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Notes to Accounts of Moser Baer India Ltd.

Mar 31, 2016

Note:

(a) Interest rate on short term borrowings varies from 10.75% to 17.25% p.a (previous year 10.75% to 12% p.a).

(b) Short term loans outstanding as at March 31,2016 are further secured by as per below:

(i) Pledge of 100% shareholding (67,420,141 number of shares) of the promoters of the Company.

(ii) Personal guarantee of Mr. Deepak Puri and Mrs. Nita Puri.

(iii) Negative lien on land of Moser Baer Infrastructure and Developers Limited at Chennai on pari passu basis.

(iv) Corporate guarantee of Moser Baer Infrastructure and Developers Limited (subsidiary of the company that owns the rights to the Chennai land).

(v) Pledge of shares of Moser Baer Infrastructure and Developers Limited.

* Warranty provision relate to the estimated outflow in respect of warranty for products sold by the Company. Due to very nature of such costs, it is not possible to estimate the timing/uncertainties relating to their outflows as well as expense from such estimates

** As per notification no. 22/2006 of Central Excise, the Company has to pay additional custom duty on its local sales, if the goods sold are exempted from payment of sales tax or value added tax. One of the units of the Company is exempt from payment of local sales tax and hence the department has disputed the same and demanded the duty on the sale of such goods. The Company has contested this matter and the dispute is currently pending at CESTAT and Commissioner of Custom and Central Excise forum and final demand order has not been raised till now. Pending the final outcome of the dispute with authorities, the Company has recorded the provision for the amount demanded by the authorities on prudence basis and is accruing the interest on it on quarterly basis. Due to very nature of such costs, it is not possible to estimate the timing / uncertainties relating to their outflows as well as expense from such estimates, hence considered as short term in nature.

Note:

As per the Corporate Debt Restructuring scheme ("CDR") approved in the year ended March 31, 2013, Company recorded amounts receivable from banks on account of installment paid prior to implementation of corporate debt restructuring, excess interest paid by the Company and release of additional limits as per the scheme. As of March 31, 2016, a total of Rs. 412,853,875 (previous year Rs. 412,853,875) is outstanding to be received from the banks. As the Company is still under CDR, no adjustment is made to the amount recoverable from banks.

1. Contingent liabilities

(a) Corporate guarantees given on behalf of the subsidiary companies: Rs. 20,518,700,000 (previous year Rs. 20,518,700,000). Against these guarantees, loans aggregating Rs. 19,060,818,131 (previous year Rs. 17,207,912,525) have been availed by the subsidiary companies.

The Company is involved in taxation disputes that arise from time to time in the ordinary course of business. Based on internal assessment and discussion with experts, management is of the view that above claims are not tenable and will not have any material adverse effect on the Company''s financial position and results of operations.

(c) Other claims against the Company not acknowledged as debts: Rs. 345,900 (previous year Rs. 345,900).

(d) Outstanding letters of credit opened by banks on behalf of the Company: Rs. 29,390,649 (previous year Rs. 37,247,363 ).

(e) Bonus payable for the period of April 1, 2014 to March 31, 2015 pursuant to retrospective amendment in Bonus Act : Rs. 5,465,257 (previous year Nil). Since the matter is subjudice and various high courts have given stay order against retrospective amendment, it has been considered as contingent liability.

(f) Recompense amount payable in lieu of bank sacrifice (mandatory disclosure as per RBI): Rs. 1,980,042,904 (previous year Rs.1,581,305,158).

The amount shown in (a) above represents guarantees given in the normal course of the Company''s operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in (b) and (c) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

(g) In respect of the outstanding foreign currency convertible bonds (FCCBs), bondholders have claimed interest for the period beyond the original date of redemption. As explained in more detail in Note 48, the Company is in the process of negotiating restructuring of these bonds. Management expects to restructure these bonds by extension of the redemption date as prescribed by the Reserve Bank of India. Contingent liability in respect thereof can''t be estimated reliably.

2 Capital commitments

Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 185,969,581 (previous year Rs. 177,722,251).

3 (a) Lease obligations

The Company has entered into operating leases for its offices and utilities that are renewable on a periodic basis and are cancellable at Company''s option. Total lease payments recognized in the statement of profit and loss with respect to aforementioned premises is Rs. 569,421,401 (previous period Rs. 527,422,277). The total rent recovered on sub lease during the year is Nil (previous year Rs. 29,730,645).

