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Notes to Accounts of Apar Industries Ltd.

Mar 31, 2016

A. Terms/rights attached to equity shares

i) The Company has one class of equity shares having a par value of Rs, 10 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 the ensuing Annual General Meeting.

ii) During the year ended 31st March 2016, the amount of per share final equity dividend recognised as distributions to equity shareholders is Rs, Nil, ( Previous year Rs, 3.50 ).

iii) During the year ended 31st March 2016, the amount of per share interim dividend recognised as distributions to equity shareholders is Rs, 6.50 (including special dividend @ Rs, 1 per share on account of 100th Birth Anniversary of late Shri Dharmsinh D. Desai, Founder of the Company), ( Previous year rupee Rs, Nil ).

iv) 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. Shares reserved for issue under options

The Company provides share-based payment to its employees. During the year ended 31st March 2016, an Employee Stock Option Plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below :

Members'' approval was obtained at the Annual General Meeting held on 9th August, 2007 for introduction of Employee Stock Option Scheme to issue and grant up to 1,616,802 options, but the Board has granted 175,150 options till date.

During the year, Company has alloted 266 equity shares of Rs, 10 each to employees of the Company under Employee stock option plan 2007 at an exercise price of Rs, 207.05 per share.

The Employee stock option plan 2007 was terminated on 26th May, 2015 upon lapse of exercise period of the options.

c. Disclosures as required by Accounting Standard (AS) 14 Accounting for Amalgamations At the hearing held on 23rd October, 2015, the Honorable High Court of Gujarat at Judicature at Ahmadabad have sanctioned the Scheme of Amalgamation of Apar Lubricants Limited (ALL) (wholly-owned subsidiary of the Company) with Apar Industries Limited (AIL) w.e.f. 1st January, 2015 (being the Appointed Date). The effective date of the Scheme is 10th November, 2015, being the date on which Certified Copy of the High Court Order and the Scheme filed with Registrar of Companies, Gujarat.

Pursuant to the Scheme :

(i) The Authorised Share Capital of AIL enhanced by Rs 10 crore and now stands at Rs. 1,019,987,500 divided into 101,998,750 Equity Shares of Rs. 10 each;

(ii) The ALL stand dissolved without winding-up; and

(iii) The Scheme has accordingly been given effect to in the financial statements with effect from the Appointed date. All the assets and liabilities excluding fixed assets of ALL have been transferred to the "Company at the book value as recorded in books of Transferor Company. Fixed assets have been recorded at its estimated market value. The Company has followed ''Purchase Method'' of accounting as per the Accounting Standard (AS) 14 ''Accounting for Amalgamations'' notified under Section 211 (3C) of the Companies Act, 1956 and as per the Scheme approved by the Honourable High Court.

(iv) The net loss Rs, 0.00 crore of the Transferor Company from the appointed date i.e. 1st January, 2015 till 31st March, 2015 has been transferred to the surplus in Statement of profit and loss in the books of the Company, thereby adjusting opening reserves. This loss has been arrived at after charging amortisation of Goodwill of Rs, 0.44 crore (net of tax) for the relevant period.

(v) In view of amalgamation, current year figures are not strictly comparable to those of the previous year.

Note:

— The Foreign Currency term loan from Credit Agricole CI Bank, Singapore, is secured by exclusive charge on the assets acquired by the Company with the proceeds of the facility.

— The Foreign Currency term loan from Union Bank of India, Hong Kong , is secured by first charge by way of equitable mortgage by deposit of title deeds of Company''s Athola properties and exclusive hypothecation charge on the assets acquired by the Company with the proceeds of the facility situated at other locations.

— The rupees term loan from ING Vysya Bank Ltd (now Kotak Mahindra Bank) is secured by first charge by way of equitable mortgage by deposit of title deed of Company''s Khatalwad properties and hypothecation of movable plant and machinery at Khatalwad excluding movable machinery hypothecated to ECB Lenders.

Terms of repayment of term loan :

— In respect of Foreign Currency Term Loans from Credit Agricole CI Bank, Singapore; in August 2016 Rs, 13.25 crore.

Note:

Working capital loans from banks of Rs, 148.90 crore are secured by : (i) hypothecation of specified stocks, specified book debts of the Company.

