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Notes to Accounts of HEG Ltd.

Mar 31, 2015

1 BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).The financial statements have been prepared to comply in all material respects with the accounting standards prescribed under the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2) Terms/Rights attached to equity shares

Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

During the year ended 31st March, 2015 , the amount per share dividend recognized as distribution to Equity Shareholders was Rs. 3 per Equity Share (Previous year Rs. 6 per Equity Share).

a) Based on legal advice, discussions with the solicitors, etc., the management believes that there are fair chances of decisions in the Company's favour in respect of all the items listed above and no value adjustment is considered necessary.

b) Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, Company has filed appeals which are pending at various levels. For assessment years where the issues have been decided in favour of the Company, the Company is in the process of reconciling / adjusting the same with the department.Necessary value adjustments shall be made on final settlement by the department.

c) Provision for Income Tax for earlier years has been made based on Income Tax Assessment cases pending at Appellate Jurisdictions on which Income Tax demand has arisen and the cases are sub-judice.

(` in Lacs)

Particulars As at As at 31st March, 2015 31st March, 2014

For Taxation matters

a) Excise duty under appeal 265.09 261.97

b) Service Tax 1,040.51 953.22

c) Income Tax 4,805.62 2,187.00

d) Sales Tax 1,439.70 210.64

Other than Taxation matters

a) Electricity Charges 4,945.38 4,650.00

b) RPO Obligation 750.62 520.35

c) Advance & EPCG License 232.62 508.84

Labour related matters 42.37 34.22

Based on legal advice, discussions with the solicitors, etc., the management believes that there is a fair chance of decisions in Company's favour in respect of all the items listed above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

3.Defined Benefit Plan

The employees' gratuity fund scheme managed by a trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. The Company has maintained a fund with ICICI Prudential Life Insurance Company and Reliance Life Insurance Company Limited.

4.Provident Fund

The Guidance note issued by Accounting Standard Board (ASB) on implementation of AS-15, "Employee Benefit" states that provident funds set up by the employers, which require interest shorfall to be met by the employer, needs to be treated as defined benefit plan.

The fund does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of Guidance Note from the actuarial society of India, the Company's actuary has expressed his inability to reliably measure the same.

5) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.

(i) RSWM Ltd

(ii) Malana Power Company Ltd

(iii) Aadi Marketing Company Pvt Ltd

(iv) Bhilwara Energy Ltd

(v) Bhilwara Services Pvt Ltd

(vi) BMD Renewable Energy Pvt Ltd

(vii) Essay Marketing Company Ltd

(viii) Glorious Commodeal Pvt Ltd

(ix) Giltedged Industrial Securities Ltd

(x) India Texfab Marketing Ltd

(xi) Investors India Ltd

(xii) Kalati Holdings Pvt Ltd

(xiii) LNJ Financial Services Ltd

(xiv) Modify Distributors Pvt Ltd

(xv) Nikita Electrotrades Pvt Ltd

(xvi) Nivedan Vanijya Niyojan Ltd

(xvii) Purvi Vanijya Niyojan Ltd

(xviii) Raghav Commercial Ltd

(xix) Raghav Knits & Textile Pvt Ltd

(xx) Shashi Commercial Company Ltd

(xxi) Veronia Tie-Up Pvt Ltd

(xxii) Zongoo Commercial Company Pvt Ltd

6 The Company had opted to avail the choice provided under paragraph 46A of AS 11: The Effects of Changes in Foreign Exchange Rates inserted vide Notification No 914 (E) dated December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, The following exchange differences on long term foreign currency monetary items are being dealt with in the following manner:

* Foreign exchange difference on acquisition of a depreciable asset, is adjusted in the cost of the depreciable asset, which would be depreciated over the balance life of the asset.

* It has transferred the differences arising out of foreign currency translation in respect of acquisition of depreciable capital assets to the respective assets account / Capital Work-in-progress. In case this accounting practice had not been adopted, the Pre-tax Profit for the financial year ended 31st March 2015 would have been up by Rs. 248.22 Lacs (Gain) (Previous year Rs. 5,064.34 (Loss)) with a consequential impact on both the Basic and Diluted EPS.

