Notes to Accounts of Aksh Optifibre Ltd.

Mar 31, 2018

1. Corporate information

Aksh Optifibre Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 2013. Its shares are listed at The Bombay Stock Exchange Limited and The National Stock Exchange Ltd. in India. The registered office of the Company is located at F-1080, RIICO Industrial area, Phase- III Bhiwadi (Alwar) Rajasthan-301019, India.

The Company is engaged in the manufacturing and selling of Optical Fibre, Optical Fibre Cable, Fibre Reinforced Plastic Rods and Impregnated Glass Roving Reinforcement and ophthalmic lens. The Company caters to both domestic and international markets. The Company also provides the E-Governance services, FTTH and Internet Protocol Television (IPTV) services in North India.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 issued by the Ministry of Corporate Affairs (‘MCA’).

The Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS.

The financial statements have been prepared on a historical cost convention, except for certain financial assets and financial liabilities (including derivative instruments) that are measured at fair value as required under relevant Ind AS.

The financial statements are presented in Indian Rupees (Rs.) and all values are rounded to the nearest lakhs, except otherwise stated.

*The Company has provided corporate guarantee against credit facilities availed by its wholly owned subsidiaries. As no payment is made by the wholly owned subsidiaries to the Company, the same has been considered as a deemed capital contribution by AOL to its subsidiaries, since the guarantee has been provided by AOL in its capacity as a shareholder. As a result, the financial guarantee has been fair valued and has been presented as deemed investment in subsidiary with a corresponding credit in other financial liabilities which will be amortised over period of term loan.

There are no trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private Companies respectively in which any director is a partner, a director or a member.

Trade receivables are generally non-interest bearing and are generally on terms of 30 to 120 days.

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Rs 5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) During the period of five years immediately preceding to reporting date, the Company has not

(i) issued any bonus shares

(ii) Bought back any shares

Aggregate number of share issued for consideration other than cash during the period of five years immediately preceding the reporting date:

Indian rupee loan from banks amounting to Rs. 6,573.69 lakhs ( March 31, 2017: Rs. 3,548.01 lakhs, April 1, 2016 : Rs. 599.39 lakhs) carries interest rate ranging between 9.20% p.a. to 11.10% p.a. and repayable in next 6 years in quarterly installments. The loans are secured by way of first pari passu charge on fixed assets of the Company, second pari passu charge on current assets of the Company and further secured by personal guarantee of Dr. Kailash S Choudhari.

Foreign currency term loan from banks amounting to Rs. 3,606.41 lakhs (March 31, 2017: Rs. 2,160.97 Lakhs, April 1, 2016: Rs. 4,012.04 Lakhs) carries interest rate ranging between 4 % to 6% p.a. and repayable in next 6 years in quarterly installments. The loans are secured by way of first pari passu charge on fixed assets of the Company, second pari passu charge on current assets of the Company and further secured by personal guarantee of Dr. Kailash S Choudhari.

Term loan from others includes Indian rupee loan from Hewlett Packard Financial Services (India) Private Limited amounting to Rs. 2.89 lakhs (March 31, 2017: Rs. 35.96 lakhs, April 1, 2016 : Rs. 93.44 lakhs) which carries fixed interest @ 13.68% and repayable in next one year in equal monthly instalment.

Working capital facilities from banks are secured by way of first pari-passu charge on hypothecation of raw materials, work-in-progress, finished goods and trade receivables both present and future and second pari-passu charge on the fixed assets of the Company. These facilities are further secured by way of first pari-passu charge on the immovable properties of the Company and personal guarantee of Dr. Kailash S. Choudhari. The cash credit is repayable on demand and credit carries interest in the range of 9.25% to 9.80 % p.a.

Buyer’s credit are secured by hypothecation of raw materials, work-in-progress, finished goods and trade receivables and carries rate of interest @ 4% to 5% p.a. (excluding hedging premium).

Inter corporate deposits from other are repayable on demand and carries interest @ 15% p.a.

Bills Discounting are unsecured and carries interest @ 9% to 10% p.a.

Loan from others are secured by way of exclusive charge on Plant and Machinery of the erstwhile APAksh Broadband Limited (Vested in the Company pursuant to Scheme of Arrangement for Amalgamation of erstwhile APAksh Broadband Limited with the Company) covered under loan agreement and personal guarantee of Dr Kailash S. Choudhari.

3. Employee benefits Defined benefit plans Gratuity:

Provision for gratuity is determined based on actuarial valuation using projected unit credit method. Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Corporation of India in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the statement of profit or loss and the funded status and amounts recognised in the balance sheet for the respective plans:

4. Segment information

Ind AS 108 establishes standards for the way that companies report information about operating segments and related disclosures about products and services, geographic areas, and major customers. The Company’s operations pre-dominantly relate to manufacturing, services and trading of goods. The Chief Operating Decision Maker (CODM) evaluates the Company’s performance and allocates resources based on analysis of various performance indicators pertaining to business. The accounting principles used in preparation of the financial statements are consistently applied to record revenue and expenditure in segment information, and are as set out in the significant accounting policies. The information about business segments are given below:

** Non-Current Operating Assets for this purpose consist of Property, Plant & Equipment, Capital work in progress and Intangible Assets.

(C) Revenue from one customer in India more than 10% amounted to Rs. 14411.70 Lakhs.

5. Related party transactions

In accordance with the requirements of Indian Accounting Standard (Ind AS) - 24 ‘Related Party Disclosures’ the names of the related party where control exists/ able to exercise significant influence along with the aggregate transactions and year end balance with them as identified by the management in the ordinary course of business and on arms’ length basis are given below:

(a) Subsidiary Companies :

- AOL FZE, (Dubai)

- AOL Composites (Jiangsu) Co. Limited, (China) (step down subsidiary)

- Aksh Composites Private Limited, (India) (formerly known as Unitape Mandovi Composites Pvt. Ltd.) w.e.f 15-Sept-2016

- AOL Projects DMCC, (Dubai) (step down subsidiary) (till 28.12.2016)

- AOL Technologies FZE, (Dubai)

- Aksh Technologies (Mauritius) Limited, (Mauritius)

(b) Key Management personnel (KMP) and their relatives:

- Dr. Kailash S. Choudhari (Chairman and Managing Director)

- Mr. Satyendra Gupta (Deputy Managing Director w.e.f 28.05.2016)

- Mr. B.R.Rakhecha (Independent Director)

- Mr Amrit Nath (Independent Director)

- Mr Dinesh Kumar Mathur (Independent Director till 12.08.2017)

- Ms. Devika Raveendran (Independent Director)

- Mr. Gauri Shankar (Independent Director w.e.f. 08.04.2017)

- Mr. Gaurav Mehta (Chief- Corporate Affairs & Company Secretary w.e.f 28.05.2016)

- Mr. Pawan Kumar Gambhir (Chief Financial Officer w.e.f 28.05.2016)

All transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and their settlement occurs in cash. For the year ended March 31, 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2017: Nil, April 1, 2016: Nil)

6. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit for the year attributable to the equity shareholders of the Company by weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

7 leases Operating Lease :

The Company has entered into various lease agreements. The lease term is for periods of three to five years and renewable at the option of both the parties.

8. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, acCompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Income taxes

The Company is subject to income tax laws as applicable in India. Significant judgment is required in determining provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

In assessing the realisability of deferred tax assets, management considers whether it is probable, that some portion, or all, of the deferred tax assets will not be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable incomes over the periods in which the deferred tax assets are deductible, management believes that it is probable that the Company will be able to realise the benefits of those deductible differences in future.

Employee benefit obligations

The cost of the defined benefit obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates. Further details about gratuity obligations are given in note 32.

Contingencies

Management judgement of contingencies is based on the internal assessments and opinion from the consultants for the possible outflow of resources, if any.

The Company has other commitments for purchase orders which are issued after considering requirements as per operating cycle for purchase of services, employee benefits. The Company does not have any long term commitment or material non-cancellable contractual commitments/contracts with respect to contractual expenditure which might have a material impact on the financial statements.

For commitments relating to lease arrangements please refer note no.37

9. Details of Loans and Advances given to Subsidiaries

The details are provided as required by regulation 53 (f) read with Para A of Schedule V to SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

10. Financial risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise loans and trade payables. The main purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets such as trade receivables, bank balances and short-term deposits, which arise directly from its operations.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

(i) Interest rate risk

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rate primarily relates to the Company’s long-term debt obligations with floating interest rates.

The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s borrowings with floating interest rates. The Company’s policy is to manage its interest cost using a mix of fixed, floating rate borrowings.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The Company has sales and purchases from outside India. The Company has transactional currency exposures arising from sales and purchases by an operating unit in currencies other than the unit’s functional currency. Accordingly, the Company’s financial state of affairs can be affected significantly by movements in the USD or any other currency exchange rates. The Company enters into derivative transactions, primarily in the nature of forward currency contracts on import payables. The purpose is to manage currency risks arising from the Company’s operations.

B. Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

(i) Trade Receivables

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

(ii) Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s finance department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2018 and March 31, 2017 is the carrying amounts of each class of financial assets except for financial guarantees and derivative financial instruments. The Company’s maximum exposure relating to financial derivative instruments is noted in note no 41 and the liquidity table below:

C. Liquidity risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are required to be settled by delivering cash or another financial asset. The Company’s objective is to, at all times, maintain optimum levels of liquidity to meet its cash and collateral obligations. The Company requires funds both for short-term operational needs as well as for long-term investment programs mainly in growth projects. The Company closely monitors its liquidity position and deploys a robust cash management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash and cash equivalents, liquid investments and sufficient committed fund facilities, will provide liquidity.

The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The average credit period taken to settle trade payables is about 60 - 90 days. The other payables are with short-term durations. The carrying amounts are assumed to be reasonable approximation of fair value. The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

11. Capital management

The purpose of the Company’s capital management, equity includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total equity. The Company’s policy is to keep the gearing ratio optimum. The Company includes within net debt, interest bearing loans and borrowings less cash and cash equivalents.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2018 and March 31, 2017.

Fair values

The fair values of trade receivables, cash and cash equivalents, other current financial asset, trade payables and other current financial liabilities are considered to be same as their carrying values due to their short term nature. The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Fair value hierarchy

All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy, described as follows based on the lowest level input that is significant to the fair value measurement as whole.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices, for example listed equity instruments, traded bonds and mutual funds that have quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques that maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The following table presents assets and liabilities measured at fair value at March 31, 2018 and March 31, 2017

12. Accounting for Amalgamation of APaksh Broadband Limited (APAKSH) with the Company.

Pursuant to the Scheme of Arrangement for Amalgamation of the erstwhile APaksh Broadband Limited (99.92% subsidiary of the Company) with the Company, as approved by the shareholders and subsequently sanctioned by the Hon’ble National Company Law Tribunal (NCLT) vide its order dated November 08, 2017, which became effective on November 10, 2017 on filing of the certified copy of the order of the Hon’ble National Company Law Tribunal in the office of Registrar of Companies, all the properties, assets, both movable and immovable, liabilities including contingent liabilities of erstwhile APAKSH have without further act or deed, been transferred to and vested in the Company at their book values, as a going concern with effect from the appointed date April 1, 2016.

Consequent to the Scheme of arrangement for Amalgamation, 225,950,000 equity shares of Rs. 5 each of erstwhile APaksh held by the Company stands cancelled and 32,901 equity share of Rs. 5/- will be allotted to the minority shareholders of erstwhile APAKSH (25 Equity shares of AKSH for every 133 shares of APAKSH) and accordingly Rs. 1.65 lakhs has been shown under Other reserve - Shares pending for allotment as on 31.03.2017.

For giving effect to the amalgamation in the nature of merger the “Pooling of Interest” method as prescribed by the Accounting Standard-14 “ Accounting for amalgamation” notified in the Companies (Accounting Standards) rules, was followed in the previous year where in, the assets and liabilities including contingent liabilities as at April 1, 2016 of the erstwhile APAKSH (being the year when pending effectuation of the Scheme, the business and activities of erstwhile APAKSH were being run and managed in trust for the Company) for the year ended March 31, 2017 are incorporated in the accounts as per following details.

No impact on statement of profit and loss as erstwhile APAKSH has not commenced its revenue operations.

13. First time adoption of Ind AS

These financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. The preparation of these financial statements resulted in changes to the accounting policies as compared to most recent annual financial statements prepared under Previous GAAP. Accounting policies have been applied consistently to all periods presented in the financial statements. They have also been applied in preparing the Ind AS opening balance sheet as at April 1, 2016 for the purpose of transition to Ind AS and as required by Ind AS 101.

