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Notes to Accounts of Easun Reyrolle Ltd.

Mar 31, 2016

1. Unsecured Term Loan from Sowraj Investments Pvt. Ltd., and Easun Products of India Pvt. Limited do not carry any interest. The Company is making necessary efforts to repay this loan against business realization.

2. Working Capital a. Primary Security

Hypothecation of entire current assets including stocks, receivables and other current assets of the Company on pari-passu basis favouring Axis Bank, DBS Bank, Standard Chartered Bank, Canara Bank and State Bank of India.

3. The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.69.45 lakhs by the Department of Sales tax, Government of Tamilnadu.

The same has been repaid in September, 2015 with interest.

4. Gratuity and Leave for AS 15 Disclosure

A Defined Benefit Plan:

(i) Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan provides for, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.

(ii) Leave Encashment (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.

B Defined Contribution Plan (Funded)

Provident Fund

All employees are entitled to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund Commissioners as per law.

5. The Company has incurred expenditure aggregating to Rs. NIL during the year (Rs.95.29 lakhs) on development of products. The expenditure has been capitalized and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2016. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 “ Intangible Assets” and its carrying value is appropriate.

6. a) In respect of company’s operations which includes execution of the turnkey projects. These

turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

b) Revenue from operations includes invoicing on customers towards execution of turnkey projects. These turnkey project invoicing is predominantly milestone associated and is independent of customer acceptance of agreement, Revenue recognized in this regard with appropriate provision for anticipated procurement / cost of manufacturing components the outcome of eventual acceptability of the claims of the company is ascertained at the closure of the respective project and is accounted accordingly.

7. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs. NIL (Rs.NIL) and net off product development expenses Rs. NIL (Rs.95.29 lakhs).

8. Reconciliation of Excise and Service Tax Records / VAT Records with the Financial Records are under Progress. Adjustments if any which may arise are not ascertainable and would be carried out in the Books upon completion of Reconciliation.

9. Trade Receivables includes an amount of Rs.1,224.75 lakhs (Rs.1,191.69 lakhs) being the Liquidated Damages recovered by some customers. The Company is in the process of recovering the said amount and pending recovery, no provision is considered in the accounts towards Liquidated Damages. During this financial year Rs.0.14 Lakhs (Rs.59.50 Lakhs) recovered from Customers against written off in earlier years has been adjusted against Liquidated Damages recoverable.

10. Trade Receivables includes an amount of Rs.487.52 lakhs (Rs.626.88 Lakhs) being the outstanding from Foreign Debtors for more than One Year. The Company is in the process of getting necessary approval from Reserve Bank of India towards extension of time limit for collection. Out of which Rs. Nil (Rs.509.85 Lakhs) received subsequently.

11. The Company has made an investment of Rs.15,502.10 lakhs in its wholly owned subsidiary at Singapore and for onward investment into its wholly owned subsidiaries. Considering the long term nature of investment and future plans of the management, no provision towards any impairment of investment is considered necessary as the management is of the opinion that this investments represents appropriate carrying value.

12. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has relaxed the requirement of the immediate debit / credit of Foreign Exchange translation differences on long term foreign currency monetary items to the Statement of Profit & Loss till 31st March 2020. Further the MCA inserting a new para 46A in AS11 allowed Companies to defer foreign exchange translation differences on long term foreign currency monetary items for entities which had not opted for such relaxation earlier. The Company during the financial year 2012-13 has opted for the relaxation as given in Para 46A and has deferred an amount of Rs.721 lakhs being the foreign exchange difference on long term external commercial borrowing from Standard Chartered Bank. The amount would be written-off over the period of 3 years, being the loan tenure. During the financial year 2015-16, the Company has written off Rs.801.45 lakhs towards loss on foreign exchange and reinstated the liability by Rs.322.37 lakhs.

13. Operating Lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.68.14 lakhs (Rs.94.48 lakhs).

14. The value of inventory pertaining to the “Metering Business” amounting to Rs.215.41 lacs is continued to be carried at cost despite no activity in the business for considerable period and realizable value has not been ascertained consequently the impact on the financial statements is not quantifiable.

15. In respect of certain turnkey contracts which have been terminated by the customers resulting in encashment of bank guarantees given by the company amounting to Rs.4,603.99 lacs has been shown recoverable from parties in respect of which negotiation with customers are stated to be in progress. Pending the outcome of negotiations no adjustment in the financial statements has been made.

16. Confirmation of balance has not been obtained from some of the supply creditors and debtors to certain parties to whom the Company has given advances.

17. The Company has applied for the extension of time limit under FEMA rules for material advances given to the associate enterprises amounting Rs.624.19 lakhs as on 31st March 2016.

18. As a matter of prudence, the Deferred Tax Assets arising predominantly on account of Carry over of Business Loss is not recognized in the books of account in line with Accounting Standard 22 “Taxes on Income”.

19. Previous year’s figures have been re-grouped / re-classified, wherever necessary to conform to the current year’s presentation.


Mar 31, 2015

1. Rights, preferences and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of Rs 2. per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount, in proportion to their shareholding.

