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Notes to Accounts of Graphite India Ltd.

Mar 31, 2017

1. Deemed cost of Plant and Equipments as at 1st April, 2015 is after considering Rs. 1,749 Lakhs being adjustment due to revision in useful lives of certain Plant and Equipments due to componentisation as per Schedule II to the Act. Also refer Note 47(A.1.3)

2. Represents exchange differences arising on long-term foreign currency loans obtained for the purpose of acquisition of depreciable capital assets [Refer Note 2(s)(ii)].

3. The Company has taken borrowings from banks which carry charge over certain property, plant and equipment (Refer Note 46 for details).

4. Contractual obligations - Refer Note 38(a) for disclosure of contractual commitments for the acquisition of property, plant and equipment.

5. Aggregate amount of depreciation has been included under ‘Depreciation and Amortisation Expense’ in the Statement of Profit and Loss (Refer Note 29).

6. Title deeds of immovable properties set out in Note 4.1 above, where applicable, are in the name of the Company except as set out below which are in the name of Graphite Vicarb India Limited (GVIL)/Powmex Steels Limited (PSL). The immovable properties of GVIL/PSL, inter alia, got transferred to and vested in the Company pursuant to the respective Schemes of Arrangement in earlier years.

*A portion of the land at Titilagarh is under dispute on legal ownership [Rs. 267 Lakhs (31st March,2016 - Rs. 267 Lakhs, 1st April, 2015 - Rs. 267 Lakhs) disclosed as contingent liability and included under ‘Other Matters’ in Note 37(i) (h)].

7. The amortization has been included under ‘Depreciation and Amortisation Expense’ in the Statement of Profit and Loss (Refer Note 29).

8. Refer Note 43 for information about fair value measurements and Note 44 for credit risk and market risk on investments.

9. Includes investments in 13,95,946.172 units of UTI Bond Fund-Growth (Face Value Rs. 10/- each) with carrying amount of Rs. 697 Lakhs, Rs. 614 Lakhs and Rs. 585 Lakhs as at 31st March, 2017, 31st March, 2016 and 1st April, 2015 respectively.

‘Amounts are below the rounding off norm adopted by the Company

10. Refer Note 46 for receivables secured against borrowings and Note 44 for information about credit risk and market risk on receivables.

11. There are no repatriation restrictions with regard to Cash and Cash Equivalents as at the end of the current reporting period and prior periods.

12. Refer Note 46 for Information on Inventories Pledged as Security

@ Balances with Government Authorities primarily include amounts realizable from the excise, value added tax and customs authorities of India and the unutilized excise input credits on purchases. These are generally realized within one year or regularly utilized to offset the excise duty liability on goods manufactured by the Company. Accordingly, these balances have been classified as current assets. Also includes Rs.491 Lakhs as at 31st March, 2017 (31st March, 2016 - Rs.491 Lakhs, 1st April, 2015 - Rs 444 Lakhs) towards payments made to various Government Authorities under protest relating to certain indirect tax matters.

@ There were no changes in number of shares during the years ended 31st March, 2017 and 31st March, 2016

* Amounts are below the rounding off norm adopted by the Company.

(a) 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 of Directors 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 amounts in proportion to their shareholding.

Nature and purpose of each Reserve

Capital Reserve

Capital Reserve has been primarily created on amalgamation in earlier years.

Capital Redemption Reserve

The Act requires that where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve. The capital redemption reserve may be applied by the company, in paying up unissued shares of the company to be issued to shareholders of the company as fully paid bonus shares. The Company established this reserve pursuant to the redemption of preference shares issued in earlier years.

Securities Premium Account

Securities Premium Account is used to record premium received on issue of shares. This reserve may be utilized in accordance with the provisions of Section 52 of the Act.

General Reserve

Under the erstwhile Indian Companies Act, 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to introduction of Companies Act, 2013, the requirement to mandatory transfer a specified percentage of the net profit to general reserve has been withdrawn though the Company may transfer such percentage of its profits for the financial year as it may consider appropriate. Declaration of dividend out of such reserve shall not be made except in accordance with rules prescribed in this behalf under the Act.

*Secured -

(a) By a first pari passu charge by way of hypothecation of the Company’s entire current assets (for Company’s Powmex Steel Division situated at Titilagarh effective March 2017), namely, stocks of raw materials, such as Calcined Petroleum Coke, Pitch, Extrusion Oil etc, semi-finished and finished goods and articles such as, Graphite Electrodes, Anodes, Misc. Graphite Products etc, stores and spares not relating to plant and machinery (consumable stores and spares), Bills receivable and Book debts and all other movable of the Company both present and future but excluding such movables as may be permitted by the said Banks from time to time ;

(b) By a second pari passu charge on the Company’s movable fixed assets (for Company’s Powmex Steel Division situated at Titilagarh effective March 2017) including movable plant and machinery, machinery spares, tools and accessories, electrical and other equipments etc, (save and except the current assets which are already hypothecated/to be hypothecated in favour of the said Banks as and by way of first charge) lying and/or stored and/or situated at the Company’s different units, godowns/factories and/or premises or in the possession of any third party or in course of transit or delivery and also all documents of title, negotiable instruments, policies of insurance and other documents and instruments relating thereto subject and/or sub-servient to the first and/or the prior charge holders for securing their respective Term Loans and/or facilities.

13. Refer Note 46 for details of carrying amount of assets pledged as security for secured borrowings and Note 44 for information about liquidity risk and market risk on borrowings.

14. Refer Note 44 for information about liquidity risk and market risk on trade payables.

15. Write-downs of inventories to net realizable value amounted to Rs.251 Lakhs (Previous Year - Rs. 215 Lakhs). These were recognized as an expense and included in Changes in Inventories of Finished Goods and Work-in-progress above.

16. Represents the difference between excise duty on opening and closing stock of finished goods, etc.

* Amounts are below the rounding off norm adopted by the Company

@ Represent refund of advance paid to employees before 8th November, 2016

# For the purposes of this clause, the term ‘Specified Bank Notes’(SBNs) shall have the same meaning as provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407(E), dated 8th November, 2016.

17. The Company has cancellable operating lease arrangements for certain accommodation. Terms of such lease include option for renewal on mutually agreed terms. There are no restrictions imposed by lease arrangements and there are no purchase options or sub leases or contingent rents. Operating lease rentals for the year recognized in profit or loss amounts to Rs. 130 Lakhs (Previous Year - Rs. 129 Lakhs).

18. Employee Benefits:

(I) Post Employment Defined Benefit Plans:

(A) Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the plan, the Gratuity Fund Trusts, administered and managed by the Trustees and funded primarily with Life Insurance Corporation of India (LICI), make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. Vesting occurs upon completion of five years of service. The Trustees are responsible for the overall governance of the plan and to act in accordance with the provisions of the trust deed and rules in the best interests of the plan participants. Each year an Asset-Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 2(t)(ii) above, based upon which, the Company makes contributions to the Employees’ Gratuity Funds.

The following table sets forth the particulars in respect of the Gratuity Plan (Funded) of the Company:

Assumptions regarding future mortality experience are based on mortality tables of ‘Indian Assured Lives Mortality (2006-2008) published by the Institute of Actuaries of India.

The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit obligation recognized in the Balance Sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(k) The Company expects to contribute Rs. 757 Lakhs (Previous Year - Rs. 692 Lakhs) to the funded gratuity plans during the next financial year.

(l) The weighted average duration of the defined benefit obligation as at 31st March, 2017 is 9.82 years (31st March, 2016 -9.84 years, 1st April, 2015 - 9.88 years).

(B) Provident Fund

Contributions towards provident funds are recognized as expense for the year. The Company has set up Provident Fund Trusts in respect of certain categories of employees which are administered by Trustees. Both the employees and the Company make monthly contributions to the Funds at specified percentage of the employee’s salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment. The Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

In view of the Company’s obligation to meet shortfall, if any, on account of interest, Provident Fund Trusts set up by the Company are treated as defined benefit plans.

The Actuary has carried out actuarial valuation of plan’s liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs. 28 Lakhs (31st March, 2016 - Rs. 22 Lakhs, 1st April, 2015- Rs. 22 Lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Further during the year, the Company’s contribution of Rs. 30 Lakhs (Previous year - Rs. 30 Lakhs) to the Provident Fund Trusts has been expensed under the ‘Contribution to Provident and Other Funds’ in Note 27. Disclosures given hereunder are restricted to the information available as per the Actuary’s Report -

(II) Post Employment Defined Contribution Plans

(A) Superannuation Fund

Certain categories of employees of the Company participate in superannuation, a defined contribution plan administered by the Trustees. The Company makes quarterly contributions based on a specified percentage of each covered employee’s salary. The Company has no further obligations under the plan beyond its annual contributions.

(B) Provident Fund

Certain categories of employees of the Company receive benefits from a provident fund, a defined contribution plan. Both the employee and employer make monthly contributions to a government administered fund at specified percentage of the covered employee’s qualifying salary. The Company has no further obligations under the plan beyond its monthly contributions.

During the year, an amount of Rs. 842 Lakhs (Previous Year- Rs. 797 Lakhs) has been recognized as expenditure towards above defined contribution plans of the Company.

(III) Leave Obligations

The Company provides for accumulation of leave by certain categories of its employees. These employees can carry forward a portion of the unutilized leave balances and utilize it in future periods or receive cash (only in case of earned leave) in lieu thereof as per the Company’s policy. The Company records a provision for leave obligations in the period in which the employee renders the services that increases this entitlement.

The total provision recorded by the Company towards this obligation was Rs. 1,679 Lakhs, Rs. 1,389 Lakhs and Rs.1,339 Lakhs as at 31st March, 2017, 31st March, 2016 and 1st April, 2015 respectively. The amount of the provision is presented as current, since the Company does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months.

(IV) Risk Exposure

Through its defined benefit plans, the Company is exposed to some risks, the most significant of which are detailed below:

Discount Rate Risk

The Company is exposed to the risk of fall in discount rate. A fall in discount rate will eventually increase the ultimate cost of providing the above benefit thereby increasing the value of the liability.

Salary Growth Risks

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.

