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Notes to Accounts of Himachal Futuristic Communications Ltd.

Mar 31, 2016

1. Merger of Manufacturing Division of Jindal Photo Limited

The Hon''ble High Court of Judicature at Allahabad and Bombay vide their Order dated 12th October, 2015 and 26th February, 2016 respectively sanctioned the scheme of arrangement (''the scheme'') between Jindal Photo Limited (“Demerged Company”) and Jindal Poly Films Limited (“Resulting Company”) and their respective shareholders and creditors, pursuant to the provisions of section 391 to 394 and other provisions of the Companies Act, 1956 and/or Companies Act, 2013. The scheme became effective upon filing of certified copies of the Orders of the Hon''ble High Court of Judicature at Bombay on 31st March, 2016.

The scheme is effective from Appointed Date i.e. 1st April, 2014 inter alia provides for the demerger of the demerged undertaking as defined in part (III) of the scheme - Business of Manufacture, production, sale and distribution of photographic products of demerged company into the Resulting Company. Accordingly financial statements of the demerged entity has been incorporated for the year ended 31st March 2016 along with corresponding previous year ended 31st March 2015.

(a) Pursuant to the scheme of Arrangement between Jindal Photo Limited (Demerged Company) and Jindal Poly Films Limited (Resulting Company) and their respective shareholders and creditors, as a Consideration, Jindal Poly Films Limited have allotted 17,38,700 (seventeen lac thirty eight thousand seven hundred) Equity shares of Rs. 10 each fully paid up in the capital of the company on 30th May,2016 in the ratio of 10 fully Paid-up equity shares of Rs. 10 each of the Company for every 59 Equity shares of Jindal Photo Limited held by shareholders of Jindal Photo Limited on record date i.e. 13th May, 2016. Accordingly these shares are treated as outstanding as on reporting date and are included for the calculation of basic earnings per share for the year ended 31st March 2016 along with corresponding previous year ended 31st March 2015.

(b) The accounting of this Arrangement was done as per the scheme and the same has been given effect to in the financial statements as under:

i. The Resulting Company has recorded all assets and liabilities of the Demerged Undertaking vested in it pursuance to this scheme, at the respective book values thereof, as appearing in the books of account of the Demerged Company immediately before the appointed date.

ii. The Resulting Company has credited the aggregate face value of the New Equity shares of the Company issued by it to the members of the Demerged Company pursuant to this scheme to the share capital in books of accounts.

iii. The difference of the aggregate of face value equity shares allotted by the Company to the shareholders of the Demerged Undertaking, and the amount representing surplus of book value of assets over liabilities of the Demerged Undertaking has been recorded by the Resulting Company as Capital Reserve.

iv. Figures of demerged undertakings have been regrouped and/or rearranged wherever required to align with disclosure parameters of the Resulting Company.

Note : Pursuant to the scheme of Arrangement between Jindal Photo Limited (Demerged Company) and Jindal Poly Films Limited (Resulting Company), as approved by Hon''ble High Court of Judicature Mumbai vide order dated 26th February 2016, the Company has given impact in its books of accounts. Accordingly general inter unit balances arose earlier to approval of the scheme between Demerged Undertaking - M/s Jindal Photo Limited (Manufacturing Division) and Residual Undertaking - M/s Jindal Photo Limited (Investing Division) aggregating Rs 9,08,29,456 (Previous Year Rs 7,26,51,606) has been disclosed in short Term Loans and Advances (Refer Note 17.1). Being merely an accounting treatment for giving effect of the scheme, the above transaction and balance thereon is not disclosed in above related party disclosures.

2. Disclosure under Regulation 34(3) of “Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015”

Loans and advances outstanding at the year end and maximum amount outstanding during the year, as required to be disclosed under schedule V and Regulation 34(3) of “securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015” are as follows: *Comprehensive disclosure of investments as at 31st March 2016 has been made in Note 10 to the Financial statements, hence closing balance of other investments (Equity shares/Preference shares) having no movement during the year were not again disclosed in above statement.

**balance including interest

Note: Pursuant to the scheme of Arrangement between Jindal Photo Limited (Demerged Company) and Jindal Poly Films Limited (Resulting Company), as approved by Hon''ble High Court of Judicature Mumbai vide order dated 26th February 2016, the Company has given impact in its books of accounts. Accordingly general inter unit balances arose earlier to approval of the scheme between Demerged Undertaking - M/s Jindal Photo Limited (Manufacturing Division) and Residual Undertaking - M/s Jindal Photo Limited (Investing Division) aggregating Rs 9,08,29,456 (Previous Year Rs 7,26,51,606) has been disclosed in short Term Loans and Advances (Refer Note 17.1). Being merely an accounting treatment for giving effect of the scheme, the above transaction and balance thereon is not disclosed in above related party disclosures.

3. Segment Reporting

Pursuant to the scheme of arrangement for merger of manufacturing business of Jindal Photo Limited having different photographic products, the management has classified the business in two reportable segment, as defined in Accounting standard - 17 (segment Reporting) as follows :

- Plastic Films Business

- Photographic Division

4. Provision for Post-sales Client support and Warranties:

Provisions for post-sales client support and warranties on certain products and services relating to photographic business of the Company are made towards expected cost of meeting such obligations of rectification/replacement, based on the expected future cash outflows and computed on total sales made during the year, based on past experience. Provision for post-sales client support are expected to be utilized over a period of one year.

5. (a) The Administration of Union Territory of Dadra & Nager Haveli vide its Notification dated 31st December, 1999 granted exemption for sales tax to the Demerged Entity M/s Jindal Photo Limited (now being merged with the Company M/s Jindal Poly Films Limited) and in view of legal opinion received from experts and as per Ads-12 such benefit being in nature of capital receipt has been reduced from Gross sales and credited to Capital Reserve.

(b) Further financial statements for the financial years 2005-06 to 2010-11 of Demerged Entity M/s Jindal Photo Limited (now being merged with the Company M/s Jindal Poly Films Limited) were prepared considering such benefit as revenue receipt and income tax was provided and paid at normal rate for respective year. The assessment of financial year 2005-06 to 2010-11 for which assessment proceedings u/s 153A is in progress, entity has filed revised income tax computations for such financial years claiming benefit of Rs. 1,12,88,56,658 as exempted income and tax liability was revised as per provisions of section 115JB of Income Tax Act, 1961 (MAT) at Rs. 22,78,69,632. As the claim is for the years for which normal revised return could not be filed, the effect of such claim of benefit is not considered and necessary effective entries will be passed on finality of the assessment. Year wise detail is as under:

6. (a) A sum of Rs.13,92,18,077 (previous year Rs.13,11,88,659) being the difference between domestic and imported raw material prices prevailing at the year ended on 31st March 2016 on account of advance liceNSE s excess utilized for which exports are yet to be made, has been adjusted in the cost of raw material.

(b) Under the Package scheme of Incentive 2001/2007 approved by the Government of Maharashtra, the Company is entitled to industrial promotion subsidy to the extent of 100% of the fixed capital investment or to the extent of taxes paid to the state Government within a period of 7 years, whichever is lower. During the year, subsidy receivable under the above said scheme amounting to Rs 52,14,31,163 (previous year Rs. 51,57,72,707) has been added to Capital Reserve .

(c) The Export obligation undertaken by the company for import of capital equipments under EPCG scheme of the Central Government at the concessional rate of custom duty are in the opinion of the management expected to be fulfilled within their respective due dates/extended due date.

7. During the year, the Company had invested Rs. 39,29,00,000 in the Zero Percent redeemable preference share capital and Rs 249,00,00,000 in Zero Percent Optionally Convertible Preference shares M/s of Jindal India Powertech Limited (JIPL), a group company. JIPL is the holding Company of Jindal India Thermal Power Limited (the borrower).

8. (a) Certain old balances of sundry debtors and sundry creditors are subject to reconciliation and confirmation.

(b) sundry Debtors include Rs.53,23,605 (previous year Rs. 46,06,143) under litigation, against which legal cases are pending in various Courts for recovery. The same are considered good and realizable in the opinion of the management.

(c) In the opinion of the Board and to the best of their knowledge and belief, the realizable value of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance sheet.

9. (a) Advance receivable in cash or in kind includes Rs. 28,254,171 (Previous Year Rs. 28,254,171 ) being the amount of custom duty deposited against import of capital goods assessed under provisional assessments in earlier year.

(b) Non - Current Investment includes 6 shares of Jindal Films India Ltd (Previously known as Jindal Metal & Mining Ltd) of which the Company is beneficial owner are held by certain individuals in fiduciary capacity.

(c) Pursuant to the scheme of Arrangement (Refer Note 30), investment held by Demerged Undertaking (M/s Jindal Photo Limited) in equity shares of M/s Jindal Imaging Limited and M/s Jindal Photo Imaging Limited has been transferred to Resulting Company (M/s Jindal Poly Films Limited), accordingly these equity shares has been considered as Non-Current Investments of the Resulting Company, however issuance of these shares in the name of M/s Jindal Poly Films Limited is under process.

(d) stores & spares consumed and salaries & wages incurred during the year for repair and maintenance of plant & machinery and sheds & building, have been charged to the former accounts wherever separation is not ascertainable.

