difference accounted in the Statement of Profit and Loss.

b) Interest Rate Risk : Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by maintaining a proper blend of Fixed & Floating Rate Borrowings. The following Table shows the Company’s Borrowings:

The Company regularly scans the Market & Interest Rate Scenario to find appropriate Financial Instruments & negotiates with the Lenders in order to reduce the effect on Cost of Funding.

Interest Rate Sensitivity

Since, the Company has only fixed rate borrowings; there would be no impact of interest rate sensitivity on profit before tax.

(c) Commodity Price Risk and Sensitivity:

The Company is exposed to the movement in price of key raw materials in domestic and international markets. The Company manages fluctuations in raw material price through hedging in the form of advance procurement when the prices are perceived to be low and also enters into advance buying contracts as strategic sourcing initiative in order to keep raw material and prices under check cost of material hedged to the extent possible.

1.2 Credit Risk:

Credit Risk arises from the possibility that counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

Trade Receivable: Customer Credit Risk is managed based on Company’s established policy, procedures and controls. The Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Individual risk limits are set accordingly.

The credit risk from the organized and bigger buyers is reduced by securing Bank Guarantees/Letter of Credits/part advance payments/post dated cheques. The Outstandings of different parties are reviewed periodically at different level of organization. The outstanding from the trade segment is secured by two tier security - security deposit from the dealer himself, and our business associates who manage the dealers are also responsible for the outstanding from any of the dealers in their respective region.

Financial Instruments and Deposits with Banks

The Company considers factors such as track record, size of institution, market reputation and service standards to select the bank with which balances and deposits are maintained. Generally, balances are maintained with the institutions with which the Company has also availed borrowings. The Company does not maintain significant cash and deposit balances other than those required for its day to day operation.

1.3 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 is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.

The Company relies on a mix of borrowings, and excess operating cash flows to meet its needs for funds. The current committed lines of credit are sufficient to meet its short to medium term expansion needs. The Company monitors rolling forecasts of its liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowings facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.

Maturity Profile of Financial Liabilities :

The following Table provides undiscounted cash flows towards financial liabilities into relevant maturity based on the remaining period at the balance sheet to the contractual maturity date.

2. Capital Risk Management:

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company’s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company’s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal structure to reduce the cost of capital.

For the purpose of the Company’s capital management, capital includes issued capital, preference shares and all other equity reserves. Net debt includes, interest bearing loans and borrowings, trade and other payables less cash and short term deposits.

The Company is not subject to any external imposed capital requirement. The Company monitors capital using a gearing ratio, which is Net Debt divided by Total Capital plus Net Debt. Net Debt is calculated as total borrowings including short term and current maturities of long term debt.

3. Fair Value of Financial Assets and Liabilities:

Set out below, is a comparison by class of the carrying amounts and fair value of the financial instruments of the companies: -

Fair Valuation Techniques:

The Company maintains policies and procedures to value Financial Assets & Financial Liabilities using the best and most relevant data available. The Fair Values of the Financial Assets and Liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values :-

1. Fair Value of cash and deposits, trade receivables, trade payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.

2. Other non-current receivables are evaluated by the Company, based on parameters such as interest rates, individual creditworthiness of the counterparty etc. Based on this evaluation, allowances are considered to account for the expected losses of these receivables. As at end of each reporting year, the carrying amounts of such receivables, net of allowances (if any), are not materially different from their calculated fair values.

3. Fair value of Investments in quoted mutual funds and equity shares are based on quoted market price at the reporting date. The fair value of unquoted Investments in preference shares are estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. The fair value of unquoted Investments in equity shares are estimated on net assets basis.

4. Fair value of borrowings from banks and other non-current financial liabilities, are estimated by discounting future cash flows using rates currently available for debt on similar terms and remaining maturities.

5. The fair values of derivatives are calculated using the RBI reference rate as on the reporting date as well as other variable parameters.

Fair Value Hierarchy: There are no Financial Assets and Liabilities for which the Company is required to do fair value measurement. Hence, fair value hierarchy of Company’s assets and liabilities to be grouped in various Levels is not applicable for the Company.

4. Segment Information:

The Company is engaged primarily into manufacturing of Cement. The Company has only one business segment as identified by management namely Cementious Materials. Segments have been identified taking into account nature of product and differential risk and returns of the segment. The business segments are reviewed by the Directors of the Company.

5. Derivative Financial Instrument:

Certain Imports for project which were made in foreign currency were hedged using foreign exchange forward contracts. Project payments for these imports were settled during the year. Hence, the Company did not have any outstanding forward contracts as on March 31, 2017 and March 31, 2016.

6. Income Tax Expense:

i. Amount recognised in the Statement of Profit & Loss

ii. Income Tax recognised in OCI and Equity:

iii. Reconciliation of effective tax rate:

# The relief from Minimum Alternate Tax (MAT) is available to the Company as provided in explanation (iii) to Section 115 JB (2) of Income Tax Act, 1961.

iv. Deferred Tax:

Deferred Tax relates to the followings:

# Recognised only to the extent that it is ‘probable’ that future taxable profits will be available.

7. Dividends :

The Company has neither proposed nor declared any dividend for the financial year 2015-16 and 2016-17.

8. Retirement benefit obligations

A. Expense recognised for Defined Contribution plan

Below tables sets forth the changes in the projected benefit obligation and plan assets and amounts recognised in the standalone Balance Sheet as at March 31, 2017 and March 31, 2016, being the respective measurement dates:

a) Movement in obligation

b) Movement in Plan Assets - Gratuity

The components of the gratuity and leave encashment are as follows:

c) Recognised in Statement of profit and loss

d) Recognised in Other Comprehensive Income

e) The principal actuarial assumptions used for estimating the Company’s defined benefit obligations are set out below:

The assumption of future salary increase takes into account the inflation, seniority, promotion and other relevant factors such as supply and demand in employment market. Same assumptions were considered for comparative period i.e. 2015-16 as considered in previous GAAP on transition to IND AS.

f) Sensitivity analysis:

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.

g) History of experience adjustments is as follows:

Estimate of expected benefit payments

h) Statement of Employee benefit provision

The following table sets out the funded status of the plan and the amounts recognised in the Company’s balance sheet.

i) Current and non-current provision for Gratuity and leave encashment

j) Employee benefit expenses

OCI presentation of defined benefit plan

- Gratuity is in the nature of defined benefit plan, Re-measurement gains/(losses) on defined benefit plans is shown under OCI as Items that will not be reclassified to profit or loss and also the income tax effect on the same.

- Leave encashment cost is in the nature of short term employee benefits.

