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Notes to Accounts of Finolex Cables Ltd.

Mar 31, 2016

A) Commitments

i. The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) scheme, of the Government of India, at concessional rates of duty on an understanding to fulfill quantified exports against which future obligation aggregates to Rs. 1,047.9 million (Previous year Rs. 1,057.3 million) which is to be discharged over a period of six / eight years from the date of licence. This includes amount of Rs.123.64 million, referred in Note 29 (a) III above.

ii. Estimated amount of contracts remaining to be executed on capital account (net of advances paid), not provided for Rs. 251.2 million (Previous year Rs. Nil).

1. (a) Other Provisions:

Other provision for duties and taxes represents provision for disputed duties and taxes. There are no changes during the year.

Outflow on account of said provision depends on the settlement of the pending cases.

2. Foreign Exchange differences

a. Exchange differences either on settlement or on translation are dealt with in the Statement of Profit and Loss. However exchange differences, arising either on settlement or on translation, in case of long-term borrowings used for acquisition of fixed assets are capitalised. Accordingly, foreign exchange loss of Rs Nil million (Previous year: Rs 11.3 million) arising during the year has been added to the cost of fixed assets.

3. Corporate Social Responsibility Expenses (CSR)

During the year, the company has incurred an expenditure of Rs. 30.1 million towards Corporate Social Responsibilities (CSR) activities which includes contribution to a educational Institute for construction of a Library, which is eligible under section 135 of Companies Act 2013 read with Schedule VII.

4. Segment Reporting:

The Business segment has been considered as a primary segment for disclosure. The categories included in each of the reported business segment are as follows:

i) Electrical Cables

ii) Communication Cables

iii) Copper Rods

iv) Others

The above business segments have been identified considering

i) The Nature of the product/services

ii) The Related risks and returns

iii) The Internal financial reporting systems

Revenue and expenses have been accounted for based on their relationship to the operating activities of the segment. Revenues and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Expenses". Assets and Liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Assets/Liabilities".

5. Previous year figures have been regrouped / reclassified to conform to current year''s classification


Mar 31, 2015

1) Terms/Rights Attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 1/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The Directors have recommended, subject to approval of the shareholders at the ensuing Annual General Meeting, a Dividend for the Year Ended on 2015 : 10% (2014: 25%).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

The distribution will be in proportion to the number of equity shares held by the shareholders.

2. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in Lacs)

As at 31st March Particulars 2015 2014

(i) Contingent Liabilities

(a) Claims against the Company's Disputed Liabilities not Acknowledged as Debts

Appeal filed in respect of disputed demand of Income Tax for Assessment Year 2007-08 146.22 146.22

(Management is contesting against these matters and hopeful to succeed the same)

(b) Guarantees & Securities

* Corporate Guarantees given for Credit facilities taken by Subsidiary Companies 15,962.74 15,836.54

* Corporate Guarantees given and Security provided for Credit facilities taken by Subsidiary 9,500.00 - Companies

* Performance Guarantees given under EPCG (Refer Note No.iii) 566.17 566.17

(c) Other money for which the Company is contingently liable for litigation matter

* Bond given to Custom Authority 3,580.75 3,580.75

29,755.88 20,129.68

(d) A search and seizure was carried out u/s 132 of the Income Tax Act, 1961 (the Act) by the Income Tax Authorities on 29th April, 2014 on the Company. Consequently, the Company have disclosed a sum of Rs. 351.36 Lacs for earlier years. Such disclosed amount for earlier years does not affect the accumulated profits of the Company as on 1st April, 2014 only such tax of Rs. 117.69 Lacs have been accounted for. Such disclosed amount is subject to final acceptance by the tax authorities u/s 143(3)/153A of the Act. Further any additional liability consequent to such disclosure under the Income Tax Act or any other Act is presently not ascertainable.

3. Other Commitment

The Company has obtained licenses under the Export Promotion Credit Guarantee ('EPCG') Scheme for importing capital goods at a concessional rate of custom duty against submission of bank guarantee and bonds.

Under the terms of the respective schemes, the Company is required to earn foreign exchange value equivalent to, eight times and in certain cases six times of the duty saved in respect of licenses where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance, as applicable with in a specified period from the date of import of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-2014 as issued by the Central Government of India, covers both manufacturer's exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy 2009-2014, the Company is required to export goods of FOB value of Rs. 3,882.39 Lacs (Previous Year : Rs. 3,675.32 Lacs). Non fulfilment of the balance of such future obligation, if any entails to the Government to recover full duty saved amount and other penalties under the above referred scheme.