(ii) first charge by way of equitable mortgage by deposit of title deeds of Company''s specified immovable properties, both present and future.

Note :

(i) There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as at 31 March 2016.

(ii) Includes deposit of Rs, 4.58 crore under lien.

(iii) Against letters of credit for Company''s import of raw materials and working capital loans.

A. List of Related Parties a). Subsidiary Companies:

(1). Petroleum Specialties Pte. Ltd, Singapore

(2). Quantum Apar Speciality Oil Pty. Ltd (subsidiary of Petroleum Specialities Pte. Ltd)

(3). Apar Lubricants Ltd (formerly Apar Chematek Lubricants Ltd )(Amalgamated w.e.f 1st January 2015)

(4). Petroleum Specialities FZE, Sharjah (100% subsidiary of Petroleum Specialities Pte. Ltd)

b). Key Managerial Personnel:

Mr. K. N. Desai - Managing Director Mr. C. N. Desai - Managing Director Mr. V. C. Diwadkar- Chief Financial Officer Mr. Sanjaya Kunder- Company Secretary

c). Chairman having significant influence:

Dr. N. D. Desai - Non Executive Chairman

d). Relatives of Key Managerial Personnel

Mrs. M. N. Desai Mrs. Noopur Kushal Desai Mr. Rishabh K. Desai Ms. Gaurangi K. Desai Mrs. Jinisha C. Desai Mr. Devharsh C. Desai Ms. Nitika C. Desai Mrs. Vineeta R. Srivastava Mr. Rajeev Srivastava Ms. Krishangi R. Srivastava Mrs. Vinaya S. Kunder Master Akshat S. Kunder Mrs. Arti V. Diwadkar Mr. Amit V. Diwadkar

e). Entities over which significant influence is exercised by key management personnel/individuals having significant influence:

Apar Corporation Private Ltd. Kushal Chaitanya N. Desai Family Trust Scope Private Limited and its'' subsidiaries, viz. Chaitanya N. Desai Family Trust

a) Apar Investment ( Singapore ) Pte. Ltd. Catalis World Private Ltd.

b) Apar Investment Inc. Gayatri Associates Apar Technologies Private Ltd AIL Benefit Trust Chaitanya N. Desai Family Private Trust Maithili Trusteeship Services Private Limited Maithili N. Desai Family Private Trust Kushal N. Desai Family Private Trust Narendra D. Desai Family Private TrusT


Mar 31, 2015

1] Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard [AS] 3 Cash Flow Statements.

2] Purchase of fixed assets includes movement of capital work-in-progress during the year.

3] Cash and cash equivalents represents cash and bank balances and include margin money of Rs. 5.91 crore; [Previous year Rs. 136.06 crore] and unrealised gain of Rs. 0.38 crore; [Previous year unrealised loss of Rs. 0.20 crore] on account of translation of foreign currency bank balances.

4] Previous year''s figures have been regrouped wherever necessary.

Note Contingent Liabilities and Commitments

31 March 2015 31 March 2014

A) Contingent liabilities not provided for:

[a] Claims against the Company not acknowledged as debts -

[i] Demand/ Show cause-cum-demand notices received and contested by the Company with the relevant appellate authorities:

Excise duty [also refer note [iii] below] 7.15 7.19

Service tax 0.20 0.20

Customs duty 4.81 4.81

Sales tax 12.88 12.72

[ii] Arbitration award regarding dispute of alleged contractual non-performance by the 9.28 8.66

Company, against which the Company is in appeal before Bombay High Court.

[iii] Interest on delayed payment of excise duty, [which duty payment was revenue neutral] 4.45 4.45 on certain deemed exports. Department has filed appeal in the Supreme Court against High Court Order in Company''s favour.

[iv] Labour matters 2.12 7.43

[v] Others 6.47 6.35

[b] Bills of exchange discounted 57.84 243.64

[c] Taxation:

Disputed demands of income tax 6.99 6.99

B) Capital commitments

Estimated amounts of contracts remaining to be executed on capital account and not provided 5.80 14.47 for [net of advances]

Defined Benefit Plan

The Employees'' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. 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 measures each unit seperately to build up the final obligation.The obligation for leave encashment is recognised in the same manner as gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotions and other relevant factors including supply and demand in the employment market.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan asset management.