2. The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.69.45 lakhs by the department of Sales tax, Government of Tamilnadu. The underlying deferred sales tax payable by the company from the financial year commencing from 2013-14.( which is not paid and interest @24% p.a on the same is provided in the books.

3. Gratuity and Leave for AS 15 Disclosure A Defined Benefit Plan:

(i) Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan rovides for, at retirement or termination ofemployment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.

(ii) Leave Encashment (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.

B Defined Contribution Plan (Funded)

Provident Fund

All employees are entitled to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund commissioners as per law.

4. Contingent Liabilities and Commitments

A. Contingent Liabilities 2015 2014

1 Letters of Credit opened by Bank for purchase of raw materials 2,111.30 1,321.74 and components

2 Counter Guarantee given to bankers in respect of Guarantees 11,381.66 15,186.60 given by them

Counter Guarantee given to bankers in respect of Standby LC - 377.13 given by them

3 Bonds executed in favour of President of India for import of 8.95 8.95 material at concessional rate of duty

4 Sales effected under CST - liability towards submission of C 745.60 1,766.93 Forms

5 Disputed amounts of Income Tax Assessment year

2003- 04 - Paid 47.85 47.85

2004- 05 - Paid 26.13 26.13

2006-07 - Paid 55.42 55.42

2008- 09 - Paid 306.33 306.33

2009- 10 - Unpaid 525.00 525.00

2010- 11 - Unpaid 178.18 178.18

Rs Lacs

6 Disputed amount of Sales Tax Karnataka

FY 2007-08 Paid - 63.65

FY 2008-09 Paid - 41.78

FY 2009-10 (Rs.3.00 Paid, Rs.17.62 Unpaid) 20.62 20.62

Tamil Nadu (Unpaid)

FY 2006-07 (Rs.19.21 - Paid, Rs.18.77 Unpaid) 37.98 37.98

FY 2007-08 8J8 8.38

FY 2008-09 29.63 29.63

FY 2009-10 30.44 -

FY 2010-11 144.43 -

FY 2011-12 337.06

TN VAT - Enforcement

FY 2010-11 ( Rs 3.94 Lac Paid ) 11.97 -

FY 2011-12 ( Rs 5.09 Lac Paid ) 17.69 -

7 Disputed Customs Duty Paid Under Protest 66.38 66.38

8 Disputed VAT Demand of West Bengalfor FY 2009-10 Unpaid 6.18 6.18

B Capital Commitment

Estimated amount of capital commitment on 115.20 135.63 account of Fixed Assets

5. The Company has incurred expenditure aggregating to Rs.95.25 lakhs during the year (Rs.165.249 lakhs) on development of products. The expenditure has been capitalised and carried in the financial statements under the head Intangible Asset Product Development as on 31st March, 2015. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 “ Intangible Assets” and its carrying value is appropriate.

6. a) In respect of company’s operations which includes execution of the turnkey projects. These turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

b) Revenue from operations includes invoicing on customers towards execution of turnkey projects. These turnkey project invoicing is predominantly milestone associated and is independent of customer acceptance of agreement, Revenue recognised in this regard with appropriate provision for anticipated procurement / cost of manufacuring components the outcome of enentual acceptability of the claims of the company is ascertained at the closure of the respective project and is accounted accordingly.

7. During the financial year 2012-13 the company has sold land at Jigani for Rs.1800 Lacs based on an agreement to sale and handing over of possession of buyer pending registration of sale deed.

The Company has recognized a profit of Rs.1747.12 Lacs towards such sale. Subsequently no objection from bank has been obtained and the sale deed has been registered.

8. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs. NIL (Rs.NIL) and net off product development expenses Rs.165.24 lakhs (Rs.153.39 lakhs).

9 Reconciliation of Excise and Service Tax Records / VAT Records with the Financial Records are under Progress. Adjustments if any which may arise are not ascertainable and would be carried out in the Books upon completion of Reconciliation.

10. Trade Receivables includes an amount of Rs.1191.69 lacs (Rs.1012.27 lacs) being the Liquidated Damages recovered by some customers. The Company is in the process of recovering the said amount and pending recovery, no provision is considered in the accounts towards Liquidated Damages. During this financial year Rs 59.50 Lacs recovered from Customers against written off in earlier years has been adjusted against Liquidated Damages recoverable.

11. Trade Receivables includes an amount of Rs. 626.88 lacs (Rs.388.89 lacs) being the outstanding from Foreign Debtors for more than 1 Year. The Company is in the process of getting necessary approval from Reserve Bank of India towards extension of time limit for collection. Out of which Rs.509.85 Lacs received subsequently

12. The Company has made an investment of Rs.15,502.10 lacs in its wholly owned subsidiary at Singapore and for onward investment into its wholly owned subsidiaries. Considering the long term nature of investment and future plans of the management, no provision towards any impairment of investment is considered necessary as the management is of the opinion that this investments represents appropriate carrying value.

