Board of Directors - Mehta · PDF fileBoard of Directors As on 31.05.2014 Mr ... Dist. Gir Somnath (Gujarat) Tel. 02876 - 308200, Fax: 02876 - 286540 ... (g) of the Companies Act,

Board of DirectorsAs on 31.05.2014Mr. M. N. Mehta ChairmanMr. Jay M. Mehta Executive Vice ChairmanMr. Sanat M. Mehta Nominee of The Mehta International LimitedMr. A. B. Shah Nominee of GIIC LimitedMr. M. S. Gilotra Managing DirectorMr. S. V. S. Raghavan Mr. P. K. BehlMr. M. L. TondonMr. Bimal ThakkarMr. Hemnabh KhatauDr. (Ms) Kala S. PantMr. Venkatesh MysoreMs. Juhi ChawlaMr. M. N. RaoMr. K. N. BhandariMrs. Bhagyam Ramani

Vice President (Legal) & Company Secretary Mrs. Anupama Pai

BankersState Bank of IndiaState Bank of Bikaner & JaipurUnion Bank of IndiaHDFC Bank Ltd.

AuditorsMessers. Manubhai & ShahChartered AccountantsAhmedabad

Registered Office & WorksOff. Veraval - Kodinar Highway Sidheegram 362 276Dist. Gir Somnath (Gujarat)Tel. 02876 - 308200, Fax: 02876 - 286540CIN: L26940GJ1973PLC002245

Corporate OfficeN. K. Mehta International House, 2nd Floor,178, Backbay Reclamation, Mumbai 400 020.Tel. 022- 66365444, Fax : 022-66365445

Registrars & Transfer Agent:M/s. Link Intime India Pvt Ltd(Unit: Gujarat Sidhee Cement Limited)C-13, Pannalal Silk Mills Compound, L.B.S. Marg, Bhandup (West), Mumbai - 400 078.Tel. 022- 25963838, Fax : 022-25946969

Website: www.mehtagroup.com

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DIRECTORS’ REPORT

Dear Members,

The Directors present the 40th Annual Report along with the Audited Accounts and Auditors Report for the Financial Year ended 31st March, 2014.

FINANCIAL RESULTS

The highlights of the financial results for the Financial Year ended 31st March 2014 are given below.

(Rs.in Million)

Particulars Standalone Consolidated

Current Financial Year

2013-2014

Previous Financial Year

2012-13

Current Financial Year

2013-2014

Previous Financial Year

2012-13

Sales & Other Receipts (Net of Excise) 4179.19 4532.83 4179.79 --

Profit before Interest and Depreciation 110.66 575.18 110.66 --

Interest 29.96 17.16 29.96 --

Profit /(Loss) before Depreciation 80.70 558.02 80.70 --

Depreciation 76.63 65.28 76.63 --

Exceptional Items Nil 85.73 Nil --

Profit /(Loss) before Taxation 4.07 578.48 4.07 --

Income Tax / Fringe Benefit Tax / Wealth tax Nil 175.36 Nil --

Deferred Tax Adjustment 31.31 168.91 31.31 --

Profit /(Loss) after tax (27.24) 403.12 (27.24) --

Carried forward Profit/ (Loss) of earlier years 360.82 (392.45) 360.82 --

Less: Adjusted against Share Capital Nil 392.45 Nil --

Less: Proposed Dividend Nil 36.15 Nil --

Less : Tax on Proposed Dividend Nil 6.15 Nil --

Balance of Profit/(Loss) carried to Balance Sheet 333.58 360.82 333.58 --

THE YEAR UNDER REVIEW

The slowdown in the economy resulted in static growth rate for the eight core industries (including cement, steel, fertilizer, oil, gas etc.), which remained at around 3 percent during April 2013 to March 2014 similar to the previous year. The cumulative growth rate in cement production was also on the lower side at around 3 percent compared to around 6 percent in the previous year.

Cement consumption in Gujarat, our main market declined by 6 percent over the previous year, which is all time low in the last six years. The regular increase in diesel price, amounting to around 16 percent during the year, resulted in higher cost of manufacturing as well as cost of delivery for cement.

The decline in the consumption in our markets and the higher capacities of cement in our region resulted in surplus availability of cement. This factor, coupled with the highly fragmented markets, resulted in fluctuating cement prices and a significant drop in profits. The availability of raw materials and the good industrial environment in the State of Gujarat is likely to result in continued over supply in the State. The infrastructural constraints in rail and ports adversely affect the economic transportation of cement to distant markets. Energy cost escalations, restrictions imposed in the energy exchange under Open Access, increased cost of transportation and high incidence of taxes will continue to challenge the Industry.

PERFORMANCE REVIEW

Production and Sales

The production of clinker for the year ended March 2014 was 1.17 million tonnes, which was 101 percent of the rated capacity of the plant and is also more than clinker production of 1.15 million tonnes for the year ended March 2013. In order to improve the ambient air quality, new bag house was installed at a substantial cost with an extended annual shutdown.

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The cement production for the year ended March 2014 is 1.16 million tonnes, which was lower than the cement production of 1.25 million tonnes for the year ended March 2013. The lower cement production was commensurate with cement sales and in order to compensate the lower cement sales, clinker was sold in the local and export markets and the overall (clinker + cement) sales of 1.27 million tonnes which was more than the overall sales of the previous year ended March 2013.

The procurement of power from the energy exchange under open access has helped the Company in maintaining the energy cost to some extent. The energy efficiency of the plant was adversely affected due to change in the quality of the limestones.

The lower cement consumption in Gujarat, higher raw material and freight cost, lower energy efficiency and the extended shutdown for installation of new bag house with substantial capex resulted in lower profitability.

Exports

The export of cement and clinker for the year ended March 2014 was 0.14 million tonnes as compared to 0.1 million tonnes in the previous year. Due to large surplus in our domestic markets, the exports continued to be a significant part of our revenues.

Dividend

The Directors have not recommended any dividend for the Financial Year ended March 31, 2014, in view of the lower profits.

Public Deposits

The Company has not invited and / or accepted any deposits, during the year.

Fresh Infusion of Funds

Hon’ble BIFR while sanctioning rehabilitation scheme of the Company had put the following condition vide its order dated 6.12.2012 issued on 16.1.2013.

Quote

Further equity infusion of Rs.50 crore (in addition to Rs.19.73 crore already brought in) into the Company for funding of the Scheme by The Mehta International Ltd., a promoter group Company, its shareholders / its subsidiaries / other group companies / associates of promoters, their relatives, friends, etc.

Unquote

In compliance with the said order, Bhadra Consultancy Private Limited, a Promoter Company has invested Rs.5 crores in March 2014 towards purchase of 50,00,000 equity shares of the Company at par. The Company has since allotted 50,00,000 equity shares to Bhadra Consultancy Private Limited.

Subsidiary & Consolidated Financial Statement

During the last quarter of the year, the Company has acquired 100 percent shares in Villa Trading Company Private Limited (VTCPL) and thus VTCPL has become wholly owned subsidiary of the Company.

As required under Clause 32 of the Listing Agreement with the Stock Exchange, the Consolidated Financial Statement has been prepared by the Company in accordance with the requirements of Accounting Standard 21 ‘Consolidated Financial Statements’ issued by ‘The Institute of Chartered Accountants of India’. The Audited Consolidated Financial Statements together with Auditors’ Report thereon form part of the Annual Report.

Section 212 of the Companies Act, 1956 requires the Company to attach the directors’ report, balance sheet, and profit and loss accounts of the subsidiary company. The Ministry of Corporate Affairs, Government of India vide its circular no.2/2011 dated 8.2.2011 has granted a general exemption from complying with Section 212 (1) of the said Act.

Accordingly, the Annual Report does not contain the financial statement of the subsidiary company. The financial information of the subsidiary company as required by the said circular, is disclosed separately in this Annual Report. The statements of Company’s interest in the subsidiary as at March 31, 2014 prepared in accordance with the provisions of Section 212 of the said Act, are also attached with this Annual Report.

The Company will make available the Annual Accounts of the subsidiary company to any member on their request and shall also be kept open for inspection by any member at the Registered Office of the Company.

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Directors

Reappointment of Directors

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Hemnabh Khatau and Mr. M. N. Mehta retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment.

Appointment of Additional Directors

Ms. Juhi Chawla has been appointed as Additional Director pursuant to Section 161 of the Companies Act, 2013 and Articles 107(a) of the Articles of Association of the Company. She holds office upto the date of this ensuing Annual General Meeting and offers herself for appointment as Director.

In furtherance to the objective of induction of professional and Independent Directors on the Board and also mandated by Companies Act, 2013 and Corporate Governance requirements, Mr. M. N.Rao, Mr. K. N. Bhandari and Mrs. Bhagyam Ramani were appointed as Additional Directors as Independent Directors on the Board of Directors of the Company, who hold office upto the date of the ensuing Annual General Meeting and are eligible for appointment as such.

The Company has received requisite notice(s) from the Member(s) proposing the candidatures of above mentioned Directors for appointment as Directors of the Company.

Appointment of Independent Directors

Pursuant to the provisions of Section 149, 152 read with Schedule IV and all other applicable provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modifications or re-enactment thereof for the time being in force) and Clause 49 of the Listing Agreement, the Independent Directors proposed to be appointed are eligible to hold office for 5 (five) consecutive years. Accordingly, Mr. S. V. S. Raghavan, Mr. P. K. Behl, Mr. M. L.Tandon, Mr. Bimal Thakkar, Mr. M. N. Rao, Mr. K. N. Bhandari and Mrs. Bhagyam Ramani are being appointed as Independent Directors at the ensuing Annual General Meeting for a term of five consecutive years on a non-rotational basis.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under Section 149 (6) of the Companies Act, 2013 and under Clause 49 of the Listing Agreement with the Stock Exchanges.

Brief resume of Directors seeking appointment / re-appointment along with other details as stipulated under Clause 49 of the Listing Agreement, are provided in the Notice for convening the Annual General Meeting.

The Directors recommend their re-appointment / appointment.

Listing of Equity Shares

The Company’s equity shares are listed on the Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company has paid listing fees as prescribed for Financial Year 2014-15.

Auditors

M/s. Manubhai & Shah., Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company, who hold office upto the conclusion of the ensuing Annual General Meeting in accordance with the provisions of the Companies Act, 1956, who are eligible for re-appointment are recommended for re-appointment to audit the Accounts of the Company for the Financial Year 2014-15. As required under the provisions of the Companies Act, 2013, the Company has received written confirmation from M/s. Manubhai & Shah that their appointment, if made, will be in conformity with the limits specified in the Section 141(3)(g) of the Companies Act, 2013.

The Audit Committee of the Board has recommended their re-appointment, the necessary Resolution is placed before the Shareholders for their approval.

Cost Auditors

In pursuance to Order No.52/56/CAB-2010 dated 30th June 2011 issued under Section 233-B of the Companies Act, 1956, M/s. M. Goyal & Co., Cost Accountants, have been appointed by the Board as Cost Auditor of the Company for the Financial Year 2014-15. Certificate of eligibility under Section 148 of the Companies Act, 2013 has been received.

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Internal Audit

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Haribhakti & Co., Chartered Accountants, to carry out the Internal Audit of the Company for the Financial Year 2014-15.

Tax Audit

The Board of Directors on the recommendation of the Audit Committee appointed M/s. Manubhai & Shah., Chartered Accountants to carry out the Tax Audit for the Assessment Year 2014-15.

Particulars of Employees

In terms of the provisions of Section 217 (2A) of the Companies Act, 1956 and the Companies (Particulars of Employees) Rules, 1975 names and other particulars of the employees are required to be set out in the Annexure to this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956 the Report and Annual Accounts of the Company sent to the shareholders do not contain the said Annexure. Any shareholders desirous of obtaining a copy of the said Annexure may write to the Company Secretary at the Registered Office of the Company.

Industrial Relations

Industrial relations at our factory and offices remained cordial.

Energy conservation, Technology Absorption and Foreign Exchange Earnings and Outgo.

As required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors’) Rules 1988 the relevant particulars are enclosed herewith in Annexure 1, forming part of the Report.

Corporate Governance

A separate report on compliance with Clause 49 of the Listing Agreement with the Stock Exchanges on Corporate Governance along with a Certificate of Compliance from the Statutory Auditors forms part of this Report.

Management Discussion and Analysis

The Management Discussion and Analysis Report is provided in a separate section and forms part of this Report.

Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 217(2AA) of the Companies Act, 1956:

! These statements have been prepared in conformity with generally accepted accounting principles and appropriate accounting standards, judgements and estimates are reasonable and prudent.

! The accounting policies selected and applied consistently give a true and fair view of the financial statements.

! The Company has implemented internal controls to provide reasonable assurances of the reliability of its financial records, proper safeguarding and use of its assets and detection of frauds and irregularities. Such controls are based on established policies and procedures and are implemented by trained, skilled and qualified personnel with an appropriate segregation of duties. The Company’s internal auditors conduct regular internal audits, which complement the internal controls.

! The annual accounts have been prepared on a going concern basis.

Acknowledgement

The Directors wish to thank the Hon’ble Board for Industrial & Financial Reconstruction (BIFR), The Hon’ble Appellate Authority for Industrial & Financial Reconstruction (AAIFR), Central Government, Government of Gujarat, Gujarat Industrial & Investment Corporation Limited, Financial Institutions, Bankers, Shareholders, Employees, Stockists, Dealers and all other stakeholders associated with its operations for the co-operation and encouragement extended to the Company.

On behalf of the Board of Directors

Place : Mumbai M.S.Gilotra Jay MehtaDated : May 31, 2014 Managing Director Executive Vice Chairman

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Annexure -1

DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Technology absorption & Foreign Exchange earnings & out go as required under Companies (Disclosure of particulars in the Report of Board of Directors) Rule 1988 & forming part of report for the year ended 31.3.2014.

A. Conservation of Energy :

a) Energy Conservation Measures Taken:

1. Replacement of existing Pre-heater cyclones #3 & 4 with low pressure drop cyclones.

2. Installation of IKN Pendulum cooler for 1st & 2nd Grates.

3. 6 nos. of New cooler fans provided with VFD drive has reduced power consumption from 4 Kw/T clinker to 3.4 Kw/T clinker.

4. Installation of Capacitor banks have helped in improving power factor from 0.95 to 0.965 which resulted in savings of Rs. 39.4 Lacs.

b) Additional Investment & Proposal, if any, being implemented for Reduction of Energy.

1. Installation of MV Drive for RABH fan and other small initiatives will help reduce power by 250Kw

c) Impact of the Measurers at (a) & (b) above.

Stable Kiln Operation at 4500tpd, Pollution control (Emission levels have reduced from 400-500 mg/Nm3 to < 25 mg/Nm3) , Reduction in Power consumption

d) Total Energy Consumption & Energy consumption per unit of Production as per Form A of the Annexure.

B. Technology Absorption : Given in prescribed Form –B attached

C. Foreign Exchange earnings and outgo

a. Activities relating to exports, initiatives taken to increase exports, development of new export market for products and services and export plants:

The Company is currently exporting its products in Sri Lanka, Maldives, Saudi Arabia, New Papua Guinea and African countries and looking forward to increase the market share in these countries, as well as exploring opportunities in other countries.

b. Foreign Exchange Earning & Outgo

2013-14 2012-13

(Rs. In Lacs) (Rs. In Lacs)

Foreign Exchange Earned Rs. 61.83 Rs. 146.53

Foreign Exchange Used Rs. 252.94 Rs. 808.09

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FORM -A (SEE RULE 2)(Form of Disclosure of particulars with respect to Conservation of Energy)

Sr. No.