Note Related Party Disclosures

A. List of Related Parties

a) . Subsidiary Companies:

(1) . Petroleum Specialities Pte. Ltd, Singapore

(2) . Quantum Apar Speciality Oils Pty. Ltd. (subsidiary of Petroleum Specialities Pte. Ltd.)

(3) . Apar Lubricants Ltd. (Formarly Apar Chematek Lubricants Ltd./

(4) . Petroleum Specialities FZE, Sharjah (100% subsidiary of Petroleum Specialities Pte. Ltd.) incorporated on 18th November, 2014)

b) . Key Managerial Personnel:

Mr. K. N. Desai - Managing Director & Chief Executive Officer

Mr. C. N. Desai - Managing Director

Mr. V. C. Diwadkar- Chief Financial Officer

Mr. Sanjaya Kunder- Company Secretary

c) . Chairman having significant influence:

Dr. N. D. Desai - Non Executive Chairman

d) . Relatives of Key Managerial Personnel

Mrs. M. N. Desai Mrs. Noopur Kushal Desai Mr. Rishabh K. Desai Ms. Gaurangi K. Desai Mrs. Jinisha C. Desai Mr. Devharsh C. Desai Ms. Nitika C. Desai Mrs. Vineeta R. Srivastava Mr. Rajeev Srivastava Ms. Krishangi R. Srivastava Mrs. Vinaya S. Kunder Master Akshat S. Kunder Mrs. Arti V. Diwadkar Mr. Amit V. Diwadkar

e). Entities over which significant influence is exercised by key management personnel/individuals having significant influence:

Apar Corporation Private Ltd. Scope Private Limited and its'' subsidiaries, viz. a] Apar Investment ( Singapore ] Pte. Ltd. b] Apar Investment Inc. Kushal N. Desai Family Trust Chaitanya N. Desai Family Private Trust Maithili N. Desai Family Private Trust

Kushal Chaitanya N. Desai Family Trust Chaitanya N. Desai Family Trust Catalis World Private Ltd. Gayatri Associates AIL Benefit Trust Maithili Trusteeship Services Private Limited Kushal N. Desai Family Private Trust Narendra D. Desai Family Private Trust

Note Km Segment Information

The Company''s operations predominantly relate to manufacture of Conductors, Transformer/Speciality Oils and Power/Telecom cables which businesses have been identified as primary segments based on the Company''s risk profile and internal reporting structure.

1) During the year, further allocation of unallocated common expenses to segments has resulted in consideration of additional cost in conductor Rs. 7.39 crore, oil Rs. 8.75 crore, cable Rs. 4.41 crore and others Rs. 0.64 crore . Consequently unallocated expenses net of income is lower by Rs. 21.19 crore. The figures for previous year have been regrouped accordingly.

2) In line with organisation structure and internal financial reporting, certain products have been clubbed under conductor segment. Hitherto, these were being reported under cable segment. Accordingly, the following amounts have been regrouped from cable segment to conductor segment for current and previous year.

As per the Accounting Standard [AS] 28 Impairment of Assets, the Company has reviewed the potential generation of economic benefit from its fixed assets and accordingly, necessary impairment loss has been provided in the financial statements.


Mar 31, 2014

Note 1 Contingent Liabilities and Commitments

(Rs. in crore )

31 March 2014 31 March 2013 A) Contingent liabilities not provided for:

(a) Claims against the Company not acknowledged as debts -

(i) Demand/ Show cause-cum-demand notices received and contested by the Company with the relevant appellate authorities:

Excise duty (also refer note (iii) below) 7.19 4.65

Service tax 0.20 0.20

Customs duty 4.81 2.90

Sales tax 12.72 10.54

(ii) Arbitration award regarding dispute of alleged contractual non-performance by the 8.66 7.94 Company, against which the Company is in appeal before Bombay High Court.

(iii) Interest on delayed payment of excise duty, (which duty payment was revenue neutral) 4.45 4.45 on certain deemed exports. Department has fled appeal in the Supreme Court against High Court Order in Company''s favour.