13. Expenditure incurred on account of borrowing costs amounting to Rs.NIL (Rs.NIL) is capitalized towards new projects.

14. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has relaxed the requirement of the immediate debit / credit of Foreign exchange translation differences on long term foreign currency monetary items to the Statement of Profit & Loss till 31st March 2020. Further the MCA inserting a new para 46A in AS11 allowed Companies to defer foreign exchange translation differences on long term foreign currency monetary items for entitites which had not opted for such relaxation earlier. The Company during the financial year 2012-13 has opted for the relaxation as given in Para 46A and has deferred an amount of Rs.721 lacs being the foreign exchange difference on long term external commercial borrowing from Standard Chartered Bank. The amount would be written-off over the period of 3 years, being the loan tenure. During the financial year 2014-15, the Company has written off Rs.600.72 lacs towards loss on foreign exchange and reinstated the liability by Rs.982.84 lacs. Total outstanding as on 31st March, 2015 amounts to Rs.1110.07 lacs which is to be written off in Six quarterly installments.

15. Operating Lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.94.48 lacs (Rs.131.68 lacs).

16. The value of inventory pertaining to the “Metering Business” amounting to Rs.215.41 lacs is continued to be carried at cost despite no activity in the business for considerable period and realisable value has not been ascertained consequently the impact on the financial statements is not quantifiable.

17. In respect of certain turnkey contracts which have been terminated by the customers resulting an encashment of bank guarantees given by the company amounting to Rs.526.95 lacs (net) has been shown recoverable from parties in respect of which negotiation with customers stated to be in progress. Pending the outcome of negotiations the no adjustment in the financial statements has been made.

18. Confirmation of balance has not been obtained from some of the supply creditors and debtors to certain parties to whom the Company has given advances.

19. The company is engaged in power transmission and distribution segment and the same is being reported

20. Pursuant to the notification of schedule II of the companies act,2013 (“the Act), by the Ministry of Corporate Affairs effective from 1st April 2014, the management has internally reassessed and changed, wherever necessary the useful lives of fixed assets for the purpose of computing depreciation, so as to conform with the requirements of the Act. Accordingly, the carrying amount of Fixed Assets as at April 1, 2014 is being depreciated over the remaining useful life of the asset and where the remaining life of an asset is nil as on April 1, 2014, the carrying amount of such asset has been recognised as adjustment to the retained earnings as on that date. Had the company continued with the previously assessed useful lives, charge for depreciation and amortization expense for the quarter and year ended March 31, 2015 would have been higher by Rs. 15 lacs and Rs. 33 lacs respectively and the profit before tax for the periods would have been lower by such amount. Further, the carrying value of Rs.261.66 Lac in case of assets with nil revised remaining useful life as at April 1, 2014 has been reduced from the retained earnings as on such date.

21. The Company is applied for the extension of time limit under FEMA rules for material advances given to the associate enterprises amounting Rs.624.19 lakhs as on 31st March 2015

22. Previsous year's figures have been re-grouped / re-classified, wherever necessary to conform to the current year's presentation


Mar 31, 2014

1. Contingent Liabilities and Commitments

A. Contingent Liabilities 2014 2013

1 Letters of Credit opened by Bank for purchase of raw materi- 1,321.74 2,728.26 als and components 2 Counter Guarantee given to bankers in respect of Guarantees 15,186.60 17,002.08 given by them

Counter Guarantee given to bankers in respect of Standby LC 377.13 1,253.66 given by them

3 Bonds executed in favour of President of India for import of 8.95 8.95 material at concessional rate of duty

4 Sales effected under CST - liability towards submission of0 C Forum 1,766.93 2,735.04

5 Disputed amounts of Income Tax

Assessment year

2003-04 - Paid 47.85 47.85

2004-05 - Paid 26.13 26.13

2006-07 - Paid 55.42 55.42

2008-09 - Paid 306.33 306.33

2009-10 - Unpaid 525.00 -

2010-11 - Unpaid 178.18 178.18

30.The Company has incurred expenditure aggregating to Rs.165.24 Lacs during the year (Rs.153.39 Lacs) on development of products. The expenditure has been capitalized and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2014. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 " Intangible Assets" and its carrying value is appropriate.

2. a) In respect of company''s operations which includes execution of the turnkey projects.

These turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

b) Revenue from operations includes invoicing on customers towards execution of turnkey projects. These turnkey project invoicing is predominantly milestone associated and is independent of customer acceptance of agreement, Revenue recognized in this regard with appropriate provision for anticipated procurement / cost of manufacturing components the outcome of eventual acceptability of the claims of the company is ascertained at the closure of the respective project and is accounted accordingly.

3. During the previous financial year 2012-13 the company has sold land at Jigani for Rs.1800 Lacs based on an agreement to sale and handing over of possession of buyer pending registration of sale deed. The Company has recognized a profit of Rs.1747.12 Lacs towards such sale.

4. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs. NIL (Rs.NIL) and net off product development expenses Rs.165.24 Lacs (Rs.153.39 Lacs).

5 Reconciliation of Excise and Service Tax Records / VAT Records with the Financial Records are under Progress. Adjustments if any which may arise are not ascertainable and would be carried out in the Books upon completion of Reconciliation.