Particulars 2013-14 2012-13

A POWER & FUEL CONSUMPTION

1 Electricity

a) Purchased

Unit (Kwh) -Lacs 1167.61 1169.75

Total Amount (Rs. in Lacs) 6460.32 7072.25

Rate / Unit (Rs.) 5.53 6.05

b) Own Generation

i Through Diesel generation 0.00 0.00

ii Fuel Cost /Electricity Duty 0.00 0.00

iii Through Steam Turbine /Generator Nil Nil

2 Coal & Other Fuel Used as Kiln/Fuel

Quantity ( in Million K.Cal) 1023293 988303

Total Cost (Rs.in Lacs) 11227.09 11582.15

Average rate (Rs. in Million K.Cal) 1097.15 1171.92

3 H.S.D. / L.D.O

Quantity in (K.Ltrs) 226.17 296.12

Total Cost of (Rs. in lacs) 142.41 144.74

Average rate (Rs. in K.Ltrs) 62966.91 48879.50

4 Other /Internal Generation Nil Nil

B CONSUMPTION PER UNIT OF PRODUCTION

Electricity (KWH/T.of Cement)* 95.45 91.73

Diesel (Ltr /T.of Clinker) 0.19 0.26

Coal /Lignite (K.Cal /Kg.of Clinker) 876 859

Others

*Net of non productivity of Power

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FORM - B (See rule - 2)(Form for Disclosure of Particulars with respect to Absorption)

A. RESEARCH AND DEVELOPMENT (R&D):

1. RESEARCH AND DEVELOPMENT HAS BEEN CARRIED OUT FOR IMPROVEMENT IN THE FOLLOWING AREAS:

a. Optimisation of raw mix designs.

b. Cement Testing facility as per international standards.

2. FOLLOWING BENEFITS WERE DERIVED OF THE ABOVE R & D:Improved Clinker Quality & Cement Grinding

3. FUTURE PLAN OF ACTION:

a. Close circuiting of cement mills to improve cement quality and increase output

b. Raw Mill Dynamic separator to increase production and enhance quality.

c. Installation of waste heat recovery system.

d. Audit of Pyro-processing system (Kiln & Cooler) for reducing heat and power consumption.

e. Energy Reduction initiates through MVD & VFD for various identified drives across the plant.

4. EXPENDITURE ON R & D:

(Rs. in Lakhs)

a. Capital Nil

b. Recurring 92.92

c. Total 92.92

d. Total R & D expenditure as a percentage of total turnover 0.23

B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

Information regarding technology imported during the last five years:

a. Technology Imported

1. Clinker cooling by IKN Kids stationary grate – IKN Germany

2. Improved flame characteristics by burner pipe –Pillard, France.

3. Installation of membrane type filter bags –Gore, USA

4. Auto Fan Balancer for PC Fan - Hofmann, Germany

b. Year of Import

1. 2012 2. 2012 3. 2012-13 4. 2013

c. Has Technology been fully absorbed Yes.

d. If not fully absorbed, areas where this has not been taken place, reason thereof and future plan of action. N.A.

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CORPORATE GOVERNANCE

1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE :

Gujarat Sidhee Cement Limited, (your Company) believes that good Corporate Governance aims at achieving high level of efficiency, transparency, accountability, responsibility and fairness in dealings with all stakeholders.

Recently, the Securities and Exchange Board of India (SEBI) sought to amend the equity listing agreement to bring in additional corporate norms for listed entities. These norms provide for stricter disclosures and protection of investor rights, including treatment for minority shareholders.

Many of the amendments are effective from October 1, 2014. The amended rules require companies to get shareholders’ approval for related party transactions, establish whistle blower mechanisms, elaborate disclosures on pay packages and have at least one woman director on their boards.

The amended norms are aligned with the provisions of the Companies Act, 2013, and is aimed to encourage companies to ‘adopt best practices on corporate governance’.

We believe that an active, well-informed and independent board is necessary to ensure the highest standards of corporate governance. It is well recognized that an effective Board is a pre-requisite for a strong and effective corporate governance. At GSCL, the Board of Directors (“the Board”) is at the core of our corporate governance practice and oversees how the Management serves and protects the long term interests of our stakeholders.

Our corporate governance framework ensures that we make timely disclosures and share accurate information regarding our financials and performance, as well as the leadership and governance of the Company.

The Company’s governance philosophy rests on protection of rights and interests of stakeholders, equity in their treatment, disclosure of timely and accurate information, strategic guidance and effective monitoring by the Board. Your Company continuously strives for excellence by adopting best governance and disclosure practices. In terms of Clause 49 of the Listing Agreement executed with the Stock Exchanges, the details of compliance for the year ended 31st March, 2014 are as follows :

2. BOARD OF DIRECTORS :

(i) Composition (As on 31.3.2014)

The Board of Directors (the Board), directs and guides the activities of the Management towards setting up of goals and seeks the accountability with a view to create long term sustainable growth that translates itself into progress, prosperity and the fulfilment of stakeholders’ aspirations. Your Company’s Board comprises of 12 (twelve) Directors, which include 7 (seven) Independent Directors. The Executive Vice Chairman and Managing Director looks after the day-to-day business of the Company under the overall supervision and guidance of the Board. The Directors are professionals, have expertise in their respective functional areas and bring a wide range of skills and experience to the Board. The composition and attendance at the Board Meetings held during the financial year ended 31.3.2014 are given below. The attendance at the last Annual General Meeting held on 30.7.2013 are given in the last column.

Sr. No.

Directors Executive / Non-Executive No. of Board Meetings held

No. of Board Meetings Attended

Last AGM Attendance (Yes/

No)1. Mr. M.N. Mehta Non-Executive Chairman 6 5 No.2. Mr. Jay M. Mehta Executive Vice Chairman 6 5 No.3. Mr. Sanat M. Mehta Non-Executive Director -

TMIL Nominee6 - No.

4. Mr. M.L. Tandon Independent Director 6 5 No.

5. Mr. S.V.S. Raghavan Independent Director 6 4 No.6. Mr. P.K. Behl Independent Director 6 6 Yes *7. Mr. Bimal Thakkar Independent Director 6 6 No

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Sr. No.

Directors Executive / Non-Executive No. of Board Meetings held

No. of Board Meetings Attended

Last AGM Attendance (Yes/

No)8. Mr. Hemnabh Khatau Independent Director 6 4 No9. Dr. (Ms) Kala S. Pant Independent Director 6 6 No10. Mr. Venkatesh Mysore Independent Director 6 6 No11. Mr. A. B. Shah Non Executive Director –

GIIC Nominee6 2 No

12. Mr. M.S. Gilotra Managing Director 6 6 Yes

• as Alternate Chairman of the Audit Committee.

(ii) MEETINGS OF THE BOARD :

Six Board Meetings were held during the financial year ended 31.3.2014

Sr. No. Date of Board Meeting Total strength of the Board No. of Directors Present

1. 07.05.2013 12 6

2. 29.05.2013 12 10

3. 30.05.2013 12 9

4. 08.08.2013 12 11

5. 17.10.2013 12 8

6. 10.02.2014 12 11

(iii) OTHER DIRECTORSHIPS

The details of other directorships etc.,held by the Directors of the Company as on 31.3.2014 are given below :-

Sr.No.

Directors Category of Directorship @

No. of otherdirec-torship held

No. of Board committees in which Member/ Chairman

1. Mr. M. N. Mehta, Chairman NED (P) 6 -

2. Mr. Jay Mehta,Executive Vice Chairman

ED (P) 7 1

3. Mr. Sanat Mehta NED (P) - -

4. Mr. S.V.S. Raghavan* NED (I) 1 1

5. Mr. M. L. Tandon NED (I) 14 -

6. Mr.P. K. Behl** NED (I) - -

7. Mr. Bimal Thakkar NED (I) 3 -

8. Mr. Hemnabh Khatau NED (I) 6 -

9. Dr.(Ms.)Kala S. Pant NED (I) 1 -

10. Mr. Venkatesh Mysore NED (I) 2 1

11. Mr. A.B. Shah NED (NI) 5 1

12. Mr. M. S. Gilotra, Managing Director ED 1 1

@NED (P) – Non Executive Director – Promoter GroupNED (I) – Non Executive Director – IndependentNED (NI) – Non Executive Director – Non IndependentED (P) – Executive Director (Promoter)ED - Executive Director* Chairman of Audit Committee** Alternate Chairman of Audit Committee

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(iv) Information to the Board of Directors.

The information required to be placed before the Board includes:

! Annual revenue budgets and capital expenditure plans, if any.

! Quarterly and annual financial and operational performance.

! Budget and Financial plan of the Company.

! Formation/Reconstitution of Board Committees and Terms of Reference of Board Committees

! Minutes of the Meetings of Audit, Shareholders/ (Investor) Grievance Committee and Remuneration Committee.

! Fatal or serious accidents or dangerous occurrence, any material effluent or pollution problems.

! Any materially relevant default, if any, in financial obligations to and by the Company or substantial non-payment of goods sold or services rendered, if any.

! Any issue, which involves possible public or product liability claims of substantial nature, including any Judgement or Order, which may have passed strictures on the conduct of the Company.

! Developments in respect of Human Resources.

! Compliance or Non-compliance of any Regulatory, Statutory or Listing requirements and Investor service such as non-payment of dividend, delay in share transfer etc. if any.

(v) APPOINTMENT / RE-APPOINTMENT OF DIRECTORS

The brief resume of the Directors proposed to be appointed / re-appointed is appended to the Notice of the Annual General Meeting.

3. AUDIT COMMITTEE:

Audit Committee of the Board of Directors is entrusted with the responsibility to supervise the Company’s internal controls and financial reporting process.

The Audit Committee of the Board comprises of 4 Non-Executive Directors. Viz. Mr. S. V. S. Raghavan, Mr. M. L. Tandon, Mr. P. K. Behl and Mr. Bimal Thakkar, all independent Directors. Mr. S. V. S. Raghavan is the Chairman of the Audit Committee. Mr. M.S. Gilotra, Managing Director is permanent invitee.

Mr. A. M. Fadia, Director (Legal) & Company Secretary was the Secretary till 17.10.2013, from 17.10.2013, Mrs. Anupama Pai, Vice President (Legal) & Company Secretary is Secretary of the Audit Committee.

During the Financial Year ended 31.3.2014, four Audit Committee Meetings were held on 29.5.2013, 8.8.2013, 17.10.2013 and 10.2.2014. The attendance at the Audit Committee Meetings was as under :

Name of the Director No. of meetings held No. of Meetings attended

Mr.S. V. S. Raghavan, Chairman 4 3

Mr. M. L. Tandon, Member 4 4

Mr. P. K. Behl, Member 4 4

Mr. Bimal Thakkar, Member 4 4

The Statutory Auditors and Internal Auditors also attended Audit committee Meetings held during the year. The approved minutes of the Audit Committee Meetings are noted by the Board of Directors at the subsequent Board Meetings.

Mr. P. K. Behl was appointed as Alternate Chairman to Mr. S. V. S. Raghavan, Chairman of the Audit Committee and attended the Annual General Meeting of the Company held on 30.7.2013.

Terms of reference

The terms of reference of the Audit Committee have been revised by the Board in its meeting held on 31.5.2014 to meet the requirements of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The terms of reference are as under:

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To:

1. Oversee the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

2. Recommend the appointment, remuneration and terms of appointment of Auditors of the Company;

3. Approve payment to Statutory Auditors for any other services rendered by them.

4. Review the management, the annual financial statements and auditor’s report thereon before submission, to the board for approval, with particular reference to:

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (c) of sub-section 3 of Section 134 of the Companies Act, 2013.

b. Changes, if any, in accounting policies and practices and reasons for the same.

c. Major accounting entries involving estimates based on the exercise of judgment by management.

d. Significant adjustments made in the financial statements arising out of audit findings.

e. Compliance with listing and other legal requirements relating to financial statements.

f. Disclosure of any related party transactions.

g. Qualifications in the draft audit report.

5. Review, with the management, the quarterly financial statements before submission to the board for approval;

6. Review, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/ notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;

7. Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

8. Approve transactions of the Company with related parties and any subsequent modification;

9. Scrutinize inter-corporate loans and investments;

10. Consider valuation of undertakings or assets of the Company, wherever it is necessary;

11. Evaluate internal financial controls and risk management systems;

12. Review, with the management, performance of statutory and internal auditors, adequacy of the internal control systems;

13. Review the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit;

14. Discuss with Internal Auditors of any significant findings and follow up there on;

15. Review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board;

16. Discuss with Statutory Auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;

17. Look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;

18. Review the functioning of the Whistle Blower / Vigil Mechanism;

19. Approve appointment of CFO (i.e. the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;

20. Carry any other function as is mentioned in the terms of reference of the Audit Committee;

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4. CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE

As per the Companies Act, 2013, all companies having a net worth of Rs.500 crore or more, or turnover of Rs.1000 crore or more or a net profit of Rs.5 crore or more during any financial year will be required to constitute a Corporate Social Responsibility (CSR) Committee of the Board consisting of three or more directors, at least one director of whom will be an Independent Director.

Accordingly, the Board in its meeting held on 31.5.2014 constituted the CSR Committee (“the Committee”) comprising of the following Directors and the terms of reference was also specified by the Board of Directors.

1. Mr. Jay Mehta - Executive Vice Chairman2. Mr. M. S. Gilotra - Managing Director3. Ms. Juhi Chawla - Member4. Mr. Bimal Thakkar - Member

Terms of Reference:

a) To formulate and recommend to the Board, a Corporate Social Responsibility Policy which shall indicate the activities to be undertaken by the Company as specified in Section 135 of Companies Act, 2013, Companies (Corporate Social Responsibility Policy) Rules, 2014 and Schedule VII;

b) To recommend the amount of expenditure to be incurred on the activities referred to in clause (a);

c) To monitor the CSR Policy of the Company from time to time; and

d) Such other Terms of Reference as may be specified from time to time under the Companies Act, 2013, Rules thereunder and Schedule VII of the Act.”

5. NOMINATION AND REMUNERATION COMMITTEE (FORMERLY REMUNERATION COMMITTEE)

The Board of Directors of the Company at its meeting held on 31.5.2014 approved setting up of the Remuneration Committee as Nomination and Remuneration Committee and also specified the revised Terms of Reference under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

(i) COMPOSITION

The Nomination and Remuneration Committee comprises of three Independent Directors viz. Mr. S. V. S. Raghavan, Mr. P. K. Behl and Mr. M.L. Tandon. Mr S. V. S. Raghavan is the Chairman of the Remuneration Committee.

During the year under review, two meetings of Remuneration Committee was held on 29.5.2013 and 10.2.2014.

Details of Remuneration Committee Meetings attended by the Members are given below:

Sr. No. Members of Audit Committee No. of meetings held No. of meetings attended.1. Mr. S.V.S.Raghavan (Chairman) 2 22. Mr. M. L. Tandon (Member) 2 23. Mr. P. K. Behl (Member) 2 2

The approved Minutes of the Remuneration Committee Meetings are circulated and noted by the Board of Directors at the subsequent Board Meetings.