7 There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard (AS)- 29 'Provisions, Contingent Liabilities & Contingent Assets'

8 The following transactions are accounted for on the basis of estimates / available data,with final adjustments being carried out in the year of settlement.

9 a) Claims lodged with insurance Companies

b) Interest on income tax refunds granted on summary basis, pending finalization of assessments is treated as income in the year of accrual. Final adjustments are carried out in the year of completion of assessment.

10 Previous year figures have been regrouped/reclassified, wherever necessary to conform to current year classification.


Mar 31, 2014

1. CONTINGENT LIABILITIES NOT PROVIDED FOR (Rs. in Lacs)

Particulars As at As at 31st March, 2014 31st March, 2013 For Taxation matters

a) Excise duty under appeal 261.97 261.97

b) Service Tax 953.22 939.04

c) Income Tax 2,187.00 2,290.00

d) Sales Tax 210.64 96.86

Other than Taxation matters

a) Electricity Charges 4,650.00 4,775.98

b) RPO Obligation 980.00 568.93

b) Advance & EPCG License 508.84 2,166.01

Labour related matters 34.22 34.02

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the company''s favour in respect of all the items listed above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.

2. Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

Defined Benefit Plan

The employees'' gratuity fund scheme managed by a trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. The Company has maintained funds with ICICI Prudential Life Insurance Co. Ltd., Kotak Mahindra Old Mutual Life Insurance Ltd. and Bajaj Allianz Life Insurance Co. Ltd.

Provident Fund

The Guidance note issued by Accounting Standard Board (ASB ) on implementation AS-15. Employee Benefit states that provident funds set up by the employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

The fund does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of Guidance Note from the actuarial society of India, the company''s actuary has expressed his inability to reliably measure the same.

3. RELATED PARTY DISCLOSURE AS REQUIRED BY ACCOUNTING STANDARD (AS-18) ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA : (contd.)

e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.

(i) Aadi Marketing Company Pvt Ltd

(ii) Bhilwara Green Energy Ltd

(iii) Bhilwara Services Pvt Ltd

(iv) Bhilwara Technical Textiles Ltd

(v) BMD Pvt Ltd

(vi) BMD Renewable Energy Pvt Ltd

(vii) NJC Hydro Power Limited

(viii) Essay Marketing Company Ltd

(ix) Giltedged Industrial Securities Ltd

(x) India Texfab Marketing Ltd

(xi) Investors India Ltd

(xii) Kalati Holdings Pvt Ltd

(xiii) LNJ Financial Services Ltd

(xiv) LNJ Bhilwara Textile Anusandhan Vikas Kendra

(xv) Malana Power Company Ltd

(xvi) Maral Overseas Ltd

(xvii) Nikita Electrotrades Pvt Ltd

(xviii) Nivedan Vanijya Niyojan Ltd

(xix) Purvi Vanijya Niyojan Ltd

(xx) Raghav Commercial Ltd

(xxi) Raghav Knits & Textile Pvt Ltd

(xxii) RSWM Ltd

(xxiii) Shashi Commercial Co Ltd

(xxiv) Veronia Tie-Up Pvt Ltd

The Company has opted to avail the choice provided under paragraph 46A of AS 11: The Effects of Changes in Foreign Exchange Rates inserted vide Notification No 914 (E) dated December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, the following exchange differences on long term foreign currency monetary items are being dealt with in the following manner:

Foreign exchange difference on acquisition of a depreciable asset, is adjusted in the cost of the depreciable asset, which would be depreciated over the balance life of the asset.

- In other cases, the foreign exchange difference is accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/ liability. It has transferred the differences arising out of foreign currency translation in respect of acquisition of depreciable capital assets to the respective assets account / Capital Work-in-progress. In case this accounting practice had not been adopted, the Pre-tax Profit for the financial year ended 31st March 2014 would have been lower by Rs. 1884.60 Lacs (Previous year Rs. 724 Lacs) with a consequential impact on both the Basic and Diluted EPS.

There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard (AS)-29 ''Provisions, Contingent Liabilities & Contingent Assets.