6 Trade Receivables includes an amount of Rs.1,012.27 Lacs (Rs.731.15 Lacs) being the Liquidated Damages recovered by some customers. The Company is in the process of recovering the said amount and pending recovery, no provision is considered in the accounts towards Liquidated Damages. During this financial year Rs.16.73 lacs recovered from Customers against written off in earlier years has been adjusted against Liquidated Damages recoverable.

7 Trade Receivables includes an amount of Rs. 388.89 lacs (Rs.160.91 Lacs) being the outstanding from Foreign Debtors for more than 1 Year. The Company is in the process of getting necessary approval from Reserve Bank of India towards extension of time limit for collection.

8 The Company has made an investment of Rs.15,502.10 Lacs in its wholly owned subsidiary at Singapore and for onward investment into its wholly owned subsidiaries. Considering the long term nature of investment and future plans of the management, no provision towards any impairment of investment is considered necessary as the management is of the opinion that this investments represents appropriate carrying value.

9 Expenditure incurred on account of borrowing costs amounting to Rs.NIL (Rs.206.76 Lacs) is capitalized towards new projects.

10 The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has relaxed the requirement of the immediate debit / credit of Foreign exchange translation differences on long term foreign currency monetary items to the Statement of Profit & Loss till 31st March 2020. Further the MCA inserting a new Para 46A in AS11 allowed Companies to defer foreign exchange translation differences on long term foreign currency monetary items for entities which had not opted for such relaxation earlier. The Company during the financial year 2012-13 has opted for the relaxation as given in Para 46A and has deferred an amount of Rs.721 Lacs being the foreign exchange difference on long term external commercial borrowing from Standard Chartered Bank. The amount would be written-off over the period of 3 years, being the loan tenure. During the financial year 2013-14, the Company has written off Rs.369.04 Lacs towards loss on foreign exchange and reinstated the liability by Rs.375.99 Lacs. Total outstanding as on 31st March 2014 amounts to Rs.727.95 Lacs which is to be written off in Eight quarterly installments.

11 Operating Lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.131.68 Lacs (Rs.117.86 Lacs).

12. Earnings Per Share

The earnings considered in ascertaining Earning per share comprise the profit after tax. The number of shares used in computing Basic Earning per share is the weighted average number of shares outstanding during the year as follows:

13. The value of inventory pertaining to the "Metering Business" amounting to Rs.215.41 lacs is continued to be carried at cost despite no activity in the business for considerable period and realisable value has not been ascertained consequently the impact on the financial statements is not quantifiable.

14. In respect of certain turnkey contracts which have been terminated by the customers resulting an encashment of bank guarantees given by the company amounting to Rs.134.82 lacs (net) has been shown recoverable from parties in respect of which negotiation with customers stated to be in progress. Pending the outcome of negotiations the no adjustment in the financial statements has been made.

15. The liquidated damages levied by the customers amounting to Rs.1012.27 lacs, is under negotiations with customers seeking waiver of the same. Pending the outcome of the same the Liquidated damages so levied has not been provided for.

16. Confirmation of balance has not been obtained from some of the supply creditors and debtors to certain parties to whom the Company has given advances.

17. The company is engaged in power transmission and distribution segment and the same is being reported


Mar 31, 2013

1. Gratuity and Leave for AS 15 Disclosure

A Defined Benefit Plan:

(i) Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan rovides for, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.

(ii) Leave Encashment (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.

B Defined Contribution Plan (Funded) Provident Fund

All employees are entitled to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund commissioners as per law.

2. Employee Stock Option Scheme

a. During the year 2010-11 the Compensation Committee has granted 1,97,245 options to its senior employees and non-promoter directors. The options granted vest over a period of 1 to 2 years; and can be exercised over a maximum period of 6 months from the date of vesting. The difference between the market price of the share underlying the value of options granted on the date of grant and the exercise price of the option are expensed over the vesting period as per the SEBI guidelines.

b. Method Used for Accounting for Share Based Payment Plan:

The Company has used Intrinsic Value Method to account for the compensation cost of stock option to employees of the Company. Intrinsic Value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option.

3. Other Income includes an amount of Rs.426.24 lacs being the gain on surrender of Currency swap entered into with Standard Chartered Bank.

4. During the financial year the Company has sold land at Jigani for Rs.1800 lacs based on an agreement to sale and handing over of possession to the buyer pending registration of sale deed. The Company has recognised a profit of Rs.1747.12 lacs towards such sale.

5. The Company has incurred expenditure aggregating to Rs.153.39 lakhs during the year (Rs.168.96 lakhs) on development of products. The expenditure has been capitalised and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2013. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 " Intangible Assets".

6. In respect of company''s operations which includes execution of the turnkey projects. These turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

7. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs. NIL (Rs.188.17 lakhs) and net off product development expenses Rs.153.39 lakhs (Rs.168.96 lakhs).

8. Reconciliation of Excise and Service Tax Records / VAT Records with the Financial Records are under Progress. Adjustments if any which may arise are not ascertainable and would be carried out in the Books upon completion of Reconciliation.