Presentation in Statement of Profit & Loss and Balance Sheet

- Expense for service cost, net interest on net defined benefit liability (asset) is charged to Statement of Profit & Loss.

- IND AS 19 do not require segregation of provision in current and non-current, however net defined liability (Assets) is shown as current and non-current provision in balance sheet as per IND AS 1.

- Actuarial liability for short term benefits (leave encashment cost) is shown as current and non-current provision in balance sheet.

- When there is surplus in defined benefit plan, Company is required to measure the net defined benefit asset at the lower of; the surplus in the defined benefit plan and the assets ceiling, determined using the discount rate specified, i.e. market yield at the end of the reporting period on government bonds, this is applicable for domestic companies, foreign Company can use corporate bonds rate.

- The Company assesses these assumptions with its projected long-term plans of growth and prevalent industry standards. The mortality rates used are as published by one of the leading life insurance companies in India.

9. In pursuance to Notification No. GSR 308(E) dated 30th March 2017, details of specified Bank Notes (SBNs) held and transacted during the period 08.11.2016 to 30.12.2016 are provided in the Table below:-

10. Expenses charged to Raw Material (Limestone) account includes:

11. Capital work in progress includes Machinery in stock, construction/erection materials, and also includes the following pre -operation expenses pending allocation

12. Estimated amount of contract remaining to be executed on capital account and not provided for (net of advances)

13. Contingent Liabilities

i. Contingent liabilities in respect of claims not accepted by the Company (including matters in appeals) and not provided for are as follows:

# Consequent upon repeal of SICA, the Company has made provision for Land Tax of Rs.1029.29 lacs which has been considered as pre-operative expense as being part of rehabilitation scheme sanctioned by BIFR and apportioned to PPE.

ii. Contingent liability for non-use of jute bags for Cement packing upto 30th June, 1997, as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained and the matter is subjudice. The Government has excluded Cement Industry from application of the said Order from 1st July, 1997.

14. The liabilities pertaining to the statutory levies and pending legal cases prior to 01.12.1993 (date of takeover of the cement undertaking from Bajaj Hindustan Limited) will be borne by Bajaj Hindustan Limited.

15. The Company has successfully completed its revival & rehabilitation scheme with start of commercial production from 31st March 2017 at its integrated Cement plant at Udaipur. The dispatches of cement and clinker have since begun.

16. During the year, the Company has received subsidy of Rs.46.24 lacs (Previous year - Rs.23.14 lacs) in terms of State Investment Promotion Scheme towards exemption from electricity duty which has been netted from Power & Fuel expenses.

17. Exceptional Items comprises of Profit on Sale of Old & Obsolete Fixed Assets amounting to Rs.404.12 lacs (Previous year - Rs.244.27 lacs) which were scrapped due to complete suspension of operation since 2002.

18. a) Sales include own consumption at cost Rs.55.75 lacs (Previous years - Rs.151.70 lacs).

b) Consumption of Stores and Spares is net of scrap sale Rs.1.32 lacs (Previous year Rs.8.59 lacs).

c) Other Operating Revenue includes Sales Tax/Value added Tax subsidy of Rs.271.52 lacs (Previous year - Rs.255.49 lacs) and Bad Debts written off now recovered - Rs.4.27 lacs (Previous year - Rs.1.10 lacs).

19. Based on information available with the Company in respect of MSME (‘The Micro Small & Medium Enterprises Development Act 2006’). The details are as under:

i. Principal and Interest amount due and remaining unpaid as at 31st March 2017 - Nil (Previous year - Nil).

ii. Interest paid in terms of section 16 of the MSME Act during the year - Nil (Previous year - Nil).

iii. The amount of Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified - Nil (Previous year - Nil).

iv. Payment made beyond the appointed day during the year - Nil (Previous year - Nil).

v. Interest Accrued and unpaid as at 31st March 2017- Nil (Previous year - Nil).

20. Some of the Balances of debtors and creditors are in process of confirmation.

21. Amount paid to Auditors:

22. Related party transactions

In accordance with the requirements of IND AS 24, on related party disclosures, name of the related party, related party relationship, transactions and outstanding balances including commitments where control exist and with whom transactions have taken place during reported periods, are:

a) Related party name and relationship

b) Key Management Personnel (KMP) - As per Companies Act 2013

Shri R.K. Gupta - Whole Time Director, CFO & Company Secretary

Additional KMP (Pursuant to IND AS 24)

Shri O.N. Rai - Chairman (Independent and Non Executive)

Shri Ganpat Singh - Non Executive Director

Shri Vinit Marwah - Non Executive Director

Smt. Poonam Singh - Independent and Non Executive Director

c) Holding Company Key Management Personnel (KMP) - As per Companies Act 2013

Shri Bharat Hari Singhania - Chairman & Managing Director

Smt. Vinita Singhania - Vice Chairman & Managing Director

Shri S.K. Wali - Whole Time Director

Dr. S. Chouksey - Whole Time Director

Shri Sudhir A Bidkar - Chief Financial Officer

Shri Brijesh K Daga - VP & Company Secretary

Additional KMP (Pursuant to IND AS 24)

Shri B.V. Bhargava - Independent and Non Executive Director

Shri N.G. Khaitan - Independent and Non Executive Director

Shri K.N. Memani - Independent and Non Executive Director

Dr. Raghupati Singhania - Non Independent and Non Executive Director

Shri Ravi Jhunjhunwala - Independent and Non Executive Director

Shri Pradeep Dinodia - Independent and Non Executive Director

d) Trusts under Common Control

JK Udaipur Udyog Limited Employees’ Group Gratuity Fund Trust JK Udaipur Udyog Limited Employees’ Provident Fund Trust JK Udaipur Udyog Limited Officers’ Superannuation Fund Trust

* Remuneration is excluding provision for Gratuity & Leave encashment, where the actuarial valuation is done on overall Company basis.

23. Earnings per share

The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share :

Net profit available to equity holders of the Company used in the basic and diluted earnings per share was determined as follows:

The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity.

24. During the Financial Year 2016-17, the Company has taken Additional Inter Corporate Loan (ICL) of Rs.17,500 lacs from Hansdeep Industries & Trading Limited (HITCL). For the grant of this ICL of aggregate amount of Rs.52,500 lacs to the Company, HITCL has raised NCDs of Rs.52,500 lacs, which are collaterally secured by a Corporate Guarantee of JK Lakshmi Cement Ltd (JKLC). The Company has given a Counter Indemnity to JKLC in consideration of their having granted the said Corporate Guarantee for the NCDs raised in HITCL utilized by them for onward lending to the Company.

25. Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising as a result of transition from Previous GAAP (IGAAP) to IND AS in accordance with IND AS 101:

- Balance Sheet as at April 1, 2015

- Other Equity as at April 1, 2015

- Balance Sheet as at March 31, 2016

- Other Equity as at March 31, 2016

- Statement of Profit and Loss for the year ended March 31, 2016

26. Previous year’s figures have been regrouped/re-classified wherever necessary.


Mar 31, 2016

1. The Net Worth of the Company being consistently positive, the Company has come out of the purview of BIFR pursuant to the order of the Hon''ble AAIFR dated 22nd January, 2016. The Rehabilitation & Resettlement Scheme of the Company is progressing satisfactorily.

2. Estimated amount of contracts remaining to be executed on capital account (Net of Advances) Rs. 10,548.27 lacs (Previous year – Rs. 23,158.46 lacs)

3. The relief from Minimum Alternate Tax (MAT) is available to the Company as provided in explanation (iii) to Section 115 JB (2) of Income Tax Act, 1961.

4. Contingent liability for non-use of Jute bags for Cement packing up to 30th June, 1997, as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained and the matter is subjudice. The Government has excluded Cement Industry from application of the said Order from 1st July, 1997.

5. Exceptional Items comprises of Profit on Sale of Old & Obsolete Fixed Assets amounting to Rs. 244.27 lacs which were scrapped due to complete suspension of operation since 2002.

6. a) Sales include own consumption at cost Rs. 151.70 lacs (Previous year - Rs. 177.53 lacs).

b) Other Operating Revenue includes Sales Tax / Value added Tax subsidy of Rs. 255.49 lacs (Previous year - Rs. 319.90 lacs) and Bad Debts written off now recovered of Rs. 1.10 lacs (Previous year - Rs. 3.05 lacs).

7. Consumption of Stores & Spares is net of Scrap Sale Rs. 8.59 lacs (Previous year - Rs. 2.10 lacs)

8. a) Forward Contracts of Rs. 627.81 lacs - Euro 0.87 Mn (Previous year - Nil) taken for the purpose of hedging of payables.

b) Un-hedged Rs. 409.27 lacs - Euro 0.55 Mn (Previous year - Nil) against letter of credit outstanding as at 31st March 2016.

9. The liabilities pertaining to the statutory levies and pending legal cases prior to 01.12.1993 (date of takeover of the cement undertaking from Bajaj Hindustan Limited) will be borne by Bajaj Hindustan Limited.

10. The Company has only one business segment namely Cementations Materials.

11. a) Based on information available with the Company in respect of MSME ( "The Micro Small & Medium Enterprises Development Act, 2006" ). The details are as under :

i) Principal and Interest amount due and remaining unpaid as at 31st March, 2016 - Nil (Previous year - Nil).

ii) Interest paid in terms of section 16 of the MSME Act during the year - Nil (Previous year - Nil).

iii) The amount of Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified - Nil

(Previous year - Nil).

iv) Payment made beyond the appointed day during the year - Nil (Previous year - Nil).

v) Interest Accrued and unpaid as at 31st March, 2016 - Nil (Previous year - Nil).

b) Some of the Balances of debtors and creditors are in process of confirmation.

12 Employee Defined Benefits:

(a) Defined Benefit Plans / Long Term Compensated Absences - As per Actuarial Valuation on 31st March, 2016.

a) Defined Benefit Plan

Amount recognized as expenses in Note 22 and included herein above.

Item "Salaries and Wages" includes Rs. 4.50 lacs (Previous year - Rs.5.76 lacs) for Leave Encashment.

Item "Contributions to Provident and Other Funds" includes Rs.7.44 lacs (Previous year - Rs.8.69 lacs) for Gratuity.

(b) Defined Contribution Plans

Amount recognized as an expense and included in Note 22 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs. 15.63 lacs (Previous year - Rs. 11.23 lacs)

(c) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

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

13. During the year, the Company has received subsidy of Rs. 23.14 lacs (Previous year - Rs. 21.12 lacs) in terms of State Investment Promotion Scheme towards exemption from electricity duty which has been netted from Power & Fuel expenses.

14. a) Expenditure in Foreign Currency on account of :

i) Travelling Expenditure - Rs. 4.47 lacs (Previous year - Rs. 15.72 lacs)

ii) C.I.F. Value of Imports of Capital Goods - Rs. 4,727.05 lacs (Previous year - Nil)

b) Earning in Foreign Currency - Nil (Previous year - Nil)

15. Current year Accounts have been prepared in accordance with the Revised Schedule-VI and previous year''s figures have been regrouped / re-classified wherever necessary.


Mar 31, 2015

A. Terms / right attached to Equity Shareholders:

1. The Company has only one class of equity shares having a par value of Rs. 4 per share. Each holder of equity shares is entitled to one vote per share.

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

e. During the year, the Authorised Share Capital of the Company has been increased from Rs. 12,500 lacs to Rs. 20,000 lacs i.e. 31,25,00,000 Equity Shares of Rs. 4 each, 60,00,000 Preference Shares of Rs. 10 each & 6,900 Preference Shares of Rs. 1,00,000 each.

f. During the year, the Company has allotted 5% Cumulative Redeemable Preference Shares (CRPS) of Rs. 6,000 lacs (Series-I & Series-II allotted on 14.01.2015 and 30.03.2015 respectively) at par against cash to the Holding Company pursuant to BIFR Sanctioned Rehabilitation Scheme.

The 5% CRPS carries a Put option. In the event of the Company being unable to pay dividend for a consecutive period of 3 years after it is out of the purview of BIFR and unable to pay the Capital back, CRPS holders have the right to get them converted into Equity Shares subject to statutory approvals.

The 5% CRPS also carries a Call option. In case there being any Liquidity Event of the Company, if it fails to redeem the CRPS at par within 3 months, CRPS holders shall have the right to get them converted into Equity Shares subject to statutory approvals.

If the Put / Call option is not exercised, the 5% CRPS are redeemable in 3 annual installments of 30%, 30% & 40% of face value at the end of 18th, 19th & 20th year from the date of allotment.

g. The Zero Coupon Redeemable Preference Shares (ZCPS) aggregating to Rs. 509.52 lacs are redeemable on March 31,2017 i.e. at the end of 7 years from the cut off date as per the Scheme.