4. In accordance with the provisions of Accounting Standard on impairment of Assets, (AS-28), the management has made assessment of assets in use & considering the business prospects related thereto, no provision is considered necessary in these accounts on account of impairment of assets.

5. The following transactions are accounted for on the basis of estimates / available data, with final adjustments being carried out in the year of settlement.

a) Claims lodged with insurance companies.

b) Interest on income tax refunds granted on summary basis, pending finalization of assessments is treated as income in the year of accrual. Final adjustments are carried out in the year of completion of assessment.

6. Previous year figures have been regrouped/reclassified , wherever necessary to conform to current year classification.


Mar 31, 2013

Note: 1. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention on going concern basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

Note: 2 CAPITAL WORK IN PROGRESS

Capital work in progress includes Rs. 5,972.56 (Previous Year Rs. 2,345.44 Lacs) being preoperative expenditure and Rs. 2,064.29 (Previous Year Rs. 3,431.55 Lacs) being capital stores.

Note: 3 LOANS & ADVANCES

a) Based on legal advice, discussions with the solicitors, etc., the management believes that there are fair chances of decisions in the Company''s favour in respect of all the items listed above and no value adjustment is considered necessary.

b) Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, Company has filed appeals which are pending at various levels and for assessment years where the issues have been decided in favour of the Company. The Company is in the process of reconciling / adjusting the same with the department. Necessary value adjustments shall be made on final settlement by the department.

c) Provision for Income Tax for earlier years has been made based on Income Tax Assessment cases pending at Appellate Jurisdictions on which Income Tax demand has arisen and the cases are sub-judice.

Note: 4 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

(Rs. in Lacs)

As at As at 31st March, 2013 31st March, 2012

a) Excise duty under appeal 1,201.01 509.90

b) Other matters 7,510.92 6,963.89

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the company''s favour in respect of all the items listed above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and results of operations.

Note: 5

Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

Note: 6 AS - 15 ''EMPLOYEE BENEFITS''

The Company has adopted Revised Accounting Standard - 15 ''Employee Benefits'' and the required disclosures are given hereunder:

Defined Benefit Plan

The employees'' gratuity fund scheme managed by a trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. The Company has maintained a fund with LIC.

Provident Fund

The Guidance note issued by Accounting Standard Board (ASB) on implementation AS-15. Employee Benefit (Revised 2005) states that provident funds set up by the employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

The funds does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of Guidance Note from the actuarial society of India, the company''s actuary has expressed his inability to reliably measure the same.

Note: 7

The Company has opted to avail the choice provided under paragraph 46A of AS 11: The Effects of Changes in Foreign Exchange Rates inserted vide Notification No914 (E) dated December 29, 2011 issued by the Ministry of Corporate Affairs, Government of India, The following exchange differences on long term foreign currency monetary items are being dealt with in the following manner:

- Foreign exchange difference on acquisition of a depreciable asset, is adjusted in the cost of the depreciable asset, which would be depreciated over the balance life of the asset

- In other cases, the foreign exchange difference is accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset/ liability. It has transferred the differences arising out of foreign currency translation in respect of acquisition of depreciable capital assets to the respective assets account / Capital Work-in-progress. In case this accounting practice had not been adopted, the Pre-tax Profit for the financial year ended 31stMarch 2013 would have been lower by Rs. 724 Lacs (Previous year 760.00) with a consequential impact on both the Basic and Diluted EPS.

Note: 8

There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard (AS)-29 ''Provisions, Contingent Liabilities & Contingent Assets''

Note: 9

In accordance with the provisions of Accounting Standard on impairment of Assets, (AS-28), the management has made assessment of assets in use & considering the business prospects related thereto, no provision is considered necessary in these accounts on account of impairment of assets

Note: 10

The following transactions are accounted for on the basis of estimates / available data, with final adjustments being carried out in the year of settlement.

a) Claims lodged with insurance companies

b) Interest on income tax refunds granted on summary basis, pending finalization of assessments is treated as income in the year of accrual. Final adjustments are carried out in the year of completion of assessment.

Note: 11

Previous year figures have been regrouped/reclassified, wherever necessary to conform to current year classification.


