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Notes to Accounts of Bhagyanagar India Ltd.

Mar 31, 2015

1.1(a) Foreign Currency Monetary Item Translation Difference Account

Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation, being a loss on transaction (i.e. Rs. 62.59 per USD. as on 31st March,2015 from Rs 60.10 per USD. as on 31st March,2014) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notification no.GSR.913(E)/914(E) dated 31st December,2011 issued by the Ministry of Corporate Affairs.

Notes: 1.2(a) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item 1 ICICI Bank provided ECB amounting to USD 13,560,000 carrying a fixed interest rate of 6.96%. ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors. Long Term ECB liability as at 31.03.2015 amounting to USD 8,706,875 is valued at Rs. 62.59 per USD as on 31st March,2015 against Rs. 60.10 per USD. as on 31st March,2014.

2 The principal is repayable in 28 quarterly installments. The company has repaid 9 quarterly installments, 4 installments being repaid during the current Financial Year amounting to Rs. 89,037,639.Total amount repayable towards principal during the financial year 2014-2015 is USD 1,741,104 (Rs. 108,975,699 on conversion @Rs. 62.59 per USD as on 31st March,2015) and the same has been classified under Other Current Liabilities.

3.(a) As per the information about the industrial status of the Creditor there are no dues to any micro and small enterprises under the micro small and medium enterprises development act 2006

4.(a) Current maturities on long term debt

The principal amount of ECB from ICICI Bank repayable during the Financial Year 2015-2016 is grouped under the head Current Liabilities (Also See Note.2.3(a))

5.(.b) Car loan from Axis Bank Ltd is secured against hypnotization of Car. The loan was taken during the Financial Year 2012-13 and is repayable in monthly installment ofRs. 215,263/- each. The final installment repayable in 2015-16 is classified under Other Current Liabilities.

6. (a) (i) Buyer's credit from banks

Buyers Credit is secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

7.(b) Deferred Sales Tax

1 Deferred Sales Tax Loan is interest free , repayment of which started from Financial Year 2013-14 . An amount of Rs. 10,154,409/- is repaid during the current Financial Year. Accordingly due within a Year is Rs. 16,160,314/- which is classified under Other Current Liabilities.

8.(c) The amount of Deferred Sales Tax repayable during the Financial Year 2015-2016 is grouped under the head Current Liabilities (Also See Note.2.3 (c))

Provision for Interest on Term Loan 2.6(d) Provision for interest on ECB from ICICI Bank has been made till 31.03.2015.Payment of interest is due on 15th April,2015

Note: 9.(a) Out of the Total demand of Rs. 28,576,863/-, a sum of Rs. 16,053,076/- has been paid and the same is shown in note 2.11 of the Balance Sheet under the Head " Taxes Paid Under Protest".

Note: 10(b) Management has preferred an appeal against the above demand before the CIT(Appeals).

Note: 11.

Retirement and other Employee Benefits

1 The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.

2 Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3 Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

4 The company has an overfunded position for its gratuity plans and accordingly, no provision has been made as at 31.03.2015

The following Table sets out the status of the gratuity plan as required under AS-15.


Mar 31, 2014

1.(a) Foreign Currency Monetary Item Translation Difference Account

Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation,being a loss on transaction ( i.e. USD 60.10 per Re. as on 31st March,2014 from USD 54.39 per Re. as on 31st March,2013) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notification no.GSR.913(E)/914(E) dated 31st December,2011 issued by the Ministry of Corporate Affairs.

2. (a) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item

1 ICICI Bank provided ECB amounting to USD 1,35,60,000 carrying a fixed interest rate of 6.96%. ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors. Long Term ECB liability as at 31.03.2014 amounting to USD 1,04,47,980 is valued at USD 60.10 per Re. as on 31st March,2014 against USD 54.39 per Re. as on 31st March,2013.

2 The principal is repayable in 28 quarterly instalments.The company has repaid 5 quarterly instalments, 4 instalments being repaid during the current Financial Year amounting to Rs. 7,82,18,608.Total amount repayable towards principal during the financial year 2014-2015 is USD 14,64,480 (Rs.8,80,15,248 on conversion @ Rs..60.10 per USD as on 31st March,2014) and the same has been classified under Other Current Liabilities.