Note 2

LONG-TERM BORROWINGS

Term Loan from a Bank of Rs. 5,000 lacs is secured / to be secured by way of first pari passu charge on all the immovable and movable fixed assets of the Company situated at Shripati Nagar, Distt. Udaipur, Rajasthan. This Term Loan shall be repayable in 28 equal quarterly installments commencing from 1st April 2017. This Term Loan is also secured by Corporate Guarantee of the Holding Company.

3 The Company is registered as a Sick Company with BIFR. Due to nonviability, operations of the plant were under suspension since 26th March 2002. A Rehabilitation Scheme for the Company (the Scheme) has been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR), New Delhi on 13th January 2012 under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985. As per the Scheme, JK Lakshmi Cement Ltd. has infused Rs. 4,911.00 lacs against which the Company has allotted Equity Shares of Rs. 8,911.00 lacs and 5% Cumulative Redeemable Preference Shares (CRPS) of Rs. 6,000.00 lacs.

4 Estimated amount of contracts remaining to be executed on capital account (Net of Advances) Rs. 23,158.46 lacs (Previous period - Rs. 7,888.48 lacs)

5 Contingent Liability in respect of claims not accepted by the Company (matters in appeals) and not provided for are as follows:

(Amount in Rs. Lacs)

31st Mar'15 31st Mar'14

a) Excise duty in respect of matters in appeal 7.21 7.21

b) Sales Tax in respect of matters in appeal 42.30 42.30

c) Service tax 66.06 66.06

d) Land Tax 1029.29 1029.29

e) Other matters 102.90 115.41

1.247.76 1,260.27

6 The Company has created Deferred Tax Asset of Rs. 1,211.28 lacs only (Previous period - Nil) considering the extent of utilization of carried forward unabsorbed depreciation against future taxable income on the principle of virtual certainty. The relief from Minimum Alternate Tax (MAT) is available to the Company as provided in explanation (iii) to Section 115JB (2) of Income Tax Act, 1961.

7 Contingent liability for non-use of Jute bags for Cement packing upto 30th June 1997, as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained and the matter is subjudice. The Government has excluded Cement Industry from application of the said Order from 1st July 1997.

8 During the Current Year, the Company has revised depreciation rate on certain Fixed Assets as per the useful life specified in Schedule II of the Companies Act, 2013 as re-assessed by the Company. Based on current estimates, the Carrying value of Rs. 50.23 lacs on account of Fixed Assets which have completed their useful life as on 1st April 2014 has been charged off against the Reserves & Surplus. Had there not been any change in useful life of the Fixed Assets, depreciation for current year ended 31.03.2015, would have been higher by Rs. 46.98 lacs.

9 Exceptional Items of Rs. 126.04 lacs comprises of :-

a) Advance from Customers of Rs. 284.15 lacs written back.

b) Bad Debts written off Rs. 84.94 lacs and certain old recoverable / payable balances amounting to Rs. 73.17 lacs (net) were written off during the year.

10 a) Sales include own consumption at cost - Rs. 177.53 lacs (Previous period - Rs. 2.36 lacs).

b) Other Operating Revenue includes Sales Tax / Value added Tax subsidy of Rs. 319.90 lacs (Previous period - Rs. 29.09 lacs were included in Sales) and Bad Debts now recovered of Rs. 3.05 lacs (Previous period - Nil).

11 a) Consumption of Stores & Spares is net of Scrap Sale - Rs. 2.10 lacs (Previous period -Rs. 33.09 lacs)

b) Prior Period Expenses for the year - Nil (Previous period - Rs. 98.12 lacs).

12 The liabilities pertaining to the statutory levies and pending legal cases prior to 01.12.1993 (date of take over of the cement undertaking from Bajaj Hindustan Limited) will be borne by Bajaj Hindustan Limited.

13 The Company has only one business segment namely Cementitious Materials.

39 a) Based on information available with the Company in respect of MSME ( The Micro Small & Medium Enterprises Development Act, 2006). The details are as under :

i) Principal and Interest amount due and remaining unpaid as at 31st March 2015 - Nil (Previous period - Nil).

ii) Interest paid in terms of section 16 of the MSME Act during the year - Nil (Previous period - Nil).

iii) The amount of Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the period) but without adding the interest specified - Nil (Previous period - Nil).

iv) Payment made beyond the appointed day during the year - Nil (Previous period - Nil).

v) Interest Accrued and unpaid as at 31st March 2015- Nil (Previous period - Nil). b) Some of the Balances of debtors and creditors are in process of confirmation.

14 Capital Work-in-Progress includes Machinery in stock, construction / erection materials, advances for construction and Machinery and also includes the following pre-operation expenses pending allocation.

15 Related Party Disclosure List of Related Parties:

a) Holding Company:

JK Lakshmi Cement Ltd (JKLC)

b) Key Management Personnel (KMP):

Shri R. K. Gupta - Whole Time Director, CFO & Company Secretary

c) The following transactions were carried out with related parties in the ordinary course of business:

16 Employee Defined Benefits:

(a) Defined Benefit Plans / Long Term Compensated Absences - As per Actuarial Valuation on 31st March 2015.

a) Defined Benefit Plan

Amount recognised as expenses in Note 23 and included herein above.

Item "Salaries and Wages" includes Rs. 5.76 lacs (Previous period - Rs. 2.49 lacs) for Leave Encashment.

Item "Contributions to Provident and Other Funds" includes Rs. 8.69 lacs (Previous period - Rs. 4.53 lacs) for Gratuity.

(b) Defined Contribution Plans

Amount recognised as an expense and included in Note 23 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs. 11.23 lacs (Previous period - Rs. 5.93 lacs)

(c) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

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

17. During the year, the Company has received subsidy of Rs. 21.12 lacs (Previous period- Rs. 1.90 lacs) in terms of State Investment Promotion Scheme, of which Rs. 21.12 lacs (Previous period- Rs. 1.90 lacs) has been netted from Power & Fuel expenses.

18. a. C.I.F. Value of Imports - Nil (Previous period - Nil)

b. Expenditure in Foreign Currency on account of Travelling aggregates to Rs. 15.72 lacs (Previous period - Nil)

c. Earning in Foreign Currency - Nil (Previous period - Nil)

19. Current year Accounts have been prepared in accordance with the Revised Schedule-VI and previous period's figures have been regrouped / re-classified accordingly.


Mar 31, 2014

1. The Company is registered as a Sick Company with BIFR. Due to nonviability, operations of the plant were under suspension since 26th March, 2002. A Rehabilitation Scheme for the Company (the Scheme) has been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR), New Delhi on 13th January 2012 under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985.As per the Scheme, JK Lakshmi Cement Ltd. has infused Rs. 12,289.53 Lacs out of which the Company has allotted Equity Shares of Rs. 8911.00 lacs on preferential basis in pursuance to the BIFR Sanctioned Scheme. Accordingly, these Accounts have been prepared on "going concern" basis.