(iv) Labour matters 7.43 6.80

(v) Others 6.35 6.07

(Rs. in crore )

31 March 2014 31 March 2013

(b) Guarantee given by the Company for credit facilities enjoyed by Petroleum Specialities - 54.29 Pte. Ltd., a wholly-owned subsidiary

(c) Bills of exchange discounted 243.64 206.61

(d) Taxation:

Disputed demands of income tax 6.99 6.99

B) Capital commitments

Estimated amounts of contracts remaining to be executed on capital account and not provided for (net of advances) 14.47 13.93

Defined Benefit Plan

The Employees'' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. 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 measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

Note 2 Related Party Disclosures

A. List of Related Parties

a). Subsidiary Companies:

(1). Petroleum Specialties Pte. Ltd., Singapore

(2). Quantum Apar Specialty Oil Pty. Ltd. (subsidiary of Petroleum Specialties Pte. Ltd.)

(3). Apar ChemateK Lubricants Ltd. (w.e.f. 26th September, 2012)

b). Joint Venture Company:

Apar ChemateK Lubricants Ltd. (Up to 25th September, 2012, became subsidiary w.e.f. 26th September, 2012)

c). Key Managerial Personnel:

Mr. K. N. Desai - Managing Director Mr. C. N. Desai - Joint Managing Director

d). Chairman having significant influence: Dr. N. D. Desai - Non Executive Chairman

e). Relatives of Key Managerial Personnel Mrs. M. N. Desai Mrs. Noopur Kushal Desai Mr. Rishabh K. Desai Ms. Gaurangi K. Desai Mrs. Jinisha C. Desai Master Devharsh C. Desai Ms. Nitika C. Desai Mrs. Vineeta R. Srivastava Mr. Rajeev Srivastava Ms. Krishangi R. Srivastava

c. Segment revenue and results

The expenses which are not directly attributable to the business segment are shown as unallowable corporate/other expenses (net of miscellaneous income).

Segment assets and liabilities

Segment assets include all operating assets used by the business segment and consists principally of fixed assets, debtors and inventories.

Segment liabilities primarily include creditors and other liabilities.

Assets and liabilities that cannot be allocated between the segments are shown as a part of unallowable corporate assets and liabilities respectively.

Note 3

As per the Accounting Standard (AS), 28 Impairment of Assets, the Company has reviewed the potential generation of economic benefit from its fixed assets and accordingly, necessary impairment loss has been provided in the financial statements.

Note 4

H ''0 ''indicate amount less than Rs. 50,000

Note 5

Figures for previous year have been regrouped, wherever necessary.


Mar 31, 2013

NOTE 1 RELATED PARTY DISCLOSURES

A. List of Related Parties

a) Subsidiary Companies:

(1) Petroleum Specialities Pte. Ltd., Singapore

(2) Quantum Apar Speciality Oil Pty. Ltd. (subsidiary of Petroleum Specialities Pte. Ltd.)

(3) Apar ChemateK Lubricants Ltd. (w.e.f. 26.09.2012)

(4) Marine Cables & Wires Private Limited (Amalgamated with Company from 1st April, 2012)

b) Joint Venture Company:

Apar ChemateK Lubricants Ltd. (Upto 25.09.2012, became subsidiary w.e.f. 26.09.2012)

c) Key Managerial Personnel:

Mr. K. N. Desai - Managing Director Mr. C. N. Desai - Joint Managing Director

d) Chairman having significant influence: Dr. N. D. Desai - Non Executive Chairman

e) Relatives of Key Managerial Personnel: Mrs. M. N. Desai

Mrs. Noopur Kushal Desai Mr. Rishabh K. Desai Ms. Gaurangi K. Desai Mrs. Jinisha C. Desai Mr. Devharsh C. Desai Ms. Nikita C. Desai Mrs. Vineeta R. Srivastava Mr. Rajeev Srivastava Ms. Krishangi R. Srivastava

f) Entities over which significant influence is exercised by key management personnel/individuals having significant influence:

Apar Corporation Private Ltd. Kushal Chaitanya N. Desai Family Trust

Scope Private Limited and its'' subsidiaries, viz Chaitanya N. Desai Family Trust

a) Apar Investment ( Singapore ) Pte. Ltd. Catalis World Private Ltd.

b) Apar Investment Inc. Gayatri Associates Kushal N. Desai Family Trust AIL Benefit Trust Apar Technologies Private Ltd.