Demographic Risk

In the valuation of the liability, certain demographic (mortality and attrition rates) assumptions are made. The Company is exposed to this risk to the extent of actual experience eventually being worse compared to the assumptions thereby causing an increase in the benefit cost.

19. Segment Information

A. Description of Segments and Principal Activities

The Company’s Executive Director examines the Company’s performance on the basis of its business and has identified three reportable segments:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Other Miscellaneous Graphite & Carbon Products and related Processing/Service Charges.

b) Glass Reinforced Plastic (GRP) Pipes Segment, engaged in manufacturing/laying of GRP Pipes, and

c) Others Segment engaged in manufacturing of High Speed Steel & Alloy Steel and Power Generating Unit exclusively for outside sale.

Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the standalone financial statements. Also, the Company’s borrowings (including finance costs), income taxes, investments and derivative instruments are managed at head office and are not allocated to operating segments.

Sales between segments are carried out on cost plus appropriate margin and are eliminated on consolidation. The segment revenue is measured in the same way as in the Statement of Profit and Loss.

Segment assets and liabilities are measured in the same way as in the standalone financial statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the assets.

(iv) Terms and conditions of transactions with related parties

Transactions relating to dividend were on the same terms and conditions that applied to other shareholders. The sales to and purchases from related parties are made in the ordinary course of business. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. No provisions are held against receivables from related parties. There are no loans outstanding with related parties. Refer Note 38(b) for corporate guarantees provided for a subsidiary company.

(ii) Fair Values

The fair values of financial assets and liabilities are included at the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values are consistent with those used for the year ended 31st March, 2016.

The following methods and assumptions were used to estimate the fair values:

(a) In respect of investments in mutual funds, the fair values represent net asset value as stated by the issuers of these mutual fund units in the published statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which issuers will redeem such units from the investors. Accordingly, such net asset values are analogous to fair market value with respect to these investments, as transactions of these mutual funds are carried out at such prices between investors and the issuers of these units of mutual funds.

(b) The fair value of foreign exchange forward contracts is determined using forward exchange rates at the Balance Sheet date.

(c) The management assessed that fair values, of trade receivables, cash and cash equivalents, other bank balances, other financial assets (current), investments in commercial papers, trade payables, borrowings (current) and other financial liabilities (current), approximate to their carrying amounts largely due to the short-term maturities of these instruments. Further, management also assessed the carrying amount of certain loans and long-term borrowings at floating interest rates which are a reasonable approximation of their fair values and the difference between the carrying amounts and fair values is not expected to be significant.

(d) The fair value of remaining financial instruments is determined on discounted cash flow analysis using a current lending/discount rate, as considered appropriate.

For financial assets carried at fair value, the carrying amounts are equal to their fair values.

(iii) Fair Value Hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair values are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows below.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds. The mutual funds are valued using the closing Net Asset Value.

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

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

The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There are no transfers between level 1 and level 2 fair value measurements during the year ended 31st March, 2017 and 31st March, 2016.

Fair value measurements using significant unobservable inputs (Level 3)

Fair valuation of unquoted equity investments is based on valuation done by an external valuer using discounted cash flow method. A change in significant unobservable inputs used in such valuation (mainly earnings growth rate and risk adjusted discount rate) is not expected to have a material impact on the fair values of such assets as disclosed above.

‘Amounts are below the rounding-off norm adopted by the Company

20. Financial Risk Management

The Company’s activities expose it to credit risk, liquidity risk and market risk. In order to safeguard against any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts are entered as per Company’s policy to hedge certain foreign currency risk exposures. Derivatives are used exclusively for hedging purposes and not as trading or speculative instruments.

The Company’s senior management oversees the management of above risks. The senior executives working to manage the financial risks are accountable to the Audit Committee and the Board of Directors. This process provides assurance to the Company’s senior management that the Company’s financial risks-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and the Company’s risk appetite.

This Note explains the sources of risk which the entity is exposed to and how the entity manages the risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below:

(A) Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The Company is exposed to credit risk from its operating activities (primarily Trade Receivables) and from its investing activities (primarily Deposits with Banks and Investments in Mutual Funds).

Trade Receivables

Trade receivables are typically unsecured and are derived from revenue earned from customers. Customer credit risk is managed by each business unit subject to the Company’s policy and procedures which involve credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit assurance. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and the Company’s historical experience with customers.

The Company’s exposure to customers is diversified and no single customer contributes to more than 10% of total revenues.

Other Financial Assets

Credit risk from balances with banks, term deposits, loans, investments and derivative instruments is managed by Company’s finance department. Investments of surplus funds are made only with approved counterparties who meet the minimum threshold requirements. The Company monitors ratings, credit spreads and financial strength of its counterparties.

The Company’s maximum exposure to credit risk for the components of the Balance Sheet as of 31st March, 2017, 31st March, 2016, and 1st April, 2015 is the carrying amounts as disclosed in Note 43 except for the financial guarantees. The Company’s maximum exposure to financial guarantees is given in Note 44(B)(ii).

Financial Assets that are Neither Past Due Nor Impaired

None of the Company’s cash equivalents with banks, loans and investments were past due or impaired as at 31st March, 2017, 31st March, 2016 and 1st April, 2015. Of the total trade receivables, Rs. 23,507 Lakhs as at 31st March, 2017, Rs. 19,623 Lakhs as at 31st March, 2016 and Rs.18,482 Lakhs as at 1st April, 2015 consisted of customer balances that were neither past due nor impaired.

Financial Assets that are Past Due but Not Impaired

The Company’s credit period for customers generally ranges from 0 - 180 days. The ageing of trade receivables that are past due but not impaired (net of provisions/allowances) is given below:

Receivables are deemed to be past due or impaired with reference to the Company’s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer’s credit quality and prevailing market conditions. Receivables that are classified as ‘past due’ in the above tables are those that have not been settled within the terms and conditions that have been agreed with that customer.

The impairment provision for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company’s past history, existing market condition as well as forward looking estimates at the end of each reporting period.

(B) Liquidity Risk

Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company’s objective is to, at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company closely monitors its liquidity position and maintains adequate sources of financing.

(i) Financing Arrangements

The Company had access to the following undrawn borrowing facilities (excluding non-fund based facilities) at the end of the reporting period:

The working capital facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the above facilities may be drawn at any time within one year.

(ii) Maturities of Financial Liabilities

The table below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows.

@ Includes contractual interest payment based on interest rate prevailing at the end of the reporting period amounting to Rs. 141 Lakhs, Rs. 200 Lakhs and Rs. 295 Lakhs as at 31st March, 2017, 31st March, 2016 and 1st April, 2015 respectively.

# Includes transaction cost adjustment on borrowings amounting to Rs. 42 Lakhs.

* Based on the maximum amount that can be called for under the financial guarantee contracts.

(C) Market Risk

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company transacts business in local currency and in foreign currencies (primarily US Dollars and Euro). The Company has obtained foreign currency loans and has foreign currency trade receivables, trade payables and other financial assets/liabilities and is therefore exposed to foreign currency risk.

The Company strives to achieve asset-liability offset of foreign currency exposures and only the net position is hedged where considered necessary. The Company manages its foreign currency risk by hedging appropriate percentage of its foreign currency exposure per established risk management policy.

The Company uses forward exchange contracts to hedge the effects of movements in foreign exchange rates on foreign currency denominated assets and liabilities.

(b) Sensitivity

The sensitivity of profit or loss to changes in the foreign exchange rates arises mainly from foreign currency denominated financial instruments.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to risk of changes in market interest rates relates primarily to the Company’s debt interest obligation. Further the Company engages in financing activities at market linked rates, any changes in the interest rate environment may impact future rates of borrowings. To manage this, the Company may enter into interest rate swaps. The management also maintains a portfolio mix of floating and fixed rate debt.

The Company’s fixed rate borrowings and investments in term deposits with bank are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of changes in market interest rates.

An analysis by maturities is provided in Note 44(B)(ii) above. The percentage of total loans shows the proportion of loans that are currently at variable rates in relation to the total amount of borrowings.

(b) Sensitivity

Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates.

(iii) Securities Price Risk

Securities price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded prices.

The Company invests its surplus funds in various debt instruments. These comprise of mainly liquid schemes of mutual funds, short term debt funds & income funds (duration investments) and fixed deposits. To manage its price risk arising from investments in mutual funds, the Company diversifies its portfolio. Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments.

(a) Securities Price Risk Exposure

The Company’s exposure to securities price risk arises from investments in mutual funds held by the Company and classified in the Balance Sheet as fair value through profit or loss (Note 43).

(b) Sensitivity

The sensitivity of profit or loss to changes in Net Assets Values (NAVs) as at year end for investments in mutual funds.

(iv) Commodity Price Risk

Exposure to market risk with respect to commodity prices primarily arises from the Company’s sales of graphite electrodes, including the raw material components for such products. Cost of raw materials forms the largest portion of the Company’s cost of sales. Market forces generally determine prices for the graphite electrodes sold by the Company. These prices may be influenced by factors such as supply and demand, production costs (including the costs of raw material inputs) and global and regional economic conditions and growth. Adverse changes in any of these factors may reduce the revenue that the Company earns from the sales of graphite electrodes. Commodity price risk exposure is evaluated and managed through operating procedures and sourcing policies. The Company has not entered into any derivative contracts to hedge exposure to fluctuations in commodity prices.

21 Capital Management

(a) Risk Management

The Company’s objectives when managing capital are to

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Company monitors capital on the basis of the net debt to equity ratio. Net debt are long-term and short-term debts as reduced by cash and cash equivalents. The Company is not subject to any externally imposed capital requirements.

The following table summarizes the capital of the Company:

No changes were made to the objectives, policies or processes for managing capital during the years ended 31st March, 2017 and 31st March, 2016.

Loan Covenants

Under the terms of the major borrowing facilities as at 1st April, 2015, the Company was required to comply with the following financial covenants:

- Minimum Tangible Net Worth of Rs. 1,50,000 Lakhs.

