Sagar Cements

1.  CONTINGENT LIABILITIES
 
 a) Estimated amount of contracts to be executed on capital account and
 not provided for Rs.3785.00 Lakhs (PreviousYear: Rs.468S.2S Lakhs).
 
 b) Demand raised by APTRANSCO towards voltage surcharge and grid
 supporting charges is Rs. 1,73,50,747/- and the company paid Rs.
 1,08,02,441/- under protestThe said demand is contested by the company
 with Division Bench of High Court of Andhra Pradesh.
 
 c) Bank Guarantees: Rs.72.36 Lakhs (Previous year: Rs.27.42 lakhs).
 
 d) Letter of Credit: Rs. Nil. (Previous year: Rs.921.20 Lakhs).
 
 e) There is a demand from Sales Tax authorities for a sum of
 Rs.31,00,933 /- in respect of Input Tax Credit on Coal Consumption
 availed to the company from April, 200S to December, 2005, claiming
 that the company is not eligible for the said credit.(Paid Under
 Protest Previ.ousYear Rs. 15,50,466/-). The said demand is contested by
 the company.
 
 f) Demand raised by Sales Tax authorities for a sum of Rs.8,08,656/- in
 respect of input tax credit availed on closing stock of coal held on 3
 I st March, 2005 and filed writ petition before the High Court of
 Andhra Pradesh on payment of 50% of the disputed tax amount i.e.
 Rs.4,04,328/-. (PreviousYear is Rs.4,04,328/-).
 
 2.  Details of utilization of proceeds received against preference
 allotment of shares / conversion of warrants to part finance the
 ongoing expansion.
 
 During the year the company had received a sum of Rs.7490.77 Lakhs
 (PreviousYear Rs.468.63 Lakhs) against preferential allotment of shares
 / conversion of warrants on preferential basis and the same was
 utilized for expansion and its related purposes.
 
 3.  SECURED LOANS
 
 a) The term loans from the Banks and Financial Institutions are secured
 by the Fixed Assets i.e., Land, Buildings, Plant & Machinery, Mining
 Equipment owned by or belonging to the borrower company both proposed
 and future, and by second charge on the current assets of the company
 and are guaranteed by Shri S.Veera Reddy, Managing Director, Dr.S.Anand
 Reddy.Joint Managing Director and Shri S.Sreekanth Reddy, Executive
 Director.
 
 b) Cash Credit from State Bank of Hyderabad, Punjab National Bank,
 State Bank of India and IDBI Bank Ltd.. are secured by hypothecation of
 raw materials, goods-in-process, finished goods, stores and spares and
 receivables, present and future, and by second charge on fixed assets
 of the company and are guaranteed by Shri S.Veera Reddy, Managing
 Director, Dr.S.Anand Reddy.Joint Managing Director and Shri S.Sreekanth
 Reddy,Executive Director.
 
 c) Loan from L&T Finance Limited is secured by the mortgage of specific
 assets purchased from that loan and further secured by personal
 guarantees of Dr.S.Anand Reddy.Joint Managing Director and Shri
 S.Sreekanth Reddy, Executive Director.
 
 e) Investment details
 
 100% invested in LIC Group gratuity (cash accumulation policy)
 
 f) Actuarial assumptions _ Mortality table (LIC) 1994-96 (ultimate).
 Discounting rate - 8%
 
 Expected rate of return on plan asset-9.25%
 
 Expected average remaining working lives of employees-18Yrs
 
 Rate of escalation in salary - 4%
 
 4.  There are no amounts due to micro and small enterprises.
 
 5.  Previous years figures have been regrouped, recast and
 reclassified wherever necessary to conform with those of the current
 year.
 
 6.  Paise have been rounded to the nearest rupee.