(ii) DETAILS OF REMUNERATON OF DIRECTORS FOR THE FINANCIAL YEAR 2013-14.

Executive Directors :

Name Salary & Allowances(Rs in lacs)

Contribution to PF/ Superannuation (Rs in lacs)

Total(Rs in lacs)

Mr. Jay M Mehta, Executive Vice Chairman 228. 21 38. 88 267. 09

Mr. M. S Gilotra, Managing Director 109. 03 21. 95 130. 98

In view of inadequacy of profit for the year 2013-14, remuneration paid by the Company to Mr. Jay Mehta and Mr. M. S. Gilotra was in excess of the limit prescribed under Sections 198 and 309 read with Schedule XIII to the Companies Act, 1956. Pending approval of the Shareholders and the Central Government, an amount of Rs.302.99 lacs is being held in trust by them.

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Non-Executive Directors :

The Directors were paid sitting fees of Rs.20,000/- per meeting for attending the meeting of the Board, Audit Committee, Remuneration Committee and Shareholders / (Investor) Grievance Committee, Allotment committee or any other committee of the Board attended by them.

Director No. of Board Meetings attended

No. of Committee meetings attended

Total Amount of sitting fees paid Rs

Mr. M. N. Mehta, Chairman 5 - 5 1,00,000

Mr. Sanat M Mehta, Non-Executive Director, TMIL Nominee

- - - -

Mr. M. L. Tandon 5 6 11 2,20,000

Mr. S. V. S. Raghavan 4 5 9 1,80,000

Mr. P. K. Behl 6 6 12 2,40,000

Mr. Bimal Thakkar 6 4 10 2,00,000

Mr. Hemnabh Khatau 4 - 4 80,000

Dr. (Ms) Kala S. Pant 6 - 6 1,20,000

Mr. Venkatesh Mysore 6 - 6 1,20,000

Mr. A. B. Shah, GIIC Nominee 2 - 2 40,000

Total 13,00,000

Note : The Company has not issued any stock options to any Directors.

Terms of Reference

1. Formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;

2. Formulate of criteria for evaluation of Independent directors and the Board;

3. Devise a policy on Board diversity;

4. Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board, their appointment and removal.

6. STAKEHOLDERS RELATIONSHIP & GRIEVANCES COMMITTEE (FORMERLY SHAREHOLDERS / INVESTORS’ GRIEVANCES COMMITTEE) :

The Board of Directors of the Company at its Meeting held on 31.5.2014 approved setting up of the Shareholders / Investors’ Grievances Committee as Stakeholders Relationship & Grievances Committee and also specified the revised Terms of Reference under the Companies Act, 2013 and Clause 49 of the Listing Agreement.

(i) COMPOSITION

The Stakeholders Relationship & Grievances Committee consist of following Directors viz. Mr. Jay Mehta, Mr. Venkatesh Mysore and Mr. M. S. Gilotra. Mr. Venkatesh Mysore is the Chairman of the Committee.

During the year, the Committee held four meetings on 29.5.2013, 8.8.2013, 17.10.2013 and 10.2.2014.

Name of the Director No. of meetings held No. of meetings attended

Mr. Jay Mehta, Executive Vice Chairman 4 4

Mr. M. S. Gilotra, Managing Director 4 4

Mr. Venkatesh Mysore 4 -

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Mr. A. M. Fadia, Director (Legal) & Company Secretary, was the Compliance Officer till 17.10.2013., Mrs. Anupama Pai, Vice President (Legal) & Company Secretary is the Compliance Officer since 17.10.2013.

During the year, the Company received 60 complaints / letters from the shareholders which were attended to / resolved satisfactorily. All requests for transfer of shares have been processed normally within the prescribed time.

The approved minutes of the Shareholders /Investors’ Grievances Committee are noted by the Board of Directors at the subsequent Board Meeting.

Terms of Reference

The Committee shall consider and resolve the grievances of Security holders of the Company as well as specifically look into the redressal of grievances of shareholders, debenture holders and other stakeholders including complaints related to transfer of shares, non receipt of Balance Sheet and non receipt of declared dividends.

7. (i) GENERAL BODY MEETINGS:

Location and time where last three Annual General Meetings / Extra ordinary General meetings were held are as follows:-

Financial Year Date Time Venue Dividend declared

2012-13 30.7. 2013 10. 00 a. m Registered Office at “Sidheegram”Off Veraval-Kodinar Highway, Pin Code 362 276,

Dist Gir Somnath

Yes

2011-12 26.6. 2012 10. 00 a. m -do- Nil

2010-11 27.7. 2011 10. 00 a. m -do- Nil

No resolutions were put for voting through postal ballot.

(ii) Extraordinary General Meetings:

No Extraordinary General Meeting was held during the year.

(iii) Special Resolutions:

Nil.

(iv) DISCLOSURES:

i) Related Party Transactions.

During the year, there were no transactions of material nature with the Promoters, the Directors, Management or their subsidiaries or relatives of the Directors that had potential conflict with the Company. Suitable disclosures as required by the Accounting Standards (AS 18) has been made in the Annual Report.

ii) Penalties, Strictures by Stock Exchange (s) / SEBI

No penalties or strictures have been imposed on the Company by Stock Exchange or SEBI or any statutory authority on any matter related to capital markets.

iii) Policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace

The Company has in place, a formal policy on Prohibition, Prevention and Redressal of Sexual Harassment of Women at Workplace (the Policy) and matters connected therewith or incidental thereto covering all the aspects as contained under the “The Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013” notified by the Government of India vide Gazette Notification dated 23rd April 2013. Detailed mechanism has been laid down in the policy for reporting of cases of sexual harassment to ‘Internal Complaints Committee’ comprising senior official of the Company and an independent member from NGO, constituted under this policy for conducting of inquiry into such complaints, recommending suitable action during the pendency and/or completion of the inquiry including strict disciplinary action including termination of the services.

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8. Disclosure of Accounting Treatment:

In preparation of Financial Statements, the Company has followed the Accounting Standards as notified under Companies (Accounting Standards), Rules 2006, as applicable.

9. Disclosure on Risk Management:

The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. The Company has framed the risk assessment and minimization procedure which is periodically reviewed.

10. Code of Conduct:

The Board has formulated a Code of Conduct for the Board Members and Senior Management of the Company. The Board members and senior management personnel have affirmed their compliance with the Code. A declaration to this effect signed by the Directors and Senior Executives of the Company was placed before the Board.

11. CEO/CFO Certification:

A CEO/CFO certificate on the Audited / Unaudited Financial Statements of the Company for each quarter and annual financial results were placed before the Board.

12. MEANS OF COMMUNICATION:

The quarterly, half-yearly and yearly financial results of the Company are sent to the Stock Exchanges immediately after these are approved by the Board. These results are published in Jaihind in Rajkot and in Financial Express, in Ahmedabad and Mumbai. The Company has not sent the reports to each household of shareholders. The Company has not made any presentation to the Institutional Investors or Analysts. These results are simultaneously posted on the website of the Company at http:/www.mehtagroup.com and Electronic Data Information Filing and Retrieval (EDIFAR) website maintained by SEBI.

13. GENERAL SHAREHOLDERS INFORMATION:

i) Audited results for the current Financial Year ended 31st March 2014

31st May 2014

ii) Board Meeting for consideration of unaudited results Quarter I (ended 30.6.2013)

Quarter II (ended 30.9.2013)

Quarter III(ended 31.12.2013)

Quarter IV (ended 31.3.2014)

Within the period as stipulated under the Listing Agreement with the Stock Exchange from time to time

iii) Annual General Meeting is proposed to be held Thursday the 18th September 2014

iv) Date of Book closure Friday the 12th September 2014 to Thursday the 18th September 2014 (both days inclusive)

v) Listing of Equity Shares on Stock Exchange at:

S. No Name(s) of the Stock Exchange Stock Code

a) The Bombay Stock Exchange Limited (BSE) Phiroze Jeejeebhoy Towers Dalal Street Mumbai 400 001

518029

Demat ISIN No INE542A01039

b) The National Stock Exchange Limited (NSE) Exchange Plaza, Bandra-Kurla Complex Bandra (East), Mumbai 400 051

GSCLCEMENT

vi) Listing Fees:

The Company has paid Listing Fees for the Financial Year 2014-15 to the Bombay Stock Exchange Ltd., (BSE) and National Stock Exchange India Ltd (NSE), where the Company’s shares are listed.

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vii) Registrar & Share Transfer Agent:

The Company has appointed “M/s.Link Intime India Pvt Ltd.” as Registrar and Transfer Agent for transfer of physical shares and connectivity lines for demat of shares. The Registrar also accepts and attends to complaints of Investors. Investors complaints are given top priority by them and are replied promptly.

No complaint received from the shareholders / investors is pending as on 31.3.2014 relating to transfer of shares.

viii) Share Transfer System

The Share Transfer in physical form are processed by the Registrars and Transfer Agents and duly transferred share certificates are returned within a period of 15 to 20 days from the date of receipt provided that the documents are found to be in order.

The shares held in demat form are transferred electronically through the depositories, i.e. CDSL & NSDL.

ix) Distribution of Shareholding as on 31.3. 2014

No. of equity shares held No. of shareholders % No. of shares held %

1 – 500 71171 93.30 7201690 19.92

501 – 1000 2309 3.03 1737654 4.81

1001 – 2000 1465 1.92 2065712 5.71

2001 – 3000 545 0.71 1363053 3.77

3001 – 4000 190 0.25 675285 1.87

4001 - 5000 143 0.19 674484 1.86

5001 - 10000 221 0.29 1567860 4.34

10001 – above* 234 0.31 20868114 57.72

TOTAL 76278 100.00 36153852 100.00

* includes 200317 forfeited shares pending to be re-issued.

x) Shareholders Profile as on 31.3.2014

Category No. of shareholders % No. of shares held %

Promoter Group Companies 15 0.02 12440349 34.42

Bodies Corporate 803 1.05 3549005 9.82

NRIs 560 0.73 538062 1.49

FIIs 11 0.01 23175 0.06

Financial Institutions 2 - 625 -

Banks 7 0.01 750177 2.07

Mutual Fund 7 0.01 31256 0.09

Overseas Corporate Bodies 2 - 8550 0.02

Indian Public 74871 98.17 18812653 52.03

TOTAL 76278 100.00 36153852 100.00

xi) Dematerialization of shares:

As on 31.3.2014, 3,47,50,198 equity shares constituting 96.12% of the Company’s total paid-up share capital were held in dematerialized form with NSDL and CDSL.

xii) Outstanding GDR or Warrants or any Convertible Instruments, Convertible Debentures etc.

The Company’s capital comprises only of Equity shares and the Company does not have any outstanding ADRs, GDRs, Warrants or any Convertible instruments. No stock option has been issued by the Company.

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xiii) Stock Market price data for the period 2013 – 2014

GSCL Price on BSE & NSE(Rupees)

Month BSE NSE

High Low High Low

April 2013 No Trading No Trading No Trading No Trading

May 2013 27.12 19.00 27.00 17.55

June 2013 24.00 15.85 24.00 15.95

July 2013 18.90 12.00 18.45 13.10

August 2013 14.75 12.25 14.85 12.20

September 2013 16.50 13.40 17.60 13.15

October 2013 16.99 13.52 16.75 13.50

November 2013 15.90 13.45 15.70 13.45

December 2013 14.65 13.20 14.85 13.25

January 2014 15.99 12.70 15.80 12.55

February 2014 13.63 12.30 13.50 12.10

March 2014 15.00 12.40 14.85 12.10

xiv) Stock Performance (Index)

The performance of the Company's shares in relation to Bombay Stock Exchange Sensex is given in the chart below:-

10000

15000

20000

25000

Apr'13

May'13

Jun'13

Jul'13

Aug'13

Sep'13

Oct'13

Nov'13

Dec'13

Jan'14

Feb'14

Mar'14

BSE Sensex

5.00

10.00

15.00

20.00

25.00

30.00

G S C L Share Price

April 2013 to March 2014

Plant Location :

“Sidheegram” Off Veraval – Kodinar Highway, Dist. Gir Somnath, Pin Code 362 276. Gujarat.

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(xv) Address for correspondence :1. Registered Office is situated at “Sidheegram”, off Veraval-Kodinar Highway, Pin Code 362 276, Dist. Gir Somnath, Gujarat2. Corporate Office : N. K. Mehta International House, 2nd Floor, 178 Backbay Reclamation, Mumbai 400 020.

E-mail id : [email protected]

Shareholder correspondence should be addressed to Registrars & Transfer Agent :

M/s. Link Intime India Pvt Ltd (Unit) Gujarat Sidhee Cement Ltd. C-13, Pannalal Silk Mills Compound, L. B. S. Marg, Bhandup (West), Mumbai 400 078. Tel.: 022-25963838, Fax: 022-25966969 Contact Person : Mr. Sharad Patkar

A separate E-mail ID : [email protected] has been created specifically for investor query / complaints.

Shareholders holding shares in electronic mode should address all their correspondence to their respective Depository Participant (DP) regarding change of address, change of Bank Account / Bank nomination etc.

A) NON MANDATORY REQUIREMENTS :

(a) Chairman’s Office :

The Corporate Office of the Company supports the Chairman in discharging the responsibilities.

(b) Shareholders Rights.

As the Company’s Financial Results are published in English Newspaper having circulation all over India and in a Gujarati Newspaper widely circulated in Gujarat, the same are not sent to each Shareholder.

(c) Audit Qualifications.

The Company did not have qualifications in the Auditors Report for the Financial Year ended 31st March 2014. The Company continues to adopt best practices to ensure regime of unqualified financial statements.

(d) Training of Board Members :

The Company’s Board of Directors comprise of professionals with expertise in their respective fields and industry. They endeavour to keep themselves abreast with changes in global economy and various legislations. .

(e) Mechanism for evaluation non-executive Board Members :

The Company does not have a mechanism to evaluate the performance of the Non-Executive Directors of the Company.

(f) Vigil Mechanism Policy

The Company at its Board Meeting held on 31.5.2014 has adopted Vigil Mechanism Policy for its Directors and Employees.

(g) Code for Prohibition of Insider Trading

Pursuant to the requirements of SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended, the Company has adopted a “Code for Prevention of Insider Trading”. Mrs. Anupama Pai, Vice President (Legal) & Company Secretary is the “Compliance Officer”. The Code of Conduct is applicable to all the Directors and designated employees.



DECLARATION OF COMPLIANCE WITH THE CODE OF CONDUCT.As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, the Board Members and the Senior Management have confirmed compliance with the Code of Conduct and Ethics for the financial year ended 31st March 2014.



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AUDITORS’ REPORT ON CORPORATE GOVERNANCETo

The Members

Gujarat Sidhee Cement Limited

We have examined the compliance of the conditions of Corporate Governance by GUJARAT SIDHEE CEMENT LIMITED (“the Company”) under Clause 49 of the Listing Agreement with Stock Exchanges for the Financial Year ended March 31, 2014.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to procedures and implementations thereof, adopted by the Company for ensuring compliance of the conditions of the Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and representations made by the Directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Manubhai & ShahChartered AccountantsFirm Registration No. 106041W

(K. C. PATEL)PartnerMembership No. 30083

Place: MumbaiDate: May 31, 2014

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MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Structure and Development

The all India cement production during the period April 2013 to March 2014 registered a cumulative growth of around 3 percent as against around 6 percent during the corresponding period of last year. The cumulative growth for the eight core industries (coal, crude oil, natural gas, refinery products, fertilisers, steel cement & electricity) remained same as previous year, at around 3 percent. The increase in capacity in Gujarat and Rajasthan during the last two years is around 22 percent and the surplus capacity, coupled with lower exports resulted in tough competition and is putting pressure on the sustained profitability of cement companies in Gujarat. There were a few new entrants in the cement producers, resulting in competitive pressures in the already fragmented market, in Gujarat as well as Rajasthan.