9. During the Year the company has completed installation and commenced production from 01.07.2012 in the new facility at Harohali, Bangalore. Company has capitalised an amount of Rs.6,277.06 lacs towards the project including preoperative expenses of Rs.1,771.11 lacs comprising of (a) Interest and Bank Charges Rs.1,246.41 lacs (b) Proto type development Rs.214.38 lacs (c) Employee expenses Rs.104.85 lacs and (d) Other expenses Rs.205.47 lacs.

10. Trade Receivables includes an amount of Rs.731.15 lacs being the Liquidated Damages recovered by some customers. The Company is in the process of recovering the said amount and pending recovery, no provision is considered in the accounts towards Liquidated Damages.

11. Trade Receivables includes an amount of Rs.160.91 lacs being the outstanding from Foreign Debtors for more than 1 Year. The Company is in the process of getting necessary approval from Reserve Bank of India towards extension of time limit for collection.

12. The Company has made an investment of Rs.15502.10 lacs in its wholly owned subsidiary at Singapore. Considering the long term prospective and future plans by the management, no provision towards impairment of investment has been.

13. Expenditure incurred on account of borrowing costs amounting to Rs.206.76 lakhs (Rs.593.81 lakhs) is capitalized towards new projects.

14. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has relaxed the requirement of the immediate debit / credit of Foreign exchange translation differences on long term foreign currency monetary items to the Statement of Profit & Loss till 31st March 2020. Further the MCA inserting a new para 46A in AS11 allowed Companies to defer foreign exchange translation differences on long term foreign currency monetary items for entitites which had not opted for such relaxation earlier. The Company during the financial year has opted for the relaxation as given in Para 46A and has deferred an amount of Rs.721 lacs being the foreign exchange difference on long term external commercial borrowing from Standard Chartered Bank. The amount would be written off over a period of three years, being the loan tenure.

15. Operating Lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.117.86 lakhs (Rs.89.81 lakhs)

16. Earnings Per Share

The earnings considered in ascertaining Earning per share comprise the profit after tax.The number of shares used in computing Basic Earning per share is the weighted average number of shares outstanding during the year as follows:

17. Confirmation of balance has not been obtained from some of the creditors, debtors and to certain parties to whom the Company has given advances.

18. The company is engaged in power transmission and distribution segment and the same is being reported.


Mar 31, 2012

1.1 Rights, preferences and restrictions attached to shares Equity Shares: The company has one class of equity shares having a par value of Rs.2 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amount, in proportion to their shareholding.

1.2 Shares Reserved for issue under Options and Contracts /Commitments for sale of Shares

(a) Employee Stock Option Scheme

During 2009-10, the Company established "Easun Rerolled Employee Stock Option Plan 2009" under which 10,00,000 options have been allocated for being granted to the employees and non promoter directors . The Company has obtained in-principle approval from National Stock Exchange Limited , Mumbai (NSE) and Bombay Stock Exchange Limited, Mumbai (BSE) for listing upto a maximum of 10,00,000 shares pursuant to exercise of options granted under the Scheme. Each option comprises one underlying Equity Shares of Rs.10/- each. This scheme has been formulated in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,1999. As per the Scheme, the Compensation Committee grants options to senior employees and non promoter directors. The options are granted at a price, which shall not be less than the par value of equity shares of the Company and shall not be more than the Market price as defined in the Guidelines.

(b) Issue of Share Warrants

During 2010-11, the Company has issued 20,00,000 Convertible Equity Warrants at Rs.133.76 per warrant in terms of the extant guidelines of SEBI on preferential issue. Each warrant is convertible into one equity shares of Rs.2 each within 18 months from the date of allotment. The Company has received Rs.668.80 Lacs towards 25% of the warrant as advance money. The balance amount is payable at the time of exercise of the option i.e., on 31st July 2012.

2 .1 For the year 2011-12, the Board of Directors have recommended a dividend of Rs.0.20 per share, which is subject to the approval by shareholders. During the previous year 2010-11, the Company had declared and distributed a dividend of Rs.1.20 per share.

2.2 Unsecured Loans

(a) The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.74.53 lacs by the department of Sales tax, Government of Tamilnadu. The underlying deferred sales tax payable by the company from the financial year commencing from 2013-14.

(b) During the year 2007-08 the company raised funds through issue of Zero Coupon Foreign currency Convertible Bond aggregating to USD 35 million (Rs.13,846 lacs) with an option to the investor to convert the FCCBs into equity shares of the company at an initial conversion price of Rs.400 per share at a fixed rate of exchange on conversion Rs.39.45=USD 1, at any time after December 5, 2007 and prior to November 28, 2012 and 34,51,875 shares would be issuable on November 28, 2012 unless previously converted, redeemed, repurchased and cancelled, the balance FCCBs will be redeemed on December 05, 2012 at 142.56% of their principal amount. The amount of premium on such redemption will be to the tune of Rs.674 lacs. Out of the aforesaid FCCBs, there were no FCCBs converted to equity shares as at the year end.

(c) During the year 2009-10, the company has bought back and cancelled 310 Nos of 5 years FCCB of the face value of USD 100,000 each, as per the notification of Reserve Bank of India, at a discount to the face value. Consequent to this the company is absolved of its liability towards the bond holders whose bonds stands cancelled.