10. (a) Discontinued Operation

Company has discontinued the operation of Partially Oriented Yarn (POY) facility at Gulaothi, Uttar Pradesh and Pet film facility at Khanvel unit as it has been terminated through abandonment in earlier years as per Accounting standard - 24 (Discontinuing Operations) referred to in section 133 of the Companies Act 2013.

Following is extracts of financial information included in loss from discontinued operations for the Gulaothi and Khanvel unit:-

(b) since FY 2006-07, the company was in the process of disposal of its unused plant & machineries and store items at Gulaothi Unit (Discontinued Operation). During the year, a part of such unused plant and machineries was reported to have been removed inappropriately. The management is taking due actions for recovery and do not consider any impairment/ provision for loss, if any, on this account as the credit balance of parties and realizable value of remaining assets is likely to exceed the book value of assets.

(c) As per Accounting standard -28 “Impairment of Assets” referred to in section 133 of the Companies Act 2013, no further impairment loss has been considered by the management in assets of Gulaothi & Khanvel unit.

11. Exceptional items represents Loss of Rs. 1,58,31,145 (previous year Rs 2,98,35,055) being exchange differences on translation/settlement of long term foreign currency loans for acquiring fixed assets.

12. Information related to Micro Enterprises and small Enterprises, as defined in the Micro, small and Medium Enterprises Development Act, 2006 (MsME Development Act), are given below. The information given below have been determined to the extent such enterprises have been identified on the basis of information available with the Company:

13. During the year, the erstwhile associate M/s Rexor Holding sAs has been merged with its wholly owned subsidiary M/s Rexor sAs, with effect from 1st April 2015, sanctioned as per order dated 21st October 2015 by an Foreign Authority (Greffe du Tribunal de Commerce de Vienne) and accordingly post-merger the surviving entity M/s Rexor sAs has become the associate of M/s Jindal Poly Films Limited. Pursuant to the scheme of merger, shares of M/s Rexor Holding sAs have been cancelled and in consideration proportionate shares as per the determined ratio, has been allotted in the surviving entity M/s Rexor sAs comprising 11163 Equity shares at Face Value of Euro 3506 allotted to M/s Jindal Poly Films Limited.

14. The Company has pledged 4,88,76,000 equity shares of Rs 10/- each of M/s Global Nonwoven Limited a subsidiary company and mortgaged 26.54 acres land of the Company situated at Nasik Maharashtra (Land being Leased out to Global


Mar 31, 2014

A Equity Shares

(i) Nil (Previous year 278,180) shares of Rs. 1/- each represent Global Depository Receipts.

(ii) 1,45,50,000 (Previous year 1,45,50,000) shares of Rs. 1/- each issued for consideration other than cash pursuant to the amalgamation of erstwhile Himachal Telematics Ltd. with the Company.

(iii) 52,96,01,640 shares of Rs. 1/- each have been allotted for a consideration other than cash pursuant to the Composite Scheme of Arrangement and Amalgamation between Sunvision Engineering Company Private Limited (SECPL), its Share holders &the Optionally Convertible Debenture (OCD) holders and the Company & its Shareholders, sanctioned by the Hon''ble High Court of Himachal Pradesh at Shimla vide its Order passed on 5th January, 2011.

B Preference Shares

The Cumulative Redeemable Preference Shares (CRPS) aggregating to Rs. 80.50 crore shall be redeemed at the rate of 25% and 75% of the face value in the financial years ending 31st March 2018 and 31st March, 2019, respectively and will carry the coupon rate of 6.50% from new cut off date i.e. 1st January, 2011 as mentioned in the rework package approved by the CDR EG on 29.03.2011. However, dividend accrued on notional basis, as same has not been declared and fallen due for payment, and penal interest thereon, till the cut-off date, stands waived as per CDR rework package.

E Terms/right attached to Equity/Preference Shares

The Company has issued equity share of Rs. 1/-each and preference share of Rs.100/-each. On a show of hands, every holder of equity shares is entitled for one vote and upon a poll shall have voting rights in proportion to the shares of the paid up capital of the Company held by them. Preference shareholders shall have voting right in proportion to the shares of the paid up capital provided if the dividend due on such capital or any part of such dividend has remained unpaid. The Company declares dividend, if any, in Indian Rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of shareholders in the 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 amount in proportion to their shareholdings.

Secured Long Term Borrowings

a) Term loan of Rs.63.28 crore (Previous year Rs.71.19 crore) and Funded interest term loan of Rs.28.92 crore (Previous yearRs. 33.92 crore) from one of the bank are secured on pari passu basis by way of first charge on all the immovable properties, both present and future, by way of equitable mortgage and first charge on the entire sales proceeds of the contracts covered under the aforesaid loan to be credited to the Escrow/designated account.

b) Term loan of Rs.18.69 crore (Previous yearRs.21.02 crore) from a bank, Working capital term loan ofRs.14.56 crore (Previous year Rs.16.38 crore) and Funded interest term loan of Rs.31.06 crore (Previous year Rs. 31.06 crore) are secured by way of pledge of shares and also secured on pari passu basis by way of hypothecation of stocks of raw materials, finished and semi- finished goods, stores and spares, book debts etc. as well as by way of second charge on immovable properties pertaining to the Company.

c) Working capital term loans of Rs.20.09 crore (Previous year Rs.22.57 crore) from banks and Funded interest term loans of Rs.20.77 crore (Previous year Rs.20.77 crore) are secured on pari passu basis by way of hypothecation of stocks of raw materials, finished and semi- finished goods, stores and spares, book debts etc. as well as by way of second charge on immovable properties pertaining to Wireline, Wireless and Cable divisions of the Company.

d) All the secured loans from banks are secured by Pledge of equity shares up to 51 % (239700000) of new co-opted promoters.

e) All the secured loans as stated above are also personally guaranteed by Managing Director of the Company.

f) Term loans and FITLare repayable in 7 years/3 years commencing from Financial year2012-13/2016-17 with rate of Interest @10% p.a. or at the rate as re-set by the lenders as detailed herein below:

Secured Short Term Borrowings

Working capital loans from banks aggregating to Rs.33.86 crore (Previous year Rs. 30.67 crore) are secured on pari passu basis by way of hypothecation of stocks of raw materials, finished and semi-finished goods, stores and spares, book debts etc. as well as by way of second charge on immovable properties pertaining to Wireline, Wireless and Cable Divisions of the Company and further secured by way of pledge of equity shares up to 51% (239700000) of new co-opted promoters and are also personally guaranteed by Managing Director of the Company.

(Rs. in crore)

As at As at

NOTE 2 Contingent Liabilities not provided for in respect of 31.03.2014 31.03.2013

(a) Unexpired Letters of Credit (margin money paid Rs.7.61 crore ; Previous year Rs.1.82 crore) 26.54 1.82

(b) Guarantees given by banks on behalf of the Company (margin money kept by way of fixed 56.03 32.93 deposits Rs.15.79 crore; Previous year Rs.10.64 crore)

(c) Counter Guarantees given by the Company to the financial institutions/banks for providing 20.16 20.16 guarantees on behalf of companies promoted by the Company, (margin money kept by the banks by way of fixed deposits Rs. Nil ; Previous year Rs. Nil)

(d) Arrears of Dividend on Cumulative redeemable preference shares - 18.90



NOTE 3 Interest charges on loans is net of Interest income from loans and advances amounting to Rs.0.43 crore (Previous year Rs.0.45 crore).

NOTE 4 The disclosures as per the Accounting Standard 7 on ''Construction Contracts'' issued by the Institute of Chartered Accountants of India are as under:

NOTE 5 (a) Debt of the Company were earlier restructured under Corporate Debt Restructuring (CDR) mechanism in April 2004 which was subsequently modified in June 2005 with cut-off date as 1st April, 2005. CDR Empowered Group at its meeting held on 9th February, 2011 has approved the Rework Package of the Company with the cut off date as 1st January 2011 and communicated its sanction vide their letter No. BY CDR(JCP)/No 8643/2010-11 dated 29th March, 2011. The Rework Package includes inter-alia reduction in the existing rate of interest, re-schedulement for repayment of loans, conversion of overdue interest into funded interest term loan (FITL), conversion of Zero Coupon Premium Bonds (ZCPB''s), part of their premium and part of working capital loans into Equity, conversion of part of working capital loan into working capital term loan (WCTL), waiver of unpaid dividend on preference shares, waiver of penal interest etc. The conditions as stipulated by CDR EG while sanctioning Rework Package have been complied with by the Company. Accordingly, the impact of the rework package has been considered in the Financial Statements.

(b) Subsequent to the implementation of Rework Package, lenders have reset the rate of interest on certain loans in view of improved performance of the Company.

(c) Further, lenders have the right to claim recompense from the Company on account of various sacrifices & waivers made by them in the CDR Rework Package. The amount of recompense and the manner of repayment shall be ascertained upon exit from CDR mechanism by the Company.