2. Estimated amount of contracts remaining to be executed on capital account (Net of Advances) Rs. 7,888.48 lacs (Previous period Rs. 206.64 lacs)

3. Contingent Liability in respect of claims not accepted by the Company (matters in appeals) and not provided for are as follows:

(Amount in Rs. Lacs)

31st Mar''14 30th Sep''12

a) Excise duty in respect of matters in appeal 7.21 7.21

b) Sales Tax in respect of matters in appeal 42.30 42.30

c) Service tax 66.06 66.06

d) Land Tax 1029.29 2,388.70

e) Other matters 115. 41 115.41

1,260.27 2,619.68

4. In view of uncertainty to have taxable profits in near future, Deferred Tax Assets in accordance with the Accounting Standard- 22 issued by the Institute of Chartered Accountants of India has not been recognised as there is no virtual certainty of sufficient future taxable income. The relief from Minimum Alternate Tax (MAT) is available to the Company as provided in explanation (vii) to Section 115 JB(2) of Income Tax Act, 1961.

5. Contingent liability for non-use of Jute bags for Cement packing upto 30th June,1997, as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained and the matter is subjudice. The Government has excluded Cement Industry from application of the said Order from 1st July, 1997.

6. During the Current Period, the Company has changed with retrospective effect, the method of providing depreciation on Furniture & Fixtures, Office Equipments, Locomotives & Vehicles from ''Straight Line'' to ''Written Down Value'' at the rate prescribed in Schedule XIV to the Companies Act, 1956. This shall result in more systematic basis of apportionment of Depreciation Charge over the useful economic life of the respective assets. This change has resulted in an additional depreciation charge of Rs. 15.37 lacs comprising of Rs. (0.56) lacs for the period and Rs. 15.93 lacs for the earlier years, which has been shown as an Exceptional Item. The Profit after tax for the period would have been higher by Rs. 15.37 lacs had the Company continued to follow the earlier method of depreciation.

7. Exceptional Items of Rs. 736.56 lacs comprises of -

a) Non-usable inventory written off amounting to Rs. 333.79 lacs due to factors such as obsolescence, corrosion, weathering & others due to the suspension of plant since 2002. In Previous period 50% book value of Inventories were written off aggregating to Rs. 421.62 lacs as provided in the BIFR Sanctioned scheme.

b) Certain old recoverable / payable balances amounting to Rs. 78.07 lacs (net) were written back during the Period.

c) Profit on Sale of Old & Obsolete Fixed Assets amounting to Rs. 1008.21 lacs which were scrapped due to complete suspension of operation since 2002.

d) Depreciation for earlier years due to change in method of depreciation amounting to Rs. 15.93 lacs.

8. a) Sales include own consumption at cost Rs. 2.36 lacs (Previous period - Nil)

b) Sales includes Sales Tax / Value added Tax subsidy of Rs. 29.09 lacs (Previous period - Nil)

9. a) Consumption of Stores & Spares is net of Scrap Sale Rs. 33.09 lacs (Previous period – Nil)

b) Prior Period Expenses aggregates to Rs. 98.12 lacs (Previous period Rs. 106.08 Lacs) includes Rs. 90.57 lacs for Excise Duty & Interest expenses on Inventory written off, BIS Fee of Rs. 3.19 lacs, & Other expenses of Rs. 4.36 lacs.

10. The liabilities pertaining to the statutory levies and pending legal cases prior to 1st Dec 1993 (date of take over of the cement undertaking from Bajaj Hindustan Limited) will be borne by Bajaj Hindustan Limited.

11. The Company has only one business segment namely Cementitious Materials.

12. a) Based on information available with the Company in respect of MSME (The Micro Small & Medium Enterprises Development Act 2006). The details are as under :

i) Principal and Interest amount due and remaining unpaid as at 31st March 2014 - Nil (Previous period Rs. 2.39 lacs).

ii) Interest paid in terms of section 16 of the MSME Act during the period - Nil (Previous period - Nil).

iii) The amount of Interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the period) but without adding the interest specified - Nil (Previous period - Nil).

Payment made beyond the appointed day during the period - Nil (Previous period - Nil).

iv) Interest Accrued and unpaid as at 31st March 2014 - Nil (Previous period - Nil).

b) Some of the Balances of debtors and creditors are in process of confirmation.

13. Capital Work-in-Progress includes Machinery in stock, construction / erection materials, advances for construction and Machinery and also includes the following pre-operation expenses pending allocation.

14. Related Party Disclosure : List of Related Parties

a) Holding Company

JK Lakshmi Cement Ltd. (JKLC) w.e.f. 28th March, 2014 (earlier Associate)

b) Key Management Personnel (KMP): Shri R K. Gupta - Whole Time Director

c) The following transactions were carried out with related parties in the ordinary course of business :

15. Employee Benefit Expenses*

(a) Defined Benefit Plans / Long Term Compensated Absences - As per Actuarial Valuation on 31st March, 2014.

a) Defined Benefit Plan

Amount recognised as expenses in Note 22 and included here in above.

Item "Salaries and Wages" includes Rs. 2.49 lacs (Previous period- Nil) for Leave Encashment. Item "Contributions to Provident and Other Funds" includes Rs. 4.53 lacs (Previous period Rs. 8.12 lacs) for Gratuity.

(b) Defined Contribution Plans

Amount recognised as an expense and included in Note 22 "Contributions to Provident and other Funds" of Statement of Profit and Loss Rs.5.93 lacs (Previous period Rs.1.86 lacs)

(c) The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of assets management, historical results of return on plan assets and the policy for plan assets management.

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

16. During the period, the Company has received subsidy of Rs. 1.90 lacs (Previous period - Nil) in terms of State Investment Promotion Scheme, of which Rs. 1.90 lacs (Previous period- Nil) has been reduced from Power & Fuel expenses.

17. Expenditure in Foreign Currency, Earning in Foreign Currency, C.I.F. Value of Imports during the period Rs. Nil (Previous period - Nil)

18. Current period Accounts have been prepared in accordance with the Revised Schedule-VI and previous period''s figures have been regrouped/re-classified accordingly.


Sep 30, 2012

A. Terms / right attached to Equity Shareholders: .

The Company has only one class of equity shares having a par value of Rs. 4 per share. Each holder of _ equity shares is entitled one vote per share.