Mar 31, 2012

Note: 1. BASIS OF PREPARATION

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).The financial statements have been prepared to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention on Going Concern basis.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

Note: 2. SHARE CAPITAL

i) 2,21,96,821 (2,21,96,821) Equity shares have been issued as fully paid up bonus shares by capitalisation of Reserves.

i) 3,00,000 (3,00,000) Equity shares have been issued as fully paid up pursuant to a contract without payment being received in cash

iii) 10,700 (10,700) Equity shares have been issued at par as fully paid up to the members of erstwhile subsidiary company Bhilwara Viking Petroleum Limited pursuant to amalgamation

The Board of Directors of the Company had approved the Buyback of its Equity Shares from open market through Stock Exchanges vide a Resolution passed at its meeting held on the 14th March, 2011. The Buyback was approved for an aggregate amount upto Rs. 6,750 Lacs. The Buyback of shares commenced on the 11th April, 2011, the Company completed the buy back of Equity Shares through open market purchases on 11 th November, 2011. 28,85,765 Shares were bought back and extinguished and entire amount of Rs. 6,750 Lacs was utilised

b) Terms/rights attached to Equity Shares

Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

Note: 3. LONG TERM BORROWINGS

a) Secured redeemable Non-Convertible Debentures (NCDs) of Rs.15,000 Lacs were allotted on private placement basis. The NCDs have been issued in demat mode and are listed in Wholesale Debt Segment of Bombay Stock Exchange. Out of the said NCDs of Rs. 15,000 Lacs, 8.50% NCDs aggregating to Rs. 5,000 Lacs allotted on 17th December, 2009 were redeemed on 17th December, 2011. 8.90% NCDs aggregating to Rs. 5,000 Lacs allotted on 17th December, 2009 shall fall due for redemption on 17th December, 2012. 9.55% NCDs aggregating to Rs. 5,000 Lacs allotted on 30th October, 2009 shall fall due for redemption on 30th October, 2012

b) Term loans from Financial Institutions and Banks and redeemable Non Convertible Debentures stated as above are/shall be secured by way of joint equitable mortgage of all the immovable properties (present and future) of Graphite & Thermal Power units at Mandideep and Hydel unit at Tawanagar ranking on pari- passu basis and hypothecation of all movable assets of the Company (except book debts) subject to prior charge of the Company's bankers on specified movable assets in respect of working capital borrowings.

Note: 4. SHORT TERM BORROWINGS

Working Capital Loans from Banks are secured by hypothecation of all stocks present and future, stores, spare parts, packing materials, raw materials, finished goods, goods in transit / process, book debts, outstanding monies receivable, claims, bills etc. and second charge by way of joint equitable mortgage of immovable properties of the Company in respect of Graphite & Thermal Power units at Mandideep and Hydel unit at Tawanagar. The said charge in favour of bank shall rank sub-ordinate and subservient to the existing charges created by the Company in favour of financial Institutions and banks for their term loans.

Note: 5. TRADE PAYABLES

The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the Company, on the basis of information and records available with them. This information has been relied upon by the auditors. Disclosure in respect of interest due on delayed payment has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers. Disclosure as required under section 22 of the Act, is as under:

Note: 6. TANGIBLE ASSETS

a) Assets amounting to Rs. 83.13 Lacs (Previous year Rs. 83.13 Lacs) (Gross) are owned jointly with RSWM Ltd.

b) Freehold agricultural land in village Kirat Nagar, District Raisen, Madhaya Pradesh measuring 0.26 acre in the Company's possession pending registration in favour of the Company.

c) The Company has exercised the option made available by the notification No GSR 914(E) dated 29th November, 2011 issued by the ministry of Corporate affairs. Accordingly,an amount of Rs.1,373.21 Lacs being exchange difference arising on reporting of long term Foreign currency loans availed for acquisition of depreciable Fixed assets have been taken to respective assets and Rs. 1,449.76 Lacs to capital work in progress.

Note: 7. CAPITAL WORK IN PROGRESS

Capital work in progress includes Rs. 2,345.54 (Previous Year Rs. 607.42 Lacs) being preoperative expenditure and Rs. 3,431.55. (Previous Year Rs. 3,840.31 Lacs) being capital stores.