3.1 The interoperate deposits are repayable with in 6 months/12 months from the date of the acceptance and carry an interest rate in the range of 13.5% - 14.5% p.a

4. Gratuity and Leave for AS 15 Disclosure

A. Defined Benefit Plan:

(i) Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan provides for, on retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.

(ii) Leave Encashment (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.

B. Defined Contribution Plan (Funded)

Provident Fund

All employees are entitled to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund commissioners as per law.

5. Employee Stock Option Scheme

5.1 During the year 2010-11 the Compensation Committee has granted 1,97,245 options to its senior employees and non-promoter directors. The options granted vest over a period of 1 to 2 years; and can be exercised over a maximum period of 6 months from the date of vesting. The difference between the market price of the share underlying the value of options granted on the date of grant and the exercise price of the option are expensed over the vesting period as per the SEBI guidelines. The net impact of the movement in option granted during the period resulted in a charge of Rs.17.81 lacs (Previous Year- Rs.24.41 Lacs) to the Statement of Profit and Loss during the year.

5.2 Method Used for Accounting for Share Based Payment Plan:

The Company has used Intrinsic Value Method to account for the compensation cost of stock option to employees of the Company. Intrinsic Value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option.

5.3 Method Used for Accounting for Share Based Payment Plan:

The Company has used Intrinsic Value Method to account for the compensation cost of stock option to employees of the Company. Intrinsic Value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option.

6. Contingent Liabilities and Commitments Rs Lacs

A. Contingent Libilities 2012 2011

(a) Letters of Credit opened by Bank for purchase of raw materials and components 3,736.97 5,308.56

(b) Bills Discounted with bank 39.84 516.40

(c) Counter Guarantee given to bankers in respect of Guarantees given by them 14,183.85 13,020.01

(d) Bonds executed in favour of President - -

of Inda for import of material at concessional rate of duty 8.95 49.98

(e) Sales effected under CST - liability towards submission of C Forms 2,785.36 2,555.68

(f) Disputed amounts of Income Tax paid Assessment year

2001-02 30.02 30.02

2003-04 47.85 47.85

2004-05 26.13 26.13

2005-06 70.28 70.28

2006-07 55.42 55.42

2008-09 306.33 306.33

(g) Disputed amounts of Sales Tax, Karnataka for the FY 2007-08 63.65 63.65

(h) Disputed amounts of Sales Tax, Karnataka for the FY 2008-09 41.78 41.78

(i) Disputed Customs Duty paid under protest 66.38 66.38

(j) VAT Demand of West Bengal for FY 2009-10 7.99 -

B. Capital Commitment (a) Estimated amount of capital commitment on account of Fixed Assets 695.21 1,809.51

7. The Company has incurred expenditure aggregating to Rs.168.97 lacs during the year (Rs.229.35 lacs) on development of products. The expenditure has been capitalized and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2012. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 " Intangible Assets".

8. In respect of company's operations which includes execution of the turnkey projects. These turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

9. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs.188.17 lacs (Rs.327.17 lacs) and net off product development expenses Rs.168.97 lacs (Rs.229.35 lacs).

10. Expenditure incurred on account of borrowing costs amounting to Rs.593.81 lacs (Rs.263.79 lacs ) is capitalized towards new projects and disclosed under Capital Works in Progress.

11. Operating Lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.89.81 lacs (Rs.88.06 lacs)

12. Confirmation of balance has not been obtained from some of the creditors, debtors and to certain parties to whom the Company had given advances.

13. The company has recognized

Rs.87.72 lacs as on 31st March 2012 as Minimum Alternate Tax (MAT) credit entitlement (Previous Year - Rs.82.60 lacs), which represents the portion of MAT Liability, the credit which would be available based on the provisions of Sec 115 JAA of the Income Tax Act, 1961.

14. The company is engaged in power transmission and distribution segment and the same is being reported.

15. The Financial Statements for the year ended 31st March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act,1956. Consequent to the Notification of Revised Schedule VI under the Companies Act,1956, the Financial Statements for the year ended 31st March 2012 are prepared as per Revised Schedule VI. Accordingly, previous year's figures have also been reclassified to confirm to this year's classification.


Mar 31, 2011

1. Contingent Liabilities not provided for in the Accounts:

a) Letters of credit opened by Bank for purchase of raw materials and components Rs.53,08,55,861 (Rs.29,13,13,542).

b) Bills discounted with bank Rs.5,16,40,097 (Rs.1,02,22,125).

c) Counter Guarantee given to bankers in respect of Guarantees given by them Rs.130,20,00,891 (Rs. 112,07,29,906).

d) Bonds executed in favour of President of India for import of material at concessional rate of duty Rs.49,97,725 (Rs.78,68,647).

e) Estimated amount of Capital commitment on account of Fixed Assets (Net of advances) amount to Rs. 18,09,50,768 (Nil).

f) In respect of sales effected under CST towards submission of C-Forms Rs.25,55,68,000 (Rs. 12,34,90,668).

g) Disputed amounts of income tax

Assessment year Disputed amount of Income tax

2001-02 Rs.30,02,382

2003-04 Rs.47,85,258

2004-05 Rs.26,12,561

2005-06 Rs.70,28,103

2006-07 Rs.55,41,946

2008-09 Rs.3,06,33,157

h) Disputed amount of Sales Tax, Karnataka of Rs.63,64,825 for the financial year 2007-08

2. Confirmation of balance has not been obtained from some of the creditors, debtors and to certain parties to whom the company has given advances.