This note explains the principal adjustments made by the Company in restating its Previous GAAP financial statements, including the balance sheet as at April 1, 2016 and March 31, 2017 and statement of profit and loss for the year ended March 31, 2017.

A. Ind AS optional exemptions applied:

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

(a) Deemed cost

The Company has adopted Para D7AA as defined in Ind AS 101 and acordingly considered the carrying value of Property, Plant & Equipment including Capital Work in progress & Intangible Assets as deemed cost as at the transition date.

(b) Investments in subsidiaries

The Company has adopted Para D14 & D15 as defined in Ind AS 101 and acordingly considered the previous GAAP carrying amount of Investment as deemed cost at the transition date.

B. Ind AS mandatory exemptions

(a) Estimates

The estimates at April 1, 2016 and at March 31, 2017 are consistent with those made for the same dates in accordance with previous GAAP apart from the following items where application of previous GAAP did not require estimation:

- Impairment of financial assets based on expected credit loss model.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2016, the date of transition to Ind AS and as of March 31, 2017

(b) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Accordingly, the classification and measurement of financial assets has been made on the basis of the facts and circumstances existed at the date of transition.

Impact of transition to Ind AS

The following is a summary of the effects of the differences between Ind AS and previous GAAP on the Company’s total equity and profit for the year previously reported under previous GAAP following transition to Ind AS.

Footnotes to the reconciliation of equity as at April 1, 2016 and March 31, 2017 and profit or loss for the year ended March 31, 2017

(i) Investments in subsidiaries

Financial guarantee contract

Under Ind AS, financial guarantee provided in relation to loans and other payable of subsidiaries for no compensation are accounted as investment in subsidiaries and measured at fair value. Accordingly, Rs.52.62 lakhs has been recognised as investment in subsidiaries as on 0April 1, 2016 and Rs. 42.92 lakhs has been recognised as on March 31, 2017 with a corresponding charge to profit or loss. Whereas under previous GAAP, these were not recognised in the balance sheet. The net effect is a increase in total equity by Rs.24.27 lakhs as at April 1, 2016 , increase in profit for the year ended March 31, 2017 of Rs.7.77 lakhs.

(ii). Security deposits

Under previous GAAP, security deposits are recognised at transaction value. Under Ind AS, refundable security deposits are initially recognised at fair value and subsequently measured at amortised cost. The difference between transaction value and fair value at inception is recognised as prepaid expense and amortised over the tenure of the security deposit. Further, interest income is recognised in statement of profit and loss on unwinding of discount on security deposits paid.

As on April 1, 2016, the security deposit reduced by Rs. 1.32 lakhs , other non current assets increased by Rs. 0.79 lakhs and other current assets increased by Rs. 0.40 lakhs with the corresponding increase in retained earnings by Rs. 0.12 lakhs. In the statement of profit and loss for the year ended March 31, 2017, rental expense increased by Rs. 1.13 lakhs, other expense increased by Rs. 1.24 lakhs and interest on unwinding of discount on security deposits paid increased by Rs. 2.05 lakhs resulting in increase in profit for the year ended on March 31, 2017 by Rs. 0.33 lakhs. As on March 31, 2017, the security deposit reduced by Rs. 15.95 lakhs and other non current assets increased by Rs. 10.29 lakhs and other current assets increased by Rs. 5.20 lakhs.

(iii) Deferred tax asset

previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences relating to various transition adjustments which are recognised in correlation to the underlying transaction either in retained earnings as a separate component in equity. Under Ind AS MAT represents a deferred tax asset and shall be measured at amount of credit available from tax authorities. Under previous GAAP MAT is classified under current tax assets.

As a result, net effect on deferred tax assets as on the date of transition is decreased by Rs. 659.80 lakhs and as on March 31, 2017 is decreased Rs. 642.26 lakhs.

(iv) Derivative instruments

Under Ind-AS, the Company will do marked to market valuation for all outstating derivative contracts at each balance sheet date and record the impact (gain/loss) in the statement of profit or loss. Under previous GAAP, the difference between forward rate and spot rate at inception of forward exchange contract (i.e. Premium) is amortised over the life of the forward exchange contract. Accordingly the same adjustments needs to be reversed under Ind AS.

The marked to market of outstanding derivatives contracts on April 1, 2016 results in a increase in other financial assets and increase in retained earnings by Rs. 27.92 lakhs. In Statement of profit and loss for the year ended March 31, 2017, other income decreased by Rs. 88.58 lakhs relating to marked to market valuation. As on March 31, 2017 other financial assets decreased by Rs. 60.66 lakhs

(v) Reclassifications

(a) The Company has in employee benefit obligations and reclassified advance recoverable in cash and kind to employee benefit obligations. As a result there is a decrease of Rs. 71.59 lakhs as on April 1, 2016 and Rs. 138.31 lakhs as on March 31, 2017, in advance recoverables with a corresponding increase in employee benefit obligation.

(b) Under previous GAAP, transaction costs incurred in connection with borrowings are amortised upfront and charged to statement of profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using EIR. As a result, borrowings as on the date of transition are lower by Rs. 88.13 lakhs and Rs. 45.82 Lakhs as at March 31, 2017.

(c) The Company has reclassified capital reserve towards government grant received amounting to Rs. 15 lakhs to retained earnings. This represents reversal of deferred income over the useful life of the asset for which the grant has been received.

(vi) Trade payable (non current)

Under Ind AS financial liabilities are measured at inception at fair value and subsequently measured at amortised cost using effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs (transaction costs and origination fees) that are an integral part of the EIR. The EIR amortisation is included in finance costs in the income statement. Whereas under previous GAAP, these were not recognised in the balance sheet. The net effect of this change is a decrease in trade payable by Rs. 136.76 lakhs and on interest payable by Rs. 29.70 lakhs as on date of transition with corresponding increase in retained earnings. In the statement of profit and loss for the year ended March 31, 2017, in there is a increase in interest expense by Rs. 70.25 lakhs and increase in foreign exchange fluctuation expense by Rs. 9.69 lakhs resulting into reduction in profit for the year ended March 31, 2017 by Rs. 60.56 lakhs. As on March 31, 2017, the trade payable reduced by Rs. 71.08 lakhs and interest payable decreased by Rs. 15.44 lakhs.