4. SEGMENT DISCLOSURES

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

5. EMPLOYEE STOCK OPTION PLAN

i. During the Financial Year 2014-15, 2013-14 and 2010-11, the Company has granted Employee Stock Options to Employees of the Company and its Subsidiary Companies.

ii. Silent Features

(iii) Method of Accounting of ESOP

The Company has adopted the Intrinsic Value-Based Method of Accounting for Stock Options granted to the employees of the Company and its Subsidiaries. The difference between the Intrinsic Value and the Exercise Price is being amortized as Employee Compensation Cost over the vesting period. For the year ended March 31, 2015 the Company has recorded Stock Compensation Expense of Rs. 44.99 Lacs (Previous Year Rs. 364.17 Lacs)

6. DISCLOSURE REQUIRED BY CLAUSE 32 OF THE LISTING AGREEMENT

Amount of Loans and Advances in the nature of Loans outstanding to Subsidiaries / Step Down Subsidiaries and Other Companies.

a) Investment by the loanee in the share of the Company

None of the loanees and loanees of subsidiary companies has, per se, made investments in Shares of the Company.

7. RELATED PARTY DISCLOSURES

Related parties and transactions with them during the year as identified by the Management are given below:

(i) Parties where control exists

Direct Subsidiary Companies:

* Atled Technologies Private Limited (ATPL)

* Caravella Casino (Goa) Private Limited (CCGPL)

* Coastal Sports and Ventures Private Limited (CSVPL) (w.e.f. 01.04.2013 till 31.07.2013)

* Daman Entertainment Private Limited (DEPL)

* Daman Hospitality Private Limited (DHPL)

* Delta Holding (USA) Inc. (DHUSA) (till 10.12.2014)

* Delta Hospitality & Entertainment Mauritius Limited (DHEML)

* Delta Lifestyle and Entertainment Private Limited (DLEPL)

* Delta Offshore Developers Limited (DODL)

* Delta Pan Africa Limited (DPAL)

* Delta Pleasure Cruise Company Private Limited (DPCCPL)

* Highstreet Cruises & Entertainment Private Limited (HCEPL)

* Interactive Gaming & Sports Pty Limited (IGSP)

* Marvel Resorts Private Limited (MRPL)

Step down Subsidiaries / LLPS:

* Buddy Communication and Productions Pte Limited (BCPL)

* Delta Corp East Africa Limited (DCEAL)

* Delta Hotels Lanka (Private) Limited (DHLKPL)

* Kaizan LLP (KLLP) (till 21.08.2014)

* Victor Hotels and Motels Limited (VHML)(amalgamated with the Company w.e.f. 01.10.2013

* iGAS Services Pty Limited (IGSPL)

* Results International Pte Limited (RIPEL)

* Results International Pty Limited (RIPYL)

* Canbet UK Limited (CUKL)

* Canbet Sports Bookmakers UK Limited (CSBUKL)

Associate Company

* Zeicast Pte Limited (ZPL) (through its Step down subsidiary Company HCEPL)

Joint Venture

* Freedom Charter Services Private Limited (FCSPL) (from 28.03.2014)

(ii) Key Management Personnels (KMP):

* Mr. Jaydev Mody (JM) - Chairman

* Mr. Ashish Kapadia (AK) - Managing Director

* Mr. Hardik Dhebar (HD) - Group CFO

(iii) Relatives of Key Management Personnels:

* Mrs. Zia Mody (ZM) - Wife of Chairman

* Mrs. Urvi Piramal (UP) - Sister of Chairman

* Mrs. Kalpana Singhania (KS) - Sister of Chairman

* Ms. Aditi Mody (ADM) - Daughter of Chairman

* Ms. Anjali Mody (AM) - Daughter of Chairman

(iv) Enterprises over which persons mentioned in (ii) and (iii) above exercise significant influence:

* AAA Holding Trust (AAAHT)

* Aarti J Mody Trust (AAJMT)

* Aditi J Mody Trust (ADJMT)

* Anjali J Mody Trust (ANJMT)

* Arrow Textiles Limited (ATL)

* AZB & Partners (AZB)

* Delta Magnets Limited (DML)

* Delta Foundation (DF)

* Freedom Registry Limited (FRL)

* Highland Resorts Private Limited (HRPL)

* J M Township and Real Estate Private Limited (JMT)

* Jayem Realty Solutions Private Limited (JRSPL)

* NMRT Partners Communication and Consultancy LLP (SKR)

* Pavurotti Finance & Investments Private Limited (PFIPL)

* Peninsula Facility Management Services Limited (PFMS)

* Peninsula Land Limited (PLL)

* Whitecity Mercantile Company Private Limited (WC)

9. EMPLOYEE BENEFITS

Disclosure required under Accounting Standard - 15 (revised 2005) for "Employee Benefits" are as under:

i) The Company has recognized the expected liability arising out of the compensated absence and gratuity as at 31st March, 2015 based on actuarial valuation carried out using the Projected Unit Credit Method.