(b) Assets given on finance lease

The Company has given buildings and utilities on financial lease to units operating in its SEZ division.

Buildings are given on lease for a period of 20 years and utilities are given for a period of 7-10 years. Apart from the regular lease rental the Company has also taken interest free refundable security deposits of Rs. 1,605,000,000 ( previous year Rs 1,605,000,000) from the lessees which is refundable at the end of the lease term.

4. Taxation

Provision for taxation has not been made in the absence of assessable taxable income as per the Income Tax Act,1961.

As per para 15 and 17 of Accounting Standard 22, "Accounting for Taxes on Income", deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable /virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets have not be recognized in view of the accumulated losses and in absence of reasonable / virtual certainty to absorb the losses in future.

5. Derivative instruments

The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

(a) There is no forward exchange contracts outstanding as at March 31, 2016.

(b) The foreign currency exposures not hedged as at year end as at March 31, 2016 are as under:

6. Related party transactions:

In accordance with the requirements of Accounting Standard - 18 ''Related Party Disclosures'' the names of the related party where control/ability to exercise significant influence exists, along with the aggregate amount of transactions and period end balances with them as identified and certified by the management are given below:

(a) Names of related parties

Subsidiary Companies

European Optic Media Technology GmbH

Moser Baer Distribution Limited (formerly known as Moser Baer SEZ Developer Limited)

Solar Research Limited

Moser Baer Laboratories Limited (formerly Moser Baer Energy Limited)

Moser Baer Entertainment Limited Moser Baer Investments Limited

Photovoltaic Holdings Limited (formerly Photovoltaic Holdings PLC)

MB Solar Holdings Limited (formerly Moser Baer Solar PLC)

Moser Baer Solar Limited (formerly known as Photovoltaic Technologies India Limited)

Helios Photo Voltaic Limited (formerly Moser Baer Photo Voltaic Limited)

Perafly Limited Nicofly Limited Peraround Limited Advoferm Limited Cubic Technologies BV*

TIFTON Limited

Value Solar Energy Private Limited Pride Solar Systems Private Limited Admire Energy Solutions Private Limited

Moser Baer Solar Systems Private Limited (formerly Arise Solar Energy Private Limited)

Competent Solar Energy Private Limited OM&T B.V**

Moser Baer Technologies Inc.***

Moser Baer Infrastructure and Developers Limited Moser Baer Photovoltaic Inc. USA****

Associate

Global Data Media FZ LLC Moser Baer Infrastructure Limited Solar Value Proizvodjna d.d.

7. Segment information

The Company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the Company comprise creation/ replication and distribution of content, sales of consumer electronic products and operations and maintenance of sector specific Special Economic Zone for non-conventional energy. As the single financial report contains both consolidated financial statements and the separate financial statements of Moser Baer India Limited (the parent), segment information has been presented only on the basis of consolidated financial statements of the period ended March 31, 2016.

8. Employee benefits

The Company has classified the various benefits provided to employees as under:

* Included in contribution to provident and other funds under employees benefits expenses (refer note 27)

B Defined benefit plans

(i) In accordance with Accounting Standard 15, the liability in respect of defined benefit plans, namely gratuity and unveiled earned leaves has been determined based on actuarial valuation based on the following assumptions:

The expected contribution on account of gratuity for the year ending March 31, 2017 cannot be ascertained at this stage.

In respect of the employee''s gratuity fund, constitution of plan assets is not readily available from the Life Insurance Corporation of India.

Premium payable on redemption of FCCB accrued up to March 31, 2016 amounting to Rs. 4,983,850,363 (previous year ended December 31,2014 Rs. 3,879,418,653) has been fully provided for and charged to securities premium account. In the event that the conversion option is exercised by the holders of FCCB in the future, the amount of premium charged to the securities premium account shall be written back to security premium account.

(c) The Company has outstanding foreign currency convertible bonds (FCCBs) with principal value of USD 88,400,000 equivalent to Rs 5,857,384,000 (previous year ended 31 December 2014 USD 88,500,000 equivalent to Rs 5,579,040,000) which were due for redemption along with premium on June 21, 2012. As at March 31, 2016, accrual for premium on FCCB aggregates Rs 4,983,850,363. The company is in the process of negotiation with the bondholders to re-structure the terms of these bonds; these negotiations have progressed and the Company has applied to the Reserve Bank of India ("RBI") for requisite approvals.

