Samruddhi Cement by gdf57j

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									Samruddhi Cement
Mr. G. D. Birla and Mr. Aditya Birla, our founding fathers.
                 We live by their values.
 Integrity, Commitment, Passion, Seamlessness and Speed
SAMRUDDHI CEMENT LIMITED


BOARD OF DIRECTORS                   Executives
Mr. Kumar Mangalam Birla, Chairman   Mr. R. K. Shah        Group Executive President &
                                                           CMO (Mfg. & Projects)
Mr. R. C. Bhargava
Mr. G. M. Dave                       Mr. S. N. Jajoo       Chief Marketing Officer

Mr. N. J. Jhaveri                    Mr. K.C. Birla        Sr. Executive President
                                                           (Finance)
Mr. S. B. Mathur
                                     Unit Heads
Mr. Adesh Gupta
                                     Mr. R. M. Gupta       Vikram Cement Works
        .
Mr. O. P Puranmalka
                                     Mr. D. R. Dhariwal    Birla White
Mr. Ashok Malu
                                     Mr. S. K. Gupta       Rajashree Cement Works
                                     Mr. S. Natarajan      Reddipalayam Cement Works
                                     Mr. M. M. Tiwari      Rawan Cement Works
                                     Mr. B. B. Joshi       Aditya Cement Works
                                     Mr. V. K. Jain        Kotputli Cement Works


Company Secretary                    Auditors
Mr. Kamal Rathi                               .
                                     M/s. G. P Kapadia & Co., Chartered Accountants,
                                     Mumbai
                                     M/s. Deloitte Haskins & Sells, Chartered Accountants,
                                     Mumbai


                                     Solicitors
                                     M/s. Amarchand & Mangaldas & Suresh A. Shroff & Co.,
                                     Mumbai




                                                                                             1
CONTENTS




                      Notice ................................................................   3

                      Management Discussion and Analysis .................. 11

                      Report on Corporate Governance ....................... 15

                      Sustainability Report/Inclusive Growth .................. 22

                      Environment Report ............................................. 25

                      Directors’ Report ................................................. 26

                      Auditors’ Report .................................................. 34

                      Balance Sheet .................................................... 38

                      Profit and Loss Account ....................................... 39

                      Schedules ........................................................... 40

                      Cash Flow Statement .......................................... 62

                      Statement Relating to Subsidiary Company ........... 64

                      Consolidated Financial Statements ....................... 65

                      Subsidiary Company’s Reports and Accounts ....... 83




            REGISTERED OFFICE: Birladham, Kharach, Kosamba 394 120, Dist. Bharuch (Gujarat)
                           Tel. : (02646) 270001-05 Fax : (02646) 270010
                               www.adityabirla.com/samruddhicement.htm
REGISTRAR & TRANSFER AGENT: Sharepro Services (India) Private Limited, 13AB, Samhita Warehousing Complex, 2nd
   Floor, Sakinaka Telephone Exchange Lane, Off. Andheri Kurla Road, Sakinaka, Andheri (East), Mumbai 400 072
                    Tel. : (022) 6772 0300 / 6772 0400 Fax : (022) 2859 1568 / 2850 8927
                                         email : scl@shareproservices.com


2
N OT I C E


NOTICE is hereby given that the First Annual             SPECIAL BUSINESS:
General Meeting of the shareholders of Samruddhi                                        .
                                                         5. Appointment of Mr. O.P Puranmalka as a
Cement Limited will be held at the Registered Office        Whole-Time Director for the period 16th
of the Company at Birladham, Kharach, Kosamba               February, 2010 to 31st March, 2010.
394 120, Dist. Bharuch (Gujarat) on Saturday, the           To consider, and if thought fit, to pass the
24th day of July, 2010 at 12.30 P   .M. to transact,        following Resolution as a Special
with or without modifications, as may be permissible,       Resolution:
the following business:
                                                            “RESOLVED THAT upon effectiveness of the
ORDINARY BUSINESS:                                          Scheme of Arrangement between Grasim
                                                            Industries Limited (“Grasim”) and the Company
1. Adoption of Accounts                                     (“the Scheme”), whereby the Cement Business
    To receive, consider and adopt the Audited              of Grasim has been transferred to the Company
    Balance Sheet as at 31st March, 2010 and the            pursuant to the Scheme under Sections 391 to
    Profit and Loss Account for the period ended            394 of the Companies Act, 1956, (“the Act”)
    31st March, 2010 and the Reports of the                 consent of the Company be and is hereby
    Directors and the Auditors thereon.                     granted to the appointment of Mr. O.P.
                                                            Puranmalka, a Director of the Company, who
2. Declaration of Dividend                                  is deemed to be treated as Whole Time Director
                                                            of the Company with effect from 16th February,
    To declare dividend on Equity Shares for the            2010 to 31st March, 2010 under the provisions
    period ended 31st March, 2010.                          of Sections 198, 269, 309, 310 and 314 read
3. Re-appointment of Mr. Adesh Gupta                        with Schedule XIII and other applicable
                                                            provisions, if any, of the Act (including any
    To appoint a Director in place of Mr. Adesh             statutory modification or re-enactment thereof,
    Gupta, who retires from office by rotation, and         for the time being in force), the relevant
    being eligible, offers himself for re-appointment.      provisions of the Articles of Association of the
                                                            Company and all applicable guidelines issued
4. Appointment of Statutory Auditors                        by the Central Government from time to time,
    To consider and, if thought fit, to pass the            on the following terms and conditions including
    following resolution as an Ordinary Resolution          remuneration, viz.:
    relating to the appointment of Auditors of the          A. Period: 16 th February, 2010 to
    Company:                                                     31st March, 2010.
                                                            B. Remuneration:
    “RESOLVED that pursuant to the provisions of
    Section 224 and other applicable provisions, if              1. Basic Salary: Rs.9,41,900/- (Rupees
    any, of the Companies Act, 1956, M/s. G.P     .                   Nine lacs forty one thousand nine
    Kapadia & Co., Chartered Accountants,                             hundred only) per month.
    Mumbai (Registration No. 104768W) and                        2. Special Allowance: Rs. 7,50,000/-
    M/s. Deloitte Haskins & Sells, Chartered                          (Rupees Seven lacs fifty thousand only)
    Accountants, Mumbai (Registration No.                             per month. This allowance however will
    117366W), be and are hereby re-appointed                          not be taken into account for
    as the Joint Statutory Auditors of the Company                    calculation of retiral benefits such as
    to hold office as such from the conclusion of                     Provident        Fund,        Gratuity,
    this Annual General Meeting until the                             Superannuation, Leave Encashment,
    conclusion of the next Annual General Meeting                     etc.
    of the Company, at such remuneration to each                 3. Variable Pay: Performance Bonus
    of them, plus service tax as applicable and                       Linked to the achievement of targets
    reimbursement of actual out of pocket expenses                    as may be decided by the Board
    as may be incurred in the performance of their                    subject     to    a    maximum       of
    duties, as the Audit Committee / Board of                         Rs.2,25,00,000/- (Rupees Two crores
    Directors may fix in this behalf.”                                twenty five lacs only) per annum.

                                                                                                           3
        4. Long-term Incentive Compensation                 Company as per the Rules of the
           (LTIC) / Employee Stock Option: As               Company. Travelling expenses of
           per the Plan applicable to the Senior            spouse accompanying the Whole-time
           Executives of the Company/Aditya Birla           Director on any official overseas or
           Group including that of any parent/              inland trip will be governed as per the
           subsidiary company.                              Rules of the Company.
    C. Perquisites                                      xi. Other Allowances / benefits /
        i.    Housing:       Free     furnished             perquisites : Any other allowances,
              accommodation or HRA @ 50% of                 benefits and perquisites as per the Rules
              Basic Salary in lieu of Company               applicable to the Senior Executives of
              provided accommodation.                       the Company and / or which may
                                                            become applicable in the future and /
        ii.   Reimbursement of expenses on actual
                                                            or any other allowance, perquisites as
              pertaining to electricity, gas, water,
                                                            the Board may from time to time
              telephone and other reasonable
                                                            decide.
              expenses for the upkeep and
              maintenance in respect of such            xii. Any other one time / periodic
              accommodation.                                 retirement allowances / benefits as may
                                                             be decided by the Board at the time
        iii. Medical Expenses: Reimbursement of
                                                             of retirement.
             all expenses incurred in India for self
             and family at actual (including            xiii. Subject as aforesaid, the Whole-time
             domiciliary and medical expenses and             Director shall be governed by such
             insurance premium for medical and                other Rules as are applicable to the
             hospitalisation policy, as applicable).          Senior Executives of the Company from
        iv. Leave Travel Expenses: Leave Travel               time to time.
            Expenses for self and family in             The aggregate of the remuneration and
            accordance with the Rules of the            perquisites as aforesaid shall not exceed
            Company.                                    the limits prescribed from time to time under
        v.    Club Fees: Fees of one Corporate Club     Sections 198, 309, 310 and all other
              in India (including admission and         applicable provisions of the Act, read with
              membership fee).                          Schedule XIII to the said Act or any statutory
        vi. Personal Accident Insurance Premium:        modifications or re-enactment thereof for
            For self and family as per the Rules of     the time being be in force, or otherwise as
            the Company.                                may be permissible at law.

        vii. (a) Company’s contribution towards         For the purposes of Gratuity, Provident
                 Provident      Fund       and          Fund, Superannuation and other like
                 Superannuation Fund, on Basic          benefits, if any, the service of Mr. O. P.
                 Salary as per the Rules of the         Puranmalka, Whole-time Director will be
                 Company.                               considered as continuous service with the
                                                        Company from the date of his joining the
              (b) Gratuity calculated on Basic Salary   Aditya Birla Group.
                  as per the Rules of the Company.
                                                        So long as Mr. Puranmalka functioned as
        viii. Car: Company maintained two Cars,
                                                        the Whole Time Director, he was not paid
              as per the Rules of the Company.
                                                        any fees for attending the meetings of the
        ix. Leave and encashment of leave: As           Board of Directors of the Company or any
            per the Rules of the Company.               Committee(s) thereof. Though, considering
        x.    Reimbursement of entertainment,           the provisions of Section 314(1) of the Act,
              travelling and all other expenses         Mr. Puranmalka would not be holding any
              incurred for the business of the          office or place of profit by his being a


4
       mere director of the Company ’s                   7. Appointment of Mr. Kumar Mangalam Birla
       subsidiary(s)/ Joint Venture(s), approval be         as a Director
       and is hereby also granted by way of
       abundant caution for him to accept the               To appoint Mr. Kumar Mangalam Birla (who
       sitting fees / commission payable to other           was appointed as an Additional Director by the
       directors for attending meetings of Board(s)         Board of Directors pursuant to the provisions
       of Directors/ Committee(s) of subsidiary(s)/         of Company’s Articles of Association and who
       Joint Venture(s) of the Company or                   holds office under the provisions of Company’s
       companies promoted by the Aditya Birla               Articles of Association and Section 260 of the
       Group.”                                              Companies Act, 1956 (“the Act”) only up to
                                                            the date of this meeting, and in respect of
       “RESOLVED FURTHER THAT the                           whom the Company has received a notice in
       remuneration payable/paid to Mr.                     writing along with a deposit of Rs.500 under
       Puranmalka as aforesaid shall be subject             Section 257 of the Act, from a member
       to the applicable provisions of Schedule             signifying his intention to propose Mr. Kumar
       XIII of the Act.”                                    Mangalam Birla as a candidate for the office
       “RESOLVED FURTHER THAT all actions                   of Director) as a Director of the Company and
       taken so far by the Company in or in                 to consider and, if thought fit, to pass the
                                                            following resolution as an Ordinary Resolution:
       relation to the aforesaid matters be and
       are hereby ratified and approved.”                   “RESOLVED that pursuant to the provisions of
       “RESOLVED FURTHER THAT the Board                     Section 257 and all other applicable provisions,
       be and is hereby authorized to do all such           if any, of the Companies Act, 1956, Mr. Kumar
       acts, deeds, matters and things as may be            Mangalam Birla be and is hereby appointed
       deemed necessary to give effect to the               as a Director of the Company liable to retire
       above resolution.”                                   by rotation.”
                         .
6. Appointment of Mr. O.P Puranmalka as a                8. Appointment of Mr. R.C. Bhargava as a
   Director                                                 Director
                         .
   To appoint Mr. O.P Puranmalka (who was                   To appoint Mr. R.C. Bhargava (who was
   appointed as an Additional Director by the               appointed as an Additional Director by the
   Board of Directors pursuant to the provisions            Board of Directors pursuant to the provisions
   of Company’s Articles of Association and who             of Company’s Articles of Association and who
   holds office under the provisions of Company’s           holds office under the provisions of the
   Articles of Association and Section 260 of the           Company’s Articles of Association and Section
   Companies Act, 1956 (“the Act”) only up to               260 of the Companies Act, 1956 (“the Act”)
   the date of this meeting, and in respect of              only up to the date of this meeting, and in
   whom the Company has received a notice in                respect of whom the Company has received a
   writing along with a deposit of Rs.500 under             notice in writing along with a deposit of Rs.
   Section 257 of the Act, from a member                    500 under Section 257 of the Act, from a
   signifying his intention to propose Mr. O.P       .      member signifying his intention to propose Mr.
   Puranmalka as a candidate for the office of              R.C. Bhargava as a candidate for the office of
   Director) as a Director of the Company and to            Director) as a Director of the Company and to
   consider and, if thought fit, to pass the following      consider and, if thought fit, to pass the following
   resolution as an Ordinary Resolution:                    resolution as an Ordinary Resolution:
   “RESOLVED that pursuant to the provisions of             “RESOLVED that pursuant to the provisions of
   Section 257 and all other applicable provisions,         Section 257 and all other applicable provisions,
   if any, of the Companies Act, 1956, Mr. O.P    .         if any, of the Companies Act, 1956, Mr. R.C.
   Puranmalka be and is hereby appointed as a               Bhargava be and is hereby appointed as a
   Director of the Company liable to retire by              Director of the Company liable to retire by
   rotation.”                                               rotation.”

                                                                                                             5
9. Appointment of Mr. G.M. Dave as a                        “RESOLVED that pursuant to the provisions of
   Director                                                 Section 257 and all other applicable provisions,
                                                            if any, of the Companies Act, 1956, Mr. N.J.
    To appoint Mr. G.M. Dave (who was appointed             Jhaveri be and is hereby appointed as a Director
    as an Additional Director by the Board of               of the Company liable to retire by rotation.”
    Directors pursuant to the provisions of
    Company’s Articles of Association and who
                                                         11. Appointment of Mr. S.B. Mathur as a
    holds office under the provisions of Company’s
                                                             Director
    Articles of Association and Section 260 of the
    Companies Act, 1956 (“the Act”) only up to
    the date of this meeting, and in respect of             To appoint Mr. S.B. Mathur (who was appointed
    whom the Company has received a notice in               as an Additional Director by the Board of
    writing along with a deposit of Rs. 500 under           Directors pursuant to the provisions of
    Section 257 of the Act, from a member                   Company’s Articles of Association and who
    signifying his intention to propose Mr. G.M.            holds office under the provisions of Company’s
    Dave as a candidate for the office of Director)         Articles of Association and Section 260 of the
    as a Director of the Company and to consider            Companies Act, 1956 (“the Act”) only up to
    and, if thought fit, to pass the following              the date of this meeting, and in respect of
    resolution as an Ordinary Resolution:                   whom the Company has received a notice in
                                                            writing along with a deposit of Rs. 500 under
    “RESOLVED that pursuant to the provisions of            Section 257 of the Act, from a member
    Section 257 and all other applicable provisions,        signifying his intention to propose Mr. S.B.
    if any, of the Companies Act, 1956,                     Mathur as a candidate for the office of Director)
    Mr. G.M. Dave be and is hereby appointed as             as a Director of the Company and to consider
    a Director of the Company liable to retire by           and, if thought fit, to pass the following
    rotation.”                                              resolution as an Ordinary Resolution:

10. Appointment of Mr. N.J. Jhaveri as a
                                                            “RESOLVED that pursuant to the provisions of
    Director
                                                            Section 257 and all other applicable provisions,
    To appoint Mr. N.J. Jhaveri (who was appointed          if any, of the Companies Act, 1956, Mr. S.B.
    as an Additional Director by the Board of               Mathur be and is hereby appointed as a
    Directors pursuant to the provisions of                 Director of the Company liable to retire by
    Company’s Articles of Association and who               rotation.”
    holds office under the provisions of Company’s
    Articles of Association and Section 260 of the
    Companies Act, 1956 (“the Act”) only up to
    the date of this meeting, and in respect of                                      By Order of the Board
    whom the Company has received a notice in
    writing along with a deposit of Rs. 500 under
    Section 257 of the Act, from a member
                                                                                             Kamal Rathi
    signifying his intention to propose Mr. N.J.
                                                                                        Company Secretary
    Jhaveri as a candidate for the office of Director)
    as a Director of the Company and to consider
    and, if thought fit, to pass the following           Place: Mumbai
    resolution as an Ordinary Resolution:                Date: 21st June, 2010




6
NOTES FOR MEMBERS’ ATTENTION AND                       5) a) Shareholders are requested to notify any
INFORMATION FOR MEMBERS’:                                    change of address:
1) A MEMBER ENTITLED TO ATTEND AND VOTE                        (i)   to their Depository Participants (DPs)
   AT THE MEETING IS ENTITLED TO APPOINT                             in respect of the shares held in demat
   A PROXY TO ATTEND AND VOTE INSTEAD                                form, and
   OF HIMSELF / HERSELF AND THE PROXY
   NEED NOT BE A MEMBER OF THE COMPANY.                        (ii) to the Company’s Registrar & Transfer
                                                                    Agents at below mentioned address,
    THE INSTRUMENT APPOINTING A PROXY                               in respect of the shares held in physical
    SHOULD, HOWEVER, BE DEPOSITED AT THE                            form together with a proof of address
    REGISTERED OFFICE OF THE COMPANY NOT                            viz., Electricity Bill, Telephone Bill,
    LESS THAN FORTY-EIGHT HOURS BEFORE                              Ration Card, Voter ID Card, Passport,
    THE COMMENCEMENT OF THE MEETING.                                etc.:

2) An Explanatory Statement pursuant to Section                      Share pro Services (India) Private
   173 (2) of the Companies Act, 1956, in respect                    Limited
   of items 5 to 11 of the Notice as set out above,                  Unit: Samruddhi Cement Limited
   is annexed hereto.                                                13 AB, Samhita Warehousing Complex
                                                                     2 nd Floor, Sakinaka Telephone
3) The Register of Members and Share Transfer                        Exchange Lane, Off Andheri Kurla
   Books of the Company will remain closed from                      Road, Sakinaka,
   16th July, 2010 to 24th July, 2010 (both days                     Mumbai – 400 072
   inclusive) for the purpose of payment of
   dividend, if approved by the Members.                   b) In case the mailing address mentioned on
                                                              this Annual Report is without the PINCODE,
4) The dividend, as recommended by the Board,                 shareholders are requested to kindly inform
   if approved at the Annual General Meeting,                 their PINCODE immediately to their DP or
   will be paid on or after 24th July, 2010 to                the Company’s Registrar and Transfer
   those Members or their mandates whose names                Agents as the case may be, as mentioned
   are registered on the Company’s Register of                above.
   Members:
                                                       6) Non-Resident Indian Shareholders are requested
    a) as Beneficial Owners as at the end of
                                                          to inform the Registrar and Transfer Agents of
       business on 15th July, 2010 as per the lists
                                                                                                ,
                                                          the Company or their concerned DP as the
       to be furnished by National Securities
                                                          case may be, immediately:-
       Depository Limited (NSDL) and Central
       Depository Services (India) Limited (CDSL)          a) the change in the residential status on
       in respect of the shares held in electronic            return to India for permanent settlement,
       form, and
                                                           b) the particulars of the NRE Account with a
    b) as Members in the Register of Members of               bank in India, if not furnished earlier.
       the Company after giving effect to all valid
       share transfers in physical form which are      7) Shareholders are requested to correspond in
       lodged with the Company or its Registrar           connection with the shares held by them by
       & Transfer Agents (RTA) viz. Sharepro              addressing letters directly to the Registrar and
       Services (India) Private Limited having their      Transfer Agents of the Company and not to the
       address at 13AB, Samhita Warehousing               Company, quoting reference of their folio
       Complex, 2nd Floor, Sakinaka Telephone             numbers or their Client ID number with DP ID
       Exchange Lane, Off Andheri Kurla Road,             number, as the case may be.
       Sakinaka,            Andheri          (East),
       Mumbai - 400 072 on or before 15th July,        8) Shareholders who are holding shares in identical
       2010.                                              order of names in more than one folio are


                                                                                                           7
    requested to send to the Registrar and Transfer                 iii) Complete address of the Bank with
    Agents of the Company the details of such                            Pin code Number
    folios together with the original Share
                                                                    iv) Account Type, whether Savings (SB)
    Certificates for consolidation of their holdings
                                                                        or Current Account (CA)
    in one folio. The Share Certificates will be
    returned to the Shareholders after making                       v)   Bank Account Number allotted by
    requisite changes thereon.                                           the Bank
9) As per the provisions of the amended                 11) Shareholders who hold shares in the
   Companies Act, 1956, facility for making                 dematerialised form and desire a change /
   nominations is now available to INDIVIDUALS              correction in the bank account details, should
   holding shares in the Company. Shareholders              intimate the same to their concerned DP and
   holding shares in physical form may obtain the           not to the Registrar and Transfer Agents of the
   Nomination Form – 2B prescribed by the                   Company. Shareholders are also requested to
   Government from the Registar and Transfer                give the MICR Code of their bank to their DPs.
   Agents of the Company. Shareholders holding              The Company will not entertain any direct
   shares in demat form are required to approach            request from such shareholders for change of
   their respective DPs for the nomination.                 address, transposition of names, deletion of
                                                            name of deceased joint holder and change in
10) a) Shareholders are advised to avail of the             the bank account details. The said details will
       facility for receipt of future dividends             be considered as will be furnished by the DPs
       through Electronic Clearing Service (ECS).           to the Company.
       Shareholders holding shares in
       dematerialised mode are requested to             12) Shareholders desirous of obtaining any
       contact their respective DPs for availing ECS        information / clarification on the accounts and
       facility. Shareholders holding shares in             operations of the Company are requested to
       physical form are requested to collect the           send in written queries to the Company, atleast
       ECS form from the Registrar and Transfer             one week before the date of the meeting.
       Agents and the same duly filled up and               Replies will be provided in respect of such
       signed along with a Xerox copy of a                  written queries received, only at the meeting.
       cancelled cheque may be sent to the
       Registrar and Transfer Agents of the             13) Pursuant to the requirement of the Listing
       Company.                                             Agreement of the Stock Exchanges on
                                                            Corporate Governance, relating to appointment
    b) To avoid the incidence of fraudulent                 of the Directors / reappointment of the retiring
       encashment of the dividend warrants,                 Directors, a statement containing the required
       Shareholders are requested to intimate the
                                                            details of the concerned Directors forms part
       Company under the signature of the Sole/             of the Report on Corporate Governance.
       First Joint holder, the following information,
       so that the Bank Account Number and              14) In terms of circulars issued by Securities and
       Name and address of the Bank can be                  Exchange Board of India (SEBI), it is now
       printed on the dividend warrants:-                   mandatory to furnish a copy of PAN card to
        1) Name of Sole/First Joint holder and              the Company or its RTA in the following cases
           Folio No.                                        viz. Transfer of shares, Deletion of name,
                                                            Transmission of shares and Transposition of
        2) Particulars of Bank Account, viz.                shares. Shareholders are requested to furnish
                                                            copy of PAN card for all the abovementioned
            i)    Name of the Bank                          transactions.
            ii)   Name of Branch




8
ANNEXURE TO NOTICE                                         ITEM NO. 7
EXPLANATORY STATEMENT UNDER SECTION                        Mr. Kumar Mangalam Birla was appointed as an
173(2) OF THE COMPANIES ACT, 1956                          Additional Director of the Company with effect from
                                                           18th May, 2010 by the Board of Directors of the
ITEM NOS. 5 and 6                                          Company pursuant to the provisions contained in
Mr. O. P. Puranmalka was appointed as an                   the Articles of Association of the Company and
Additional Director of the Company with effect from        Section 260 of the Companies Act, 1956 (‘the
                                                           Act”). According to the provisions of Articles of
16th February, 2010 by the Board of Directors of
                                                           Association of the Company and Section 260 of
the Company pursuant to the provisions contained
                                                           the Act, he holds office up to the date of this
in the Articles of Association of the Company and          Annual General Meeting. As required under Section
Section 260 of the Companies Act, 1956 (“the               257 of the Act, notice has been received from a
Act”).                                                     member along with a deposit of Rs.500 signifying
Upon the effectiveness of the Scheme of                    his intention to propose Mr. Kumar Mangalam Birla
Arrangement between Grasim Industries Limited              as a candidate for the office of Director.
(“Grasim”) and the Company (“the Scheme”),                 Mr. Kumar Mangalam Birla is the Chairman of the
whereby the Cement Business of Grasim has been             Aditya Birla Group, a global conglomerate with
transferred to the Company pursuant to the Scheme          operations spanning 25 countries. An iconic figure,
under Sections 391 to 394 of the Act, the                  Mr. Birla holds several key positions on various
appointment of Mr. O. P Puranmalka, as a Director
                           .                               regulatory and professional Boards. A Chartered
                                                           Accountant, Mr. Birla earned his MBA from the
of the Company, shall be deemed to be treated as
                                                           London Business School, where he is also an
Whole Time Director of the Company with effect             Honorary Fellow. With his vast experience as an
from 16th February, 2010 to 31st March, 2010 under         Industrialist, his presence on the Board is a great
the provisions of Sections 198, 269, 309, 310 and          advantage and the Board feels it is beneficial for
314 read with Schedule XIII and other applicable           the Company to continue to avail of his services as
provisions, if any, of the Act as he was an employee       a Director of the Company.
of the Company during that period. He ceased to            Your Directors recommend his continuance as a
be the Whole Time Director w.e.f. 1st April, 2010          Director. Mr. Kumar Mangalam Birla is interested in
and had become the Additional Director of the              the Resolution.
Company with effect from the said date. According
                                                           ITEM NO. 8
to the provisions of the Articles of Association and
Section 260 of the Act, he holds office up to the          Mr. R.C. Bhargava was appointed as an Additional
date of this Annual General Meeting. As required           Director of the Company with effect from 18th May,
under Section 257 of the Act, notice has been              2010 by the Board of Directors of the Company
received from a member along with a deposit of             pursuant to the provisions contained in the Articles
Rs.500 signifying his intention to propose Mr. O. P .      of Association of the Company and Section 260 of
Puranmalka as a candidate for the office of Director.      the Companies Act, 1956 (“the Act”). According to
                                                           the provisions of the Articles of Association and
A Chartered Accountant by qualification, Mr.               Section 260 of the Act, he holds office up to the
Puranmalka has over three decades of rich and              date of this Annual General Meeting. As required
varied experience in various roles. He is an integral      under Section 257 of the Act, notice has been
part of the Group’s Cement Leadership team, taking         received from a member along with a deposit of
responsibility for identifying locations for new plants,   Rs.500 signifying his intention to propose Mr. R.C.
limestone reserves and other opportunities for             Bhargava as a candidate for the office of Director.
establishing growth options through mergers and            Mr. R.C. Bhargava is the Chairman of Maruti Suzuki
acquisitions. Highly respected in the Cement               India Ltd. He is on the Board of several reputed
industry, Mr. Puranmalka is also known for his             companies. With his vast experience in the corporate
entrepreneurial capabilities. His presence on the          field, his presence on the Board is a great advantage
Board is a great advantage and the Board feels it          and the Board feels it is beneficial for the Company
is beneficial for the Company to continue to avail         to continue to avail of his services as a Director of
of his services as a Director of the Company.              the Company.
Your Directors recommend his continuance as a              Your Directors recommend his continuance as a
Director. Mr. O. P Puranmalka is interested in the
                  .                                        Director. Mr. R.C. Bhargava is interested in the
                                                           Resolution.
said Resolution.