9. EXCEPTIONAL ITEMS

An exceptional item included in financial statement is on account of gain of Rs. 343.32 Lacs (Previous Year : ' 1,546.11 Lacs) arising on partial liquidation proceeds received from overseas subsidiary (in Liquidation) and gain on account of depreciation gain of Rs. 23.40 Lacs (Previous Year : Rs. Nil) due to change in method of depreciation as per Companies Act, 2013 and provision made for diminution in value of Investment and loans & advances in Foreign Subsidiary in the business of online gaming amounting to Rs. Nil (Previous Year : Rs. 1424.05 Lacs ) respectively.

10. MAT CREDIT ENTITLEMENT

MAT Credit Entitlement of Rs. 2,167.61 Lacs (Previous Year Rs. 2,374.51 Lacs) is based on future business projections of Company as projected by Management, and the same have been relied upon by the Auditors.

11. The Company has incurred total expenditure of Rs. 82.23 Lacs on CSR activities as defined under section 135 of the Companies Act, 2013 along with relevant rules.

12. PREVIOUS YEAR COMPARATIVES

Previous year's figures have been regrouped/ rearranged/ recasted/reclassified/ re-adjusted wherever necessary to conform to the Current Year's classifications. Current Year Figures are really not Comparable with corresponding Previous Year figures as Current Year Figures includes the figures of amalgamated Companies for whole year while previous year they were for part of the year.


Mar 31, 2014

1. a. Terms / rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs.2/- per share. Each holder of Equity Shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting,except in case of Interim dividend.

During the year ended 31st March, 2014 the amount of per share dividend recognised as distributions to the equity shareholders is Rs. 1.60 per share ( Previous year Rs. 1.20 per share) In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

b. Shares held by holding/ultimate holding company and/or their subsidiaries/associates

There are no Shares held by holding/ultimate holding company and/or their subsidiaries/associates.

c. Aggregate number of bonus Shares issued, Shares issued for consideration other than cash and Shares bought back during the period of five years immediately preceding the reporting date

There are no bonus Shares issued, Shares issued for consideration other than cash and Shares bought back during the period of five years immediately preceding the reporting date.

d. Terms of securities issued with conversion option into Equity / Preference Shares There are no securities issued with conversion option into Equity/preference Shares

2. Contingent Liabilities and commitments

a) Contingent liabilities

(Rs. in million)

Particulars 2014 2013

Demands disputed by the Company in appeal

Excise 141.3 201.5

Customs 13.4 13.4

Sales tax 944.5 946.9

Income tax 76.6 497.9

Appeals preferred by the authorities against Appellate decisions in favour of the Company Income tax 42.4 524.4

Guarantees given by Bankers on behalf of the Company, towards performance and other 1,212.1 573.8

matters, (Secured by hypothecation of Stock in trade, Book Debts, Stores and Spares etc.)

Margin deposits against the above guarantee Rs 29.7 million (Previous Year Rs 75.0 million)

Corporate counter guarantee given to J-Power Systems Corporation Japan, joint venture 245.0 -

partner towards credit facilities from a bank availed by the Joint Venture Company, Finolex J-Power Systems Limited

Claims against the Company by a bank not acknowledged as debts in respect of derivative transactions which are under dispute 175.0 170.9

b) Commitments

i. The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) scheme, of the Government of India, at concessional rates of duty on an understanding to fulfil quantified exports against which future obligation aggregates to Rs. 1,211.7 million (Previous year Rs. 1,474.0 million) over a period of six / eight years from the date of license.

ii. Estimated amount of contracts remaining to be executed on capital account (net of advances paid), not provided for Rs. 77.0 million (Previous year Rs. 279.6 million).

30. Provision for Derivatives:

Provision for derivatives as at the year-end is Rs. 525.2 million (Previous year Rs. 525.2 million) including provided during the year of Rs. Nil million (Previous year Rs. 233.9 million).

3. Foreign Exchange differences

a) In terms of the circular issued by Ministry of Corporate Affairs ("MCA"), in respect of changes to Accounting Standard 11 and subsequent amendments thereto, the Company had in earlier years exercised the option of capitalising foreign exchange difference arising on long term foreign currency borrowings taken for acquisition of fixed assets. Accordingly, foreign exchange loss of Rs 46.1 million (Previous year: Rs 35.2 million) arising during the year has been added to the cost of fixed assets.

b) As per the clarifications of MCA, the Company in the previous year had adjusted exchange loss of Rs 34.9 million to the cost of respective fixed assets with retrospective effect from 1 April 2011, which was earlier charged to Statement of Profit and Loss as borrowing cost. The corresponding reversal was reflected in Other Income in the previous year.