NOTE 2

Rs. ''0 ''indicate amount less than Rs. 50,000

NOTE 3

As per the Accounting Standard (AS), 28 Impairment of Assets, the Company has reviewed the potential generation of economic benefit from its fixed assets and accordingly, necessary impairment loss has been provided in the financial statements.


Mar 31, 2012

A Terms/rights attached to equity shares

(i) The Company has only one class of equity shares having a par value of Rs. 10 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 the ensuing Annual General Meeting.

(ii) During the year ended 31 March, 2012, the amount of per share dividend recognised as distributions to equity shareholders is Rs. 4/-, (Rs. 6 for FY 2011).

(iii) 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. Shares reserved for issue under options

The Company provides share-based payment to its employees. During the year ended 31 March, 2012, an Employee Stock Option Plan (ESOP) was in existence.The relevant details of the scheme and the grant are as below:

Members' approval was obtained at the Annual General Meeting held on 9th August, 2007 for introduction of Employee Stock Option Scheme to issue and grant upto 1,616,802 options but the Board has granted 175,150 options till date.

c. Aggregate number of bonus shares issued for consideration other than cash during the period of five years immediately preceding the reporting date :

The Company has allotted 8,084,008 fully paid Bonus Equity Shares of Rs. 10 each, on 12th January, 2007 by utilisation of Rs. 80.84 million out of Capital Redemption Reserve in the ratio of 1 Bonus Equity Share for 3 equity shares held.

* For Conductor Nalagarh Plant from Himachal Pradesh State Industrial Development Corporation Limited,Shimla.

**Effective 1 st April, 2011, the Company has started accounting for derivative contracts, entered into to hedge commodity/ forex unexecuted firm commitments and highly probable forecast transactions.Gains or losses arising out of fair valuation of derivative contracts are recognised in the statement of profit and loss or balance sheet, as the case may be, after applying the test of hedge effectiveness. Gains or losses are recognised as 'Cash Flow Hedge Reserve1 in the balance sheet when the hedge is effective and where the hedge is ineffective the same is recognised in the Statement of profit and loss. Gain and losses on roll over or cancellation of derivative contract which qualify as effective hedge are recognised in the Statement of profit and loss in the same period in which the hedge item is accounted.

Note:

a) Out of Working capital loans from banks (secured) Rs. 647.96 million are secured by -

- hypothecation of specified stocks, specified book debts of the Company and movable plant and machinery at Nalagarh Unit.

- first charge by way of equitable mortgage by deposit of title deeds of Company's specified immovable properties, both present and future.

- first charge by way of equitable mortgage by deposit of title deeds of certain immovable properties of Apar Corporation Private Limited, a related party.

b) Balance Working capital loans (Secured) Rs. 65.41 million pertaining to erstwhile Uniflex Cables Ltd.(UCL) are secured by hypothecation of stock and debts of the cable division and first charge on the fixed assets of the cable division.

Note:

(a) There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as on 31st March, 2012.

(b) Other payable includes security deposit, book overdraft and advance from customers.

a. Includes Rs. 5.69 million, (Previousyear f5.87 million) for capital expenditure on Research and development (Refer Note 31 (A)).

b. In line with Notification No G.S.R. 914(E) dated 29th December, 2011 issued by the Ministry of Corporate Affairs, Government of India in respect of accounting periods commencing on or after the 1st April, 2011 for an enterprise which had earlier exercised the option under paragraph 46 and at the option of any other enterprise, the exchange differences arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, can be added to or deducted from the cost of the asset and shall be depreciated over the balance life of the asset.

Accordingly, Rs. 2.56 million (Previousyear f nil) have been capitalised to Plant and Machinery and Rs. 26.94 million, (Previous year Rs. nil) debited to Capital work in progress. (Refer Note 1(l4)(v))

** Marine Cables & Wires Private Limited (MCWPL), a wholly-owned subsidiary of erstwhile Uniflex Cables Limited (UCL) has been declared as a sick industrial company by the Hon'ble Board for Industrial and Financial Reconstruction (BIFR). Draft Rehabilitation Scheme (DRS) for its1 expeditious revival which, inter alia, includes a Scheme of Amalgamation with the Company with cut off date as at 31st March, 2010 has been submitted to BIFR by Operating Agency (OA) appointed by BIFR, for its consideration. The shareholders of the Company have approved the DRS subject to the approval of BIFR. BIFR approval is awaited.