- Maximum Total Gearing of 200%

- Maximum External Gearing of 150%

- Minimum Ratio of EBIT/Interest of 300%

- Maximum Ratio of Net Debt/EBITDA of 300%

- Minimum Debt Service Coverage Ratio of 150%

The Company had complied with these covenants as at 1st April, 2015.

* Amounts are below the rounding off norm adopted by the Company.

# First Charge existed as at 1st April, 2015 only for foreign currency term loans from a bank disclosed under Noncurrent Borrowings (Refer Note 15). Second Charge existed for all the periods presented for loans repayable on demand from banks disclosed under Current Borrowings (Refer Note 15).

Trade Receivables under Bill Discounting

The carrying amount of trade receivables include receivables which are subject to bill discounting arrangement. Under this arrangement, the Company has discounted the relevant receivables in exchange of cash and is prevented from selling or pledging the receivables. However, the Company has retained late payment and credit risk. The Company therefore continues to recognise such receivables in their entirety in its balance sheet. The amount payable under the bill discounting arrangement is presented as secured borrowings (Refer Note 15).

22. First-time Adoption of Ind AS

These are the Company’s first standalone financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the standalone financial statements for the year ended 31st March, 2017, the comparative information presented in these standalone financial statements for the year ended 31st March, 2016 and in the preparation of an opening Ind AS standalone balance sheet at 1st April, 2015 (the Company’s date of transition). In preparing its opening Ind AS standalone balance sheet, the Company has adjusted the amounts reported previously in the standalone financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Previous GAAP). An explanation of how the transition from Previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

A Exemptions and Exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous GAAP to Ind AS.

A.1 Ind AS Optional Exemptions

A. 1.1 Business Combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company has elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

A.1.2 Prospective Application of Ind AS 21 to Business Combinations

Ind AS 101 allows a first-time adopter not to apply Ind AS 21 ‘The Effects of Changes in Foreign Exchange Rates’ retrospectively for business combinations that occurred before the date of transition to Ind AS.

The Company has elected to apply this exemption.

A.1.3 Deemed Cost for Property, Plant and Equipment and Intangible Assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the standalone financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 ‘Intangible Assets’.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their Previous GAAP carrying value.

A.1.4 Investments in Subsidiaries

Ind AS 101 permits a first-time adopter to elect to measure its investments in subsidiaries at fair value of such investments at the Company’s date of transition to Ind AS or Previous GAAP carrying amount at that date and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure its investments in Graphite International B.V. at its fair value as at 1st April, 2015 and its investments in Carbon Finance Limited at its Previous GAAP carrying value as at 1st April, 2015.

A.1.5 Exchange Differences on Long-term Foreign Currency Monetary Items

Under Previous GAAP, an alternative accounting treatment was provided to companies with respect to exchange differences arising on restatement of long-term foreign currency monetary items. Exchange differences on account of depreciable assets could be added/deducted from the cost of the depreciable asset, which would then be depreciated over the balance life of the asset. In other cases, the exchange difference could be accumulated in a foreign currency monetary item translation difference account, and amortized over the balance period of such long term asset/ liability. Ind AS 101 includes an optional exemption that allows a first-time adopter to continue the above accounting treatment in respect of the long-term foreign currency monetary items recognized in the standalone financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period.

The Company has elected to apply this exemption for such items recognized in the standalone financial statements up to 31st March, 2016.

A.2 Ind AS Mandatory Exceptions A.2.1 Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1st April, 2015 are consistent with the estimates as at the same date made in conformity with Previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Previous GAAP:

- Investments in equity and debt instruments carried at FVPL; and

- Impairment of financial assets (trade receivables) based on expected credit loss model.

- Investments in Graphite International B.V. carried at deemed cost based on fair value as at 1st April, 2015 (Refer A.1.4)

- Determination of the fair value for financial assets/liabilities carried at amortized cost.

A.2.2 De-recognition of Financial Assets and Liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

A.2.3 Classification and Measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS. The Company has assessed the same accordingly.

B Reconciliations between Previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from Previous GAAP to Ind AS.

* The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this Note.

@ Balances as per Previous GAAP is after considering adjustment as at 1st April, 2015 due to componentization as per Schedule II to the Act which was given effect during the year ended 31st March, 2016.

Impact of Ind AS adoption on the Cash Flow Statement for the year ended 31st March, 2016

There were no material differences between the Cash Flow Statement presented under Ind AS and the Previous GAAP.

C Notes to First-time Adoption

a Fair Valuation of Investments (Other than Investments in Subsidiaries)

Under the Previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments (other than investments in subsidiaries) are required to be measured at fair value considering the Company’s business model and contractual terms of the cash flows. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended 31st March, 2016. This increased the investments (non-current) by Rs. 534 Lakhs as at 31st March, 2016 (1st April, 2015 - Rs. 851 Lakhs) and investments (current) by Rs. 5,344 Lakhs as at 31st March, 2016 (1st April, 2015 - Rs. 3,160 Lakhs) with corresponding increase in retained earnings by Rs. 5,878 Lakhs as at 31st March, 2016 (1st April, 2015 - Rs. 4,011 Lakhs). The profit for the year ended 31st March, 2016 increased by Rs. 1,867 Lakhs as a result of the fair value changes on investments (other than investments in subsidiaries).

b Fair Valuation of Investments in Graphite International B.V.

Under the Previous GAAP, investments in Graphite International B.V., a subsidiary company, were classified as long-term investments and carried at cost. Under Ind AS, the Company has elected to measure such investments at its fair value as at 1st April, 2015. The resulting fair value adjustment of such investments have been recognised in retained earnings at the date of transition. This decreased investments (non-current) and retained earnings by Rs. 7,051 Lakhs as at 31st March, 2016 (1st April, 2015 - Rs. 7,051 Lakhs).

c Fair Valuation of Derivatives

Under Ind AS, derivatives which are not designated as hedging instruments are fair valued with resulting changes being recognized in profit or loss. The fair valuation of derivatives resulted in a gain of Rs. 183 Lakhs as at 31st March, 2016 (1st April, 2015 - Rs. Nil). Consequently, the total equity as at 31st March, 2016 increased by Rs. 183 Lakhs (1st April, 2015-Rs. Nil). The profit for the year ended 31st March, 2016 increased by Rs. 183 Lakhs as a result of the fair value change on such derivatives.

d Trade Receivables

As per Ind AS 109, the Company is required to apply expected credit loss model for recognizing the allowance on trade receivables. As a result, the allowance for expected credit losses was recognized amounting to Rs. 1,057 Lakhs as at 31st March, 2016 (1st April, 2015 - Rs. 591 Lakhs). Consequently, the total equity as at 31st March, 2016 decreased by Rs. 1,057 Lakhs (1st April, 2015 - Rs. 591 Lakhs) and profit for the year ended 31st March, 2016 decreased by Rs. 466 Lakhs.

e Borrowings

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Accordingly, long-term borrowings as at 31st March, 2016 have been reduced by Rs. Nil [1st April, 2015 — Rs. 42 Lakhs (including Rs. 30 Lakhs for current maturities)] with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. The profit for the year ended 31st March, 2016 decreased by Rs. 42 Lakhs as a result of the additional interest expense.

f Proposed Dividend

Under the Previous GAAP, dividend proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend including dividend distribution tax thereon was recognized as a provision. Under Ind AS, such dividend is recognized when the same is approved by the shareholders in the general meeting. Accordingly, the provision for proposed dividend including dividend distribution tax thereon of Rs. Nil as at 31st March, 2016 (1st April, 2015 — Rs. 4,703 Lakhs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.

g Excise Duty

Under the Previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of products is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31st March, 2016 by Rs. 7,796 Lakhs. There is no impact on the total equity and profit.

h Remeasurements of Post-employment Benefit Obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on net defined benefit obligations are recognized in other comprehensive income instead of profit or loss. Under the Previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31st March, 2016 increased by Rs. 54 Lakhs (net of current tax Rs. 29 Lakhs). There is no impact on the total equity as at 31st March, 2016.

i Deferred Tax

Under the Previous GAAP, deferred tax was accounted using the income statement approach, on timing differences between the taxable profit and accounting profit for the year. Under Ind AS, deferred tax is recognized following balance sheet approach on the temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base. In addition, various transitional adjustments have also led to recognition of deferred taxes on new temporary differences. Deferred tax assets on unused capital loss was also not created as it did not meet the recognition criteria under the Previous GAAP. However under Ind AS, deferred tax asset on such item is recognized to the extent its meets the recognition criteria under Ind AS 12. Accordingly, deferred tax liabilities (net) as at 31st March, 2016 have been increased by Rs. 1,536 Lakhs (1st April, 2015 - Rs. 2,166 Lakhs) with a corresponding adjustment to retained earnings. The total equity decreased by an equivalent amount.

The above adjustments increased deferred tax benefit recognized in profit or loss by Rs. 630 Lakhs for the year ended 31st March, 2016.

j Retained Earnings

Retained earnings as at 1st April, 2015 and as at 31st March, 2016 has been adjusted consequent to above Ind AS transition adjustments.

k Other Comprehensive Income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as other comprehensive income includes remeasurements on postemployment defined benefit plans. The concept of other comprehensive income did not exist under Previous GAAP. Accordingly, remeasurements on post-employment defined benefit plans for the year ended 31st March, 2016 amounting to Rs. 54 Lakhs (net of current tax of Rs. 29 Lakhs) have been recognized in other comprehensive income.

23. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon’ble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).


Mar 31, 2016

1 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 of Directors 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 amounts in proportion to their shareholding.

2 Represents exchange differences arising on long - term foreign currency loans obtained for the purpose of acquisition of depreciable capital assets [Refer Note 1(H) above].

3 Represents adjustment due to revision in useful lives of certain fixed assets due to componentization as per Schedule II to the Act (Refer Note 38).

4 Represents adjustment due to revision in useful lives of certain fixed assets as per Schedule II to the Act.

5 Title deeds of immovable properties set out in Note 11.1 above, where applicable, are in the name of the Company except as set out below which are in the name of Graphite Vicarb India Limited (GVIL)/Powmex Steels Limited (PSL), inter alia, the immovable properties of GVIL/PSL got transferred to and vested in the Company pursuant to the respective Schemes of Arrangement in earlier years.