                                                                                                              9
ITEM NO. 9                                              the Board feels it is beneficial for the Company to
Mr. G.M. Dave was appointed as an Additional            continue to avail of his services as a Director of the
Director of the Company with effect from 18th May,      Company.
2010 by the Board of Directors of the Company           Your Directors recommend his continuance as a
pursuant to the provisions contained in the Articles    Director. Mr. N.J. Jhaveri is interested in the
of Association of the Company and Section 260 of        Resolution.
the Companies Act, 1956 (“the Act”). According to       ITEM NO. 11
the provisions of the Articles of Association of the    Mr. S.B. Mathur was appointed as an Additional
Company and Section 260 of the Act, he holds
                                                        Director of the Company with effect from 18th May,
office up to the date of this Annual General Meeting.   2010 by the Board of Directors of the Company
As required under Section 257 of the Act, notice        pursuant to the provisions contained in the Articles
has been received from a member along with a
                                                        of Association of the Company and Section 260 of
deposit of Rs.500 signifying his intention to propose   the Companies Act, 1956 (“the Act”). According to
Mr. G.M. Dave as a candidate for the office of          the provisions of the Articles of Association of the
Director.
                                                        Company and Section 260 of the Act, he holds
Mr. G.M. Dave is a partner of Messrs. Dave &            office up to the date of this Annual General Meeting.
Girish & Co., Advocates. He is also a director in       As required under Section 257 of the Act, notice
several other companies. Considering his vast           has been received from a member along with a
experience, his presence on the Board is a great        deposit of Rs. 500 signifying his intention to propose
advantage and the Board feels it is beneficial for      Mr. S.B. Mathur as a candidate for the office of
the Company to continue to avail of his services as     Director.
a Director of the Company.                              Mr. S.B. Mathur was Chairman of the Life Insurance
Your Directors recommend his continuance as a           Corporation of India (LIC) from August, 2002 to
Director. Mr. G.M. Dave is interested in the            October, 2004. Post retirement from LIC, Mr. Mathur
Resolution.                                             was appointed as Administrator of the Specified
ITEM NO. 10                                             Undertaking of the Unit Trust of India (SUUTI). He
                                                        is also on the Board of several reputed companies.
Mr. N.J. Jhaveri was appointed as an Additional         Considering his vast experience, his presence on
Director of the Company with effect from 18th May,      the Board is a great advantage and the Board feels
2010 by the Board of Directors of the Company           it is beneficial for the Company to continue to avail
pursuant to the provisions contained in the Articles    of his services as a Director of the Company.
of Association of the Company and Section 260 of
the Companies Act, 1956 (“the Act”). According to       Your Directors recommend his continuance as a
                                                        Director. Mr. S.B. Mathur is interested in the
the provisions of the Articles of Association of the
Company and Section 260 of the Act, he holds            Resolution.
office up to the date of this Annual General Meeting.   The brief resume in relation to the experience,
As required under Section 257 of the Act, notice        functional expertise, memberships on other
has been received from a member along with a            companies’ Boards and committees in respect of
deposit of Rs.500 signifying his intention to propose   appointment of the new directors or re-appointment
Mr. N.J. Jhaveri as a candidate for the office of       of a director, as required under clause 49 of the
Director.                                               Listing Agreement is set out in the Report on
                                                        corporate governance forming part of the
Mr. N.J. Jhaveri is M.Sc. in (Economics) from the
                                                        Annual Report.
London School of Economics. Mr. Jhaveri joined
ICICI in September 1974 and rose to the position                                     By Order of the Board
of Jt. Managing Director and retired as Executive
Chairman of ICICI Securities in August 1995, after
a long and meritorious service and is on the Board
of several reputed companies. With his vast                                                   Kamal Rathi
                                                                                         Company Secretary
experience in business and industrial circles, his
                                                        Place: Mumbai
presence on the Board is a great advantage and          Date: 21st June, 2010

10
MANAGEMENT DISCUSSION AND ANALYSIS


OVERVIEW

This is the first year of operation of your Company.        recording total despatches of around
The Cement business of Grasim Industries Ltd.               200 million tons. The growth was supported by
(Grasim) was demerged and vested into your                  economic recovery, reduction in excise duty,
Company effective from 1st October, 2009.Therefore,         Government ’s initiatives viz. National Rural
the business operations are only for six month during       Employment Guarantee and low cost housing.
the current financial year.                                 The demand upturn has been generally broad based,
                                                            with all regions recording double digit growth, except
During the year, Cement demand saw a double digit           Southern Region which was impacted due to floods
growth of 11%, one of the highest in the decade,            and political unrest in Andhra Pradesh during part
                                                            of the year.
BUSINESS PERFORMANCE REVIEW
                                                                                                     2009-10*
                                                             Unit                   (from 1st October 2009 to
                                                                                              31st March 2010)
    Grey Cement
    Capacity **                                              Mn. TPA                                      25.65
    Production                                               Mn. MT                                        9.85
    Sales Volumes $                                          Mn. MT                                       10.03
    Average Realisation                                      Rs. / MT                                     3,390
    White Cement
    Capacity **                                               TPA                                      560,000
    Production                                               MT                                        276,416
    Sales Volumes $$                                         MT                                        273,172
    Average Realisation                                      Rs. / MT                                     8,499

*  This being the first financial year of the Company since incorporation, disclosure of previous year figures
   is not applicable
** Production quantity is for six months only, whereas the installed capacity given above is for full year
$ Includes captive consumption for RMC
$$ Includes captive consumption for value added products

Your Company completed its ongoing cement                   increase in taxes and energy prices.
expansion. The 3.1 million TPA grinding capacity at         White Cement division registered an impressive
Kotputli, Rajasthan became operational during               performance and achieved 99% capacity utilisation.
quarter ended March, 2010. Cement production was            The Ready mix concrete division is emerging out of
9.85 million tons during the six months ended March,        the sluggishness, with recovery in the real estate
2010. The sales volumes were 10.03 million tons.            segment.
The bunching of new capacities created a downward
pressure in cement prices across the regions during         On the cost front, the business gained from the
the quarter ended December, 2009. The decline               global softness in energy prices in the first three
was more pronounced in the Southern Region.                 months. It has petered off in the last quarter.
Unavailability of railway wagons in various pockets
of the country resulted in under utilisation of capacity.   Outlook
There was partial recovery in cement prices in the          Cement demand is expected to remain buoyant with
last quarter due to renewed construction activity and       increased domestic consumption, both in the


                                                                                                               11
government as well as the private sector. The             FINANCIAL REVIEW AND ANALYSIS
government has reiterated its commitment to
infrastructure spending in the budget. The Planning                                                (Rs. in Crores)
Commission in its midterm appraisal of the 11th year                                                         2009-10
plan has envisaged an expenditure of Rs.20.5 trillion                                             (from 4th September
on infrastructure during the plan period. Additionally,                                                      2009* to
the broad based economic growth will continue to                                                     31st March 2010)
drive cement demand from semi urban and rural India
with their rising prosperity levels. With the economy        Net Turnover                                    4,290.6
having recovered from the slow down, revival in              Other Operating
organised real estate and corporate capex are also           Income and Other Income                            50.0
expected to add to the buoyancy in demand. Overall,          Profit Before Interest,
cement            demand            is       expected        Depreciation and Tax                            1,242.2
to grow at a robust 10% + for the next five                  PBIDT Margin (%)                                   28.6
years.                                                       Interest                                           87.1
                                                             Depreciation                                      213.1
                                                             Profit before Tax Expenses                        942.0
The surplus supply scenario, however, is expected to         Total Tax Expenses                                324.0
create short term pressure. New capacities                   Net Profit                                        618.0
commissioned during FY10 are in various stages of
ramp up while additional capacities continue to be        During the current period ended 31st March 2010,
set up. This might lead to a surplus scenario after       your Company has recorded a net turnover of
peak demand in Q1FY11, which may last for 6 to 8          Rs.4,291 Crores and net profit of Rs.618 Crores.
quarters.                                                 It earned a healthy 28.6% PBIDT margin.

                                                          CASH FLOW ANALYSIS
On the cost front, higher coal prices are likely to        (Rs. in Crores)
exert pressure on margins in FY11. The Company’s
focus on higher volume growth, better logistics                                                              2009-10
support, together with cost efficiency, should help in                                            (from 4th September
partially mitigating the impact.                                                                             2009* to
                                                                                                     31st March 2010)

Your Company continues to focus on achieving               Sources of Cash
greater than industry growth and building sustainable      Cash from Operations                                1,029
competitive advantage through its reach, service and       Non-operating Cash Flow
cost competitiveness. Its distribution network is being    (Dividend Income)                                      10
further expanded throughout India particularly in rural    Proceeds from Equity                                   85
areas to increase the reach. Customer responsiveness       Increase in Debts                                     409
is being further improved with the implementation of       Decrease in Working Capital                           181
online order booking and tracking system.                  Decrease in Cash and Cash equivalent                   28
                                                                                                               1,742
Capex Plan                                                 Uses of Cash
                                                           Net Increase in Investments                         1,265
An overall capital outlay of Rs.2,375 Crores has           Capital Expenditure (net)                             376
been earmarked. This will be spent over the next 2         Interest                                              101
years on logistics infrastructure, waste heat recovery
systems, completion of existing projects and                                                                   1,742
modernization.
                                                          *Date of Incorporation




12
Sources of Cash                                            marketing initiatives that help create differentiation
                                                           and provide optimum service to its customers.
Cash from Operations
                                                           Human Resource Risk
Cash from operations was Rs.1,029 Crores during
the six months of operation.                               Your Company’s ability to deliver value is shaped by
Increase in Debts                                          its ability to attract, train, motivate, empower and
                                                           retain the best professional talents. Your Company
Term Loans of Rs.450 Crores were raised to fund            continuously benchmarks HR policies and practices
capacity expansion. Short term loan of Rs.42 Crores        with the best in the industry and carries out the
were repaid.                                               necessary improvements to attract and retain the
Proceeds from Equity                                       best talent.

17 Crores equity shares of Rs.5 each were issued at        Foreign Exchange Risk
par to Grasim, the Holding Company.                        Your Company’s policy is to hedge all long-term
Decrease in Working Capital                                foreign exchange risk as well as short-term exposures
                                                           within the defined parameters. The long-term foreign
Reduction in trade receivables and inventories and         exchange liability is fully hedged and hedges are on
increase in trade payables led to decrease in working      held to maturity basis.
capital.
                                                           Interest Rate Risk
Uses of Cash
                                                           The Company is exposed to interest rate fluctuations
Net Increase in Investments                                on its borrowings. It uses a judicious mix of fixed
Your Company invested Rs.1,234 Crores in the debt          and floating rate debts within the stipulated
scheme of various mutual funds. An investment of           parameters to mitigate the interest rate risk and
Rs.3.9 Crores was made in equity share capital of          whenever required, uses hedging tools to minimise
Bhaskarpara Coal Company Ltd., a joint venture of          interest rate risk.
the Company. Further, a sum of Rs.27 Crores was            Commodity Price Risk
advanced to Harish Cement Ltd., a subsidiary of the
Company.                                                   Your Company is exposed to the risk of price
                                                           fluctuation on raw materials, energy sources as well
Capital Expenditure (Net)                                  as finished goods. However, considering the normal
Your Company have spent Rs.376 Crores towards              correlation in the prices of raw materials and finished
the completion of expansion projects and normal            goods, the risk is reduced. Setting up of captive
modernisation.                                             power plants helps control the effect of rise in energy
                                                           cost, a major cost element for cement manufacturing.
RISKS AND CONCERNS
                                                           Forward integration in value added products e.g.,
Upon transfer of Cement business from Grasim               ready mix concrete in cement, wall care putty in
(Holding Company), your Company has adopted its            white cement, help reduce the impact of price
risk management policy. The risk management policy         fluctuation in finished goods.
inter alia provides for risk identification, assessment,
reporting and mitigation procedure. The risk               Input Availability Risk
management framework actively supports the Board           Availability of natural resource for current needs and
in its strategic decision making.                          future growth requirements is a key risk. Indian coal
An analysis of the Company’s key business risks and        availability continues to be insufficient to meet the
mitigation plans is as follows:                            current and growing demand in the country. To meet
                                                           the shortfall, your Company procures coal from
Competitor Risk                                            various sources including imports, open market
The market is highly competitive with no fiscal barriers   purchases and pet coke. One coal block has also
and entry of large MNCs into the country with              been allocated by Government of India to our joint
inorganic growth strategies. Your Company continues        venture with other corporates. This coal block will,
to focus on increasing its market share and taking         however, meet only a small part of our requirement


                                                                                                               13
on becoming operational. Your Company has               with effect from 1st July, 2010 under a scheme of
intensified its efforts to increase use of various      amalgamation, subject to receipt of requisite
alternative fuels. Waste heat recovery systems are      approvals. The merger will create largest Cement
being planned to reduce energy consumption. Your        Company in India creating a platform that will help
Company has sufficient limestone reserves at its        in pursuing aggressive growth going forward.
existing facilities. Prospecting and acquiring leases
of new limestone mines are being undertaken on a
regular basis to ensure future growth.                  CAUTIONARY STATEMENT

INTERNAL CONTROL SYSTEM                                 Statement in this “Management Discussion and
                                                        Analysis” describing the Company’s objectives,
The Company has appropriate internal control            projections, estimates, expectations or predictions may
systems for business processes, with regards to         be “forward looking statements” within the meaning
efficiency of operations, financial reporting,          of applicable securities laws and regulations. Actual
compliance with applicable laws and regulations,        results could differ materially from those expressed
etc. Clearly defined roles and responsibilities down    or implied. Important factors that could make a
the line for all managerial positions have also been    difference to the Company’s operations include global
                                                        and Indian demand supply conditions, finished goods
institutionalised. All operating parameters are
                                                        prices, feedstock availability and prices, cyclical
monitored and controlled. Regular internal audits       demand and pricing in the Company’s principal
and checks ensure that responsibilities are executed    markets, changes in Government regulations, tax
effectively. The Audit Committee of the Board of        regimes, economic developments within India and
Directors reviews the adequacy and effectiveness of     the countries within which the Company conducts
internal control systems and suggests improvement       businesses and other factors such as litigation and
for strengthening them, from time to time.              labour negotiations. The Company assumes no
                                                        responsibility to publicly amend, modify or revise any
CONCLUSION                                              forward looking statements, on the basis of any
Your Company has decided to amalgamate with             subsequent development, information or events or
UltraTech Cement Ltd., another subsidiary of Grasim     otherwise.




14
R E P O R T O N C O R P O R AT E G OV E R N A N C E


Governance Philosophy                                                      governance practices and its adherence in the true
                                                                           spirit, at all times. Our governance practices are
Corporate governance refers to a set of laws,
                                                                           self-driven, reflecting the culture of the trusteeship
regulations and good practices that enable an
                                                                           that is deeply ingrained in our value system and
organization to perform efficiently and ethically
                                                                           reflected in our strategic growth process.
generate long term wealth and create value for all
its stakeholders. There is, however, no single                             In terms of Clause 49 of the Listing Agreement of
template to define good governance. Your                                   the stock exchanges, the details of compliance as on
Company is committed to the adoption of best                               the date of this Report i.e. 18th May, 2010 are as
                                                                           follows:
I.       BOARD OF DIRECTORS
         Compliance with Corporate Governance Guidelines
         I. BOARD OF DIRECTORS
         (A) Composition of Board
             Your Company’s Board comprises of 8 Directors, 4 of whom are Independent Directors and 4 are
             Non-Executive Directors, with considerable experience in their respective fields.
     Name of Director             Executive /    Date of          No. of         No. of Outside         No. of Outside          No. of Board
                                Non-Executive/ Appointment     Equity Shares   Directorships Held1        Committee              Meetings
                                 Independent                    held as on                              Positions Held2
                                                                31st March,
                                                                   2010
                                                                                Public      Private   Chairman   Member        Held     Attended

     Mr. Kumar Mangalam Birla    Non-Executive   18.05.2010          -           11           13          -          -           -          -
 Mr. R.C. Bhargava               Independent     18.05.2010          -           10           2          4           5           -          -
 Mr. G.M. Dave                   Independent     18.05.2010          -            8           5          2           8           -          -
 Mr. N.J. Jhaveri                Independent     18.05.2010          -           12           2          4           4           -          -
     Mr. S.B. Mathur             Independent     18.05.2010          -           12           3          3           3           -          -
     Mr. Adesh Gupta            Non-Executive    04.09.2009         2*            9           1           -          2          9           9
     Mr. O.P. Puranmalka **     Non-Executive    16.02.2010          -            2            -         -           -          1           1
 Mr. Ashok Malu                 Non-Executive    04.09.2009         2*            -            -          -          -          9           9




*     As a Nominee of Grasim Industries Ltd., the holding company
**    Deemed to be a Whole Time Director from 16th February, 2010 to 31st March, 2010. Appointed as an Additional Director (Non-Executive Director)
      w.e.f. 1st April, 2010.
Notes :
1.    Excluding Directorship in foreign companies and companies under Section 25 of the Companies Act, 1956.
2.    Only two Committees of the Board viz. the Audit Committee and the Shareholders’ Grievance/Allotment & Transfer Committee are considered.
         (B) Non-Executive Directors’ Compensation                               (C) Other Provisions as to Board and
             and Disclosures                                                         Committees
             Apart from sitting fees that are paid to the
                                                                                         Your Company’s Board of Directors plays
             Non-Executive and Independent Directors
                                                                                         primary role in ensuring good governance
             for attending Board/Committee meetings,
                                                                                         and functioning of the Company. Agenda
             no other fees/commission were paid during
                                                                                         and Notes on Agenda are circulated to
             the period under review. No transactions
                                                                                         the Directors in advance of each meeting
             have been entered into by the Company
                                                                                         of the Board of Directors. Where it is not
             with the Non-Executive and Independent
                                                                                         practical to attach or send the relevant
             Directors.

                                                                                                                                                15
         information as a part of agenda papers,                   Apart from the above, additional Board
         the same are tabled at the meeting and                    Meetings are convened by giving
         the presentations are made to the Board.                  appropriate notice to address the specific
         The Members of the Board have complete                    needs of the Company.
         freedom to express their opinion and the
         decisions are taken after detailed discussions.           During the period under review, the Board
                                                                   met 9 times. The details of Board Meetings
         The Board meets at least once in a quarter                held during the period are as under:
         to review the operations of your Company.


 Sr. No.     Date of Board Meeting                          City                 No. of Directors Present*
 1.          9th September, 2009                           Mumbai                             3
                    th
 2.          17 September, 2009                            Mumbai                             3
 3.          24th September, 2009                          Mumbai                             3
                    th
 4.          26 September, 2009                            Mumbai                             3
 5.          29th September, 2009                          Mumbai                             3
               rd
 6.          3 October, 2009                               Mumbai                             3
 7.          16th October, 2009                            Mumbai                             3
                    th
 8.          15 November, 2009                             Mumbai                             3
 9.          16th February, 2010                           Mumbai                             3

* Upto 17th May, 2010, the Board constituted of 3 members
                                                                   the statutory and internal auditors and the
                                                                   Board of Directors and oversees the
                                                                   financial reporting process.
      (D) Code of Conduct
                                                                   The Audit Committee was reconstituted on
         The Board of Directors plays an important                 18th May, 2010 and its present composition
         role in ensuring good governance and has                  is as follows:
         laid down the Code of Conduct (“the
         Code”) applicable to all Board Members                    1. Mr. G.M. Dave, Chairman
         and Senior Management of the Company.                     2. Mr. N.J. Jhaveri, Member
         A declaration by Directors affirming the
                                                                   3. Mr. S.B. Mathur, Member
         compliance of the Code by Board Members
         and Senior Management Executives is given                 All the present members of the Audit
         at the end of the report.                                 Committee are Independent Directors.
II. AUDIT COMMITTEE                                                Prior to 18th May, 2010, the composition
                                                                   of the Audit Committee was as follows:-
      (A) Composition of Audit Committee
                                                                   1. Mr. Adesh Gupta
         Your Company has an Audit Committee at
         the Board level, with the powers and the                            .
                                                                   2. Mr. O.P Puranmalka
         role in accordance with the Clause 49 II                  3. Mr. Ashok Malu
         (C) and (D) of the Listing Agreement, which
                                                                   Mr. Kamal Rathi, Company Secretary, acts
         acts as a link between the management,
                                                                   as the Secretary of the Audit Committee.

16
   (B) Meetings of Audit Committee                           Company has allotted 16.99 crores equity
       During the period under review, the Audit             shares of Rs. 5 each on rights basis on 29th
       Committee met once on 16 th February,                 September, 2009.
       2010 to deliberate on various matters.            (E) Remuneration of Directors
                                                             During the period under review, no sitting
III. SUBSIDIARY COMPANIES                                    fee has been paid to the Directors for
                                                             attending the meetings of the Board and
   Your Company does not have any material non-              its Committees.
   listed Indian Subsidiary Company. The Audit
   Committee reviews the financial statements and            W.e.f. 18th May, 2010, sitting fee payable
   in particular, the investments made by the unlisted       to the Members of the Board for attending
   subsidiary company.                                       the Board meetings has been fixed @ Rs.
                                                             20,000/- per meeting.
IV. DISCLOSURES
                                                             Similarly, w.e.f. 18 th May, 2010, the sitting
   (A) Basis of related party transactions                   fees payable to the Members of the Audit
       Your Company places all the relevant                  Committee, Shareholders’ Grievance /
       details before the Audit Committee.                   Allotment & Transfer Committee and ESOS
                                                             Compensation Committee for attending the
       A comprehensive list of related party                 meetings of the Committees has been fixed
       transactions as required by the Accounting            @ Rs. 10,000/- per meeting of the
       Standard (AS) 18 issued by the Institute of           Committee.
       Chartered Accountants of India, forms part
       of the Note No. 20 of Schedule 21 to the          (F) Management
       Accounts in the Annual Report. These                  i)    The Management Discussion and
       transactions are not likely to have any                     Analysis Report forms part of the
       conflict with the interests of the Company                  Annual Report and is in accordance
       at large.                                                   with the requirements laid out in
   (B) Disclosure of Accounting Treatment                          Clause 49 of the Listing Agreement.
       Your Company has followed all relevant                ii)   No material transaction has been
       Accounting Standards while preparing the                    entered into by the Company with the
       Financial Statements.                                       Promoters,       Directors    or    the
   (C) Risk Management                                             Management, their subsidiaries or
       Your Company has a comprehensive risk                       relatives etc. that may have a potential
       management policy and has laid down                         conflict with the interest of the
       procedures to inform Board members                          Company.
       about the risk assessment and minimization        (G) Shareholders
       procedures. The same are periodically
       reviewed to ensure that executive                     i)    The Company has provided the details
       management controls the risks through                       of the Directors seeking re -
       properly defined framework.                                 appointment at the end of this Report.
       The risk management issues are discussed              ii)   Copies of the Press Release and
       in the Management Discussion & Analysis                     Presentations on financial performance
       Section which forms part of this Annual                     shall be hosted on the website of the
       Report.                                                     Company, www.adityabirla.com/
   (D) Proceeds from public issues, right issues,                  samruddhicement.htm.
       preferential issues, etc.                             iii) Shareholders’ Grievance / Allotment
       During the period under review, the                        and Transfer Committe
       Company has not raised any proceeds                         The Board has on 18 th May, 2010
       from public issue or preferential issue. The


                                                                                                        17
        constituted       a     “Shareholders’                  v)   Compliances by the Company
        Grievance / Allotment and Transfer
                                                                     No strictures/ penalties have been
        Committee” at the Board level to look
                                                                     imposed on the Company by the Stock
        into various issues relating to
                                                                     Exchanges or the Securities and
        shareholders/investors including
                                                                     Exchange Board of India (SEBI) or any
        transfer and transmission of shares as
                                                                     statutory authority on any matters
        well as non-receipt of dividend, Annual
                                                                     related to capital markets, since the
        Report, shares after transfers and
                                                                     incorporation of the Company on 4th
        delays in transfer of shares. In addition,
                                                                     September, 2009.
        the Committee shall also look into
        other issues including status of             V.   REPORT ON CORPORATE GOVERNANCE
        dematerialization / rematerialization of          This Corporate Governance Report forms part
        shares and debentures as well as                  of the Annual Report. The Company is
        systems and procedures followed to                compliant with the provisions of Clause 49 of
        track investor complaints and suggest             the Listing Agreement of the Stock Exchanges
        measures for improvement from time                in India.
        to time.
                                                     VI. COMPLIANCE
        The Committee comprises of the                    i)    Certificate from the Statutory Auditors
        following Directors:                                    confirming compliance with the conditions
        1. Mr. G.M. Dave, Chairman                              of Corporate Governance as stipulated in
                                                                Clause 49 of the Listing Agreement of the
                  .
        2. Mr. O.P Puranmalka, Member
                                                                Stock Exchanges in India is annexed to the
        3. Mr. Adesh Gupta, Member                              Directors’ Report and forms part of the
     iv) ESOS Compensation Committee                            Annual Report.
        (a) Pursuant to the Scheme of                     ii)   Status of compliance of Non mandatory
            Arrangement      between       the                  requirement
            Company and Grasim Industries                       a) The Company maintains a separate
            Limited (“Grasim”) under Sections                      office for the Non-Executive Chairman.
            391 to 394 of the Companies Act,                       All necessary infrastructure and
            1956 for demerger of the Cement                        assistance are made available to enable
            Business of Grasim to the                              him to discharge his responsibilities.
            Company, the eligible employees
                                                                b) The Company does not have a
            of Grasim holding stock options
                                                                   Remuneration       Committee.        The
            in Grasim shall be entitled to one
                                                                   remuneration of the Directors is decided
            stock option of Rs. 5/- each of
                                                                   and approved by the Board of
            the Company for every stock
                                                                   Directors.
            option they hold in Grasim in
            terms of the Compensatory Stock          VII. GENERAL BODY MEETINGS
            Option Scheme of the Company,                 During the period ended 31st March, 2010,
            ESOS – 2010.                                  three Extraordinary General Meetings of the
        (b) ESOS Compensation Committee                   shareholders of the Company were held on
            has been constituted on 18th May,             19th September, 2009, 25th September, 2009
            2010 and the same comprises of                and 29th March, 2010 respectively.
            the following Directors, viz. Mr.
            Kumar Mangalam Birla, Mr. G.M.
            Dave and Mr. N.J. Jhaveri. The           VIII.MEANS OF COMMUNICATION
            Committee has been formed to                  Any website, where displayed    :
            implement, administer and                     www.adityabirla.com/samruddhicement.htm
            supervise ESOS – 2010.


18
                                         CODE OF CONDUCT
                                              DECLARATION
As provided under Clause 49 of the Listing Agreement with the Stock Exchanges, we confirm that the Board
Members and Senior Management of the Company have confirmed compliance with the Code of Conduct
for the period ended 31st March, 2010.
                                                                               For Samruddhi Cement Limited
                                                                       .
                                                                    O.P Puranmalka               Adesh Gupta
                                                                            Director                  Director
Place : Mumbai
Date : 18th May, 2010

                                     CEO/ CFO CERTIFICATION
       .
Mr. O.P Puranmalka and Mr. Adesh Gupta, Directors of the Company have certified to the Board that:
(a) They have reviewed financial statements and the cash flow statement for the period ended
    31st March, 2010 and that to the best of their knowledge and belief:
    i)    these statements do not contain any materially untrue statement or omit any material fact or
          contain statements that might be misleading; and
    ii)   these statements together present a true and fair view of the Company’s affairs and are in compliance
          with existing accounting standards, applicable laws and regulations.
(b) There are, to the best of their knowledge and belief, no transactions entered into by the Company
    during the period which are fraudulent, illegal or violative of the Company’s code of conduct.
(c) They accept responsibility for establishing and maintaining internal controls for financial reporting
    and that they have evaluated the effectiveness of the internal control systems of the Company
    pertaining to financial reporting and they have disclosed to the auditors and the Audit Committee,
    deficiencies in the design or operation of internal controls, if any, of which they are aware and the
    steps they have taken or propose to take to rectify these deficiencies.
(d) They have indicated to the auditors and the Audit Committee:
    i)    significant changes in internal control over financial reporting for the period under review;
    ii)   significant changes in accounting policies for the period under review and that the same have
          been disclosed in the notes to the financial statements; and
    iii) instances of significant fraud of which they have become aware and the involvement therein, if
         any, of the management or an employee having a significant role in the Company’s internal
         control system over financial reporting.


                                                                               For Samruddhi Cement Limited
                                                                       .
                                                                    O.P Puranmalka               Adesh Gupta
                                                                            Director                  Director
Place : Mumbai
Date : 18th May, 2010


                                                                                                            19
20
           Details of the Directors seeking appointment/ re-appointment in the ensuing Annual General Meeting
      Name of Director                  Mr. Kumar                     Mr. R.C. Bhargava           Mr. G.M. Dave                 Mr. Adesh Gupta                Mr. N.J. Jhaveri                 Mr. S.B. Mathur           Mr. O.P.
                                        Mangalam Birla                                                                                                                                                                    Puranmalka

      Date of Birth                           14.06.1967                   30.07.1934                   12.07.1938                    11.09.1956                     09.08.1935                       11.10.1944                02.01.1952

      Date of Appointment                     18.05.2010                   18.05.2010                   18.05.2010                     04.09.2009                     18.05.2010                       18.05.2010              16.02.2010


      Expertise in specific                   Industrialist           General Management                Advocate                Company Executive              Management Consultant            Management Consultant Company Executive
      functional areas

      Qualification                           A.C.A., M.B.A.          M.Sc. (Maths.)        M.Com. LL.B.,C.A.I.I.B              B. Com., FCS, FCA.             M.A., M.Sc. in Economics B.Com. F.C.A. I.C.W.A.                     FCA
                                                                      Development Economics                                                                    - London School of       (Part I & II), London
                                                                      and M.A.                                                                                 Economics

      No. of Equity Shares held as on              –                              –                         –                              2*                              -                              -                           –
      31st March 2010

      List of outside Company           1. Aditya Birla Minacs        1. Birla Sun Life           1. Aditya Birla Retail Ltd.   1. Aditya Birla Telecom Ltd.   1.  Afcons Infrastructure Ltd.   1. DCM Sriram             1. Dakshin Cements Ltd.
      Directorships held                    Worldwide Ltd.                Asset Mgt. Co. Ltd.     2. Camphor & Allied           2. Birla Consultants Ltd.      2.  Edelweiss Capital Ltd.           Industries Ltd.       2. UltraTech Cement Ltd.
                                        2. Aditya Birla Nuvo Ltd      2. Dabur India Ltd.            Products Ltd.              3. Birla Industrial            3.  Edelweiss Securities Ltd.    2. Havells India Ltd.
                                        3. Birla Sun Life             3. Grasim Industries Ltd.   3. Cinemax India Ltd.            Finance (India) Ltd.        4.  Gujarat Venture              3. HDIL
                                            Asset Management          4. Idea Cellular Ltd.       4. Grasim Bhiwani             4. Birla Industrial                Finance Ltd.                 4. Hindustan Oil
                                            Co. Ltd.                  5. IL&FS Ltd.                  Textiles Ltd.                 Investments (India) Ltd.    5. Hindalco Industries Ltd.          Exploration
                                        4. Birla Sun Life             6. Maruti Suzuki            5. PSI Data Systems Ltd.      5. Birla Insurance             6. Pidilite Industries Ltd.          Company Ltd.
                                            Insurance Co. Ltd.            India Ltd.              6. PCS Technology Ltd.           Advisory and Broking        7. Siemens Ltd.                  5. IL&FS Ltd.
                                        5. Century Textiles &         7. Optimus Global           7. UltraTech Cement Ltd.         Services Ltd.               8. Siemens Healthcare            6. ITC Ltd.
                                            Industries Ltd.               Services Ltd.           8. Vinati Organics Ltd.       6. Grasim Bhiwani                  Diagnostics Ltd.             7. National Collateral
                                        6. Essel Mining &             8. Polaris Software                                          Textiles Ltd.               9. SKF India Ltd.                    Management
                                            Industries Ltd.               Lab. Ltd.                                             7. Grasim Industries Ltd.      10. Usha Martin Ltd.                 Services Ltd.
                                        7. Grasim Industries          9. Thomson Press Ltd.                                     8. Samruddhi Swastik           11. Voltas Ltd.                  8. National Stock
                                            Ltd.                      10. UltraTech Cement Ltd.                                    Trading And                 12. UltraTech Cement Ltd.            Exchange of India
                                        8. Hindalco Industries Ltd.                                                                Investments Ltd.                                                 Ltd.
                                        9. Idea Cellular Ltd.                                                                   9. Sun God Trading                                              9. Orbis Financial
                                        10. Pilani Investment &                                                                    And Investments Ltd.                                             CorporationLtd.
                                            Industries                                                                                                                                          10. Universal Sompo
                                            Corporation Ltd.                                                                                                                                        General Insurance
                                                                                                                                                                                                    Company Ltd.
                                        11. UltraTech                                                                                                                                           11. Axis Bank Ltd.
                                            Cement Ltd.                                                                                                                                         12. UltraTech Cement Ltd.