Note: 1. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS

Defined Benefit Plan

The Employees' Gratuity Fund Scheme managed by a Trust is a defined benefit plan. 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 measures each unit separately to build up the final obligation.The obligation for leave encashment is recognised in the same manner as gratuity.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotions and other relevant factors including supply and demand in the employment market.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the Company's policy for plan asset management.

Note: 2. RELATED PARTY DISCLOSURES

A. List of Related Parties

a) Subsidiary Companies:

(1) Petroleum Specialties Pte. Ltd., Singapore

(2) Power Oil Specialities Products FZE Sharjah (closed on 21st February, 2011)

(3) Quantum Apar Specialities Oil Pty. Ltd (subsidiary of Petroleum Specialities Pte. Ltd.)

(4) Marine Cables & Wires Private Limited (subsidiary of Apar Industries Limited after amalgamation of Uniflex Cables Ltd.)

b) Joint Venture Company:

Apar Chematek Lubricants Limited

c) Key Managerial Personnel:

Mr. K. N. Desai - Managing Director

Mr. C. N. Desai - Joint Managing Director

d) Chairman having significant influence:

Dr. N. D. Desai - Non Executive Chairman

e) Relatives of Key Managerial Personnel

Mrs. Noopur Kushal Desai

Mrs. Vineeta R. Srivastava

Mr. Rishabh K. Desai

Mrs. Jinisha C. Desai

Ms. Gaurangi K. Desai

Mrs. M. N. Desai

Mr. Rajeev Srivastava

Mr. Devharsh C. Desai

Ms. Krishangi R. Srivastava

Kum. Nikita C. Desai

f) Entities over which significant influence is exercised by key management personnel/individuals having significant influence:

Apar Corporation Private Ltd. Kushal Chaitanya Desai Family Trust

Scope Private Limited and its' subsidiaries, viz Chaitanya N. Desai Family Trust

a) Apar Investment (Singapore) Pte. Ltd. Catalis World Private Ltd.

b) Apar Investment Inc. Gayatri Associates

Kushal N. Desai Family Trust AIL Benefit Trust

Apar Technologies Private Ltd.

Note: 3. SEGMENT INFORMATION

The Company's operations predominantly relate to manufacture of Conductors, Transformer/Speciality Oils and Power/ Telecom cables which businesses have been identified as primary segments based on the Company's risk profile and internal reporting structure.

c. Segment revenue and results

The expenses which are not directly attributable to the business segment are shown as unallocable corporate/other expenses (net of miscellaneous income).

Segment assets and liabilities

Segment assets include all operating assets used by the business segment and consist principally of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities.

Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocable corporate assets and liabilities respectively.

Note: 4. Rs. '0 'indicate amount less than Rs. 5,000

Note: 5. As per the Accounting Standard (AS) 28 Impairment of Assets, the Company has reviewed the potential generation of economic benefit from its fixed assets. Accordingly, no impairment loss is required to be provided in the financial statements.

Note: 6. Till year ended 31 st March, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956 for preparation and presentation of its financial statements. During the year ended 31 March, 2012,the Revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year's figures to confirm to this year's classification. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

(Amount in Rupees)

As at 31.03.2011 As at 31.03.2010

1. Contingent liabilities not provided for :

(a) Bills of exchange discounted 2,565,754,276 1,311,439,622

(b) Taxation: Disputed demands of income tax 39,915,009 -

(c) (i) Guarantee given by the Company for credit facilities enjoyed by Petroleum Specialities Pte Ltd., a wholly-owned subsidiary 446,000,000 673,650,000

(ii) Guarantee given by the Company for credit facilities enjoyed by Uniflex Cables Limited, a subsidiary company. 1,000,000,000 1,250,000,000

(d) Claims against the Company not acknowledged as debts - (i) Demand/ Show cause-cum-demand notices received and contested by the Company with the relevant appellate authorities:

Excise duty (also refer note (iii) below) 43,526,440 36,817,515

Service tax 1,984,896 1,984,896

Customs duty 31,166,096 31,004,925

Sales tax 62,696,327 56,012,976

(ii) Arbitration award regarding dispute of alleged contractual non-performance by the Company, against which the Company is in appeal before

Bombay High Court. 70,215,141 65,631,906

(iii) Interest on delayed payment of excise duty, (which duty payment was revenue neutral) on certain deemed exports. Department has filed appeal in the Supreme Court against High Court Order in Company's favour. 44,507,841 44,507,841

(iv) Labour matters 16,431,439 16,431,439

2. The Company has issued and allotted 3,636,363 Equity shares (10.11% post allotment) of Rs. 10 each at a premium of Rs. 210 per share on preferential allotment basis on 4th May, 2011 to Templeton Strategic Emerging Markets Fund III, L.D.C. Post allotment, the paid-up capital, of the Company has been increased to Rs. 35,97,23,940 consisting of 3,59,72,394 Equity shares of Rs. 10 each fully paid.

3. During the year, the Company has closed operations of Poweroil Speciality Products FZE, Sharjah, a wholly-owned subsidiary, as there was no likelyhood of the said subsidiary reaching break-even. Consequent to closure, the Company has written-off advances and investment of Rs.3,972,864 and Rs.1,967,274 respectively.

4. The Company has entered into non-speculative commodity forward contract in order to hedge its exposure to fluctuations in the metal prices against requisite firm price sales contracts (received / to be received) for its conductor segment. The mark - to - market losses on such contracts, in accordance with the Announcement dated 28th March, 2008, issued by the Institute of Chartered Accountants of India, amounting to Rs. 280,401,393 as at 31st March, 2011 (Rs. 400,027,218 as at 31st March, 2010), has not been provided in the financial statements, as in the opinion of the management, such loss is notional in nature and the said loss would get extinguished on execution of firm sale price orders corresponding to these commodity forward contracts.

5. The Company has an equity investment of Rs. 278,833,569 (net of impairment provision of Rs. 555,538,198) in Uniflex Cables Limited ('UCL') , a subsidiary company. UCL has taken various steps to improve its productivity, debottlenecking of manufacturing facility, expansion of production line and markets, strengthening of managerial resources etc. and losses incurred by the UCL are reducing gradually. The equity investment of Rs. 278,833,569, loans and advances and debtors aggregating to Rs.1,880,541,637, (Previous year Rs. 800,240,013) are considered good.

6. The compensation committee of directors (CCD) of the Company, at its meeting held on 27th May, 2008 have granted 175,150 options at an exercise price of Rs. 207.05 per option to eligible employees/directors. The above options will vest in three installments (1/3rd each) on 27th May, 2009, 27th May, 2010 and 27th May , 2011 respectively. As of date, no employee has exercised any options. The Company has obtained in-principle approval for the listing of the entire 1,616,802 equity shares to be issued and alloted on exercise of options, as and when exercised, under the Scheme.

7. The exchange rate differences arising on purchases/vendor balances and those on account of sales/receivables have been grouped under 'Raw materials consumed' and 'Sales' respectively. Similarly, exchange rate differences on other transactions have been shown under 'Other expenses' or 'Other income', as the case may be. The net exchange difference gain so grouped, for the year is Rs. 57,610,176; (Previous year Rs.187,456,828).

Defined Benefit Plan

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. 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 measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

8. Disclosure pursuant to Accounting Standard (AS) 18 – Related party disclosures A. List of Related Parties

a) Subsidiary Companies:

(1) Petroleum Specialties Pte. Ltd, Singapore

(2) Power Oil Specialities Pte. FZE Sharjah

(3) Quantum Apar Speciality Oil Pty. Ltd. (subsidiary of Petroleum Specilaties Pte. Ltd.)

(4) Uniflex Cables Ltd.

