SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE FINANCIAL STATEMENTS Note No. "1"

[A] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation of Financial Statements:

The Financial Statements have been brpared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards specified under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013.

General:

[i] The Accounts are brpared on the historical cost basis except for certain assets which are revalued.

[ii] The Accounts are brpared on the principles of a going concern.

[iii] Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

Revenue Recognition:

[i] Revenue is recognised when it can be reliably measured and it is reasonable to expect ultimate collection.

[ii] Revenue from Sale of Goods transactions (excluding transactions for which Revenue recognition policy is specifically mentioned below) is recognised when significant risks and rewards of ownership have been transferred to the buyer and no significant uncertainty exists regarding amount of consideration. Cement Sales / Clinker Sales/ Others are net of Excise Duty/ Value Added Tax and exclusive of Self Consumption.

[iii] Revenue from Sale of service transactions are recognised when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the service.

[iv] Advances received for Time Share Weeks are reckoned as income in equal amounts sbrad over the Time Share period commencing from the year in which full payment is received.

[v] Escalations/Claims are taken in the Accounts on the basis of receipt or as acknowledged by the client depending upon the certainty of receipt.

[vi] Revenue from Real Estate Development of constructed properties is recognised based on the "Percentage of completion method". Total sale consideration as per the legally enforceable agreements to sell entered into is recognised as revenue based on the percentage of actual project costs incurred to total estimated project cost, subject to such actual cost incurred being 30 percent or more of the total estimated project cost. Project cost includes cost of land, estimated cost of construction and development of such properties. The estimates of the saleable area and costs are reviewed periodically and effect of any changes in  such estimates recognised in the period such changes are determined. Where aggregate of the payment received from customers provide insufficient evidence of their commitment to make the complete payment, revenue is recognised only to the extent of payment received.

Revenue from sale / sub-lease of undeveloped land is recognized when full consideration is received against agreement to sell / sub-lease, all significant risks and rewards are transferred to the customer and possession is handed over.

Revenue from sale / sub-lease of developed land / plot is recognised based on the "Percentage of completion method" when a firm agreement has been entered into and 30 percent or more of the consideration is received and where no significant uncertainty exists regarding the amount of the consideration that will be derived from such sales and it is not unreasonable to expect ultimate collection, and all significant risks and rewards are transferred to the customer.

The revenue in respect of projects undertaken on or after 1st April, 2012 or where the revenue is being recognised for the first time after 1st April, 2012 is recognised in accordance with the Guidance Note on Accounting for Real Estate Transactions [Revised 2012] issued by Institute of Chartered Accountants of India.

[vii] (a) The costs that are incurred before a construction contract is secured are treated as expenses for the year in which these are incurred and charged to revenue.

(b) The costs attributable to contracts are normally identified to respective contracts. However, the costs which cannot be identified/identifiable to a specified contract are charged to the general revenue in the year in which such costs are incurred.

[viii] Dividend Income is recognized when right to receive payment is established.

[ix] Interest is recognised on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

[x] Royalties are accounted on accrual basis in accordance with the terms of the relevant agreement.

Use of Estimates:

The brparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.

Fixed Assets:

Fixed Assets are stated at Cost of acquisition or construction inclusive of freight, erection & commissioning charges, duties and taxes, expenditure during construction period, interest on borrowing and financial costs upto the date of acquisition/ installation and net of recoverable taxes. Major Expenditure in Hotel properties involving relocation and redesigning of various outlets, guest floors and additions thereto, enhancement in the value of assets and revenue generating capacity is capitalised. Foreign Exchange Rate Difference on long term monetary items arising on settlement or at reporting dates attributable to Fixed Assets is capitalised/adjusted in the carrying value of the Fixed Assets.

Debrciation & Amortisation:

[i] Debrciation on Tangible Fixed Assets is provided on Straight Line Method depending on useful life of the assets as brscribed in Schedule-II to the Companies Act, 2013.

[ii] Computer Softwares [Intangible Assets] is amortised over a period of five years.

[iii] Premium on Lease-hold Land [except in case of perpetual lease] is amortised over the period of lease.

Investments:

Long term Investments are stated at Cost and where there is permanent diminution in the value of investments a provision is made wherever applicable. Current Investments are carried at lower of cost or quoted/ fair value, computed categorywise.

Employee Benefits:

Employee Benefits are provided in the books as per AS -15 in the following manner :

[i] The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the period when the employee render the services.

[ii] Provident Fund and Pension contribution - as a percentage of salary/wages is a Defined Contribution Plan and is accounted on accrual basis.

[iii] Gratuity and Leave Encashment is a Defined Benefit obligation. The liability is provided for on the basis of actuarial valuation made at the end of each financial year. The actuarial valuation is done as per Projected Unit Credit method.