3. (b) Car Loan from Bank

Car loan from Axis Bank Ltd is secured against hyphotication of Car. The loan was taken during the Financial Year 2012-13 and is repayable in monthly installment of Rs. 2,15,263/- each. Accordingly due with in a year is Rs 25,83,156/- which is clasified under Other Current Liabilities.

4. (c) Deferred Sales Tax

1 Deferred Sales Tax Loan is interest free , repayment of which started from Financial Year 2013-14. An amount of Rs.10,82,565/- is repaid during the current Financial Year. Accordingly due with in a Year is Rs. 1,01,54,409/- which is classified under Other Current Liabilities.

Current maturities on long term debt

5. (a) The principal amount of ECB from ICICI Bank repayable during the Financial Year 2014-2015 is grouped under the head Current Liabilities (Also See Note.2.3(a))

(b) The amount of Deferred Sales Tax repayable during the Financial Year 2014-2015 is grouped under the head Current Liabilities (Also See Note.2.3 (c)) Provision for Interest on Term Loan

(c) Provision for interest on ECB from ICICI Bank has been made till 31.03.2014.Payment of interest is due on 15th April,2014

6. (a) During the year,the company acquired 1,30,000 shares at the rate of Rs.15 each in Metropolitan Ventures India Limited making it a wholly owned subsidiary of the company.

(b) During the year,the company acquired 14,72,600 shares at the rate of Rs.10 each in Solar Dynamics Private Limited by way of conversion of loan into equity.

7. (a) Income tax Receivable(TDS and Advance Tax)

During the current Financial Year,the company won appeals relating to Assessment Year 2008-2009 and 2009-2010 pending before ITAT.Consequently, tax amount of Rs.68,00,000 which was paid under pro- test pending appeal, is transferred to Income Tax Receivable Account.

(b) Deferred Revenue Expenditure

Represents Processing fees paid to ICICI Bank for availing ECB which is amortised over a period of 3 years starting from Financial Year 2011-2012.Current Financial Year being the last year of Amortisation,balance expenditure amounting to Rs. 55,20,653 has been charged off to Profit & Loss Account during the current Financial Year. [Refer Note No.2.23(a)]

Note: 8 As at As at Commitments and Contingent Liabilities 31.03.2014 31.03.2013 Rs. Rs.

(i) Counter Guarantees given to the Banks against Guarantee issued by them 33,600,000 28,650,000

(ii) Letters of Credit opened by Banks 44,884,679 -

(iii) Customs Duty/Excise Duty matters under Dispute (Net of Taxes Paid under Protest) 12,523,787 12,569,007

(iv) Demand raised by Income-Tax Authorities contested by the Company (Net of Taxes Paid under Protest) 13,733,766 13,733,766

Note : 9

Retirement and other Employee Benefits

1. The Company''s employee benefits primarily cover provident fund, gratuity and leave encashment.

2. Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3. Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

4. The company has an overfunded position for its gratuity plans and accordingly,no provision has been made as at 31.03.2014


Mar 31, 2013

Note :1.1

Retirement and other Employee Benefits

1. The Company''s employee benefits primarily cover provident fund, gratuity and leave encashment.

2. Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3. Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.


Mar 31, 2012

1.1 (a) The company has bought back 44,10,000 Equity shares of the face value of Rs. 2/- each for total consideration of Rs. 8,20,53,689 during the year In accordance with the Scheme of Buy-back of equity shares approved by the competent authorities, the company has closed the scheme on 09.03.2012 as it has fulfilled all the requirements. Equity share capital of the company after the buy-back stands at 6,39,90,000 shares of the face value of Rs. 2-each.

1.2 (a) FCCB:

1 On 14th October,2011, the company redeemed the entire outstanding Foreign Currency Convertible Bonds amounting to Rs. 49,09,00,000 along with YTM and withholding tax of Rs. 23,68,83,795 and Rs. 2,63,20,422 respectively resulting in a total outflow of Rs. 75,41,04,217 (Refer note 2.23(b))

2 The obligation of repayment was met partly by availing ECB from ICICI Bank to the extent of Rs. 66,57,96,000 (US$ 1,35,60,000) and balance Rs. 8,55,00,000 have been paid through internal accrual of the company lying in mutual fund.