NOTE 6 Pursuant to the disinvestment by the Government of India, the Company had acquired 11,10,000 equity shares of Rs.100/- each of HTL Limited representing 74% of its equity capital at total consideration of Rs. 55.00 crore in terms of Shareholders Agreement dated 16.10.2001. The above consideration paid by the Company is subject to post closing adjustments on account of difference in net worth of HTL Limited as on 31.03.2001 and as on the date of purchase of shares in terms of Share Purchase Agreement dated 16.10.2001. The Company has submitted its claim on account of Closing Date Adjustment to the Government in respect of such reduction in net assets of HTL Limited which has not been settled by the Government. Due to this, the Company has invoked the provisions of the Share Purchase Agreement for settlement of dispute by Arbitration. The Hon''ble Arbitral Tribunal has since given the award in favour of the Company on 12th October, 2007 upholding the claim of the Company on account of the above to the extent of Rs.55.00 crore and interest from the date of award till actual date of payment. The said award has been upheld by the single Judge of Hon''ble High Court of Delhi on 5th December, 2012 and again by the Division Bench on 25th February, 2013. SLP filed by DoT against Order of Division Bench of Hon''ble High Court of Delhi was also dismissed on 1 st November, 2013, by the Hon''ble Supreme Court of India. The Review Petition filed by DoT was also dismissed on 16th January, 2014 by the Hon''ble Supreme Court of India. However, the consequential effect has not been given in the books of accounts as DoT is entitled to file Curative Petition before Hon''ble Supreme Court of India.

NOTE 7 The Company had made payment of Rs.9.70 crore (Previous year Rs.0.24 crore) to certain Cumulative Redeemable Preference Shareholders as per contractual obligations. The said amount has been shown as "advances recoverable in cash or kind or for value to be received".

NOTE 8 Payment made to lenders towards guarantee contract/obligation amounting to Rs.Nil on behalf of associates companies (Previous year 9.82 crore) has been accounted for under the head Exceptional items.

NOTE 9 In accordance with the Company''s Policy, the Company has reviewed the outstanding receivables and has written off a sum of Rs.87.14 crore during the year as bad, which in the opinion of the Management is adequate.

NOTE 10 During the year, Company has recognised the following amounts in the financial statements as per Accounting Standard 15 (Revised) "Employees Benefits" issued by the ICAI:

b) Defined Benefit Plan

The employees'' gratuity fund scheme is partially managed by HDFC Standard Life Insurance Company Limited which 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 and the obligation for leave encashment is recognised in the same manner as gratuity.

NOTE 11 The Company has carried out Impairment Test on its Fixed Assets as on 31.3.2014 and the Management is of the opinion that there is no asset for which impairment is required to be madeasperAccountingStandard-28on Impairment of Assets issued by the ICAI. (Previous year Rs. Nil)

NOTE 12 The Board of Directors has recommended a dividend of Rs. 6.50 p.a. on each 80,50,000 Cummulative Redeemable Preference Shares of Rs. 100/- each for the period from 1 st January, 2011 to 31 st March, 2014. The dividend for the financial year 2010-11 would be proportionate which is Rs. 1.60 per Preference Share.

NOTE 13 As required by Accounting Standard 18 "Related Party Disclosures"

(i) Name and description of related parties.

Relationship Name of Related Party

(a) Subsidiaries: HTLLtd. Moneta Finance Pvt. Ltd.

(b) Associates: Microwave Communications Ltd.

Exicom Tele-systems Ltd.

HFCL Satellite Communications Ltd.

HFCL Dacom Infochek Ltd.

HFCL Bezeq Telecom Ltd.

Westel Wireless Ltd.

Polixel Security Systems Pvt. Ltd.

DragonWave HFCL India Pvt. Ltd.

ANM Enginnering and Works Pvt. Ltd.

NextWave Communications Pvt. Ltd.

(c) Key management personnel : Mr. Mahendra Nahata

Mr. Arvind Kharabanda

Note : Related party relationship is as identified by the Company and relied upon by the auditors.

(a) Primary segment information

The Company''s operations primarily relates to manufacturing of telecom products, executing turnkey contracts and providing services relating thereto. Accordingly segments have been identified in line with Accounting Standard on Segment Reporting ''AS-17''. Telecom products and Turnkey contracts and services are the primary business segments whereas Others constituting less than 10% of the segment revenue/results/assets and accordingly have been considered as other business segments and are disclosed in the financial statements. Details of business segments are as follows:

(b) Secondary segment information

The Company caters mainly to the needs of Indian market and the export turnover being 0.72% (Previous year 0.02%) of the total turnover of the Company, there are no reportable geographical segments.

NOTE 14 Details of business advances outstanding from Subsidiary for the year ended 31st March, 2014 - Disclosure required under Clause 32 of the

NOTE 15 Derivative Instruments

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The use of foreign currency forward contracts is governed by the Company''s strategy, which provides principles on the use of such forward contracts consistent with Company''s Risk Management Policy. The Company does not use forward contracts for speculative purposes.

NOTE 16 Previous year figures have been regrouped/reclassified wherever necessary and the figures have been rounded off to the nearest rupees in lakh. NOTE 52 Value of imported and indigenous raw material and stores & spares consumed


Mar 31, 2013

As at As at 31.03.2013 31.03.2012

01 Contingent Liabilities not provided for in respect of :

(a) Unexpired Letters of Credit (margin money paid Rs.18,155 ; Previous year 18,155 125,214 Rs.70,000)

(b) Guarantees given by banks on behalf of the Company (margin money kept by 329,274 338,176 way of fxed deposits Rs.106,424; Previous year Rs.147,919)

(c) Counter Guarantees given by the Company to the fnancial institutions/banks for 201,591 1,374,331 providing guarantees on behalf of companies promoted by the Company. (margin money kept by the banks by way of fxed deposits Rs.Nil ; Previous year Rs Nil)

(d) Arrears of Dividend on Cumulative redeemable preference shares 189,013 136,688

The Company has received necessary approval from the Central Government (CG) for the re-appointment and payment of remuneration to Wholetime Directors for the Financial Year 2007-08, 2008-09 and part Financial Year 2009-10 for Rs.27,464.The Company also fled the necessary Applications with the CG seeking their approval for re-appointment and payment of remuneration to Wholetime Directors for remaining part of the Financial Year 2009-10 and onwards which have not been approved by the CG in absence of "no objection letter" from the lenders. Accordingly a sum of Rs.41,144 being the excess amount paid for the aforesaid period continuous to be shown as recoverable. The working capital lenders have authorised IDBI Bank Ltd. (IDBI) to issue ‘no objection letter'' (NOC) for payment of managerial remuneration to whole time directors for the aforesaid period which has since been received from IDBI. The Company will now fle its representation with the CG for seeking their approval for the balance amount of remuneration. However, pending approval from the Central Government, the said amount, subsequent to Balance Sheet date, has been recovered from the respective Directors.

02 Interest charges on loans is net of Interest income from loans and advances amounting to Rs.4,515 (Previous year Rs.4,282).

03 Debt of the Company were earlier restructured under Corporate Debt Restructuring (CDR) mechanism in April 2004 which was subsequently modifed in June 2005 with cut-off date as 1st April, 2005. CDR Empowered Group at its meeting held on 9th February, 2011 has approved the reworked package of the Company with the cut off date as 1st January 2011 and communicated its sanction vide their letter No. BY CDR(JCP)/No 8643/2010-11 dated 29.03.2011. The reworked package includes interalia reduction in the existing rate of interest, re-schedulement for repayment of loans, conversion of overdue interest into funded interest term loan (FITL), conversion of Zero Coupon Premium Bonds (ZCPB''s), part of their premium and part of working capital loans into Equity, conversion of part of working capital loan into working capital Term Loan (WCTL), waiver of unpaid dividend on preference shares, waiver of penal interest etc. The conditions as stipulated by CDR EG while sanctioning Rework Package have been complied with by the Company. Accordingly, the impact of the reworked package has been considered in the Financial Statement.

04 Pursuant to the disinvestment by the Government of India, the Company had acquired 11,10,000 equity shares of Rs.100/- each of HTL Limited representing 74% of its equity capital at total consideration of Rs. 550,000 in terms of Shareholders Agreement dated 16.10.2001. The above consideration paid by the Company is subject to post closing adjustments on account of difference in net worth of HTL Limited as on 31.03.2001 and as on the date of purchase of shares in terms of Share Purchase Agreement dated 16.10.2001.The Company has submitted its claim on account of Closing Date Adjustment to the Government in respect of such reduction in net assets of HTL Limited which has not been settled by the Government. Due to this, the Company has invoked the provisions of the Share Purchase Agreement for settlement of dispute by Arbitration. The Hon''ble Arbitral Tribunal has since given the award in favour of the company on 10th October, 2007 upholding the claim of the company on account of the above to the extent of Rs.550,000 and interest from the date of award. The said award has been upheld by the Divisional Bench of Hon''ble High Court of Delhi on 25th February, 2013, however, the consequential effect has not been given as DoT is entitled to appeal against said order before Hon''ble Supreme Court of India.

05 The Company had made payment of Rs.2,400 (Previous year Rs.2,400) to certain cumulative redeemable preference shareholders as per contractual obligations in the earlier years. The said amount paid have been shown as "advances" to be adjusted against future expected liability of dividend on cumulative preference shares.

06 Payment made to lenders towards guarantee contract/obligation amounting to Rs.98,187 including associate company (Previous year Rs.59,500) has been accounted for under the head Exceptional items.

07 In accordance with the Company Policy, the company has reviewed the outstanding receivables and is in continuous process of working out different modalities of recovery. The Company has also written off a sum of Rs. 303,007 during the year, which in the opinion of the Management, is adequate.