Inventories :

[i] Inventories are valued at Cost or Net Realisable Value whichever is lower. Cost of Inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. Cost of Raw Materials, Construction Materials, Stores & Spares, Packing Materials, Stock of Food & Beverages, Operating Stores and supplies are determined on Weighted Average basis.

[ii] Work-in-Progress/Stock-in-Process are valued at cost. In case of Item Rate Contract work in progress is measured on the basis of physical measurement of work actually completed as at the balance sheet date. In case of cost plus contracts work in progress is taken as cost not billed on the contractee.

[iii] Stock of Finished Goods lying in the factory brmises includes excise duty, pursuant to accounting standard [AS-2].

[iv] Goods-in-Transit at Cost incurred.

Project Under Development :

Project Under Development includes cost of Land purchased and other costs incurred including internal development and external development charges, construction cost, material cost, cost of services and other related costs.

Foreign Currency Transactions:

[i] Transactions denominated in Foreign Currency are recorded in the Books of Account in Indian Rupees at the rate of exchange brvailing on the date of transaction.

[ii] Monetary Assets and Liabilities related to Foreign Currency transactions and outstanding, except assets and liabilities hedged by a hedge contract, at the close of the year, are exbrssed in Indian Rupees at the rate of exchange brvailing on the date of Balance Sheet. The exchange difference arising either on settlement or at reporting date is recognised in the Statement of Profit & Loss except in cases where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

[iii] Monetary Assets and Liabilities hedged by a hedge contract are exbrssed in Indian Rupees at the rate of exchange brvailing on the date of Balance Sheet adjusted to the rates in the hedge contracts. The exchange difference arising either on settlement or at reporting date is recognised in the Statement of Profit & Loss except in cases where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. Premium paid in respect of Hedge Contracts are recognised in the Statement of Profit & Loss, except in case where they relate to the acquisition or construction of fixed assets, in which case, they are adjusted to the carrying cost of such assets.

[iv] The Company uses foreign currency contracts to hedge its risks associated with foreign currency fluctuations. The Company does not use derivative financial instrument for speculative purposes.

[v] Non Monetary foreign currency items are carried at cost.

Lease Rentals:

[i] Operating Leases: Rentals are expensed with reference to lease terms.

[ii] Finance Leases: The lower of the fair value of the assets and brsent value of the minimum lease rentals is capitalised as fixed assets with corresponding amount disclosed as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to Statement of Profit & Loss.

Research and Development:

Revenue expenditure on Research and Development is charged to Statement of Profit & Loss in the year in which it is incurred. Capital expenditure on Research and Development is shown as an addition to Fixed Assets.

Miscellaneous Expenditure:

Share/Debenture Issue Expenses are adjusted against Security Premium Reserve in the year in which they are incurred.

Incidental Expenditure During Construction Period:

Incidental Expenditure incurred on projects/assets during construction/implementation is capitalised and apportioned to projects/assets on commissioning.

Earnings Per Share:

Basic earnings per equity share is computed by dividing net profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share is computed by dividing adjusted net profit after tax by the aggregate of weighted average number of equity shares and dilutive potential equity shares during the year.

Borrowing Costs:

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that takes substantial period of time to get ready for intended use or sale. All other borrowing costs are charged to Statement of Profit & Loss, except brmium on redemption of debentures [net of tax impact], which is adjusted against the Securities Premium Reserve.

Segment Reporting:

Revenue, operating results, assets and liabilities have been identified to rebrsent separate segments on the basis of their relationship to the operating activities of the segment. Assets, Liabilities, Revenue and Expenses which are not allocable to separate segment on a reasonable basis, are included under "Unallocated".

Taxes on Income:

Current Tax is determined as per the provisions of the Income Tax Act in respect of Taxable Income for the year. Deferred Tax Liability is computed as per Accounting Standard [AS-22]. Deferred Tax Asset and Deferred Tax Liability are computed by applying tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet Date.

Impairment of Assets:

If the carrying amount of Fixed Assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount and an impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. The recoverable amount is measured as the higher of the net selling price or the value in use determined by the brsent value of estimated future cash flows. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of the recoverable amount.

Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent Assets are neither recognised nor disclosed in the financial statements. The Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

Accounting for Oil Activity:

The Company has adopted Full Cost Method of Accounting for its Oil & Gas Exploration Activity and all costs incurred in Acquisition, Exploration and Development are accumulated.

Premium on Redemption of Debentures

Premium paid/ payable on Redemption of Debentures, net of tax impact, is adjusted against the Securities Premium Reserve.

Cash and Cash Equivalents

Cash and Cash Equivalents comprises cash on hand, demand deposits with banks and other short term highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

Cash Flow Statements

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

NOTE No."1"

The Company has pledged Nil Equity Shares [Previous Year 20,35,000 Equity Shares] held in Delhi Gurgaon Super Connectivity Limited to HUDCO as Security for Loans granted by Lenders to Delhi Gurgaon Super Connectivity Limited.