(vii) Financial guarantee obligation

*The Company has provided corporate guarantee against credit facilities availed by its wholly owned subsidiaries. As no payment is made by the wholly owned subsidiaries to the Company, the same has been considered as a deemed capital contribution by AOL to its subsidiaries, since the guarantee has been provided by AOL in its capacity as a shareholder. As a result, the financial guarantee has been fair valued and has been presented as deemed investment in subsidiary with a corresponding credit in other non current financial liabilities amounting to Rs. 20.59 lakhs and Rs.11.93 lakhs in March 31, 2016 & March 31, 2017 respectively and in current financial liabilities amounting to Rs. 7.77 lakhs and Rs. 8.66 lakhs in March 31, 2016 & March 31, 2017 respectively. As a results revene has increased by Rs. 10.57 lakhs.

(viii) Deferred payment terms

Under previous GAAP, revenue was recognised and measured at the amount of the proceeds received. Whereas in Ind AS, revenue is measured at fair value of consideration received/ receivable. The difference between fair value of consideration and proceeds is recognised as interest expense over the deferment period. As a result, other financial liability increased by Rs. 11.74 lakhs with a corresponding decreased in retained earning. In the statement of profit and loss for the year ended for the year ended March 31, 2017, revenue decreased by decreased by Rs. 9.84 lakhs and other income increase by 2.23 lakhs.

(ix). Revenue from operation

Under the previous GAAP, excise duty on sale of goods was reduced from sales to present the revenue from operations. Whereas, under Ind AS, this excise duty is included in the revenue from operations and the corresponding expense is included is part of total expenses. The change does not affect total equity as at April 1, 2016 and profit before tax for the year ended March 31, 2017. As a result, there is an increase in revenue and expenses for the year ended March 31, 2017 by Rs. 2,017.54 lakhs.

(x). Re-measurement of post-employment benefit obligations

Both under previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to statement of Profit and Loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income (OCI). Under previous GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled previous GAAP profit or loss to profit or loss as per Ind AS. Further, previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

(xi) Statement of cash flows

The impact of transition from previous GAAP to Ind AS on the statement of cash flows is due to various reclassification adjustments recorded under Ind AS in Balance Sheet and Statement of Profit and loss. The transition from previous GAAP to Ind AS has not had a material impact on the statement of cash flows.

14. Opening balance sheet as on April 1, 2016 represents balance sheet as on 31st March 2016 considering the transitional IND AS adjustment.

The accompanying notes (1-49) are an integral part of the financial statements

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Mar 31, 2016

Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Rs.5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(b) During the period of five years immediately preceding to reporting date, the Company has not

(i) issued any bonus shares

(ii) issued shares for consideration other than cash

(iii) Bought back any shares

1. External Commercial Borrowings are secured by way of first pari- passu charge on the fixed assets of the Company and personal guarantee of Dr. Kailash S Choudhari.

2. Term Loan from Punjab National Bank are secured by way of exclusive charge on Plant and Machinery installed under the project, second pari-passu charge on current assets, third pari-passu charge on fixed assets of the Company and further secured by personal guarantee of Dr. Kailash S Choudhari.

3. Term Loan from HDFC Bank are secured by way of first pari-passu charge on fixed assets, second pari-passu charge on current assets of the Company and further secured by personal guarantee of Dr. Kailash S Choudhari.

4. Term Loan from others are secured by way of exclusive charge on Fixed assets installed under the subject project.

5. Issue of Foreign Currency Convertible Bonds (FCCBs) convertible into ordinary shares, the particulars, terms of issue and the status of conversion as at March 31, 2016 are given below:-

6. Contingent Liabilities:

Liabilities through contingent are provided for, if there are reasonable prospects of their maturity. Other contingent liabilities except frivolous claims are disclosed.

b) Bank Guarantees, letters of credit (Net of margin) issued by banks and outstanding as on the reporting date is Rs.2,965.83 Lacs (March 31, 2015: Rs.1,940.99 Lacs)

c) Estimated amounts of contracts remaining to be executed on Capital Account (net of advances) is Rs.2,276.93 Lacs (March 31, 2015 : Rs.28.00 Lacs)

d) Corporate guarantee given by the Company in respect of Loans outstanding as on the reporting date is Rs.2,033.12 Lacs (March 31, 2015: Rs.2,376.07 Lacs).

e) Liabilities of Letter of credit bill discounted with bank of Rs.4,055.19 Lacs (March 31, 2015 : Rs.344.21 Lacs) has been netted off from trade receivables.

7. Employee Benefits:

The disclosures as per the Notified AS 15 under the Companies (Accounting Standards) Rules, 2006 on "Employee Benefits", are as follows:

a) The Company has classified various benefits provided to employees as under:

Defined Contribution Plans and amount recognized in Statement of Profit and Loss.

8. Detail of loans given, Investment made and guarantee given covered U/s 186 (4) of the Companies Act, 2013 Investment made are given under respective head ( refer note no. 15)

9. Exceptional items represents net foreign exchange gain / (loss) on translation of Foreign Exchange assets and liabilities other than operational of Rs.(267.55) Lacs (March 31, 2015: Rs.104.68 Lacs), profit/(loss) on sale of fixed assets and Investments of Rs.(1.16) Lacs (March 31, 2015: Rs.10.83 Lacs) and balances written of Rs.(460.55) Lacs (March 31, 2015 : Nil).

10. The Company has an investment of Rs.11,297.50 Lacs (March 31, 2015 : Rs.11,297.50 Lacs) in the equity shares and has outstanding dues of Rs.1,539.10 Lacs (March 31, 2015 : Rs.1,576.55 Lacs) (net of advances) from APAKSH Broadband Limited (APAKSH), subsidiary acquired as a result of the amalgamation of erstwhile Aksh Broadband Limited with the Company. APAKSH''s operations got suspended due to litigation by one of the shareholder of APAKSH. The Board of Directors has approved the merger of its subsidiary APAKSH with the Company subject to necessary statutory approvals and process to be finalised in due course with requisite agencies. Post merger synergies of APAKSH would be utilised to augment business domain of the Company. In view of this, no provision has been considered necessary in respect of the outstanding dues and investment at this stage.

11. There are no Micro and Small Enterprises, to whom the Company owes, which are outstanding for more than 45 days as at March 31, 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

12. During the year, Hon''ble High Court of Jaipur, Rajasthan admitted a winding up petition against the Company, being Corporate Guarantor for Rs.540.00 Lacs, for the alleged /disputed liability of its subsidiary, i.e. M/s APAKSH Broadband Limited. Consequently, Company filed an appeal in Double Bench of Hon''ble High Court of Jaipur, Rajasthan, which has been admitted by Court and pending for adjudication.