Future Outlook

With the stable political scenario and the sustained development strategies the need of infrastructure facilities and the housing needs of the population will enhance the consumption of cement further in the country. The long-term future of the cement industry is optimistic and positive. However, due to addition of new plants with large capacities, the capacity utilization would continue to be low. In the state of Gujarat, there is likely to be a large surplus of capacity over demand for the near future, which may affect the stability of cement prices. A large part of production therefore will need to be exported or transported to longer distances, in other states like Maharashtra, Karnataka and Kerala.

Opportunities & Threats

The decline in cement consumption in the state of Gujarat is likely to be reversed and is expected to give opportunities for growth in the cement industry.

Substantial increase in the prices of diesel and other petroleum products has adversely affected the raw material cost and cost of delivery. The rail freight continued to be high and the transportation by rail remains uneconomic. The additional restrictions imposed in buying of power from the energy exchange under Open Access are likely to increase the cost of power and the manufacturing cost of cement. The infrastructural constraints and high cost of handling of cement at public ports continue and Railway sidings continue to put pressure on the cost of delivery of cement.

Although, Gujarat state is likely to continue to be surplus in cement production, the Company can access coastal markets economically being close to the sea.

Segment Review and Analysis

During the year, the Company has produced and sold mainly cement of different varieties like Ordinary Portland Cement (OPC) and Portland Pozzolana Cement (PPC). The Company also sold clinker, which is intermediate product for the manufacture of cement. The bulk of the revenue and profitability comes from the sale of cement.

Risks and Concerns

Over capacity of cement versus the demand coupled with slow down in the export of cement is leading to tough market conditions and high levels of volatility in the profitability of cement business. The cost escalation of inputs likes diesel, fuel, power etc. and the high rates of government levies (excise, sales tax, octroi, local body tax and other miscellaneous levies) continue to be a major concern for our Company. The delay in getting the required mining lease for the additional mining areas is a great concern as the availability of good quality limestone has substantially reduced in the existing limestone mines.

Absence of railway siding and a port near the factory results in increase in cost of transportation to farther markets of Gujarat as well as the markets outside Gujarat. The Company proposes to set up a captive jetty to mitigate the risk.

Internal Control systems and their adequacy

Your Company has adequate internal control system and procedures commensurate with the size of its operation and nature of its business. The independent Internal Auditors continuously reviews the adequacy and effectiveness of the Internal Control systems on the on-going operations of the Company, which provides reasonable assurance of adequacy and effectiveness, control, governance and risk management procedures to the Audit Committee. The recommendations of the Internal Auditors and the Audit Committee are followed up effectively for implementation. Following objectives of the Internal Audit is forming part of the audit plan as approved by the Audit Committee.

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! Adherence to the operating system and manual.

! Performance of operating activities in efficient and effective manner.

! Compliance with the risk management procedures.

! Compliance with the legislative and regulatory provisions.

The Audit Committee reviews the audit reports and also hold discussions with the Statutory Auditors.

Human Resource Development / Industrial Relations

Company believes that its Human Resource is the most important resource and continues to work for its development. The Company continues to invest in upgrading the knowledge and skills of the employees. The Company is providing growth opportunities to internal talent by assigning them with higher responsibilities along with suitable exposure.

In view of people development as a key focus, the Company continues to take new initiatives to further align its HR policies to meet the growing needs of its business.

We have embarked up on employee engagement as a tool to create conducive working environment that will facilitate employee commitment.

The Industrial relations at the plant were cordial.

The Management places on record the contribution of employees at all levels during the year and their whole-hearted co-operation, which has resulted in improved results.

Corporate Social Responsibility

Health Care

GSCL plant has a health care center providing medical aid to the Company’s employees and the family members, workers as well as patients from the near by areas. The Company conducts various Immunization programmes, family welfare education, health care, safety as well as various periodical health check up and first aid training programmes for employees and workers.

Education

The Company’s plant has a full-fledged secondary school for the children of the employees and local people staying in nearby areas. In order to enable the children studying in English medium schools or Colleges in Veraval and nearby areas, the Company provides school bus facility.

Afforestation

The Company is committed to the protection of environment and maintenance of bio diversity. A green belt has been developed in the plant and nearby areas. Many saplings were planted at various places in the plant and mines area. The plant has also carried out rain water harvesting and this has increased ground water resources besides providing greenery.

Cautionary Statement

Statements in this report on Management’s Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws and regulations. The Statements are based on certain assumptions and expectation of future events. Actual results could however differ from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and domestic demand supply position, raw material, fuel, transport cost and availability, changes in Government regulations and tax structure, economic development in India.

The Company assumes no responsibility in respect of forward-looking statements, which may be amended or modified in future on the basis of subsequent developments, information or events.



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INDEPENDENT AUDITOR’S REPORT

To,The Members ofGujarat Sidhee Cement Limited

Report on the Financial StatementsWe have audited the accompanying financial statements of Gujarat Sidhee Cement Limited, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting standards referred to sub-section (3C) of Section 211 of the Companies Act, 1956 (the Act) read with General Circular 15/2013 dated September 13, 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;(b) in the case of the Profit and Loss Account, of the loss for the year ended on that date; and(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of MatterWe draw your attention to note 35(B)(5) to the financial statements, relating to remuneration paid in respect of the Executive Vice Chairman and Managing Director of the company for the financial year 2013-14, in excess of the limits prescribed under section 198 read with schedule XIII to the Act, which is subject to the approval of the Central Government. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor’s Report) Order, 2003 (“the Order”) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2 As required by section 227(3) of the Act, we report that:a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our

audit;b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those

booksc. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of

accountd. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred

to in subsection (3C) of section 211 of the Companies Act, 1956;e. on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none

of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For MANUBHAI & SHAHCHARTERED ACCOUNTANTS

Registration No.: 106041W

(K.C. PATEL)PLACE : MUMBAI PARTNERDATED : May 31, 2014 MEMBERSHIP NO. 30083

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ANNEXURE TO THE AUDITOR’S REPORTThe annexure referred to in our report to the members of Gujarat Sidhee Cement Limited (the Company) for the year ended March 31, 2014.

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period, which in our opinion is reasonable having regard to the size of the company and nature of its assets. Pursuant to the programme portion of fixed asset has been physically verified during the year by the management. According to the information and explanation given to us no material discrepancies were noticed on such verification;

(c) There has not been any significant disposal of fixed assets during the year.

2. (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) The Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification as compared to book records.

3. According to information and explanation given to us there are no parties covered in the register maintained under section 301 of the Companies Act, 1956, consequently reporting requirement as per clauses (iii) (b) to (d) as well as (f) and (G) of para 4 of the order are not applicable in case of the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In our opinion and as explained to us, there were no contracts and arrangements referred in Section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

6. The Company has not accepted deposits from the public within the meaning of section 58A of the Companies Act, 1956 and the Rules framed there under. We are informed that no order has been passed by the Company Law Board (‘the CLB’) or National Company Law Tribunal (‘the NCLT’) or Reserve Bank of India (‘the RBI’) or any Court or any other Tribunal.

7. Internal Audit has been carried out by an external agency. On the basis of reports of internal auditors, in our opinion the internal audit system is commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 related to the manufacture of cement, and are of the opinion that prima facie the prescribed accounts and records has been made and maintained.

9. (a) In our opinion and according to the information and explanation given to us, the company is generally regular in depositing undisputed statutory dues with the appropriate authorities in respect of provident fund, employees’ state insurance, wealth tax, investor education and protection fund, profession tax, royalty, cess and other material statutory dues applicable to it except there were some delays on few occasions in payment of Service Tax, Tax Deducted at Source, Income Tax, custom duty and Excise duty.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty, service tax, royalty and cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of wealth tax and cess which have not been deposited on account of any dispute. In respect of excise duty, customs duty, sales tax and income tax, details of disputed dues not deposited are given hereunder:

24

Name of the Statute Nature of the Dues Amount(Rs. In Lacs)

Period to which amount relates

Forum where dispute is pending

Central Excise Act, 1944 Excise Duty 36.72 1992-93 Customs, Excise & Service Tax Appellate Tribunal

Central Excise Act, 1944 Excise Duty 8.08 2008-09 TO2010-11

Customs, Excise & Service Tax Appellate Tribunal



Customs Act, 1962 Custom Duty 35.85 1995-96 Customs, Excise & Service Tax Appellate Tribunal



Central Excise / CENVAT Credit Rules, 2004

Service Tax 6.32 2007-08 Customs, Excise & Service Tax Appellate Tribunal


Service Tax 302.61 2009-10 Commissioner, Central Excise


Service Tax 162.70 2010-11 Commissioner, Central Excise

Income Tax Act, 1961 Income Tax Deducted at Source

1.50 2006-07 Commissioner, Income Tax

Income Tax Act, 1961 Assessment U/S 143 (3)


Income Tax Act, 1961 Income Tax Deducted at Source


Rajasthan Sales Tax Act, 1994

Sales Tax 24.73 1997-98 Rajasthan High Court

Gujarat Sales Tax Act,1961 Sales Tax 121.21 2002-03 to 2004-05 Joint Commissioner, Rajkot

Gujarat Value Added Tax Act, 2003

Value Added Tax 321.88 2006-07 & 2007-08 Tribunal, Gujarat Value Added Tax

10. The accumulated losses of the Company as at the end of the year are not more than fifty percent of its net worth. The Company has not incurred cash loss during the year as well as in the immediately preceding financial year.

11. In respect of term loans obtained from banks for purchase of vehicles, the company has not defaulted in repayment of dues to them.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society as per the Chit Fund Act, 1982 and other state legislations. Hence, reporting requirement as per clause 4(xiii) is not applicable.

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14 The company is not dealing or trading in shares, securities, debentures and other investments. However in respect of investment in shares and other securities proper records have been maintained. The shares and securities are held by the company in its own name.

15 According to the information and explanation given to us, the company has not provided guarantee for loans taken by others from banks and financial institutions. Hence, reporting requirement as per clause 4(xv) is not applicable.

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 According to records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have not, prima facie, been used for long term investment.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

19. There are no debentures issued and outstanding during the year.

20 During the year, the Company has not raised money by public issue(s).

21. To the best of our knowledge and belief, and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.




26

BALANCE SHEET AS AT MARCH 31, 2014PARTICULARS Note No. As at

March 31, 2014` In lacs

As atMarch 31, 2013

` In lacsI. EQUITY AND LIABILITIES

(1) Shareholder's funds(a) Share Capital 2 3,620.69 3,620.69 (b) Reserves and surplus 3 10,284.43 10,556.81

13,905.12 14,177.50

(2) Share Application Money Pending Allotment 4 500.00 -

(3) Non- current liabilities(a) Long-term borrowings 5 59.93 128.40 (b) Deferred tax liabilities (Net) 6 698.90 385.78 (c) Other long-term liabilities 7 503.81 499.15 (d) Long- term provisions 8 2,023.22 1,986.75

3,285.86 3,000.08 (4) Current liabilities

(a) Short- term borrowings 9 1,931.58 25.00 (b) Trade payables 10 7,341.98 7,208.45 (c) Other current liabilities 11 2,711.96 2,621.99 (d) Short-term provisions 12 140.39 900.57

12,125.91 10,756.01 TOTAL 29,816.89 27,933.60

II. ASSETS(1) Non Current Assets

(a) Fixed Assets (i) Tangible assets 13 12,010.54 7,866.54 (ii) Intangible assets 13 49.74 34.34 (iii) Capital work-in-progress 13 255.38 1,053.61 (b) Non-current investments 14 782.88 0.10 (c) Long-term loans and advances 15 2,662.11 2,558.82 (d) Other non-current assets 16 598.55 309.65

16,359.20 11,823.06 (2) Current Assets

(a) Current Investments 17 0.06 0.06 (b) Inventories 18 5,797.73 6,650.80 (c) Trade receivables 19 1,672.48 1,611.17 (d) Cash and cash equivalents 20 4,094.18 5,876.85 (e) Short-term loans and advances 21 1,739.27 1,700.18 (f) Other current assets 22 153.97 271.48

13,457.69 16,110.54 TOTAL 29,816.89 27,933.60 Significant Accounting Policies and Notes to Accounts 1 to 37

See accompanying Notes to Financial Statements As per our Report of even date attached For MANUBHAI & SHAHChartered AccountantsFirm Registration No. 106041W

For and on behalf of the Board of Directors

M. N. MehtaJay M. MehtaP. K. BehlM. S. GilotraV. R. MohnotAnupama Pai

ChairmanExecutive Vice ChairmanDirectorManaging DirectorCFOVice President (Legal) & Company Secretary

(K.C. PATEL)PartnerMembership No. 30083

Place : MumbaiDate : May 31, 2014


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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2014PARTICULARS Note No. For the year ended


For the year ended March 31, 2013

` In lacs1 Revenue from operations 23 45,820.23 50,033.26

Less : Excise Duty 4,845.31 5,462.14 40,974.92 44,571.12

2 Other income 24 817.00 757.23 3 Total Revenue (1+2) 41,791.92 45,328.35

4 Expenses :a. Cost of material consumed 25 5,074.49 5,327.24 b. Changes in inventories of finished goods, work-in-progress and stock-in-trade

26 537.78 (190.29)

c. Employee benefits expenses 27 2,680.76 2,291.99 d. Finance cost 28 299.53 171.64 e. Depreciation and amortisation expenses 13 766.29 652.76 f. Other expenses 29 32,392.33 32,147.56 Total Expenses 41,751.18 40,400.90

5 Profit before exceptional and extraordinary items and tax (3-4) 40.74 4,927.45 6 Exceptional items 30 - 857.33 7 Profit before tax (5+6) 40.74 5,784.78 8 Tax expense:

a. For the Current Year (i) Current tax 5.24 1,157.41 (ii) MAT Credit Entitlement (5.24) (1,092.94) (iii) Deferred Tax Charge 313.12 1,689.15 b. Relating to earlier years (i) Current tax 203.36 - (ii) MAT Credit Entitlement (203.36) -

313.12 1,753.62 9 Profit / (Loss) for the year (7-8) (272.38) 4,031.16 10 Earnings per equity share: 31

a. Basic - ` per share (0.75) 11.15 b. Diluted - ` per share (0.75) 11.15 Significant Accounting Policies and Notes to Accounts 1 to 37








28

CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014 PARTICULARS For the Year ended


For the Year ended March 31, 2013

` In lacsA. CASH FLOW FROM OPERATING ACTIVITIES

NET PROFIT BEFORE TAX AND EXTRAORDINARY ITEMS 40.74 5,784.78 Adjustments for Depreciation 766.29 652.76 Finance Cost 299.53 171.64 Interest Income (495.90) (513.94) Loss of sale / discard of fixed assets 7.18 17.41 Profit on sale of fixed assets (0.15) (0.77) Provision for doubtful debtors and advances (Net) (15.77) (7.63)OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 601.92 6,104.25 Adjustments for Trade and other receivables 510.77 312.60 Inventories 853.07 (1,094.01) Trade payable (500.21) 397.36 CASH GENERATED FROM OPERATIONS 1,465.55 5,720.20 Income-tax paid (595.40) (801.71)NET CASH FLOW FROM OPERATING ACTIVITIES 870.15 4,918.49

B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (4,139.78) (1,726.44) Investment in Shares and OCD of Subsidiary Company (782.78) - Interest Income 495.90 513.94 Advance to parties for capital expenditure (103.29) (390.43) Sale of fixed / discarded assets 5.28 24.71 Fixed deposits and interest accrued (171.39) 65.59 NET CASH FLOW FROM INVESTING ACTIVITIES (4,696.06) (1,512.63)

C. CASH FLOW FROM FINANCING ACTIVITIES Long / Short Term Borrowings (Net) 1,842.77 (488.44) Finance Cost (299.53) (171.64) Equity Share Application money 500.00 - NET CASH FLOW FROM FINANCING ACTIVITIES 2,043.24 (660.08)

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (1,782.67) 2,745.78 CASH AND CASH EQUIVALENTS AS ON 01.04.2013 5,876.85 3,131.07 CASH AND CASH EQUIVALENTS AS ON 31.03.2014 4,094.18 5,876.85

Note: 1. Cash Equivalents includes ` 4,092.89 lacs; previous period ` 5,875.72 lacs being Bank Balances and Fixed Deposits with Banks.2. Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard - 3 notified under Companies (Accounting Standards) Rules, 2006.3. Figures in bracket indicate Cash Outflow.