1. During the period the Company in terms of the rehabilitation scheme has restructured its Share Capital. The existing equity share capital of Rs. 6337 lacs (comprising 633.70 lacs shares - face value of Rs. 10.00 each) is reduced by 60%, i.e. the nominal and paid up value of 633.70 lacs shares is reduced to Rs. 2534.80 lacs. Further, the Company has issued equity shares of Rs. 1111.00 lacs against Unsecured outstanding dues at Rs. 4 each in consideration other than cash as per scheme. The Company has also issued equity shares to Secured Lenders amounting to Rs. 373.08 lacs in consideration other than cash as per the terms of the Scheme.

2. The Zero Coupon Redeemable Preference Shares (ZCPS) of Rs. 5095.23 lacs are written down in compliance with the scheme to 10% of the face value, i.e. from Rs. 5095.23 lacs to Rs. 509.52 lacs. The aforesaid ZCPS at their reduced value are redeemable on March 31,2017 i.e. at the end of 1st year from the cut off date as perthe Scheme.

3. The Company is registered as a Sick Company with BIFR. Due to nonviability, operations of the plant were under suspension since 26th March, 2002. A Rehabilitation Scheme for the Company (the Scheme) has been sanctioned by the Board for Industrial and Financial Reconstruction (BIFR), New Delhi on 13th January 2012 under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985. The Scheme provides for various reliefs & concessions in respect of Share Capital, Secured Lenders, Unsecured Creditors, Employees Dues, State & Central Government dues and other statutory bodies dues. In view of the above the necessary entries in the books have been passed by the Company for giving effect of the Scheme.. Exceptional Items of Rs. 746.55 Lacs appearing in the Statement of Profit & Loss Account comprises of write back of Deferred interest amounting to Rs.1,082.29 lacs, unsecured creditors amounting to Rs. 1,287.27 lacs, loss on account of impairment amounting to Rs. 3.00 lacs and depreciation provided for earlier years amounting Rs. 1,620.01 lacs. The expenses relating to the project have been capitalized under the head Capital Work-in-Progress. After taking the possession of the plant & mines w.e.f from 23rd July 2012, the Company has now undertaken the work towards upgradation and modernization of the plant. As per the Scheme, JKLC has invested Rs. 7002.83 lacs which are reflected under the head Advance against Securities (Refer Note 4). Accordingly, these Accounts have been prepared on "going concern" basis.

4. After taking possession of the plant, physical verification of the Fixed Assets was carried out to ascertain impairment in the value of assets during the period the plant operations remained suspended. The impairment exercise was carried out in detail by a high level technical task force constituted by the management. For the reasons stated in Note no. 18 above, physical verification of Inventories of raw materials, process stocks, stores & spares, scrap and finished goods could not be carried out during the period. However, Inventories have been valued at 50% of book value as provided in the Scheme.

5. The liabilities pertaining to the statutory levies and pending legal cases prior to 01.12.1993 (date of take over of the cement undertaking from Bajaj Hindustan Limited) will be borne by Bajaj Hindustan Limited.

6. The Company has only one business segment, i.e. manufacturing and selling of cement.

7. In view of uncertainty to have taxable profits in near future, Deferred Tax Assets in accordance with the Accounting Standard- 22 issued by the Institute of Chartered Accountants of India has not been recognised. The relief from Minimum Alternate Tax (MAT) is available to the Company as provided in explanation (iii) & (vii) to Section 115 JB of Income Tax Act. 1961.

8. Contingent liability for non-use of Jute bags for Cement packing upto 30th June,1997, as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained. The Government has excluded Cement Industry from application of the saidOrderfrom 1st July, 1997.

9. Disclosure of Trade Payable under Current Liabilities & Provisions is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006".Principal amount overdue as on 30th September 2012, to "Micro Small & Medium Enterprises aggregates to Rs. 2,39,446 (Previous Year Rs. 22,11,239). The necessary entries for write back of the unsecured creditors have been passed as perthe Scheme.

10. Debts over six months and Loans and.Advances includes Rs. 98,90,249/- (Previous year Rs. 3,67,79,578/-) and Rs. 4,71,84,621 /- (Previous year Rs. 4,71,84,621/-) respectively, for which legal and other necessary action has been taken for recovery. Provision for Doubtful Debts amounting to Rs. 2,68,89,329/- has been made during the period (Previous Year-NIL) as perthe Scheme. .

11. Loans and Advances includes interest free loan to employees of Rs. 7,65,868 (Previous year Rs. 7,65,868) and interest free advances to employees of Rs. 2,84,75,225 (Previous year Rs. 1,41,60,915). Maximum balance outstanding during the period Rs. 765,868 and Rs. 2,84,75,225 respectively.

12. Internal audit has not been conducted during the period since operations of the plant continue to remain suspended as stated in note no. 18 above.

13. Prior Period Expenses aggregates to Rs. 106.08 Lacs includes Insurance Premium of Rs. 31.50 lacs, plant Valuation fee of Rs. 4.64 lacs, royalty & dead rent of Rs. 31.90 lacs, dues of ESIC of Rs. 34.64 lacs, CSDL dues of Rs. 1.66 lacs & NSDLduesofRs.1.74 lacs.

14. Estimated amount of contracts remaining to be executed on capital account (Net of Advances) Rs. 206.64 Lacs (Previousyear-Nil).

15. Particulars of raw materials consumed, stores and spares consumed, Earning/expenditure on foreign currency Nil. (Previous year-Nil).

16. Capital Work-in-Progress includes the following Pre-operative Expenses :-

17. Related Party Disclosure:

List of Related Parties

a) Key Management Personnel (KMP):

Shri R. K. Gupta - Whole Time Director

b) Enterprise which has significant influence overthe reporting enterprise:

JKLakshmi Cement Ltd (JKLC).

c) The following transactions were carried out with related parties in the ordinary course of business:

18. The current period figures are for 18 months period from 151 April 2011 to 30th September 2012 and accordingly, these are not comparable with the previous year figures of 12 months.

19. Current period Accounts have been prepared in accordance with the Revised Schedule-VI and previous year''s figures have been regrouped/re-classified accordingly.


Mar 31, 2011

1. The company is registered as a sick company with BIFR. Due to nonviability, operations of the plant are under suspension since 26th March, 2002 . The company has submitted draft rehabilitation scheme which has been sanctioned by Hon'ble BIFR in its hearing on 24.11.2010 subject to completion of certain conditions. BIFR is taking further necessary steps in accordance with the law for issue of the final sanctioned scheme. Accordingly, these accounts have been prepared on "going concern" basis.