      Chairman/Member of the                       –                          –                   1. Audit Committee                Shareholders‘ Grievance/        Audit Committee                 Audit Committee           Shareholders’
      Committees of the Board of                                                                     - Chairman                     Allotment and                   - Member                        - Member                  Grievance/Allotment
      Directors of the Company                                                                    2. Shareholders’                  Transfer Committee                                                                        and Transfer
                                                                                                     Grievance/Allotment            - Member                                                                                  Committee
                                                                                                     and Transfer                                                                                                             - Member
                                                                                                     Committee
                                                                                                      - Chairman
     * as a nominee of Grasim Industries Limited
       Name of Director                   Mr. Kumar               Mr. R.C. Bhargava        Mr. G.M. Dave             Mr. Adesh Gupta             Mr. N.J. Jhaveri           Mr. S.B. Mathur          Mr. O.P.
                                          Mangalam Birla                                                                                                                                             Puranmalka

       Chairman /Member of the
       Committees of Directors of other
       Companies in which he is a
       Director
       a) Audit Committee                          -              1. Dabur India Ltd.      1. Aditya Birla Retail Ltd. 1. Grasim Bhiwani         1. Afcons Infrastructure   1. DCM Sriram                  -
                                                                     - Member                 - Chairman                  Textiles Ltd.-Member      Ltd. - Chairman            Industries Ltd.
                                                                  2. Grasim Industries     2. Camphor & Allied 2. Samruddhi Swastik              2. Edelweiss Capital          - Member
                                                                     Ltd. - Member            Prouducts Ltd               Trading And               Ltd. - Chairman         2. Havells India Ltd.
                                                                  3. IL&FS Ltd.-Chairman      - Member                    Investments Ltd.       3. Hindalco Industries        - Chairman
                                                                  4. Optimus Global        3. Cinemax India Ltd.          - Member                  Ltd. - Member           3. Hindustan Oil
                                                                     Services Ltd              - Member                                          4. Pidilite Industries        Exploration
                                                                     - Chairman            4. Grasim Bhiwani                                        Ltd. - Member              Company Ltd.
                                                                  5. Polaris Software         Textiles Ltd.                                      5. Siemens Healthcare         - Member
                                                                     Lab. Ltd. - Member.      - Member                                              Diagnostics Ltd.        4. ITC Ltd. - Chairman
                                                                  6. Thomson Press Ltd.    5. PCS Technology Ltd.                                   - Member                5. Orbis Financial
                                                                     - Chairman               - Member                                           6. SKF India Ltd.             Corporation Ltd.
                                                                  7. UltraTech Cement      6. Vinati Organics Ltd.                                  - Member                   - Member
                                                                     Ltd. - Chairman          - Chairman                                         7. Usha Martin Ltd.        6. Universal Sompo
                                                                                           7. UltraTech Cement                                       Chairman                  General Insurance
                                                                                              Ltd- Member                                        8. Voltas Ltd.                Co. Ltd. - Chairman
                                                                                                                                                    - Chairman

       b) Shareholders/Investors                       -          1. Maruti Suzuki India 1. Camphor & Allied .                 -                          -                         -                      -
          Grievance Committee/                                       Ltd. - Member          Products Ltd.-Member
          Share Transfer Committee                                2. UltraTech Cement 2. UltraTech Cement
                                                                     Ltd. - Member          Ltd. - Member
                                                                                         3. Vinati Organics Ltd.
                                                                                            - Member




     Note: Pursuant to Clause 49 of the Listing Agreement, only two committees viz. Audit Committee and Shareholders’ Grievance Committee have been considered




21
SUSTAINABILITY R E P O R T / INCLUSIVE GROWTH


Corporate Social Responsibility Policy                   Birla Rural Technology Parks • Agriculture
For us in the Aditya Birla Group, reaching out to        development and better farmer focus • Watershed
underserved communities is part of our DNA. We           development • Partnership with Industrial Training
believe in the trusteeship concept. This entails         Institutes.
transcending business interests and grappling with       In Infrastructure Development, we endeavour to
the “quality of life” challenges that underserved        set up essential services that form the foundation of
communities face, and working towards making a           sustainable development through • Basic
meaningful difference to them.                           infrastructure facilities • Housing facilities • Safe
Our vision is - “to actively contribute to the social    drinking water • Sanitation & hygiene • Renewable
and economic development of the communities in           sources of energy.
which we operate. In so doing build a better,            To bring about Social Change, we advocate and
sustainable way of life for the weaker sections of       support         •     Dowryless       marriage
society and raise the country’s human development        • Widow remarriage • Awareness programmes on
index” (Mrs. Rajashree Birla, Chairperson, Aditya        anti social issues • De-addiction campaigns and
Birla Centre for Community Initiatives and Rural         programmes • Espousing basic moral values.
Development).                                            Activities, setting measurable targets with time
Implementation process:           Identification of      frames and performance management.
projects                                                 Prior to the commencement of projects, we carry
All projects are identified in a participatory manner,   out a baseline study of the villages. The study
in consultation with the community, literally sitting    encompasses various parameters such as – health
with them and gauging their basic needs. We              indicators, literacy levels, sustainable livelihood
recourse to the participatory rural appraisal mapping    processes, population data - below the poverty line
process. Subsequently, based on a consensus and          and above the poverty line, state of infrastructure,
in discussion with the village panchayats, and other     among others. From the data generated, a 1-year
influentials, projects are prioritized.                  plan and a 5-year rolling plan are developed for
Arising from this, the focus areas that have emerged     the holistic and integrated development of the
are Education, Health care, Sustainable livelihood,      marginalized. These plans are presented at the
Infrastructure development, and espousing social         Annual Planning and Budgeting meet. All projects
causes. All of our community projects are carried        are assessed under the agreed strategy, and are
out under the aegis of The Aditya Birla Centre for       monitored every quarter, measured against targets
Community Initiatives and Rural Development.             and budgets. Wherever necessary, midcourse
                                                         corrections are effected.
In Education, our endeavour is to spark the desire
for learning and knowledge at every stage through        Organizational mechanism and responsibilities
• Formal schools • Balwadis for elementary               The Aditya Birla Centre for Community Initiatives
education • Quality primary education • Aditya Bal       and Rural Development provides the vision under
Vidya Mandirs • Girl child education • Adult             the leadership of its Chairperson, Mrs. Rajashree
education programmes.                                    Birla. This vision underlines all CSR activities. Every
In Health care, our goal is to render quality health     Manufacturing Unit has a CSR Cell. Every Company
care facilities to people living in the villages and     has a CSR Head, who reports to the Group Executive
elsewhere through our Hospitals.• Primary health         President (Communications & CSR) at the Centre.
care centres • Mother and Child care projects •          At the Company, the Business Director takes on the
Immunization programmes with a thrust on polio           role of the mentor, while the onus for the successful
eradication • Health care for the visually impaired,     and time bound implementation of the projects is
and physically challenged • Preventive health through    on the various Unit Presidents and CSR teams. To
awareness programmes.                                    measure the impact of the work done, a social
                                                         satisfaction survey / audit is carried out by an external
In Sustainable Livelihood, our programmes aim            agency.
at providing livelihood in a locally appropriate and
environmentally sustainable manner through •             Partnerships
Formation of Self Help Groups for women                  Collaborative partnerships are formed with the
empowerment • Vocational training through Aditya         Government, the District Authorities, the village


22
panchayats, NGOs and other like-minded                      patients with TB.
stakeholders. This helps widen the Company’s reach          596 patients were treated for dental problems.
and leverage upon the collective expertise, wisdom
                                                            Over 3,630 villagers benefited from specific disease
and experience that these partnerships bring to the
                                                            camps organized for cardiac checkup, skin diseases,
table.
                                                            arthritis and other specific health problems.
In collaboration with FICCI, we have set up Aditya
                                                            A special programme for drug de-addiction
Birla CSR Centre for Excellence to make CSR an
                                                            organized at Bhatinda was attended by 550 people.
integral part of corporate culture.
                                                            Mother and Child Care
The Company engages with well established and
recognized programmes and national platforms such           We administered 1,19,457 polio doses to children
as the CII, FICCI, ASSOCHAM to name a few,                  at Birla White, Kharia Khangar and Vikram Cement,
given their commitment to inclusive growth.                 Khor.
Budgets                                                     Nearly 10,000 children were immunized against
                                                            diphtheria, tetanus, measles and hepatitis-B across
A specific budget is allocated for CSR activities.
                                                            the locations mainly in Khor, Shambhupura, Kharia
This budget is project driven.
                                                            Khangar and Kotputli.
Information dissemination
                                                            More than 1,886 couples have opted for planned
The Company’s engagement in this domain is                  families and responsible parenting at Rawan, Kotputli,
disseminated on its website, Annual Reports, its house      Khor, Kharia Khangar, Sawa, Malkhed and
journals and through the media.                             Reddipalayam.
Management Commitment                                       Over 1,500 mothers were provided pre and post
Our Board of Directors, our Management and all              natal care at Reddipalayam, Khor, Shambhupura,
of our employees subscribe to the philosophy of             Kotputli, Rawan and Kharia Khangar.
compassionate care. We believe and act on an ethos          Education
of generosity and compassion, characterized by a
                                                            Over 507 students were enlisted this year in our
willingness to build a society that works for everyone.
                                                            Balwadis at Khor, Nawalgarh, Shambhupura and
This is the cornerstone of our CSR policy.
                                                            Reddipalayam.
Our Corporate Social Responsibility policy conforms
                                                            To encourage the spirit of excellence, 361 children
to the Corporate Social Responsibility Voluntary
                                                            from the adopted rural schools were awarded
Guidelines spelt out by the Ministry of Corporate
                                                            scholarships at Rawan and Malkhed.
Affairs, Government of India in collaboration with
FICCI (2009).                                               This year we were able to persuade the parents of
                                                            290 girls who had dropped out from their schools
Towards inclusive growth
                                                            in the villages to get back to their studies at Malkhed
A snapshot of your Company’s work                           and Kharia Khangar.
Your Company’s CSR activities extend to 310                 To focus on the girl child we support the Kasturba
villages, in proximity to its plants, across the country.   Gandhi Balika Vidhyalayas (KGBV) - residential
Health Care                                                 schools for girls at Kharia Khangar.
At the rural medical camps organized for general            More than 15 education centres across Rawan and
health check-ups 15,388 villagers were examined.            Kharia Khangar provide bridge education to girls
Over 91,400 patients were treated at our hospitals.         who had dropped out from the education stream,
Those afflicted with serious ailments were taken to         mid-way. So far, 290 girls have been successfully
the Company’s hospitals for treatment.                      placed in KGBVs and other Government schools.
Intra Ocular lens surgery benefited 3,662 cataract          Over 80 people have joined our adult literacy classes
                         .),
patients at Khor (M.P Shambhupura (Rajasthan)               at Malkhed.
and Kharia Khangar (Rajasthan).                             More than 8,100 students at various Government
More than 35,050 truck drivers, their helpers and           schools have been provided educational aids such
migrant workers were sensitized to the dangers of           as school bags, notebooks, stationery and utensils
HIV/AIDS.                                                   for mid-day meal support at Kharia Khangar,
The DOTS centre at Kotputli continues to treat              Neemuch, Shambhupura, Rawan and Malkhed.


                                                                                                                23
At the Kagina Industrial Training Centre, which we        Infrastructure Development
are running at Malkhed, 171 students have been            To augment the ground water storage by minimizing
trained as fitters, welders, electronic, electric and     the excess runoff, two water harvesting structures in
mechanical repairmen. They have been successfully         the form of Anicuts were constructed at Kharia
placed. This centre is recognized by the Department       Khangar.
of Employment & Training of the Government of
                                                          A community hall has been provided for Segwa
Karnataka.
                                                          village in Neemuch to facilitate informative and
Free coaching classes for underprivileged students        cultural exchanges among communities.
were conducted at Rawan.
                                                          School buildings, boundary walls, anganwadi centres,
Safe drinking water and sanitation                        panchayat offices, Primary Health Centre and cattle
Water tanks have been set up at Neemuch,                  sheds have been constructed/renovated at the
Chittorgarh, Kharia Khangar and Reddipalayam.             Company’s Neemuch, Chittorgarh, Kharia Khangar,
Under the Nirmal Gram Yojana, your Company                Rawan and Kotputli plants.
facilitated the construction of individual toilets in     Your Company has repaired the village approach
villages around Khor and Shambhupura plants.              roads at Rawan and Shambhupura.
At schools around Shambhupura, 8 roof rain water          Vikram Cement has set up a 20-bed maternity ward
harvesting structures were constructed.                   at the District Hospital.
Sustainable Livelihood                                    Public sanitation facilities have been provided at
Towards fostering renewable energy, 50 bio-gas units      Neemuch and other units.
have been promoted in villages around our Vikram          At the Navjeevan Gaushala at Kharia Khangar,
Cement Plant near Khor.                                   3,500 cattle were vaccinated. The vermin compost
Immunized 9,061 animals in animal husbandry and           pits produce manure which is supplied to farmers.
other veterinary camps at Vikram Cement, Khor,            The Gaushala also serves as a demonstration site
Grasim Rawan, Birla White Kharia Khangar and              for better bred cattle and farming practices.
Aditya Cement Shambhupura.                                Social Welfare
Farm based income generation activities have              Under the mass marriage programme, 104 couples
benefitted 70 farmers at Kharia Khangar, Khor and         have wed.
Shambhupura.                                              We helped more than 120 new beneficiaries at
Self Help Groups and Income Generation                    Reddipalayam, Malkhed and Rawan access
Our 120 Self Help Groups empower 1,200 rural              Government pension funds for old age widows and
households financially and socially at Malkhed,           the physically handicapped. Other social security
Kharia Khangar and Reddipalayam. Most of these            programmes were facilitated by us.
groups have been linked with the economic schemes         The drug de-addiction campaign organized at
of NABARD and the District Industries Centre.             Bhatinda, was attended by 8,000 people so far, of
Vocational training programmes were conducted for         which 250 addicts have been cured and successfully
637 youngsters. Among these were two-wheeler              rehabilitated.
repairing, driving, domestic electric fitting, motor      At the week long Yoga and Sanskar classes organized
rewinding, mobile repairing, training on refrigeration,   for school children at Malkhed 1,177 children
computer training and beauty parlour courses in           participated.
Khor, Shambhupura, Kharia Khangar, Reddipalayam,          Our Board of Directors, our Management and all
Malkhed and Rawan.                                        of our employees subscribe to the philosophy of
At the various tailoring centres across our Units,        compassionate care and to the upliftment of our
linkages with entrepreneurs have been developed to        rural societies.
close the marketing loop. Over 36 women have
been the beneficiaries.




24
ENVIRONMENT R E P O R T


The challenges that the world faces on environment        measures and is a knowledge networking forum on
conservation, are indeed alarming. Just to highlight      environmental impact issues. Your Company’s
a few – climate change, the severity of droughts          sustainable development program is in sync with the
and floods, their impact on rain fed agriculture, the     parameters of the CSI.
emission of greenhouse gases and our ability to
pursue sustainable development. We in India are           Your Company’s Cement plants continue to validate
no exception to these issues. Environment                 its energy efficiency, kiln reliability and productivity
conservation and sustainable development are              based on data from Global Benchmarking Surveys,
continuously on your Company’s radar. Hence these         conducted annually by Whitehopleman – an
are integrated into its business strategies as well as    independent UK based consulting firm.
its efforts towards fostering inclusive growth through
its rural development and community initiatives.          Your Company’s thrust on use of alternate fuels is
                                                          gaining momentum. We have been continuing our
All of your Company’s plants are ISO14001 EMS,            efforts to reduce consumption of fossil fuels by
OHSAS 14001 and SA8000 certified.                         substituting these with wastes from other industries.
                                                          It is difficult for the waste generating industries to
A rigorous in-depth environment audit of each of
                                                          safely dispose these wastes generated and the only
our plants is conducted by external specialists in this   other choice is through incineration.
domain. Among the auditors enlisted by us are
KPMG Peat Maverick, Det Norkse Veritas and                We have saved using coal by recoursing to alternate
Environmental Systems Auditors. Alongside these           fuels such as processed municipal solid waste, agro
experts, the State Pollution Control Board’s certified    waste, tyre chips and used polythene and plastics.
auditors also carry out these audits. They reconfirm      In 2009-10, we substituted the use of natural
our commitment to environment conservation as a           resources with 18,000 tons of waste materials as
major operating principle.                                fuel, equivalent to 9,000 tons of coal burning. This
                                                          has helped our environmental conservation efforts
Your Company has developed and implemented
                                                          significantly. We are building competency and
measures to monitor and reduce green house gas
                                                          installing machinery at our plants to handle waste
(GHG) emissions from its manufacturing operations.
                                                          fuels in the most eco-friendly manner.
The GHG emission details and mitigation plan are
being audited by KPMG as Independent Third Party
                                                          Rain water harvesting continues to be a priority area.
Auditors. This is work-in-progress. We expect to          Water bodies in the catchment areas for rainwater
publish their findings in the 3rd quarter of FY 2010-     storage and ground water recharging have been set
11. Whatever course correction or innovative
                                                          up. At the same time in shopping complexes, hospital
suggestions emanate from the report, will be              roofs, school and mine offices at our plant locations,
implemented. Their findings will be published by
                                                          rain water harvesting system has been instituted.
mid 2010-11.                                              This effectively recharges rain water in the bore wells
Your Company is greatly advantaged by its linkages        and helps maintain ground water levels.
with its parent Company, Grasim Industries Limited,
                                                          The greenbelt at our plants is simply awesome and
which is a voluntary member of the Cement
                                                          is surrounded by trees all around. At some points,
Sustainability Initiative (CSI). The CSI sets common
                                                          you cannot even see the skyline. Only the leaves
measures and is a knowledge networking forum on
                                                          and the flowers and hear the cacophony of the
environmental impact issues. Your Company’s
                                                          birds. When you walk through this wooded
sustainable development program is in sync with the
                                                          ambience, you can never imagine that there would
parameters of the CSI.
                                                          be a plant in the midst of nature. Our Board, our
Your Company is a voluntary member of the Cement          Management and all of our colleagues are
Sustainability Initiative (CSI). The CSI sets common      committed to living in harmony with nature.


                                                                                                               25
D I R E C TO R S ’ R E P O R T


Dear Shareholders,                                        year under review, the figures of the previous year
                                         th
Your Company was incorporated on 4 September,             are not available.
2009. As such, your Directors present the First Annual                                           (Rs. Crores)
Report of your Company together with the Audited                                   Consolidated Stand-alone
Accounts for the period ended 31st March, 2010.                                         2009-10      2009-10
SCHEME OF ARRANGEMENT                                     Gross Turnover              4,745.70 4,745.70
As you are aware, the Cement Business of Grasim           Gross Profit (PBDT)          1,155.07     1155.11
Industries Limited (“Grasim”), the holding company,       Less: Depreciation             213.12       213.12
has been demerged into your Company w.e.f. 1st            Profit before Tax              941.95       941.99
October, 2009, being the Appointed Date fixed for         Tax Expenses                   324.03       324.03
this purpose, pursuant to a Scheme of Arrangement
under Sections 391 to 394 of the Companies Act,           Surplus available for
                                                          Appropriation                    617.92         617.96
1956 (“the Scheme of Arrangement”). Pursuant to
the Scheme of Arrangement and in consideration            Appropriation:
thereof, your Company shall issue 1 (one) equity          General Reserve                   200.00        200.00
share of the face value of Rs. 5/- credited as fully      Debenture Redemption
paid up, to the shareholders of Grasim for every
                                                          Reserve                            12.50          12.50
equity share they hold in Grasim as on 28th May,
2010, being the Record Date fixed for this purpose.       Proposed Dividend                  45.79          45.79
The Scheme of Arrangement has become effective            Corporate Tax on Dividend           7.61           7.61
on 18th May, 2010, having received the regulatory         Balance carried to
approvals, interalia, the sanction of the Hon’ble High    Balance Sheet                     352.02        352.06
Court of Madhya Pradesh, Indore and Hon’ble High
Court of Gujarat, Ahmedabad.                                                               617.92         617.96
MERGER WITH ULTRATECH CEMENT LIMITED                      OPERATIONS
As a separate matter, the Board of Directors of your      A review of operations of your Company for the
Company and that of UltraTech Cement Limited              period ended 31st March, 2010 is provided in the
(UltraTech), another subsidiary of Grasim, have           Management Discussion and Analysis Section, which
decided to amalgamate your Company with                   forms part of this Annual Report.
UltraTech under a Scheme of Amalgamation under            DIVIDEND
Sections 391 to 394 of the Companies Act, 1956            Your Directors are pleased to recommend a maiden
(“Scheme of Amalgamation”), subject to necessary          Dividend @ Rs. 1.75 per fully paid-up equity share
approvals, w.e.f. 1st July, 2010, being the Appointed     of Rs. 5 each for the period ended on 31st March,
Date fixed for the purpose. In terms of the Scheme,       2010. The total outgo of the dividend to be paid to
the shareholders of the Company will receive 4 (four)     the shareholders will be Rs. 53.40 crores (inclusive
equity shares of UltraTech of the face value of Rs.10     of Corporate Tax on Dividend).
each, credited as fully paid up, for every 7 (seven)      EMPLOYEE STOCK OPTION SCHEME (ESOS)
equity shares of the Company of the face value of         Pursuant to the Scheme of Arrangement between
Rs.5 each held on the record date to be fixed for         Grasim Industries Limited (“Grasim”), the Company
the purpose. The Scheme of Amalgamation is                and their respective shareholders and creditors under
pending for sanction before the Hon’ble High Courts       the provisions of Sections 391 to 394 of the Companies
of Bombay and Gujarat.                                    Act, 1956 (“Scheme of Arrangement”), the Cement
                                                          Business of Grasim was transferred to the Company.
The amalgamation of your Company with UltraTech           Grasim had constituted an employees’ stock option
will result in UltraTech emerging as the largest Cement   scheme in 2006 (“ESOS-2006”) under which Grasim
Company in India and the 10th largest in the world.       had granted options to its eligible employees. In respect
FINANCIAL PERFORMANCE                                     of the stock options granted by Grasim under ESOS-
                                                          2006, the Company is required to offer one (1)
The results of your Company on consolidated basis         employee stock option for every employee stock option
for the period ended 31st March, 2010 are as under.       held by an employee in Grasim, as on the date as
As the Company has been incorporated during the           may be determined by Grasim for this purpose, under


26
the Compensatory Stock Option Scheme created by          and job bands have been institutionalized.
the Company (“ESOS-2010”), pursuant to the Scheme        Ongoing learning, refreshing HR systems in line with
of Arrangement.                                          global benchmarks, aligning rewards and recognition
The details of Employee Stock Options granted pursuant   with performance, have enabled your Company
to ESOS - 2010, as also the disclosures in compliance    sustain its reputation of a meritocratic organization.
with Clause 12 of the Securities and Exchange Board      The Group's Corporate Human Resources function
of India (Employee Stock Option Scheme and Employee      has played and continues to play an integral role in
Stock Purchase Scheme) Guidelines, 1999, are set         your Company's Talent Management Processes.
out in the Annexure to this Report.
                                                         CORPORATE GOVERNANCE
DEBENTURES AND TERM LOANS
                                                         As required by Clause 49 of the Listing Agreement of
Your Company has raised long term loans                  Stock Exchanges, the report on Corporate Governance
aggregating Rs.450 Crores to meet the requirements       forms part of this Annual Report. The Company’s
of capital expenditure and other approved purposes.      Statutory Auditors’ Certificate dated 18th May, 2010
AWARDS & ACCOLADES                                       in terms of Clause 49 of the Listing Agreement is
Your Company has earned several honours. Some            annexed to and forms part of the Directors’ Report.
of the significant accolades received include:           DIRECTORS’ RESPONSIBILITY STATEMENT
¢ National Energy Conservation Award 2009 in             As stipulated in Section 217(2AA) of the Companies
     Cement Sector : Birla White Division                Act, 1956, your Directors subscribe to the “Directors’
¢ CAPEXIL Export Award – “Certificate of Merit”          Responsibility Statement” and confirm that:
     for Export Recognition : Birla White Division       i) in the preparation of the accounts for the period
¢ IMC - Ramakrishna Bajaj National Quality                    ended 31 st March, 2010, the applicable
     Award for Outstanding Achievement Trophy                 accounting standards have been followed along
     2009 : Birla White Division                              with proper explanation relating to material
                                                              departures;
RESEARCH AND DEVELOPMENT
                                                         ii) the Directors have selected such accounting
In an increasingly competitive business environment,
                                                              policies and applied them consistently and made
your Company recognizes the importance of
                                                              judgments and estimates that are reasonable
Research & Development (R&D) to maintain its
                                                              and prudent so as to give a true and fair view
leadership position. To further its competitive edge
                                                              of the state of affairs of the Company at the
through product innovations and quality upgradation
                                                              end of the financial year and of the profit or
as part of its customer-centric endeavors, your
                                                              loss of the Company for that period;
Company pursues a focused R&D strategy. Its R&D
efforts also aim at ensuring cost optimization and       iii) the Directors have taken proper and sufficient
environment protection.                                       care of the maintenance of adequate accounting
                                                              records in accordance with the provisions of
Your Company ’s R&D efforts are focused on
                                                              this Act for safeguarding the assets of the
development of new products and processes for
                                                              Company and for preventing and detecting fraud
creating greater value for its customers. While               and other irregularities; and
meeting customer needs is at the centre of all R&D
activities, your Company is committed to sustainable     iv) the Directors have prepared the accounts for
development and looks for new ways to preserve                the period ended 31st March, 2010 on a going
the environment and manage resources responsibly.             concern basis.
Towards this, your Company aims to maximise use          CONSOLIDATED FINANCIAL STATEMENTS
of industrial waste, alternative sources of fuel and     Upon effectiveness of the Scheme of Arrangement,
chemicals and mineral evaluation of captive              Harish Cement Limited has become a wholly owned
limestone reserves.                                      subsidiary of your Company and Bhaskarpara Coal
HUMAN RESOURCES                                          Company Limited has become a joint venture of
Your Company continuously strives to foster a culture    your Company, with effect from 1st October, 2009.
of high performance. Your Management has infused         The Consolidated Financial Statements have been
a lot of rigor and intensity in its people development   prepared by your Company in accordance with the
processes and in honing skill sets. Its HR processes     applicable Accounting Standards (AS-21 and AS-
are absolutely aligned to organizational goals.          27) issued by the Institute of Chartered Accountants
The implementation of People Soft HRMS (Human            of India. Together with the Auditors’ Report, these
Resource Management System), the variable pay plan       form part of the Annual Report.


                                                                                                            27
PARTICULARS AS PER SECTION 217 OF THE                    candidature for the office of Directors, liable to retire
COMPANIES ACT, 1956                                      by rotation.
Information on Conservation of Energy, Technology        Mr. Adesh Gupta retires from office by rotation at
Absorption and Foreign Exchange Earnings and Outgo,      the ensuing Annual General Meeting and being
stipulated under Section 217(1)(e) of the Companies      eligible, offers himself for re-appointment.
Act, 1956 is set out in a separate statement, attached   AUDITORS
to this report and forms part of it.                     The observations made in the Auditors’ Report are
In accordance with the provisions of Section 217(2A)     self explanatory and therefore do not call for any
ot the Companies Act, 1956 read with the                 further comments under Section 217(3) of the
Companies (Particulars of Employees) Rules, 1975,        Companies Act, 1956.
the names and other particulars of employees are
                                                         The Board, on the recommendation of the Audit
to be set out in the Directors’ report, as an
                                                                                                    .
                                                         Committee, has proposed that M/s. G.P Kapadia &
addendum thereto. However, in tandem with the
                                                         Co., Chartered Accountants, Mumbai and
provisions of Section 219(1)(b)(iv) of the Companies
                                                         M/s. Deloitte Haskins & Sells, Chartered Accountants,
Act, 1956, the Report and Accounts as set out
                                                         Mumbai, be appointed as the Joint Statutory Auditors
therein, are being sent to all members of the
                                                         of the Company to hold office from the conclusion
Company excluding the aforesaid information about
                                                         of the ensuing Annual General Meeting till the
the employees. Any member, who is interested in
                                                         conclusion of the next Annual General Meeting of
obtaining these particulars about employees, may
write to the Company Secretary at the Registered                                   .
                                                         the Company. M/s. G.P Kapadia & Co., Chartered
Office of the Company.                                   Accountants, Mumbai and M/s. Deloitte Haskins &
                                                         Sells, Chartered Accountants, Mumbai have
DIRECTORS                                                forwarded their certificates to the Company, stating
Your Company had initially three directors, viz., Mr.    that their appointment, if made, will be within the
Adesh Gupta, Mr. Sanjeev Bafna and Mr. Ashok             limit specified in that behalf in Sub-section (1B) of
Malu. Subsequent to the resignation of Mr. Sanjeev       Section 224 of the Companies Act, 1956.
Bafna, Mr. Saurabh Misra was appointed as an
                                                         Resolutions seeking your approval on these items
additional director of your Company with effect from
                                                         are included in the Notice of the ensuing Annual
17th September, 2009. Upon the resignation of Mr.
                                                         General Meeting.
                          .
Saurabh Misra, Mr. O.P Puranmalka was appointed
as an additional director of your Company with           COST AUDITORS
effect from 16th February, 2010.                         In pursuance of Section 233-B of the Companies
The Directors place on record their appreciation of      Act, 1956, your Directors have appointed M/s R.J.
the services rendered by Mr. Sanjeev Bafna and Mr.       Goel & Co., Delhi, M/s K.G. Goyal & Co., Jaipur
Saurabh Misra during their tenure as members of          and M/s N.D. Birla & Co., Ahmedabad, as the Cost
the Board.                                               Auditors for the year 2010-11, subject to the
Upon effectiveness of the Scheme of Arrangement          approval of the Central Government.
between Grasim and the Company, whereby the              APPRECIATION
Cement Business of Grasim has been transferred to        Your Directors wish to place on record their
the Company pursuant to the Scheme, the                  appreciation of the dedication and commitment of
                        .
appointment of Mr. O.P Puranmalka as an Additional       your Company’s employees to the growth of your
Director of the Company was deemed to be treated         Company.
as Whole Time Director of the Company with effect
                                                         Your Directors express their gratitude to the Central
from the date of his appointment, viz. 16th February,
                                                         and State Governments, banks, financial institutions,
2010 to 31st March, 2010 under the provisions of
                                                         shareholders and business associates for their
Section 269 and 314 read with Schedule XIII and
                                                         ongoing co-operation and support.
other applicable provisions, if any, of the Companies
Act, 1956.                                                                 For and on behalf of the Board
Mr. Kumar Mangalam Birla, Mr. R.C. Bhargava,
Mr. G.M. Dave, Mr. N.J. Jhaveri and Mr. S.B. Mathur,
who were appointed as the Additional Directors at                                          .
                                                                          Adesh Gupta O. P Puranmalka
the Board Meeting held on 18th May, 2010, hold                                    Directors
office till the conclusion of the ensuing Annual         Place: Mumbai
General Meeting. The Company has received the            Date: 18th May, 2010
notices in writing from a member proposing their


28
A N N E X U R E “A” TO T H E D I R E C TO R S ’ R E P O R T


In terms of the Scheme of Arrangement for demerger of the Cement Business of Grasim Industries Limited
(“Grasim”) to the Company (“Scheme of Arrangement”), the Company is required to offer one (1) employee
stock option for every employee stock option held by the eligible employees in Grasim, as on the date as
may be determined by Grasim for this purpose, under the Compensatory Stock Option Scheme created by
the Company (“ESOS-2010”), pursuant to the Scheme of Arrangement. The stock options enumerated in the
table below are in accordance with the Scheme of Arrangement.
      Nature of disclosure                                Particulars
 a) Options granted                                       1,85,654
 b) The pricing formula                                   Exercise Price
                                                          1st Tranche : Rs. 405 per option
                                                          2nd Tranche : Rs. 606 per option
                                                          In terms of the Scheme of Arrangement, the Exercise
                                                          Price of the stock options granted by Grasim under
                                                          its Stock Option Scheme (“ESOS-2006”) has been
                                                          divided between its stock options under ESOS-2006
                                                          and the stock options of the Company. The Exercise
                                                          Price as aforesaid has been determined accordingly.
 c)   Options vested                                      97,534
 d) Options exercised                                     Nil
 e)   The total number of shares arising as a result      Nil
      of exercise of options
 f)   Options lapsed                                      Nil
 g) Variation of terms of options                         None
 h)   Money realized by exercise of options               Nil
 i)   Total number of options in force                    1,85,654
 j)   Employee-wise details of options granted:
      i)    Senior managerial personnel:                         .
                                                          Mr. O.P Puranmalka : 9,430
                                                          (Whole-Time Director till 31.03.2010)
      ii)   Any other employee who receives agrant        None
            in any one year of option amounting to
            5% or more of option granted during that
            year
      iii) Identified employees who were granted          None
           option, during any one year, equal to or
           exceeding 1% of the issued capital
           (excluding outstanding warrants and
           conversions) of the Company at the time
           of grant
 k)   Diluted Earnings Per Share (EPS) pursuant to        Rs. 55.90
      issue of shares on exercise of options calculated
      in accordance with Accounting Standard (AS)
      20 ‘Earning per share’.


