Note 1

SIGNIFICANT ACCOUNTING POLICIES

1.1 The financial statements are brpared in accordance with the Indian General Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory Accounting Standards as brscribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 2013. Accounting Policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

1.2 Fixed Assets are stated at cost of acquisition / purchase subject to impairment.

1.3 Expenditure during construction / erection period is included under Capital Work-in-Progress and is allocated to the respective fixed assets on completion of construction / erection.

1.4 Foreign currency transactions are recorded at exchange rates brvailing on the date of transaction. Monetary Assets and liabilities related to foreign currency transactions are stated at exchange rate brvailing at the end of the year and exchange difference in respect thereof is charged to Statement of Profit & Loss. Premium in respect of forward contracts is recognized over the life of the contract.

1.5 Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management. The current investments are stated at lower of cost and quoted / fair value computed categorywise.

1.6 Inventories are valued at lower of cost and net realisable value (except scrap / waste which is valued at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process stock include cost of conversion and other costs incurred in bringing the Inventories to their brsent location and condition.

1.7 Revenue is recognized when significant risk and reward of ownership have been passed on to the Customer. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss and other revenue incentives are netted from respective head. Investment Subsidy is considered as Other Operating Revenue.

1.8 Revenue expenditure on research and development is charged to Statement of profit and loss and capital expenditure is added to the fixed assets.

1.9 Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for acquisition of qualifying assets, which is capitalised till the date of commercial use of the assets.

1.10 (i) Debrciation on Buildings, Plant & Machinery and Railway Siding is provided as per Straight Line Method (SLM), at the rates and in the manner specified in Schedule II to the Companies Act, 2013. Debrciation on Furniture & Fixtures,

Office Equipments, Vehicles and Locomotives is provided on Written Down Value (WDV) method as per the said Schedule. The useful lives of Continuous Process Plants as defined in Schedule II, have been considered based on technical evaluation and debrciation is provided accordingly. Debrciation on impaired assets is provided on the basis of their residual useful life. (ii) Leasehold land is being amortised over the lease period.

1.11 The carrying amounts of Assets are reviewed at each Balance Sheet date to assess impairment, if any, based on internal / external factors. An impairment loss is recognised, as an expense in the Statement of Profit & Loss, wherever the carrying amount of the Asset exceeds its recoverable amount. The impairment loss recognized in prior accounting period is reversed, if there has been improvement in recoverable amount in subsequent years.

1.12 Intangible Assets are being recognized if the future economic benefits attributable to the Assets are expected to flow to the Company and cost of the Asset can be measured reliably. The same are being amortised over the expected duration of benefits.

1.13 Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act, 1961. Deferred Tax Assets and Liabilities are recognised in respect of current year and prospective years. Deferred Tax Assets is recognized on the basis of reasonable / virtual certainty that sufficient future taxable income will be available against which the same can be realised.

1.14 Employee Benefits:

(i) Defined Contribution Plan

Contributions to the Employees' Regional Provident Fund (PF), Employees' State Insurance (ESI), Superannuation Fund, and Pension Fund are recognized as defined contribution plan and charged as expenses in the year in which the employees rendered the services.

(ii) Defined Benefit Plan

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit plan and are determined on the basis of actuarial valuation, using the Projected Unit Credit method, as at the date of the Balance Sheet. Actuarial gains / losses, if any, are immediately recognized in the Statement of Profit and Loss.

(iii) Short Term Employee Benefits

Short term compensated absences are provided based on past experience of the leave availed.

1.15 Provisions in respect of brsent obligation arising out of past events are made in accounts when reliable estimates can be made of the amount of the obligation. Contingent Liabilities are not recognized but are disclosed by way of Notes to Accounts. Contingent Assets are not recognised or disclosed in Financial statements.

NOTES TO ACCOUNTS

2 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.

3 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)

4  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 debrciation 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.

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 Year, the Company has revised debrciation 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, debrciation for current year ended 31.03.2015, would have been higher by Rs. 46.98 lacs.

7  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.

8  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).

9  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).

10  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.

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 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.

13. 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 period­Rs. 1.90 lacs) has been netted from Power & Fuel expenses.

14 . 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)

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

As per our report of even date For and on behalf of the Board

For Om Prakash  S. Chaplot & Co.

Chartered Accountants

FRN : 000127C

O.P. Chaplot

Partner

M. No. : 010184

Onkar Nath Rai Director

Vinit Marwaha Director

S.K. Kinra Directors Director

Ganpat Singh Director

Kumud Pahuja Director

R.K. GUPTA Whole Time Director, CFO & Company Secretary

Place : Udaipur

Date : 12th May 2015