2. Dispute regarding salaries, wages, allowances and other benefits etc., to the employees for the period 18th June 2002 onward is pending for adjudication before the Labour Tribunal and therefore the same has not been provided in the books of Accounts (Amount Unascertained). However, the provision in respect of above expenses (except contribution to Superannuation fund for the year period 01.10.2004 to 31.12.2005 and conveyance allowance and leave encashment w.e.f. 01.10.2004 onwards) has been made for those employees who were engaged in essential services including whole time director during this period.

3. For the reasons stated in Note no. 1 above physical verification of the Fixed Assets and Inventories of raw materials, process stocks, stores & spares, scrap and finished goods could not be carried out during the year. Fixed assets and inventories have been taken same as in the previous year and inventories have been valued on the same value as in the previous year. Adjustment, if any for lower of net realisable value over cost of inventories and provision for non-moving, obsolete and damaged inventories and fixed assets and for impairment of assets could not be ascertained, hence not provided for. Further, in view of the non-utilization of plant & machinery, depreciation of Rs. 7,20,92,012/-has not been provided for the year ended as on 31st March 2011.

4. (a) Interest on secured loans, bank borrowings, trade deposits, royalty and dues to Ajmer Vidyut Vitran Nigam Limited, Excise duty demand, other deposits and penal interest, liquidated damages etc thereon, if any, has not been provided since the matter relating to rehabilitation is pending with BIFR (Amount Unascertained).

(b) Matured Debentures amounting to Rs.40,42,34,400/- (Previous year Rs. 40,48,09,400/-) have not been shown under current liabilities since the matter relating to rehabilitation is pending with BIFR.

(c) Interest earned on certain deposits will be accounted for on receipt basis (Amount Unascertained).

5. Deferred interest of Rs. 10,82,29,116/- represents amount payable to Term Lenders and Debenture holders commencing from June,2005 and ending on March,2008 (read with note no. B-3 of Schedule 3), pursuant to the Sanctioned Restructuring Scheme and has fallen due for payment as on 31 st March 2008, but could not be paid due to suspension of operation.

6. The liabilities pertaining to the statutory levies and pending legal cases prior to the date of take over of the cement undertaking i.e. 01.•12.1993 will be borne by Bajaj Hindustan Limited.

7. In the absence of profit, the required Debenture Redemption Reserve has not been created.

8. The company has only one business segment, i.e. manufacturing and selling of cement.

9. In view of uncertainty to have taxable profits in near future, Deferred Tax Assets in accordance with the Accounting Standard- 22 issued by the Institute of Chartered Accountants of India has not been recognised.

10. In respect of the pending Stamp duty matter the Collector (Stamps), Udaipur vide order dated 29.01.2004 had determined stamp duty liability at Rs. 8,04,28,911 along with equal amount of penalty. The company filed a revision petition against the said order dated 29.01.2004 before the Revenue Board, Ajmer, which was subsequently transferred to Rajasthan Tax Board, Ajmer who vacated the stay order earlier granted by the Revenue Board. Consequently the Collector (Stamps) initiated recovery proceedings by attaching the properties of the company. There upon the company filed a writ petition in the Hon'ble High Court of Judicature for Rajasthan at Jodhpur against the said attachment. The Hon'ble High Court vide order dated 08.05.2006 allowed our writ petition. In the meantime Rajasthan Tax Board dismissed our revision petition on 06.10.2006.The Collector (Stamps) again initiated recovery proceedings by auctioning/ threatening to auction property of the company inspite of the fact that such proceeding cannot be taken in view of Section 22 of SICA and order of Hon'ble High Court dated 08.05.2006.The Company has filed writ petitions intere-alia challenging the impugned order dated 06.10.2006 and action of the Collector (Stamps). The Hon'ble High Court has stayed further action by the Collector (Stamps), Udaipur and petitions are pending disposal.

11. Contingent liability for non-use of Jute bags for Cement packing upto 30th June, 1997,as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained. The Government has excluded Cement Industry from application of the said Order from 1st July, 1997.

12. Disclosure of Sundry Creditors under Current Liabilities & Provisions is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Principal amount overdue as on 31st March 2011, to "Micro, Small and Medium Enterprises aggregate to Rs, 22,11,239/- (Previous year Rs. 22,11,239/-). No interest has been paid or provided on overdue liability of Micro, Small and Medium Enterprises, since the operations of the plant are under suspension since 26th March, 2002 and matter relating to rehabilitation is pending with BIFR (Amount Unascertained).

13. Debts over six months and Loans and Advances includes Rs.3,67,79,578/- (Previous year Rs. 3,67,79,578/-) and Rs. 4,71,84,621/- (Previous year Rs. 4,70,28,145/-) respectively, for which legal and other necessary action has been taken for recovery. Provision, if any, will be considered on completion of the reconciliation/confirmation.

14. Interest free demand Loans and Advances include loan to employees of Rs. 7,65,868 (Previous year Rs. 7,65,868) and interest free advances to employees of Rs. 1,41,60,915 (Previous year Rs. 1,41,60,915). Maximum balance outstanding during the year Rs. 765,868 and Rs. 1,41,60,915 respectively.

15. The repayment of zero coupon unsecured loan of Rs. 10 crores payable by Bengal & Assam Company Ltd. on 15.02.2010 has been extended by a period of 18 months on the existing terms.

16. Internal audit has not been conducted during the year since operations of the plant continue to remain suspended as stated in note no. 1 above.

17 Prior Period Expenses include fees & subscription Rs. 1,49,957/- (Nil) and licence fee Rs. 8,520/-(Nil).

18. The balances of Secured loans, Unsecured loans, Deferred interest, Creditors, Other Current liabilities and bank & other deposits are pending for confirmation / reconciliation (Impact unascertainable).

19 Particulars of raw materials consumed, stores and spares consumed, Earning/expenditure on foreign currency Nil. (Previous year Nil).

20 Related Party Disclosure: List of Related Parties

a) Key Management Personnel:

Shri R. K. Gupta Whole Time Director

b) The following transactions were carried out with related parties in the ordinary course of business:

21 The current year figures are for 12 months period from 1 st April 2010 to 31st March 2011 and accordingly, these are not comparable with the previous year figures of 15 months. In view of this, previous period figures have been regrouped and recast wherever necessary and are not strictly comparable with current period.


Mar 31, 2010

1. The company is registered as a sick company with BIFR. Due to nonviability, operations of the plant are under suspension since 26th March, 2002.The company has submitted a Draft Rehabilitation Scheme (DRS) and BIFR is taking necessary steps in accordance with the law. Accordingly, these accounts have been prepared on "going concern" basis.