1.3 (b) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item

1 ICICI Bank provided ECB carrying a fixed interest rate of 6.96% to the extent of Rs. 66,57,96,000 (US$ 1,35,60,000 @ Rs. 49.10 per US$). ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors.ECB liability as at 31.03.2012 is in- creased due to Foreign Exchange Fluctuation(i.e. USD 51.16 per Rs. as on 31st March,2012 against USD 49.10 per Rs., rate prevailing at the time of receipt of ECB)(Refer note.2.17(a))

2 The principal is repayable in 28 quarterly instalments beginning from 14th January, 2013.Total amount repayable towards principal during the financial year 2012-2013 is US$ 3,29,508 (Rs. 1,68,57,629 on conversion @ Rs., 51.16 per US$ as on 31st March, 2012)

1.4 (c) Deferred Sales Tax

1 Deferred Sales Tax Loan is interest free and payable in 84 monthly installments, starting from Financial Year 2013-14 & ending in 2019-20.

1.5 (a) Cash Credit is secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

1.6 (a) Sundry creditors include Rs. 12,47,59,330 secured by way of Letter of Credit/ Buyers credit. Letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation. Further, as per the information about the industrial status of the Creditor there are no dues to any micro and small enterprises under the micro small and medium enterprises development act 2006.

Current maturities on long term debt

1.7 (a) Term Loan from HDFC Bank is secured by Corporate Guarantee given by one of its Associate Companies.The loan is repayable during the Financial Year 2012-2013.

1.7 (b) The principal amount of ECB from ICICI Bank repayable during the Financial Year 2012-2013 is grouped under the head Current Liabilities.

Provision for Interest on Term Loan 2.6 (c) Provision for interest on ECB from ICICI Bank has been made till 31.03.2012. Payment of interest is due on 16th April,2012.

1.8 (a) The Board of Directors have recommended a dividend of Rs. 0.40 per share for the year ended 31st March, 2012 (Previous Year Rs. 0.40 per share).

In case of balances in Trade Receivables, letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation.

1.9 (a) Deferred Revenue Expenditure

Represents Processing fees paid to ICICI Bank for availing ECB which is amortised over a period of 3 years.one third of the expenditure amounting to Rs. 55,20,653 have been charged off to Profit & Loss Account during the current financial year. (Refer Note No.2.23(a))

1.9 (b) Foreign Currency Monetary Item Translation Difference Account

Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation,being a loss on transaction (i.e. USD 51.16 per Rs. as on 31st March, 2012 from USD 49.10 per Rs. prevailing rate at the time of receipt of ECB) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notifi- cation no.GSR.913(E)/914(E) dated 31st December, 2011 issued by the Ministry of Corporate Affairs.

1.10 (a) Interest on Loans, Deposits and Others

Interest amounting to Rs. 7,03,43,053 has been Debited to Subsidiary Companies in accordance with section 372A of the Companies Act,1956 and is reflected in Advances to Subsidiary cos.

1.11(a) Financial Charges

Financial Charges includes Rs. 55,20,653 towards amortisation of Deferred Revenue Expenditure. (Refer Note No.2.17(a))

1.11 (b) Interest on FCCB Bonds

The Company had a commitment to the Foreign Currency Convertible Bond holders to pay Yield to Maturity at the rate of 8% compounded half year for the tenure of the bond i.e.5 years in case the option of conversion is not exercised by them,before the maturity of bond.As the interest has accrued on maturity of bond due to non-exercise of option of conversion interest amounting to Rs. 26,32,57,834 along with withholding tax is accounted in the Current Year.(Refer note no.2.3(a)).

1 Sales tax paid is net of the sales tax incentive of Rs. 1,74,28,877 sanctioned by Commissionerate of Industries

Note : 1.12

Retirement and other Employee Benefits

1 The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.

2 Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3 Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

4 The company has an overfunded position for its gratuity plans and accordingly,no provision has been made as at 31.03.2012.


Mar 31, 2011

1. A. Equity Share Capital:

The company has bought back 5,26,614 Equity shares of the face value of Rs.2/- each for total consideration of Rs.135.17 lacs during the year in accordance with the Scheme of Buy-back of equity shares approved by the competent authorities, the company has closed the scheme on 17.05.2010 as it has fulfilled all the requirements. Total number of shares bought back under the scheme are 61,00,000 for a total consideration of Rs.1616.82 lacs. Equity share capital of the company after the buy-back stands at 684 lacs shares of the face value of Rs. 2-each.