Note: 8. LOANS & ADVANCES

a) Based on legal advice, discussions with the solicitors, etc., the management believes that there are fair chances of decisions in the Company's favour in respect of all the items listed above and no value adjustment is considered necessary.

b) Direct taxes refundable represent amounts recoverable from the Income Tax Department for various assessment years. In respect of disputed demands, company has filed appeals which are pending at various levels and for assessment years where the issues have been decided in favour of the Company, company is in the process of reconciling / adjusting the same with the department. Necessary value adjustments shall be made on final settlement by the department.

c) Provision for Income Tax for Earlier years has been made based on Income Tax Assessment cases pending at Appellate Jurisdictions on which Income Tax Demand has arisen and the cases are sub-judice.

Note: 9. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF :

As at March 31, 2012 As at March 31, 2011

a) Excise duty under appeal 509.90 509.90

b) Other matters 6,963.89 1,619.23

c) Bank Guarantees 4,635.44 8,895.31

Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the Company's favour in respect of all the items listed above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company's financial position and results of operations.

Note: 10.

Inventories, loans & advances, trade receivables and other current / non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.

Note: 11. AS - 15 'EMPLOYEE BENEFITS'

The Company has adopted Revised Accounting Standard - 15 'Employee Benefits' and the required disclosures are given hereunder:

Defined Benefit Plan

The employees' gratuity fund scheme managed by a trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. The Company has maintained a fund with LIC.

Provident Fund

The Guidance note issued by Accounting Standard Board (ASB) on implementation AS-15. Employee Benefit (Revised 2005) states that provident funds set up by the employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan

The funds does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of Guidance Note from the actuarial society of India, the Company's actuary has expressed his inability to reliably measure the same.

Note:12. RELATED PARTY DISCLOSURE AS REQUIRED BY ACCOUNTING STANDARD (AS-18) ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA :

A List of Related Parties & Relationships

e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.

i) RSWM Ltd.

ii) Malana Power Company Limited

iii) BMP Solar Power Pvt Ltd

iv) Escribe (India) Pvt Ltd

v) Bhilwara Services Pvt Ltd

vi) Ganga Yamuna Auto Pvt Ltd

vii) Deepak Knits & Texturise Pvt. Ltd.

viii) Maral Overseas Ltd.

ix) Investors India Ltd

x) Kalati Holdings Pvt Ltd

xi) Bhilwara Technical Textiles Ltd.

xii) BMP Power Pvt Ltd

xiii) Purvi Vanijya Niyojan Ltd

xiv) Uttri Investments Pvt Ltd

xv) LNJ Bhilwara Textile Anusandhan Vikas Kendra

xvi) Veronia Tie-Up Pvt Ltd

xvii) Vivek Garments Pvt Ltd

xviii) NJC Hydro Power Ltd

xix) Bhilwara Green Energy Ltd

Note: 13.

As the Company has opted to avail the choice provided under paragraph 46A of AS 11: The Effects of Changes in Foreign Exchange Rates inserted vide Notification No914 (E) dated December 29, 2011 issued by the Ministry of Corporate Affairs, Govt, of India, it has transferred the differences arising out of foreign currency translation in respect of acquisition of depreciable capital assets to the respective assets account/ Capital Work-in-progress. In case this accounting practice had not been adopted, the Pre-tax Profit for the financial year ended 31st March, 201 2 would have been lower by Rs. 760.00 Lacs (Previous year NIL) with a consequential impact on both the Basic and Diluted EPS.

Note: 14.

There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard (AS)- 29 'Provisions, Contingent Liabilities & Contingent Assets'.

Note: 15.

In accordance with the provisions of Accounting Standard on impairment of Assets, (AS-28), the management has made assessment of assets in use & considering the business prospects related thereto, no provision is considered necessary in these accounts on account of impairment of assets.

Note: 16.

The following transactions are accounted for on the basis of estimates / available data,with final adjustments being carried out in the year of settlement.

a) Claims lodged with insurance companies.

b) Interest on income tax refunds granted on summary basis, pending finalization of assessments is treated as income in the year of accrual. Final adjustments are carried out in the year of completion of assessment.

Note: 17.