                                                                                                           29
 l)   Difference between the employee compensation       Rs. 0.13 crore
      cost computed using the intrinsic value of the
      stock options and the employee compensation
      cost that shall have been recognized if the fair
      value of the options had been used.
      The impact of this difference on profits and on    Particulars                              Rs. Crores
      EPS of the company
                                                         Net Profit                                    617.96
                                                         Add: Intrinsic value
                                                         Compensation Cost                               0.17
                                                         Less: Fair Value
                                                         Compensation Cost                               0.30
                                                         Adjusted Net Profit                           617.83
                                                         Earnings Per share (Rs.)
                                                         (Basic and diluted)      Basic      Diluted
                                                         As reported :             55.92     55.90
                                                         As adjusted :             55.91     55.89
 m) Weighted-average exercise prices and weighted-       Options granted under 1st Tranche
    average fair values of options whose exercise        Weighted average exercise price     : (Rs.) 405.00
    price either equals or exceeds or is less than
    the market price of the stock                        Weighted average fair value         : (Rs.) 276.19
                                                         Options granted under 2nd Tranche
                                                         Weighted average exercise price     : (Rs.) 606.00
                                                         Weighted average fair value         : (Rs.) 231.87
                                                         As the shares of the Company are currently not
                                                         listed, the market price thereof is not available.
                                                         Hence, the classification is not applicable
 n)   A description of the method and significant
      assumptions used to estimate the fair values of
      options, including the following weighted-
      average information:
      (i)   risk-free interest rate (%)                  7.78
      (ii) expected life (No. of years)                  5
      (iii) expected volatility (%)                      33.40
      (iv) dividend yield (%)                            2.38
      (v) the price of the underlying share in market    Not applicable, as the shares of the Company are
           at the time of option grant                   currently not listed




30
A N N E X U R E “B” TO D I R E C TO R S ’ R E P O R T


Information under Section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of
Particulars in the Report of Board of Directors) Rule, 1988 and forming part of the Directors’ Report for the
year ending 31st March, 2010
A   CONSERVATION OF ENERGY
    a) Energy Conservation measures taken
         The Company is continuously engaged in the process of energy conservation through improved
         operational and maintenance practices. Following measures have been taken by different units of
         the company:
         -   Use of grinding aids for increasing blended cement production and fly ash absorption in
             blended cement.
         -   Process Optimization in Raw Mill, Coal Mill and Cement Mills.
         -   Installation of Variable Frequency Drives.
         -   Modification in Compressed Air System and Cooling Tower.
         -   Installation of reject recirculation system and increasing filtration area of bag house.
         -   Modification in Pre-heater cyclones, immersion tube and guide vanes for Kiln.
         -   Usage of thermal power plant ash as fuel to recover residual heat value from petcoke.
    b) Additional investment and proposals, if any, being implemented for reduction of consumption
       of energy:
         -   Installation of waste heat recovery systems in pre heater and cooler.
         -   Cooler modification for recovery of cooler heat losses.
         -   Use of Solar Lighting System with LED lights.
         -   Improve efficiency of process fans.
         -   Installation of additional Air Heater Module for waste heat recovery at Kiln.
         -   Modification in Pre-heater cyclones and installation of higher efficiency fan at Dryer and
             Decoloriser at Kiln.
    c)   Impact of Measures at (a) and (b) above for reduction of energy consumption and consequent
         impact on the cost of production of goods:
         -   The above measures have resulted/ will result in reduction in fuel & power consumption,
             increase in productivity and reduction in energy cost.
    d) Total Energy Consumption and Energy Consumption per Unit of Production:
         As per Form “A” attached.
B. TECHNOLOGY ABSORPTION
    Efforts made in Technology Absorption in Form “B”.




                                                                                                          31
RESEARCH & DEVELOPMENT (R&D)
FORM “B”
1    Specific areas in which R&D carried out by the Company:
     -    Development of variants of wall care putty.
2    Future Plan of Action
     -    Development of new variants of value added products
3    Expenditure on R & D
     Expenditure                                                                    Rs. Crs.
     a. Capital                                                                        0.87
     b. Recurring                                                                      1.99
                                                                                       2.86
     c.   Total R & D Expenditure as a percentage of turnover                        0.07%
4    Technology Absorption, Adoption and Innovation
     The Company continuously strives to adopt latest technology for improving productivity and product
     quality and reducing consumption of scarce raw material, energy and other inputs.
     Information regarding technology imported during the last five years:
     -    Installation of Loop Duct and TCS System through M/s Taiheiyo Engineering Corporation, Japan for
          both kiln lines.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
     (a) Activities related to Exports
          Exports on F.O.B. basis during the year were Rs. 10.39 Crores
     (b) Total Foreign Exchange used and earned
          Foreign Exchange used Rs. 5.21 Crores
          Foreign Exchange earned Rs. 10.43 Crores
FORM ‘A’
Total Energy Consumption and Energy Consumption per unit of Production
(A) POWER & FUEL CONSUMPTION
                                                          Unit                             Current Year
1. Electricity
   a) Purchased - Unit                                    ‘000                                  168449
       Total amount                                       Rs in lacs                              7942
       Rate per Unit                                      Rs./Unit                                 4.72
   b) Own Generation
       I) Through Diesel Generator - Unit                 ‘000                                   52465
            Unit per Liter of Diesel Oil                  Units/Ltr.                               3.62
            Cost / Unit                                   Rs./Unit                                 8.06
       II) Through Steam Turbine - Units                  ‘000                                  644967
            Units per Kg. Of Steam                        Co-generation of Steam & Power
            Cost / Unit                                    Rs./Unit                                3.28
            (Cost of fuel and duties only)

32
(A) POWER & FUEL CONSUMPTION
                                                      Unit                             Current Year

2. Coal (Slack, Steam & ROM including
   Lignite Coal & other Alternative Fuel)
   For Co-generation of Steam & Power                 Tonne                                775841
   For Process in Cement Plants                       Tonne                               1039120
   Total amount                                       Rs in lacs                             68121
   Average rate                                       Rs./Tonne                            3753.33
3. Furnace Oil (Including LSHS)
   Quantity                                           K. Ltrs.                               13986
   Total amount                                       Rs in lacs                              3534
   Average rate                                       Rs./K. Ltrs.                           25266
4. Light Diesel Oil (LDO)
   Quantity                                           K. Ltrs.                                   0
   Total amount                                       Rs in lacs                                 0
   Average rate                                       Rs./K. Ltrs.                           40833
5. High Speed Diesel Oil (HSD)
   Quantity                                           K. Ltrs.                                2284
   Total amount                                       Rs in lacs                               761
   Average rate                                       Rs./K. Ltrs.                           33327

(B) CONSUMPTION PER UNIT OF PRODUCTION
                                                                 Electricity (units)   Coal/Petcoke
                                                                           Current          Current
                                  Unit                                         Year            Year
   Name of the Product
   Cement
   Grey Cement :
   Electricity
       Standard                   Per Tonne                                    100                -
       Actual                     Per Tonne                                     81                -
   Coal/Petcoke
       Standard                   K.Cal Per Kg of Clinker                         -        710-800
   Actual                         K.Cal Per Kg of Clinker                         -            709
   White Cement :
   Electricity
       Actual                     Per Tonne                                   119                 -
   Coal/Petcoke
       Actual                     Kg Per Tonne                                    -            132




                                                                                                 33
A U D I TO R S ’ R E P O R T


TO THE MEMBERS OF SAMRUDDHI CEMENT LIMITED
1. We have audited the attached Balance Sheet of SAMRUDDHI CEMENT LIMITED (“the Company”) as
   at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the
   period 4th September, 2009 (date of incorporation) to 31st March 2010, both annexed thereto. These
   financial statements are the responsibility of the Company’s Management. Our responsibility is to
   express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
   Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
   financial statements are free of material misstatements. An audit includes examining, on a test basis,
   evidence supporting the amounts and the disclosures in the financial statements. An audit also includes
   assessing the accounting principles used and the significant estimates made by the Management, as
   well as evaluating the overall financial statement presentation. We believe that our audit provides a
   reasonable basis for our opinion.
3. As required by the Companies (Auditor’s Report) Order, 2003 (CARO) issued by the Central Government
   in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on
   the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows:
   (a) we have obtained all the information and explanations which to the best of our knowledge and
       belief were necessary for the purposes of our audit;
   (b) in our opinion, proper books of account as required by law have been kept by the Company so far
       as it appears from our examination of those books;
   (c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this
       report are in agreement with the books of account;
   (d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt
       with by this report are in compliance with the Accounting Standards referred to in Section 211(3C)
       of the Companies Act, 1956;
   (e) in our opinion and to the best of our information and according to the explanations given to us, the
       said accounts give the information required by the Companies Act, 1956 in the manner so required
       and give a true and fair view in conformity with the accounting principles generally accepted in
       India:
       (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;
       (ii) in the case of the Profit and Loss Account, of the profit of the Company for the period from 4th
             September, 2009 (date of incorporation) to 31st March 2010 and
       (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the period 4th
             September, 2009 (date of incorporation) to 31st March 2010.
5. On the basis of the written representations received from the Directors as on 31st March, 2010 taken on
   record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March,
   2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.
For DELOITTE HASKINS & SELLS                                                              .
                                                                                 For G. P KAPADIA & CO.
Chartered Accountants                                                                Chartered Accountants
(Registration No. 117364W)                                                     (Registration No. 104768W)

    .
B. P Shroff                                                                                   Atul Desai
Partner                                                                                          Partner
Membership No.: 34382                                                             Membership No.: 30850
MUMBAI
Date : May 18, 2010

34
A N N E X U R E TO T H E AU D I TO R S ’ R E P O R T


(Referred to in paragraph 3 of our report of even date)
(i)   Having regard to the nature of the Company’s business/activities/results clauses (x) regarding cash loss
      incurred by the Company, (xiii) regarding chit fund, nidhi / mutual benefit fund / societies and (xiv)
      regarding dealing or trading in shares, securities, debentures and other investments of CARO are not
      applicable.
(ii) In respect of its fixed assets:
      (a) The Company has maintained proper records showing full particulars, including quantitative details
          and situation of the fixed assets.
      (b) The fixed assets were physically verified during the period by the Management in accordance with a
          programme of verification, which in our opinion, provides for physical verification of all the fixed
          assets at reasonable intervals. According to the information and explanations given to us, no
          material discrepancies were noticed on such verification.
      (c) The fixed assets disposed off during the period, in our opinion, do not constitute a substantial part
          of the fixed assets of the Company and such disposal has, in our opinion, not affected the going
          concern status of the Company.
(iii) In respect of its inventory:
      (a) As explained to us, the inventories were physically verified during the period by the Management
          except stocks lying with third parties for which confirmations have been obtained. In our opinion the
          frequency of verification is reasonable.
      (b) In our opinion and according to the information and explanation given to us, the procedures of
          physical verification of inventories followed by the Management were reasonable and adequate in
          relation to the size of the Company and the nature of its business.
      (c) In our opinion and according to the information and explanations given to us, the Company has
          maintained proper records of its inventories and no material discrepancies were noticed on physical
          verification.
(iv) The Company has neither granted nor taken any loans, secured or unsecured, to / from companies,
     firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations given to us, there is an adequate
    internal control system commensurate with the size of the Company and the nature of its business with
    regard to purchases of inventory and fixed assets and the sale of goods and services. During the course
    of our audit, we have not observed any major weakness in such internal control system.
(vi) To the best of our knowledge and belief and according to the information and explanations given to us,
     there were no contracts or arrangements that needed to be entered in the Register maintained under
     Section 301 of the Companies Act, 1956.
(vii) According to the information and explanations given to us, the Company has not accepted any deposit
      from the public in terms of the provisions of Sections 58A and 58AA or any other relevant provisions of
      the Companies Act, 1956.
(viii) In our opinion, the Company has an adequate internal audit system commensurate with the size and the
       nature of its business.
(ix) We have broadly reviewed the books of account maintained by the Company pursuant to the rules
     made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the
     Companies Act, 1956 in respect of the Company’s products to which the said rules are applicable and
     are of the opinion that prima facie the prescribed accounts and records have been made and maintained.
     We have, however, not made a detailed examination of the records with a view to determining whether


                                                                                                            35
        they are accurate or complete. To the best of our knowledge and according to the information and
        explanations given to us, the Central Government has not prescribed the maintenance of cost records
        for any other product of the Company.
(x) According to the information and explanations given to us in respect of statutory dues:
        (a) The Company has been regular in depositing undisputed dues, including Provident Fund, Investor
            Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales Tax, Wealth Tax,
            Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with
            the appropriate authorities.
        (b) There were no undisputed amounts payable in respect of above mentioned statutory dues in arrears
            as at 31st March, 2010 for a period of more than six months from the date they became payable.
        (c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and
            Cess, to the extent applicable, which have not been deposited as on 31st March, 2010 on account
            of disputes and the forum where the dispute is pending are given below:

             Sr.   Name of the statute                  Forum where dispute               Amount     Period
             No.   (Nature of dues)                     is pending                  (Rs in Crores)
             1     Sale Tax and Value Added Act (Tax)   Supreme Court, High Court           89.21    1994-2010
                                                        Tribunal                             3.29    1988-2010
                                                        Appellate Authorities               28.29    1990-2010
                                                        Assessing Authorities                0.04    2000-2010
             2     Income Tax Act, 1961 (Tax)           Supreme Court, High Court            0.47    2006-2009
                                                        Appellate Authorities                0.01    2009-2010
             3     Central Excise Act, 1944             Supreme Court, High Court            2.47    1995-2010
                   (Duty/Penalty)                       Tribunal                            36.92    1994-2010
                                                        Appellate Authorities                4.64    2001-2010
                                                        Assessing Authorities                5.20    1991-2010
             4     Cess under various Acts              Supreme Court, High Court           78.35    2002-2010
                                                        (Cess/Interest)
             5     Service Tax under the                Tribunal                            21.47    1997-2010
                   Finance Act, 1994 (Tax)              Appellate Authorities                1.51    2004-2010


(xi)     In our opinion and according to the information and explanations given to us, the Company has not
         defaulted in the repayment of dues to banks, financial institutions and debenture holders during the
         period.

(xii)    In our opinion and according to the information and explanation given to us, the Company has not
         granted loans and advances on the basis of security by way of pledge of shares, debentures and other
         securities.

(xiii) In our opinion and according to the information and explanation given to us, the Company has not
       given any guarantees for loans taken by others from banks or financial institutions.

(xiv) In our opinion and according to the information and explanations given to us, the term loans have
      been applied for the purposes for which they were obtained other than temporary deployment pending
      application.

(xv)     In our opinion and according to the information and explanations given to us and on an overall
         examination of the Balance Sheet, we report that funds raised on short-term basis have not been used
         for long term investment.


36
(xvi) According to the information and explanations given to us, during the period covered by our audit
      report, 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.
(xvii) According to the information and explanations given to us and the records examined by us, security/
       charges in respect of debentures transferred pursuant to the ‘Scheme of Arrangement’ under Sections
       391 to 394 of the Companies Act, 1956, demerging the cement business of the parent company,
       Grasim Industries Limited into the Company on 1st October, 2009, which became effective on 18th
       May, 2010 are yet to be registered in the name of the Company.
(xviii) According to the information and explanations given to us, the Company has not raised any money by
        way of public issue during the period.
(xix) During the course of our examination of the books and records of the company, carried out in
      accordance with the generally accepted auditing practices in India, and according to the information
      and explanations given to us, we have neither come across any instance of fraud on or by the
      Company, noticed or reported during the year nor have we been informed of such case by the
      management.

For DELOITTE HASKINS & SELLS                                                             .
                                                                               For G. P KAPADIA & CO.
Chartered Accountants                                                               Chartered Accountants
(Registration No. 117364W)                                                    (Registration No. 104768W)

    .
B. P Shroff                                                                                  Atul Desai
Partner                                                                                         Partner
Membership No.: 34382                                                            Membership No.: 30850

MUMBAI
Date : May 18, 2010

                     AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
                      TO THE MEMBERS OF SAMRUDDHI CEMENT LIMITED

We have examined the compliance of conditions of corporate governance procedures implemented by
Samruddhi Cement Limited as on 18th May, 2010, as stipulated in Clause 49 of the Listing Agreement.
The compliance of conditions of Corporate Governance is the responsibility of the management. Our
responsibility was limited to the review of procedures and implementation thereof, adopted by the Company
for ensuring the compliance of conditions of the Corporate Governance. It is neither an audit nor an
expression of opinion on the financial statements of the Company.
On the basis of our review and according to the information and explanation given to us, and representation
made by the management, the conditions of Corporate Governance as stipulated on Clause 49 of the
Listing Agreement have been complied with by the Company.
We state that such compliance is neither an assurance as to the future viability of the Company nor the
efficiency or effectiveness with which the management has conducted the affairs of the Company.


                                                                                        .
                                                                                 For G.P KAPADIA & CO.,
                                                                                    Chartered Accountants

                                                                                          ATUL B. DESAI
Place: Mumbai                                                                                    Partner
Date: May 18, 2010                                                               (Membership No. 30850)

                                                                                                        37
B A L A N C E S H E E T A S AT 3 1 S T M A R C H , 2 0 1 0


                                                                                        Rs. in Crores
                                                                Schedules
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital                                                      1A          85.00
Share Capital Suspense [Note 5(b), Sch.21(B)]                      1B          45.84
Employee Stock Options Outstanding                                 1C           2.52
Reserves and Surplus                                                2       4,452.56
                                                                                           4,585.92
Loan Funds
Secured Loans                                                      3        1,835.31
Unsecured Loans                                                    4          707.51
                                                                                           2,542.82
Deferred Tax Liabilities (Net) [Note 16, Sch. 21(B)]                                         918.01
TOTAL FUNDS EMPLOYED                                                                       8,046.75
APPLICATION OF FUNDS
Fixed Assets
Gross Block                                                        5        9,038.70
Less: Depreciation/Amortisation                                             2,585.19
Net Block                                                                   6,453.51
Capital Work-in-Progress                                                      392.95
                                                                                           6,846.46
Investments                                                        6                       1,238.64
Current Assets, Loans and Advances
Inventories                                                        7         772.31
Sundry Debtors                                                     8         241.52
Cash and Bank Balances                                              9         90.95
Loans and Advances                                                 10        611.25
                                                                            1,716.03
Less:
Current Liabilities and Provisions
Liabilities                                                        11       1,505.07
Provisions                                                         12         249.31
                                                                            1,754.38
Net Current Assets                                                                           (38.35)
TOTAL FUNDS UTILISED                                                                       8,046.75
Significant Accounting Policies and Notes on Accounts           21 & 22

Schedules referred to above form an integral part of the Balance Sheet


In terms of our report attached

For DELOITTE HASKINS & SELLS                   .
                                       For G. P KAPADIA & CO.                          ADESH GUPTA
Chartered Accountants                  Chartered Accountants                         .
                                                                                  O.P PURANMALKA
                                                                                       ASHOK MALU
   .
B.P SHROFF                             ATUL B. DESAI                                        Directors
Partner                                Partner

Mumbai                                   KAMAL RATHI
Dated: 18th May, 2010             Manager & Company Secretary


38
PROFIT & LOSS ACCOUNT FOR THE PERIOD FROM 4TH SEPTEMBER, 2009
(DATE OF INCORPORATION) TO 31ST MARCH, 2010


                                                                                               Rs. in Crores
                                                                   Schedules
INCOME
Gross Sales                                                                        4,745.70
Less: Excise Duty                                                                    455.07
Net Sales                                                                                         4,290.63
Interest and Dividend Income                                          13                             10.88
Other Income                                                          14                             39.07
Increase in Stocks                                                    15                             48.39
                                                                                                  4,388.97


EXPENDITURE
Raw Materials Consumed                                                16                            535.61
Manufacturing Expenses                                                17                          1,245.18
Purchases of Finished Goods                                                                          53.14
Payments to and Provisions for Employees                              18                            198.62
Selling, Distribution, Administration and Other Expenses              19                          1,120.97
Interest                                                              20                             87.06
Depreciation and Amortisation [Note 2, Sch. 5]                                                      213.12
                                                                                                  3,453.70
Less: Captive Consumption of Cement (Net of Excise Rs. 6.13 Crores)                                   6.72
                                                                                                  3,446.98
Profit before Tax Expenses                                                                          941.99
Provision for Current Tax (including Wealth Tax Rs. 0.79 Crores)                                    179.26
Deferred Tax                                                                                        144.77
Profit after Tax and available for Appropriation                                                    617.96
Appropriations:
Debenture Redemption Reserve                                                                         12.50
Proposed Dividend                                                                                    45.79
Corporate Dividend Tax                                                                                7.61
General Reserve                                                                                     200.00
Balance carried to Balance Sheet                                                                    352.06
                                                                                                    617.96
Basic earnings per share (Rs.)                                                                       55.92
Diluted earnings per share (Rs.)                                                                     55.90
Significant Accounting Policies and Notes on Accounts              21 & 22

Schedules referred to above form an integral part of the Profit and Loss Account



In terms of our report attached

For DELOITTE HASKINS & SELLS                    .
                                        For G. P KAPADIA & CO.                                ADESH GUPTA
Chartered Accountants                   Chartered Accountants                               .
                                                                                         O.P PURANMALKA
                                                                                              ASHOK MALU
   .
B.P SHROFF                              ATUL B. DESAI                                              Directors
Partner                                 Partner

Mumbai                                    KAMAL RATHI
Dated: 18th May, 2010              Manager & Company Secretary


                                                                                                         39
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                                       Rs. in Crores
SCHEDULE 1A
SHARE CAPITAL
   Authorised
   202,000,000 Equity Shares of Rs. 5 each                                                                  101.00
                   (Effective 18th May, 2010 stands increased to 270,000,000
                   Equity Shares of Rs. 5 each, Rs. 135.00 Crores pursuant to
                   Scheme of Arrangement)
     Issued, Subscribed and Paid up
     170,000,000 Equity Shares of Rs. 5 each fully paid                                                      85.00
                   All of the above, Equity Shares of Rs. 5 each fully paid up
                   aggregating 100 % of the Company’s paid up Share Capital
                   are held by Grasim Industries Ltd., the Holding Company.
SCHEDULE 1 B
SHARE CAPITAL SUSPENSE
              Share Capital Suspense                                                                         45.84
              91,683,571 Equity Shares of Rs. 5 each, fully paid, to be issued
              without payment being received in cash pursuant to Scheme
              of Arrangement. Refer Note 5(b) of Schedule 21 (B).
              (Excluding issue of 14,906 Equity Shares kept in abeyance
              against shares of Grasim Industries Limited under Share
              Capital Suspense)
                                                                                                             45.84
SCHEDULE 1 C
EMPLOYEE STOCK OPTIONS OUTSTANDING
             Employee Stock Options Outstanding                                                                2.86
                   Less : Deferred Employees Compensation Expenses                                             0.34
                                                                                                               2.52
                   Outstanding Employee Stock Options exercisable into 185,654
                   Equity Shares of Rs. 5 each fully paid up. [Note 19 of Schedule 21(B)]
SCHEDULE 2
RESERVES AND SURPLUS                                                                                   Rs. in Crores
                                         Reserves transferred          Addition       Deduction/      Balance as at
                                     from Grasim Industries          during the       Adjustments 31st March, 2010
                                      Ltd. as per Scheme of              period        during the
                                              Arrangement *                                period
1.   Capital Reserve
     - Capital Subsidy                                 0.30                  -                 -              0.30
2.   Debenture Redemption Reserve                     27.50              12.50                 -             40.00
3.   General Reserve #                             3,862.80             200.00              2.60          4,060.20
4.   Surplus as per Profit and Loss Account               -             352.06                 -            352.06
                                                     3,890.60            564.56             2.60          4,452.56
*    Refer note 5 of Schedule 21(B)
#    Opening General Reserve
     Excess of assets over liabilites transferred from Grasim Industries Limited as per
     Scheme of Arrangement                                                                                4,088.26
     Less : - Share Capital Suspense (Refer Note 5(b) of Schedule 21 (B))                                   (45.84)
             - Deferred Tax Liability recognised on transferred assets towards
                accumulated depreciation.                                                                   (92.24)
             - Provision for costs in relation to transfer of assets pursuant to
                Scheme of Arrangement (Net of Tax)                                                          (87.38)
                                                                                                          3,862.80

#    Deduction/Adjustments of Rs. 2.60 Crores from General Reserve represents transfer to Employee Stock Option
     Outstanding against the Stock Option to be granted against ESOS 2006 of Grasim Industries Limited in terms of
     the Scheme of Arrangement (refer note 19 of Schedule 21B).

40
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                         Rs. in Crores
SCHEDULE 3
SECURED LOANS
Non-Convertible Debentures (Note 2)                                                           500.00
Loans and advances from Banks:
    - Working Capital Borrowings (Note 3)                                                      74.10
    - Rupee Term Loans (Note 4)                                                               450.00
    - Foreign Currency Loans (Note 5)                                                         747.71
    - Buyer’s Credit (Note 6)                                                                  60.40
Deferred Sales Tax Loan (Note 7)                                                                 3.10
                                                                                           1,835.31
Notes:

1    Refer Note 5 (d) (ii) of Schedule 21 (B)
2    Non-Convertible Debentures :
     (a) 10.48% - XXXVII Series Non-Convertible Debentures
          (redeemable at par on 16th December, 2013);                                         200.00
     (b) 8.80% - XXXVIII Series Non-Convertible Debentures
          (redeemable at par on 30th December, 2015, with
          Put & Call option on 30th December, 2013); and                                      100.00
     (c) 8.01% - XXXIX Series Non-Convertible Debentures
          (redeemable at par on 14th July, 2016, with Put &
          Call option on 14th July, 2014)                                                     200.00
     are secured by first pari passu charge on the fixed assets,
     both present and future, of the units at Rawan;
     Reddipalayam; Shambhupura; Jawad; Hotgi; Bathinda; Malkhed;
     White Cement Unit at Kharia Khangar;
     and Bulk Terminal at Doddaballapur.

                                                                                              500.00

3    Working Capital Borrowings from Banks are secured by hypothecation
     of stocks and book debts of the Company.                                                  74.10
4    Rupee Term Loans from Banks are secured by first pari passu charge on
     certain fixed assets, both present and future, of Kotputli unit.                         450.00
5    Foreign Currency Loans from Banks are secured by first pari passu charge on the
     fixed assets, both present and future, of the units as mentioned in Note 2 above.        747.71
6    Buyer’s Credit from Bank is secured by exclusive charge on certain specific fixed
     assets of Kotputli unit.                                                                  60.40
7    Deferred Sales Tax Loan is secured by bank guarantee backed by hypothecation
     of stocks and book debts of the Company.                                                    3.10




                                                                                                   41
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                                                                             Rs. in Crores

SCHEDULE 4
UNSECURED LOANS

Short Term Loans and Advances
     From Banks:
           Buyer’s Import Credit                                                                                                                      13.46
Other Loans and Advances:
     From Banks:
           Foreign Currency Loans                                                                                                                   518.76
           Buyer’s Import Credit (Due within a year Rs. 82.16 Crores)                                                                                 82.16
     From Others:
           Deferred Sales Tax Loan (Due within a year Rs. 67.43 Crores)                                                                               93.13

                                                                                                                                                    707.51



SCHEDULE 5
FIXED ASSETS                                                                                                                                 Rs. in Crores
 PARTICULARS                                          GROSS BLOCK                                       DEPRECIATION/AMORTISATION                 NET BLOCK
                                  Transferred   Additions   Deductions         As at      Transferred           For the Deductions         Upto         As at
                                from Grasim                              31.03.2010     from Grasim              period              31.03.2010   31.03.2010
                               Industries Ltd                                          Industries Ltd
                               on 01.10.09                                             on 01.10.09
                                   as per the                                              as per the
                                   Scheme of                                               Scheme of
                               Arrangement                                             Arrangement
                                   (Note 1)                                                (Note 1)
 1   Freehold Land                379.05        114.51               -     493.56                  -                -            -            -     493.56

 2   Leasehold Land                 90.00         8.33               -       98.33          15.81               2.67             -      18.48        79.85

 3   Buildings                    486.25         47.55           0.35      533.45           86.87               7.18         0.14       93.91       439.54

 4   Railway Sidings               103.03        12.43               -     115.46           43.71               2.43             -      46.14        69.32

 5   Plant and Machinery        7,110.16        522.57           7.46    7,625.27       2,122.35              190.32         3.38    2,309.29     5,315.98

 6   Furniture, Fittings and
     Office Equipment             129.79          6.21           8.36      127.64           94.28               6.07         7.94       92.41        35.23

 7   Vehicles                       17.42         2.20           0.68        18.94            6.67              1.29         0.50         7.46        11.48

 8   Intangible Assets
     - Computer Software            25.66         1.12           0.73        26.05          15.03               3.20         0.73       17.50          8.55

     TOTAL                     8,341.36         714.92         17.58     9,038.70      2,384.72              213.16         12.69    2,585.19     6,453.51
     Capital work-in-progress (including Advances and Pre-operative Expenses)                                                                       392.95
                                                                                                                                                  6,846.46




42
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


SCHEDULE 5 (Contd.)
                                                                                                      Rs. in Crores
Notes:

1   Refer note 5 (e) of Schedule 21(B)
2   Depreciation and Amortisation for the year                                                             213.16
    Less: Transferred to pre-operative expenses (Towards use of assets during pre-operative period)          0.04
                                                                                                           213.12

3   Execution of documents in respect of plots of Freehold Land amounting to Rs. 0.39 Crores is pending.

4   Buildings include Rs.16.07 Crores being cost of Debentures of and shares in a Company entitling the right of
    exclusive occupancy and use of certain premises.