6. The Company had reviewed its tangible fixed assets as at 1st April, 2015 and identified certain significant components with different useful lives from the remaining parts of the asset in keeping with the provisions of Schedule II to the Companies Act, 2013. The depreciation has been computed for such components separately effective 1st April, 2015. As a result, the depreciation expense for the year ended 31st March, 2016 is higher and the profit before tax is lower by Rs. 648.71 Lakhs and the net book value aggregating Rs. 1,179.80 Lakhs (net of deferred tax Rs. 569.06 Lakhs) relating to assets, where the revised useful lives have expired by 31st March, 2015 has been adjusted against opening balance of retained earnings as on 1st April, 2015.

The aforesaid revision of the useful lives will result in the following changes in the depreciation expense as compared to the original useful life of the assets.

7. Fixed Assets including Capital Work-in-progress includes Pre-operative expenses : Salaries & Wages Rs. 8.60 Lakhs (Previous Year - Rs. Nil), Rates and Taxes Rs. 5.37 Lakhs (Previous Year - Rs. 7.45 Lakhs), Insurance Rs. Nil (Previous Year - Rs. 3.16 Lakhs), Travelling and Conveyance Rs.2.79 Lakhs (Previous Year - Rs. 2.65 Lakhs), Contract Labour Charges Rs. 39.83 Lakhs (Previous Year - Rs. Nil) and Miscellaneous Expenses Rs. 36.27 Lakhs (Previous Year - Rs. 0.17 Lakhs).

The above particulars, as applicable, have been given in respect of MSEs to the extent they could be identified on the basis of the information available with the Company.

8. Employee Benefits:

(I) Post Employment Defined Benefit Plans:

(A) Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1(N)(b) above, based upon which, the Company makes contributions to the Employees’ Gratuity Funds.

The following table sets forth the particulars in respect of the Gratuity Plan (Funded) of the Company for the year ended 31st March, 2016:

Notes:

(a) The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

(b) The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company’s policy for plan asset management and other relevant factors.

(B) Provident Fund

Contributions towards provident funds are recognized as expense for the year. The Company has set up Provident Fund Trusts in respect of certain categories of employees which is administered by Trustees. Both the employees and the Company make monthly contributions to the Funds at specified percentage of the employee’s salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment. The Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on “Employee Benefits’ issued by the Accounting Standard Board of The Institute of Chartered Accountants of India (ICAI), Provident Fund Trusts set up by the Company are treated as defined benefit plans in view of the Company’s obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation of plan’s liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs. 22.26 Lakhs (Previous Year - Rs. 21.70 Lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Further during the year, the Company’s contribution of Rs. 30.60 Lakhs (Previous Year - Rs. 31.25 Lakhs) to the Provident Fund Trusts has been expensed under the ‘Contribution to Provident and Other Funds’ in Note 26. Disclosures given hereunder are restricted to the relevant information available as per the Actuary’s Report -

9. Employee Benefits: (Contd.)

(II) Post Employment Defined Contribution Plans

During the year, an amount of Rs. 795.70 Lakhs (Previous Year - Rs. 771.04 Lakhs) has been recognized as expenditure towards defined contribution plans of the Company.

10. The following table includes the classification of investments in accordance with Accounting Standard (AS) 13 -‘Accounting for Investments’

11. Segment Information

A. Primary Segment Reporting (by Business Segments)

i) The composition of business segments is as under:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Other Miscellaneous Carbon and Graphite Products including Captive Power Generating Units and Impervious Graphite Equipment division.

b) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

c) Others Segment engaged in manufacturing of Glass Reinforced Pipes and Power Generating Unit exclusively for outside sale.

ii) Composition of Geographical Segments

The geographical segments considered for disclosure are as follows :

a) Sales within India include sales to customers located within India

b) Sales outside India include sales to customers located outside India

c) The carrying amount of segment assets in India and outside India is based on geographical location of assets.

12. Related Party Disclosures:

(In accordance with Accounting Standard - 18 specified under the Act)

(i) Related Parties -

Name Relationship

(a) Where control exists:

Emerald Company Limited (ECL) Holding Company

Bavaria Carbon Holdings GmbH Subsidiary

Bavaria Carbon Specialities GmbH Subsidiary

Bavaria Electrodes GmbH Subsidiary

Carbon Finance Limited Subsidiary

Graphite Cova GmbH Subsidiary

Graphite International B.V. Subsidiary

(b) Others with whom transactions have taken place during the year:

Carbo Ceramics Limited Fellow Subsidiary (up to 11th March, 2015)

Shree Laxmi Agents Limited Fellow Subsidiary

Mr. K. K. Bangur Individual owning an interest in the voting power of

ECL that gives him control over the Company

Mrs. Manjushree Bangur, Ms. Divya Bangur, Mrs. Aparna

Daga and Mrs. Rukmani Devi Bangur Relatives of the above individual

GKW Limited and B.D. Bangur Endownment Enterprise over which Mr. K. K. Bangur is able to

exercise significant influence

Mr. M. B. Gadgil, Executive Director Key Management Personnel

13. The Company has cancellable operating lease arrangements for certain accommodation. Terms of such lease include option for renewal on mutually agreed terms. Operating lease rentals for the year debited to the Statement of Profit and Loss amount to Rs. 129.26 Lakhs (Previous Year - Rs. 122.80 Lakhs).

14. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon’ble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

15. Research and Development Expenditure of revenue nature of Rs. 12.58 Lakhs (Previous Year - Rs. 12.95 Lakhs).

16. Previous year’s figures have been regrouped/rearranged, wherever necessary to conform to current year’s classification.


Mar 31, 2015

1. The above Cash Flow Statement has been prepared under the 'Indirect Method' as set out in the Accounting Standard - 3 on 'Cash Flow Statements' specified under the Act.

2. Previous year's figures have been regrouped /rearranged, wherever necessary to conform to current year's classification.

2.1 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 of Directors 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 amounts in proportion to their shareholding.

(b) The Company has become a subsidiary of ECL pursuant to a Scheme of Amalgamation of The Bond Company Limited, Guardian Leasing Limited, Likhami Leasing Limited, H.L. Investment Company Limited, Tandem Fiscal Services Limited, Uttam Fiscal Services Limited, D.C. Mercantile Private Limited and SCL Investments Private Limited with ECL as sanctioned by the Hon'ble High Court at Calcutta vide Order passed during the current year. The certified copies of the aforesaid Order have been filed with the Registrar of Companies on 3rd July, 2014 (Effective Date of the Scheme).

Terms of Repayment -

(a) Total loan amount of Rs. 4,172.00 Lakhs (USD 6.67 Million) [Previous Year - Rs. 8,013.34 Lakhs (USD 13.33 Million)] is repayable on February, 2016. Interest is payable on quarterly basis at Libor plus 1.85% p.a. Current maturity of the loan amounting to Rs. 4,172.00 Lakhs (Previous Year - Rs. 4,006.67 Lakhs) has been disclosed in Note 9.

(b) Total loan amount of Rs. 6,258.00 Lakhs (USD 10 Million) [Previous Year - Rs. 6,010.00 Lakhs (USD 10 Million)] is repayable in 3 equal annual installments commencing from August, 2015. Interest is payable on quarterly basis at Libor plus 2.10% p.a. Current maturity of the loan amounting to Rs.2,086.00 Lakhs (Previous Year - Rs. Nil) has been disclosed in Note 9.

@ After considering Rs. 767.65 Lakhs (Previous Year - Rs. Nil) being tax effect arising from adjustment of Net Book Value of certain Fixed Assets in the General Reserve (Refer Note 37).

Loans Repayable on Demand from Banks

(Secured by first charge by way of hypothecation of certain stocks and book debts, both present and future, and secured by creation of second charge by way of mortgage/charge on certain other movable and immovable assets of the Company, both ranking pari- passu amongst the related chargeholders)

3.1 Balance outstanding as at 31st March, 2015 in respect of Commercial Paper was Rs. Nil (Previous Year - Rs. Nil). Maximum amount outstanding at any time during the year was Rs. 5,000.00 Lakhs (Previous Year - Rs. 5,000.00 Lakhs).

4.1 For classification of investments in accordance with Accounting Standard (AS) 13 - 'Accounting for Investments', refer Note 43.

4.2 Reclassified from current to long-term on exercise of extension option of maturity provided by the respective schemes during the year.

4.3 Reclassified from current to non-current on exercise of extension option of maturity provided by the respective schemes during the year.

5. Contingent Liabilities -

(i) Claims against the Company not acknowledged as debts:

(a) Disputed Excise Duty 1,023.12 1,023.12

(b) Disputed Customs Duty 1,163.01 1,163.01

(c) Disputed Service Tax 509.06 2,516.07

(d) Disputed Sales Tax / Value Added Tax 656.09 516.54

(e) Disputed Entry Tax 383.50 360.08

(f) Disputed Income Tax 120.90 880.47

(g) Labour Related Matters 585.63 503.69

(h) Other Matters (Property, Rental, etc.) 316.58 49.23

(ii) Guarantee 16,144.80 6,195.75 Corporate Guarantees given to banks to secure the financial assistance/ accommodation extended to Subsidiary Companies

(iii) In respect of Contingent Liabilities mentioned in Note 36(i) above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above Contingent Liabilities.

6. Effective 1st April, 2014, the estimated useful lives of fixed assets have been revised in keeping with the provisions of Schedule II to the Companies Act, 2013. Pursuant to the said revision in useful lives, the depreciation expense for the year ended 31st March, 2015 is lower and the profit before tax is higher by Rs. 1,033.39 Lakhs and the net book value aggregating Rs. 1,746.57 Lakhs [net of deferred tax Rs. 767.65 Lakhs] relating to assets, where the revised useful lives have expired by 31st March, 2014, has been adjusted against opening balance of General Reserve (Note 3) as on 1st April, 2014.

The aforesaid revision of the useful lives will result in the following changes in the depreciation expense as compared to the original useful life of the assets.