4. Preform Manufacturing Facility Based on the periodic review, it is the Company’s view that the Preform Manufacturing Facility which was impaired in 2004-05 continues to remain impaired. During the year the Company has not made any further provision (Previous Year: Rs 15.5 million). Consequently, the impairment loss of Rs. 304.0 million (Previous Year Rs.304.0 million) is being carried forward.

5. Segment Reporting

The Business segment has been considered as a primary segment for disclosure. The categories included in each of the reported business segment are as follows:

i) Electrical Cables

ii) Communication Cables

iii) Copper Rods

iv) Others

The above business segments have been identified considering

i) The nature of the product/services

ii) The related risks and returns

iii) The internal financial reporting systems

Revenue and expenses have been accounted for based on their relationship to the operating activities of the segment. Revenues and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Expenses". Assets and Liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Assets/Liabilities".


Mar 31, 2013

1 DEFERRED TAX

In accordance with Accounting Standard 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has accounted for Deferred Tax during the year. The components of Deferred Tax Assets to the extent recognized and Deferred Tax Liabilities as on 31st March, 2013 are as follows:

2 SEGMENT DISCLOSuRES

As per Accounting Standard (AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

3 employee stock option plan

i. During the year 2010-11, the Company has granted Employee Stock Options to Employees of the Company and Subsidiaries.

ii. Salient Features

The options are granted at the price determined by the Compensation Committee. Each option entitles the holder to exercise the right to apply for and seek allotment of one equity share of Rs. 1/- each. The option shall vest in four equal installments. Details of options granted during the financial year 2010-11 duly approved by the Compensation Committee under the said scheme are as under:

**Out of ESOP granted in November, 2010 employees of the Company and Subsidiary Companies have surrendered their unexercised right of ESOP to the Company. The Compensation Committee of the Board of Directors of the Company at its meeting held on 30th March, 2013, have cancelled 23,15,100 options granted in November, 2010.

4 DISCLOSURE REQUIRED BY CLAUSE 32 OF THE LISTING AGREEMENT

Amount of Loans and Advances in the nature of Loans outstanding to Subsidiaries /Step down Subsidiaries / Associates etc.

a) Loans and Advances in the nature of Loans

b) Investment by the loanee in the share of the Company

None of the loanees and loanees of subsidiary Companies has, per se, made investments in Shares of the Company.

5 RELATED PARTY DISCLOSURES

(A) Related parties and transactions with them during the year as identified by the Management are given below:

(i) Parties where control exists Direct Subsidiaries:

- Daman Entertainment Private Limited

- Delta Pleasure Cruise Company Private Limited (DPCCPL)

- Delta Adventures and Entertainment Private Limited (DAEPL)

- Delta Holding USA Inc. (DHUSA)

- Delta Hospitality & Leisure Private Ltd (DHLPL)

- Delta Leisure and Entertainment Private Limited (earlier known as Delta Cruises and Entertainment Private Limited (DLENPL)

- Delta Lifestyle and Entertainment Private Limited (DLEPL) (upto 19.03.2013)

- Delta Offshore Developers Limited (DODL)

- Delta Pan Africa Limited (DPAL)

Step-down Subsidiaries / LLPS:

- AAA Township Private Limited (AAATPL)

- Aman Infrastructure Private Limited (AIPL)

- Argyll Hotels Private Limited (AHPL)

- Atled Technologies Private Limited (ATPL)

- Caravella Casino (Goa) Private Limited (CCGPL)

- Coastal Sports and Ventures Private Limited (CSVPL)

- Daman Hospitality Private Limited (DHPL)

- Delta Corp East Africa Limited (DCEAL)

- Delta Hospitality and Entertainment Private Limited (DHEPL)

- Delta Square Limited (DSL)

- Delta Hotels Lanka (Private) Limited (DHLKPL)

- Freedom Charter Services Private Limited (FSCPL) (from 16.10.2012)

- Highstreet Cruises & Entertainment Private Limited (HCEPL)

- Highstreet Riviera Leisure (Goa) Private Ltd (HRLGPL) (through its Subsidiary Company DLEPL)

- Kaizan LLP (KLLP)

- Marvel Resorts Private Limited (MRPL)

- Samarpan Properties and Construction Private Limited (SPCPL)

- Samarpan Township Private Limited (STPL)

- Shree Mangesh Realty Private Limited (SMRPL)

- Victor Hotels and Motels Limited (VHML)