5   Assets amounting to Rs.14.98 Crores are held on co-ownership with other Companies.

6   Fixed assets include assets of Rs. 37.63 Crores not owned by the Company.

7   Plant and machinery includes assets given on operating lease amounting to Rs. 25.54 Crores

8   Capital work in progress includes advance against capital orders, technical know-how and supervision fees,
    machinery under installation/in transit, construction materials purchases, other assets under erection and pre-
    operative expenses.

9   Leasehold land includes mining rights.

10 The title deeds of immovable properties pursuant to Scheme of Arrangement are yet to be transferred in the name
   of the Company.

11 The above includes Research and Development Assets (Plant and Machinery, Furniture, Fittings and Office
   Equipments and Intangible Assets) in Gross Block as on 01.10.2009 of Rs. 11.41 Crores and Net Block as on
   01.10.2009 of Rs. 9.23 Crores. Additions for the said Assets during the period is Rs. 0.87 Crores.

12 Pre-operative Expenses incurred during the year :
    Salaries, Wages, Bonus, Gratuity, etc.                                                                    1.01
    Contribution to Provident and Other Funds                                                                 0.09
    Employees’ Welfare Expenses                                                                               0.02
    Rent and Hire charges                                                                                     0.08
    Rates and Taxes                                                                                           0.02
    Stationery, Printing, Postage and Telephone Expenses                                                      0.01
    Travelling and Conveyance                                                                                 0.19
    Legal and Professional Charges                                                                            2.18
    Depreciation                                                                                              0.04
    Miscellaneous Expenses (Net)                                                                              1.37
    Interest on Loans and Debentures                                                                         10.51
                                                                                                            15.52
    Less : Sale of Trial Run Production                                                                       1.70
    Balance Transferred to Fixed Assets/ Capital Work in Progress                                           13.82



                                                                                                                43
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                                      Rs. in Crores
SCHEDULE 6
INVESTMENTS
LONG TERM (Trade) (At Cost unless otherwise stated)
   Shares In Subsidiary Companies - Unquoted
   Fully Paid - Equity Shares of Rs.10 each
                 50,000 Harish Cement Limited                                                                 0.10
   Others - Unquoted
   Fully Paid - Equity Shares of Rs.10 each
             4,429,997 Bhaskarpara Coal Company Limited                                                       4.43
CURRENT (At Cost or Fair Value, whichever is less)
     Unquoted
        1,168,732,446 Units of Debt Schemes of various Mutual Funds                                      1,234.11

                                                                                                         1,238.64

     Aggregate Book Value of Unquoted Investments                                                        1,238.64
     Note : No. of Units of Various Mutual Funds - Purchased and Redeemed during the year           3,368,797,614
SCHEDULE 7
INVENTORIES
Stores and Spare parts, Packing Materials and Fuel                                                         421.00
Raw Materials                                                                                               72.64
Finished Goods                                                                                              87.60
Process Stock                                                                                              185.98
Waste/Scrap                                                                                                  5.09
                                                                                                           772.31
SCHEDULE 8
SUNDRY DEBTORS *
(Unsecured, considered good unless otherwise stated)
Due for period exceeding six months                                                                         10.27
(Net of doubtful, fully provided Rs. 1.07 Crores)
Others                                                                                                     231.25

                                                                                                           241.52
*    Includes amount in respect of which the Company holds deposits.                                        52.48
SCHEDULE 9
CASH AND BANK BALANCES
Cash balance on hand                                                                                          0.57
Bank Balances with Scheduled Banks:
    Current Accounts (including cheques under collection)                                   90.33
     Deposit Accounts #                                                                      0.05
                                                                                                            90.38
                                                                                                            90.95

Note :
#    (a) Rs. 0.04 Crore lodged as security with Government Department.
     (b) Rs. 0.01 Crore as Interest accrued.


44
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                                Rs. in Crores
SCHEDULE 10
LOANS AND ADVANCES
(Unsecured, considered good except otherwise stated)
Deposits and Balances with Government and other Authorities (including accrued interest )             78.91
Other Deposits (Net of Doubtful, fully provided Rs. 3.32 Crores)                                      65.61
Advances to Holding Company                                                                            0.09
Advances to Subsidiaries                                                                              73.84
Advances recoverable in cash or in kind or for value to be received                                  376.35
Advance Income Tax (Net of Provision for Taxation)                                                    16.45
                                                                                                     611.25

SCHEDULE 11
CURRENT LIABILITIES
Sundry Creditors :
a) Micro, Small & Medium Enterprises                                                        -
    [To the extent identified with available information, Note 10 of Sch.21(B)]
b) Others                                                                             859.34
                                                                                                     859.34
Security and Other Deposits                                                                          240.77
Other Liabilities                                                                                    354.82
Interest accrued but not due on Debentures and Loans                                                  50.14
                                                                                                  1,505.07

SCHEDULE 12
PROVISIONS
Provision for Employee Benefits                                                                       64.03
Provision for Mines Restoration Expenditure                                                            0.72
Provision for Assets Transfer Cost on demerger [Refer Note 5(c) of Schedule 21(B)]                   131.16
Proposed Dividend                                                                                     45.79
Corporate Dividend Tax                                                                                 7.61
                                                                                                     249.31

SCHEDULE 13
INTEREST AND DIVIDEND INCOME
i) On Investments
    Dividends on Current Investments                                                                    9.99
ii) Others : Interest (Gross) on:
    Bank and Other Accounts (Tax deducted at source Rs. 0.35 Crore)                                     0.89
                                                                                                      10.88

SCHEDULE 14
OTHER INCOME
Export Incentives                                                                                      0.46
Rent Received (Tax deducted at source Rs. 0.02 Crore)                                                  0.36
Lease Rent (Tax deducted at source Rs. 0.17 Crore)                                                     1.63
Insurance Claims                                                                                       1.91
Profit on Sale of Current Investments (Net)                                                            0.03
Excess Provisions written back (Net)                                                                  18.18
Scrap/Waste Sales (Net of Excise Duty)                                                                 8.84
Miscellaneous Receipts                                                                                 7.66
                                                                                                      39.07




                                                                                                          45
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                               Rs. in Crores
SCHEDULE 15
INCREASE/(DECREASE) IN STOCKS
Closing Stock
Finished Goods                                                                                       87.60
Process Stock                                                                                       185.98
Waste/Scrap                                                                                           5.09
                                                                                                    278.67
Stock transferred from Grasim Industries Ltd. as per Scheme of Arrangement.
Finished Goods                                                                                      101.10
Process Stock                                                                                       121.94
Waste/Scrap                                                                                           5.28
                                                                                                    228.32
Add: (Increase)/Decrease in Excise Duty on Stocks                                                    (0.26)
     Stock Transfer from pre-operative expenses                                                      (1.70)
                                                                                                     48.39



SCHEDULE 16
RAW MATERIALS CONSUMED
Stock transferred from Grasim Industries Ltd. as per Scheme of Arrangement          74.64
Purchases and Incidental Expenses (includes cost of Lime Stone raised)             533.61
                                                                                                    608.25
Less : Closing Stock                                                                                 72.64
                                                                                                    535.61



SCHEDULE 17
MANUFACTURING EXPENSES
Consumption of Stores, Spare Parts and Components, Packing Materials and Incidental Expenses        248.03
Power and Fuel                                                                                      831.57
Processing Charges                                                                                    8.24
Freight and Handling expense on Clinker transfer                                                    109.37
Repairs to Buildings                                                                                  8.80
Repairs to Machinery (excluding Spare Parts and Components)                                          30.74
Repairs to Other Assets                                                                               8.43
                                                                                                 1,245.18



SCHEDULE 18
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages and Bonus                                                                           176.70
Contribution to Provident and Other Funds                                                            12.05
Welfare Expenses                                                                                      9.70
Employee compensation expenses under Employee Stock Option Scheme                                     0.17
(Refer Note 19 of Schedule 21(B))
                                                                                                    198.62




46
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


                                                                                             Rs. in Crores
SCHEDULE 19
SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES
Commission to Selling Agents                                                                       39.69
Brokerage and Discount                                                                             56.43
Freight and Handling Expenses                                                                     735.02
Advertisements and Sales Promotion                                                                147.95
Insurance                                                                                           5.34
Rent (including Lease Rent)                                                                        13.92
Rates and Taxes                                                                                    36.69
Stationery, Printing, Postage and Telephone Expenses                                                7.14
Travelling and Conveyance                                                                          15.82
Legal and Professional charges                                                                     20.31
Bad debts written off                                                                               0.01
Donations                                                                                           1.50
Exchange Rate Difference (Net)                                                                      6.74
Loss on Sale and/or discard of Fixed Assets (Net)                                                   0.96
Miscellaneous Expenses (includes diminution in value of current investment Rs 0.07 Crores)         33.45
                                                                                               1,120.97
SCHEDULE 20
INTEREST
On Fixed Period Loans and Debentures                                                               86.64
Other Interest                                                                                     10.93
                                                                                                   97.57
Less: Interest Capitalized                                                                         10.51
                                                                                                   87.06




                                                                                                       47
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


SCHEDULE 21
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
(A) Significant Accounting Policies :
1. Accounting Concepts:
    The financial statements are prepared and presented in accordance with the Generally Accepted Accounting
    Principles (GAAP) in India and comply in all material aspects with the Accounting Standards (AS) notified under the
    Companies (Accounting Standard) Rules, 2006 (as amended), other pronouncements of the Institute of Chartered
    Accountants of India, the relevant provisions of the Companies Act, 1956 and guidelines issued by Securities and
    Exchange Board of India.
2. Use of Estimates:
    The preparation of financial statements require estimates and assumptions to be made that affect the reported
    amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses
    during the reporting period. Difference between the actual results and estimates are recognized in the period in
    which the results are known/materialized.
3. Fixed Assets:
    Fixed Assets are stated at cost, less accumulated depreciation/ amortisation. Cost comprises the purchase price
    and any attributable cost of bringing the asset to its working condition for its intended use.
4. Treatment of expenditure during construction period:
    Expenditure during construction period is included under Capital Work in Progress and the same is allocated to
    the respective fixed assets on the completion of its construction.
5. Foreign Currency Transactions:
    Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction. Monetary
    assets and liabilities in foreign currency existing at Balance Sheet date are translated at year-end exchange
    rates.Exchange differences, including premium or discount on forward exchange contracts, arising till the
    commissioning of fixed assets, relating to borrowed funds and liabilities in foreign currency for acquisition of the
    fixed assets are adjusted to the cost of fixed assets. Other premium or discount on forward exchange contracts is
    amortised as expense or income over the life of the contract. All other exchange differences are recognised in
    Profit and Loss Account.
6. Financial Derivatives:
    Financial Derivative instruments such as Swaps and Options, are used to hedge risks associated with fluctuations
    in foreign exchange and interest rates. The derivative contracts are closely linked with the underlying transactions
    and are intended to be held to maturity. The underlying transactions are recorded as per terms of the financial
    derivative contracts.
7. Investments:
    Investments are classified as long term based on management intention at the time of purchase, all other
    investments are classified as current investment. Current investments are stated at lower of cost and fair value.
    Long term investments are stated at cost after deducting provisions made, if any, for permanent diminution (i.e.
    other than temporary diminution) in value.
8. Inventories:
    Inventories except scrap/waste are valued at the lower of cost and net realisable value. Waste/scrap is valued at net
    realisable value. The cost is computed on weighted average basis.
    Cost of Finished goods and process stock include cost of conversion and other costs incurred in bringing the
    inventories to their present location and condition.
    Obsolete, defective, slow moving and unserviceable inventories are duly provided for.
9. Depreciation/Amortisation:
    Depreciation/ Amortisation charge is provided for on the following basis:
    (a) On fixed assets - on straight line method applying the rates/useful life specified in Schedule XIV of the
          Companies Act, 1956, except as stated hereunder :
          Asset                                                                Estimated Useful Life
          Leasehold Land                                                       over the period of lease
          Capital expenditure on assets not owned                              5 years
          Motor Cars                                                           5 years
          Computer Software                                                    3 years
          Computer and Other Electronic Office Equipments                      4 years
          Furniture and Fixtures and Electrical Fittings                       7 years
          Mobile Phone                                                         3 years
          Continuous process plants as defined in Schedule XIV have been classified on technical assessment and
          depreciation provided accordingly.

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SCHEDULE 21 (Contd.)
   (b) In respect of fixed assets added/disposed off during the year on pro-rata basis with reference to the month of
       addition/deduction except in case of new projects where it is provided on the basis of days of use.
10. Impairment of Assets:
    Carrying amount of assets is reviewed at Balance Sheet date, if there is indication of impairment, based on the
    internal and external factors. The assets are treated as impaired when the carrying amount of asset exceeds its
    recoverable amount. An impairment loss, if any, is charged to Profit and Loss Account in the year in which the
    asset is identified as impaired. Reversal of impairment loss recognised in prior years, is recorded when there is an
    indication that impairment loss recognised for the asset no longer exists or has decreased.
11. Revenue Recognition:
    (a) Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to the
        buyer and stated at net of sales tax, VAT, trade discounts and rebates but includes excise duty.
    (b) Dividend income on investments is accounted for when the right to receive the payment is established.
    (c) Interest income is recognised on time proportion basis.
    (d) Certain claims of the Company viz. export incentives, insurance, railway etc. in respect of which quantum of
        accruals cannot be ascertained with reasonable certainity, are accounted on acceptance basis.
12. Employee Benefits:
    (a) Short term employee benefits and contribution to defined contribution plans are recognised as an expense on
        accrual at the undiscounted amount in the Profit and Loss Account.
    (b) The contribution as specified under the law are paid to the provident fund set up as irrevocable trust by the
        Company or to Regional Provident Fund Commissioner. The Company is generally liable for annual contribution
        and any shortfall in the fund assets based on the government specified minimum rates of return and
        recognises such contributions and shortfall, if any, as an expense in the year incurred.
    (c) Post employment and other long term employee benefits are recognised as an expense, at the present value
        of the amounts payable determined using actuarial valuation techniques, in the Profit and Loss Account for
        the year. Actuarial gains and losses in respect of post employment and other long term benefits are charged
        to the Profit and Loss Account.
    (d) Employee Stock Option Scheme: The intrinsic value of options granted under Employee Stock Option Scheme
        is recognised as deferred compensation cost and amortised over the vesting period.
13. Government Grants:
    Government Grants are recognised when there is reasonable assurance that the same will be received. Capital
    grants relating to specific assets are reduced from the gross value of the fixed assets and capital grants for Project
    Capital Subsidy are credited to Capital Reserve. Revenue grants are recognised in the Profit and Loss Account or
    deducted from related expenses.
14. Borrowing Cost:
    Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the
    acquisition/construction of qualifying fixed assets are capitalised upto the date when such fixed assets are ready
    for their intended use and all other borrowing costs are charged to Profit and Loss Account.
15. Provision for Current and Deferred Tax:
    Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period in
    accordance with the provisions of Income Tax Act, 1961. Deferred Tax resulting from timing difference between
    book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or
    substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and carried forward only
    to the extent there is a reasonable certainty that the deferred tax assets will be realised in future.
16. Mines Restoration Expenditure:
    The Company provides for the expenditure to restore the mines based on technical estimates by internal/external
    specialists. The total estimate of restoration expenditure is apportioned over the estimated quantities of total
    mineral reserves and provision is made based on the minerals mined during the year.
17. Operating Leases:
    Leases where significant portion of risk and reward of ownership are retained by the Lessor are classified as
    Operating Leases and lease rentals thereon are charged to Profit and Loss Account.


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SCHEDULE 21 (Contd.)
18. Provisions/Contingencies:
     A provision is recognised when there is a present obligation as a result of past event and it is probable that an
     outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
     Provisions are determined based on best estimate of the amount required to settle the obligation at the Balance
     Sheet date.
     Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor
     disclosed, in the financial statements.
19. Research and Development expenditure:
     Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such
     research. Assets procured for research and development activities are generally capitalised.
(B) NOTES ON ACCOUNTS                                                                                        Rs.in Crores
1    Contingent Liabilities not provided for in respect of:
     Claims not acknowledged as debts                                                                            373.28
     (Includes demands in respect of Royalty on Limestone,
     Excise Duty, Entry Tax, Cenvat Credit, etc.)
2    Estimated amount of Contracts remaining to be executed on capital account and not                           220.12
     provided (Net of advance paid Rs. 34.11 Crores).
3    The Company, incorporated on 4th September, 2009, has the main object of carrying on the business of
     manufacture and sale of cement and allied products. Accordingly, the current financial year is for the period from
     4th September 2009 to 31st March, 2010. This being the first financial year of the Company since incorporation,
     disclosure of previous year figures is not applicable.
4    The Company was incorporated by Samruddhi Swastik Trading and Investments Limited (SSTIL) with an Authorised
     Share Capital of Rs. 101 Crores divided into 20,20,00,000 Equity Shares of Face Value Rs. 5 each, Grasim
     Industries Limited (GIL) acquired the entire holding from SSTIL at par on 3rd October, 2009 and the Company
     became a Subsidiary of GIL.
5    (a) Pursuant to a Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956, GIL has
         demerged its Cement Business comprising inter alia of Grey Cement, White Cement and Ready Mix Concrete
         and vested into the Company with effect from 1st October, 2009 on a going concern basis. The Scheme has
         been approved inter alia by the Shareholders of GIL and Hon’ble High Courts of Madhya Pradesh, Indore
         Bench and Gujarat and has become effective on 18th May, 2010.
     (b) In terms of the Scheme, the Company will issue and allot its shares to the shareholders of GIL in the ratio of
         one equity share of face value of Rs. 5 each fully paid up in the Company for every one equity share of face
         value of Rs. 10 each fully paid held by the shareholders of GIL on 28th May, 2010, the record date fixed for
         the purpose. Pending allotment of these shares, the amount of Rs. 45,84,17,855 is disclosed as ‘Share
         Capital Suspense’. Upon allotment of equity shares to the shareholders of GIL, the shareholding of GIL in the
         Company will reduce to 64.96%.
     (c) Transfer and vesting of assets and liabilities of the Cement Business of GIL to the Company has been effected
         at the values appearing in the books of accounts of GIL as at 30th September, 2009 and recorded as such
         in the book of accounts of the Company. Excess of assets over liabilities (net of Debenture Redemption
         Reserve of Rs. 27.50 Crores and Capital Subsidy Reserve of Rs. 0.30 Crores transferred as liabilities
         pertaining to Cement Business) so recorded, amounting to Rs. 4,088.26 Crores is recognized in these
         financial statements, and as stipulated in the scheme, has been credited to ‘General Reserve’. Assets transfer
         cost on demerger will be borne by the Company pursuant to the Scheme of Arrangement.
     (d) (i)   As the Scheme became effective on 18th May, 2010, though the Assets and the Liabilities as on 31st
               March, 2010 arising out of the transferred business are vested in the Company, titles of the same are still
               not transferred in the name of the Company and being held in the name of GIL.
          (ii) Creation of securities against the secured loans as per Schedule 3 of Secured Loans is not yet effected.



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SCHEDULE 21 (Contd.)
       (e) The details of the Assets and Liabilities relating to the Cement Business vested with the Company with
           effect from 1st October, 2009, the appointed date are as follows:
            Particulars                                                                               Rs. in Crores
            ASSETS
            Gross Block                                                             8,341.36
            Less : Depreciation and Amortisation                                    2,384.72
             Net Block                                                                5,956.64
             Capital Work-in-Progress                                                   717.26               6,673.90
             Investments                                                                                          0.66
             Current Assets, Loans and Advances
             Inventories                                                                 795.62
             Sundry Debtors                                                              304.12
             Cash and Bank balances                                                      118.67
             Loans and Advances                                                          571.87
                                                                                      1,790.28
             Less :
             Current Liabilities snd Provisions
             Liabilities                                                              1,435.70
             Provisions                                                                  63.81

                                                                                      1,499.51
             Net Current Assets                                                                                290.77
             TOTAL ASSETS                                                                                    6,965.33
             LIABILITIES
             Debenture Redemption Reserve                                                 27.50
             Capital Subsidy Reserve                                                       0.30                  27.80
             Loan Funds
             Secured Loans                                                            1,392.24
             Unsecured Loans                                                            741.17               2,133.41
             Deferred Tax Liabilities (Net)                                                                    715.86
             TOTAL LIABILITIES                                                                               2,877.07

              Excess of Assets over Liabilities                                                        4,088.26
              Contingent Liabilities not provided for                                                    331.10
       (f)   In terms of the Scheme, the Company will formulate a Compensatory Employee Stock Option Scheme
             (CESOS) under which stock option holders of GIL will be entitled to one employee stock option of the
             Company for every employee stock option held in GIL.
   6   Pursuant to a separate Scheme of Arrangement/Amalgamation under sections 391 to 394 of the Companies
       Act, 1956, the Company is proposed to be amalgamated with Ultratech Cement Limited (Ultratech), a
       subsidiary of GIL w.e.f 1st July, 2010. The Scheme has been approved by the Shareholders of the Company
       and also by Shareholders of GIL and Ultratech. The Scheme will be effective upon approval of the same by
       the Hon’ble High Courts of Bombay and Gujarat and such other actions as may be required to be taken in
       terms of the Scheme. Upon effectiveness of the Scheme, the shareholders of the Company will receive 4 (four)
       equity shares of Ultratech of the face value of Rs. 10 each, credited as fully paid up, for every 7 (seven) fully
       paid up shares of the Company of face value of Rs. 5 each held on the record date to be fixed for the
       purpose. No effect of the Scheme is required or possible at this stage.
   7   The Ministry of Coal, Government of India, has alloted a Coal block in Jharkhand to the Company together
       with one other allottee for captive consumption. The allottees have formed a Joint Venture Company i.e.
       Bhaskarpara Coal Co. Limited (BCCL) for the aforesaid purpose. In terms of Joint Venture agreement, the
       Company holds 4,429,997 equity shares of Rs. 10 each aggregating 47.37% of the paid up capital of BCCL.



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SCHEDULE 21 (Contd.)
8    (a) Loans and Advances in the nature of loans/advances given to Holding and Subsidiary Companies.
                                                                                                  Rs. in Crores
                                                          Balance as on              Maximum Balance
                                                        31st March, 2010       outstanding during the period
          Harish Cement Limited (Subsidiary Company)               73.84                          73.84
          Grasim Industries Limited (Holding Company)              0.09                           0.09
     (b) Advances recoverable in cash or in kind include:
          Payments made to employees by way of Loans and Advances in the nature of loan where no interest is
          charged or interest is charged at a rate less than the rate prescribed in Section 372A of Companies Act,1956
                                                                                                          Rs. in Crores
          Outstanding as on 31st March, 2010                                                                      8.01
          Maximum balance outstanding during the period.                                                          9.31
9    The Ministry of Textiles, vide its orders dated 30th June, 1997 and 1st July, 1999 has deleted cement from the list
     of commodities to be packed in Jute bags under the Jute Packaging (Compulsory use in Packing Commodities)
     Act, 1987. In view of this, the Company does not expect any liability for non-despatch of cement in Jute bags in
     respect of earlier years, carried on by its predecessors.
10   There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises
     Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest
     and accordingly no additional disclosures have been made. The above information regarding Micro, Small and
     Medium Enterprises has been determined to the extent such parties have been identified on the basis of information
     avaliable with the Company. This has been relied upon by the auditors.
11   The following are included under other heads of expenses in the Profit and Loss Account :
                                                                                                          Rs. in Crores
     (a) Stores and Spares Consumed                                                                              24.70
     (b) Power and Fuel                                                                                          25.75
     (c) Repairs to Machinery                                                                                     9.80
     (d) Royalty and Cess                                                                                        78.13
     (e) Rates and Taxes                                                                                          6.56
     (f) Others                                                                                                   3.40
12   Revenue expenditure on Research and Development included in different heads of expenses in the Profit and Loss
     Account is Rs. 1.99 crores.
13   Auditors’ Remuneration
                                                                                                            Rs in Lakhs
     (a) Statutory Auditors:
          Audit fee                                                                                              64.73
          Tax audit fee                                                                                           7.50
          For certification and other work                                                                        6.56
          Reimbursement of expenses                                                                               2.86
     (b) Cost Auditors:
          Audit fee                                                                                               2.39
          For certification and other work                                                                           —
          Reimbursement of expenses                                                                               0.23
14   Managerial Remuneration* :
                                                                                                          Rs. in Crores
     (Paid to Whole-Time Director; Rs. Nil to Manager)
     Salary                                                                                                       0.25
     Contribution to Provident and other funds                                                                    0.04
     Perquisite                                                                                                   0.02
                                                                                                                  0.31
     * In the determination of Manager’s remuneration, certain perquisites have been valued in accordance with the
       Income Tax Rules, 1962.
Expenses towards gratuity and leave encashment provisions are determined actuarially on an overall company basis at
the end of each year and accordingly have not been considered in the above information. Employee compensation
under Employee Stock Option Scheme has also not been considered in the above information.

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SCHEDULE 21 (Contd.)
15 Earnings per share:
    Net profit for the period attributable to equity shareholders      Rs. in Crores                        617.96
    Weighted average number of equity shares outstanding                 Numbers                     110,505,024
    Weighted average Potential Equity Shares on exercise of option       Numbers                            35,260
    (i)   Basic earnings per share (face value of Rs.5 each)                Rs.                              55.92
    (ii) Diluted earnings per share (face value of Rs.5 each)               Rs.                              55.90
                                                                                                       Rs. in Crores
16 Deferred Tax Assets and Liabilities as on 31st March, 2010 are as under:
    Deferred Tax Assets:
    Accrued Expenses deductible on payment basis                                                             59.32
    Expenses allowable in installments in Income Tax                                                         35.58
    Others                                                                                                    0.90
                                                                                                             95.80
    Deferred Tax Liability :
    Accumulated Depreciation                                                                             1,013.81
    Net Deferred Tax Liability                                                                              918.01

17 Details of Company’s interest in its Joint Ventures, having Joint Control , as per the requirement of AS-27 on
   Financial Reporting of Interest in Joint Ventures is as under :
                                                                                                       Rs. in Crores

                                                                                                Bhaskarpara Coal
      Particulars                                                                                      Co.Limited
      % Share Held                                                                                        47.37%
      (a) Assets                                                                                             4.39
      (b) Liabilities                                                                                       0.00*
      (c) Income                                                                                             0.00
      (d) Expenses                                                                                           0.04
    * Denotes amount below Rs. 0.01 Crores
18 The Company has one business segment “Cement” as its primary segment. The Company has secondary segment
   (geographical segment) which being insignificant is not disclosed.
19 In terms of the Scheme of Arrangement, as mentioned in Note 5 of Schedule 21 (B), a Compensatory Employee
   Stock Option Scheme (CESOS) will be formulated under which the stock option holders of GIL will be entitiled to
   one employee stock option of the Company for every employee stock option held by them in GIL. The CESOS is
   an outcome of the Scheme and is in no way a modified or a new ESOS.
    The impact on account of CESOS has been accounted for on provisional basis, based on the divided grant price
    of the stock options to be issued by the Company under CESOS, as per the division of stock option grant price
    under GIL’s Employee Stock Option Scheme 2006 (ESOS 2006) recommended by the Merchant Bankers to GIL’s
    ESOS 2006. Adjustments, if any, required on final approval of grant price by the Compensation Committee of the
    Board of Directors of GIL in consultation with the Board of Directors of the Company, will be carried out in the
    next year.
    The provisional grant price considered for options under CESOS is Rs. 405 per stock option granted under the
    Tranche I and Rs. 606 per stock option granted under Tranche II of ESOS 2006.




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SCHEDULE 21 (Contd.)

     Under the ESOS - 2006 of GIL, GIL has granted 218140 Options to its eligible employees in two tranches, the
     details of which are given hereunder :
     (A) Employee Stock Option Scheme:
             Particulars                                            Tranche I                Tranche II

             No. of Options granted                                 201530                   16610

             Method of Accounting                                   Intrinsic Value          Intrinsic Value

             Vesting Plan                                           Graded Vesting -         Graded Vesting -
                                                                    25% every year           25% every year

             Normal Exercise Period                                 5 Years from the         5 Years from the
                                                                    date of Vesting          date of Vesting

             Grant Date                                             23rd August, 2007        25th January, 2008

             Grant Price (Rs. Per share)                            1928                     2885

             Market Price on the Date of Grant of Option (Rs.)      2728                     2885

     (B)     Movement of Options Granted:

             Particulars                                           For the Period ended
                                                                      31st March, 2010

             Options Outstanding at the beginning of the period                       -

             Granted pursuant to the Scheme of Arrangement                 185654

             Exercised during the period                                              -

             Lapsed during the period                                                 -

             Options outstanding at the end of the period                  185654

             Options unvested at the end of the period                       88120

             Options exercisable at the end of the period                    97534

     (C) Fair Valuation:

           The fair value of options used to compute proforma net income and earnings per equity share has been done
           by an independent firm of Chartered Accountants on the date of grant of original scheme using Black-Scholes
           Model.

           The Key assumptions in Black-Scholes Model for calculating fair value as on the date of grant are:

           (i)   Risk Free Rate                                   7.78%

           (ii) Option Life                                       Vesting Period (1 Year) + Average of exercise period

           (iii) Expected Volatility                              Tranche I : 33%, Tranche II : 36%

           (iv) Expected Growth in Dividend                       2.38%

           The weighted average fair value of the option as on the date of grant of ESOS - 2006 by GIL works out to
           Rs. 273 per stock option.




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SCHEDULE 21 (Contd.)