(5) Marine Cables & Wires Private Limited (subsidiary of Uniflex Cables Ltd.)

b) Joint Venture Company: Apar Chematek Lubricants Ltd.

c) Key Managerial Personnel:

Mr. K. N. Desai - Managing Director Mr. C. N. Desai - Jt. Managing Director

d) Chairman having significant influence: Dr. N. D. Desai - Non executive Chairman

e) Relatives of Key Managerial Personnel Mrs. Noopur Kushal Desai

Mrs. Vineeta R. Srivastava Mr. Rishabh K. Desai Mrs. Jinisha C. Desai Ms. Gaurangi K. Desai Mrs. M. N. Desai Mr. Rajeev Srivastava Mr.Devharsh C. Desai Ms. Krishangi R. Srivastava Kum. Nikita C. Desai

f) Entities over which significant influence is exercised by key management personnel/individuals having significant influence: Apar Corporation Private Ltd.

Scope Private Limited and its' subsidiaries, viz

a) Apar Investment ( Singapore ) Pte. Ltd.

b) Apar Investment Inc. Kushal N. Desai Family Trust Apar Technologies Private Ltd.

Kushal Chaitanya Desai Family Trust Chaitanya N. Desai Family Trust Catalis World Private Ltd. Apar Masat Conductors Ltd. Gayatri Associates

Further, DRS also envisage issue of one equity share of Rs. 10 each of the Company to the shareholders of the UCL in exchange of ten equity shares of Rs. 10 each held by them in UCL. Such allottee shall be entitled to the final dividend of Rs. 3.50 per share recommended by the directors at it's meeting held on 27th May,2011, only if, the new shares are allotted to them before the declaration of said final dividend at the ensuring 22nd Annual General Meeting.

9.Marine Cables & Wires Private Limited (MCWPL), a wholly-owned subsidiary of Uniflex Cables Limited (UCL) has been declared as a sick company by the BIFR. For its' expenditious revival, MCWPL has prepared a Draft Rehabilitation (DRS) proposal which, inter alia, includes a Scheme of Amalgamation with the Company, with effect from 1st April, 2010 (Transfer date). The shareholders of the Company have approved the DRS subject to the approval of BIFR and other regulatory approvals. The said draft proposal has been furnished to the Operating Agency (OA) appointed by BIFR and all concerned parties. The OA report to BIFR in this regard is awaited. The effect of the Scheme of Amalgamation will be accounted for in the financial statements on completion of the Amalgamation process.

10.Disclosure pursuant to Accounting Standard (AS) 17 Segment Reporting :

The Company's operations predominantly relate to manufacture of Conductors and Transformer/Speciality Oils which businesses have been identified as primary segments based on the Company's risk profile and internal reporting structure.

iv) The Company's fixed assets are located entirely in India. Segment Revenue and Results

The expenses which are not directly attributable to the business segment are shown as unallocable corporate/other expenses (net of miscellaneous income). Segment assets and liabilites

Segment assets include all operating assets used by the business segment and consist principally of fixed assets, debtors and inventories.

Segment liabilities primarily include creditors and other liabilities.

Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocable corporate assets and liabilites respectively.

11.There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as at 31st March,2011.

12. As per the Accounting Standard (AS), 28 Impairnment of Assests, the Company has reviewed the potential generation of economic benefit from its fixed assets. Accordingly, no impairment loss is required to be provided in the financial statements.

* Company's application for manufacture has been taken on record and registered by the concerned Government authorities.

** Equivalent to MT.

$ Opening and Closing Stock is included in work-in-process as the same is for captive consumption.

Notes:

a) Installed capacities are certified by Management of the Company and not verified by the auditors as this is a technical matter.

b) In cases where installed capacities exceed the licensed capacities, the Company's applications to the Government for regularisation of the same have been accepted in part only or are pending with the Government.

c) Includes : (A) Conversion by the Company on customers' account, captive consumption, and sample for testing.

d) In some of the classes of goods listed above, the licences are available in terms of more than one unit. In such cases, the quantitative information is expressed in terms of the units in which the items are sold. Further, in the cases where the licensed capacity has also been shown in the units in which the goods are sold (alongwith the units in which the licence has been issued), the conversion has been relied on by the auditors without verification as this is a technical matter.

e) Figures in brackets pertain to the previous year.

f) In respect of item (i) , the quantities stated against production, turnover and stock of goods produced are in KL, except one product i.e. Flex Oil A-Super, Greases included under the head "Other Specialities Oils".

13. Previous year figures have been regrouped, wherever necessary.