2. Secured Loans:

- Cash Credit and Medium term loans from Banks are secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

3. Unsecured Loans - Foreign Currency Convertible Bonds:

- During the year 2006-07, the company issued at par, 5 years Zero Coupon US $ denominated Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 15 millions comprising of 150 bonds of US $ 1,00,000 each to finance capital expenditure. Out of the issued bonds, the company bought back 50 bonds of US $ 1,00,000 each during the year 2009-10.

- The remaining bond-holders have an option of converting these bonds into equity shares at the conversion price of Rs 44 per share (Face value Rs 2 each) and the bond-holders are entitled to get 104.45 lacs shares at any time prior to close of business on 17th October, 2011 unless redeemed.

- The company has a commitment towards the remaining FCCB bondholders to pay 8% half yearly compounded yield-to-maturity (YTM), in case the option of conversion is not exercised by them, within 5 years from the date of issue of the Bonds. The YTM accrues to the Bond-holders only at the time of repayment. Contingent liability on account of YTM is Rs 2063.63 lacs as on 31.03.2011 including withholding Tax @ 10%. This will undergo a change in accordance to the currency conversion rates and Income tax rates prevailing on the date of repayment if it is made on non- conversion.

- In compliance with the Companies (Accounting Standards) Rules,2009 issued the Ministry of Cor- porate Affairs, the notional exchange gain of Rs 40 lacs during the year due to appreciation in Rupee rate vis-à-vis US$ amounting to Rs 0.40 per US$ has been considered as income in the Profit & Loss Account

- Liability on account of Foreign Currency Convertible Bonds as on 31.03.2011 is valued at the exchange rate of that date which was Rs 44.65 = 1 US $ as against exchange rate of 31.03.2010 which was Rs 45.05 = 1 US$

- The company is obliged to pay dividend even to those FCCB Holders who convert their bonds into equity after adoption of the financial statements and up to the book closure date for dividend purposes. Incremental dividend payable, if any, will be paid out of the balance available in the Profit & Loss Account. No provision for dividend payable to the FCCB bondholders has been made in the books of accounts.

4. Contingent Liability not provided for (As certified by the management): 31-03-2011 31-03-2010 Rs.in lakhs Rs. In lakhs

a) Counter guarantees given to the Banks against Guarantee Issued by them 364.31 723.69

b) Letters of Credit opened by Banks/ Buyers' credit 326.02 124.91

c) YTM payable to the FCCB bond-holders 2063.63 1551.17

d) Custom duty/Excise duty matters under dispute 228.59 265.21

5. Fixed Assets - Impairment:

The management has carried out a detailed internal review of the assets with respect value in use, recoverable amount and carrying cost in books and is of the firm opinion that there is no impairment in the value of assets of the company.Hence no provision as required under AS-27,Impairment of Asset is made.

6. Minimum Aleternate Tax - MAT (Non-Current Asset)

The Management after a detailed review of future business growth prospect of the company, the provisions of applicable accounting standards to the company and the Guidance Note issued by Institute of Chartered Accountants of India on Accounting and Disclosure of MAT Credit, is of the opinion that the MAT credit would be reversed by way of adjustment to Income Tax Payable in the forthcoming years.

In the previous year this amount has been treated as Deferred Tax Asset now this has been reclassified as such in the Schedule of Loans and Advances.

7. Sundry Debtors & other balances:

- In case of balances in Sundry Debtors, Loans and Advances, other current assets and Sundry Creditors, letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation.

- Sundry creditors include Rs 661.95 lacs secured by way of Letter of Credit/ Buyers' credit. Further, the Company does not owe any sum to Micro & small enterprises as at the end of the accounting year on account of principal and interest under the Micro, Small and Medium Enterprises Development Act, 2006 as per the information and records available with the company about their industrial status which has been relied upon by the auditors.

8. Loss of Material in Transit

- During the year 2009-10, the company paid an advance of Rs 214.22 lacs to M/s United Interna- tional Shipping Agent (T) Ltd, Tanzania, towards part payment for cost of Copper cathode which is principal raw material for the copper manufacturing units. The payment thus made was disclosed as Advances to Suppliers under Schedule-11 of "Loans & Advances". However, Copper was stolen and replaced with worthless material on the sea-way.

- The Company lodged claims with Insurance Company and the shipping agent. The Insurance Com- pany has rejected the claim during the year in the month of October 2010.