Had the compensation cost for the stock options to be granted under CESOS been determined, based on fair-value
approach, the Company’s net profit and earnings per share would have been as per the proforma amounts indicated
below:
                                                                        Rs. in Crores

          Particulars                                                    For the Period
                                                                            ended 31st
                                                                          March, 2010

          Net Profit (As Reported)                                             617.96

          Add: Compensation Expenses under CESOS included
          in the Net Profit                                                       0.17

          Less: Compensation Expenses under CESOS as
          per fair value                                                          0.30

          Net Profit (Fair value basis)                                        617.83

          Basic Earning per Share (As Reported) - Rs./Share                      55.92

          Basic Earning per Share (Fair value basis) - Rs./Share                 55.91

          Diluted Earning per Share (As Reported) - Rs./Share                    55.90

          Diluted Earning per Share (Fair value basis) - Rs./Share               55.89


20 Related Party Transactions :
    (a) Parties where control exists -
        Holding Companies:
        Grasim Industries Limited (With effect from 3rd October, 2009)
        Samruddhi Swastik Trading and Investments Limited (SSTIL) (Upto 2nd October, 2009)
        Subsidiary:
        Harish Cement Limited (HCL)
    (b) Other Related Parties with whom transactions have taken place during the year :
        Fellow Subsidiaries:
        Samruddhi Swastik Trading and Investments Limited (SSTIL) (With effect from 3rd October, 2009)
        UltraTech Cement Limited (UTCL)
        Grasim Bhiwani Textiles Limited (GBTL)
        Joint Ventures:
        Bhaskarpara Coal Co. Limited
        Key Management Personnel:
                .
        Shri O.P Puranmalka, Whole Time Director*
        Shri Kamal Rathi, Manager
                  .
        * Shri O.P Puranmalka has been appointed as a Director of the Company with effect from 16th February,
        2010 to 31st March, 2010 while he was an employee of the Cement Business of Grasim Industries Limited,
        which has been demerged into the Company under a Scheme of Arrangement under Sections 391 to 394 of
        the Companies Act, 1956. Upon the Scheme becoming effective on 18th May, 2010 he is being considered
        as Whole-Time Director.


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SCHEDULE 21 (Contd.)
     (c) Nature of Transaction
                                                                                                                              Rs. in Crores
              Particulars                       Holding   Subsidiary              Fellow                  Joint       Key           Total
                                               Company                          Subsidiaries           Ventures    Manag-
                                                                                                                     ement
                                                               HCL      UTCL    GBTL           SSTIL              Personnel

          1. Sales and Services                    0.53          Nil   125.61    0.03            Nil       Nil          Nil       126.17

          2. Purchases of goods /
             Payment for other services            0.25          Nil    38.44      Nil         0.05        Nil        0.31         39.05

          3. Finance Provided                       Nil       27.00       Nil      Nil           Nil       Nil          Nil        27.00
          4. Finance Obtained                      1.25          Nil      Nil      Nil           Nil       Nil          Nil         1.25

          5. Repayment against Finance
             Obtained                              1.25          Nil      Nil      Nil           Nil       Nil          Nil         1.25

          6. Sale of Fixed Assets                  0.03          Nil     0.03      Nil           Nil       Nil          Nil         0.06
          7. Purchase of Fixed Assets               Nil          Nil     0.05      Nil           Nil       Nil          Nil         0.05

          8. Equity Contribution in cash            Nil          Nil      Nil      Nil           Nil     3.87           Nil         3.87
          9. Outstanding Balances as on
             31st March, 2010 :
              Loans and Advances                   0.09       73.84      0.18      Nil         0.07        Nil          Nil        74.18

              Creditors                           13.09          Nil     4.29      Nil           Nil      Nil           Nil        17.38
21 Retirement Benefits
   A Defined Benefit Plans:
        (a) Gratuity: The employees’ gratuity fund scheme is managed by Grasim Industries Limited Employee
            Gratuity Fund, Trust of Holding Company, Grasim Industries Ltd. The present value of obligation is
            determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each
            period of service as giving rise to additional unit of employee benefit entitlement and measure each unit
            separately to build up final obligation.
            The amount recognised in respect of gratuity (funded by the Company) is as under:
                                                                                                        Rs. in Crores
        (i) Present value of the funded defined benefit obligation at the end of the period                    93.46
            Fair value of plan assets                                                                          92.21
              Net Liability / (Assets)                                                                                              1.25
         (ii) The amounts recognized in salary, wages and employee benefits in the
              Profit and Loss Account as follows in respect of gratuity :
              Current service cost                                                                                                  4.49
              Interest on defined benefit obligations                                                                               3.91
              Expected return on plan assets                                                                                      (3.33)
              Net Actuarial (gain) / loss recognised during the period                                                            (2.07)
              Charge to Profit and Loss Account                                                                                     3.00
         (iii) Actual return on plan assets
              Expected return on plan assets                                                                                        3.33
              Actuarial gain / (loss) on plan assets                                                                                0.08
              Actual return on plan assets                                                                                          3.41



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SCHEDULE 21 (Contd.)
       (iv) Reconciliation of present value of the obligation :                                        Rs. in Crores
            Opening defined benefit obligation                                                                88.80
            Current service cost                                                                                4.49
            Interest cost                                                                                       3.91
            Actuarial (gain)/loss                                                                             (2.00)
            Benefits paid                                                                                     (1.74)
             Closing defined benefit obligation as on 31st March, 2010                                       93.46
       (v)   Reconciliation of fair value of the plan assets :
             Opening fair value of the plan assets                                                           88.80
             Expected return on plan assets                                                                    3.33
             Actuarial gain/(loss)                                                                             0.08
             Contributions by the employer                                                                     1.74
             Benefits paid                                                                                   (1.74)
             Closing fair value of the plan assets                                                           92.21
       (vi) Experience Adjustments
            Defined benefit obligation                                                                       93.46
            Plan assets                                                                                      92.21
             Surplus/(Deficit)                                                                               (1.25)
             Experience adjustment on plan liabilities                                                        0.89
             Experience adjustment on plan assets                                                             0.08
       (vii) Investment details of plan assets
             Government of India Securities                                                                    25%
             Corporate Bonds                                                                                   16%
             Insurer Managed Fund                                                                              48%
             Others                                                                                            11%
             Total                                                                                           100%
       (viii) (a) The fair value of the Plan Assets includes 8.8% Non-Convertible Debentures
                     of the Company of the face value of Rs. 1.20 Crores purchased at Rs. 1.19 Crores.
              (b) There are no amounts included in the fair value of plan assets for:
                   -     Company’s own financial instrument other than those mentioned above [(viii) (a)]
                   -     Property occupied by or other assets used by the Company
              (c) The overall expected rate of return on assets is determined based on the
                   market prices prevailing on that date, applicable to the period over which the
                   obligation is to be settled.
       (ix) Principal Actuarial Assumptions at the Balance Sheet date
              Discount / rate                                                                                 8.27%
              Estimated rate of return on plan assets                                                         7.50%
              The estimates of future salary increases are considered
              taking into account inflation, seniority promotion and other relevant factors.                  8.00%
              Mortality                                                                              Published rates
                                                                                                under LIC (1994-95)
                                                                                                    mortality tables
       (b) The obligation for compensated absence is recognised in the same manner as gratuity, amounting to
              Rs.2.01 Crores for the period ended 31st March, 2010.
   B   Defined Contribution Plans -
       Amount recognized as expense and included in the Schedule 18 - “Contribution to Provident & Other Funds”
       - Rs. 11.49 Crores.


                                                                                                                57
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


SCHEDULE 21 (Contd.)

22 Disclosure of Derivative Instruments
     (i)   Derivative Instruments as on 31st March, 2010
                                                                                                           In Millions
           Type of Instrument                                          Type of    Currency 31st March,        Cross
                                                                     Exposure                    2010      Currency
           A.   Forward Contracts (for hedging                                        USD         18.62         INR
                foreign currency exposures)                             Import
                                                                     (Payables)       Euro          9.35        USD
                                                                                      CHF           1.07        USD
                                                                                      Euro          2.69        INR
                                                                   Import Trade       USD           3.04        INR
                                                                       Finance
           B.   Currency & Interest Rate Swaps (For hedging                ECB        USD         10.00         INR
                of foreign currency and interest rate exposures)                       JPY    28,642.50         INR
                                                                   Import Trade        JPY      3,905.11        INR
                                                                       Finance

     (ii) Unhedged Foreign Currency Exposure as on 31st March, 2010
                                                                                                           In Millions
           Type of Exposure                                                                  Currency 31st March,
                                                                                                            2010
           Export (Receivables)                                                                  USD           0.69


                                                                              Rs. in Crores
23 (a) Provisions made for Mines closure/ restoration :
           Balance transferred from Grasim Industries Ltd
           as per Scheme of Arrangement                                              0.53
           Add: Provision made during the period                                     0.19
           Less: Utilised during the period                                             —
           Closing Balance                                                           0.72
     (b) Provision for Cost of Transfer of Assets :
           Opening Balance                                                              —
           Add: Created during the period                                         131.16
           Less: Utilised during the period                                             —
           Closing Balance                                                        131.16

24 Additional information required under Part II of Schedule VI to the Companies Act, 1956 is as per Schedule 22.




58
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S



SCHEDULE 22
ADDITIONAL INFORMATION UNDER PART II OF SCHEDULE VI TO THE COMPANIES ACT, 1956
A.   CAPACITY AND PRODUCTION

     Products                                   Unit                 Installed Capacity              Production #
                                                                         (Quantity)                    (Quantity)

                                                                          2009-10                       2009-10

     1   Cement                                 Tonne                   25650000                       9845527
     2   Ready Mix Concrete                     Cu. Meter                 5485708                      1190941
     3   White Cement                           Tonne                      560000                       276416
     4   Putty                                  Tonne                      260000                       129762

Note:    Licenced capacity not indicated due to abolition of industrial licenses under The Industries (Development and
         Regulation) Act, 1951.
         The Installed Capacities are certified by the Management and accepted by the Auditors as correct, being a
         technical matter.
         #       (i)    Excludes Clinker not converted into Cement production.
                 (ii)   The installed capacity is transferred from Grasim Industries Limited pursuant to Scheme of
                        Arrangement. Production Quantity is for 6 months only, hence is not comparable with the installed
                        capacity.
B.   TURNOVER AND STOCKS                                                                            (Value Rs. in Crores)

     Products                                      Unit                           Turnover                  Stock
                                                                                  2009-10                  2009-10

                                                                           Quantity        Value   Quantity        Value
     1   Cement                                    Tonne                  9828080      3,842.27     239733        55.33
                                                                           315565*
     2   Ready Mix Concrete                        Cu. Meter              1192228         316.17           -           -
     3   White Cement                              Tonne                    245359        225.33     27999        16.34
                                                                            27813*
     4   Putty                                     Tonne                    125173        263.22     15497        14.66
                                                                                 80*
     5   Others                                                                            98.71                    1.27
                                                                                       4,745.70                   87.60


         * Inter-Divisional transfers/Captive Consumption




                                                                                                                     59
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


SCHEDULE 22 (Contd.)
C. RAW MATERIALS, STORES, SPARE PARTS AND COMPONENTS                                      (Value Rs. in Crores)

                                                             Unit                              2009-10
                                                                                        Quantity         Value
     1   Raw Materials Consumed:
         Lime Stone                                          Tonne                    12239347        138.00
         Slag                                                Tonne                       306074          21.62
         Clinker                                             Tonne                        20298          10.52
                                                                                       1422369*
         China Clay                                          Tonne                        73692           3.90
         Chemicals                                           Tonne                         3633          53.97
         Gypsum                                              Tonne                       437820          55.08
         Fly Ash                                             Tonne                     1748270           68.74
         Laterite, Hematite etc.                             Tonne                       480980          40.00
         Sand                                                Tonne                       984784          39.15
         Aggregates                                          Tonne                     1299394           56.98
         Others                                                                                          47.65
                                                                                                      535.61
         * Consumption of own Production
     2   Purchase of Finished Goods:
         Cement                                              Tonne                       199008          52.86
         Ready Mix Concrete                                  Tonne                         1287           0.28
                                                                                                         53.14

     3   Imports at CIF Value:
         Raw Materials                                                                                   60.97
         Spare Parts, Components and Coal                                                             125.16
         Capital Goods                                                                                   41.40


     4   Total Value of Raw Materials, Stores, Spare Parts and Components consumed:
                                                                                          (Value Rs. in Crores)

                                                         Raw Materials                  Stores, Spare parts,
                                                                                         Components etc.
                                                            2009-10                            2009-10
                                                    Value                 %            Value                 %

         Imported                                   55.63                10%           37.26              14%
         Indigenous                                479.98                90%          235.47              86%
                                                   535.61             100%            272.73             100%




60
S C H E D U L E S F O R M I N G PA R T O F A C C O U N T S


SCHEDULE 22 (Contd.)
                                                                                       Value Rs. in Crores
    D.   EXPENDITURE IN FOREIGN CURRENCY                                                        2009-10
         i)     Technical know-how and Services                                                      3.20
         ii)    Professional and Consultancy Fees                                                    0.28
         iii)   Interest and Commitment Charges on Foreign Currency Loans/Debentures                 0.19
         iv)    Others                                                                               1.54

    E.   EARNINGS IN FOREIGN EXCHANGE:
         i)     Export of Goods - On F.O.B basis                                                   10.39
         ii)    Others                                                                              0.04

In terms of our report attached

For DELOITTE HASKINS & SELLS                     .
                                         For G. P KAPADIA & CO.                             ADESH GUPTA
Chartered Accountants                    Chartered Accountants                            .
                                                                                       O.P PURANMALKA
                                                                                            ASHOK MALU
   .
B.P SHROFF                               ATUL B. DESAI                                           Directors
Partner                                  Partner

Mumbai                                   KAMAL RATHI
Dated: 18th May, 2010             Manager & Company Secretary




                                                                                                       61
CASH FLOW STATEMENT FOR THE PERIOD FROM 4TH SEPTEMBER, 2009
(DATE OF INCORPORATION) TO 3 1 S T M A R C H, 2 0 1 0


                                                                                                          Rs. in Crores
                                                                                                 Current year
A.   Cash Flow from Operating Activities
     a. Net profit before tax and exceptional item                                            941.99
        Adjustment for :
        Depreciation                                                                          213.12
        Interest expenses                                                                      87.06
        Bad Debts Written Off                                                                    0.01
        Dividend Income                                                                         (9.99)
        Excess Provisions written back (Net)                                                  (18.18)
        Employee Compensation Expenses under Employee Stock Option Scheme                         0.17
        Provision for Mines Restoration                                                          0.19
        (Profit) / Loss on sale of Fixed Assets (Net)                                            0.96
        (Profit) / Loss on sale of Current Investments (Net)                                    (0.03)
     b.   Operating profit before working capital changes                                   1,215.30
          Adjustments for :
          Trade and other receivables                                                          66.63
          Inventories                                                                          23.31
          Trade Payables                                                                       91.15
     c.   Cash generated from Operations                                                    1,396.39
          Direct Taxes Paid (Net)                                                            (186.76)
         Net Cash from / (used in) Operating Activities                                                        1,209.63
B.  Cash Flow from Investing Activities
    Purchase of Fixed Assets                                                                (380.06)
    Sale of Fixed Assets                                                                         3.93
    Purchase of Investments                                                               (1,234.08)
    Investment in Joint Venture                                                                 (3.87)
    Loans & Advances to Subsidiaries                                                          (27.00)
    Dividend received                                                                            9.99
    Net Cash from / (used in) Investing Activities                                                           (1,631.09)
C. Cash Flow from Financing Activities
    Proceeds from Equity                                                                       85.00
    Proceeds from Borrowings                                                                  453.11
    Repayments of Borrowings                                                                  (43.70)
    Interest paid                                                                           (100.67)
    Net Cash from / (used in) Financing Activities                                                               393.74
D. Net Increase/(Decrease) in Cash and Cash equivalent                                                           (27.72)
    Cash and Cash equivalent as on 04.09.09                                                         —
    Add : Transferred from Grasim Industries Ltd. as per Scheme of Arrangement                118.67             118.67
    Cash and Cash equivalent at end of the year                                                                    90.95
    (Cash and cash equivalent represent Cash and Bank balances)
Note: 1 Transactions arising out of demerger as per note 5 of Schedule 21 (B) is a non cash transaction and not
         considered in above cash flow workings.
      2 This being first financial year of the Company since incorporation disclosure of previous year is not applicable.
      3 Cash Flow statement has been prepared under the indirect method as set out in AS-3.
      4 Purchase of fixed assets includes movement of capital work in progress during the period.
In terms of our report attached

For DELOITTE HASKINS & SELLS                     .
                                         For G. P KAPADIA & CO.                                           ADESH GUPTA
Chartered Accountants                    Chartered Accountants                                          .
                                                                                                     O.P PURANMALKA
                                                                                                          ASHOK MALU
   .
B.P SHROFF                               ATUL B. DESAI                                                         Directors
Partner                                  Partner

Mumbai                                   KAMAL RATHI
Dated: 18th May, 2010             Manager & Company Secretary


62
ADDITIONAL INFORMATION UNDER PART IV OF
SCHEDULE VI TO THE COMPANIES ACT, 1956

Balance Sheet Abstract and General Business Profile
1. Registration Details
                CIN No.          U26959GJ2009PLC058011                               State Code 0 4
                Balance Sheet Date 3 1 - 0 3 - 2 0 1 0
2. Capital raised during the year (Amount in Rs. Thousands)
                                             Public Issue                                     Rights Issue
                                                          N I L                                8 5 0 0 0 0
                                             Bonus Issue                                  Private Placement
                                                          N I L                                          N I L
                                       Share Capital Suspense
                                               4 5 8 4 1 8
3. Position of Mobilisation and Development of Funds (Amount in Rs. Thousands)
                                            Total Liabilities                              Total Assets
                                        9 8 0 1 1 2 7 9                                 9 8 0 1 1 2        7 9
                Sources of Funds:
                                           Paid-up Capital                             Share Capital Suspense
                                               8 5 0 0 0 0                                   4 5 8 4 1 8
                                         Reserves & Surplus                            Employee Stock Option
                                        4 4 5 2 5 5 5 2                                         2 5 1 6 1
                                            Secured Loans                                 Unsecured Loans
                                        1 8 3 5 3 0 9 6                                    7 0 7 5 1 1 2
                                        Deferred Tax Liability
                                          9 1 8 0 1 0 0
               Application of Funds:      Net Fixed Assets                                   Investments
                                       6 8 4 6 4 6 2 1                                 1 2 3 8 6 4 0 1
                                        Net Current Assets                          Miscellaneous Expenditure
                                          - 3 8 3 5 8 4                                                N I L
                                        Accumulated Losses
                                                        N I L
4. Performance of the Company (Amount in Rs. Thousands)
                                               Turnover                                  Total Expenditure
                                       4 7 4 5 7 0 2 8                                 3 8 0 3 7 1 6 5
                                     + - Profit/(Loss) before Tax                    + - Profit/(Loss) after Tax
                                          9 4 1 9 8 6 3                                   6 1 7 9 5 6 3
                                      Earnings per Share (Rs.)                           Dividend Rate (%)
                                                  5 5 . 9 2                                            3 5 %
5. Generic Names of three principal products/services of the Company (As per monetary terms)
      a) Item Code No.               2 5 2 3 2 9 - 0 1
         Product Description        G R E Y          P O R T L A N D          C E M E N T
      b) Item Code No.               2 5 2 3 2 1
         Product Description        WH I T E            C E M E N T



                                                                                                     ADESH GUPTA
                                                                                                   .
                                                                                                O.P PURANMALKA
                                        KAMAL RATHI                                                  ASHOK MALU
                                 Manager & Company Secretary                                              Directors


Mumbai
Dated: 18th May, 2010



                                                                                                                   63
Statement pursuant to Section 212 of the Companies
Act, 1956 relating to Subsidiary Company


     Name of the Subsidiary Company                                               Harish Cement Limited

 1    Financial year of the Subsidiary ended on                                             31.03.2010
 2    Holding Company’s Interest
      i) Equity Shares of Rs.10 each
          a) Number of Shares Fully paid                                                         50,000
          b) % Share held by Samruddhi Cement Limited                                             100%

                                                                                              Rs. in Lacs
 3    Net aggregate amount of Profit/(Losses) of the Subsidiary, so far as they
      concern members of Samruddhi Cement Limited
      i) For the Financial Year of Subsidiary
          a) Dealt with in the accounts of the Holding Company                                       NIL
          b) Not dealt with in the accounts of the Holding Company                                   NIL
      ii) For the previous Financial years of the Subsidiary since it became
          the holding Company’s Subsidiary
          a) Dealt with in the accounts of the Holding Company                                       NIL
          b) Not dealt with in the accounts of the Holding Company                                   NIL

 4    As the Financial Year of the Subsidiary Company coincide with the
      Financial Year of the Holding Company, Section 212(5) of the
      Companies Act, 1956, is not applicable.                                                        NA
      Changes in the interest of the Holding Company between the end
      of the Subsidiary’s financial year and 31st March, 2010
      Number of shares acquired
      Material changes between the end of the Subsidiary’s financial
      year and 31st March, 2010
      a) Fixed assets (net additions)
      b) Investments (Net)
      c) Moneys lent by the Subsidiary
      d) Moneys borrowed by the Subsidiary company other than
         for meeting current liabilities




64
A U D I T O R S ’ R E P O R T ON THE CONSOLIDATED
FINANCIAL STATEMENTS

TO THE BOARD OF DIRECTORS OF SAMRUDDHI CEMENT LIMITED
1. We have audited the attached Consolidated Balance Sheet of SAMRUDDHI CEMENT LIMITED (“the
   Company”), its subsidiary and jointly controlled entity (the Company, its subsidiary and jointly controlled
   entity constitute “the Group”) as at 31st March, 2010, the Consolidated Profit and Loss Account and the
   Consolidated Cash Flow Statement of the Group for the period 4th September, 2009 (date of incorporation)
   to 31st March, 2010, both annexed thereto. The Consolidated Financial Statements include jointly
   controlled entity accounted in accordance with Accounting Standard 27 (Financial Reporting of Interests in
   Joint Ventures) as notified under the Companies (Accounting Standards) Rules, 2006. These financial
   statements are the responsibility of the Company’s Management and have been prepared on the basis of
   the separate financial statements and other financial information regarding components. Our responsibility
   is to express an opinion on these Consolidated Financial Statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those
   Standards require that we plan and perform the audit to obtain reasonable assurance about whether the
   financial statements are free of material misstatements. An audit includes examining, on a test basis,
   evidence supporting the amounts and the disclosures in the financial statements. An audit also includes
   assessing the accounting principles used and the significant estimates made by the Management, as
   well as evaluating the overall financial statement presentation. We believe that our audit provides a
   reasonable basis for our opinion.
3. We did not audit the financial statements of the jointly controlled entity, whose financial statements
   reflect total assets of Rs. 4.39 Crores as at 31st March, 2010, total revenues of Rs. Nil and net cash
   outflows amounting to Rs. 3.58 Crores for the period 1st October, 2009 (date of acquisition of the
   jointly controlled entity) to 31st March, 2010, as considered in the Consolidated Financial Statements.
   These financial statements have been audited by other auditor whose reports have been furnished to us
   and our opinion in so far as it relates to the amounts included in respect of this jointly controlled entity
   is based solely on the report of the other auditor.
4. We report that the Consolidated Financial Statements have been prepared by the Company in accordance
   with the requirements of Accounting Standard 21 (Consolidated Financial Statements) and Accounting
   Standard 27 (Financial Reporting of Interests in Joint Ventures) as notified under the Companies
   (Accounting Standards) Rules, 2006.
5. Based on our audit and on consideration of the separate audit reports on individual financial statements
   of the Company, its aforesaid subsidiary and jointly controlled entity and to the best of our information
   and according to the explanations given to us, in our opinion, the Consolidated Financial Statements
   give a true and fair view in conformity with the accounting principles generally accepted in India:
   (i) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at
         31st March, 2010;
   (ii) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the period
         4th September, 2009 (date of incorporation) to 31st March, 2010 and
   (iii) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the period
         4th September, 2009 (date of incorporation) to 31st March, 2010.

For DELOITTE HASKINS & SELLS                                                                .
                                                                                   For G. P KAPADIA & CO.
Chartered Accountants                                                                  Chartered Accountants
(Registration No. 117364W)                                                       (Registration No. 104768W)

    .
B. P Shroff                                                                                     Atul Desai
Partner                                                                                            Partner
Membership No.: 34382                                                               Membership No.: 30850
Mumbai
Dated: 18th May, 2010


                                                                                                            65
C O N S O L I D AT E D B A L A N C E S H E E T A S AT 3 1 S T
MARCH, 2010

                                                 Schedules                          Rs. in Crores
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital                                           1A                  85.00
Share Capital Suspense [Note 4(b), Sch.21 (B)]          1B                  45.84
Employee Stock Options Outstanding                      1C                   2.52
Reserves and Surplus                                     2               4,452.52
                                                                                       4,585.88
Loan Funds
Secured Loans                                           3                1,835.31
Unsecured Loans                                         4                  707.51
                                                                                       2,542.82
Deferred Tax Liabilities (Net) [Note 11, Sch. 21 (B)]                                    918.01
TOTAL FUNDS EMPLOYED                                                                   8,046.71

APPLICATION OF FUNDS
Fixed Assets
Gross Block                                             5                9,086.24
Less: Depreciation/Amortisation                                          2,585.32
Net Block                                                                6,500.92
Capital Work-in-Progress                                                   423.64
                                                                                       6,924.56
Goodwill                                                                                   0.05
Investments                                             6                              1,234.11
Current Assets, Loans and Advances
Inventories                                             7                 772.31
Sundry Debtors                                          8                 241.52
Cash and Bank Balances                                   9                 91.32
Loans and Advances                                      10                541.34
                                                                         1,646.49
Less:
Current Liabilities and Provisions
Liabilities                                             11               1,509.19
Provisions                                              12                 249.31
                                                                         1,758.50
Net Current Assets                                                                     (112.01)
TOTAL FUNDS UTILISED                                                                   8,046.71
Significant Accounting Policies and
Notes on Accounts                                21
Schedules referred to above form an integral part of the Balance Sheet

In terms of our report attached

For DELOITTE HASKINS & SELLS                   .
                                       For G. P KAPADIA & CO.                      ADESH GUPTA
Chartered Accountants                  Chartered Accountants                     .
                                                                              O.P PURANMALKA
                                                                                   ASHOK MALU
   .
B.P SHROFF                             ATUL B. DESAI                                    Directors
Partner                                Partner

Mumbai                                   KAMAL RATHI
Dated: 18th May, 2010             Manager & Company Secretary


66
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD FROM
4TH SEPTEMBER, 2009 (DATE OF INCORPORATION) TO 31ST MARCH, 2010

                                                       Schedules                              Rs. in Crores

INCOME
Gross Sales                                                                        4,745.70
Less: Excise Duty                                                                    455.07
Net Sales                                                                                        4,290.63
Interest and Dividend Income                               13                                       10.88
Other Income                                               14                                       39.07
Increase in Stocks                                         15                                       48.39
                                                                                                 4,388.97
EXPENDITURE
Raw Materials Consumed                                     16                                      535.61
Manufacturing Expenses                                     17                                    1,245.18
Purchases of Finished Goods                                                                         53.14
Payments to and Provisions for Employees                   18                                      198.62
Selling, Distribution, Administration and Other Expenses   19                                    1,121.01
Interest                                                   20                                       87.06
Depreciation and Amortisation [Note 1, Sch. 5]                                                     213.12
                                                                                                 3,453.74
Less: Captive Consumption of Cement
(Net of Excise Rs. 6.13 Crores)                                                                       6.72
                                                                                                 3,447.02
Profit before Tax Expenses                                                                         941.95
Provision for Current Tax
(Including provison for Wealth Tax Rs. 0.79 Crores)                                                179.26
Deferred Tax                                                                                       144.77

Profit after Tax and available for Appropriation                                                   617.92
Appropriations:
Debenture Redemption Reserve                                                                        12.50
Proposed Dividend                                                                                   45.79
Corporate Dividend Tax                                                                               7.61
General Reserve                                                                                    200.00
Balance carried to Balance Sheet                                                                   352.02
                                                                                                   617.92

Basic earnings per share (Rs.)                                                                      55.92
Diluted earnings per share (Rs.)                                                                    55.90
Significant Accounting Policies and
Notes on Accounts                                          21
Schedules referred to above form an integral part of the Profit and Loss Account
In terms of our report attached

For DELOITTE HASKINS & SELLS                        .
                                            For G. P KAPADIA & CO.                           ADESH GUPTA
Chartered Accountants                       Chartered Accountants                          .
                                                                                        O.P PURANMALKA
                                                                                             ASHOK MALU
   .
B.P SHROFF                                  ATUL B. DESAI                                         Directors
Partner                                     Partner

Mumbai                                      KAMAL RATHI
Dated: 18th May, 2010                Manager & Company Secretary


                                                                                                        67
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 1 A                                                                                                          Rs. in Crores
SHARE CAPITAL
   Authorised
  202,000,000 Equity Shares of Rs. 5 each                                                                                  101.00
                     (Effective 18th May, 2010 stands increased to 270,000,000 Equity Shares of Rs. 5 each,
                     Rs. 135.00 Crores pursuant to Scheme of Arrangement)
Issued, Subscribed and Paid up
   170,000,000 Equity Shares of Rs. 5 each fully paid                                                                        85.00
                     All of the above, Equity Shares of Rs. 5 each fully paid up aggregating
                     100% of the Company’s paid up Share Capital are held by
                     Grasim Industries Ltd., the Holding Company.

SCHEDULE 1 B
SHARE CAPITAL SUSPENSE
               Share Capital Suspense                                                                                        45.84
               91,683,571 Equity Shares of Rs. 5 each, fully paid, to be issued without payment being
               received in cash pursuant to Scheme of Arrangement. Refer Note 4(b) of Schedule 21(B).
               (Excluding issue of 14,906 Equity Shares kept in abeyance against shares of Grasim
               Industries Limited under Share Capital Suspense)
                                                                                                                             45.84

SCHEDULE 1 C
EMPLOYEE STOCK OPTIONS OUTSTANDING
             Employee Stock Options Outstanding                                                                               2.86
             Less : Deferred Employees Compensation Expenses                                                                  0.34
                                                                                                                              2.52
                     Outstanding Employee Stock Options exercisable into 185,654
                     Equity Shares of Rs. 5 each fully paid up.