- Delta Hospitality and Entertainment (Mauritius) Ltd (DHEML)

Associate Companies:

- Zeicast Pte Limited (ZPL) (through its Step down subsidiary Company HCEPL)

- Interactive Gaming & Sports Pty Ltd (IGSP) (through its Step down subsidiary Company DLEPL)

(ii) Key Management Personnels (KMP):

- Mr. Jaydev Mody (JM) - Chairman

- Mr. Ashish Kapadia (AK) - Managing Director

- Mr. Hardik Dhebar (HD) - Group CFO

(iii) Relatives of Key Management Personnels:

- Mrs. Zia Mody (ZM) - Wife of Chairman

- Mrs. Urvi Piramal (UP) - Sister of Chairman

- Mrs. Kalpana Singhania (KS) - Sister of Chairman

- Ms. Anjali Mody (AM) - Daughter of Chairman

(iv) Enterprises over which persons mentioned in (ii) and (iii) above exercise significant influence:

- Anjoss Trading Private Limited (ATPL)

- Aarti Management Consultancy Private Limited (AMCPL)

- Aditi Management Consultancy Private Limited (ADCPL)

- Blackpool Realty Private Limited (BRPL)

- Arrow Textiles Limited (ATL)

- AZB & Partners (AZB)

- Delta Magnets Limited (DML)

- Freedom Registry Private Limited (FRPL)

- Peninsula Facility Management Services Private Limited (PFMS)

- Peninsula Land Ltd (PLL)

- Aarti J Mody Trust (AAJMT)

- Aditi J Mody Trust (ADJMT)

- Anjali J Mody Trust (ANJMT)

- Jayem Realty Solutions Private Limited (JRSPL)

- AAA Holding Trust (AAAHT)

- Pavurotti Finance & Investments Private Limited (PFIPL)

- Khemani & Sorabjee Charitable Trust (KSCT)

6 EMPLOYEE BENEFITS

Disclosure required under Accounting Standard - 15 (revised 2005) for "Employee Benefits" are as under:

i) The Company has recognized the expected liability arising out of the compensated absence and gratuity as at 31st March, 2013 based on actuarial valuation carried out using the Project Credit Method.

ii) The below disclosure have been obtained from independent actuary. The other disclosures are made in accordance with AS - 15 (revised) pertaining to the Defined Benefit Plan is as given below :

7 Pursuant to the Scheme of Amalgamation (‘the Scheme'') between the Company and Richtime Realty Private Ltd (RRPL) (the Transferor Company), as approved by the respective shareholders of both the Companies and subsequently approved by the Honorable High Court of Judicature at Mumbai vide its Order dated 21st December, 2012, which has been filed with the Registrar of Companies on 10th January, 2013 (the Effective Date), the entire business and the whole undertakings of the Richtime Realty Private Ltd (the Transferor Company) were transferred to, as a going concern and became vested in, the Company, effective from 1st April, 2011 (the appointed date). The Transferor and Transferee Company both are engaged in the business of real estate.

Accordingly, accounting treatment as per the scheme approved by the Hon''ble High Court has been given effect in the above financial statements and is as under:

- All the Assets and Liabilities of RRPL as at April 01, 2011 were incorporated in the financial of the Company at their book value.

- Inter-Company balances, if any, stands cancelled.

- The Equity Shares, if any held by the Transferee Company or its Wholly Owned Subsidiary in the Transferor Company stands cancelled and there shall be no further obligation/outstanding in that behalf.

- The excess of Net Assets of the Transferor Company transferred to the Transferee Company over the Equity Shares issued by the Transferee Company were credited to Capital Reserve of the Transferee Company. Working of Goodwill/ (Capital Reserve) is as under:

Pursuant to the Scheme, the Company had credited 335 Equity shares for each Equity Shares held by the Shareholders of the Transferor Company whose name was appearing as Registered Member / Shareholder of the Transferor Company on the record date. Accordingly, 16,74,665 Equity Shares of Rs. 1 each credited as fully paid up have been issued to the Shareholder of Transferor Company.

As per the conditions prescribed in the Accounting Standard (AS) 14 - "Accounting for Amalgamations" (AS 14), the Company was suppose to adopt Pooling of Interest method. However, to reflect the impact of the Scheme (approved by the High Court), the Company has adopted Purchase Method prescribed under the AS 14.

As per the Pooling of Interest method as prescribed in Accounting Standard 14, the difference arising if any, needs to be adjusted in the balance of General Reserve. However, as prescribed in the merger scheme approved by the Honorable High Court of Judicature at Mumbai vide its Order dated 1st April, 2011, the difference of Rs. 1,040.98 Lacs arising of account of such merger is recognized as Capital Reserve.