08 During the year, Company has recognised the following amounts in the fnancial statements as per Accounting Standard 15 (Revised) "Employees Benefts" issued by the ICAI:

09 The Company has carried out Impairment Test on its Fixed Assets as on 31.3.2013 and the Management is of the opinion that there is no asset for which impairment is required to be made as per Accounting Standard-28 on Impairment of Assets issued by ICAI . (Previous year Rs. Nil)

10 Lease payments under cancellable operating leases have been recognised as an expense in the proft & loss account. Maximum obligation on lease amount payable as per rentals stated in respective agreements are as follows:-

11 Segment Reporting

(a) Primary segment information

The Company''s operations primarily relates to manufacturing of telecom products, executing turnkey contracts and providing services relating thereto. Accordingly segments have been identifed in line with Accounting Standard on Segment Reporting ''AS-17'' .Telecom products and Turnkey contracts and services are the primary business segments whereas Others constituting less than 10% of the segment revenue/results/assets and accordingly have been considered as other business segments and are disclosed in the fnancial statements. Details of business segments are as follows:

12 Previous period''s fgures have been regrouped/reclassifed wherever necessary and the fgures have been rounded off to the nearest rupee.


Mar 31, 2012

A Equity Shares

(i) 278,180 (Previous year 278,180) shares of Re. 1/- each represent Global Depository Receipts.

(ii) 14,550,000 (Previous year 14,550,000) shares of Re. 1/- each issued for consideration other than cash pursuant to the amalgamation of erstwhile Himachal Telematics Ltd. with the Company.

(iii) The Company on 10th April 2006, further allotted 100B to F Series Foreign Currency Convertible Bonds (FCCBs) of USD 100,000 each fully paid up aggregating to USD 10 million. Each FCCB has been converted into 168,620 fully paid up equity shares of face value of Rs.10 each at a premium of Rs.16.45 per equity share ( At a total price of Rs.26.45 per share).

(iv) 529,601,640 shares of Re. 1/- each have been allotted for a consideration other than cash pursuant to the Composite Scheme of Arrangement and Amalgamation between Sunvision Engineering Company Private Limited (SECPL) its share holders and the Optionally Convertible Debenture (OCD) holders and the Company and its shareholders sanctioned by the Hon'ble High Court of Himachal Pradesh at Shimla vide its order passed on 5 th January, 2011.

B Preference Shares

The Cumulative Redeemable Preference Shares (CRPS) aggregating to Rs. 805,000 shall be redeemed at the rate of 25% and 75% of the face value in the financial years ending 31st March 2018 and 31st March, 2019, respectively and will carry the coupon rate of 6.50% from new cut off date i.e. 1st January 2011. However, dividend accrued on notional basis, as same has not been declared and fallen due for payment, and penal interest thereon, till the cut-off date, stands waived as per CDR rework package.

C Terms/right attached to Equity/Preference Shares

The Company has issued equity share of Re.1/- each and preference share of Rs.100/- each. On a show of hands, every holder of equity shares is entitled for one vote and upon a poll shall have voting rights in proportion to the shares of the paid up capital of the Company held by them. Preference shareholders shall have voting right in proportion to the shares of the paid up capital provided if the dividend due on such capital or any part of such dividend has remained unpaid. The Company declares dividend, if any, in Indian Rupees. The dividend, if any, proposed by the Board of Directors is subject to the approval of shareholders in the 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 amount in proportion to their shareholdings.

Secured Long Term Borrowings

a) Term loan of Rs.791,043 (Previous year Rs.791,043) from financial institution and Funded interest term loan of Rs.339,154 (Pre- vious year Rs. 450,022) are secured on pari passu basis by way of first charge on all the immovable properties, both present and future, by way of equitable mortgage and first charge on the entire sales proceeds of the contracts covered under the aforesaid loan to be credited to the Escrow/designated account.

b) Term loan of Rs.233,541 (Previous year Rs.233,541) from a bank, Working capital term loan of Rs.182,010(Previous year Rs.182,010) and Funded interest term loan of Rs.310,600 (Previous year Rs. 361,614) are secured by way of pledge of shares/ Bonds/Units and also secured on pari passu basis by way of hypothecation of stocks of raw materials, finished and semi- finished goods, stores and spares, book debts etc. as well as by way of second charge on immovable properties pertaining to the Com- pany.

c) Working capital term loans of Rs.250,800 (Previous year Rs.134,941) from banks and Funded interest term loans of Rs.207,800 (Previous year Rs.143,900) are secured on pari passu basis by way of hypothecation of stocks of raw materials, finished and semi- finished goods, stores and spares, book debts etc. as well as by way of second charge on immovable properties pertaining to Wireline, Wireless and Cable divisions of the Company.

d) Pursuant to the rework CDR package, some of the loans amounting to Rs.24,30,301 have been converted into Equity shares of the Company at a price of Rs.9.84 per equity share as per SEBI guidelines, after complying with necessary formalities in this regard. In the previous year pending completion of such formalities the said amount of Rs.24,30,301 was shown as " Loans pending conversion into Equity" under the head "Loan Funds".

e) All the secured loans as stated above are also personally guaranteed by Managing Director of the Company.

f) Term loans are repayable in 7 years commencing from Financial year 2012-13 with rate of Interest @10% p.a. and Interest free Funded interest term loans are repayable in three equal annual installments commencing from December 31, 2016, as detailed here in below:

a) Working capital loans from banks aggregating to Rs.363,504 (Previous year Rs. 534,300) are secured on pari passu basis by way of hypothecation of stocks of raw materials, finished and semi- finished goods, stores and spares, book debts etc. as well as by way of second charge on immovable properties pertaining to Wireline, Wireless and Cable divisions of the Company.

b) Other loans amounting to Rs. Nil (Previous year Rs.123) are secured by way of hypothecation of assets under hire purchase agreements.

As at As at 31.03.2012 31.03.2011

1 Contingent Liabilities not provided for in respect of :

(a) Unexpired Letters of Credit (margin money paid Rs.70,000 ; Previous year Rs.20,511) 125,214 15,702

(b) Guarantees given by banks on behalf of the Company (margin money kept by way 338,176 478,992 of fixed deposits Rs.147,919; Previous year Rs.168,812)

(c) Counter Guarantees given by the Company to the financial institutions/ banks for providing 1,374,331 1,374,331* guarantees on behalf of companies promoted by the Company. (margin money kept by the banks by way of fixed deposits Rs. Nil ; Previous year Rs Nil)

(d) Arrears of Dividend on Cumulative redeemable preference shares 137,937 400,513

* This excludes Company's counter guarantees of Rs.56.70 crore in respect of guarantees provided by the banks and institutions on behalf of HFCL Bezeq Telecom Ltd. for bid bonds to Department of Telecommunications (DoT) towards tender for operation of basic telephone services as the guarantees have already expired and the Hon'ble Delhi High Court vide its order dated 19.09.97 granted permanent injunction restraining the DoT from invoking the said guarantees. The appeal filed by DoT against this also stands dismissed as per order dated 02/01/2012. The Hon'ble High Court has further directed the banks to treat the said bank guarantee(s) as discharged.

2 Estimated amount of contracts remaining to be executed on capital account and not 78,138 51,625 provided for (net of advances)

3 Claims against the Company towards sales tax, income tax and others in dispute not acknowledged 100,903 100,903 as debt (deposited under protest Rs.5,000 shown as advance)

4 The Company has received necessary approval from the Central Government for the re-appointment and payment of remuneration to Wholetime Directors for the Financial Year 2007-2008, 2008-09 and part Financial Year 2009-10 for Rs.27,464.The Company has also filed the necessary application with the Central Government seeking their approval for re-appointment and payment of remuneration to Wholetime Director for remaining part of the Financial Year 2009-10 and onwards which has not been approved by the Central Government. However, since the Financial Year 2007-08, the company has so far paid Rs.64,396 as remuneration to Whole time Directors. As the approval of Central Government received is of lesser amount than the actual amount paid for the aforesaid period, the excess amount of Rs.36,932 paid continues to be shown as recoverable. The Company is in the process of making representation to the Central Government for seeking their approval for the entire amount of remuneration paid to them.

5 Interest charges on loans is net of Interest income from loans and advances amounting to Rs.4,282 (Previous year Rs.122,333) .

6 (a) Debt of the Company were earlier restructured under Corporate Debt Restructuring (CDR) mechanism in April 2004 which was subsequently modified in June 2005 with cut-off date as 1st April, 2005. CDR Empowered Group at its meeting held on 9th February, 2011 has approved the Rework package of the Company with the cut off date as 1st January 2011 and communicated its sanction vide their letter No. BY CDR(JCP)/No 8643/2010-11 dated 29.03.2011. The Rework package interalia includes reduction in the existing rate of interest, re-schedulement for repayment of loans, conversion of overdue interest into funded interest term loan (FITL), conversion of Zero Coupon Premium Bonds (ZCPB's), part of their premium and part of working capital loans into Equity, conversion of part of working capital loan into working capital Term Loan (WCTL), waiver of unpaid dividend on preference shares, waiver of penal interest etc. The said CDR package also stipulates arrangement of additional infusion of funds by the promoters.