SCHEDULE 2
RESERVES AND SURPLUS
                                                    Reserves transferred          Addition             Deduction/      Balance as at
                                                from Grasim Industries          during the             Adjustments 31st March, 2010
                                                 Ltd. as per Scheme of              period       during the period
                                                         Arrangement *

1.   Capital Reserve
     - Capital Subsidy                                           0.30                   -                       -             0.30
2.   Debenture Redemption Reserve                               27.50               12.50                       -            40.00
3.   General Reserve #                                       3,862.80              200.00                    2.60         4,060.20
4.   Surplus as per Profit and Loss Account                         -              352.02                       -           352.02
                                                             3,890.60              564.52                    2.60         4,452.52

*    Refer note 4 of Schedule 21 (B)
#    Opening General Reserve :
     Excess of assets over liabilites transferred from Grasim Industries Limited as per Scheme of Arrangement             4,088.26
     Less : - Share Capital Suspense (Refer Note 4(b) of Schedule 21 (B))                                                   (45.84)
            - Deferred Tax Liability recognised on transferred assets towards accumulated depreciation                      (92.24)
            - Provision for costs in relation to transfer of assets pursuant to Scheme of Arrangement (Net of Tax)          (87.38)
                                                                                                                          3,862.80

#    Deduction/Adjustments of Rs. 2.60 Crores from General Reserve represents transfer to Employee Stock Option
     Outstanding against the Stock Option to be granted against ESOS 2006 of Grasim Industries Limited in terms of the
     Scheme of Arrangement.



68
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

                                                                                                                                                                  Rs. in Crores
SCHEDULE 3
SECURED LOANS
Non-Convertible Debentures                                                                                                                                              500.00
Loans and advances from Banks:
 - Working Capital Borrowings from Banks                                                                                                                                 74.10
 - Rupee Term Loans                                                                                                                                                     450.00
 - Foreign Currency Loans                                                                                                                                               747.71
 - Buyer’s Credit                                                                                                                                                        60.40
Deferred Sales Tax Loan                                                                                                                                                   3.10
                                                                                                                                                                       1,835.31



SCHEDULE 4
UNSECURED LOANS
Short Term Loans and Advances
    From Banks:
         Buyer’s Import Credit                                                                                                                                            13.46
Other Loans and Advances:
    From Banks:
         Foreign Currency Loans                                                                                                                                         518.76
         Buyer’s Import Credit                                                                                                                                           82.16
      From Others:
         Deferred Sales Tax Loan                                                                                                                                          93.13
                                                                                                                                                                        707.51


SCHEDULE 5
FIXED ASSETS                                                                                                                                                      Rs. in Crores
 PARTICULARS                                                      GROSS BLOCK                                              DEPRECIATION/AMORTISATION                    NET BLOCK

                                        Transferred   Additions     Deductions            As at                Transferred        For the    Deductions         Upto         As at
                                      from Grasim                                   31.03.2010               from Grasim           period                 31.03.2010   31.03.2010
                                     Industries Ltd                                                         Industries Ltd
                                     on 01.10.09                                                            on 01.10.09
                               as per the Scheme                                                      as per the Scheme
                                  of Arrangement                                                         of Arrangement

1   Freehold Land                         379.05        161.72               -          540.77                        -                -             -             -       540.77
2   Leasehold Land                         90.00          8.33               -           98.33                    15.81             2.67             -         18.48        79.85
3   Buildings                             486.25         47.55            0.35          533.45                    86.87             7.18          0.14         93.91       439.54
4   Railway Sidings                       103.03         12.43               -          115.46                    43.71             2.43             -         46.14        69.32
5   Plant and Machinery                 7,110.16        522.57            7.46        7,625.27                 2,122.35           190.32          3.38      2,309.29     5,315.98
6   Furniture, Fittings and               130.08          6.21            8.36          127.93                    94.37             6.11          7.94         92.54        35.39
    Office Equipment
7 Vehicles                                  17.43         2.20            0.68            18.95                     6.67             1.29         0.50          7.46        11.49
8 Intangible Assets
  - Computer Software                       25.66         1.15            0.73            26.08                    15.03             3.20         0.73        17.50          8.58
    TOTAL                               8,341.66       762.16            17.58        9,086.24                 2,384.81           213.20         12.69      2,585.32     6,500.92
    Capital work-in-progress                                                                                                                                               423.64
    (including Advances and
    Pre-operative Expenses)
                                                                                                                                                                         6,924.56
Notes:
                                                                                                                             Rs. in Crores
    Depreciation and Amortisation for the year                                                                                     213.20
    Less: Transferred to pre-operative expenses (Towards use of assets during pre-operative period)                                  0.08
                                                                                                                                  213.12



                                                                                                                                                                              69
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

                                                                                               Rs. in Crores
SCHEDULE 6
INVESTMENTS
CURRENT (At Cost or Fair Value, whichever is less)
Unquoted
    1,168,732,446 Units of Debt Schemes of various Mutual Funds                                  1,234.11
                                                                                                 1,234.11


Aggregate Book Value of : Unquoted Investments                                                   1,234.11

Note : No. of Units of Various Mutual Funds - Purchased and Redeemed during the year       3,368,797,614


SCHEDULE 7
INVENTORIES
Stores and Spare parts, Packing Materials and Fuel                                                  421.00
Raw Materials                                                                                        72.64
Finished Goods                                                                                       87.60
Process Stock                                                                                       185.98
Waste/Scrap                                                                                           5.09
                                                                                                    772.31


SCHEDULE 8
SUNDRY DEBTORS *
(Unsecured, considered good unless otherwise stated)
Due for period Exceeding Six Months                                                                  10.27
(Net of doubtful, fully provided Rs. 1.07 Crores)
Others                                                                                              231.25
                                                                                                    241.52


* Includes amount in respect of which the Company holds deposits.                                    52.48


SCHEDULE 9
CASH AND BANK BALANCES
Cash balance on hand                                                                                  0.57
Bank Balances with Scheduled Banks:
    Current Accounts (including cheques under collection)                              90.48
    Deposit Accounts #                                                                  0.27
                                                                                                     90.75
                                                                                                     91.32

Note :
# (a) Rs. 0.04 Crore lodged as security with Government Department.
    (b) Rs. 0.01 Crore as Interest accrued.




70
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

                                                                                                    Rs. in Crores
SCHEDULE 10
LOANS AND ADVANCES
(Unsecured, considered good except otherwise stated)
Deposits and Balances with Government and other Authorities (including accrued interest)                  82.23
Other Deposits (Net of Doubtful, fully provided Rs. 3.32 Crores)                                          65.61
Advances to Holding Company                                                                                0.09
Advances recoverable in cash or in kind or for value to be received                                      376.96
Advance Income Tax (Net of Provision for Taxation)                                                        16.45
                                                                                                         541.34
SCHEDULE 11
CURRENT LIABILITIES
Sundry Creditors :
(a) Micro, Small & Medium Enterprises                                                           -
(b) Others                                                                                 860.87
                                                                                                         860.87
Security and Other Deposits                                                                              240.77
Other Liabilities                                                                                        354.85
Bank Overdraft                                                                                             2.56
Interest accrued but not due on Debentures and Loans                                                      50.14
                                                                                                      1,509.19
SCHEDULE 12
PROVISIONS
Provision for Employee benfits                                                                            64.03
Provision for Mines Restoration Expenditure                                                                0.72
Provison for Assets Transfer Cost on demerger [Refer Note 4(c) of Schedule 21(B)]                        131.16
Proposed Dividend                                                                                         45.79
Corporate Dividend Tax                                                                                     7.61
                                                                                                         249.31
SCHEDULE 13
INTEREST AND DIVIDEND INCOME
i) On Investments
        Dividends on Current Investments                                                                   9.99
ii) Others: Interest (Gross) on:
        Bank and Other Accounts (Tax deducted at source Rs. 0.35 Crore)                                    0.89
                                                                                                          10.88
SCHEDULE 14
OTHER INCOME
Export Incentives                                                                                          0.46
Rent Received (Tax deducted at source Rs. 0.02 Crore)                                                      0.36
Lease Rent (Tax deducted at source Rs. 0.17 Crore)                                                         1.63
Insurance Claims                                                                                           1.91
Profit on Sale of Current Investments (Net)                                                                0.03
Excess Provisions written back (Net)                                                                      18.18
Scrap/Waste Sales (Net of Excise Duty)                                                                     8.84
Miscellaneous Receipts                                                                                     7.66
                                                                                                          39.07



                                                                                                              71
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

                                                                                                  Rs. in Crores
SCHEDULE 15
INCREASE / (DECREASE) IN STOCKS
Closing Stock
Finished Goods                                                                                          87.60
Process Stock                                                                                          185.98
Waste/Scrap                                                                                              5.09
                                                                                                       278.67
Stock transferred from Grasim Industries Ltd. as per Scheme of Arrangement :
Finished Goods                                                                                         101.10
Process Stock                                                                                          121.94
Waste/Scrap                                                                                              5.28
                                                                                                       228.32
Add: (Increase) / Decrease in Excise Duty on Stocks                                                     (0.26)
     Stock Transfer from pre-operative expenses                                                         (1.70)
                                                                                                        48.39



SCHEDULE 16
RAW MATERIALS CONSUMED
Stock transferred from Grasim Industries Ltd. as per Scheme of Arrangement                74.64
Purchases and Incidental Expenses (includes cost of Lime Stone raised)                   533.61
                                                                                                       608.25
Less : Closing Stock                                                                                    72.64
                                                                                                       535.61



SCHEDULE 17
MANUFACTURING EXPENSES
Consumption of Stores, Spare Parts and Components, Packing Materials and Incidental Expenses           248.03
Power and Fuel                                                                                         831.57
Processing Charges                                                                                       8.24
Freight and handling expense on Clinker transfer                                                       109.37
Repairs to Buildings                                                                                     8.80
Repairs to Machinery (excluding Spare Parts and Components)                                             30.74
Repairs to Other Assets                                                                                  8.43
                                                                                                    1,245.18




72
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

                                                                                              Rs. in Crores
SCHEDULE 18
PAYMENTS TO AND PROVISIONS FOR EMPLOYEES
Salaries, Wages and Bonus                                                                          176.70
Contribution to Provident and Other Funds                                                           12.05
Welfare Expenses                                                                                     9.70
Employee compensation expenses under Employee Stock Option Scheme                                    0.17
(Refer Note 19 of Schedule 21 (B))
                                                                                                   198.62



SCHEDULE 19
SELLING, DISTRIBUTION, ADMINISTRATION AND OTHER EXPENSES
Commission to Selling Agents                                                                        39.69
Brokerage and Discount                                                                              56.43
Freight and Handling Expenses                                                                      735.02
Advertisements and Sales Promotion                                                                 147.95
Insurance                                                                                            5.34
Rent (including Lease Rent)                                                                         13.92
Rates and Taxes                                                                                     36.69
Stationery, Printing, Postage and Telephone Expenses                                                 7.14
Travelling and Conveyance                                                                           15.82
Legal and Professional charges                                                                      20.31
Bad debts written off                                                                                0.01
Donations                                                                                            1.50
Exchange Rate Difference (Net)                                                                       6.74
Loss on Sale and/or discard of Fixed Assets (Net)                                                    0.96
Miscellaneous Expenses (includes diminution in value of current investment Rs. 0.07 Crores)         33.49
                                                                                                1,121.01



SCHEDULE 20
INTEREST
On Fixed Period Loans and Debentures                                                                86.64
Other Interest                                                                                      10.93
                                                                                                    97.57
Less: Interest Capitalized                                                                          10.51
                                                                                                    87.06




                                                                                                        73
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21
SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS
(A) Significant Accounting Policies:
    1. Accounting Concepts:
        The financial statements are prepared and presented in accordance with the Generally Accepted Accounting
        Principles (GAAP) in India and comply in all material aspects with the Accounting Standards (AS) notified
        under the Companies (Accounting Standard) Rules, 2006 (as amended), other pronouncements of the
        Institute of Chartered Accountants of India, the relevant provisions of the Companies Act, 1956 and guidelines
        issued by Securities and Exchange Board of India.
    2. Use of Estimates:
        The preparation of financial statements require estimates and assumptions to be made that affect the reported
        amount of assets and liabilities on the date of financial statements and reported amount of revenues and
        expenses during the reporting period. Difference between the actual results and estimates are recognized in
        the period in which the results are known/materialized.
    3. Fixed Assets:
        Fixed Assets are stated at cost, less accumulated depreciation/amortisation. Cost comprises the purchase
        price and any attributable cost of bringing the asset to its working condition for its intended use.
    4. Treatment of expenditure during construction period:
        Expenditure during construction period is included under Capital Work-in-Progress and the same is allocated
        to the respective fixed assets on the completion of its construction.
    5. Foreign Currency Transactions:
        Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.
        Monetary assets and liabilities in foreign currency existing at Balance Sheet date are translated at year-end
        exchange rates. Exchange differences, including premium or discount on forward exchange contracts, arising
        till the commissioning of fixed assets, relating to borrowed funds and liabilities in foreign currency for
        acquisition of the fixed assets are adjusted to the cost of fixed assets. Other premium or discount on forward
        exchange contracts is amortised as expense or income over the life of the contract. All other exchange
        differences are recognised in Profit and Loss Account.
    6. Financial Derivatives:
        Financial Derivative instruments such as Swaps and Options, are used to hedge risks associated with
        fluctuations in foreign exchange and interest rates. The derivative contracts are closely linked with the
        underlying transactions and are intended to be held to maturity. The underlying transactions are recorded as
        per terms of the financial derivative contracts.
    7. Investments:
        Investments are classified as long term based on management intention at the time of purchase, all other
        investments are classified as current investment. Current investments are stated at lower of cost and fair value.
        Long term investments are stated at cost after deducting provisions made, if any, for permanent diminution
        (i.e. other than temporary diminution) in value.
    8. Inventories:
        Inventories except scrap/waste are valued at the lower of cost and net realisable value. Waste/scrap is valued
        at net realisable value. The cost is computed on weighted average basis.
        Cost of Finished goods and process stock include cost of conversion and other costs incurred in bringing the
        inventories to their present location and condition.
        Obsolete, defective, slow moving and unserviceable inventories are duly provided for.
    9. Depreciation/Amortisation:
        Depreciation/Amortisation charge is provided for on the following basis:
        (a) On fixed assets - on straight line method applying the rates/useful life specified in Schedule XIV of the
              Companies Act, 1956, except as stated hereunder :
              Asset                                                          Estimated useful life
              Leasehold Land                                                 over the period of lease
              Capital expenditure on assets not owned                        5 years
              Motor Cars                                                     5 years
              Computer Software                                              3 years
              Computer and Other Electronic Office Equipments                4 years
              Furniture and Fixtures and Electrical Fittings                 7 years
              Mobile Phone                                                   3 years


74
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
              Continuous process plants as defined in Schedule XIV have been classified on technical assessment and
              depreciation provided accordingly.
         (b) In respect of fixed assets added/disposed off during the year on pro-rata basis with reference to the
              month of addition/deduction except in case of new projects where it is provided on the basis of days of
              use.
   10.   Impairment of Assets:
         Carrying amount of assets is reviewed at Balance Sheet date, if there is indication of impairment, based on
         the internal and external factors. The assets are treated as impaired when the carrying amount of asset
         exceeds its recoverable amount. An impairment loss, if any, is charged to Profit and Loss Account in the year
         in which the asset is identified as impaired. Reversal of impairment loss recognised in prior years, is recorded
         when there is an indication that impairment loss recognised for the asset no longer exists or has decreased.
   11.   Revenue Recognition:
         (a) Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to
              the buyer and stated at net of sales tax, VAT, trade discounts and rebates but includes excise duty.
         (b) Dividend income on investments is accounted for when the right to receive the payment is established.
         (c) Interest income is recognised on time proportion basis.
         (d) Certain claims of the Company viz. export incentives, insurance, railway etc. in respect of which quantum
              of accruals cannot be ascertained with reasonable certainity, are accounted on acceptance basis.
   12.   Employee Benefits:
         (a) Short term employee benefits and contribution to defined contribution plans are recognised as an
              expense on accrual at the undiscounted amount in the Profit and Loss Account.
         (b) The contribution as specified under the law are paid to the provident fund set up as irrevocable trust by
              the Company or to Regional Provident Fund Commissioner. The Company is generally liable for annual
              contribution and any shortfall in the fund assets based on the government specified minimum rates of
              return and recognises such contributions and shortfall, if any, as an expense in the year incurred.
         (c) Post employment and other long term employee benefits are recognised as an expense, at the present
              value of the amounts payable determined using actuarial valuation techniques, in the Profit and Loss
              account for the year. Actuarial gains and losses in respect of post employment and other long term
              benefits are charged to the Profit and Loss Account.
         (d) Employee Stock Option Scheme: The intrinsic value of options granted under Employee Stock Option
              Scheme is recognised as deferred compensation cost and amortised over the vesting period.
   13.   Government Grants:
         Government Grants are recognised when there is reasonable assurance that the same will be received.
         Capital grants relating to specific assets are reduced from the gross value of the fixed assets and capital
         grants for Project Capital Subsidy are credited to Capital Reserve. Revenue grants are recognised in the Profit
         and Loss Account or deducted from related expenses.
   14.   Borrowing Cost:
         Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the
         acquisition/construction of qualifying fixed assets are capitalised upto the date when such fixed assets are
         ready for their intended use and all other borrowing costs are charged to Profit and Loss Account.
   15.   Provision for Current and Deferred Tax:
         Provision for Current Tax is made on the basis of estimated taxable income for the current accounting period
         in accordance with the provisions of Income Tax Act, 1961. Deferred Tax resulting from timing difference
         between book and taxable profit for the year is accounted for using the tax rates and laws that have been
         enacted or substantively enacted as on the Balance Sheet date. The deferred tax asset is recognised and
         carried forward only to the extent there is a reasonable certainty that the deferred tax assets will be realised in
         future.
   16.   Mines Restoration Expenditure:
         The Company provides for the expenditure to restore the mines based on technical estimates by internal/
         external specialists. The total estimate of restoration expenditure is apportioned over the estimated quantities
         of total mineral reserves and provision is made based on the minerals mined during the year.
   17.   Operating Leases:
         Leases where significant portion of risk and reward of ownership are retained by the Lessor are classified as
         Operating Leases and lease rentals thereon are charged to Profit and Loss Account.


                                                                                                                        75
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
     18. Provisions/Contingencies:
         A provision is recognised when there is a present obligation as a result of past event and it is probable that
         an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be
         made. Provisions are determined based on best estimate of the amount required to settle the obligation at the
         Balance Sheet date.
         Contingent Liabilities are not recognised but are disclosed and Contingent Assets are neither recognised nor
         disclosed, in the financial statements.
     19. Research and Development expenditure:
         Expenditure incurred during research phase is charged to revenue when no intangible asset arises from such
         research. Assets procured for research and development activities are generally capitalised.
(B) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     1   Principles of Consolidation:
         (a) The Consolidated Financial Statements (CFS) are prepared in accordance with Accounting Standard on
             “Consolidated Financial Statements” (AS - 21) and “Financial Reporting of Interests in Joint Ventures” (AS
             - 27) issued by the Institute of Chartered Accountants of India.
             The CFS are prepared using uniform significant accounting policies, in accordance with the generally
             accepted accounting policies.
         (b) The CFS comprise the financial statements of Samruddhi Cement Limited, its subsidiary and its interest in
             Joint Venture as on 31st March, 2010, which are as under:
             (I)   Subsidiary:
                    Name of the Company                                       Country of            % Shareholding &
                                                                            Incorporation             Voting Power
                    Harish Cement Ltd. (HCL)                                    India                    100.00
             (II) Joint Venture (JV):
                    Name of the Company                    Status        Country of     Ownership         Financial
                                                                       Incorporation    Interest %    Statements as on
                    Bhaskarpara Coal Company Ltd.         Audited          India            47.37    31st March, 2010
         (c) The effect of intra group transactions between Samruddhi Cement Limited, subsidiary and joint venture
             are eliminated in consolidation.
     2   The Company, incorporated on 4th September, 2009, has the main object of carrying on the business of
         manufacture and sale of cement and allied products. Accordingly, the current financial year is for the period
         from 4th September, 2009 to 31st March 2010. This being the first financial year of the Company since
         incorporation, disclosure of previous year figures is not applicable.
     3   The Company was incorporated by Samruddhi Swastik Trading and Investments Limited (SSTIL) with an
         Authorised Share Capital of Rs. 101 Crores divided into 20,20,00,000 Equity Shares of Face value Rs. 5
         each. Grasim Industries Limited (GIL) acquired the entire holding from SSTIL at par on 3rd October, 2009
         and the Company became a Subsidiary of GIL.
     4   (a) Pursuant to a Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956, GIL has
             demerged its Cement Business comprising inter alia of Grey Cement, White Cement and Ready Mix
             Concrete and vested into the Company with effect from 1st October, 2009 on a going concern basis.
             The Scheme has been approved inter alia by the Shareholders of GIL and Hon’ble High Courts of
             Madhya Pradesh, Indore Bench and Gujarat and has become effective on 18th May, 2010.
         (b) In terms of the Scheme, the Company will issue and allot its shares to the shareholders of GIL in the ratio
             of one equity share of face value of Rs. 5 each fully paid up in the Company for every one equity share
             of face value of Rs. 10 each fully paid held by the shareholders of GIL on 28th May, 2010, the record
             date fixed for the purpose. Pending allotment of these shares, the amount of Rs. 45,84,17,855 is
             disclosed as ‘Share Capital Suspense’. Upon allotment of equity shares to the shareholders of GIL, the
             shareholding of GIL in the Company will reduce to 64.96%.


76
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
       (c) Transfer and vesting of assets and liabilities of the Cement Business of GIL to the Company has been
           effected at the values appearing in the books of accounts of GIL as at 30th September, 2009 and recorded
           as such in the book of accounts of the Company. Excess of assets over liabilities (net of Debenture
           Redemption Reserve of Rs. 27.50 Crores and Capital Subsidy Reserve of Rs. 0.30 Crores transferred as
           liabilities pertaining to Cement Business) so recorded, amounting to Rs. 4,088.26 Crores is recognized in
           these financial statements, and as stipulated in the scheme, has been credited to ‘General Reserve’. Assets
           transfer cost on demerger will be borne by the Company pursuant to Scheme of Arrangement.
       (d) (i)   As the Scheme became effective on 18th May, 2010, though the Assets and the Liabilities as on 31st
                 March, 2010 arising out of the transferred business are vested in the Company, titles of the same
                 are still not transferred in the name of the Company and being held in the name of GIL.
            (ii) Creation of securities against the secured loans as per Schedule 3 of Secured Loans is not yet
                 effected.
       (e) In terms of the Scheme, the Company will formulate a Compensatory Employee Stock Option Scheme
           (CESOS) under which stock option holders of GIL will be entitled to one employee stock option of the
           Company for every employee stock option held in GIL.
   5   Pursuant to a separate Scheme of Arrangement/Amalgamation under sections 391 to 394 of the Companies
       Act, 1956, the Company is proposed to be amalgamated with Ultratech Cement Limited (Ultratech), a
       subsidiary of GIL w.e.f 1st July, 2010. The Scheme has been approved by the Shareholders of the Company
       and also by Shareholders of GIL and Ultratech. The Scheme will be effective upon approval of the same by
       the Hon’ble High Courts of Bombay and Gujarat and such other actions as may be required to be taken in
       terms of the Scheme. Upon effectiveness of the Scheme, the shareholders of the Company will receive 4 (four)
       equity shares of Ultratech of the face value of Rs. 10 each, credited as fully paid up, for every 7 (seven) fully
       paid up shares of the Company of face value of Rs. 5 each held on the record date to be fixed for the
       purpose. No effect of the Scheme is required or possible at this stage.
   6   Goodwill arising out of consolidation of financial statements of Subsidiaries and Joint Ventures is not
       amortised. However, the same is tested for impairment at each Balance Sheet Date.
   7   The Company’s proportionate share in assets, liabilities, income and expenses of its Joint Venture Company
       included in these consolidated financial statements are given below :
                                                                                                          Rs. in Crores
       (a) BALANCE SHEET                                                                                 Current Year
            SOURCES OF FUNDS
            Equity Share Capital                                                                                  4.43
            Loan Funds                                                                                                -
            Deferred Tax Liabilities                                                                                  -
            TOTAL                                                                                                 4.43
            APPLICATION OF FUNDS
            Capital Work-in-Progress                                                                              4.05
            Cash and Bank Balances                                                                                0.34
            Profit and Loss Debit Balance                                                                         0.04
            TOTAL                                                                                                 4.43


       (b) PROFIT AND LOSS ACCOUNT
            Income                                                                                                    -
            Expenditure                                                                                           0.04
            Profit before Tax                                                                                    (0.04)
            Tax Expenses                                                                                              -
            Profit after Tax                                                                                     (0.04)


                                                                                                                    77
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
     8   The Ministry of Textiles, vide its orders dated 30th June, 1997 and 1st July, 1999 has deleted cement from the
         list of commodities to be packed in Jute bags under the Jute Packaging (Compulsory Use in Packing
         Commodities) Act, 1987. In view of this, the Company does not expect any liability for non-dispatch of
         cement in Jute bags in respect of earlier years, carried on by its predecessors.
     9   (a) Contingent Liabilities not provided for in respect of :                                     Rs. in Crores
               Claims not acknowledged as debts                                                               373.28
               (Includes demands in respect of Royalty on Limestone,
               Excise Duty, Entry Tax, Cenvat Credit, etc.)
         (b) Estimated amount of Contracts remaining to be executed on
             capital account and not provided (Net of advance paid Rs. 84.18 Crores)                          310.32
     10 Earnings per share:
         Net profit for the period attributable to equity shareholders                 Rs. in Crores          617.92
         (i)   Weighted average number of equity shares outstanding                    Numbers          110,505,024
         (ii) Weighted average Potential Equity Shares on exercise of option           Numbers                35,260
         (i)   Basic earnings per share (face value of Rs. 5 each)                     Rs.                      55.92
         (ii) Diluted earnings per share (face value of Rs. 5 each)                    Rs.                      55.90
     11 Deferred Tax Assets and Liabilities as on 31st March, 2010 are as under:
                                                                                                         Rs. in Crores
         Deferred Tax Assets:
         Accrued Expenses deductible on payment basis                                                           59.32
         Expenses allowable in installments in Income Tax                                                       35.58
         Others                                                                                                  0.90
                                                                                                                95.80
         Deferred Tax Liability :
         Accumulated Depreciation                                                                           1,013.81
         Net Deferred Tax Liability                                                                           918.01
     12 The Company has one business segment “Cement” as its primary segment. The Company has secondary
        segment (geographical segment) which being insignificant is not disclosed.
     13 Related Party Transactions :
         (a) Parties where control exists -
               Holding Companies:
               Grasim Industries Limited (With effect from 3rd October, 2009)
               Samruddhi Swastik Trading and Investments Limited (SSTIL) (Upto 2nd October, 2009)
         (b) Other Related Parties with whom transactions have taken place during the year :
               Fellow Subsidiaries:
               Samruddhi Swastik Trading and Investments Limited (With effect from 3rd October, 2009)
               UltraTech Cement Limited (UTCL)
               Grasim Bhiwani Textiles Limited (GBTL)
               Joint Ventures:
               Bhaskarpara Coal Co. Limited
               Key Management Personnel:
                       .
               Shri O.P Puranmalka, Whole Time Director*
               Shri Kamal Rathi, Manager


78
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
            * Shri O.P.Puranmalka has been appointed as a Director of the Company with effect from 16th February,
            2010 to 31st March, 2010 while he was an employee of the Cement Business of Grasim Industries
            Limited, which has been demerged into the Company under a Scheme of Arrangement under Sections
            391 to 394 of the Companies Act, 1956. Upon the Scheme becoming effective on 18th May, 2010 he
            is being considered as Whole-Time Director.
       (c) Nature of Transaction
                                                                                                                Rs. in Crores
                 Particulars                   Holding          Fellow Subsidiaries              Joint        Key      Total
                                              Company                                         Ventures   Manage-
                                                                                                             ment
                                                             UTCL         GBTL        SSTIL         #    Personnel
             1. Sales and Services                0.53     125.61         0.03          Nil        Nil         Nil   126.17
             2. Purchases of goods /
                Payment for other services        0.25       38.44          Nil       0.05         Nil       0.31     39.05
             3. Finance Obtained                  1.25          Nil         Nil         Nil        Nil         Nil     1.25
             4. Repayment against
                Finance Obtained                  1.25          Nil         Nil         Nil        Nil         Nil     1.25
             5. Sale of Fixed Assets              0.03        0.03          Nil         Nil        Nil         Nil     0.06
             6. Purchase of Fixed Assets            Nil       0.05          Nil         Nil        Nil         Nil     0.05
             7. Equity Contribution in cash         Nil         Nil         Nil         Nil      3.87          Nil     3.87
             8. Outstanding Balances
                as on 31st March :
                 Loans and Advances               0.09        0.18          Nil       0.07         Nil         Nil     0.34
                 Creditors                      13.09         4.29          Nil         Nil        Nil         Nil    17.38
            # Transaction with Joint Venture has been disclosed at full value.
   14 Retirement Benefits
      A Defined Benefit Plans:
           (a) Gratuity: The employees’ gratuity fund scheme is managed by Grasim Industries Limited Employee
               Gratuity Fund, Trust of Holding Company, Grasim Industried Ltd. The present value of obligation is
               determined based on actuarial valuation using the Projected Unit Credit Method, which recognises
               each period of service as giving rise to additional unit of employee benefit entitlement and measure
               each unit separately to build up final obligation.
               The amount recognised in respect of gratuity (funded by the Company) is as under:
                                                                                                        Rs. in Crores
               (i) Present value of the funded defined benefit obligation at the end of the period             93.46
                    Fair value of plan assets                                                                  92.21
                      Net Liability/(Assets)                                                                            1.25
                 (ii) The amounts recognized in salary, wages and employee benefits
                      in the Profit and Loss Account as follows in respect of gratuity :
                      Current service cost                                                                              4.49
                      Interest on defined benefit obligations                                                           3.91
                      Expected return on plan assets                                                                  (3.33)
                      Net Actuarial (gain)/loss recognised during the period                                          (2.07)
                      Charge to Profit and Loss Account                                                                 3.00
                 (iii) Actual return on plan assets
                      Expected return on plan assets                                                                   3.33
                      Actuarial gain/(loss) on plan assets                                                             0.08
                      Actual return on plan assets                                                                     3.41


                                                                                                                          79
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
                                                                                                      Rs. in Crores
              (iv) Reconciliation of present value of the obligation:
                    Opening defined benefit obligation                                                      88.80
                    Current service cost                                                                     4.49
                    Interest cost                                                                            3.91
                    Actuarial (gain)/loss                                                                   (2.00)
                    Benefits paid                                                                           (1.74)
                    Closing defined benefit obligation as on 31st March, 2010                               93.46
              (v)   Reconciliation of fair value of the plan assets:
                    Opening fair value of the plan assets                                                   88.80
                    Expected return on plan assets                                                           3.33
                    Actuarial gain/(loss)                                                                    0.08
                    Contributions by the employer                                                            1.74
                    Benefits paid                                                                           (1.74)
                    Closing fair value of the plan assets                                                   92.21
              (vi) Experience Adjustments
                    Defined benefit obligation                                                              93.46
                    Plan assets                                                                             92.21
                    Surplus/(Deficit)                                                                       (1.25)
                    Experience adjustment on plan liabilities                                                0.89
                    Experience adjustment on plan assets                                                     0.08
              (vii) Investment details of plan assets
                    Government of India Securities                                                            25%
                    Corporate Bonds                                                                           16%
                    Insurer Managed Fund                                                                      48%
                    Others                                                                                    11%
                    Total                                                                                   100%
              (viii) (a) The fair value of the Plan Assets includes 8.8% Non-Convertible Debentures
                         of the Company of the face value of Rs. 1.20 Crores purchased at Rs. 1.19
                         Crores.
                    (b) There are no amounts included in the fair value of plan assets for:
                         (i)    Company’s own financial instrument other than those mentioned above
                                [(viii) (a)]
                         (ii) Property occupied by or other assets used by the Company
                    (c) The overall expected rate of return on assets is determined based on the
                        market prices prevailing on that date, applicable to the period over which
                        the obligation is to be settled.
              (ix) Principal Actuarial Assumptions at the Balance Sheet date
                    Discount / rate                                                                         8.27%
                    Estimated rate of return on plan assets                                                 7.50%
                    The estimates of future salary increases are considered taking into
                    account inflation, seniority promotion and other relevant factors.                      8.00%
                    Mortality                                                                      Published rates
                                                                                              under LIC (1994-95)
                                                                                                  mortality tables


80
SCHEDULES FORMING PART OF CONSOLIDATED
FINANCIAL STATEMENTS

SCHEDULE 21 (Contd.)
              (b) The obligation for compensated absence is recognised in the same manner as gratuity, amounting
                  to Rs. 2.01 Crores for the period ended 31st March, 2010.
        B     Defined Contribution Plans -
              Amount recognized as expense and included in the Schedule 18 - “Contribution to Provident & Other
              Funds” - Rs. 11.49 Crores
    15 Disclosure of Derivative Instruments
        (i)   Derivative Instruments as on 31st March, 2010
                                                                                                       (In Millions)
               Type of Instrument           Type of Exposure     Currency   31st March, 2010 Cross Currency
               A. Forward Contracts                                  USD               18.62                  INR
                  (For hedging of foreign
                  currency exposures)
                                            Import (Payables)        Euro                9.35                USD
                                                                     CHF                 1.07                USD
                                                                     Euro                2.69                 INR
                                              Import Trade
                                                Finance              USD                 3.04                 INR
               B. Currency & Interest
                  Rate Swaps
                  (For hedging of foreign
                  currency and interest           ECB                USD              10.00                   INR
                  rate exposures)                                     JPY         28,642.50                   INR
                                              Import Trade
                                                Finance               JPY           3,905.11                  INR
        (ii) Unhedged Foreign Currency Exposure as on 31st March, 2010
                                                                                                       (In Millions)
               Type of Exposure                                                    Currency 31st March, 2010
               Export (Receivables)                                                      USD                 0.69
                                                                                                      Rs. in Crores
    16 (a) Provisions made for Mines closure/ restoration:
           Balance transferred from Grasim Industries Ltd as per Scheme of Arrangement                        0.53
           Add: Provision made during the period                                                              0.19
           Less: Utilised during the period                                                                      -
              Closing Balance                                                                                 0.72
        (b) Provision for Cost of Transfer of Assets:
            Opening Balance                                                                                     -
            Add: Created during the period                                                                 131.16
            Less: Utilised during the period                                                                    -
              Closing Balance                                                                              131.16
    17 Revenue expenditure on Research and Development included in different heads of expenses in the Profit and
       Loss Account is Rs. 1.99 Crores.