- On the basis of legal opinion received and on the recommendations of the Board of Directors the amount is written off as irrecoverable business loss..

9. Interest on Loans, Deposits and others as appearing in Schedule-17 - Other Income is net of irrecov- erable interest amounting to Rs 148.68 lacs

10. Retirement and other Employees Benefits:

- The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.

- Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

- Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

- The company has provided for leave encashment liability at year end on account of unavailed earned leave as per the actuarial valuation done by Life Insurance Corporation of India.

- The following Table summaries the components of Net Benefit expenses recognized in the Profit & Loss Account and amount recognized in the Balance Sheet for the respective Plans

11. No Commission is paid to managerial personnel or provided for in the accounts for the year ended 31- 03-11 and hence the calculation for the same under section 349 of the company's act is not given.

12. Previous years figures have been regrouped/ rearranged wherever necessary.


Mar 31, 2010

1. A. Equity Share Capital:

The company has bought back 55,73,386 Equity shares, till 31st March, 2010, of the face value of Rs 2/- each for total consideration of Rs 1482 lakhs. In accordance with the Scheme of Buy-back of equity shares approved by the competent authorities, the company has closed the scheme on 17.05.2010 as it has fulfilled all the requirements. Total number of shares bought back under the scheme till the date of approval of the Accounts are 61,00,000 for a total consideration of Rs 1616.82 lakhs. Equity share capital of the company after the buy-back stands at 684 lakhs shares of the face value of Rs 2-each.

1. B. Dividend on share capital

Dividend is payable only on the Equity shares outstanding after closure of buy-back scheme being 684 lakhs shares and hence, provided for accordingly.

2. Secured Loans:

* Cash Credit and Medium term loans from Banks are secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

3. Unsecured Loans - Foreign Currency Convertible Bonds:

* During the year 2006-07, the company issued at par, 5 years Zero Coupon US $ denominated Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 15 millions comprising of 150 bonds of US $ 1,00,000 each to finance capital expenditure.

* During the year under review, i.e. 2009-10, the Company has bought back 50 bonds of US $ 1,00,000 each, in accordance with the guidelines issued by the Reserve Bank of India from time to time. Out of total book profit of Rs 449.82 lakhs on buy-back of FCCBs, Rs 327.22 lakhs has been adjusted against cost of Fixed Assets in the ratio of application of FCCB proceeds and balance of Rs 122.60 lakhs has been adjusted against the "Foreign Currency Monetary Items Translation Difference Account" Reserve, created during the financial year 2008-09 in accordance with the Revised AS-11 adopted by the Company.

( The remaining bond-holders have an option of converting these bonds into equity shares at the conversion price of Rs 44 per share (Face value Rs 2 each) and the bond-holders are entitled to get 104.45 lakhs shares at any time prior to close of business on 10th October, 2011 unless redeemed.

* The company has a commitment towards the remaining FCCB bondholders to pay 8% half yearly compounded yield-to-maturity (YTM), in case the option of conversion is not exercised by them, within 5 years from the date of issue of the Bonds. As the liability on this account has not crystallized as on the date of Balance Sheet, no provision has been made in the books of accounts. Contingent liability on account of YTM is Rs 1551.17 lakhs as on 31.03.2010.

* In compliance with the Companies (Accounting Standards) Rules,2009 issued the Ministry of Corpo- rate Affairs, the notional exchange gain of Rs 590 lakhs during the year due to appreciation in Rupee rate vis-à-vis US$ amounting to Rs 5.9 per US$ has been adjusted partly against cost of Depreciable Fixed Assets in the ratio of FCCB proceeds utilized for acquiring those Assets and partly against cost of non-depreciable assets in the ratio of FCCB proceeds utilized for acquiring those assets. Detailed working of the impact of revised AS-11 is given in Note no. 14 to 17

* Liability on account of Foreign Currency Convertible Bonds as on 31.03.2010 is valued at the exchange rate of that date which was Rs 45.05 = 1 US $ as against exchange rate of 31.03.2009 which was Rs 50.95 = 1 US$

* The company is obliged to pay dividend even to those FCCB Holders who convert their bonds into equity after adoption of the financial statements and up to the book closure date for dividend purposes. Incremental dividend payable, if any, will be paid out of the balance available in the Profit & Loss Account. No provision for dividend payable to the FCCB bondholders has been made in the books of accounts.