13 Previous year''s figures have been regrouped, rearranged and reclassified to conform to those of current year''s figures wherever necessary.

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Mar 31, 2015

1. Contingent Liabilities:

a) Claims not acknowledged as debts

b) Bank Guarantees, letters of credit (Net of margin) issued by banks and outstanding as on the reporting date is Rs. 1,940.99 lacs (31.03.2014 : Rs.2,163.96 lacs).

c) The Company had imported plant and machinery in previous years under EPCG scheme. An export obligation ('EO') amounting to Rs.10,699.43 lacs was placed on the Company which was to be fulfilled in a period of 8 years starting from August 2001. Subsequently, the said EO was refixed by DGFT vide its letter dated Jan 2011 upto August 2011 in terms of the Chapter VI of EXIM Policy and Procedure (Vol-1) 1997-2002. The Company has fulfilled the entire EO and final redumption is awaited.

d) Estimated amounts of contracts remaining to be executed on Capital Account (net of advances) is Rs.28.00 lacs (31.03.2014 : Rs. 18.03 lacs).

2. Employee Benefits:

The disclosures as per the Notified AS 15 under the Companies (Accounting Standards) Rules, 2006 on "Employee Benefits", are as follows: a) The Company has classified various benefits provided to employees as under :

Defined Contribution Plans and amount recognized in Statement of Profit and Loss.

3. Detail of loans given, Investment made and guarantee given covered U/s 186 (4) of the Companies Act, 2013

Investment made are given under respective head (Refer Note No. 11)

4. Related Party Disclosures

Related party disclosures as required under Accounting Standard - 18 on "Related Party Disclosures" issued by

The Institute of Chartered Accountants of India are as given below as on March 31, 2015:

a) Subsidiary Companies :

- APAKSH Broadband Limited

- AOL FZE (Dubai)

- AOL PROJECTS DMCC (Fellow Subsidiary)

b) Individuals exercising significant influence and their relatives:

- Dr. Kailash S. Choudhari (Chairman)

- Dr. Rohan Choudhari

c) Key Management personnel and their relatives:

- Mr. Chetan Choudhari (Managing Director)

- Mr. Satyendra Gupta (Chief Financial Officer) ( related w.e.f. 2nd August, 2014)

- Mr. Gaurav Mehta (Company Secretary) ( related w.e.f. 2nd August, 2014)

d) Enterprise over which personnel referred in (b) and ( C) aforementioned exercise significant influence :-

- Mangal Chand Tubes Private Limited

Lease rental expense in respect of operating leases is Rs.8.86 lacs (31.03.2014 : Rs.0.74 lacs) Contingent rent recognised in the Statement of Profit and Loss is Rs. Nil (31.03.2014 : Rs. Nil)

30 Expenditure relating to corporate social responsibility as per section 135 of the Companies Act, 2013 read with schedule VII

a) Gross amount required to be spent during the year : Rs. 40.17 lacs

b) Amount spent during the year on:

5. Exceptional items represents net foreign exchange gain on translation of Foreign Exchange assets and liabilities other than operational of Rs.104.68 lacs (31.03.2014: Rs.717.10 lacs), profit/(loss) on sale of fixed assets and Investments of Rs. 10.83 lacs {31.03.2014: (Rs.20.76) lacs}, liabilities written back of Rs. Nil lacs (31.03.2014: Rs.10.26 lacs).

6. The Company has an investment of Rs. 11,297.50 lacs in the equity shares and has outstanding dues of Rs. 1,576.55 lacs (31.03.2014: Rs. 1,565.21 lacs) (net of advances) from APAKSH Broadband Limited (APAKSH), subsidiary acquired as a result of the amalgamation of erstwhile Aksh Broadband Limited with the Company. APAKSH's operations are presently suspended due to pending litigation by one of the shareholder of APAKSH.Considerinng creation of spreading OFC network by all orders in the country, the Management of the Company is in the process of discussions on the revival of the project and pending that no provision has been considered necessary in respect of the outstanding dues and investment at this stage.

7. There are no Micro and Small Enterprises, to whom the Company owes, which are outstanding for more than 45 days as at March 31, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

8.Previous year's figures have been regrouped, rearranged and reclassified to conform to those of current year's figures wherever necessary. The accompanying notes (1-42) are an integral part of the financial statements.

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Mar 31, 2014

1 CORPORATE INFORMATION

Aksh Optifibre Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at The Bombay Stock Exchange Limited, The National Stock Exchange Limited in India and GDRs are listed at Luxembourg Stock Exchange. The Company is engaged in the manufacturing and selling of Optical Fibre, Optical Fibre Cable, Fibre Reinforced Plastic Rods and Impregnated Glass Roving Reinforcement, The Company caters to both domestic and international markets. The Company also provides the Internet Protocol Television (IPTV) services in association with BSNL in 20 cities of North India. The Company is the pioneer in the FTTH (Fibre to the Home) space and has further consolidated its place by starting FTTH services in Delhi, Jaipur, Ajmer & Faridabad.

2 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs and the relevant provisions of the 1956 Act/ 2013 Companies Act, as applicable 1956.

3 Contingent Liabilities:

a) Claims not acknowledged as debts (Rs. in lacs)

S. No. Particulars 31-Mar-14 31-Mar-13

1 Sales Tax Matters 185.77 328.87

2 Service Tax 304.76 318.08

3 Excise / Custom Duty 552.18 559.93

4 Stamp Duty 28.50 28.50

5 Others 78.91 78.91

b) Corporate Guarantee given by erstwhile Aksh Broadband Limited aggregating to Rs. 582.03 lacs (31.03.2013 : Rs. 582.03 lacs) in favor of Cisco Systems Capital India Private Limited for loan taken by APAKSH Broadband Limited, subsidiary of erstwhile Aksh Broadband Limited.

c) Corporate Guarantee given by the Company aggregating to USD 3.38 Mn equivalent to Rs. 2,025.30 lacs (31.03.2013 : Rs. Nil) in favor of Bank of Baroda, Dubai for loan taken by AOL (FZE).

d) Bank Guarantees, letters of credit (Net of margin) issued by banks and outstanding as on the reporting date is Rs. 2,163.96 lacs (31.03.2013 : Rs. 1070.89 lacs)

e) The Company had imported Plant and Machinery in previous years under EPCG scheme. An export obligation (''EO'') amounting to Rs.10,699.43 lacs was placed on the Company which was to be fulfilled in a period of 8 years starting from August 2001. Subsequently, the said EO was refixed by DGFT vide its letter dated Jan 2011 up to August 2011 in terms of the Chapter VI of EXIM Policy and Procedure (Vol-1) 1997-2002. The Company has fulfilled the entire EO. The application for redemption of EPCG license was filed on March 2013 and final redemption is awaited.