(d) During the year, the Company has issued 9,879 equity shares of Rs 10 each upon conversion of 6.75% Tranche B Foreign Currency Convertible Bonds (FCCBs) of principal amount of USD 100,000 to one of the bondholder out of the total of USD

9. million outstanding as at December 31, 2014. Post the conversion, Tranche B FCCBs aggregating to USD 42.9 million and Tranche A FCCBs aggregating to USD 45.5 million are outstanding as at March 31, 2016.

10. Based on the information available with the Company, the Company has identified 32 vendors as micro, small and medium enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006. The balance due to such vendors has been disclosed separately under trade payables.

11. Impairment of investments

Management performed a detailed impairment assessment (using an independent valuer) as at March 31, 2016 for its investments in and advances/other receivables from certain subsidiaries, viz. Moser Baer Solar Limited ("MBSL"), Photovoltaic Holdings Limited, Moser Baer Investments Limited, Helios Photo Voltaic Limited ("HPVL") and Moser Baer Entertainment Limited ("MBEL") to determine if there is any other than temporary diminution in the values of these investments and if outstanding advances or other receivables are recoverable. This analysis for certain subsidiaries involved use of material estimates and judgments related to future business projections which, amongst other factors, are dependent on the acceptance of revised restructuring with lender banks, ramping up operations with adequate advance from customers, external market conditions of the solar market and regulatory benefits. Basis the assessment, management has concluded no impairment is required in carrying value of the investments, advances/ other receivables from these aforementioned subsidiary companies as at March 31, 2016 aggregating to Rs. 8,455,719,793 (previous year Rs. 10,301,708,211) except in case of HPVL where, subsequent to exit from CDR, management has recorded hundred percent provision in carrying value of investment and receivables during the period.

12. Going concern

The Company has incurred a loss of Rs 7,036,473,934 during the period ended March 31, 2016 (previous year Rs 7,083,003,303), and as of that date, the Company''s accumulated losses amounts to Rs. 23,605,019,015 (previous year Rs. 16,457,149,952) and it has negative net worth of Rs. 17,252,950,584 (previous year Rs. 9,139,176,589). Further, as of March 31, 2016, the Company''s current liabilities exceeded its current assets by Rs. 21,986,021,287 (previous year Rs. 14,877,708,565)

The Company has outstanding foreign currency convertible bonds (FCCBs) with principal value of USD 88,400,000 equivalent to Rs 5,857,384,000 (previous year ended December 31, 2014 USD 88,500,000 equivalent to Rs 5,579,040,000) which were due for redemption along with premium on June 21, 2012. As at March 31, 2016, accrual for premium on FCCB aggregates Rs 4,983,850,363 . The company is in the process of negotiation with the bondholders to re-structure the terms of these bonds and these negotiations have progressed. The Company has applied to the RBI for approval to extend the repayment of FCCBs till December 2016.

Due to continued liquidity issues primarily resulting from non-release of sanctioned working capital limits and refunds due to the Company, the Company has been unable to comply with repayment terms of its borrowing arrangement with secured lenders as agreed in the Corporate Debt Restructuring package approved in year ended March 31, 2013. The Company has received debt recall and other notices from certain consortium lender banks for their respective share of debt. Meanwhile, the Company has approached the lender consortium for a revised debt restructuring plan. The revised debt restructuring plan submitted by the Company includes deferment of debt and interest repayment, disposal of surplus assets and infusion of fresh capital by the promoters. The banks instituted a TEV study to be conducted by an expert appointed by bank who has since submitted its report to the lenders. In a recent meeting, the lenders have indicated their inability to accept the TEV and have indicated their intention to exit from the CDR and initiate legal proceedings against the company subject to approval of their competent authorities. The Company continues to engage with management of banks for restructuring proposal during the period as well as previous year. The final response of the banks is awaited. Meanwhile the banks have allowed the company to continue to operate through TRA with 6% tagging. On March 30, 2016, one of the lender banks, which is part of the CDR consortium of the Company, has assigned its outstanding dues in favour of an asset reconstruction company on the same terms and conditions as applicable to the said lender.