7. Fixed Assets including Capital Work-in-progress includes Pre-operative expenses : Salaries and Wages Rs. Nil (Previous Year - Rs. 6.50 Lakhs), Power and Fuel Rs. Nil (Previous Year - Rs. 14.56 Lakhs), Rates and Taxes Rs. 7.45 Lakhs (Previous Year - Rs. Nil), Insurance Rs. 3.16 Lakhs (Previous Year - Rs. Nil), Travelling and Conveyance Rs. 2.65 Lakhs (Previous Year - Rs. Nil), Contractors' Labour Charges Rs. Nil (Previous Year - Rs. 5.18 Lakhs) and Miscellaneous Expenses Rs. 0.17 Lakhs (Previous Year - Rs.Nil).

8. Employee Benefits:

(I) Post Employment Defined Benefit Plans:

(A) Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1(N)(b) above, based upon which, the Company makes contributions to the Employees' Gratuity Funds.

The following table sets forth the particulars in respect of the Gratuity Plan (Funded) of the Company for the year ended 31st March, 2015:

Notes:

(a) The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

(b) The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company's policy for plan asset management and other relevant factors.

(B) Provident Fund

Contributions towards provident funds are recognised as expense for the year. The Company has set up Provident Fund Trusts in respect of certain categories of employees which is administered by Trustees. Both the employees and the Company make monthly contributions to the Funds at specified percentage of the employee's salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment. The Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on 'Employee Benefits' issued by the Accounting Standard Board of The Institute of Chartered Accountants of India (ICAI), Provident Fund Trusts set up by the Company are treated as defined benefit plans in view of the Company's obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation of plan's liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs. 21.70 Lakhs (Previous Year - Rs. 21.30 Lakhs) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Further during the year, the Company's contribution of Rs. 31.25 Lakhs (Previous Year - Rs. 41.63 Lakhs) to the Provident Fund Trusts has been expensed under the 'Contribution to Provident and Other Funds' in Note 25. Disclosures given hereunder are restricted to the relevant information available as per the Actuary's Report -

(II) Post Employment Defined Contribution Plans

During the year, an amount of Rs. 771.04 Lakhs (Previous Year - Rs. 755.63 Lakhs) has been recognised as expenditure towards defined contribution plans of the Company.

9. Segment Information

A. Primary Segment Reporting (by Business Segments)

i) The composition of business segments is as under:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Other Miscellaneous Carbon and Graphite Products including Captive Power Generating Units and Impervious Graphite Equipment division.

b) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

c) Others Segment engaged in manufacturing of Glass Reinforced Pipes and Power Generating Unit exclusively for outside sale.

ii) Composition of Geographical Segments

The geographical segments considered for disclosure are as follows:

a) Sales within India include sales to customers located within India

b) Sales outside India include sales to customers located outside India

c) The carrying amount of segment assets in India and outside India is based on geographical location of assets.

10. Related Party Disclosures:

(In accordance with Accounting Standard-18 specified under the Act)

(i) Related Parties -

Name Relationship

(a) Where control exists:

Emerald Company Limited (ECL) [Refer Note 2.2(b)] Holding Company

Bavaria Carbon Holdings GmbH Subsidiary

Bavaria Carbon Specialities GmbH Subsidiary

Bavaria Electrodes GmbH Subsidiary

Carbon Finance Limited Subsidiary

Graphite Cova GmbH Subsidiary

Graphite International B.V. Subsidiary

(b) Others with whom transactions have taken place during the year:

Carbo Ceramics Limited Fellow Subsidiary (up to 11th March, 2015) [Refer Note 2.2(b)

Shree Laxmi Agents Limited Fellow Subsidiary [Refer Note 2.2(b)]

Likhami Leasing Limited A Shareholder holding 28.60% Equity Shares [Refer Note 2.2(b)] of the Company

Mr. K. K. Bangur Individual owning an interest in the voting power of ECL that gives him control over the Company

Mrs. Manjushree Bangur, Relatives of the above individual Ms. Divya Bangur, Mrs.Aparna Daga and Mrs. Rukmani Devi Bangur

GKW Limited Enterprise over which Mr. K. K. Bangur is able to exercise significant influence

Mr. M. B. Gadgil, Executive Key Management Personnel Director

11. The Company has cancellable operating lease arrangements for certain accommodation. Terms of such lease include option for renewal on mutually agreed terms. Operating lease rentals for the year debited to the Profit and Loss Statement amount to Rs. 122.80 Lakhs (Previous Year - Rs. 110.21 Lakhs).

12. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon'ble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

13. Research and Development Expenditure of revenue nature of Rs. 12.95 Lakhs (Previous Year - Rs. 13.85 Lakhs).

14. Previous year's figures have been regrouped / rearranged, wherever necessary to conform to current year's classification.


Mar 31, 2014

1. Contingent Liabilities -

(i) Claims against the Company not acknowledged as debts:

(a) Disputed Excise Duty 1,023.12 523.95

(b) Disputed Customs Duty 1,163.01 999.62

(c) Disputed Service Tax 2,516.07 324.92

(d) Disputed Sales Tax / Value Added Tax 516.54 528.46

(e) Disputed Entry Tax 360.08 246.04

(f) Disputed Income Tax 880.47 1.89

(g) Labour Related Matters 503.69 324.42

(h) Other Matters (Rent etc.) 49.23 49.23

(Rs. in Lakhs)

As at 31 st As at 31st March, 2014 March, 2013

(ii) Guarantee

Corporate Guarantees given to banks to secure the financial assistance/accommodation extended to Subsidiary Companies 6,195.75 5,209.50

(iii) In respect of Contingent Liabilities mentioned in Note 37(i) above, it is not practicable for the Company to estimate the timings of cash outflows, if any, pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above Contingent Liabilities.

2. The Company had entered into a Power Delivery Agreement (PDA) with Wardha Power Company Limited (WPCL) for procurement of power for its manufacturing activity at the terms set out in the said agreement for twenty five years from the commencement of commercial operation of power plant to be declared by WPCL. As per the terms of Share Subscription Agreement (SSA) with WPCL, the Company invested Rs. 247.66 Lakhs (Previous Year – Rs. 247.66 Lakhs) in its Class A Equity Shares and Rs. 312.34 Lakhs (Previous Year – Rs. 312.34 Lakhs) in its 0.01% Class A Redeemable Preference Shares, shown under Non-current Investments (Note 12) and were required to subscribe Rs.350.00 Lakhs (Previous Year – Rs. 350.00 Lakhs) to Class C Redeemable Preference Shares of WPCL prior to commencement of commercial operation of the said Power Plant. The aforesaid shares are/shall be under lien with WPCL.

Upon the expiry of Power Delivery Agreement, Class A Equity Shares and Class A Redeemable Preference Shares will be bought back by WPCL for a total consideration of Re.1.00. One-tenth of Class C Redeemable Preference Shares will be redeemed on every anniversary from the date of issue at Re.0.01 per share.

Pursuant to failure of WPCL to commence power supply in accordance with the terms of PDA, the Company terminated the PDA and SSA and asked them to buy back the shares held by the Company along with interest. The Company has invoked the arbitration clause as provided in the agreement.

3. Fixed Assets including Capital Work-in-progress includes Pre-operative expenses : Salaries and Wages Rs. 6.50 Lakhs (Previous Year – Rs. 41.22 Lakhs), Contribution to Provident and Other Funds Rs. Nil (Previous Year – Rs. 5.23 Lakhs), Consumption of Stores and Spare Parts Rs. Nil (Previous Year – Rs. 0.20 Lakhs), Power and Fuel – Rs. 14.56 Lakhs (Previous Year – Rs. Nil), Rates and Taxes Rs. Nil (Previous Year – Rs. 0.12 Lakhs), Insurance Rs. Nil (Previous Year – Rs. 5.04 Lakhs), Travelling and Conveyance Rs. Nil (Previous Year – Rs. 1.03 Lakhs), Contractors'' Labour Charges Rs. 5.18 Lakhs (Previous Year – Rs. Nil), Miscellaneous Expenses Rs. Nil (Previous Year – Rs. 17.89 Lakhs) and Interest and Other Borrowing Cost Rs. Nil (Previous Year – Rs. 130.91 Lakhs).

4. Employee Benefits:

(I) Post Employment Defined Benefit Plans:

(A) Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1(N)(b) above, based upon which, the Company makes contributions to the Employees'' Gratuity Funds.

Notes :

(a) The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

(b) The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company''s policy for plan asset management and other relevant factors.

(B) Provident Fund

Contributions towards provident funds are recognised as expense for the year. The Company has set up Provident Fund Trusts in respect of certain categories of employees which is administered by Trustees. Both the employees and the Company make monthly contributions to the Funds at specified percentage of the employee''s salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment. The Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on ''Employee Benefits'' issued by the Accounting Standard Board of The Institute of Chartered Accountants of India (ICAI), Provident Fund Trusts set up by the Company are treated as defined benefit plans in view of the Company''s obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation of plan''s liabilities and interest rate guarantee obligations as at the Balance Sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, an amount of Rs. 21.30 Lakhs (Previous Year - Rs. Nil) has been provided towards future anticipated shortfall with regard to interest rate obligation of the Company as at the Balance Sheet date. Further during the year, the Company''s contribution of Rs. 41.63 Lakhs (Previous Year - Rs. 35.89 Lakhs) to the Provident Fund Trusts has been expensed under the ''Contribution to Provident and Other Funds'' in Note 26. Disclosures given hereunder are restricted to the information available as per the Actuary''s Report -

(II) Post Employment Defined Contribution Plans

During the year, an amount of Rs.755.63 Lakhs (Previous Year - Rs. 683.18 Lakhs) has been recognised as expenditure towards defined contribution plans of the Company.

5. Disclosure pursuant to SEBI''s circular No. SMD/POLICY/CIR-02/2003 –

The Company has given loans and advances in the nature of loans to its employees for housing, medical etc. [balance outstanding as on 31st March, 2014 is Rs. 311.84 Lakhs (Previous Year - Rs. 249.69 Lakhs)] where, in some cases, the repayment schedule extends beyond seven years and interest is below the rate referred to in Section 372A of the Companies Act, 1956. In view of the voluminous data, furnishing of required particulars by name, amount and maximum amount due in respect of such loans is not considered practicable.