(b) The Company has created securities as stipulated by the CDR Empowered Group and complied with all other terms and conditions except execution of pledge of shares in favour of the lenders. The execution of pledge of shares as stipulated in CDR rework package which is in process. Accordingly, during the year:

i) In terms of CDR rework package, Secured working capital loans from banks amounting to Rs.165,201 Zero Coupon Premium Bonds (ZCPBs) amounting to Rs.19,50,700 and the premium of Rs.3,14,400 accrued on these ZCPB's till cut off date have been converted into equity shares of face value of Re.1/-each at a price of Rs.9.84 per equity share as per SEBI guidelines.

ii) Subsequent to the individual sanctions & reconciliation with working capital lenders, a sum of Rs.120,800 (Previous period Rs.235,604) out of working capital loan have been converted into working capital term loans (WCTL) and the same is to be repaid in 84 monthly installments commencing from 30th April 2012.

iii) Subsequent to the individual sanctions & reconciliation with working capital lenders, a sum of Rs.63,900 (Previous period Rs.793,654) being interest accrued and due up to the cut off date on working capital loans have been converted into Funded Interest Term Loan (FITL) and which is repayable in three equal annual installments commencing from 31st December 2016 onwards and shall not carry any interest.

(c) The Company is in process of reconciliation of balances with one of the bank. Adjustments, if any, on account of interest/ principal will be made when the same stands reconciled and confirmed.

7 Pursuant to the disinvestment by the Government of India, the Company had acquired 1,110,000 equity shares of Rs.100/- each of HTL Limited representing 74% of its equity capital at total consideration of Rs. 550,000 in terms of Shareholders Agreement dated 16.10.2001. The above consideration paid by the Company is subject to post closing adjustments on account of difference in net worth of HTL Limited as on 31.03.2001 and as on the date of purchase of shares in terms of Share Purchase Agreement dated 16.10.2001.The Company has submitted its claim on account of Closing Date Adjustment to the Government in respect of such reduction in net assets of HTL Limited which has not been settled by the Government. Due to this, the Company has invoked the provisions of the Share Purchase Agreement for settlement of dispute by Arbitration. The Hon'ble Arbitral Tribunal has since given the award in favour of the company on 10th October, 2007 upholding the claim of the company on account of the above to the extent of Rs.550,000 and interest from the date of award.

Since the Government of India has gone in appeal against the above arbitral award which is yet to be decided by the Hon'ble High Court, no adjustment has been made in the accounts in respect of above award pending the final outcome.

8 The Company had made payment of Rs.113,375 to certain cumulative preference shareholders as per contractual obligations in the earlier years. Pursuant to the CDR rework package some of the preferential share holders has adjusted a sum of Rs.110,975 against the contractual liability and waived the balance dues. Accordingly, a sum of Rs.110,975 has been written off and the balance amount of Rs.2,400 (previous year 113,375) has been shown as "advances" to be adjusted against future expected liability of dividend on cumulative preference shares.

9 Exceptional items consists of (i) Payment made to lenders towards guarantee contract/obligation amounting to Rs.59,500 including promoted companies (Previous period 64,500) (ii) Written back of liabilities / waiver under rework package of CDR and on account of One Time Settlement of some of the of the lenders Rs. NIL (Previous period Rs.2,677,977).

10 Sundry debtors include debts outstanding for more than two years amounting to Rs.2,417,161. The Company is in continuous process of working out different modalities of recovery for its remaining long outstanding debts. Pending outcome of such exercise, an amount of Rs.83,507 has been written off during the year, which is in opinion of the management is adequate.

11 During the year, Company has recognised the following amounts in the financial statements as per Accounting Standard 15 (Revised) "Employees Benefits" issued by the ICAI :

a) Defined Contribution Plan

Contribution to Defined Contribution Plan, recognised are charged off for the year/period as under :

b) Defined Benefit Plan

The employees' gratuity fund scheme managed by HDFC Standard Life Insurance Company Limited 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 and the obligation for leave encashment is recognised in the same manner as gratuity.

12 The Company has carried out Impairment Test on its Fixed Assets as on 31.03.2012 and the Management is of the opinion that there is no asset for which impairment is required to be made as per Accounting Standard-28 on Impairment of Assets issued by ICAI . (Previous period Rs.795,275 has been impaired )

13 Lease payments under cancellable operating leases have been recognised as an expense in the profit & loss account. Maximum obligation on lease amount payable as per rentals stated in respective agreements are as follows:-

14 Balances of some of the sundry debtors, creditors, lenders ,loans and advances are subject to confirmations from the respective parties and consequential adjustments arising from reconciliation, if any. The Management, however is of the view that there will be no material adjustments in this regard.

15 Segment Reporting

(a) Primary segment information

The Company's operations primarily relates to manufacturing of telecom products, executing turnkey contracts and providing services relating thereto. Accordingly segments have been identified in line with Accounting Standard on Segment Reporting 'AS- 17' .Telecom products and Turnkey contracts and services are the primary business segments whereas others constituting less than 10% of the segment revenue/results/assets and accordingly have been considered as other business segments and are disclosed in the financial statements. Details of business segments are as follows:

Note: 1. The above information and that given in Note No. 7 ' Trade payable' regarding Micro, Small and Medium Enterprises has been determined on the basis of information available with the Company and has been relied upon by the auditors.

Note: 2. The Company is in process of compiling relevant information for the period from its suppliers, since the information is not ready, no disclosure have been made in accounts. However, in view of the management, the impact of interest, if any, that may be payable is not expected to be material.

16 Earning per Share (EPS)- In accordance with the Accounting Standard (AS-20)

17 The figures of the current year are not comparable with those of previous period as current year is for Twelve months as against six months for previous period. Previous period's figures have been regrouped/reclassified wherever necessary and the figures have been rounded off to the nearest rupee.


Mar 31, 2011

(Rs. in thousands) 1. The Company has opted for the period of current financial year as six months from 1st October, 2010 to 31st March 2011. During the previous year, Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh (ROC) vide its order dated 4th May, 2010 had granted the permission to the Company to prepare the annual accounts for a period of eighteen months ending 30th September, 2010.

As at As at 31.03.2011 30.09.2010

2. Contingent Liabilities not provided for in respect of :

(a) Unexpired Letters of Credit (margin money paid Rs. 20,511; Previous year 15,702 24,348 Rs. 44,745)

(b) Guarantees given by banks on behalf of the Company (margin money kept 4,78,992 4,15,295 by way of fixed deposits Rs. 168,812; Previous year Rs. 104,422)

(c) Counter Guarantees given by the Company to the financial institutions/banks 13,74,331* 19,15,672* for providing guarantees on behalf of companies promoted by the Company. (margin money kept by the banks by way of fixed deposits Rs. Nil ; Previous year Rs. Nil)

* This excludes Company’s counter guarantees of Rs. 567,000 in respect of guarantees provided by the banks and institutions on behalf of HFCL Bezeq Telecom Ltd. for bid bonds to Department of Telecommunications (DoT) towards tender for operation of basic telephone services as the guarantees have already expired and the Hon’ble Delhi High Court vide its order dated 19.09.97 granted permanent injunction restraining the DoT from invoking the said guarantees. The appeal fled by DoT against this also stands dismissed. The DoT has fled application for restoration of appeal before the Double Bench of the Hon’ble High Court of Delhi which has been allowed and matter is now pending for decision.

* The Company has received necessary approval from the Central Government for the re-appointment and payment of remuneration to Wholetime Directors for the Financial year 2007-08, 2008-09 and part financial year of 2009-10 for Rs. 27,464. The Central Government has not given its approval for remuneration paid to Managing Director for the period from 1st October, 2010 to 31st March, 2011. However, since the financial year 2007-08, the Company has so far paid Rs. 52,772 as remuneration to Wholetime Directors. As the approval of Central Government received is of lesser amount than the actual remuneration paid for the aforesaid period, the excess amount of Rs. 25,308 paid continues to be shown as recoverable. The Company is in the process of making representation to the Central Government for seeking their approval for the entire amount of remuneration paid to them. The Company also fled necessary application with the Central Government seeking their approval for re-appointment and payment of remuneration to Wholetime Director for financial year 2009-10 and onwards which is under their consideration.

3. Interest charges on loans is net of Interest income from loans and advances amounting to Rs. 122,333 (Previous year Rs. 145,483).

4. a Debt of the Company were earlier restructured under Corporate Debt Restructuring (CDR) mechanism in April 2004 which was subsequently modified in June 2005 with cut-off date as 1st April, 2005. Because of liquidity problems and due to inadequate working capital funds, the Company had again approached its lenders viz. Banks and Financial Institutions for Rework of earlier sanctioned restructuring package. CDR Empowered Group at its meeting held on 9th February, 2011 has approved the Rework package of the company with the cut off date as 1st January 2011 and communicated its sanction vide their letter No. BY CDR(JCP)/No 8643/2010-11 dated 29.03.2011. The Rework package includes interalia reduction in the existing payable rate of interest, reschedulement and longer period for repayment of loans, conversion of overdue interest into funded interest term loan (FITL), conversion of Zero Coupon Premium Bonds (ZCPB’s), part of their premium and part of working capital loans into Equity, conversion of part of working capital loan into working capital Term Loan (WCTL), waiver of unpaid dividend on preference shares, waiver of penal interest etc. The said CDR package also stipulates conditions to be complied with by the Company and arrangement of additional infusion of funds from promoters.

b The Company has complied with most of the conditions as stipulated in CDR Rework package. Accordingly, the impact of CDR Scheme as above has been incorporated in these financial statements as below:

i) Interest to banks and financial institutions w.e.f. cut off date has been accounted for at the rates specified in the said package.