The Company has been operating at suboptimal levels due to working capital constraints, resulting in adverse impact on cash flow from operations. With restoration of OEM optical media business, generation of funds through sale of surplus assets and promoter contribution, accompanied by restructuring of debt from banks, the Company expects to achieve better utilization of its manufacturing facilities and consequently, generate positive cash flow from operations.

Conditions explained above, indicate existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern due to which the Company may not be able to realize its assets and discharge its liabilities in the normal course of business. However, considering recent developments, inter-alia, progress made in the review of plan and further management''s plans relating to restructuring of debt, FCCBs, infusion of capital, generation of funds through sale of surplus assets and expected improvement in the operating activities, management is confident of generating positive cash flow from operations and accordingly, these results have been prepared on a going concern basis.

13. Under the Income Tax Act, 1961, for domestic Transfer Pricing transaction the Company is required to use specified methods for computing arm''s length price in relation to domestic transactions with its associated enterprises. Further, Company is required to maintain prescribed information and documents in relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions/class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The management confirms that all transactions with associated enterprises are undertaken at negotiated contracted prices on usual commercial terms, and adjustments if any, arising from the transfer pricing study shall be accounted for as and when the study is completed. The Company is in the process of conducting a transfer pricing study for the current financial year, however, management is of the view that the same would not have a material impact on the financial statements. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any.

14. During the period ended March 31, 2016, the Company decided to sell part of its non-core assets. On the basis of approval by Board of Directors and upon completion of successful bidding process, assets has been classified as "Non-current asset held for sale" in financial statements. The Company has ceased to charge depreciation from the date of classification as held for sale. Had the company not decided to sell these assets, depreciation for period ended March 31, 2016 would have been higher by Rs. 3,31,081.

15. The Ministry of New & Renewable Energy (''MNRE) had sanctioned grant-in-aid for implementation of R&D project on "Development of CIGS solar cell pilot plant to achieve grid parity solar cess" vide order no. MNRE/31/10/2009-10/PVSE, dated October 21, 2010 with a project cost of Rs. 156,376,000 of which MNRE share was Rs. 71,050,000 and Company''s share was Rs. 85,326,000 for three years. In the year ended March 31, 2011, the Company had received grant of Rs. 35,000,000 for the said project.

Pursuant to the meeting of R&D Project Appraisal Committee (RDPAC) on Solar Photovoltaic and Solar Thermal held on November 16, 2015 and letter No. 15/01/2010-11/ST dated March 28, 2016, the project was considered as commercially unviable and therefore decided to abandon the project and the Company has been requested to shift all MNRE assets acquired out of the grant received to National Institute of Solar Energy (NISE) and unspent money is to be return to the MNRE.

Note 16. on "Fixed Assets" under the sub-head Plant and Equipment includes testing equipments of Rs. 21,139,973 acquired out of the grant received, having carrying value of Rs. 9,329,622 as at March 31, 2016. Out of the total grant received by the Company, balance unspent money of Rs. 13,860,027 has been kept in the form of fixed deposits with one of the nationalised bank and included in cash and bank balances.

Pursuant to the letter received by the Company in respect of demand of unspent money by the MNRE, the grant received has been disclosed in the financial statements as "Deferred Government grant" under sub-head "Other Current Liabilities" during

the current period.

17. During the current period, certain workers at Greater Noida plant instigated illegal stoppage of work, which consequently affected factory operations in the month of March 2015. On account of stoppage of work as aforesaid, the Company''s shipment and revenue were adversely affected. Operating cost were also lower on account of lower expenses including wages cost. With the support of concerned government and administrative authorities, an amicable settlement reached with the workers and normalcy was restored in early April 2015. Company ensured that disruption led to minimum impact on operating cash flows and speedy recovery thereafter.

18. The Company has changed its financial year from 31 December to 31 March and prepared financial statements for 15 months, whereas previous financial year consisted of 12 months period. Accordingly, current financial period figures are not comparable with those of the previous year.