f) Estimated amounts of contracts remaining to be executed on Capital Account (net of advances) is Rs.18.03 lacs (31.03.2013 : Rs. 106.79 lacs)

4 The Company has an investment of Rs. 11,297.50 lacs in the equity shares and has outstanding dues of Rs. 1,565.21 lacs

(31.03.2013: Rs. 1,754.83 lacs), (net of advances) from APAKSH Broadband Limited (APAKSH), subsidiary acquired as a result of the amalgamation of erstwhile Aksh Broadband Limited with the Company. APAKSH''s operations are presently suspended due to pending litigation by one of the shareholder of APAKSH. The Management of the Company is in the process of discussions on the revival of the project and pending that no provision has been considered necessary in respect of the outstanding dues and investment at this stage.

5 Previous year''s figures have been reworked, regrouped, rearranged and reclassified to conform to those of current year''s figures wherever necessary.

The accompanying notes (1-41) are an integral part of the financial statements.

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Mar 31, 2013

1 CORPORATE INFORMATION

Aksh Optifibre Limited is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at The Bombay Stock Exchange Ltd., The National Stock Exchange Ltd. in India and GDRs are listed at Luxembourg Stock Exchange. The Company is engaged in the manufacturing and selling of Optical Fibre, Optical Fibre Cable, Fibre Reinforced Plastic Rods and Impregnated Glass Roving Reinforcement, The Company caters to both domestic and international markets. The Company also provides the Internet Protocol Television (IPTV) services in association with MTNL in the cities of Delhi and Mumbai and IPTV services with BSNL in 20 cities of North India. The Company is the pioneer in the FTTH (Fibre to the Home) space and has further consolidated its place by starting FTTH services in Delhi, Jaipur, Ajmer & Faridabad.

2 BASIS OF PREPARATION

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by Companies Accounting Standard Rules 2006 (as amended) and the relevant requirements of the Companies Act, 1956. The financial statements have been prepared under historical cost convention on an accrual basis of accounting except in case of assets for which impairment is carried out. The accounting policies have been consistently applied by the Company.

3 Contingent Liabilities:

a) Claims not acknowledged as debts (Rs. in lacs)

S. No. Particulars 31-Mar-13 31-Mar-12

1 Sales Tax Matters 328.87 494.46

2 Service Tax 318.08 344.17

3 Excise / Custom Duty 559.93 559.93

4 Stamp Duty 28.50 57.00

5 Others 78.91 52.25

b) Corporate Guarantee given by erstwhile Aksh Broadband Ltd. amounting to Rs. 582.03 lacs (31.03.2012 : Rs. 582.03 lacs) in favour of M/s Cisco Systems Capital India Private Limited for loan taken by APAKSH Broadband Ltd., subsidiary of erstwhile Aksh Broadband Ltd.

c) Bank Guarantees, letters of credit (Net of margin) issued by banks and outstanding as on the reporting date is Rs. 1,070.89 Lacs (31.03.2012 : Rs. 515.77 lacs)

d) The Company had imported Plant & Machinery in previous years under EPCG scheme. An export obligation amounting to Rs. 10,699.43 lacs was placed on the Company to be fulfilled in 8 years starting from 16th August 2001. The Company applied for extension of export obligation period and received the extension up to 31st August 2011. The Company has fulfilled all the export obligations within the stipulated time but is yet to receive the certificate for discharge of liability as on the reporting date.

e) Estimated amounts of contracts remaining to be executed on Capital Account (net of advances) is Rs.106.79 Lacs (31.03.2012 : Rs. 607.33 lacs)

4 Employee Benefits:

The disclosures as per the Notified AS 15 under the Companies (Accounting Standards) Rules, 2006 on "Employee Benefits", are as follows:

a) The Company has classified various benefits provided to employees as under :

Defined Contribution Plans and amount recognized in the Statement of Profit and Loss.

b) Defined Benefit Plans

Gratuity and Leave Encashment - actuarial valuation done in accordance with the Accounting Standard -15 (Revised), details of the same are given :

5 Related Party Disclosures

Related party disclosures as required under Accounting Standard - 18 on "Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as given below as on 31st March, 2013:

a) Subsidiary Companies :

- APAKSH Broadband Limited -AOLFZE

- AOL Projects JLT (Fellow Subsidiary)

b) Individuals exercising significant influence & their relatives:

- Dr. Kailash S. Choudhari (Chairman)

- Mr. P. F. Sundesha

- Mr. Shailesh Popat Lal (Relative of Mr. P F Sundesha)

c) Key Management personnel

- Mr. Chetan Choudhari

d) Enterprises over which personnel referred in (b) & (c) aforementioned exercise significant influence:

- Fulchand Finance Private Limited (Relates to Mr. P F Sundesha)

6 FCCBs aggregating $13.00 Mn and $ 1.00 Mn have become due for redemption on January 8, 2013 and February 5, 2013 respectively. At the Company''s request, RBI vide its letter dated March 1, 2013 granted extension till June 30, 2013. Consequent to the year end, settlement has been reached with the Bond holders holding FCCBs aggregating $ 4.50 Mn by the Company out of fresh ECB raised from the Bank. The Company is in discussion with the balance bondholders for the settlement of the outstanding amount.

7 Exceptional items represents net foreign exchange gain on translation of Foreign Exchange assets & liabilities other than operational of Rs. 345.98 lacs (31.03.2012: Rs. 488.53 lacs), profit on sale of fixed assets of Rs. 915.14 lacs (31.03.2012: Nil), liabilities written back of Rs. 28.10 lacs (31.03.2012: Rs. 296.08 lacs, advances written off of Rs. 670.20 lacs (31.03.12: Rs. Nil).

8 The Company has an investment of Rs.11,297.50 lacs in the equity shares and has outstanding dues of Rs. 1,754.83 lacs (31.03.2012: Rs. 1,739.19 lacs) (net of advances) from APAKSH Broadband Limited (APAKSH), a subsidiary of the Company. APAKSH''s operations are suspended due to litigation filed by one of the shareholder of APAKSH which finally dismissed by the Hon''ble Supreme Court vide it''s order dated 7th May 2010. The Management of the Company is in discussions on the revival of the project. In view of the above, no provision has been considered necessary in respect of the outstanding dues and investment at this stage.