3. Foreign Currency Convertible Bonds

a) During the year 2007-08 the company raised funds through issue of Zero Coupon Foreign currency Convertible Bond aggregating to USD35 million (Rs. 13,846 lakhs) with an option to the investor to convert die FCCBs into equity shares of the company at an initial conversion price of Rs.400 per share at a fixed rate of exchange on conversion Rs.39.45 =USD 1, at any time after December 5, 2007 and prior to November 28, 2012 and 34, 51,875 shares would be issuable on November 28.2012.

b) During the previous year, the company has bought back and cancelled 310 Nos of 5 years FCCB of the face value of USD 1,00,000 each, as per the notification of Reserve Bank of India, at a discount to the face value. Consequent to this the company is absolved of its liability towards the bond holders whose bonds are cancelled.

c) Unless previously converted, redeemed, repurchased and cancelled, the balance FCCBs will be redeemed on December 05, 2012 at 142.56% of their principal amount. The amount of premium on such redemption will be to the tune of Rs.674 lakhs. Out of the aforesaid FCCBs, there were no FCCBs converted to equity shares as at the year end. The FCCBs pending conversion as at the year end aggregating to Rs. 1,582 lakhs (without considering exchange fluctuation) are grouped under "Unsecured Loans".

4. The Company issued 20,00,000 share warrants of Rs.2 each @ Rs. 133.76 per warrant to the promotors against which initial deposit of Rs.6,68,80,000 has been received during die year.

5. Employee Stock Option Scheme

During 2009 2010, the Company established the "Easun Reyrolle Employee Stock Option Plan 2009" under which 10,00,000 options have been allocated for being granted to the employees and non-promoter Directors. The Company has obtained in-princi pie approval from both National Stock Exchange of India Limited, Mumbai (NSE) and Bombay Stock Exchange Limited, Mumbai (BSE) for listing up to a maximum of 10,00,000 shares pursuant to exercise of options granted under the Scheme. Each option comprises one underlying Equity Share of Rs.10/- each. This Scheme has been formulated in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. As per die Scheme, die Compensation Committee grants options to senior employees and non-promoter Directors. . The options are granted at a price, which shall not be less than the par value of equity share of the Company and shall not be more than the Market price as defined in the Guidelines.

During the financial year 2010-11 the Compensation Committee has granted 1,97,245 options to its senior employees and non-promoter directors. The options granted vest over a period of 1 to 2 years; and can be exercised over a maximum period of 6 months from the date of vesting.

The difference between the market price of the share underlying the options granted on the date of grant and the exercise price of the option are expensed over die vesting period as per the SEBI guidelines. The net impact of the movement in option granted during die period resulted in a charge of Rs.24,40,907 (Previous Year NIL) to the Profit & Loss Account during the year.

Method Used for Accounting for Share Based Payment Plan:

The Company has used Intrinsic Value Method to account for the compensation cost of stock option to employees of the Company. Intrinsic Value is the amount by which the quoted market price of the underlying share exceeds the exercise price of the option.

6. The company has incurred expenditure aggregating to Rs.2,23,65,902 during the year (Rs. 1,68,83,843) on development of products. The expenditure has been capitalised and carried in the financial statements under the head Intangible Asset Product Development as on 31s' March 2011. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and could be capitalized as per AS-26 "Intangible Assets".

7. In respect of company's operations which includes execution of the turnkey projects. These turnkey projects significantly involve supply of equi pment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

8. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs.3,27,17,105 (Rs.2,47,67,949) and net off product development expenses Rs.2,23,65,902 (Rs.1,68,83,843).

9. Expenditure incurred on account of borrowing costs amounting to Rs.2,63,79,207 (Rs.46,863) is capitalized towards new projects and disclosed under Capital Work-in Progress.

10. AS-15, Employee Benefits

a. Defined Benefit Plan: Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan provides for, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines me contribution premium required to be paid by the trust.

Leave Encashment Liability (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in me books of accounts, covering permanent employees.

Detailed Annexure A enclosed

b. Defined Contribution Plan Provident Fund

All employees are entided to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund commissioners as per law.

11. The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.74,53,000 by the department of Sales tax, Government of Tamilnadu. The underlying deferred sales tax payable by the company from the financial year commencing from 2013-14.

12. The company is engaged in power transmission and distribution segment and the same is being reported.

13. Operating lease

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to die Company for renewing at the end of the initial term. Rental expenses for operating leases included in die income statement for die year is Rs.88,06,256 (Rs.64,55,350).