ii) The Cumulative Redeemable Preference Shares (CRPS) aggregating to Rs. 805,000 shall be redeemed at the rate of 25% and 75% of the face value in the financial years ending 31st March 2018 and 31st March, 2019, respectively and will carry the coupon rate of 6.50% from new cut off date i.e. 1st January 2011. However, dividend accrued on notional basis, as same has not been declared and fallen due for payment, and penal interest thereon, till the cut-off date, shall be waived. (Also refer Note no. 9 (c ) below)

iii) Zero Coupon Premium Bonds (ZCPBs) amounting to Rs. 1,950,700 shall be converted into equity shares of face value of Rs. 1/-each at a price to be arrived at as per SEBI guidelines. Accordingly Equity shares equal to Rs. 1,950,700 divided by such arrived at price shall be allotted to the holders of ZCPBs after necessary compliance & formalities. Out of the total premium of Rs. 1,189,781 accrued on these ZCPBs till cut off date, a sum of Rs. 314,400 shall also converted into equity share of face value of Rs. 1/- each at a price to be arrived at as per SEBI guidelines. According Equity shares equal to Rs. 314,400 divided by such arrived at price shall be allotted to the holders of ZCPBs after necessary compliance & formalities and balance amount of premium of Rs. 875,381 has been waived. The amount of premium waived which was earlier adjusted from security premium account in earlier years has now been reversed.

iv) Secured and unsecured working capital loans from banks amounting to Rs. 240,545 have been converted into working capital term loans (WCTL) which together with existing WCTL of Rs. 76,406 have been reschedule so as to be repaid in 84 monthly installments, commencing from 30th April 2012 and ending 31st March 2019.

v) Secured working capital loans from banks amounting to Rs. 170,142 shall be converted in to equity shares of face value of Rs. 1/- each at a price to be arrived at as per SEBI guidelines. Accordingly equity shares equal to Rs. 170,142 divided by such arrived at price shall be allotted to the respective lenders after necessary compliance & formalities.

vi) The outstanding principal amount of secured loan amounting to Rs. 1,024,584 from financial institutions and banks have been rescheduled so as to be repaid in 84 monthly installments commencing from 30th April, 2012 and ending 31st March 2019 on flat interest rate of 10% p.a. from cut off date.

vii) Funded Interest Term Loans (FITL) amounting to Rs. 647,346 have been settled at 25% on one time settlement basis. One time settled amount of Rs. 161,836 is payable by 30th September 2011. The balance 75% of FITL i.e. Rs. 485,509 has been waived off and shown under the head other income as waiver of loans & writes back of liability.

viii) Interest accrued and due on simple interest basis amounting to Rs. 506,500 up to the cut off date on the term loans have been converted into Funded Interest Term Loan (FITL) and is to be repaid in three equal installments on 31st December 2016, 31st December 2017 and 31st December 2018 and shall not carry any interest. Balance amount of outstanding interest as on cut off date, comprising of liquidated damages etc. amounting to Rs. 83,294 has been waived and shown under the head other income as waiver of loans & writes back of liability.

ix) Interest accrued and due on simple interest basis amounting to Rs. 287,200 up to the cut off date on working capital loans have been converted into Funded Interest Term Loan (FITL) and is to be repaid in three equal installments on 31st December 2016, 31st December 2017 and 31st December 2018 and shall not carry any interest. Balance amount of outstanding interest as on cut off date, comprising of liquidated damages etc. amounting to Rs. 63,928 has been waived and shown under the head other income as waiver of loans & writes back of liability.

x) The Company has to create securities as stipulated by the CDR Empowered Group.

xi) One of the working capital lender having total outstanding of Rs. 157,226 as at 31.03.2011 has not agreed to the restructuring granted by CDR empowered group. However, the Company is in discussion with the lender for fresh proposal which is under consideration.

c Some of the Cumulative Redeemable Preference Share (CRPS) shareholders have disputed the modified terms of redemption and rate of dividend as per CDR package on the ground that they have not agreed to any of the restructuring granted by CDR empowered group and hence original terms and conditions of 12% CRPS continues to be in force and accordingly are insisting for redemption and dividend as per the original terms of the issue of CRPS. One of the preference shareholder has earlier fled case against the company for recovery. The Company is in the advance stage of negotiation with these CRPS holders to accord their approval to reworked package approved under CDR system in view of the present financial position of the Company.

d The company is in process of reconciliation of balances with the lenders i.e. financial institutions and banks. Adjustments, if any, on account of interest/ principal will be made when the same are confirmed by them.

e The Company had settled the dues of certain lender/suppliers on One Time Settlement (OTS) basis and made the final payment of settled amount during the current period. The gain arising out of such OTS has been accounted for during the current period under the head other income as waiver of loan, interest thereon and write backs. The provision for premium on Zero Coupon Premium Bond issued to lender amounting to Rs. 641,349 which was adjusted from security premium account in earlier years has been now reversed.

f Pursuant to the rework of CDR package, some of the loans amounting to Rs. 2,435,242, are to be converted into Equity shares of the Company at a price to be arrived at as per SEBI guidelines, after complying with necessary formalities in this regard. Pending completion of such formalities the amount of Rs. 2,435,242 has been kept as " Loans pending conversion into Equity" and shown under the head "Loan Funds".

5. 529,601,640 equity share of Rs. 1/- each have been issued & allotted as on 10th February, 2011 pursuant to the Arrangement & Amalgamation to the shareholders and Optionally Convertible Debenture (OCD) holders of erstwhile Sunvision Engineering Company Private Limited (SECPL) this amount was shown as ‘Equity Share Suspense Account’ as on 30.09.2010.

6. Pursuant to the disinvestment by the Government of India, the Company had acquired 1,110,000 equity shares of Rs.100/- each of HTL Limited representing 74% of its equity capital at total consideration of Rs. 550,000 in terms of Shareholders Agreement dated 16.10.2001. The above consideration paid by the Company is subject to post closing adjustments on account of difference in net worth of HTL Limited as on 31.03.2001 and as on the date of purchase of shares in terms of Share Purchase Agreement dated 16.10.2001.The Company has submitted its claim on account of Closing Date Adjustment to the Government in respect of such reduction in net assets of HTL Limited which has not been settled by the Government. Due to this, the Company has invoked the provisions of the Share Purchase Agreement for settlement of dispute by Arbitration. The Hon’ble Arbitral Tribunal has since given the award in favour of the company on 10th October, 2007 upholding the claim of the company on account of the above to the extent of Rs. 550,000 and interest from the date of award.

Since the Government of India has gone in appeal against the above arbitral award which is yet to be decided by the Hon’ble High Court, no adjustment has been made in the accounts in respect of above award pending the final outcome.

7. The Company had made a payment of Rs. 113,375 to certain cumulative preference shareholders as per contractual obligations in the earlier years. The said amounts paid have been treated as "advances" to be adjusted against future expected liability of dividend on cumulative preference shares.

8. Dividend on 6,500,000 equity shares of AB Corp Ltd. which are pledge with OBC (e- GTBL), amounting to Rs. 39,000 has not been received by the Company. The same is under reconciliation and shall be accounted for after completion of reconciliation.

9. During the year, the Company has transferred a sum of Rs. 1,432,715 to Loans & Advances from the carrying amount of its investment in Optionally Fully Convertible Debentures (OFCDs), as per the agreed terms with respective investee companies, since the Company has not exercised its conversion option and said OFCDs had become overdue for redemption. An amount of Rs.1,132,715 had already been provided in the accounts in earlier years towards diminution in value of these OFCDs.

10. Profit on sales of Investment (net) includes Rs. 60 being Profit on sales of OFCD’s, [Sale proceeds of OFCDs Rs. 60 Less (cost in books Rs. 2,700,757) less (Provision already made in earlier years for diminution in value Rs. 2,700,757) ].

11. During the period the Company has paid Guarantee contract/obligation amounting to Rs. 64,500 towards obligation payments ( as Corporate guarantor ) to the lenders of promoted companies against their over dues.

12. Sundry debtors include debts outstanding for more than two years amounting to Rs.v2,564,056. The Company is in continuous process of working out different modalities of recovery for its remaining long outstanding debts. Pending outcome of such exercise, an amount of Rs. 614,203 has been written off during the period, which is in opinion of the management is adequate.

13. Pursuant to the Accounting Standard (AS-28) - Impairment of Assets issued by ICAI, the Company had appointed an outside agency for conducting an exercise of identifying the assets, if any, that may have been impaired. Based on the report Impairment loss of Rs. 795,275 has been determined on curtained fixed assets as at 31.03.2011 and the same has been provided in the accounts. The Impairment loss has been assessed on the basis of projected cash flows of Cash Generating Units (CGUs) for the next 3 years discounted at IRR of 8.5%.

14. Balances of some of the sundry debtors, creditors, lenders ,loans and advances are subject to confirmations from the respective parties and consequential adjustments arising from reconciliation, if any. The Management, however is of the view that there will be no material adjustments in this regard.

15. The fgures of the current period are not comparable with those of previous year as current period is for six months as against period of eighteen months for previous year. Previous year’s fgures have been regrouped/reclassified wherever necessary and the fgures have been rounded off to the nearest rupee.


Sep 30, 2010

A. OTHER NOTES

1 The Company has filed an application under section 210 (4) of the Companies Act, 1956 with the Registrar of Companies , Punjab, Himachal Pradesh and Chandigarh (ROC) seeking permission to extend the fi -nancial year of the Company for a period of eighteen months commencing from 1st April, 2009 to 30th September, 2010. The ROC vide its order dated 4th May, 2010 has granted the permission to the Company to prepare the annual accounts for eighteen months up to 30th September, 2010.