2. Dispute regarding salaries, wages, allowances and other benefits etc., to the employees for the period 18th June 2002 onward is pending for adjudication before the Labour Tribunal and therefore the same has not been provided in the books of Accounts (Amount Unascertained). However, the provision in respect of above expenses (except contribution to Superannuation fund for the year period 01.10-2004 to 31.12.2005 and conveyance allowance and leave encashment w.e.f. 01.10.2004 onwards) has been made for those employees who were engaged in essential services including whole time director during this period.

3. For the reasons stated in Note no.1 above physical verification of the Fixed Assets and Inventories of raw materials, process stocks, stores & spares, scrap and finished goods could not be carried out during the year. Fixed assets and inventories have been taken same as in the previous year and inventories have been valued on the same value as in the previous year. Adjustment, if any for lower of net realisable value over cost of inventories and provision for non-moving, obsolete and damaged inventories and fixed assets and for impairment of assets could not be ascertained, hence not provided for. Further, in view of the non-utilization of plant & machinery, depreciation of Rs. 8,99,08,531 /-has not been provided for the period of 15 months ended as on 31 st March 2010.

4. (a) Interest on secured loans, bank borrowings, trade deposits, royalty and dues to Ajmer Vidyut Vitran Nigam Limited, Excise duty demand, other deposits and penal interest, liquidated damages etc thereon, if any, has not been provided since the matter relating to rehabilitation is pending with BIFR (Amount Unascertained).

(b) Matured Debentures amounting to Rs.40,48,09,400/- (Previous year Rs. 31,48,65,974) have not been shown under current liabilities since the matter relating to rehabilitation is pending with BIFR.

(c) Interest earned on certain deposits will be accounted for on receipt basis (Amount Unascertained).

5. Deferred interest of Rs. 10,82,29,116/- represents amount payable to Term Lenders and Debenture holders commencing from June,2005 and ending on March,2008 (read with note no. B-3 of Schedule 3), pursuant to the Sanctioned Restructuring Scheme and has fallen due for payment as on 31st March 2008, but could not be paid due to suspension of operation.

6. Claims made against the Company; to the extent could be identified from available information, at Rs. 3,45,44,938 (Previous year Rs. 3,20,96,064) disputed/not accepted by the company, hence not provided (excluding Stamp Duty as stated in Note No. 11 below).

7. The liabilities pertaining to the statutory levies and pending legal cases prior to the date of take over of the cement undertaking i.e. 01.12,1993 will be borne by Bajaj Hindustan Limited.

8. In the absence of profit, the required Debenture Redemption Reserve has not been created.

9. The company has only one business segment, i.e. manufacturing and selling of cement.

10. In view of uncertainty to have taxable profits in near future, Deferred Tax Assets in accordance with the Accounting Standard- 22 issued by the Institute of Chartered Accountants of India has not been recognised.

11. In respect of the pending Stamp duty matter the Collector (Stamps), Udaipur vide order dated 29.01.2004 had determined stamp duty liability at Rs. 8,04,28,911along with equal amount of penalty. The company filed a revision petition against the said order dated 29.01.2004 before the Revenue Board, Ajmer, which was subsequently transferred to Rajasthan Tax Board, Ajmer who vacated the stay order earlier granted by the Revenue Board. Consequently the Collector (Stamps) Initiated recovery proceedings by attaching the properties of the company. There upon the company filed a writ petition in the Honble High Court of Judicature for Rajasthan at Jodhpur against the said attachment. The Honble High Court vide order dated 08.05.2006 allowed our writ petition. In the meantime Rajasthan Tax Board dismissed our revision petition on 06.10.2006.The Collector (Stamps) again initiated recovery proceedings by auctioning/ threatening to auction property of the company inspite of the fact that Such proceeding cannot be taken in view of Section 22 of SICA and order of Honble High Court dated 08.05.2006.The Company has filed writ petitions intere-alia challenging the impugned order dated 06.10.2006 and action of the Collector (Stamps). The Honble High Court has stayed further action by the Collector (Stamps), Udaipur and petitions are pending disposal.

12. Contingent liability for non-use of Jute bags for Cement packing upto 30th June,1997,as per Jute Packaging Materials (Compulsory use of Packaging Commodities) Act, 1987 is not ascertained. The Government has excluded Cement Industry from application of the said Order from 1st July, 1997.

13. Disclosure of Sundry Creditors under Current Liabilities & Provisions is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006". Principal amount overdue as on 31st March 2010, to "Micro, Small and Medium Enterprises aggregate to Rs, 22,11,239/- (Previous year Rs. 22,11,239/-). No interest has been paid or provided on overdue liability of Micro, Small and Medium Enterprises, since the operations of the plant are under suspension since 26lh March, 2002 and matter relating to rehabilitation is pending with BIFR (Amount Unascertained).

14. Debts over six months and Loans and Advances includes Rs.3,67,79,578/- (Previous year Rs. 3,78,70,578) and Rs. 4,70,28,145/- (Previous year Rs. 4,72,70,130) respectively, for which legal and other necessary action has been taken for recovery. Provision, if any, will be considered on completion of the reconciliation/confirmation.

15. Interest free demand Loans and Advances include loan to employees of Rs. 7,65,868 (Previous year Rs. 7,65,868) and interest free advances to employees of Rs. 1,41,60,915 (Previous year Rs. 1,41,60,915). Maximum balance outstanding during the year Rs. 765,868 and Rs. 1,41,60,915 respectively.

16. The repayment of zero coupon unsecured loan of Rs. 10 crores payable by Bengal & Assam Company Ltd. on 15.02.2010 has been extended by a period of 18 months on the existing terms.

17. Internal audit has not been conducted during the year since operations of the plant continue to remain suspended as stated in note no. 1 above.

18 Prior Period Expenses include fees & subscription Rs. Nil (1,00,440/-) and Bank charges Rs. Nil (10,148/-).

19. The balances of Secured loans, Unsecured loans, Deferred interest, Creditors, Other Current liabilities and bank & other deposits are pending for confirmation / reconciliation (Impact unascertainable).

Note :-

a) As certified by the Management.

b) Figures in brackets represent previous year.

20 Particulars of raw materials consumed, stores and spares consumed, Earning/expenditure on foreign currency Nil. (Previous year Nil).

21 Related Party Disclosure:

22 The Company has changed accounting year from December ending to March ending. Consequently, accounts for current period have been prepared for 15 months ended 31st March, 2010. In view of this, previous period figures have been regrouped and recast wherever necessary and are not strictly comparable with current period.

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