Till the year ended 31 March, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31 March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

(Rs. in Lacs)

As at As at March 31, 2011 March 31, 2010

1 Contingent liabilities

a) Claims against the Company not acknowledged as debts :

i) Excise duty under appeal 509.90 564.05

ii) Other matters 1,619.23 1,008.56

b) Bank Guarantees 8,895.31 4,094.70

c) The Company has provided Guarantee in favour of International Finance Corporation (IFC) with M/s RSWM Ltd. on joint and several basis on behalf of M/s AD Hydro Power Ltd. 600.00 600.00

d) Bills discounted with bankers 1,524.83 4,833.79

e) Pending export obligation against Advance Licences & EPCG Licences 952.59 2,118.78

2 Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances of Rs.3503.16 Lacs (Rs.622.79 Lacs)) 7,020.77 704.30

3 There are no present obligations requiring provisions in accordance with the guiding principles as enunciated in Accounting Standard (AS)-29 'Provisions, Contingent Liabilities & Contingent Assets'

4 In accordance with the provisions of Accounting Standard on impairment of Assets, (AS-28), the management has made assessment of assets in use & considering the business prospects related thereto, no provision is considered necessary in these accounts on account of impairment of assets.

As the liabilities for gratuity and leave encashment are provided on an actuarial valuation basis for the Company as a whole, the amount pertaining to the directors are not included above.

5 The following transactions are accounted for on the basis of estimates / available data, with final adjustments being carried out in the year of settlement.

a) Claims lodged with insurance companies.

b) Interest on income tax refunds granted on summary basis, pending finalisation of assessments is treated as income in the year of accrual. Final adjustments are carried out in the year of completion of assessment.

6 Term loans, Bonds and Debentures falling due in next 12 months Rs.6,536 Lacs (previous year Rs.2,904 Lacs).

7 a) In the opinion of the management and to the best of their knowledge and belief, the value on realisation of loans, advances and other current assets in the ordinary course of business will not be less than amount at which they are stated in the balance sheet.

8 The Company had allotted 47,30,000 Preferential Warrants of Rs.365/- each on 5th June, 2008. These Warrants were convertible into equity shares within 18 months from the date of allotment. Since no warrant had been converted till 4th December, 2009, the aggregate amount of Rs.1726.45 lacs received in respect of the same has been forfeited by the Company in the previous year. The funds had been utilised for long term working capital requirement.

9 One case of loss of material, by theft, was detected during the previous year involving an amount of Rs.360.85 lacs which has been shown as "Loss of material by theft" and is included in Schedule 12 : Consumption of materials in the Profit & Loss account in the previous year

10 AS - 15 'EMPLOYEE BENEFITS'

The Company has adopted Revised Accounting Standard - 15 'Employee Benefits' and the required disclosures are given hereunder:

Defined Benefit Plan

The employees' gratuity fund scheme managed by a trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. The Company has maintained a fund with LIC.

Provident Fund

The Guidance note issued by Accounting Standard Board (ASB) on implementation AS-15. Employee Benefit (Revised 2005) states that provident funds set up by the employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

The funds does not have any existing deficit or interest shortfall. In regard to any future obligation arising due to interest shortfall (ie government interest to be paid on provident fund scheme exceeds rate of interest earned on investment), pending the issuance of Guidance Note from the actuarial society of India, the Company's actuary has expressed his inability to reliably measure the same.

G) Provision for Income Tax for Earlier years has been made based on Income Tax Assessment cases pending at Appellate Jurisdictions on which Income Tax Demand has arisen and the cases are sub-judice.

I) In terms of Notification No.S.O.301(E) dated 8th February, 2011, issued by Ministry of Corporate Affairs, the Board of Directors of the Company has given its consent at the Board Meeting held on 29th April 2011 for non-disclosure of information contained in para 3(i)(a), 3(ii)(a), 3(ii)(b), 3(ii)(d), of Part II of Schedule VI.

(Previous Year's figures have been regrouped and recast wherever considered necessary.

Figures in amount have been rounded off to nearest lacs upto two decimals. Figures in bracket relate to the previous year.

The Schedules referred to in the Balance Sheet and Profit and Loss Account form an integral part of the accounts.

 
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