2 The Board of Directors of the Company in compliances with the terms of (i) letter dated 13th August, 2009 issued by CDR Cell of IDBI, (ii) Settlement Co-operation Agreement dated 12th September, 2009, (iii) SEBI order dated 3rd March, 2010 and IDBIs letter dated 30th March, 2010 at its meeting held on 30th March, 2010 has approved the sale of 32,67,05,000 equity shares and 65,00,000 Cumulative Redeemable Preference shares of HFCL Infotel Limited held by the Company to fulfi ll its obligation as stipulated in settlement co-operation agreement dated 12.09.2009. Accordingly the said shares have been sold on 31st March, 2010 and HFCL Infotel Limited has ceased to be a subsidiary of the Company w.e.f. 31st March, 2010. The loss on sale of the said investment in subsidiary of Rs.3916.05 million has been shown as extra ordinary item in the profit & Loss Account.

3 (a) The Honble High Court of Himachal Pradesh at Shimla has sanctioned the Composite Scheme of Arrangement and Amalgamation (" the Scheme") between Sunvision Engineering Company Private Limited ("SECPL", Transferrer Company), its Shareholders and Optionally Convertible Debenture holder ("OCD holder") and Himachal Futuristic Communications Limited ("HFCL", Company, Transferee Company) and its Shareholders vide its order passed on 5th January, 2011 u/s 391 to 394 of the Companies Act, 1956.The aforesaid Order has been filed with the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh (ROC) in the prescribed form no. 21 both by HFCL and SECPL, and ROC has issued a certifi cate confi rming the registration of the aforesaid Court Order on 14th January, 2011 i.e. "effective date". With the registration of the aforesaid Court Order on 14th January, 2011 (effective date), SECPL stands amalgamated with HFCL w.e.f. 1st January, 2010 (Appointed date).

(b) The objects for which SECPL had been established were to carry on the business of manufacturing, assembling, trading, repairing, installation and commissioning of various types of engineering equipments, engineering goods, infrastructural works, civil, mechanical, electrical projects, etc. The Company forayed in the business of electronic surveillance, electronic security and monitoring systems, etc. and made a strategic investment of 47.95% in Polixel Security Systems Private Limited (Polixel).

(c) Consequent upon the said scheme becoming effective, the Companys issued, subscribed and paid up equity share capital stands reduced from Rs. 4627.94 million divided into 46,27,93,697 equity shares of Rs. 10/- each to Rs. 462.79 million divided into 46,27,93,697 equity shares of Re 1/- each by reduction in face value and paid up value from Rs. 10/- per share to Re 1/- per share. Accordingly, an amount of Rs.4165.15 million being the equity capital so reduced has been credited to the Business Reconstruction Account. The ROC has also issued a necessary certifi cate under Section 103(4) of the Companies Act, 1956 on 14th January, 2011 confi rming the reduction in equity share capital of the Company.

(d) With effect from the Appointed date SECPL (Transferor Company) has been amalgamated with the Company, as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein subject to existing charges thereon in favour of banks and financial institutions. All the employees of the Transferor Company, who are in service on the effective date, shall become the employees of the Company on that date, without any break or interruption in service.

(e) In consideration for the amalgamation, 470,000,000 equity shares of face value of Re1/- each, credited as fully paid-up, in the ratio of 47(forty seven) equity shares of the face value of Re1/- each in the Company for every 1 (one) equity share of face value of Rs.10/- each held in SECPL have been allotted on 10th February, 2011 to the share holders of SECPL whose names appeared in the Register of Members, as on 9th February, 2011, being the record date. Further, upon the scheme becoming effective, 59,601,640 equity shares of Re 1/- each credited as fully paid-up have been allotted to the Optionally Convertible Debenture Holders of erstwhile SECPL.

(f) The amalgamation has been accounted for under the Purchase method prescribed by Accounting standard AS-14 " Accounting for Amalgamations " issued by the Institute of Chartered Accountants of India. Accordingly, the assets and liability of SECPL have been recorded at fair value on the appointed date.

(g) In terms of the Scheme, the Company has recorded all the assets and liabilities appearing in the books of account of SECPL and transferred to and vested in the Company at their fair values as on 1st January, 2010. For this purpose the fair value of Assets including Investments is as per the report of the independent valuers, fairness opinion on the said valuation report and based on the managements assessment of its recoverability. The difference of Rs.33.68 million between the fair value of net assets of SECPL transferred to the Company, and the fair value of equity shares allotted by the Company (the consideration) has been debited to Goodwill. The same has been written off in profit and Loss Statement.

(h) Excess of Consideration over the paid-up value of equity shares issued and allotted (as referred to under 3(e) above) amounting to Rs.4770.50 million has been credited to Securities Premium Account as prescribed in the Scheme. Further, difference between fair value and paid up value of equity shares issued and allotted to OCD holders of erstwhile SECPL (as referred to under 3(e) above) amounting to Rs.640.40 million has been credited to Securities Premium Account as prescribed in the Scheme.

i) The Company is in the process of getting the investment and other assets of SECPL transferred in its own name by the operation of law.

(j) Authorised Share Capital of the Transferee Company is total of the authorised share capital of both the Companies

4 529,601,640 equity share of Re 1/- each referred to note no. B-3(e) above have been allotted after the balance sheet date i.e. on 10th February, 2011 for a consideration other than cash pursuant to the scheme to the shareholders and the OCD holders of erstwhile SECPL and have been booked in " Equity Share Suspense" account as on 30.09.2010.

5 Pursuant to the scheme approved by the Honble high court of Himachal Pradesh vide its order dated 05 January, 2011 under section 391 to 394 of the Companies Act, 1956, (the Act), SECPL has amalgamated with Company w.e.f. 1st January, 2010. Before amalgamation SECPL was having certain investment and loans. However being a private limited company it was exempt from the provisions of section 372A of the Act. On amalgamation, the financial statements of SECPL and Company have been combined as a result of which the Company has exceeded the prescribed limit u/s 372A(1) of the Act and it has to carry on certain investment in the form of debentures at a rate of interest lower than the rate prescribed u/s 372A(3) of the Act. The above situation has arisen only on account of amalgamation as per the scheme approved by the Honble High Court.

The Company has been legally advised that in above situation it would not be deemed to have violated the provisions of section 372A(1) and (3) of the Act.

As at As at 30.09.2010 31.03.2009 (Rs. in millions) (Rs. in millions)

6 Contingent Liabilities not provided for in respect of :

(a) Unexpired Letters of Credit (margin money paid Rs.44.74 million ; Previous year Rs.2.62 million) 24.35 26.17

(b) Guarantees given by banks on behalf of the Company (margin money kept by way of fixed deposits Rs.104.42 million;

Previous year Rs.123.70 million) 415.29 440.06

(c) Counter Guarantees given by the Company to the financial institutions/banks for providing guarantees on behalf of companies promoted by the Company. (margin money kept by the banks by way of fi -xed deposits Rs. Nil ;

Previous year Rs Nil) 1,915.67* 7225.67*

* This excludes Companys counter guarantees of Rs.567.00 million in respect of guarantees provided by the banks and institutions on behalf of HFCL Bezeq Telecom Ltd. for bid bonds to Department of Telecommunications (DoT) towards tender for operation of basic telephone services as the guarantees have already expired and the Honble Delhi High Court vide its order dated 19.09.97 granted permanent injunction restraining the DoT from invoking the said guarantees. The appeal filed by DoT against this also stands dismissed. The DoT has filed application for restoration of appeal before the Double Bench of the Honble High Court of Delhi which has been allowed and matter is now pending for decision.

7 Interest charges on loans is net of Interest income from loans and advances and others amounting to Rs.145.48 million (Previous year Rs.1.01 million) .

8 (a) The Company had approached its lenders viz. Banks and Financial Institutions for financial restructuring and a financial restructuring package, has been approved under the Corporate Debt Restructuring (CDR) mechanism by the CDR Empowered Group of lenders vide letter dated 6th April ,2004. Subsequently the CDR Empowered Group in its meeting held on 8th June, 2005 has approved modifi cations to the aforesaid CDR package with the cut off date as 1st April 2005 and communicated to the company vide their letter No. BY CDR(ALB)/No 404 dated 24.06.2005.The modifi cation in the CDR package include, interalia, reduction of interest rate on loans with effect from new cut off date, re-schedulement of repayment of loans and Cumulative Redeemable Preference Shares (CRPS) and conversion of certain loan amounts into Zero Coupon Premium Bonds (ZCPBs) . The said CDR package also stipulates conditions to be complied with by the Company and arrangement of additional infusion of working capital from existing or new lenders.