NOTE No."2"

Letter of Credit facility taken from Axis Bank Limited - Rs. Nil Lakhs [Previous Year Rs. 10000 Lakhs] is secured by way of Subservient charge on the Current Assets of the company

NOTE No."3"

In compliance of Accounting Standard-2, the Company has provided liability of Excise Duty amounting to 7 1721 Lakhs [Previous Year 7 1173 Lakhs] on the stocks of Finished Goods lying at Works. However, there is no impact on the profit for the current year.

The Excise Duty of 7 123 Lakhs [Previous Year Debit 7 1182 Lakhs] related to difference between Closing and Opening Stock has been credited in the Statement of Profit & Loss.

NOTE No."4"

The External Commercial Borrowings [ECBs] outstanding as on 31.03.2015 of USD 32.50 million, USD 6.629 million, JPY 284.551 million, GBP 5.801 million, CAD 10.261 million and USD 140 million are hedged in respect of coupon as well as repayment. JPY to USD leg for above said ECB of JPY 284.551 million is unhedged.

Foreign Currency Convertible Bonds [2012] outstanding USD 110.40 million, Long Term Borrowings from Banks / Financial Institutions outstanding Euro 20.20 million & USD 5.071 million and Short Term Borrowings from Banks / Financial Institutions outstanding USD 31.600 million & Euro 0.50 million are unhedged as at 31.03.2015.

NOTE No."5"

The Scheme of Arrangement between Jaypee Cement Corporation Limited, wholly owned subsidiary of the Company and Ultratech Cement Limited for sale of Gujarat Cement Plant comprising an integrated 2.4. MTPA Cement Plant at Kutch and 2.4 MTPA Cement Grinding Unit at Wanakbori has been completed on 12th June, 2014. In terms of the Scheme, 1,41,637 equity shares of 7 10/- each, fully paid up of Ultratech Cement Limited have been allotted to the Company as per the Scheme of Arrangement for the capital held by the Company in Jaypee Cement Corporation Limited.

NOTE No."6"

The Company has sold 74% stake (9,89,01,000 equity shares owned by it) in the paid-up equity share capital of Bokaro Jaypee Cement Limited (BoJCL) [a joint venture between the Company and Steel Authority of India Ltd.] to M/s. Shri Rangam Securities & Holdings Limited, an Associates / Affiliates of M/s Dalmia Cement (Bharat) Limited, for overall consideration of 7 66756 Lakhs. Profit on said transaction aggregating 7 48071 Lakhs has been included in Profit on sale of non-current investments.

NOTE No."7"

(i) The Board of Directors have approved Implementation Agreement and Scheme of Arrangement with UltraTech Cement Limited [UTCL] for transfer of two of its Cement Plants with an aggregate grinding capacity of 4.9 Mn TPA and 180 MW Captive Thermal Power Plants at Bela and Sidhi in Madhya Pradesh to UTCL.

The transaction is subject to the approval of Shareholders and Creditors, sanction of the Scheme of Arrangement by the High Courts, approval of the Competition Commission of India and all other Statutory approvals. The Scheme have been approved by Shareholders and Creditors in the Court convened meeting held on 16th May, 2015.

(ii) The Company has entered into a Business Transfer Agreement with M/s Shree Cement Limited for sale of Company's 1.5 MTPA Cement Grinding Unit at Panipat, Haryana. The transaction has been consummated on 27th April, 2015.

NOTE No."8"

The Free-hold Land [Agricultural] purchased by the Company for Rs. 3 Lakhs measuring 7 Bighas at Rangpuri, New Delhi had been notified for acquisition U/s 4 & 6 of the Land Acquisition Act. The Company's claim for compensation is pending for  settlement.

NOTE No."9"

The brvious year figures have been regrouped/recast/rearranged wherever considered necessary to conform to the current year's classification.

NOTE No."10"

All the figures have been rounded off to the nearest lakh Rs..

For and on behalf of the Board

For M. P. SINGH & ASSOCIATES

Chartered Accountants

Firm Registration No. 002183C

MANOJ GAUR

Executive Chairman & C.E.O.

DIN - 00008480

RAVINDER NAGPAL

Partner

M. No. 081594

SUNIL KUMAR SHARMA

Executive Vice Chairman DIN - 00008125

RAHUL KUMAR

Whole-time Director & C.F.O.

DIN - 00020779

ASHOK JAIN  

President [Finance]

RAM BAHADUR

C.F.O. [Cement]

SINGH MOHINDER PAUL KHARBANDA

Sr. General Manager [Sectl.] & Company Secretary

Place : Noida

Dated: 14th November, 2015