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Note No. 1STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES :1.1 Basis of Accounting :

The financial statements are prepared as under :

(a) on the historical cost convention,

(b) on a going concern basis,

(c) in accordance with the generally accepted accounting principles,

(d) on an accrual system of accounting,

(e) in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 which have been prescribed by the Companies (Accounting Standards) Rules, 2006 read with General Circular 15/2013 dated 13th September, 2013 issued by Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

1.2 Use of Estimates:

The preparation of the financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting year, the reported amounts of assets and liabilities and the disclosures of contingent liabilities as on the date of the financial statements. Examples of such estimates include useful life of Fixed Assets, provision for doubtful debts/ advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognised in the year in which the results are known / materialised.

1.3 Revenue Recognition :

The Company generally follows accrual system of accounting as required under Section 209(3) (b) of the Companies Act, 1956. However, considering uncertainties and / or difficulties involved in estimation of liabilities and / or final determination of refund claims filed by the Company, the following items are considered to be accrued and accounted only when settled or agreed to with the party and / or receipts of amount.

(a) Claim against Railways for shortages / damages for cement in transit

(b) Insurance Claims

(c) Scrap Sales

(d) Octroi Refund Claims

1.4 Fixed Asset and Depreciation :

(a) Fixed assets include all expenditure of capital nature and are stated at cost (net of Cenvat, wherever applicable) less accumulated depreciation.

(b) Depreciation on fixed assets is provided on straight-line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

(c) In respect of addition and sales of assets during the year, depreciation is provided on prorata monthly basis.

(d) Intangible assets are stated at cost of acquisition less accumulated amortisation and accumulated impairment loss, if any. Amortisation is provided over their respective individual estimated useful lives on the straight line basis commencing from the year of assets available for use to the Company.

1.5 Impairment of Fixed Assets :

(a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company’s fixed assets. If any indication exists, an asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exists or have decreased.

1.6 Investments :

Investments that are intended to be held for more than a year from the date of acquisition are classified as long-term investments and are stated at its cost of acquisition. Diminution, other than temporary, in the value of such investments is provided. Investments other than long-term investments, being current investments, are valued at the lower of cost and fair value, determined on an individual basis, including held by the Subsidiaries for long-term purposes is provided. Diminution in the value of other investments is provided.

30

1.7 Inventories :

(a) Inventories are stated at cost or net realizable value, whichever is lower. For this purpose cost has been arrived at on the basis of moving weighted average. Cost of finished goods include all direct cost, other related factory overheads and excise duty.

(b) Provision for obsolescence is made wherever considered necessary.

1.8 Sales :

(a) Sales figures are inclusive of excise duty, but are net of sales tax, sales returns and rate difference adjustment.

(b) Export sales are accounted on the basis of the rate of foreign exchange prevailling on dates of bills of lading / mate receipts.

(c) Export benefits on account of entitlement to import duty free materials are recognized in the year of export.

1.9 Foreign Currency Transactions :

Transactions of foreign currency are recorded at the exchange rate as applicable at the date of transaction. Monetary Assets / liabilities outstanding at the close of the financial year are stated at the contracted and / or appropriate exchange rate at the close of the year and the gain / loss is credited / charged to Statement of Profit & Loss.

1.10 Employee Benefits :

(a) Short term employee benefits are charged off in the year in which the related service is rendered.

(b) Post employment employee benefits under defined contribution plans are charged off in the year in which the employee has rendered services. In respect of Defined Benefit Plans, the amount charged off is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Statement of Profit & Loss.

1.11 Provisions, Contingent Liabilities and Contingent Assets :

(a) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

(b) Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date in accordance with the Accounting Standard AS-29 on “Provisions, Contingent Liabilities And Contingent Assets” notified under the Companies (Accounting Standards) Rules, 2006.

1.12 Borrowing Cost :

Borrowing costs, attributable to the acquisition / construction of qualifying assets, are capitalized. Other borrowing costs are charged to Statement of Profit and Loss.

1.13 Taxation :

(a) Income tax charge or credit comprises current tax and deferred tax charge or credit.

(b) Current Income tax is measured at the amount expected to be paid to Tax authorities in accordance with the Income Tax Act, 1961.

(c) Deferred tax asset or liability on timing difference are recognised using current rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised to the extent there exists a virtual certainty that these assets can be realised in future. Deferred tax assets and liabilities are reviewed at each Balance Sheet date.

(d) Minimum Alternate Tax (MAT) Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT Credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Statement of Profit and Loss and shown as MAT credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

1.14 General :

Accounting policies not specifically referred to are consistent with generally accepted accounting practice.

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Notes to Balance Sheet :Note No.

Particulars As on 31.03.2014

As on 31.03.2013

2 Share Capital ` In lacs ` In lacs(a) Authorized : 50,00,00,000 Equity Shares of ` 10 each 50,000.00 50,000.00 (b) Issued : 14,48,16,075 Equity Shares of ` 10 each 14,481.61 14,481.61 (c) Subscribed : 3,62,03,932 Equity Shares of ` 10 each 3,620.39 3,620.39 (d) Paid up : 3,61,53,852 Equity Shares of ` 10 each 3,615.39 3,615.39 Add : Forfeited Shares 5.30 5.30 Total Share Capital 3,620.69 3,620.69

(e) Rights, preferences and restrictions :

(i) The Company has only one class of equity shares referred to as Equity shares having a par value of ` 10. Each holder of equity share is entitled to one vote per share.

(ii) Dividends, if any, is declared and paid in Indian Rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(iii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive residual assets of the Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

(f) Details of shares in the Company held by each shareholder holding more than 5 per cent shares :

S.No. Name of the Shareholder No. of shares % of shareholding

No. of shares % of shareholding

1 The Arj Investments Ltd. 4,557,379 12.61 - - 2 Gujarat Industrial and Investment

Corporation Ltd. 2,063,174 5.71 2,063,174 5.71

(g) Reconciliation of Paid up Share Capital : ` In lacs ` In lacsOpening Balance 3,615.39 14,461.54 Less : Reduction in Share Capital in terms of BIFR's order* - 10,846.15 Closing Balance 3,615.39 3,615.39 * See Note No. 34

3 Reserves and Surplus ` In lacs ` In lacs(a) Capital Reserves

(i) Capital Reserve Govt. Subsidy 26.95 26.95 (ii) Capital Reserve - Capital Reduction Account* 6,921.68 6,921.68

6,948.63 6,948.63 (b) Surplus / (Deficit) in the Statement of Profit and Loss

Opening Balance 3,608.18 (3,924.48)Add : Adjustment against Share Capital* - 3,924.48 Add : Surplus / (deficit) for the year (272.38) 4,031.16 Less : Proposed Dividend - (361.54)Less : Tax on Proposed Dividend - (61.44)Closing balance 3,335.80 3,608.18 * See Note No. 34 10,284.43 10,556.81

4 Share Application Money Pending AllotmentShare Application Money * 500.00 -

500.00 -

*As stated in note no. 34 pursuant to the order of Hon'ble BIFR, the Company has received share application money from a Promoter Company. 50,00,000 equity shares have been alloted at par on May 09, 2014.

32

As on 31.03.2014

As on 31.03.2013

5 Long-term Borrowings ` In lacs ` In lacs(a) Term loans, Secured • from banks 5.18 26.16 • from other parties 54.75 102.24

59.93 128.40

Term loans from HDFC Bank Ltd., Yes Bank Ltd. and NBFCs in respect of finance availed for purchase of vehicles are secured by hypothecation of vehicles financed by them. The Loans are repayable in monthly equated installments over 3 to 5 years.

6 Deferred Tax Liabilities / Assets

In accordance with Accounting Standard 22 “Accounting for Taxes on Income” notified under the Companies (Accounting Standards) Rules, 2006, the Company has reviewed its Deferred Tax Liabilities (DTL) and Deferred Tax Assets (DTA) upto March 31, 2014.

Accordingly the Company has computed Deferred Tax Assets of ` 822.59 Lacs and Deferred Tax Liabilities of ` 1,521.49 Lacs as on March 31, 2014 on the following items of timing differences :

a. Deferred Tax Assets : ` In lacs ` In lacs

Accrued Expenses deductible on cash basis 207.32 459.14

Provision for Doubtful debts & advances 149.24 159.48

Unabsorbed Depreciation 466.03 -

Total 822.59 618.62

b. Deferred Tax Liabilities:

Difference between WDV of fixed assets as per the Income-tax Act,1961 and the Companies Act, 1956

1,521.49 1,004.40

Total 1,521.49 1,004.40

c. Net Deferred Tax (Liability)/ Assets (a – b) (698.90) (385.78)

7 Other Long-term Liabilities ` In lacs ` In lacs

Deposits 503.81 499.15

503.81 499.15

8 Long-term provisions ` In lacs ` In lacs

(a) Provision for employee benefits.

(i) Gratuity 516.92 515.37

(ii) Privilege Leave 159.44 165.44

(b) Others 1,346.86 1,305.94

2,023.22 1,986.75

The Company's gratuity plan and leave encashment are not funded. The following table sets out the status of the gratuity plan and Leave Encashment as required under Accounting Standard 15 "Employee Benefits" and the reconciliation of opening balances of the present value of the defined benefit obligation.

I Changes in Present Value of Obligations:

Particulars For the year endedMarch 31, 2014

For the year endedMarch 31, 2013

Gratuity PL Encashment Gratuity PL Encashment

` In lacs ` In lacs ` In lacs ` In lacs

Present Value of Obligation as at the beginning of the year 574.36 219.84 493.17 231.65

Current Service Cost 27.36 18.27 24.67 16.12

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For the year endedMarch 31, 2013

Interest Cost 45.95 17.59 41.92 19.69

Actuarial (gain) / Loss on obligations (20.35) 9.20 42.58 (17.12)

Benefits paid (44.37) (40.00) (27.98) (30.49)

Present value of Obligation as at the end of the year 582.95 224.90 574.36 219.84

II The amount recognised in Balance Sheet:

Present value of Obligation as at the end of the year 582.95 224.90 574.36 219.84

Fair Value of Plan Assets at the end of the year - - - -

Net Liability recognized in Balance sheet 582.95 224.90 574.36 219.84

III Amount recognised in Statement of Profit and Loss :

Current Service Cost 27.36 18.27 24.67 16.12

Interest Cost 45.95 17.59 41.92 19.69

Net Actuarial (Gain) / Loss recognised in the year (20.35) 9.20 42.58 (17.12)

Expenses Recognized in the statement of Profit & Loss 52.96 45.06 109.17 18.69

IV Assumptions:

Mortality Table (Indian Assured Life Mortality)

2006-08 2006-08 2006-08 2006-08

Discount Rate 8.00% 8.00% 8.50% 8.50%

Rate of increase in compensation levels 5.50% 5.50% 5.50% 5.50%

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

As on 31.03.2014

As on 31.03.2013

9 Short-term borrowings ` In lacs ` In lacs

Loans repayable on demand - Secured

• from banks 1,931.58 25.00

1,931.58 25.00

The overdraft from bank is secured against pledge of FDRs of ` 3,212.08 lacs (previous year ` 3,227.71 lacs) and repayable on demand.

10 Trade Payables ` In lacs ` In lacs

Trade Payable 7,341.98 7,208.45

7,341.98 7,208.45

Trade Payable includes dues to small and medium enterprises, which require the following disclosure in accordance with Section 22 of Micro, Small and Medium Enterprises Development Act, 2006 :

i. Principal amount remaining unpaid and interest thereon 351.93 250.12

ii. Interest paid in terms of Section 16 - -

iii. Interest due and payable for the period of delay in payment - -

iv. Interest accrued and remaining unpaid - -

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

34

As on 31.03.2014

As on 31.03.2013

11 Other current liabilities ` In lacs ` In lacs

(a) Current maturities of long-term debt

(i) Financial Institutions - 11.59

(ii) Banks 27.85 73.67

(iii) Others 47.49 63.95

(b) Interest accrued and due on borrowings from a Financial Institution - 30.94

(c) Advance from customers 1,561.99 1,251.69

(d) Statutory dues 858.80 767.06

(e) Due to Banks in Current Account - 247.08

(f) Unpaid Dividend 14.47 -

(g) Other liabilities 201.36 176.01

2,711.96 2,621.99

12 Short-term provisions ` In lacs ` In lacs

(a) Provision for Gratuity- Current 66.03 58.99

(b) Provision for Leave encashment - Current 65.46 54.40

(c) Provision for Taxation (Net of Advance Tax paid in previous year ` 801.71 lacs) 8.90 364.20

(d) Proposed Dividend - 361.54

(e) Tax on Proposed Dividend - 61.44

140.39 900.57

40thAnnualReport

35

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36

As on 31.03.2014

As on 31.03.2013

14 Non-current investments ` In lacs ` In lacsLong Term (At Cost)(a) Investment in Equity Instrument (Quoted) :

100 equity shares of ` 10/- each in Saurashtra Cement Limited 0.02 0.02

(b) Investment in Subsidiary Company (Unquoted) :43,17,022 Equity shares in Villa Trading Company Private Limited of ` 10/- each 432.78 - 70,00,000 Optionally Convertible Debentures of Villa Trading Company Private Limited of ` 100/- each, ` 5/- paid up

350.00 -

(c) Other Investment (Unquoted) :6 Years National Savings Certificates 0.08 0.08 (Kept as security deposit with Government authorities)

782.88 0.10 Aggregate Market Value of Quoted Investments 0.02 0.02

15 Long-term loans and advances ` In lacs ` In lacs(a) Capital Advances, considered good 82.29 143.37 (b) Security Deposits, considered good 830.59 1,289.25 (c) MAT Credit Entitlement 1,312.23 1,092.94 (d) Taxes paid in Advance 432.41 7.41 (e) VAT refund receivable 4.59 - (f) Other loans and advances (i) Considered Good - 25.85 (ii) Considered Doubtful 323.92 323.92 Less : Provision for Doubtful Advance (323.92) (323.92)

2,662.11 2,558.82

16 Other non-current assets ` In lacs ` In lacs

(a) Fixed deposits with banks maturing after 12 months

Of the above fixed deposits of ` 598.55 lacs (Previous year ` 109.65 lacs) kept as margin money against guarantees issued by the banks.