8 EXCEPTIONAL ITEM

An exceptional item included in financial statement is comprised of employee compensation expenses written back during the year. Due to the unexpected decrease in share price of the Company, which has fallen beyond Rs. 51 which is exercise price of ESOP granted in November, 2012 tranche, employees of the Company and it''s subsidiary Companies have surrendered their unexercised rights of ESOP to the Company. The Compensation Committee of the Board of Directors of the its Company at its meeting held on March 30, 2013, has accordingly, cancelled 23,15,100 options granted to grantees under ESOP Scheme of the Company and Subsidiary Companies. In view of the same, the Compensation Cost debited in Current Year as well as Earlier Years amounting to Rs. 516.27 Lacs has been reversed and shown as exceptional item in financial statements.

9 MAT CREDIT ENTITLEMENT

MAT Credit Entitlement of Rs. 1,808.11 Lacs (Previous Year Rs. 1,818.14 Lacs) is based on business projections of Company provided by Management, and the same have been relied upon the Auditors.

10 Borrowing cost capitalized for the year amounts to Rs. Nil (Previous year Rs. 168.58 Lacs).

11 PREVIOUS YEAR COMPARATIVES

Previous year''s figures have been regrouped/ rearranged/ recasted/reclassified/ readjusted wherever necessary to conform to Current Year''s classifications.


Mar 31, 2012

A. Terms / rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 2 per share. Each holder of Equity Shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share dividend recognised as distributions to the equity shareholders is Re. 0.80 ( Previous year Re. 0.70 )

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

b. Shares held by holding/ultimate holding company and/or their subsidiaries/associates

There are no shares held by holding/ultimate holding company and/or their subsidiaries/associates.

The company does not have any continuing defaults in repayment of loans and interest as on the reporting date.

Cash Credit and Packing credit from bank is secured by hypothecation of inventories and book debts. The cash credit is repayable on demand. Packing Credit and Acceptances are generally repayable within 180 days.

*The figure does not include any amount due and outstanding to be credited to Investor Education & Protection Fund.

1. Contingent Liabilities:

a) Disputed demands in appeal towards Excise Rs. 156.4 million (Previous year Rs. 107.1 million), Customs Rs. 13.4 million (Previous year Rs. 13.4 million) and Sales Tax Rs. 599.0 million (Previous year Rs. 471.3 million)

b) i) Disputed Income Tax demands and matters in Appellate proceedings Rs. 424.9 million (Excluding consequential interest or penalty), (Previous year Rs. 439.4 million).

ii) Appeals preferred by Income Tax Department against Appellate decisions in favour of the Company, wherein, should the ultimate decision be unfavourable to the Company, the liability is estimated to be Rs. 485.6 million (Previous year Rs. 570.1 million)

c) Guarantees given by Company's Bankers on behalf of the Company, towards performance and other matters, amounting to Rs. 474.3 million (Previous year Rs. 485.4 million), are secured by hypothecation of Stock in trade, Book Debts, Stores and Spares etc.

d) The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) scheme, of the Government of India, at concessional rates of duty on an understanding to fulfil quantified exports against which future obligation aggregates to Rs. 728.3 million (Previous year Rs. 791.9 million) over a period of six / eight years from the date of license.

e) Amounts claimed by Banks in respect of derivative transactions which are under dispute not acknowledged as debt Rs. 170.9 million (Previous year Rs.138.7).

2. Estimated amount of contracts remaining to be executed on capital account (net of advances paid), not provided for Rs. 37.1 million (Previous year Rs.307.9 million).

3. Pursuant to notification of 31st March 2009 issued by Ministry of Corporate Affairs, Government of India, in respect of changes to Accounting Standard 11 and subsequent amendments thereto the Company had opted for capitalisation of exchange difference in respect of long term foreign currency loans taken for acquisition of assets. Accordingly, the exchange difference has been recalculated based on the exchange rate prevalent on date of repayment of loan or 31.03.2012 as the case may be and an amount of Rs. 111.9 million has been capitalised during the year 2011-12.

Similar treatment has been accorded to foreign currency borrowings made after April 1, 2009 and the foreign exchange fluctuation gain pertaining to previous year amounting to Rs. 10.2 million being transitional has been debited to General Reserve.

Current Tax:

Provided in accordance with the provisions of the Income Tax Act 1961.

4. Trade Payable:

A) Outstanding to Suppliers other than Micro, Small & Medium Enterprise Rs. 563.6 million (Previous year Rs. 306.3 million) (Interest Paid/Payable is Rs. Nil, Previous year Rs. Nil)

B) Outstanding to Micro, Small & Medium Enterprise Rs. 4.5 million (Previous year Rs.0.7 million) includes Trade Payable Rs. 0.2 million (Previous year Rs. 0.6 million).