6. Segment Information

A. Primary Segment Reporting (by Business Segments) i) The composition of business segments is as under:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Other Miscellaneous Carbon and Graphite Products including Captive Power Generating Units and Impervious Graphite Equipment (IGE) division.

b) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

c) Others Segment engaged in manufacturing of Glass Reinforced Pipes (GRP) and Power Generating Unit exclusively for outside sale.

ii) Composition of Geographical Segments

The geographical segments considered for disclosure are as follows:

a) Sales within India include sales to customers located within India

b) Sales outside India include sales to customers located outside India

c) The carrying amount of segment assets in India and outside India is based on geographical location of assets. 48. The Company has cancellable operating lease arrangements for certain accommodation. Terms of such lease include option for renewal on mutually agreed terms. Operating lease rentals for the year debited to Profit and Loss Statement amount to Rs. 110.21 Lakhs (Previous Year - Rs. 108.64 Lakhs).

7. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon''ble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

8. Research and Development Expenditure of revenue nature of Rs. 13.85 Lakhs (Previous Year - Rs. 21.41 Lakhs).

9. Previous year''s figures have been re-grouped / re-arranged, wherever necessary to conform to current year''s classification.


Mar 31, 2013

1.1 Represents the aggregate amount of excise duty borne by the Company and difference between excise duty on opening and closing stock of finished goods.

2. Contingent Liabilities -

(i) Claims against the Company not acknowledged as debts:

(a) Disputed Excise Duty 523.95 567.54

(b) Disputed Customs Duty 999.62 1,004.47

(c) Disputed Service Tax 324.92 256.35

(d) Disputed Sales Tax 528.46 524.34

(e) Disputed Entry Tax 246.04 267.28

(f) Disputed Income Tax 1.89 -

(g) Labour Related and Other Matters 373.65 355.70

3. The Company had entered into a Power Delivery Agreement (PDA) with Wardha Power Company Limited (WPCL) for procurement of power for its manufacturing activity at the terms set out in the said agreement for twenty five years from the commencement of commercial operation of power plant to be declared by WPCL. As per the terms of Share Subscription Agreement (SSA) with WPCL, the Company invested Rs. 247.66 Lakhs (Previous Year - Rs. 247.66 Lakhs) in its Class A Equity Shares and Rs. 312.34 Lakhs (Previous Year - Rs. 312.34 Lakhs) in its 0.01% Class A Redeemable Preference Shares, shown under Non-current Investments (Note 12) and were required to subscribe Rs.350.00 Lakhs (Previous Year - Rs. 350.00 Lakhs) to Class C Redeemable Preference Shares of WPCL prior to commencement of commercial operation of the said Power Plant. The aforesaid shares are/shall be under lien with WPCL.

Upon the expiry of Power Delivery Agreement, Class A Equity Shares and Class A Redeemable Preference Shares will be bought back by WPCL for a total consideration of Re. 1.00. One-tenth of Class C Redeemable Preference Shares will be redeemed on every anniversary from the date of issue at Re.0.01 per share.

Pursuant to failure of WPCL to commence power supply in accordance with the terms of PDA, the Company terminated the PDA and SSA and asked them to buy back the shares held by the Company alongwith interest. The Company has invoked the arbitration clause as provided in the agreement.

4. Fixed Assets including Capital Work-in-Progress includes Pre-operative expenses : Salaries and Wages Rs. 41.22 Lakhs (Previous Year - Rs. 101.89 Lakhs), Contribution to Provident and Other Funds Rs. 5.23 Lakhs (Previous Year - Rs. 10.70 Lakhs), Consumption of Stores and Spare Parts Rs. 0.20 Lakhs (Previous Year - Rs. Nil), Rates and Taxes Rs. 0.12 Lakhs (Previous Year - Rs. Nil), Insurance Rs. 5.04 Lakhs (Previous Year - Rs. 1.20 Lakhs), Travelling and Conveyance Rs. 1.03 Lakhs (Previous Year - Rs. 6.80 Lakhs), Miscellaneous Expenses Rs. 17.89 Lakhs (Previous Year - Rs. 63.21 Lakhs) and Interest and Other Borrowing Cost Rs. 130.91 Lakhs (net of Interest Income of Rs. Nil) [(Previous Year - Rs. 376.52 Lakhs) (net of Interest Income of Rs. 18.71 Lakhs)].

5. Exceptional item Rs. Nil (Previous Year - Rs. 2,961.63 Lakhs) represents profit on disposal of long-term investments in a wholly owned subsidiary.

6. Employee Benefits:

(I) Post Employment Defined Benefit Plans:

(A) Gratuity (Funded)

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1(N)(b) above, based upon which, the Company makes contributions to the Employees'' Gratuity Funds.

(B) Provident Fund

Contributions towards provident funds are recognised as expense for the year. The Company has set up Provident Fund Trusts in respect of certain categories of employees which is administered by Trustees. Both the employees and the Company make monthly contributions to the Funds at specified percentage of the employee''s salary and aggregate contributions along with interest thereon are paid to the employees/nominees at retirement, death or cessation of employment. The Trusts invest funds following a pattern of investments prescribed by the Government. The interest rate payable to the members of the Trusts is not lower than the rate of interest declared annually by the Government under The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, on account of interest is to be made good by the Company.

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on Employee Benefits issued by the Accounting Standards Board of The Institute of Chartered Accountants of India (ICAI), Provident Fund Trusts set up by the Company are treated as defined benefit plans in view of the Company''s obligation to meet shortfall, if any, on account of interest.

The Actuary has carried out actuarial valuation of plan''s liabilities and interest rate guarantee obligations as at the balance sheet date using Projected Unit Credit Method and Deterministic Approach as outlined in the Guidance Note 29 issued by the Institute of Actuaries of India. Based on such valuation, there is no future anticipated shortfall with regard to interest rate obligation of the Company as at the balance sheet date. Further during the year, the Company''s contribution of Rs. 35.89 Lakhs (Previous Year - Rs. 35.16 Lakhs) to the Provident Fund Trusts has been expensed under the ''Contribution to Provident and Other Funds'' in Note 26. Disclosures given hereunder are restricted to the information available as per the Actuary''s report -

(b) The Company has given loans and advances in the nature of loans to its employees for housing, medical etc. [balance outstanding as on 31st March, 2013 is Rs. 249.69 Lakhs (Previous Year - Rs. 213.00 Lakhs)] where, in some cases, the repayment schedule extends beyond seven years and interest is below the rate referred to in Section 372A of the Companies Act, 1956. In view of the voluminous data, furnishing of required particulars by name, amount and maximum amount due in respect of such loans is not considered practicable.

7. Segment Information

A. Primary Segment Reporting (by Business Segments)

i) Considering the present operating environment and risks and returns from its businesses, the Company has revised during the year the composition of business segments for its segment reporting. Accordingly, Captive power generating units and Impervious Graphite Equipment (IGE) division which were included under ''Power Segment'' and ''Others Segment'' respectively in the previous year have now been included under ''Graphite and Carbon Segment''. Further, power generating unit used for external sales which was included under ''Power Segment'' in the previous year has been included under ''Others Segment'' as the same accounts for less than the threshold limits specified in AS 17 on ''Segment Reporting'' in the current as well as in the previous year. The previous year figures have also been regrouped / rearranged to make the same comparable with the current year figures.

The revised composition of business segments is as under:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, other Miscellaneous Carbon and Graphite Products including Captive power generating units and Impervious Graphite Equipment (IGE) division.

b) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

c) Others Segment engaged in manufacturing of Glass Reinforced Pipes (GRP) and Power generating unit exclusively for outside sale.

ii) Composition of Geographical Segments

The geographical segments considered for disclosure are as follows:

a) Sales within India includes sales to customers located within India

b) Sales outside India includes sales to customers located outside India

8. The Company has cancellable operating lease arrangements for certain accommodation with tenures ranging from one to three years. Terms of such lease include option for renewal on mutually agreed terms. Operating lease rentals for the year debited to Profit and Loss Statement amount to Rs. 108.64 Lakhs (Previous Year - Rs. 100.51 Lakhs).

9. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon''ble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

10. Research and Development Expenditure of revenue nature of Rs. 21.41 Lakhs (Previous Year - Rs. 24.87 Lakhs).

11. Previous Year''s figures have been re-grouped / re-arranged, wherever necessary to conform to current year''s classification.


Mar 31, 2012

1.1 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 of Directors 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 amounts in proportion to their shareholdings.

1.1 Represents dividend paid in respect of 11,932,742 Equity Shares of Rs. 2/- each allotted on conversion of Foreign Currency Convertible Bonds before the book closure date but after 31st March, 2010 as indicated in Note 2.1 above.

3.1 Gross Block as at 31st March, 2012 includes Rs. 720.35 Lakhs (Previous Year - Rs. 720.35 Lakhs) being expenditure in respect of Outdoor Transmission Lines not owned by the Company. Written down value of said assets as on 31st March, 2012 is Rs. 226.65 Lakhs (Previous Year - Rs. 260.87 Lakhs).

3.2 Includes Rs. 132.02 Lakhs (Previous Year - Rs. Nil) transferred from Capital Work-in-Progress.

4.1 Includes 1,300,000 shares acquired on conversion of loan.

4.2 The Company has disposed of its entire shareholding in Carbon International Holdings N.V. (CINV), a wholly owned subsidiary on 14th March, 2012 at a consideration of Rs. 3,018.09 Lakhs. Consequent upon its disposal, CINV has ceased to be a subsidiary with effect from the aforesaid date.

5. Commitments -

(iv) The Company has entered into a Power Delivery Agreement with Wardha Power Company Limited (WPCL) for procurement of power for its manufacturing activity at the terms set out in the said agreement for twenty five years from the commencement of commercial operation of power plant to be declared by WPCL. As per the terms of another related agreement with WPCL, the Company invested Rs. 247.66 Lakhs (Previous Year – Rs. 247.66 Lakhs) in its Class A Equity Shares and Rs. 312.34 Lakhs (Previous Year – Rs. 312.34 Lakhs) in its 0.01% Class A Redeemable Preference Shares, shown under Non-current Investments (Note 12) and are required to subscribe Rs.350.00 Lakhs to Class C Redeemable Preference Shares of WPCL prior to commencement of commercial operation of the said Power Plant. The aforesaid shares are/shall be under lien with WPCL.