598.55 309.65

598.55 309.65

17 Current Investments ` In lacs ` In lacs

Investments in Government securities :

6 Years National Savings Certificates 0.06 0.06

(Kept as security deposit with Government authorities)

0.06 0.06

18 Inventories ` In lacs ` In lacs

(a) Raw materials 140.37 374.13

(b) Work-in-progress 1,234.89 1,422.95

(c) Finished goods 327.39 677.11

(d) Stores and spares (includes stores and spares in transit of ` 1.84 lacs, previous year ` Nil)

4,095.08 4,176.61

5,797.73 6,650.80

40thAnnualReport

37

As on 31.03.2014

As on 31.03.2013

19 Trade Receivables (unsecured) ` In lacs ` In lacs

(a) Outstanding for a period exceeding six months - considered good 350.34 470.92

(b) Others - considered good 1,322.14 1,140.25

(c ) Doubtful 127.92 143.69

1,800.40 1,754.86

Less : Provision for Doubtful Debts (127.92) (143.69)

1,672.48 1,611.17

20 Cash and Bank Balances ` In lacs ` In lacs

(a) Cash and cash equivalent

(i) Balances with banks in current and fixed deposits 732.03 5,358.19

(ii) Cash on hand 1.29 1.13

733.32 5,359.32

(b) Other Bank Balances

(i) Earmarked Balances with Bank 14.47 -

(ii) Fixed Deposits with Banks held as margin money against overdraft and guarantees 3,346.39 517.53

4,094.18 5,876.85

21 Short-term loans and advances ` In lacs ` In lacs

(a) Unsecured, Considered Good

(i) Taxes paid in advance (net of provision of ` 1366.01 lacs ) 68.30 -

(ii) Advance against purchase of Stores and Spares 215.68 109.66

(iii) Cenvat and Service Tax Receivable 1,012.88 661.99

(iv) Others 442.41 928.53

(b) Unsecured, Considered Doubtful

(i) Advance against purchase of Stores and Spares 1.60 1.60

1,740.87 1,701.78

Less : Provision for Doubtful Advance (1.60) (1.60)

1,739.27 1,700.18

22 Other current assets ` In lacs ` In lacs

Interest accrued but not due on Fixed Deposits 153.97 271.48

153.97 271.48

38

NoteNo. Particulars For the year ended

March 31, 2014For the year ended

March 31, 201323 Revenue from Operations : ` In lacs ` In lacs

(a) Sale of products; (i) Cement 43,042.33 49,514.20 (ii) Clinker 2,526.58 333.00

(b) Other operating revenues(i) Sale of other products / scrap 250.46 160.69 (ii) Railway Claim for Cement Shortage 0.86 16.89 (iii) Export Entitlement - 8.48

45,820.23 50,033.26 Less: (c) Excise duty 4,845.31 5,462.14

40,974.92 44,571.12

24 Other Income ` In lacs ` In lacs(a) Interest Income 495.90 513.94 (b) Insurance claim 17.31 19.99 (c) Profit on sale of fixed assets 0.15 0.77 (d) Excess provision written back 97.04 150.09 (e) Sundry creditors written back 112.63 36.67 (f) Provision for doubtful debts written back 30.13 11.51 (g) Miscelloneous Income 63.84 24.26

817.00 757.23

25 Cost of material consumed ` In lacs ` In lacs(a) Raw materials * Opening Stock of Raw Materials 374.13 266.71 Add: Purchases 1,357.46 2,111.29 Less: Closing Stock of Raw Materials 140.37 374.13

1,591.22 2,003.87 (b) Royalty, Cess and Limestone raising cost (i) Limestone raising and Transportation 1,032.67 906.55 (ii) Royalty 818.06 805.65 (iii) Welfare cess 16.19 16.08

1,866.92 1,728.28 (c) Packing material Opening Stock of Packing Materials 94.24 72.36 Add: Purchases 1,633.59 1,616.97 Less: Closing Stock of Packing Materials 111.48 94.24

1,616.35 1,595.09 Total material consumed 5,074.49 5,327.24

* Details of Raw Material Consumed (i) Limestone and Marl excavated by the Company - - (ii) Gypsum 790.69 902.96 (iii) Fly Ash 338.35 530.66 (iv) Purchase of Clinker - 170.78 (v) Others 462.18 399.47

1,591.22 2,003.87

Notes to Statement of Profit and Loss:

40thAnnualReport

39



26 Change in inventories of finished goods, work-in-progress and stock in trade ` In lacs ` In lacs

(a) Opening stock of inventories

Finished Goods - Cement 677.11 744.03

Work-in-progress - Raw Flour and Clinker 1,422.95 1,165.74

(b) Closing Stock of inventories

Finished Goods - Cement 327.39 677.11

Work-in-progress - Raw Flour and Clinker 1,234.89 1,422.95

(Increase)/ decrease in inventories 537.78 (190.29)

27 Employee Benefits Expense ` In lacs ` In lacs

(a) Salaries and wages 2,324.64 2,003.16

(b) Contribution to provident and other funds 202.23 161.58

(c) Staff Welfare Expenses 153.89 127.25

2,680.76 2,291.99

28 Finance Cost ` In lacs ` In lacs

Interest

(a) On Borrowings 165.15 115.11

(b) On Income Tax 95.15 -

(c) On Others 39.23 56.53

299.53 171.64

29 Other expenses ` In lacs ` In lacs

(a) Power and fuel 17,687.41 18,654.42 (b) Stores and spares consumed 2,568.14 2,780.38 (c) Repair and maintenance* 1,204.63 1,063.12 (d) Insurance 110.44 102.32 (e) Rent 166.48 129.39 (f) Rates and taxes 31.48 30.86 (g) Payment to auditors** 8.82 9.20 (h) Directors' sitting fees 13.20 8.80 (i) Loss on sale/discard of assets 7.18 17.41 (j) Bad Debts written off 21.18 - (k) Provision for doubtful debt 14.36 5.39 (l) Wealth Tax 8.90 8.50 (m) Travelling and conveyance expenses 547.59 493.85 (n) Exchange rate fluctuation 206.56 119.38 (o) Legal and Professional Expenses 274.83 162.73 (p) Freight 6,576.81 5,519.35 (q) Commission and discounts 872.79 825.85

(r) Selling expenses 1,280.91 1,457.07

(s) Miscellaneous Expenses 790.62 759.54

32,392.33 32,147.56

40

*Repairs and maintenance

(a) Repairs to buildings. 12.16 64.67

(b) Repairs to machinery. 471.58 635.92

(c ) Others 720.89 362.53

1,204.63 1,063.12

** Payments to the auditors

(a) For Statutory Audit 5.50 5.50

(b) For Tax Audit 2.00 2.00

(c) For Other services 1.32 1.70

8.82 9.20

30 Exceptional Items

Interest on Deposit and reversal of provision for ED - 857.33

- 857.33

31 Earning Per Share:

(a) Net Profit after Tax (` in lacs) (272.38) 4,031.16

(b) Total Weighted Average Number of Shares for Basic Earning 36,153,852 36,153,852

(c) Basic Earning per share in rupees (0.75) 11.15

(d) Total Weighted Average Number of Shares for Diluted Earning 36,208,647 36,153,582

(e) Diluted Earning per share in rupees (0.75) 11.15

32 a) Value of imports calculated on C.I.F. basis by the company during the financial year in respect of

` In lacs ` In lacs

(i) Components and spare parts 450.03 411.89

(ii) Capital goods 963.57 131.51

b) Expenditure in foreign currency during the financial year on account of

(i) Professional and Consultation fees 34.91 4.42

(ii) Others 218.02 260.27

c) Total value of all imported raw materials, spare parts and components consumed during the financial year and the total value of all indigenous raw materials, spare parts and components similarly consumed and the percentage of each to the total consumption.

` In lacs Percentage ` In lacs Percentage

(i) Imported 379.60 14.78 381.58 13.72

(ii) Indigenous 2,188.54 85.22 2,398.80 86.28

2,568.14 100.00 2,780.38 100.00

d) Earnings in foreign exchange ` In lacs ` In lacs

Export of goods calculated on F.O.B. basis 67.83 146.53

40thAnnualReport

41



33 Contingent liabilities and commitments ` In lacs ` In lacs

(to the extent not provided for)

(a) Contingent liabilities

(i) Claims against the company not acknowledged as debt 807.18 807.18

(ii) Other money for which the company is contingently liable - Matter under dispute

- Excise duty 55.53 55.53

- Customs 261.39 37.09

- Service Tax 472.20 540.32

- Rajasthan Sales Tax 24.73 24.73

- Gujarat Sales Tax 112.94 112.94

- Gujarat VAT 311.84 311.84

- Income-tax 1,226.03 1,247.06

- Octroi 140.98 140.98

(b) Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances of ` 20.80 lacs; previous year ` 84.54 lacs)

143.01 1,816.04

(ii) Uncalled liability on partly paid debentures 6,650.00 Nil

34 Hon’ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its order dated 23.10.2012 inter-alia held that the company’s net worth has turned positive as on 31.3.2010 and consequent thereto, the company has been discharged from Board for Industrial and Financial Reconstruction (BIFR). However, in the same order, Hon’ble AAIFR has reiterated its decision in M/s.Kunal Virenchee Sagar case holding that the BIFR’s jurisdiction continues un-interrupted and the BIFR is competent to exercise its jurisdiction under Section 18(5) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and remanded the matter to BIFR.

Hon’ble BIFR vide its order dated 6.12.2012 issued on 16.1.2013 sanctioned the Modified Draft Rehabilitation Scheme of the company inter-alia consisting of following main points :(i) Reduction of paid up capital by 75%.(ii) Fresh infusion of equity capital of ̀ 50 crores consisting of 5 crore equity shares of ̀ 10/- each at par to the Promoters, associates

etc. (iii) To complete the jetty at revised cost of ` 59.72 crores. In compliance to the aforesaid order, in the year 2012-13 the Company’s paid up Share Capital was reduced by 75% (Seventy

five percent) from ` 1,44,61,54,080/- consisting of 14,46,15,408 fully paid up Equity Shares of ` 10/- each to ` 36,15,38,520/- consisting of 3,61,53,852 fully paid up Equity Shares of ` 10/- each as at 25.2.2013, being the Record Date. The amount of reduction in capital of ` 10,846.16 lacs was adjusted towards accumulated losses of ` 3,924.48 lacs as on 31.3.2012 and balance amount of ` 6,921.68 lacs was credited to Capital Reserve account. During the year, the promoters have brought in ` 500 lacs equity share capital at par.

35 (A) Related Parties Disclosure:(a) Promoter companies together with its subsidiaries and associate companies holding more than 20% of the Equity Capital :

1 Ria Holdings Ltd.*2 Pranay Holdings Ltd.*3 Reeti Investments Ltd.*4 Prachit Holdings Ltd.*5 Sumaraj Holdings Pvt. Ltd.6 Sunnidhi Trading Pvt. Ltd.7 Shree Anandeya Investment Pvt. Ltd.8 Sameta Export Pvt. Ltd.9 Pallor Trading Company Pvt. Ltd.

10 The Arj Investments Limited11 Treasurer's Trading Limited

42

12 Gujarat Industrial Investment Corp. Ltd.13 Industrial Construction Limited (holding company of Sr. No. 9)14 Samja Maurtius Limited (holding company of Sr. No.

10)15 Bhadra Consultancy Private Limited

*10,35,912 shares held as security by a bank in bank's name for financial assistance granted.

(b) Subsidiary Company:Villa Trading Company Private Limited

(c) Name of Key Management Personnel :1 Mr. Jay Mehta Executive Vice Chairman2 Mr. M. S. Gilotra Managing Director

(d) Name of a company in which policies are controlled by common key management personnel: Saurashtra Cement Limited

(B) Disclosure of Related Parties Transactions :



` In lacs ` In lacs1 Investment in Equity Share of Villa Trading Co. Pvt.

Ltd. 432.78 -

2 Investment in OCD of Villa Trading Co. Pvt. Ltd. 350.00 - 3 Remuneration to Mr. Jay Mehta 267.09 24.38 4 Remuneration to Mr. M S Gilotra 130.98 119.48

5 In view of inadequacy of profit for the year 2013-14, remuneration paid by the Company to Mr. Jay Mehta and Mr. M S Gilotra was in excess of the limit prescribed under Sections 198 and 309 read with Schedule XIII to the Companies Act, 1956. Pending approval of the Central Government an amount of ` 302.99 lacs is being held in trust by them.

6 Particulars of transactions with Saurashtra Cement Ltd. The transactions are disclosed in aggregate value for the year:Particulars For the year ended

March 31, 2014For the year ended

March 31, 2013` In lacs ` In lacs

Purchase of Goods & materials 27.42 203.49 Sale of Goods & materials 4,621.54 2,948.45 Services received / (rendered) [Net] 46.94 32.39 Outstanding Receivable/(Payable) 149.10 29.92

36 The Company has only one business segment ‘Cement / Clinker’ as primary segment.

37 The previous year's figures have been regrouped / rearranged so as to conform to the current year's figures.

As per our Report of even date attached

For MANUBHAI & SHAHChartered AccountantsFirm Registration No. 106041W







40thAnnualReport

43

INDEPENDENT AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To,The Board of Directors ofGujarat Sidhee Cement Limited

Report on the Consolidated Financial StatementsWe have audited the accompanying consolidated financial statements of Gujarat Sidhee Cement Limited (“the Company”) and its subsidiary (collectively referred to as “the group”), which comprise the consolidated Balance Sheet as at March 31, 2014, the Consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the consolidated Financial StatementsManagement is responsible for the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the group in accordance with the accounting principles generally accepted in India including the Accounting standards referred to sub-section (3C) of Section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated September 13, 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the consolidated financial statements that give true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the consolidated Balance Sheet, of the state of affairs of the group as at March 31, 2014.(b) in the case of the consolidated statement of Profit and Loss, of the loss for the year ended on that date; and(c) in the case of the consolidated Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of MatterWe draw your attention to note 34(B)(3) to the financial statements, relating to remuneration paid in respect of the Executive Vice Chairman and Managing Director of the company for the financial year 2013-14, in excess of the limits prescribed under section 198 read with section 309 of the Act, which is subject to the approval of the Central Government. Our opinion is not qualified in respect of this matter.

Other MattersWe did not audit the financial statements of the subsidiary – Villa Trading Company Private Limited whose financial statements reflect total assets of ` 791.39 Lacs as at March 31, 2014. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management, and our opinion is based solely on the reports of the other auditors. Our opinion is not qualified in respect of other matters.