(b) The Company has complied with most of the conditions as stipulated in CDR package and Master Restructuring Agreement (MRA) has been signed with the lenders. Pursuant to the modifi ed CDR package:

i) Interest to banks and financial institutions has been accounted for at the rates specifi ed in the said package.

ii) The Cumulative Redeemable Preference Shares (CRPS) aggregating to Rs. 805.00 million shall be redeemed at the rate of 25% and 75% of the face value in the financial years ending 31st March 2018 and 31st March, 2019, respectively and will carry the coupon rate of 9% from old cut off date till new cut off date and 6.50% from new cut off date. (Also refer Note no.13(d) below)

iii) The Company has issued 23,600,000 and 8,318,000 Zero Coupon Premium Bonds (ZCPBs) of Rs.100/- each on 30th October,2004 and 8th October, 2005 respectively in lieu of the part of term loans and debentures from financial institutions and banks. ZCPBs are to be redeemed in 48 monthly installments, from 30th April 2011 and ending 31st March 2015 on ballooning basis to ensure yield of 8.5% p.a. on simple interest basis by way of premium payable in 36 monthly interest free installments commencing from 30th April,2015 till 31st March, 2018.

iv) Secured and unsecured working capital loans from banks amounting to Rs. 315.00 million and Rs. 76.41 million respectively have been converted into working capital term loans to be repaid in 48 monthly installments, on ballooning basis, from 30th April, 2011 and ending 31st March, 2015 to ensure yield of 8.5% p.a. on simple interest basis..

v) The outstanding principal amount of secured and unsecured term loans (after conversion into OFCDs and ZCPBs) amounting to Rs.1316.82 million (Previous year Rs.1756.82 million) and Rs.33.50 million (Previous year Rs.131.59 million) respectively from financial institutions and banks have been rescheduled so as to be repaid on ballooning basis in monthly installments commencing from 30th April, 2007 till 31st March, 2013. The installments fallen due/repayable during the period eighteen month amounted to Rs.107.78 million (Previous year Rs.89.20 million) and Rs.3.35 million (Previous year Rs.6.71 million). Accordingly overdue installments amounting to Rs.349.95 million and Rs.11.73 million have not been paid for Secured and unsecured loans, respectively.

vi) Funded Interest Term Loan (FITL) amounting to Rs.889.68 million (Previous year Rs.889.68 million) is repayable in twenty four monthly installments commencing from 30th April, 2017 till 31st March, 2019 and shall not carry any interest.

vii) The Company is required to open and operate Trust and Retention Account and the rights, title and interest in all bank accounts have to be assigned to the lenders by way of fi rst ranking security interest.

viii) The Company has to create securities as stipulated by the CDR Empowered Group.

(c) Due to continued cash losses and very tight liquidity conditions, the company could not meet its interest and repayment obligations towards its lenders under CDR package its over due amount towards such lenders as on 30th September, 2010 is Rs.841.10 million (Previous year 556.91 million) including interest Rs.479.42 million (Previous year 394.88 million). However the company is in continuous discussions with lenders in respect of such default / possibility of further restructuring / modifi cation in the CDR package in view of this, the company does not expect withdrawal of any relief. Further, the company has submitted fresh restructuring proposal to the lenders which is under consideration

(d) Some of the Cumulative Redeemable Preference Share (CRPS) shareholders have disputed the modifi ed terms of redemption and rate of dividend as per CDR package on the ground that they have not agreed to any of the restructuring granted by CDR empowered group and hence original terms and conditions of 12% CRPS continues to be in force and accordingly are insisting for redemption and dividend as per the original terms of the issue of CRPS.

The management has requested the said CRPS shareholders to accord their approval to revised package in view of the present financial position of the company. One of the shareholders, has, however filed case against the company for recovery which is being contested.

(e) The company is in process of reconciliation of balances with the lenders i.e. financial institutions and banks. Adjustments, if any, on account of interest/ principal will be made when the same are confi rmed by them. The Company has submitted fresh restructuring proposal which has already been recommended by the lenders to the empowered group of CDR Cell.

(f) The Company has settled the dues of The Jammu & Kashmir Bank Ltd. and HDFC Bank Ltd. ( Formerly Centurion Bank of Punjab Ltd. ) on One Time Settlement (OTS) basis and the gain arising out of OTS amounting to Rs.210.67 million and Rs.391.18 million respectively has been accounted for under the head other income as remission of liability & interest thereon. Further, Rs.86.85 million being the provision for premium on Zero Coupon Premium Bond issued to the The Jammu & Kashmir Bank Ltd. which was earlier adjusted from security premium account in earlier year has been now reversed.

(g) The Company has its dues with Assets Reconstruction Company (India) Ltd (ARCIL) on One time settlement (OTS) basis and most of the commitments as per the OTS have been fulfi lled. In view of this, provision of interest on loan from ARCIL has not been made for the period from 1st July, 2010 to 30th September, 2010. The effect of the settlement will be given in the accounts after completion of all obligations.

9 The Board of Directors of the Company at their meeting held on 26th March, 2010 has allotted 20,000,000 equity shares of Rs. 10/- each at par to Asset Reconstruction Company (India) Limited on account of conversion of part of their loan into equity shares in terms of Loan Agreement dated 5th March, 2001 and letter dated 8th February, 2010 from ARCIL.

10 In terms of the modifi ed CDR package, Company has to pay interest on term loans on ballooning basis over the period 2006 to 2013 at the ballooning rates of interest from 2% to 15.5% p.a. The Company accounts for interest at the rate it is required to pay during the respective year in terms of the aforesaid package on monthly rests for this year, in place of @ 8.50% p.a. i.e. on YTM basis. Had the interest been provided for on YTM basis, the loss for the year would have been lower by Rs.172.60 million and the accumulated debit balance in the profit and Loss Account would have been higher by Rs.46.35 million.

11 Pursuant to the disinvestment by the Government of India, the Company had acquired 1,110,000 equity shares of Rs.100/- each of HTL Limited representing 74% of its equity capital at total consideration of Rs. 550.00 million in terms of Shareholders Agreement dated 16.10.2001. The above consideration paid by the Company is subject to post closing adjustments on account of difference in net worth of HTL Limited as on 31.03.2001 and as on the date of purchase of shares in terms of Share Purchase Agreement dated 16.10.2001.The Company has submitted its claim on account of Closing Date Adjustment to the Government in respect of such reduction in net assets of HTL Limited which has not been settled by the Government. Due to this, the Company has invoked the provisions of the Share Purchase Agreement for settlement of dispute by Arbitration. The Honble Arbitral Tribunal has since given the award in favour of the company on 10th October, 2007 upholding the claim of the company on account of the above to the extent of Rs.550.00 million and interest from the date of award.

Since the Government of India has gone in appeal against the above arbitral award which is yet to be decided by the Honble High Court, no adjustment has been made in the accounts in respect of above award. It shall be made as and when the appeal is decided finally.

12 The Company had made a payment of Rs.113.38 million to certain cumulative preference shareholders as per contractual obligations in the earlier years. The said amounts paid have been treated as "advances" to be adjusted against future expected liability of dividend on cumulative preference shares.

13 During the period the Company has paid Guarantee contract/obligation amounting to Rs. 69.92 million. It includes Rs. 23.12 million on account of compensation to its customers/ invocation of performance bank guarantees due to non fulfillment of contractual obligations in terms of work orders and Rs.46.80 million towards obligation payments ( as Corporate guarantor ) to the lenders of promoted companies against their over dues.

14 Sundry debtors include debts outstanding for more than two years amounting to Rs 1922.92 million. The Company is in continuous process of working out different modalities of recovery for its remaining long outstanding debts. Pending outcome of such exercise, an amount of Rs.677.19 million (net of provision) has been written off during the period, which is in opinion of the management is adequate.

15 During the year, Company has recognised the following amounts in the financial statements as per Accounting Standard 15 (Revised) "Employees benefits" issued by the ICAI :

a) Defi ned Contribution Plan

Contribution to Defi ned Contribution Plan, recognised are charged off for the year/period are as under:

b) Defi ned Benefit Plan

The employees gratuity fund scheme managed by HDFC Standard Life Insurance Company Limited a defi ned 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 fi nal obligation and the obligation for leave encashment is recognised in the same manner as gratuity.

15 To comply with the requirement of the Accounting Standard (AS-28) on "Impairment of Assets" the management has appointed an outside agency for conducting an exercise of identifying the assets that may have been impaired, if any. Since the exercise is still in process, the effect of diminution in value of assets due to impairment, if any shall be given in the accounts upon such determination.

16 Balances of some of the sundry debtors, creditors, lenders ,loans and advances are subject to confirmations from the respective parties and consequential adjustments arising from reconciliation, if any. The Management, however is of the view that there will be no material adjustments in this regard.

17 As required by Accounting Standard 18 "Related Party Disclosures" (i) Name of related parties and description of relationship:

Relationship Name of Related Party

(a) Subsidiaries: HTL Ltd.

Moneta Finance Pvt. Ltd.

HFCL Infotel Ltd. (Ceased w.e.f. 31st March, 2010)

Infotel Tower Infrastructure Private Ltd (Ceased w.e.f. 31st March, 2010)

(b) Associates: HFCL Bezeq Telecom Ltd

HFCL Dacom Infochek Ltd (HDIL) HFCL Kongsung Telecom Ltd HFCL Satellite Communications Ltd Exicom Tele-systems Ltd. Microwave Communications Ltd. Westel Wireless Ltd WPPL Ltd Polixel Security Systems Pvt. Ltd.

(c) Key management personnel: Mr. Mahendra Nahata

Mr. Arvind Kharabanda

Note : Related party relationship is as identified by the Company and relied upon by the auditors.

18 The figures of the current period are not comparable with those of previous year as current period is for eighteen months as against twelve months in previous year and in view of the amalgamation of SECPL w.e.f 01.01.2010. Previous years figures have been regrouped/reclassified wherever necessary and the figures have been rounded off to the nearest rupee.

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