4. Contingent Liability not provided for (As certified by the management):

31-03-2010 31-03-2009

Rs.in lakhs Rs. In lakhs

a) Counter guarantees given to the Banks against

Guarantee Issued by them 723.69 2537.20

b) Letters of Credit opened by 124.91 1352.59 Banks/Buyers credit

c) YTM payable to the FCCB bond-holders 1551.17 1812.93

d) Sales Tax matters under dispute Nil 11.28

e) Custom duty/Excise duty matters 265.21 265.21 under disput

5. Fixed Assets -

- Decrease in Cost of Free-hold Land, part of which is on account of capitalization of Information Technology Park, amounting to Rs 241 lakhs as shown in Schedule-5 to the Balance Sheet includes decrease of Rs 75.60 lakhs due to apportionment of Book Profit on buy-back of FCCB Bonds in the ratio of utilization of FCCB proceeds.

- Decrease in Cost of Lease-Hold Land amounting to Rs 7.52 lakhs as shown in Schedule-5 to the Balance Sheet includes decrease of Rs 2.39 lakhs due to apportionment of Book Profit on buy-back of FCCB in the ratio of utilization of FCCB proceeds.

* Decrease in cost of Plant & Machinery amounting to Rs 2318 lakhs as shown in Schedule-5 to the Balance Sheet includes decrease of Rs 38.90 lakhs and Rs 21.57 lakhs (Previous year increase of Rs 68.48 lakhs due to notinal loss) due to notional gain on foreign exchange fluctuation on account of FCCB liability and apportionment of Book Profit on buy-back of FCCB respectively during the year 2009-10. Further, the company has sold the entire Plant & Machinery of one of its oldest Units, situated in Hyderabad, engaged in manufacturing of Jelly Filled Telephone Cables. Cost and WDV of the same was Rs 2181.87 lakhs and Rs 45.74 lakhs respectively.

* Decrease in cost of Wind Power Plant amounting to Rs 638.13 lakhs as shown in Schedule-5 to the Balance Sheet is on account of decrease of Rs 410.47 lakhs and Rs 227.66 lakhs (Previous year increase of Rs 640.68 lakhs due to notional loss) due to notional gain on foreign exchange fluctuation on account of FCCB liability and apportionment of Book Profit on buy-back of FCCB respectively during the year 2009-10.

6. Fixed Assets - Impairment:

In the view of the management, there is no impairment of the assets of the company and the management is fully confident of realizing the book value of the assets in cash or in kind. Hence, no provision for the same has been made in the books of accounts.

7. Depreciation:

Depreciation on fixed assets has decreased by Rs 31.24 lakhs and Rs 5.26 due to adoption of The Companies (Accounting Standards) Rules,2009 issued by the Ministry of Corporate Affairs on 31.03.2009 and apportionment of Book profit on account of buy-back of FCCB respectively, thereby resulting into net decrease of 36.83 in depreciation.

8. Sundry Debtors & other balances:

* In case of balances in Sundry Debtors, Loans and Advances, other current assets and Sundry Creditors, letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation.

* Advances to Suppliers under Schedule-11 of "Loans & Advances" include Rs 214.22 lakhs paid to Ms United International Shipping Agent (T) Ltd, Tanzania, towards cost of Copper cathode. However,

Copper was stolen and replaced with worthless material on the sea-way. The Company has lodged claim with Insurance Company which is under process. As the Management is confident of recovering the entire amount from the Insurance Company/Shipping Agent, no provision for loss of goods has been made in the books of Account.

* Sundry creditors include Rs 124.91 lakhs secured by way of Letter of Credit/Buyers credit. Further, the Company does not owe any sum to Micro & small enterprises as at the end of the accounting year on account of principal and interest under the Micro, Small and Medium Enterprises Development Act, 2006 as per the information and records available with the company about their industrial status which has been relied upon by the auditors.

9. Retirement and other Employees Benefits:

* The Companys employee benefits primarily cover provident fund, gratuity and leave encashment.

* Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

* Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

* The company has provided for leave encashment liability at year end on account of unavailed earned leave as per the actuarial valuation done by Life Insurance Corporation of India.

* The following Table summaries the components of Net Benefit expenses recognized in the Profit & Loss Account and amount recognized in the Balance Sheet for the respective Plans

10. Previous years figures have been regrouped/ rearranged wherever necessary.

 
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