44

CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2014` In lacs

PARTICULARS Note No. As atMarch 31, 2014

I. EQUITY AND LIABILITIES(1) Shareholder's funds

(a) Share Capital 2 3,620.69 (b) Reserves and surplus 3 10,292.97

13,913.66

(2) Share Application Money Pending Allotment 4 500.00

(3) Non- current liabilities(a) Long-term borrowings 5 59.93 (b) Deferred tax liabilities (Net) 6 698.90 (c) Other long-term liabilities 7 503.81 (d) Long- term provisions 8 2,023.22

3,285.86 (4) Current liabilities

(a) Short- term borrowings 9 1,931.58 (b) Trade payables 10 7,342.05 (c) Other current liabilities 11 2,711.96 (d) Short-term provisions 12 140.39

12,125.98 TOTAL 29,825.50

II. ASSETS(1) Non Current Assets

(a) Fixed Assets (i) Tangible assets 13 12,010.54 (ii) Intangible assets 13 49.74 (iii) Capital work-in-progress 13 255.38 (b) Non-current investments 14 428.63 (c) Long-term loans and advances 15 2,673.62 (d) Other non-current assets 16 598.55

16,016.46 (2) Current Assets

(a) Current Investments 17 0.06 (b) Inventories 18 5,797.73 (c) Trade receivables 19 1,672.48 (d) Cash and cash equivalents 20 4,445.53 (e) Short-term loans and advances 21 1,739.27 (f) Other current assets 22 153.97

13,809.04 TOTAL 29,825.50 Significant Accounting Policies and Notes to Accounts 1 to 35

See accompanying Notes to Consolidated Financial Statements As per our Report of even date attached For MANUBHAI & SHAHChartered AccountantsFirm Registration No. 106041W







40thAnnualReport

45

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2014` In lacs

PARTICULARS Note No. For the year ended March 31, 2014

1 Revenue from operations 23 45,820.23

Less : Excise Duty 4,845.31

40,974.92

2 Other income 24 817.00

3 Total Revenue (1+2) 41,791.92

4 Expenses :

a. Cost of material consumed 25 5,074.49

b. Changes in inventories of finished goods, work-in-progress and stock-in-trade 26 537.78

c. Employee benefits expenses 27 2,680.76

d. Finance cost 28 299.53

e. Depreciation and amortisation expenses 13 766.29

f. Other expenses 29 32,392.37

Total Expenses 41,751.22

5 Profit before tax (3-4) 40.70

6 Tax expense:

a. For the Current Year

(i) Current tax 5.24

(ii) MAT Credit Entitlement (5.24)

(iii) Deferred Tax Charge 313.12

b. Relating to earlier years

(i) Current tax 203.36

(ii) MAT Credit Entitlement (203.36)

313.12

7 Profit / (Loss) for the year (5-6) (272.42)

8 Earnings per equity share: 30

a. Basic - ` per share (0.75)

b. Diluted - ` per share (0.75)

Significant Accounting Policies and Notes to Accounts 1 to 35

See accompanying Notes to Consolidated Financial Statements As per our Report of even date attached








46

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2014

Particulars For the Year ended March 31, 2014

` In lacsA. CASH FLOW FROM OPERATING ACTIVITIES

NET PROFIT BEFORE TAX AND EXTRAORDINARY ITEMS 40.69 Adjustments for Depreciation 766.29 Finance Cost 299.53 Interest Income (495.90) Loss of sale / discard of fixed assets 7.18 Profit on sale of fixed assets (0.15) Provision for doubtful debtors and advances (Net) (15.77)OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 601.87 Adjustments for Trade and other receivables 510.77 Inventories 853.07 Trade payable (500.23)CASH GENERATED FROM OPERATIONS 1,465.48 Income-tax paid (595.40)NET CASH FLOW FROM OPERATING ACTIVITIES 870.08

B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (4,139.78) Investment in shares of Subsidiary Company (432.77) Sale of Investment 1.00 Interest Income 495.90 Advance to parties for capital expenditure (103.29) Sale of fixed / discarded assets 5.28 Fixed deposits and interest accrued (171.39)NET CASH FLOW FROM INVESTING ACTIVITIES (4,345.05)

C. CASH FLOW FROM FINANCING ACTIVITIES Long / Short Term Borrowings (Net) 1,842.77 Finance Cost (299.53) Equity Share Application money 500.00 NET CASH FLOW FROM FINANCING ACTIVITIES 2,043.24

NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS (1,431.73)CASH AND CASH EQUIVALENTS AS ON 01.04.2013 5,877.26 CASH AND CASH EQUIVALENTS AS ON 31.03.2014 4,445.53

Note: 1. Cash Equivalents includes Rs. 4,444.24 lacs being Bank Balances and Fixed Deposits with Banks.2. Cash Flow Statement has been prepared under the indirect method as set out in Accounting Standard - 3 notified under Companies (Accounting Standards) Rules, 2006.3. Figures in bracket indicate Cash Outflow.

See accompanying Notes to Consolidated Financial Statements As per our Report of even date attachedFor MANUBHAI & SHAHChartered AccountantsFirm Registration No. 106041W







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Notes forming part of Consolidated Financial Statements Note No. 1STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES :1.1 Basis of Accounting :

The Consolidated Financial Statements are prepared as under :

(a) on the historical cost convention,

(b) on a going concern basis,

(c) in accordance with the generally accepted accounting principles,

(d) on an accrual system of accounting,

(e) in accordance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 which have been prescribed by the Companies (Accounting Standards) Rules, 2006 read with General Circular 15/2013 dated 13th September, 2013 issued by Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

1.2 Principles of Consolidation :

i. The Financial Statements of the Holding Company and its Subsidiary Company have been consolidated on a line-by-line basis by adding together the book value of like items of assets, liabilities, income and expenses after eliminating intra-group balances and intra-group transactions resulting in unrealised profits or losses.

ii. As far as possible, the Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented to, in the same manner as the Holding Company’s separate Financial Statements.

iii. This being the first accounting year for which the Consolidated Financial Statements are drawn up, and that previous year consolidated figures are not available, no previous year comparable figures are presented.

1.3 Subsidiary Company considered in the Consolidated Financial Statement are:

No. Name of the Company Country of Incorporation

Parent’s ultimate holding as on 31.03.2014

Financial Year ends

i. Villa Trading Company Private Limited India 100% Year ended March 31, 2014.1.4 Use of Estimates:

The preparation of the Consolidated Financial Statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting year, the reported amounts of assets and liabilities and the disclosures of contingent liabilities as on the date of the Consolidated Financial Statements. Examples of such estimates include useful life of Fixed Assets, provision for doubtful debts/ advances, deferred tax, etc. Actual results could differ from those estimates. Such difference is recognised in the year in which the results are known / materialised.

1.5 Revenue Recognition :

The Holding Company generally follows accrual system of accounting as required under Section 209(3)(b) of the Companies Act, 1956. However, considering uncertainties and / or difficulties involved in estimation of liabilities and / or final determination of refund claims filed by the Holding Company, the following items are considered to be accrued and accounted only when settled or agreed to with the party and / or receipts of amount.

(a) Claim against Railways for shortages / damages for cement in transit

(b) Insurance Claims

(c) Scrap Sales

(d) Octroi Refund Claims

1.6 Fixed Asset and Depreciation :

(a) Fixed assets include all expenditure of capital nature and are stated at cost (net of Cenvat, wherever applicable) less accumulated depreciation.

(b) Depreciation on fixed assets is provided on straight-line method at the rates prescribed in Schedule XIV to the Companies Act, 1956.

(c) In respect of addition and sales of assets during the year, depreciation is provided on prorata monthly basis.

(d) Intangible assets are stated at cost of acquisition less accumulated amortisation and accumulated impairment loss, if any. Amortisation is provided over their respective individual estimated useful lives on the straight line basis commencing from the year of assets available for use to the Holding Company.

48

1.7 Impairment of Fixed Assets :(a) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying

amount of the Holding Company’s fixed assets. If any indication exists, an asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(b) Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exists or have decreased.

1.8 Investments : Investments that are intended to be held for more than a year from the date of acquisition are classified as long-term investments and

are stated at its cost of acquisition. Diminution, other than temporary, in the value of such investments is provided. Investments other than long-term investments, being current investments, are valued at the lower of cost and fair value, determined on an individual basis, including held by the Subsidiaries for long-term purposes is provided. Diminution in the value of other investments is provided.

1.9 Inventories :(a) Inventories are stated at cost or net realizable value, whichever is lower. For this purpose cost has been arrived at on the basis of

moving weighted average. Cost of finished goods include all direct cost, other related factory overheads and excise duty.(b) Provision for obsolescence is made wherever considered necessary.

1.10 Sales : (a) Sales figures are inclusive of excise duty, but are net of sales tax, sales returns and rate difference adjustment. (b) Export sales are accounted on the basis of the rate of foreign exchange prevailling on dates of bills of lading / mate receipts. (c) Export benefits on account of entitlement to import duty free materials are recognized in the year of export.1.11 Foreign Currency Transactions : Transactions of foreign currency are recorded at the exchange rate as applicable at the date of transaction. Monetary Assets / liabilities

outstanding at the close of the financial year are stated at the contracted and / or appropriate exchange rate at the close of the year and the gain / loss is credited / charged to Consolidated Statement of Profit & Loss.

1.12 Employee Benefits : (a) Short term employee benefits are charged off in the year in which the related service is rendered.

(b) Post employment employee benefits under defined contribution plans are charged off in the year in which the employee has rendered services. In respect of Defined Benefit Plans, the amount charged off is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Consolidated Statement of Profit & Loss.

1.13 Provisions, Contingent Liabilities and Contingent Assets :(a) Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a

result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the Financial Statements.

(b) Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date in accordance with the Accounting Standard AS-29 on “Provisions, Contingent Liabilities And Contingent Assets” notified under the Companies (Accounting Standards) Rules, 2006.

1.14 Borrowing Cost : Borrowing costs, attributable to the acquisition / construction of qualifying assets, are capitalized. Other borrowing costs are charged

to Consolidated Statement of Profit and Loss.1.15 Taxation :

(a) Income tax charge or credit comprises current tax and deferred tax charge or credit.(b) Current Income tax is measured at the amount expected to be paid to Tax authorities in accordance with the Income Tax Act,

1961.(c) Deferred tax asset or liability on timing difference are recognised using current rates and tax laws that have been enacted or

substantively enacted by the Balance Sheet date. Deferred tax assets are recognised to the extent there exists a virtual certainty that these assets can be realised in future. Deferred tax assets and liabilities are reviewed at each Balance Sheet date.

(d) Minimum Alternate Tax (MAT) Credit is recognized as an asset only when and to the extent there is convincing evidence that the Holding Company will pay normal income tax during the specified period. In the year in which the MAT Credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of credit to the Consolidated Statement of Profit and Loss and shown as MAT credit entitlement. The Holding Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Holding Company will pay normal Income Tax during the specified period.

1.16 General : Accounting policies not specifically referred to are consistent with generally accepted accounting practice.

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Notes to Consolidated Balance Sheet :

Note No.

Particulars As on 31.03.2014

2 Share Capital ` In lacs(a) Authorized : 50,00,00,000 Equity Shares of ` 10 each 50,000.00 (b) Issued : 14,48,16,075 Equity Shares of ` 10 each 14,481.61 (c) Subscribed : 3,62,03,932 Equity Shares of ` 10 each 3,620.39 (d) Paid up : 3,61,53,852 Equity Shares of ` 10 each 3,615.39 Add : Forfeited Shares 5.30 Total Share Capital 3,620.69

(e) Rights, preferences and restrictions :

(i) The Holding Company has only one class of equity shares referred to as Equity shares having a par value of ` 10. Each holder of equity share is entitled to one vote per share.

(ii) Dividends, if any, is declared and paid in Indian Rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(iii) In the event of liquidation of the Holding Company, the holders of equity shares will be entitled to receive residual assests of the Holding Company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

(f) Details of shares in the Holding Company held by each shareholder holding more than 5 per cent shares :

S.No. Name of the Shareholder No. of shares % of shareholding

1 The Arj Investments Ltd. 4,557,379 12.61 2 Gujarat Industrial and Investment Corporation Ltd. 2,063,174 5.71

3 Reserves and Surplus ` In lacs

(a) Capital Reserves

(i) Capital Reserve Govt. Subsidy 26.95

(ii) Capital Reserve - Capital Reduction Account* 6,921.68

(iii) Capital Reserve - On account of Consolidation 8.58

6,957.21

(b) Surplus / (Deficit) in the Consolidated Statement of Profit and Loss

Opening Balance 3,608.18

Add : Deficit for the year (272.42)

Closing balance 3,335.76

* See Note No. 33 10,292.97

4 Share Application Money Pending Allotment

Share Application Money * 500.00

500.00

*As stated in note no. 33 pursuant to the order of Hon'ble BIFR, the Holding Company has received share application money from a Promoter Company. 50,00,000 Equity Shares have been alloted at par on May 09, 2014.

50

As on 31.03.2014

5 Long-term Borrowings ` In lacs(a) Term loans, Secured • from banks 5.18 • from other parties 54.75

59.93

Term loans from HDFC Bank Ltd., Yes Bank Ltd. and NBFCs in respect of finance availed for purchase of vehicles are secured by hypothecation of vehicles financed by them. The Loans are repayable in monthly equated installments over 3 to 5 years.

6 Deferred Tax Liabilities / Assets

In accordance with Accounting Standard 22 “Accounting for Taxes on Income” notified under the Companies (Accounting Standards) Rules, 2006, the Holding Company has reviewed its Deferred Tax Liabilities (DTL) and Deferred Tax Assets (DTA) upto March 31, 2014.

Accordingly the Holding Company has computed Deferred Tax Assets of ` 822.59 Lacs and Deferred Tax Liabilities of ` 1,521.49 Lacs as on March 31, 2014 on the following items of timing differences :

a. Deferred Tax Assets : ` In lacs

Accrued Expenses deductible on cash basis 207.32

Provision for Doubtful debts & advances 149.24

Unabsorbed Depreciation 466.03

Total 822.59

b. Deferred Tax Liabilities:

Difference between WDV of fixed assets as per the Income-tax Act,1961 and the Companies Act, 1956 1,521.49

Total 1,521.49

c. Net Deferred Tax (Liability)/ Assets (a – b) (698.90)

7 Other Long-term Liabilities ` In lacs

Deposits 503.81

503.81

8 Long-term provisions ` In lacs

(a) Provision for employee benefits.

(i) Gratuity 516.92

(ii) Privilege Leave 159.44

(b) Others 1,346.86

2,023.22

The Holding Company's gratuity plan and leave encashment are not funded. The following table sets out the status of the gratuity plan and Leave Encashment as required under Accounting Standard 15 "Employee Benefits" and the reconciliation of opening balances of the present value of the defined benefit obligation.

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I Changes in Present Value of Obligations:


Gratuity PL Encashment

` In lacs ` In lacs

Present Value of Obligation as at the beginning of the year 574.36 219.84

Current Service Cost 27.36 18.27

Interest Cost 45.95 17.59

Actuarial (gain) / Loss on obligations (20.35) 9.20

Benefits paid (44.37) (40.00)

Present value of Obligation as at the end of the year 582.95 224.90

II The amount recognised in Balance Sheet:

Present value of Obligation as at the end of the year 582.95 224.90

Fair Value of Plan Assets at the end of the year - -

Net Liability recognized in Balance sheet 582.95 224.90

III Amount recognised in Statement of Profit and Loss :

Current Service Cost 27.36 18.27

Interest Cost 45.95 17.59

Net Actuarial (gain) / Loss recognised in the year (20.35) 9.20

Expenses Recognized in the statement of Profit & Loss 52.96 45.06

IV Assumptions:

Mortality Table (Indian Assured Life Mortality)

2006-08 2006-08

Discount Rate 8.00% 8.00%

Rate of increase in compensation levels 5.50% 5.50%

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

As on 31.03.2014

9 Short-term borrowings ` In lacs

Loans repayable on demand - Secured

• from banks 1,931.58

1,931.58

The overdraft from bank is secured against pledge of FDRs of ` 3,212.08 lacs.