9 There are no Micro and Small Enterprises, to whom the Company owes, which are outstanding for more than 45 days as at 31st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

10 Previous year''s figures have been reworked, regrouped, rearranged and reclassified to conform to those of current year''s figures wherever necessary.

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Mar 31, 2011

1. Contingent Liabilities not provided for:

a) Claims not acknowledged as debts

(Rs. in lacs)

S. Particulars March 31, 2011 March 31, 2010 No.

i) VAT/Sales Tax Matters 390.65 321.80 ii) Stamp Duty 40.42 -

iii) Others 113.41 101.26

b) Corporate Guarantee given by erstwhile Aksh Broadband Ltd. amounting to Rs. 582.03 lacs (Previous Year Rs. 582.03 lacs) in favour of M/s Cisco Systems Capital India Private Limited for loan taken by APAKSH Broadband Ltd., subsidiary of erstwhile Aksh Broadband Ltd.

c) Corporate Guarantee given by the Company amounting to Rs. 6055.00 lacs (Previous Year Rs. 6055.00 lacs) in favour of Union Bank of India, Punjab National Bank and ICICI Bank (Consortium Banks) for working capital facilities sanctioned to Aksh Technologies Ltd, a subsidiary company. Further the Immovable properties of the company are also charged for working capital facilities sanctioned to Aksh Technologies Limited.

d) Estimated amounts of contracts remaining to be executed on Capital Account (net of advances) is Rs 983.88 lacs ( Previous Year Rs. 1510.03 lacs).

2. Employee Benefits:

The disclosures as per the Notified AS 15 under the Companies (Accounting Standards) Rules, 2006 (as amended) on "Employee Benefits", are as follows:

b) Defined Benefit Plans

Gratuity and Leave Encashment - actuarial valuation done in accordance with the Accounting Standard -15 (Revised), details of the same are given :

3. The Company had earlier issued 1% Foreign Currency Convertible Bonds (FCCBs) aggregating USD 8.75 Mn in January 2007 against which FCCBs aggregating USD 2.50 Mn were converted and balance USD 6.25 Mn were outstanding. These FCCBs were due for redemption in Janurary 2010. Pursuant to RBI approval, the Company exchanged the FCCBs aggregating USD 5.25 Mn with the new FCCBs of USD 6.328 Mn. The redemption premium of USD 1.078 Mn payable on redemption was adjusted against Securities Premium Account. The outstanding FCCBs of USD 1.00 Mn (due 2010) have been included under FCCBs and the redemption premium of USD 205,300 is included under current liabilities.

In respect of outstanding FCCBs of USD 1 Million (due 2010), The Bank of New York has filed a winding up petition against the Company in Jaipur High Court under section 433 of the Companies Act, 1956. The matter is sub-judice and the Company is in process of filing suitable reply.

4. The Authorised Share Capital of the Company has increased from Rs 8,000 lacs to Rs. 39,500 lacs vide shareholders resolution dated 22nd October 2010. However, the relevant Form 5 as per Companies Act, 1956 has not been filed with Registrar of Companies. Consequently, Form 2 with regard to allotment of 4,794,932 Equity Shares upon conversion of FCCBs after 22nd October 2010 has also not been filed with Registrar of Companies.

5. During the year, The Company has incorporated a wholly owned subsidiary in Dubai, viz. "AOL FZE" for expansion of Companies businesses. The Company also applied for winding up of its three wholly owned subsidiaries, i.e Aksh Net Tel Limited, Spyk Global Limited and Aksh Infratel Limited, which have accordingly been dissolved under section 560 of the Companies Act, 1956.

6. Related Party Disclosures

Related party disclosures as required under Accounting Standard - 18 on "Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as given below as on 31st March, 2011:

a) Subsidiary Companies :

- APAKSH Broadband Limited

- Aksh Technologies Limited

- Aksh Net Tel Limited (Dissolved)

- Aksh Infratel Limited (Dissolved)

- SPYK Global Limited (Dissolved)

- AOL FZE

b) Individuals exercising significant influence & their relatives:

- Dr. Kailash S. Choudhari (Managing Director upto 31st August 2010, thereafter appointed as Chairman of the Company)

- Mr P. F. Sundesha

- Mr Shailesh Popat Lal (Relative of Mr. P F Sundesha)

c) Key Management Personnel & their relatives:

- Dr. Kailash S. Choudhari (Managing Director upto 31st August 2010, thereafter appointed as Chairman of the Company)

d) Enterprise over which personnel referred in b & c aforementioned exercise significant influence :

- Fulchand Finance Private Limited (Relates to Mr. P F Sundesha)

7. Computation of net profit in accordance with Section 349 of the Companies Act, 1956, has not been given as no commission is payable to Managing Director for the current year.

8. There is no party to the extent to which they could be identified as Micro, Small and Medium Enterprises (MSMED), as none of the creditors have confirmed to be registered under the MSMED Act, 2006.

9. The Company has an investment of Rs. 11,297.50 Lacs in the equity shares and has outstanding dues of Rs. 1,727.97 Lacs (net of advances) from APAKSH Broadband Limited (APAKSH), subsidiary acquired as a result of the amalgamation of erstwhile Aksh Broadband Limited with the Company. APAKSHs operations are presently suspended due to some litigation. One of the shareholder of APAKSH filed a petition under sections 397, 398, 402, 403 of The Companies Act before Company Law Board(CLB), Additional Principal Bench, Chennai. The Honble Company Law Board gave specific findings of fact and law and dismissed the said petition. An appeal was filed against the judgment passed by CLB in Honble High Court of Andhra Pradesh, which was also dismissed. A Special Leave Petition (SLP) was filed against the Honble High Court order in the Honble Supreme Court. The Honble Supreme Court vide its order dated 7th May 2010 has dismissed the SLP. The Management of the Company has now initiated discussions on the revival of the project and is hopeful to restart the same. In view of the above, no provision has been considered necessary in respect of the outstanding dues and investment at this stage.

10. Operating Leases

The Company has given factory land and building on operating lease. The lease term is for a period of eleven months and renewable as mutually agreed by both the parties. Disclosures in respect of Operating Leases of factory buildings as per the requirement of Notified AS-19 under the Companies (Accounting Standard) Rules, 2006 (as amended) on Leases issued by The Institute of Chartered Accountants of India, is as under:

Lease rental recognized in the statement of Profit and Loss for the year is Rs. 444 Lacs (Previous year Rs. 148 Lacs).