The identification of suppliers as Micro and Small Enterprises covered under the "Micro, Small and Medium Enterprises Development Act, 2006" was done on the basis of the information to the extent provided by the suppliers to the company. Total Outstanding dues of Micro and Small Enterprises, which were outstanding for more than stipulated period, are given below:

5. Based on the periodic review, it is the Company's view that the Preform Manufacturing Facility which was impaired in 2004-05 continues to remain impaired. Consequently, the impairment loss of Rs 288.5 million (Gross) is being carried forward. No further additions have been made to the impairment provisions, since there is no significant change in status.

6. Investment in Joint Venture

(a) 1. The name of the joint venture company : Finolex J-Power Systems Private Limited

2. Ownership interest : 49%

3. Country of Incorporation : India

On 13th December, 2007, the Company entered into a joint venture agreement with J-Power Systems Corporation of Japan, to offer complete turnkey solutions in extra high voltage (EHV) cable systems in India and abroad.

As on 31st March 2012, the Company has invested Rs. 480.2 million in the shares of the joint venture.

(b) 1. The name of the joint venture company : Corning Finolex Optical Fibre Private Limited

2. Ownership interest : 50%

3. Country of Incorporation : India

As on 31st March 2012, the Company has invested Rs. 0.5 million in the shares ofthe joint venture.

7. Related Party Transactions: Disclosures as required by Accounting Standard 18 "Related Party Disclosures" are given below:

a) List of Related Parties:

Associate Companies : Finolex Industries Limited

: Finprop Advisory Services Limited : Finolex Plasson Industries Private Limited

Joint Venture

: Finolex J-Power Systems Private Limited : Corning Finolex Optical Fibre Private Limited

Others

: Orbit Electricals Private Limited : Finolex Infrastructure Limited

b) Key management Personnel and Relatives

Key Management Personnel

1. Mr. P. P. Chhabria - Chairman

2. Mr. D. K. Chhabria - Managing Director

3. Mr. Mahesh Viswanathan - Director - Finance and Chief Financial Officer Relatives

Mr. K. P. Chhabria - Brother of Mr. P.P. Chhabria, and Father of Mr. D. K. Chhabria

B. The Company has entered into derivative transactions with an objective to hedge the financial risks associated with its business viz. foreign exchange and interest rate.

C. The Company has not hedged the following foreign currency exposures:

(i) Borrowings grouped under long and short categories equivalent to Rs. 891.9 million (Previous year Rs.1,493.9 million).

(ii) Creditors for imports equivalent to Rs. 144.6 million (Previous year Rs. 65.6 million)

(iii) Receivables equivalent to Rs. 39.6 million. (Previous year Rs. 25.3 million)

Revenue and expenses have been accounted for based on their relationship to the operating activities of the segment. Revenues and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Expenses". Assets and Liabilities which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under "Unallocable Assets/Liabilities".

8. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. Revised Schedule VI significantly impact presentation and disclosures made in the financial statements, particularly presentation of Balance Sheet. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2010

1. Contingent Liabilities:

a) Liability on account of Sales Bills discounted with Bank Rs. 385.096 million (Previous year Rs. 395.817 million).

b) Disputed demands in appeal towards excise Rs. 73.623 million (Previous year Rs. 61.860 million), customs Rs. 13.427 million (Previous year 13.427 million) and sales tax Rs. 453.491 million (Previous year Rs. 71.370 million)

c) i) Disputed Income Tax demands and matters in appellate proceedings Rs. 440.390 million (Excluding consequential interest or penalty), (Previous year Rs. 468.110 million).

Notes forming part of the Accounts

ii) Appeals preferred by Income Tax Department against Appellate decisions in favour of the Company, wherein, should the ultimate decision be unfavourable to the Company, the liability is estimated to be Rs. 538.290 million (Previous year Rs. 535.860 million)

d) Guarantees given by Companys Bankers on behalf of the Company, towards performance and other matters, amounting to Rs. 523.237 million (Previous year Rs. 663.149 million), are secured by hypothecation of Stock in trade, Book Debts, Stores and Spares etc.

e) The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) scheme, of the Government of India, at concessional rates of duty on an understanding to fulfil quantified exports against which future obligation aggregates to Rs. 1,017.00 million (Previous year Rs. 1,297.321 million) over a period of eight years from the date of license.

2. Estimated amount of contracts remaining to be executed on capital account (net of advances paid), not provided for Rs. 187.750 million (Previous year Rs. 236.239 million).