14. Income Tax

The Company has recognized Rs.82,59,877 as on 31st March 2011 as Minimum Alternate Tax (MAT) credit entitlement (previous year Nil), which represents the portion of MAT Liability, the credit of which would be available based on the provisions of Section 115JAA of the Income Tax Act, 1961. The management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

14. Previous year's fiqures have been regrouped wherever necessary to conform to current year's classifications. Previous year's figures are shown in brackets.

15. Figures have been rounded off to the nearest rupee.


Mar 31, 2010

1 . Contingent Liabilities not provided for in the Accounts:

a) Letters of credit opened by Bank for purchase of raw materials and components Rs.29,13,13,542 (Rs.12,96,05,782).

b) Bills discounted with bank Rs.1,02,22,125 (Rs.7,19,88,700).

c) Counter Guarantee given to bankers in respect of Guarantees given by them Rs 1,12,07,29,906 (Rs.45,96,12,936).

d) Bonds executed in favour of President of India for payment of excise duty Rs Nil ( Nil) and for import of material at concessional rate of duty Rs.78.68,647 (Rs.62,78,350).

e) Estimated amount of Capital commitment on account of Fixed Assets ( Net of advances) amount to Rs Nil ( Rs.1,17,66,294)

f) In respect of sales effected under CST towards submission of C-Forms- Rs.12,34,90,668 (Rs.10,57,30,573)

2. Confirmation of balance has not been obtained from some of the creditors, debtors and to certain parties to whom the company has given advances.

3. Foreign Currency Convertible Bonds

a) During the year 2007-08 the company raised funds through issue of Zero Coupon Foreign currency Convertible Bond aggregating to USD 35 million (Rs13846 lakhs) with an option to the investor to convert the FCCBs into equity shares of the company at an initial conversion price of Rs. 400 per share at a fixed rate of exchange on conversion Rs.39.45 = USD 1, at any time after December 5, 2007 and prior to November 28, 2012 and 34, 51,875 shares would be issuable on November 28, 2012.

b) During the year, the company has bought back and cancelled 310 nos of 5 years FCCB of the face value of USD 1,00,000 each, as per the notification of Reserve Bank of India, at a discount to the face value. The company has achieved a reduction in liability of bonds aggregating Rs. 6113 lakhs which has been disclosed as an exceptional income. Consequent to this the company is absolved of its liability towards the bond holders whose bonds are cancelled.

c) Unless previously converted, redeemed, repurchased and cancelled, the balance FCCBs will be redeemed on December 05, 2012 at 142.56% of their principal amount. The amount of premium on such redemption will be to the tune of Rs. 674 lakhs. Out of the aforesaid FCCBs, there were no FCCBs converted to equity shares as at the year end. The FCCBs pending conversion as at the year end aggregating to Rs. 1,582 lakhs (without considering exchange fluctuation) are grouped under "Unsecured Loans".

4 The company has incurred expenditure aggregating to Rs. 1,68,83,843 during the year (Rs.1,58,19,514) on development of products. The expenditure has been capitalised and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2010. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and could be capitalized as per AS-26 "Intangible Assets".

5. In respect of companys operations which includes execution of the turnkey projects which significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.

6. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs.2,47,67,949 (Rs.2,05,73,670) and net off product development expenses Rs.1,68,83,843 (Rs.1,58,19,514).

7. Expenditure incurred on account of borrowing costs amounting to Rs.46.863 is capitalized towards new projects and disclosed under Capital Works in Progress.

8 . Managerial Remuneration:

Commission to Non-Executive Directors

9 . Disclosure under AS-15, Employee Benefits

a . Defined Benefit Plan:

Gratuity (Funded)

In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan provides for, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.

Leave Encashment Liability (Unfunded)

In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.

b . Defined Contribution Plan

Provident Fund

For all categories of employees the company makes contributions to Regional Provident Fund commissioners as per law.

10. The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.74,53,000 by the department of Sales tax, Government of Tamilnadu. The underlying deferred sales tax payable by the company from the financial year commencing from 2013-14.

11. The company is engaged in power transmission and distribution segment and the same is being reported.

12. Disclosures as AS 18 for the year 2009-10 Related Party Disclosures of Associate Companies

13.Operating leases

The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.64,55,350 (Rs.80,09,500)

14. Financial Lease

**Based on the information available with the company in respect of micro, small and medium enterprises (as defind in The Micro, Small and Medium Enterprises Development Act, 2006). The company is generally regular making payments of dues to such enterprises. Hence, the question of payments of interest or provision thereof towards belated payments does not arise.

* Including Micro processor / Non-Micro processor based Products - 25,773 (20,478) Wind Energy - 4,49,977(4,87,197) used for Captive Consumption

**Kilowatt/hour units

# Details of Licensed capacity are not provided in view of de-licensing of Products.

* Including Micro processor / Non-Micro processor based Products - 25,773 (20,478) Wind Energy - 4,49,977 (4,87,197) used for Captive Consumption

15 Earnings Per Share

The earnings considered in ascertaining Earning per share comprise the profit after tax. The number of shares used in computing Basic earning per share is the weighted average number of shares outstanding during the year as follows:

16. Previous years

have been regrouped wherever necessary to conform to current years classifications. Previous years figures are shown in brackets.

17. Figures have been rounded off to the nearest rupee.

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