                                                                                                     ADESH GUPTA
                                                                                                   .
                                                                                                O.P PURANMALKA
                                        KAMAL RATHI                                                  ASHOK MALU
                                 Manager & Company Secretary                                              Directors
Mumbai
Dated: 18th May, 2010


                                                                                                                81
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD FROM
4TH SEPTEMBER, 2009 (DATE OF INCORPORATION) TO 31ST MARCH, 2010

                                                                                                                  Rs. in Crores
                                                                                                                  Current year
A.   Cash Flow from Operating Activities
     a. Net profit before tax and exceptional item                                                941.95
        Adjustment for :
        Prior Period adjustment written off                                                          0.04
        Depreciation                                                                              213.12
        Interest expenses                                                                          87.06
        Bad Debts Written Off                                                                        0.01
        Dividend Income                                                                             (9.99)
        Excess Provisions written back (Net)                                                      (18.18)
        Employee Compensation Expenses under Employee Stock Option Scheme                             0.17
        Provision for Mines Restoration                                                              0.19
        (Profit)/Loss on sale of Fixed Assets (Net)                                                  0.96
        (Profit)/Loss on sale of Current Investments (Net)                                          (0.03)
     b.       Operating profit before working capital changes                                   1,215.30
              Adjustments for :
              Trade and other receivables                                                           66.45
              Inventories                                                                           23.31
              Trade Payables                                                                        94.86
     c.       Cash generated from Operations                                                    1,399.92
              Direct Taxes Paid (Net)                                                            (186.76)
              Net Cash from/(used in) Operating Activities                                                             1,213.16
B.   Cash Flow from Investing Activities
     Purchase of fixed assets                                                                    (414.75)
     Sale of fixed assets                                                                           3.93
     Purchase of Investments                                                                   (1,234.08)
     Dividend received                                                                              9.99
     Net Cash from/(used in) Investing Activities                                                                    (1,634.91)
C. Cash Flow from Financing Activities
   Proceeds from Equity                                                                             85.00
   Proceeds from borrowings                                                                       453.11
   Repayments of borrowings                                                                        (43.70)
   Interest paid                                                                                 (100.67)
   Net Cash from/(used in) Financing Activities                                                                          393.74
D.   Net Increase/(Decrease) in Cash and Cash equivalent                                                                 (28.01)
     Cash and Cash equivalent as on 04.09.09                                                           -
     Add : Transferred as per Scheme of Arrangement                                               119.33                 119.33
     Cash and Cash equivalent at end of the year                                                                           91.32
     (Cash and cash equivalent represent Cash and Bank balances)
Note: 1          Transactions arising out of demerger as per note 4 of Schedule 21 (B) is a non cash transaction and not
                 considered in above cash flow workings.
          2      This being first financial year of the Company since incorporation disclosure of previous year is not applicable.
          3      Cash Flow statement has been prepared under the indirect method as set out in AS-3.
          4      Purchase of fixed assets includes movement of capital work in progress during the period.
In terms of our report attached

For DELOITTE HASKINS & SELLS                          .
                                              For G. P KAPADIA & CO.                                              ADESH GUPTA
Chartered Accountants                         Chartered Accountants                                             .
                                                                                                             O.P PURANMALKA
                                                                                                                  ASHOK MALU
   .
B.P SHROFF                                    ATUL B. DESAI                                                            Directors
Partner                                       Partner

Mumbai                                        KAMAL RATHI
Dated: 18th May, 2010                  Manager & Company Secretary


82
Subsidiary Company’s Reports and Accounts




                                        83
HARISH CEMENT LIMITED


DIRECTORS’ REPORT
TO THE MEMBERS
The Directors have pleasure in presenting the Thirteenth Annual Report of your Company together with the
Audited Accounts for the year ended 31st March, 2010.
OPERATIONS
During the year under review, Company incurred Rs.4,721.28 lacs for puchases of private land of Plant &
Mining Site area & also incurred preoperative expenses of Rs.221.65 lacs as compared to last year
Rs. 108.09 lacs.
Your company have entered in to land purchase agreements for 1,702 bighas of private land upto
31st March, 2010 falling in plant site and mining lease area.
The Govt. of HP has approved and notified the Rehabilitation and Resettlement Plan,2009 for resettlement
& rehabilitation of families affected by Cement Plants to be established in Himachal Pradesh.
Your company has received Technical Offers from technology suppliers for Main Plant and machineries and
these offers have been evaluated by the consultant for placing the order.
DIRECTORS
Shri. Arun Daga retires from office by rotation and being eligible offer himself for re-appointment.
DIRECTORS’ RESPONSIBILITY STATEMENT
As stipulated in Section 217(2AA) of the Companies Act, 1956, your Directors subscribe to the “Directors
Responsibility Statement” and confirm as under that :
i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed
     along with proper explanation relating to material departures;
ii) accounting policies have been selected and applied consistently and the judgments and estimates made
     are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at
     the end of the financial year and of the profit or loss of the company for that period;
iii) proper and sufficient care has been taken for the maintenance of adequate records in accordance with
     the provisions of this Act for safeguarding the Assets of the company and for preventing and detecting
     fraud and other irregularities;
iv) the annual accounts have been prepared on a going concern basis.
AUDITORS
The observations made in the Auditors’ Report are self explanatory and therefore do not call for any further
comments under Secion 217(3) of the Companies Act,1956.
                                        .
The Board has proposed that M/s. G.P Kapadia & Co. Chartered Accountants, Mumbai, be re-appointed as
the Statutory Auditor of the Company and to hold office till the conclusion of the next Annual General
                                     .
Meeting of the Company. M/s G.P Kapadia & Co. Chartered Accountants, Mumbai have forwarded their
certificate to the Company , stating that their re-appointment, if made, will be within the limit specited in that
behalf in Sub-section (1B) of Section 224 of the Companies Act,1956.
PARTICULARS OF EMPLOYEES
The Company had no employee in the Category specified Under Section 217 (2A) of the Companies Act,
1956.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO
In view of the nature of operations, we have nothing to report on these matters.
                                                                                        On behalf of the Board

                                                                                                    R.M.GUPTA
                                                                                                       .
                                                                                                      P K.JAIN
Mumbai                                                                                             ARUN DAGA
Date: 18th May, 2010                                                                                   Directors


84
HARISH CEMENT LIMITED


AUDITORS’ REPORT
To the Shareholder’s of Harish Cement Limited
We have audited the attached Balance Sheet of Harish Cement Limited as at 31st March, 2010. No Profit
and Loss Account has been prepared as the Company has not carried out any activities. These financial
statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that:
1. As the Company has carried out no activities during the year, the requirement by the Companies
   (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A)
   of the Companies Act, 1956, is not applicable.
2. Further to our comments in paragraph 1 above, 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 purposes 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 books;
    (c) the balance sheet dealt with by this report is in agreement with the books of account;
    (d) in our opinion, the balance sheet dealt with by this report, complies with the accounting standards
        referred to in Section 211(3C) of the Companies Act, 1956, to the extent applicable;
    (e) on the basis of written representations received from the directors as on 31st March, 2010, and
        taken on record by the Board of Directors, we report that none of the directors is disqualified as on
        31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the
        Companies Act, 1956; and
    (f) in our opinion and to the best of our information and according to the explanations given to us, the
        said balance sheet read together with the significant accounting policies and other notes appearing
        in Schedule 5, gives the information required by the Companies Act, 1956, in the manner so
        required and give a true and fair view in conformity with the accounting principles generally
        accepted in India, of the state of Company’s affairs as at 31st March, 2010.


G. P Kapadia & Co
Chartered Accountants
(Firm No 104768W)


ATUL B. DESAI
Partner
(Membership No 30850)
Mumbai
Dated: 18th May, 2010


                                                                                                          85
HARISH CEMENT LIMITED


BALANCE SHEET AS AT 31ST MARCH, 2010
                                                                                              (Amount in Rs.)
                                             Schedules                                              Previous
                                                                                                        Year
31st March, 2010
SOURCES OF FUNDS
Shareholders’ Funds
Share Capital                                     1                             500,000              500,000
Reserves and Surplus                              2                                   -                    -

Loan Funds
Secured Loans                                     3                                   -                    -
Unsecured Loans                                   4                        73,83,52,754         25,71,68,655
TOTAL                                                                      73,88,52,754         25,76,68,655

APPLICATION OF FUNDS
Fixed Assets                                      5
Gross Block                                                                47,54,67,551            22,92,606
Less : Depreciation                                                           12,27,468              735,181
Net Block                                                                  47,42,40,083            15,57,425
Capital Work-in-Progress                                                   26,63,61,251         22,80,14,463
                                                                           74,06,01,334         22,95,71,888

Investments                                       6                                       -                  -
Current Assets, Loans and Advances
Inventories                                       7                                   -                    -
Sundry Debtors                                    8                                   -                    -
Cash and Bank Balances                            9                            2,76,086            45,77,114

Loans and Advances                                10                        3,90,39,723          2,40,12,241
                                                                            3,93,15,809          2,85,89,355
Less :
Current Liabilities and Provisions
Liabilities                                       11                        4,10,64,389             4,33,000
Provisions                                        12                                  -                59588

                                                                            4,10,64,389             4,92,588
Net Current Assets                                                           (17,48,580)         2,80,96,767
Balance as per attached Profit and Loss Account
TOTAL                                                                      73,88,52,754         25,76,68,655

Accounting Policies and Notes on Accounts         13
As the Company has not started operation, so Profit and Loss Statement is not prepared.
As per our report of even date
        .
For G. P Kapadia & Co.                                                                            R.M.GUPTA
Chartered Accountants                                                                                .
                                                                                                    P K.JAIN
                                                                                                 ARUN DAGA
                                                                                                     Directors
ATUL B. DESAI
Partner
Mumbai
Dated: 18th May, 2010


86
HARISH CEMENT LIMITED


SCHEDULES FORMING PART OF ACCOUNTS                                                                                                                                             (Amount in Rs.)
                                                                                                                                                                                     Previous
                                                                                                                                                                                         Year
SCHEDULE - 1
SHARE CAPITAL
Authorised
50,00,000 Equity Shares of Rs.10/- each                                                                                                              5,00,00,000                      5,00,00,000
Issued, Subscribed & Paid-up *
50,000 Equity Shares of Rs.10/- each                                                                                                                         5,00,000                         5,00,000
TOTAL                                                                                                                                                        5,00,000                         5,00,000
* Full Share capital is held by the Holding company.

SCHEDULE - 2
RESERVES AND SURPLUS                                                                                                                                                      -                                    -
TOTAL                                                                                                                                                                     -                                    -
SCHEDULE - 3
SECURED LOANS                                                                                                                                                             -                                    -
TOTAL                                                                                                                                                                     -                                    -
SCHEDULE - 4
UNSECURED LOANS
From Holding Company                                                                                                                              73,83,52,754                     25,71,68,655
TOTAL                                                                                                                                             73,83,52,754                     25,71,68,655



SCHEDULE - 5
FIXED ASSETS
                                                                                                                                                                                             (Amount in Rs.)
 Sr.No.           PARTICULARS                                                 GROSS BLOCK                                                   DEPRECIATION                                    NET BLOCK
                                                      As at       Additions      Adjustments               As at           Upto       For the     Adjustments /         Up to      As at
                                                01/04/2009                      / Deductions         31/03/2010      31/03/2009          Year        Deductions   31/03/2010 31/03/2010          31/03/2009
 1        FREEHOLD LAND                                   -   47,21,28,473                 -       47,21,28,473               -             -                 -            - 47,21,28,473                  -
 2        BUILDINGS                                       -              -                 -                  -               -             -                 -            -            -                  -
 3        RAILWAY SIDINGS                                 -              -                 -                  -               -             -                 -            -            -                  -
 4        PLANT AND MACHINERY                             -              -                 -                  -               -             -                 -            -            -                  -
 5        SHIPS                                           -              -                 -                  -               -             -                 -            -            -                  -
 6        ROLLING STOCKS AND LOCOMOTIVES                  -              -                 -                  -               -             -                 -            -             -                 -
 7        FURNITURE, FIXTURES & OFFICE
          EQUIPMENT                              22,00,949        7,65,481               -            29,66,430        7,21,905     4,67,153                -      11,89,058    17,77,372         14,79,045
 8        VEHICLES ETC.                             91,657               -               -               91,657          13,276        8,707                -         21,983       69,674            78,380
 9        INTANGIBLE - ASSETS                            -        2,80,991               -             2,80,991               -       16,427                -         16,427     2,64,564                 -
          TOTAL                                  22,92,606    47,31,74,945               -         47,54,67,551        7,35,181     4,92,287                -      12,27,468 47,42,40,083         15,57,425
          Previous Year                          14,13,600        9,22,863          43,857            22,92,606        2,92,633     4,71,454           28,906       7,35,181
          Capital Work-in-Progress (including
          advances and Project Dev. Exp.)                                                                                                                                  * 26,63,61,251       22,80,14,463
                                                                                                                                                                             74,06,01,334       22,95,71,888

Notes:
Capital   work in progress includes the followings:
*         Details                                                                              To date Amount(Rs)
1         Project Development Exp                                                                  8,63,85,795(For detail refer Note No.1 of Sch. No. 13B)
2         Cost of Mining Rights (Acquired from HCIL)                                               7,55,00,000
3         Stamp fees of Mining lease deed                                                            42,13,000
4         Advance against land purchase-Mines                                                      6,19,72,150
5         Advance against land purchase-Plant                                                      2,48,20,690
6         Rehabilitation & Resettlement exps                                                       1,17,82,826
7         Advance for Stamp Duty                                                                     16,86,790
          Total                                                                                   26,63,61,251




                                                                                                                                                                                                         87
HARISH CEMENT LIMITED


                                                                                 (Amount in Rs.)
                                                                                       Previous
                                                                                           Year

SCHEDULE - 6
INVESTMENT                                                                   -                 -
TOTAL                                                                        -                 -



SCHEDULE - 7
INVENTORIES                                                                  -                 -
TOTAL                                                                        -                 -



SCHEDULE - 8
SUNDRY DEBTORS
                                                                             -                 -
TOTAL                                                                        -                 -



SCHEDULE - 9
CASH AND BANK BALANCES
Cash balance on hand                                                   60,989            57,163
Cheques on hand                                                             -                 -
Bank Balances :
With Scheduled Banks :
    In Current accounts (including cheque under collection)          2,15,097         45,19,951
    In Fixed deposit accounts                                               -                 -
TOTAL                                                                2,76,086         45,77,114



SCHEDULE - 10
LOANS AND ADVANCES
(Unsecured, considered good except stated otherwise)
Deposits and Balances with Government and other Authorities        3,32,35,030      2,12,35,030
Other Deposits                                                          50,000           42,340
Advance recoverable in cash or kind or for value to be received.
Considered Good                                                     57,54,693         27,34,871
TOTAL                                                              3,90,39,723      2,40,12,241




88
HARISH CEMENT LIMITED


                                                                                                        (Amount in Rs.)
                                                                                                              Previous
                                                                                                                  Year

SCHEDULE - 11
CURRENT LIABILITIES
Sundry creditors :
a)   Small scale industrial undertakings*                                                           -                 -
     (To the extent identified with available information)
b) Others                                                                              1,52,78,311            2,96,264
Bank Overdraft(SBI)                                                                    2,55,90,450                   -
Interest Accrued on Bank OD                                                                  8,996                   -
Security and Other Deposits                                                                      -                   -
Provision for expenses                                                                      36,182              36,500
TDS Payable                                                                               1,50,450            1,00,236
TOTAL                                                                                  4,10,64,389            4,33,000




SCHEDULE - 12
PROVISIONS
Provision for Gratuity                                                                              -           40,588
Provision for Leave Encashment                                                                      -           19,000
TOTAL                                                                                               -           59,588



SCHEDULE - 13
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A.    Significant Accounting Policies:

1     Accounting Concepts:

      The financial statements are prepared under the historical cost convention on an accrual basis and in in
      accordance with the applicable mandatory Accounting Standards.

2     Use of Estimates:

      The preparation of financial statements are in conformity with the generally accepted accounting principles which
      requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the
      date of financial statements and the reported amounts of revenues and expenses during the reported period.
      Difference between the actual results and estimates are recognised in the period in which the results are known
      or materialise.

3     Fixed Assets:

      Fixed assets are stated at cost (including other expenses related to acquisition and installation)

4     Treatment of expenditure during construction period:

      Expenditure during construction period is included under Capital Work in Progress and the same to be allocated
      to the respective Fixed Assets on the completion of its construction.

5     Depreciation:

      Depreciation is charged on a straight-line basis over the estimated useful lives of the assets.



                                                                                                                    89
HARISH CEMENT LIMITED


     The estimated useful lives are as follows.
     Assets                                No of Years
     Office Equipment                                  4
     Computers                                         4
     Furniture & Fittings                              7
     Motor cycles                                     10
     Intangible-Assets(Software)                       3
     Mobile sets                                       3
     Depreciation on additions/deductions is calculated pro-rata from/ to the month of addition/deduction.
B    NOTES ON ACCOUNTS
     1.   The Company is setting up a Greenfield Cement Plant in Sundernagar, Himachal Pradesh, India. No profit
          and Loss Account has been prepared since the company has not commenced revenue operations. The
          expenditure incurred during the construction period are classified as “Project Development Expenditure”
          pending capitalisation and will be apportioned to the Assets on the completion of the project. Necessary
          details as per part II of schedule VI of the Companies Act,1956 have been disclosed below :
                                                                                                    (Amount in Rs.)
           Project Development Expenditures                    For the year                  For the year
           Account (Included under Capital                     2009-2010                     2008-2009
           work-in-progress)

           Opening Balance                                             6,42,20,588                  5,34,13,000
           Add :
           Advertisement Expenses                           6,57,614                    4,03,433
           Architectural Services (Office Interior)                -                      12,000
           Audit Fees                                         5,000                        5,000
           Bank Charges                                       9,767                        8,898
           Books & Periodicals                                7,604                        4,210
           Casual Salary & Wages                            9,13,921                    8,44,647
           Computer Maintenance Exp.                          4,310                       10,605
           Consultancy Charges                             30,03,750                    7,86,000
           Contribution to HimShree Ladies Club               8,430                        9,870
           Conveyance Expenses                              8,03,213                    3,84,212
           Depreciation                                     4,92,287                    4,71,455
           Drilling / Exploration Exp.                        1,800                             -
           Electricity Charges                               76,483                       77,107
           EIA/EMP/SIA Exp                                   56,439                     3,43,561
           Environment & Pollution Control Exp                     -                       6,580
           Festival Celebrations                             33,859                       33,255
           General Expenses                                  80,383                     1,68,310
           General Insurance premium                         28,440                        2,975
           Gift Expenses                                    3,38,867                    4,30,464
           Guest Entertainment Exp.                          59,020                     1,05,948
           Guest House Expenses                             1,33,358                    1,28,487


90
HARISH CEMENT LIMITED


                                                                                                    (Amount in Rs.)
          Project Development Expenditures                   For the year                   For the year
          Account (Included under Capital                    2009-2010                      2008-2009
          work-in-progress)
          HRMS Services Charges                            24,750                               -
          Interst on Bank OD                                8,996                               -
          I.T.Services Expenses                             2,400                               -
          Lab Consumable Expenses                        1,16,857                        42,273
          L.A.O- Office Exp                              8,09,962                      4,53,867
          Land Development Expenses                    57,47,172                                -
          Loss on sale of Fixed Assets                           -                         6,950
          Legal & Professional Charges                 18,55,092                      16,73,400
          Postage & Telegram Expenses                      32,482                        50,185
          Printing & Stationery Expenses                 4,78,534                      3,72,337
          Prospecting / Exploration Exp.               10,12,500                                -
          Rates & Taxes                                  7,15,685                      2,83,585
          Recruitment Exp.                                       -                       15,990
          Rent(Office & Guest House)                     7,59,500                      6,05,000
          Repair & Maintenance Exp.                        54,901                        36,339
          Sample Testing                                 2,60,077                      2,57,211
          Social Welfare Activities Expenses           21,88,032                      11,17,249
          Soil Testing Exp                               1,23,700                               -
          Staff Welfare Expenses                         1,38,718                      1,34,138
          Subscription for Membership                       1,500                          1,500
          Telephone Expenses                             1,93,126                      2,95,152
          Topographic Survey                             1,22,400                        67,320
          Training Exp.                                     9,530                          8,950
          Travelling Expenses                            7,80,006                      9,77,258
          Vehicle Repair / Running Expenses                13,940                        19,612
          Water Exp (Office-Sundernagar)                      802                            718

          Total                                      2,21,65,207                    1,06,56,051

          Provision For Taxation
          Fringe Benefit Tax                                     -                     1,51,537
          Closing Balance                            2,21,65,207 8,63,85,795        1,08,07,588     6,42,20,588

2   Contingent liabilities -Estimated amount of Contracts remaining to be executed on capital account and not
    provided( advance paid Rs.5,006.72 lacs) Rs. 9,020.31 Lacs
3   Previous year figures have been regrouped wherever necessary.
4   Prusuant to a Scheme of Arrangement u/s 391 to 394 of the Companies Act, 1956, Shares of the Company
    held by Grasim Industries Ltd. (holding Company of the Company) have been transferred to Samruddhi Cement
    Ltd. w.e.f. 1st October, 2009. Accordingly the Company is a subsidiary of Samruddhi Cement Ltd. (subsidiary of
    Grasim Industries Ltd.) w.e.f. 1st October, 2009.


                                                                                                                91
HARISH CEMENT LIMITED


5    Disclosure of related parties/related party transactions:
     A.   List of related parties
          Name of the Related Party                     Nature of Relationship
          Samruddhi Cement Ltd                          Holding Company
          Grasim Industries Ltd.(Grasim)                Ultimate Holding Company
          UltraTech Cement Ltd.                         Fellow Subsidiary
     B.   Disclosure of related party transactions:
           Sr. No.     Nature of Transaction              Holding Company          Amount in Rs.

           1           Loans & Borrowings                 Grasim Industries Ltd.   21,11,84,099

           2           Loans & Borrowings                 Samruddhi Cement Ltd     27,00,00,000

          Outstanding Balance as on March,2010
           Sr. No.     Nature of Transaction              Holding Company          Amount in Rs.

           1           Unsecured loans                    Samruddhi Cement Ltd     73,83,52,754




92
HARISH CEMENT LIMITED


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2010
                                                                                     Amt in Rs.
                                                                    Current Year   Pervious Year

A.   Cash Flow from Operating Activities
     Adjustments for:
     Advances and Receivables                                       (15,027,482)      (229,006)
     Trade Payables                                                  25,589,754        384,998
     Net Cash from/(used in)Operating activities                     10,562,272        155,992
B.   Cash Flow from Investing Activities
     Purchases of Fixed Assets                                     (473,174,945)      (922,863)
     CWIP(Advances & Projet Dev. Expes)                             (22,872,454)   (94,445,915)
     Sale of fixed assets                                                      -        43,857
     Net Cash from/(used in) investing activities                  (496,047,399)   (95,324,921)
C    Cash Flow from Financing Activities
     Proceeds from borrowings                                       481,184,099     99,118,686
     Net Cash from/(used in) Financing activities                   481,184,099     99,118,686
D    Net increase/(Decrease) in Cash and Cash equivalent             (4,301,028)     3,949,757
     Cash and Cash equivalent at beginning of the year                4,577,114        627,357
     Cash and Cash equivalent at end of the year                        276,086      4,577,114
     (Cash and cash equivalent represent cash and bank balances)

As per our report of even date
        .
For G. P Kapadia & Co.                                                              R.M.GUPTA
Chartered Accountants                                                                  .
                                                                                      P K.JAIN
                                                                                   ARUN DAGA
                                                                                       Directors
ATUL B. DESAI
Partner
Mumbai
Dated: 18th May, 2010




                                                                                             93
HARISH CEMENT LIMITED


Balance Sheet abstract and Company’s General Business Profile
I. Registration Details
                Registration No.     0 6      - 1 9 1 7 3                                  State Code 0 6
               Balance Sheet Date    3 1      - 0 3      - 1 0
II. Capital raised during the year (Amount in Rs. Thousands)
                                            Public Issue                                         Rights Issue
                                                        N I    L                                           N I     L
                                            Bonus Issue                                      Private Placement
                                                        N I    L                                           N I     L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
                                           Total Liabilities                                     Total Assets
                                             7 7 9 9 1 7                                         7 7 9 9 1 7
               Sources of Funds :
                                          Paid up Capital                                    Reserves & Surplus
                                                        5 0 0                                              N I     L
                                           Secured Loans                                     Unsecured Loans
                                                        N I    L                                 7 3 8 3 5 3
               Application of Funds :
                                          Net Fixed Assets                                       Investments
                                             7 4 0 6 0 1                                                   N I     L
                                         Net Current Assets                            Miscellaneous Expenditure
                                            ( 1 7 4 8 )                                                    N I     L
                                        Accumulated Losses
                                                     N I L
IV. Performance of Company (Amount in Rs. Thousands)
                              Turnover (including other income)                              Total Expenditure
                                                        N I    L                                           N I     L
                           +/-      Profit / (Loss) Before Tax                +/-          Profit / (Loss) After Tax
                                                        N I    L                                           N I     L
                                    Please Tick Appropriate box + for Profit, - for loss
                                    Earnings Per Share in Rs.                                 Dividend Rate %
                                                        N I    L                                           N I     L
V. Generic Names of Three Principal Products / Services of the Company (as per monetary terms)

                                          No Production activities during the year




                                                                                                                 R.M.GUPTA
                                                                                                                    .
                                                                                                                   P K.JAIN
                                                                                                                ARUN DAGA
                                                                                                                    Directors

Mumbai
Dated: 18th May, 2010




94
PLANT LOCATIONS
HARISH CEMENT LIMITED


 Aditya Cement Works               Rajashree Cement Works
 Adityapuram                       Aditya Nagar, Malkhed Road
 Sawa – Shambhupura Road           Gulbarga 585 292, Karnataka
 Dist. Chittorgarh                 Tel : (08441) 288888
 Rajasthan 312 613                 Fax : (08441) 288624 / 288365
 Tel : (01472) 2220192-197
 Fax : (01472) 2220289             Reddipalayam Cement Works
                                   Reddipalayam P  .O.
 Rawan Cement Works                Dist. Ariyalur 621 704, T.N.
 Grasim Vihar, Village P.O.        Tel : (04329) 249240
 Rawan Tehsil: Sigma               Fax : (04329) 249253
 Dist. Raipur (C.G.)
 Tel : (07726) 288217-20           Vikram Cement Works
 Fax : (07726) 288215, 288209      Dist. Neemuch, Khor 458 470 (M.P.)
                                   Tel : (07420) 230830, 235557
 Kotputli Cement Works             Fax : (07420) 235524
 V&P   .O. Mohanpura
 Tehsil: Kotputli                  Birla White
 Dist. Jaipur, Rajasthan 303 108   Rajashree Nagar, P .O. Kharia Khangar
 TTel: (01421) 215719              Tehsil: Bhopalgarh
 Fax: (01421) 288665               Dist. Jodhpur 342 606 (Rajasthan)
                                   Tel : (02920) 264040–47
                                   Fax : (02920) 264244 / 264222




                                                                           95
NOTES
HARISH CEMENT LIMITED




96
INFOMEDIA 18 LIMITED

								
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