3. Pursuant to notification of 31st March 2009 issued by Ministry of Corporate Affairs, Government of India, in respect of changes to Accounting Standard 11 the Company had in 2008-09 capitalised exchange differences to the tune of Rs. 196.723 million. Further an amount of Rs 62.300 million debited to General Reserve towards exchange difference previously recognised in the Profit and loss Account for the year 2007-08. As required under the said notification, the exchange difference has been recalculated based on the exchange rate prevalent on 31.03.2010 and accordingly an amount of Rs. 143.600 million has been decapitalised during the year 2009-10.

4. Sundry Creditors:

A) Outstanding to creditors other than Micro, Small & Medium Enterprise Rs. 530.547 million (Previous year Rs. 581.133 million) (Interest Paid/Payable is Rs. Nil, Previous year Rs. Nil)

B) Outstanding to Micro, Small & Medium Enterprise : Rs. 2.249 million (Previous year Rs. 11.433 million)

The identification of suppliers as Micro & Small Enterprises covered under the "Micro, Small and Medium Enterprises Development Act, 2006" was done on the basis of the information to the extent provided by the suppliers to the company. Total Outstanding dues of Micro and Small Enterprises, which were outstanding for more than stipulated period are given below:

5. Based on the periodic review, it is the Companys view that the Preform Manufacturing Facility which was impaired in 2004-05 continues to remain impaired. Consequently, the impairment loss of Rs 288.510 million (Gross) is being carried forward. No further addition have been made to the impairment provisions, since there is no significant change in status.

6. Investment in Joint Venture

1. The name of the joint venture company : Finolex J-Power Systems Private Limited

2. Ownership interest : 49%

3. Country of Incorporation : India

On 13th December, 2007, the Company entered into a joint venture agreement with J- Power Systems Corporation of Japan, to offer complete turnkey solutions in extra high voltage (EHV) cable systems in India and abroad.

As on 31st March, 2010 the Company has invested Rs. 284.200 million in the shares of the joint venture with a commitment to invest a further Rs. 100.000 million.

7. Related Party Transactions: Disclosures as required by Accounting Standard 18 "Related Party Disclosures" are given below: a) List of Related Parties :

Associate Companies Finolex Industries Limited Finprop Advisory Services Limited Corrugated Box Industries (India) Private Limited Finolex Plasson Industries Limited Finolex Infrastructure Limited Other Companies Akash-Tatva Investments Private Limited Coated Fabrics Private Limited Devita Investments Private Limited Fino Communication Equipments Private Limitf Finolib Chemicals Private Limited Hi-Tech Poly Coatings Private Limited K. R Investments Private Limited Majesty Investments Private Limited Mohini Investments Private Limited Orbit Electricals Private Limited Pratibha Xero-Graph. Imp. Private Limited VKC Investments Private Limited Joint Venture Finolex J-Power Systems Private Limited

B. The Company has entered into derivative transactions with an objective to hedge the financial risks associated with its business viz. foreign exchange and interest rate.

C. The Company has not hedged the following foreign currency exposures :

(i) Borrowings grouped under secured loans equivalent to Rs. 1,347.000 million (Previous year Rs. 1,521.600 million).

(ii) Creditors for imports equivalent to Rs. 97.435 million (Previous year Rs. 48.954 million) (Hi) Receivables equivalent to Rs. 23.194 million (Previous year Rs. 50.372 million)

D. Loss on Derivative / Forex transactions includes Rs. 100.000 million (Previous year 100.000 million) loss on certain outstanding derivatives at the Balance Sheet date assessed by the management based on the principle of prudence.

The Company has provided for remuneration of whole time Directors in accordance with the resolution passed by the Shareholders at the Annual General Meeting of the Company held on SO"1 July, 2008.

Pursuant to the recommendation of the Remuneration Committee of Directors and the approval of the Members in the Annual General Meeting held on 26th August, 2009 in terms of the provisions of Section 198, 269, 309 and other applicable provisions, if any, of the Companies Act, 1956 (the "Act") read with Schedule XIII to the Act, the Company has filed separate applications with

the Central Government for obtaining its approval for payment of remuneration including all perquisites but excluding commission due to inadequacy or absence of profits for the previous financial year 2008 - 2009, to the following whole time Directors of the Company namely : Mr. P. P. Chhabria, Chairman, Mr. D. K. Chhabria, Managing Director, Mr. V. K. Chhabria, Deputy Managing Director and Mr. M. L. Jain, Assistant Managing Director and Chief Operating Officer. The approval of the Central Government is yet to be received by the Company

8. Figures in respect of the previous year have been regrouped or rearranged wherever necessary to conform to current years classification.

 
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