Upon the expiry of Power Delivery Agreement, Class A Equity Shares and Class A Redeemable Preference Shares will be bought back by WPCL for a total consideration of Re.1.00. One-tenth of Class C Redeemable Preference Shares will be redeemed on every anniversary from the date of issue at Re.0.01 per share.

6. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Hon'ble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

7. Fixed Assets including Capital Work-in-Progress includes Pre-operative expenses : Salaries and Wages Rs. 101.89 Lakhs (Previous Year – Rs. 51.79 Lakhs), Contribution to Provident and Other Funds Rs. 10.70 Lakhs (Previous Year – Rs. 7.30 Lakhs), Consumption of Stores and Spare Parts Rs. Nil (Previous Year – Rs. 5.27 Lakhs), Power and Fuel Rs. Nil (Previous Year – Rs. 2.60 Lakhs), Rates and Taxes Rs. Nil (Previous Year – Rs. 0.67 Lakhs), Insurance Rs. 1.20 Lakhs (Previous Year – Rs. 1.35 Lakhs), Travelling and Conveyance Rs. 6.80 Lakhs (Previous Year – Rs. 4.82 Lakhs), Miscellaneous Expenses Rs. 63.21 Lakhs (Previous Year – Rs. 29.58 Lakhs) and Interest and Other Borrowing Cost Rs. 376.52 Lakhs (net of Interest Income of Rs. 18.71 Lakhs)[(Previous Year – Rs. 273.79 Lakhs) (net of Interest Income of Rs. 34.79 Lakhs)].

8. Employee Benefits:

(I) Post Employment Defined Benefit Plans:

(A) Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), make payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1(L)(b) above, based upon which, the Company makes contributions to the Employees' Gratuity Funds.

(B) Provident Fund

Certain employees of the Company receive provident fund benefits, which are administered by the Provident Fund Trusts set up by the Company. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the Company make monthly contributions at specified percentage of the employee's salary to such Provident Fund Trusts. The Company has an obligation to fund any shortfall in return on plan assets over the interest rates prescribed by the authorities from time to time.

In terms of the Guidance on implementing Accounting Standard -15 (AS -15) on 'Employee Benefits' issued by the Accounting Standards Board of The Institute of Chartered Accountants of India (ICAI), a provident fund set up by the Company is a defined benefit plan in view of the Company's obligation to meet shortfall, if any, on account of interest.

Unlike previous year, consequent upon issuance of Guidance Note by The Institute of Actuaries of India in 2011-12, actuarial valuation of the provident fund as at the year-end has been done under the Projected Unit Credit Method and the resultant charge / gain has been recognised in the accounts. Information pertaining to the year required to be considered as per AS-15 in this regard is also disclosed. However, in the absence of a Guidance Note from The Institute of Actuaries of India in earlier years, such exercise was not carried out and the related information has not been disclosed in respect of earlier years.

Notes:

(a) The expenses for the above mentioned benefits have been included and disclosed under the following line items:- Gratuity – under 'Contribution to Provident and Other Funds' in Note 25.

Provident Fund – under 'Contribution to Provident and Other Funds' in Note 25, other than employees' statutory contributions, voluntary contributions etc. which are recovered from their salaries, as included under 'Salaries and Wages' in Note 25.

(b) The estimate of future salary increases takes into account inflation, seniority, promotion and other relevant factors, such as demand and supply in the employment market.

(c) The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Company's policy for plan asset management and other relevant factors.

(II) Post Employment Defined Contribution Plans

During the year an amount of Rs. 571.71 Lakhs (Previous Year - Rs.500.53 Lakhs) has been recognised as expenditure towards defined contribution plans of the Company.

9. Disclosure pursuant to SEBI's circular No.SMD/POLICY/CIR-02/2003 -

(b) The Company has given loans and advances in the nature of loans to its employees for housing, medical etc. [balance outstanding as on 31st March, 2012 is Rs.213.00 Lakhs (Previous Year - Rs.147.64 Lakhs)] where, in some cases, the repayment schedule extends beyond seven years and interest is below the rate referred to in Section 372A of the Companies Act,1956. In view of the voluminous data, furnishing of required particulars by name, amount and maximum amount due in respect of such loans is not considered practicable.

10. Segment Information

A. Primary Segment Reporting (by Business Segments) i) Composition of Business Segments

The Company's operations predominantly relate to the following segments:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Other Miscellaneous Carbon and Graphite Products,

b) Power Segment engaged in generation of Power,

c) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

d) Other Segment, engaged in manufacturing of Impervious Graphite Equipment (IGE) and Glass Reinforced Pipes (GRP)

ii) Inter Segment Transfer Pricing

Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks.

11. Related Party Disclosures:

(In accordance with Accounting Standard-18 prescribed under the Act)

(i) Related parties -

Name Relationship

(a) Where control exists:

Bavaria Carbon Holdings GmbH Subsidiary

Bavaria Carbon Specialities GmbH Subsidiary

Bavaria Electrodes GmbH Subsidiary

Carbon Finance Limited Subsidiary

Carbon International Holdings N.V. (Up to 13th March, 2012) Subsidiary

Graphite Cova GmbH Subsidiary

Graphite International B.V. Subsidiary

(b) Others:

Mr. M. B. Gadgil, Executive Director Key Management Personnel

Likhami Leasing Limited A Shareholder holding 28.60% Equity Shares of the Company

12. The Company has cancellable operating lease arrangements for certain accommodation with tenures of three years. Terms of such lease include option for renewal on mutually agreed terms. Operating lease rentals for the year debited to Profit and Loss Statement amount to Rs. 100.51 Lakhs (Previous Year - Rs. 99.94 Lakhs).

13. Research and Development Expenditure of revenue nature of Rs.24.87 Lakhs (Previous Year - Rs. 20.56 Lakhs).

14. 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, the previous year figures have also been reclassified / regrouped to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2011

1. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Honble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

2. The Company has entered into a Power Delivery agreement with Wardha Power Company Limited (WPCL) for procurement of power for its manufacturing activity at the terms set out in the said agreement for twenty five years from the commencement of commercial operation of power plant to be declared by WPCL. As per the terms of another related agreement with WPCL, the Company invested Rs. 247.66 Lakh (Previous Year – Rs. 24.77 Lakh) in its Class A Equity Shares and Rs. 312.34 Lakh (Previous Year – Rs. 312.34 Lakh) in its 0.01% Class A Redeemable Preference Shares, shown under Investments (Schedule 7) and advanced Rs. Nil (Previous Year – Rs. 222.89 Lakh) to WPCL against investment, shown under Loans and Advances (Schedule 12) and are required to subscribe Rs.350.00 Lakh to Class C Redeemable Preference Shares of WPCL prior to commencement of commercial operation of the said Power Plant. The aforesaid shares are/shall be under lien with WPCL.

Upon the expiry of Power Delivery agreement, Class A Equity Shares and Class A Redeemable Preference Shares will be bought back by WPCL for a total consideration of Re.1. One-tenth of Class C Redeemable Preference Shares will be redeemed on every anniversary from the date of issue at Re.0.01 per share.

3. a) Fixed Assets including Capital Work-in-Progress includes Pre-operative expenses : Salary, Wages & Bonus Rs. 51.79 Lakh (Previous Year – Rs. 8.31 Lakh), Contribution to Provident and Pension Funds Rs. 3.27 Lakh (Previous Year – Rs. 0.52 Lakh), Contribution to Superannuation Fund Rs. 4.03 Lakh (Previous Year – Rs. Nil), Staff Welfare Expenses Rs. Nil (Previous Year – Rs. 0.01 Lakh), Stores & Spare Parts Consumed Rs. 5.27 Lakh (Previous Year – Rs. 18.59 Lakh), Electricity Charges Rs. 2.60 Lakh (Previous Year – Rs. Nil), Other Repair Rs. Nil (Previous Year – Rs. 0.15 Lakh), Rates & Taxes Rs. 0.67 Lakh (Previous Year – Rs. Nil), Insurance Rs. 1.35 Lakh (Previous Year – Rs. Nil), Travelling & Conveyance Rs. 4.82 Lakh (Previous Year – Rs. 0.74 Lakh), Professional Charges Rs. 26.62 Lakh (Previous Year – Rs. 32.27 Lakh), Bank Charges Rs. 271.58 Lakh (Previous Year – Rs. 0.32 Lakh), Miscellaneous Expenses Rs. 2.96 Lakh (Previous Year – Rs. 0.52 Lakh) and Interest Expense Rs. 2.21 Lakh (net off Interest Income of Rs. 34.79 Lakh)(Previous Year – Rs. Nil).

The above particulars, as applicable, have been given in respect of MSEs to the extent they could be identified on the basis of the information available with the Company.

4. d) In respect of 1,19,32,742 Equity Shares of Rs. 2/- each allotted as fully paid up on conversion of Foreign Currency Convertible Bonds as indicated in Note 2 on Schedule 1 before the book closure date but after 31st March, 2010, dividend amounting to Rs. 417.65 Lakh (Previous Year – Rs. Nil) has been paid for the year ended 31st March, 2010.

5. Contingent Liabilities not provided in respect of –

(Rs. in Lakh) As at 31st As at 31st March, 2011 March, 2010

(I) Claims not acknowledged as debts :

(i) Disputed Excise Duty for which appeals are pending 394.01 398.42

(ii) Disputed Customs Duty for which appeals are pending 1,060.75 1068.97

(iii) Disputed Service Tax for which appeals are pending 218.23 304.89

(iv) Disputed Sales Tax for which appeals are pending 506.32 491.64

(v) Disputed Entry Tax for which appeals are pending 246.04 246.04

(vi) Others 295.79 390.04

6. Research and Development Expenditure of revenue nature of Rs. 20.56 Lakh (Previous Year - Rs. 29.62 Lakh)

7. Employee Benefits

(I) Post Employment Defined Benefit Plans

(A) Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), makes payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note 1(J)(b) above, based upon which, the Company makes contributions to the Employees Gratuity Funds.