52

10 Trade Payables ` In lacs

Trade Payable 7,342.05

7,342.05

Trade Payable includes dues to small and medium enterprises, which require the following disclosure in accordance with Section 22 of Micro, Small and Medium Enterprises Development Act, 2006 :

i. Principal amount remaining unpaid and interest thereon 351.93

ii. Interest paid in terms of Section 16 -

iii. Interest due and payable for the period of delay in payment -

iv. Interest accrued and remaining unpaid -

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

As on 31.03.2014

11 Other current liabilities ` In lacs

(a) Current maturities of long-term debt

(i) Banks 27.85

(ii) Others 47.49

(b) Advance from customers 1,561.99

(c) Statutory dues 858.80

(d) Unpaid Dividend 14.47

(e) Other liabilities 201.36

2,711.96

12 Short-term provisions ` In lacs

(a) Provision for Gratuity- Current 66.03

(b) Provision for Leave encashment - Current 65.46

(c) Provision for Taxation 8.90

140.39

As on 31.03.2014

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53

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54

As on 31.03.2014

14 Non-current investments ` In lacs

Long Term (At Cost)

(a) Investment in Equity Instrument (Quoted) :

450 equity shares of ` 10/- each in Saurashtra Cement Limited 0.05

(b) Other Investment (Unquoted) :

(i) 4,28,500 Non Convertible Debentures of Pallor Trading Co. Pvt. Ltd. * 428.50

(ii) 6 Years National Savings Certificates 0.08


428.63

Aggregate Market Value of Quoted Investments 0.07

*Debentures are to be redeemed on or before 19th September, 2014

15 Long-term loans and advances ` In lacs

(a) Capital Advances, considered good 82.29

(b) Security Deposits, considered good 830.60

(c) MAT Credit Entitlement 1,312.23

(d) Taxes paid in Advance 432.41

(e) VAT refund receivable 4.59

(f) Other loans and advances

(i) Considered Good 11.50

(ii) Considered Doubtful 323.92

Less : Provision for Doubtful Advance (323.92)

2,673.62

16 Other non-current assets ` In lacs

(a) Fixed deposits with banks maturing after 12 months Of the above fixed deposits of ` 598.55 lacs kept as margin money against guarantees issued by the banks. 598.55

598.55

17 Current Investments ` In lacs

Investments in Government securities :

6 Years National Savings Certificates 0.06


0.06

18 Inventories ` In lacs

(a) Raw materials 140.37

(b) Work-in-progress 1,234.89

(c) Finished goods 327.39

(d) Stores and spares (includes stores and spares in transit of ` 1.84 lacs) 4,095.08

5,797.73

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As on 31.03.2014

19 Trade Receivables (unsecured) ` In lacs

(a) Outstanding for a period exceeding six months - considered good 350.34

(b) Others - considered good 1,322.14

(c ) Doubtful 127.92

1,800.40

Less : Provision for Doubtful Debts (127.92)

1,672.48

20 Cash and Bank Balances ` In lacs

(a) Cash and cash equivalent

(i) Balances with banks in current and fixed deposits 1,083.38

(ii) Cash on hand 1.29

1,084.67

(b) Other Bank Balances

(i) Earmarked Balances with Bank 14.47

(ii) Fixed Deposits with Banks held as margin money against overdraft and guarantees 3,346.39

4,445.53

21 Short-term loans and advances ` In lacs

(a) Unsecured, Considered Good

(i) Taxes paid in advance (net of provision of ` 1366.01 lacs ) 68.30

(ii) Advance against purchase of Stores and Spares 215.68

(iii) Cenvat and Service Tax Receivable 1,012.88

(iv) Others 442.41

(b) Unsecured, Considered Doubtful

(i) Advance against purchase of Stores and Spares 1.60

1,740.87

Less : Provision for Doubtful Advance (1.60)

1,739.27

22 Other current assets ` In lacs

Interest accrued but not due on Fixed Deposits 153.97

153.97

56

Notes to Consolidated Statement of Profit and Loss:Note No.

Particulars For the year ended March 31, 2014

23 Revenue from Operations : ` In lacs(a) Sale of products;

(i) Cement 43,042.33 (ii) Clinker 2,526.58

(b) Other operating revenues(i) Sale of other products / scrap 250.46 (ii) Railway Claim for Cement Shortage 0.86

45,820.23 Less: (c) Excise duty 4,845.31

40,974.92

24 Other Income ` In lacs(a) Interest Income 495.90 (b) Insurance claim 17.31 (c) Profit on sale of fixed assets 0.15 (d) Excess provision written back 97.04 (e) Sundry creditors written back 112.63 (f) Provision for doubtful debts written back 30.13 (g) Miscelloneous Income 63.84

817.00

25 Cost of material consumed ` In lacs(a) Raw materials * Opening Stock of Raw Materials 374.13 Add: Purchases 1,357.46 Less: Closing Stock of Raw Materials 140.37

1,591.22 (b) Royalty, Cess and Limestone raising cost (i) Limestone raising and Transportation 1,032.67 (ii) Royalty 818.06 (iii) Welfare cess 16.19

1,866.92 (c) Packing material Opening Stock of Packing Materials 94.24 Add: Purchases 1,633.59 Less: Closing Stock of Packing Materials 111.48

1,616.35 Total material consumed 5,074.49

* Details of Raw Material Consumed (i) Limestone and Marl excavated by the Company - (ii) Gypsum 790.69 (iii) Fly Ash 338.35 (iv) Purchase of Clinker - (v) Others 462.18

1,591.22

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26 Change in inventories of finished goods, work-in-progress and stock in trade ` In lacs(a) Opening stock of inventories Finished Goods - Cement 677.11 Work-in-progress - Raw Flour and Clinker 1,422.95 (b) Closing Stock of inventories Finished Goods - Cement 327.39 Work-in-progress - Raw Flour and Clinker 1,234.89 Decrease in inventories 537.78

27 Employee Benefits Expense ` In lacs

(a) Salaries and wages 2,324.64

(b) Contribution to provident and other funds 202.23

(c) Staff Welfare Expenses 153.89

2,680.76

28 Finance Cost ` In lacs

Interest

(a) On Borrowings 165.15

(b) On Income Tax 95.15

(c) On Others 39.23

299.53

29 Other expenses ` In lacs(a) Power and fuel 17,687.41 (b) Stores and spares consumed 2,568.14 (c) Repair and maintenance* 1,204.63 (d) Insurance 110.44 (e) Rent 166.48 (f) Rates and taxes 31.48 (g) Payment to auditors** 8.83 (h) Directors' sitting fees 13.20 (i) Loss on sale/discard of assets 7.18 (j) Bad Debts written off 21.18 (k) Provision for doubtful debt 14.36 (l) Wealth Tax 8.90 (m) Travelling and conveyance expenses 547.59 (n) Exchange rate fluctuation 206.56 (o) Legal and Professional Expenses 274.84 (p) Freight 6,576.81 (q) Commission and discounts 872.79 (r) Selling expenses 1,280.91 (s) Miscellaneous Expenses 790.64

32,392.37

58

*Repairs and maintenance ` In lacs(a) Repairs to buildings. 12.16 (b) Repairs to machinery. 471.58 (c ) Others 720.89

1,204.63

** Payments to the auditors(a) For Statutory Audit 5.51 (b) For Tax Audit 2.00 (c) For Other services 1.32

8.83

30 Earning Per Share:(a) Net Profit after Tax (` in lacs) (272.42)(b) Total Weighted Average Number of Shares for Basic Earning 36,153,852 (c) Basic Earning per share in rupees (0.75)(d) Total Weighted Average Number of Shares for Diluted Earning 36,208,647 (e) Diluted Earning per share in rupees (0.75)

31 a) Value of imports calculated on C.I.F. basis by the company during the financial year in respect of ` In lacs (i) Components and spare parts 450.03 (ii) Capital goods 963.57 b) Expenditure in foreign currency during the financial year on account of (i) Professional and Consultation fees 34.91 (ii) Others 218.02 c) Total value of all imported raw materials, spare parts and components consumed during the financial year and the total

value of all indigenous raw materials, spare parts and components similarly consumed and the percentage of each to the total consumption.

` In lacs Percentage(i) Imported 379.60 14.78 (ii) Indigenous 2,188.54 85.22

2,568.14 100.00

d) Earnings in foreign exchange ` In lacs Export of goods calculated on F.O.B. basis 67.83

32 Contingent liabilities and commitments

(to the extent not provided for)

(a) Contingent liabilities

(i) Claims against the company not acknowledged as debt 807.18

(ii) Other money for which the company is contingently liable - Matter under dispute

- Excise duty 55.53

- Customs 261.39

- Service Tax 472.20

- Rajasthan Sales Tax 24.73

- Gujarat Sales Tax 112.94

- Gujarat VAT 311.84

- Income-tax 1,226.03

- Octroi 140.98


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(b) Commitments

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances of ` 20.80 lacs)

143.01

33 Hon’ble Appellate Authority for Industrial and Financial Reconstruction (AAIFR) vide its order dated 23.10.2012 inter-alia held that the Holding Company’s net worth has turned positive as on 31.3.2010 and consequent thereto, the Holding Company has been discharged from Board for Industrial and Financial Reconstruction (BIFR). However, in the same order, Hon’ble AAIFR has reiterated its decision in M/s.Kunal Virenchee Sagar case holding that the BIFR’s jurisdiction continues un-interrupted and the BIFR is competent to exercise its jurisdiction under Section 18(5) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and remanded the matter to BIFR."

Hon’ble BIFR vide its order dated 6.12.2012 issued on 16.1.2013 sanctioned the Modified Draft Rehabilitation Scheme of the company inter-alia consisting of following main points :

(i) Reduction of paid up capital by 75%.

(ii) Fresh infusion of equity capital of ̀ 50 crores consisting of 5 crore equity shares of ̀ 10/- each at par to the Promoters, associates etc.

(iii) To complete the jetty at revised cost of ` 59.72 crores.

In compliance to the aforesaid order, in the year 2012-13 the Holding Company’s paid up Share Capital was reduced by 75% (Seventy five percent) from ` 1,44,61,54,080/- consisting of 14,46,15,408 fully paid up Equity Shares of ` 10/- each to ` 36,15,38,520/- consisting of 3,61,53,852 fully paid up Equity Shares of ` 10/- each as at 25.2.2013, being the Record Date. The amount of reduction in capital of ` 10,846.16 lacs was adjusted towards accumulated losses of ` 3,924.48 lacs as on 31.3.2012 and balance amount of ` 6,921.68 lacs was credited to Capital Reserve account. During the year, the promoters have brought in ` 500 lacs equity share capital at par.

34 (A) Related Parties Disclosure:

(a) Promoter companies together with its subsidiaries and associate companies holding more than 20% of the Equity Capital :

1 Ria Holdings Ltd.*

2 Pranay Holdings Ltd.*

3 Reeti Investments Ltd.*

4 Prachit Holdings Ltd.*

5 Sumaraj Holdings Pvt. Ltd.

6 Sunnidhi Trading Pvt. Ltd.

7 Shree Anandeya Investment Pvt. Ltd.

8 Sameta Export Pvt. Ltd.

9 Pallor Trading Company Pvt. Ltd.

10 The Arj Investments Limited

11 Treasurer's Trading Limited

12 Gujarat Industrial Investment Corp. Ltd.

13 Industrial Construction Limited (holding company of Sr. No. 9)

14 Samja Maurtius Limited (holding company of Sr. No. 10)

15 Bhadra Consultancy Private Limited

*10,35,912 shares held as security by a bank in bank's name for financial assistance granted.

(b) Name of Key Management Personnel :

1 Mr. Jay Mehta Executive Vice Chairman

2 Mr. M. S. Gilotra Managing Director

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(c) Name of a company in which policies are controlled by common key management personnel:

Saurashtra Cement Limited

(B) Disclosure of Related Parties Transactions :


` In lacs

1 Remuneration to Mr. Jay Mehta 267.09

2 Remuneration to Mr. M S Gilotra 130.98

3 In view of inadequacy of profit for the year 2013-14, remuneration paid by the Holding Company to Mr. Jay Mehta and Mr. M S Gilotra was in excess of the limit prescribed under Sections 198 and 309 read with Schedule XIII to the Companies Act, 1956. Pending approval of the Central Government an amount of ` 302.99 lacs is being held in trust by them.

4 Particulars of transactions with Saurashtra Cement Ltd. The transactions are disclosed in aggregate value for the year:

Particulars For the year ended March 31, 2014

` In lacs

Purchase of Goods & materials 27.42

Sale of Goods & materials 4,621.54

Services received / (rendered) [Net] 46.94

Outstanding Receivable/(Payable) 149.10

35 The Holding Company has only one business segment ‘Cement / Clinker’ as primary segment.

As per our Report of even date attached








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Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary company

1. Name of the Subsidiary Villa Trading Company Private Limited

2. Financial Year of the Subsidiary

Company ended on March 31, 2014

3. Holding Company's interest

(i) No. of equity shares 4,317,022

equity shares of ` 10/- each

4. The net aggregate amount of Subsidiary's Profit / (Losses) so far as it concerns the members of the Holding Company not dealt with in the Holding Company's Accounts

(i) For the Current Financial Year (` in Lacs) (0.05)

(ii) For the previous financial years since

it became a subsidiary (` in Lacs) (4.29)

5. Net aggregate amount of Profit / (Losses)

of the subsidiary which has been dealt

with in the accounts of the Holding

Company

i) For the Current Financial Year (` in Lacs) Nil

ii) For the Previous Financial Years since

it became a subsidiary (` in Lacs) Nil

6. Material changes between the end of

the financial year of the subsidiaries and

that of Saurashtra Cement Limited

(i) Fixed Assets -

(ii) Investments -

(iii) Loans and Advances -

(iv) Monies borrowed by the subsidiary company other than for meeting

current liability -





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STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY COMPANIES AS REQUIRED VIDE CIRCULAR NO.2/2011 DATED 8.2.2011 FROM MINISTRY OF CORPORATE AFFAIRS, GOVERNMENT OF INDIA FOR THE YEAR ENDED 31ST MARCH 2014.

In view of the above, the Balance Sheet, Statement of Profit & Loss and other documents of the subsidiary companies are not being attached to this Balance Sheet of the Holding Company. Financial information of the subsidiary companies as required by the above circular, are given herein below :

(` in Lacs)

Sr. No.

Particulars Villa Trading Company Private Limited

a. Capital 431.70

b. Reserves and Surplus 9.62

c. Total Assets 791.39

d. Total Liabilities 791.39

e. Investments (Net) 428.53

f. Turnover -

g. Profit/(Loss) before Tax (0.05)

h. Tax -

i. Profit / (Loss) After Tax (0.05)

j. Proposed Dividend Nil





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Documents

Board of Directors - Mehta · PDF fileBoard of Directors As on 31.05.2014 Mr ... Dist. Gir Somnath (Gujarat) Tel. 02876 - 308200, Fax: 02876 - 286540 ... (g) of the Companies Act,