The future minimum lease rental receivable over the remaining lease period is Rs. 259 Lacs (Previous year Rs. 259 Lacs ).

11. Derivative Instruments and unhedged Foreign Currency Exposure

No forward exchange contract, for hedge purpose, has been outstanding as on 31st March 2011.

12 Previous years figures have been reworked, regrouped, rearranged and reclassified to conform to those of current years figures wherever necessary.

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Mar 31, 2010

1. Employee Benefits:

The disclosures as per the Notified AS 15 under the Companies (Accounting Standards) Rules, 2006 on "Employee Benefits", are as follows:

The Company has classified various benefits provided to employees as under :

a) Defined Contribution Plans and amount recognised in Profit and Loss Account.

2. The Company had earlier issued 1% Foreign Currency Convertible Bonds (FCCBs) aggregating USD 8.75 Mn in January 2007 against which FCCBs aggregating USD 2.50 Mn were converted and balance USD 6.25 Mn were outstanding. These FCCBs were due for redemption in Janurary 2010. Pursuant to RBI approval, the Company has exchanged the FCCBs aggregating USD 5.25 Mn with the new FCCBs of USD 6.328 Mn. The redemption premium of USD 1.078 Mn payable on redemption has been adjusted against Securities Premium Account. The balance FCCBs of USD 1.00 Mn have been included under FCCBs and the redemption premium of USD 205,300 is included under current liabilities.

3. The Company had issued 4,603,175 Convertible warrants on preferential basis. As the holders of the convertible warrants did not exercise the option of conversion of warrants into equity shares within the stipulated period of 18 months from the date of allottment .i.e. 15th January 2008, the Application money @ Rs. 6.30 per warrant aggregating to Rs. 290 lacs received against 4,603,175 warrant has been forfeited and credited to Securities Premium Account.

4. Pursuant to agreement for transfer of business under section 293(1) (a) of the Companies Act, 1956 as approved by the shareholders vide a special resolution dated 15th April 2009, the manufacturing division of Aksh Optifibre Limited together with all properties both movable and immovable (other than land & building) and liabilities including contingent liabilities has been transferred to Aksh Technologies Limited at book value with effect from the appointed date i.e. April, 1 2009.

The profit & loss account pertaining to manufacturing facilities of the company for the eight months ended November 2009, the period for which business was run and managed in trust for the Aksh Technologies Limited resulting in a profit of Rs. 24.34 lacs as detailed below has been transferred to Aksh Technologies Limited from these accounts.

5. Breakup of Deferred Tax Assets and Deferred Tax Liabilities:

6. Related Party Disclosures

Related party disclosures as required under Accounting Standard - 18 on "Related Party Disclosures" issued by The Institute of Chartered Accountants of India are as given below as on 31st March, 2010:

a) Subsidiary Companies :

- APAKSH Broadband Limited

- Aksh Technologies Limited

- Aksh Net Tel Limited

- Aksh Infratel Limited

- SPYK Global Limited

b) Individuals exercising significant influence & their relatives:

- Dr. Kailash S. Choudhari

- Mr P. F. Sundesha

- Mr Shailesh Popat Lai (Relative of Mr. P F Sundesha)

c) Key Management personnel & their relatives:

- Dr. Kailash S. Choudhari

- Mr. B. R. Rakhecha (upto 30th September, 2008)

d) Enterprise over which personnel referred in b & c aforementioned exercise significant influence :- Fulchand Finance Private Limited. (Relates to Mr. P F Sundesha)

7. The company is in the process of compiling the requisite list of mini, small and micro enterprises under the MSMED Act which has come into force recently and in the absence of information in this regard, the particulars required by the aforesaid Act have not been given.

8. The company has not received any claim for interest from any supplier covered under the "Interest on delayed payments to Small Scale and Ancillary Industrial Undertakings Act, 1993" to the extent such parties have been identified from the available information.

9. The Company has an investment of Rs. 11,297.50 Lacs in the equity shares and has outstanding dues of Rs. 1,716.43 Lacs (net of advances) from APAKSH Broadband Limited (APAKSH), subsidiary acquired as a result of the amalgamation of erstwhile Aksh Broadband Limited with the Company. The companys operations are presently suspended due to some litigation. One of the shareholder of APAKSH filed a petition under sections 397, 398, 402, 403 of The Companies Act before Company Law Board(CLB), Additional Principal Bench, Chennai. The Honble Company Law Board gave specific findings of fact and law and dismissed the said petition. An appeal was filed against the judgment passed by CLB in Honble High Court of Andhra Pradesh, which was also dismissed. A Special Leave Petition (SLP) was filed against the Honble High Court order in the Honble Supreme Court. The Honble Supreme Court vide its order dated 7,th May 2010 has dismissed the SLP. The Management of the Company has now initiated discussions on the revival of the project and is hopeful to restart the same. In view of the above, no provision has been considered necessary in respect of the outstanding dues and investment at this stage.

10. Operating Leases

The Company has given factory land and building on operating lease. The lease term is for a period of eleven months and renewable as mutually agreed by both the parties. Disclosures in respect of Operating Leases of factory buildings as per the requirement of Notified AS-19 under the Companies (Accounting Standard) Rules, 2006 on Leases issued by The Institute of Chartered Accountants of India, is as under:

Lease rental recognized in the statement of Profit and Loss for the period is Rs. 148 Lacs (Previous period Rs. Nil).

The future minimum lease rental receivable over the remaining lease period is Rs. 259 Lacs (Previous period Rs. Nil).

11. Derivative Instruments and unhedged Foreign Currency Exposure

No forward exchange contract, for hedge purpose, has been outstanding as on 31st March 2010.

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

Amount payable in foreign currency on account of the following:

12. In terms of approval of Shareholders under section 293(1) (a) of the Companies Act 1956, the Company has transferred its manufacturing business comprising of manufacturing facilities of optical fibre, optical fibre cable and FRP on going concern basis to Aksh Technologies Limited, 100% subsidiary with appointed date being April 1, 2009 on book values. Consequently, the figures for the year ended March 31, 2010 have been worked out after giving effect of above transfer and thus are not comparable with previous periods figures.

13.Previous Periods figures have been reworked, regrouped,rearranged and reclassified to conform to those of current years figures wherever necessary.