(i) The estimate of future salary increases take into account inflation, seniority, promotion and other relevant factors.

(j) The expected return on plan assets is determined after taking into consideration composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets, the Companys policy for plan asset management and other relevant factors.

(B) Provident Fund

Certain employees of the Company receive provident fund benefits, which are administered by the Provident Fund Trusts set up by the Company. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the Company make monthly contributions at specified percentage of the employees salary to such Provident Fund Trusts. The Company has an obligation to fund any shortfall in return on plan assets over the interest rates prescribed by the authorities from time to time.

In terms of the Guidance on implementing Accounting Standard 15 (Revised 2005) on Employee Benefits issued by the Accounting Standard Board of The Institute of Chartered Accountants of India (ICAI), a provident fund set up by the Company is defined benefit plan in view of the Companys obligation to meet shortfall, if any, on account of interest. Interest shortfall for the year has been provided for in these accounts.

Unlike earlier years, the Actuary has expressed his inability to provide an actuarial valuation of the provident fund as at the year-end in the absence of a Guidance Note from The Institute of Actuaries of India. Accordingly, complete information pertaining to the year required to be considered as per AS-15 in this regard are not available and the same could not be disclosed.

The Companys contribution to the aforesaid provident fund for the year amounting to Rs. 40.65 Lakh (31st March, 2010 – Rs. 31.85 Lakh) has been included in Contribution to Provident and Pension Funds in Schedule 16.

(II) Post Employment Defined Contribution Plans

During the year an amount of Rs. 500.53 Lakh (Previous Year - Rs.497.56 Lakh) has been recognised as expenditure towards defined contribution plan of the Company.

8. Disclosure pursuant to SEBIs circular No.SMD/POLICY/CIR-02/2003

b) The Company has given loans and advances in the nature of loans to its employees for housing, medical etc. [balance outstanding as on 31st March, 2011 is Rs.147.64 Lakh (Previous Year - Rs.140.61 Lakh)] where, in some cases, the repayment schedule extends beyond seven years and interest is below the rate referred to in Section 372A of the Companies Act,1956. In view of the voluminous data, furnishing of required particulars by name, amount and maximum amount due in respect of such loans is not considered practicable.

9. SEGMENT INFORMATION

A. Primary Segment Reporting (by Business Segments)

i) Composition of Business Segments

The Companys operations predominantly related to the following segments:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Anodes and other miscellaneous Carbon and Graphite Products,

b) Power Segment engaged in generation of Power,

c) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

d) Other Segment, engaged in manufacturing of Impervious Graphite Equipment (IGE) and Glass Reinforced Pipes (GRP)

ii) Inter Segment Transfer Pricing

Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks.

10. RELATED PARTY DISCLOSURES :

(In accordance with Accounting Standard-18 prescribed under the Act)

i) Related Parties

Name Relationship

(a) Where control exists :

Bavaria Carbon Holdings GmbH Subsidiary

Bavaria Carbon Specialities GmbH Subsidiary

Bavaria Electrodes GmbH Subsidiary

Carbon Finance Limited Subsidiary

Carbon International Holdings N.V. Subsidiary

Graphite Cova GmbH Subsidiary

Graphite International B.V. Subsidiary

(b) Others :

Mr. M. B. Gadgil, Executive Director Key Management Personnel

11. The Company has cancellable operating lease arrangements for certain accommodation with tenures of three years. Terms of such lease include option for renewal on mutual agreed terms. Operating lease rentals for the year debited to Profit and Loss Account amount to Rs. 99.94 Lakh (Previous Year - Rs. 99.00 Lakh).

12. Previous Years figures have been re-grouped and/or re-arranged, wherever necessary.


Mar 31, 2010

1. Pending completion of the relevant formalities of transfer of certain assets and liabilities of Powmex Steels Undertaking of GKW Limited (GKW) acquired pursuant to the Scheme of Arrangement sanctioned by the Honble High Court at Calcutta vide Order of 22nd May, 2009, such assets and liabilities remain included in the books of the Company under the name of GKW (including another company, erstwhile Powmex Steels Limited, which was amalgamated with GKW in earlier years).

2. The Company has entered into a Power Delivery agreement with Wardha Power Company Limited (WPCL) for procurement of power for its manufacturing activity at the terms set out in the said agreement for twenty five years from the commencement of commercial operation of power plant to be declared by WPCL. As per the terms of another related agreement with WPCL, the Company invested/ advanced Rs.247.66 Lakh in the Class A Equity Shares fRs.24.77 Lakh shown under Investments (Schedule 7) and Rs.222.89 Lakh shown under Loans and Advances (Schedule 12)] and Rs.312.34 Lakh in 0.01% Class A Redeemable Preference Shares (shown under Investments in Schedule 7) of WPCL and are required to subscribe Rs.350.00 Lakh to Class C Redeemable Preference Shares of WPCL prior to commencement of commercial operation of the said Power Plant. The aforesaid shares are/shall be under lien with WPCL.

Upon the expiry of Power Delivery agreement, Class A Equity Shares and Class A Redeemable Preference Shares will be bought back by WPCL for a total consideration of Re.l. One-tenth of Class C Redeemable Preference Shares will be redeemed on every anniversary from the date of issue at Re.0.01 per share.

3. a) Fixed Assets including Capital Work-in-Progress includes Pre-operative expenses: Salary, Wages and Bonus Rs. 8,31 Lakh (Previous Year - Rs. Nil), Contribution to Provident and Pension Funds Rs. 0.52 Lakh (Previous Year - Rs. Nil), Other Repair Rs. 0.15 Lakh (Previous Year - Rs. Nil), Contractors Labour Charges Rs. Nil (Previous Year - Rs. 3.41 Lakh), Staff Welfare Expenses Rs. 0.01 Lakh (Previous Year - Rs. Nil), Travelling and Conveyance Rs. 0.74 Lakh (Previous Year - Rs. Nil), Rates and Taxes Rs. Nil (Previous Year - Rs. 12.59 Lakh), Professional Charges Rs. 32.27 Lakh (Previous Year - Rs. 46.81 Lakh), Stores and Spares Parts Consumed Rs. 18.59 Lakh (Previous Year - Rs. 16.28 Lakh)and Miscellaneous Expenses Rs.0.84 Lakh (Previous Year - Rs. 0.11 Lakh).

The above particulars, as applicable, have been given in respect of MSEs to die extent diey could be identified on the basis of the information available widi the Company and pursuant to amendment of Schedule VI to the Companies Act, 1956 (the Act) vide Notification dated 16th November, 2007 issued by the Central Government of India.

4. Contingent Liabilities not provided in respect of —

(Rs. in Lakh) As at As at 31st Match, 2010 31st March, 2009 I) Claims not acknowledged as debts (i) Disputed Excise Duty for which appeals are pending 398.42 423.57 (ii) Disputed Customs Duty for which appeals are pending 1068.97 999.62 (iii)Disputed Service Tax for which appeals are pending 304.89 309.76 (iv) Disputed Sales Tax for which appeals are pending 491.64 455.95 (v) Disputed Entry Tax for which appeals are pending 246.04 246.04 (vi) Others 390.04 172.22

II) Corporate Guarantees given to banks to secure the financial assistance/ accommodation extended to Subsidiary Companies 4537.50 5723.90

5. Research and Development Expenditure of revenue nature of Rs. 29.62 Lakh (Previous Year - Rs. 22.19 Lakh)

6. Employee Benefits

(I) Post Employment Defined Benefit Plans

Gratuity

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. As per the scheme, the Gratuity Fund Trusts, administered and managed by the Life Insurance Corporation of India (LICI), makes payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as set out in Note l(J)(b) above, based upon which, the Company makes contributions to the Employees Gratuity Funds.

Provident Fund

Certain employees of the Company receive benefits from provident fund, which is a defined benefit plan and administered by the Trusts set up by the Company. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the Company make monthly contributions at specified percentage of the employees salary to such Provident Fund Trusts. The Company has an obligation to fund any shortfall in return on plan assets over the interest rates prescribed by the authorities from time to time.

(II) Post Employment Defined Contribution Plans

During the year an amount of Rs. 497.56 Lakh (Previous Year - Rs. 450.83 Lakh) has been recognised as expenditure towards defined contribution plan of the Company.

Figures in bracket relate to previous year.

b) The Company has given loans and advances in the nature of loans to its employees for housing, medical etc. [balance outstanding as on 31st March, 2010 is Rs.140.61 Lakh (Previous Year - Rs.161.61 Lakh)] where, in some cases, the repayment schedule extends beyond seven years and interest is below the rate referred to in Section 372A of the Companies Act,1956. In view of the voluminous data, furnishing of required particulars by name, amount and maximum amount due in respect of such loans is not considered practicable.

7. The net proceeds upon issue of Convertible Bonds as referred to in Schedule 4 has been utilised pardy during the year on overall basis as set out below:

8. SEGMENT INFORMATION

A. Primary Segment Reporting (by Business Segments) i) Composition of Business Segments

The Companys operations predominantly related to the following segments:

a) Graphite and Carbon Segment, engaged in the production of Graphite Electrodes, Anodes and other miscellaneous Carbon and Graphite Products,

b) Power Segment engaged in generation of Power,

c) Steel Segment engaged in production of High Speed Steel and Alloy Steel, and

d) Other Segment, engaged in manufacturing of Impervious Graphite Equipment (IGE) and Glass Reinforced Pipes (GRP)

ii) Inter Segment Transfer Pricing

Inter Segment prices are normally negotiated amongst the segments with reference to the costs, market prices and business risks.

9. The Company has cancellable operating lease arrangements for certain accommodation with tenures of three years. Terms of such lease include option for renewal on mutual agreed terms. Operating lease rentals for the year debited to Profit and Loss Account amount to Rs. 99.00 Lakh (Previous Year - Rs. 71.25 Lakh).

10. Previous Years figures have been re-grouped and/or re-arranged, wherever necessary.

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