19. Figures of the previous year have been regrouped and rearranged wherever necessary, to make them comparable.


Dec 31, 2014

1 Contingent liabilities

(a) Corporate guarantees given on behalf of the subsidiary companies: Rs. 20,518,700,000 (previous period Rs. 20,430,975,000). Against these guarantees, loans aggregating Rs.17,192,809,905 (previous period Rs. 15,867,946,862) have been availed by the subsidiary companies.

(b) Disputed demands (gross) in respect of:

Particulars As at As at December 31, December 31, 2014 2013

Entry tax

[Amount paid under protest Rs. 10,382,071 (previous period Rs. 11,928,443) and bank guarantees furnished Rs.10,919,501(previous period Rs. 15,558,616)] 127,609,720 133,795,207

Service tax

[Amount paid under protest Rs. 2,953,470 (previous period Rs. 2,953,470)] 635,730,978 695,928,194

Sales tax

[Amount paid under protest Rs. 17,960,040 (previous period Rs. 18,454,494) and bank and other guarantees furnished Rs. 100,989,626 (previous period Rs. 104,723,040)] 425,029,622 159,974,070

Custom duty and excise duty

[Amount paid under protest Rs. 5,805,819 (previous period Rs. 5,805,819)] 564,132,236 543,349,313

Income tax

[Amount paid under protest Rs. 34,500,000 (previous period Rs. 34,500,000)] 119,575,567 115,689,581

Total 1,872,078,123 1,648,736,365

(c) Claims against the Company not acknowledged as debts: Rs. 345,900 (previous period Rs. 345,900).

(d) Letters of credit opened by banks on behalf of the Company: Rs. 37,247,363 (previous period Rs. 244,331,479).

(e) Recompense amount payable in lieu of bank sacrifice (mandarory disclosure as per RBI): Rs. 1,581,305,158 (previous period Rs. 1,194,220,949).

The amount shown in (a) above represents guarantees given in the normal course of the Company''s operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in (b) and (c) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

(f) In respect of the outstanding foreign currency convertible bonds ( FCCBs), bondholders have claimed interest for the period beyond the original date of redemption. As explained in more detail in Note 43 (c ), the company is in the process of negotiating restructuring of these bonds. Management expects to restructure these bonds by extension of the redemption date as prescribed by the Reserve Bank of India. Contingent liability in respect thereof can''t be estimated reliably.

2. Capital commitments

Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 177,722,251 (previous period Rs. 173,433,150).

3. (a) Lease obligations

The Company has entered into operating leases for its offices, guest houses, employee''s residences and utilities that are renewable on a periodic basis and are cancellable at Company''s option. Total lease payments recognized in the statement of profit and loss with respect to aforementioned premises is Rs. 527,422,277 (previous period Rs. 444,168,254). The total rent recovered on sub lease during the year is Rs. 29,730,645 (previous period Rs. 47,253,780).

4 Segment information

The Company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the Company comprise creation/ replication and distribution of content, sales of consumer electronic products and operations and maintenance of sector specific Special Economic Zone for non-conventional energy. As the single financial report contains both consolidated financial statements and the separate financial statements of Moser Baer India Limited (the parent), segment information has been presented only on the basis of consolidated financial statements of the year ended 31 December 2014.

5 Employee benefits

The Company has classified the various benefits provided to employees as under : A Defined contribution plans

During the year, the Company has recognised the following amounts in the statement of profit and loss:

Premium payable on redemption of FCCB accrued up to 31 December 2014 calculated on prorata basis Rs. 3,879,418,653 (previous period Rs. 3,176,579,698) has been fully provided for and charged to securities premium account. In the event that the conversion option is exercised by the holders of FCCB in the future, the amount of premium charged to the securities premium account shall be written back to security premium account.

(c) The outstanding foreign currency convertible bonds (FCCBs) aggregating to principal value of USD 88,500,000 (equivalent to Rs 5,579,040,000) matured for redemption on 21 June 2012, which have since been claimed by the trustee of the bondholders. The Company has received approval from the Reserve Bank of India to extend the redemption date of bonds and is in discussions with the bondholders, through the Trustee, to re-structure the terms of these bonds. In view of the ongoing negotiations with bondholders, financial obligations of the Company, other than the premium on redemption, have not been provided for in books.

6 Based on the information available with the Company, the Company has identified 32 vendors as micro, small and medium enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006. The balance due to such vendors has been disclosed separately under trade payables. (refer note 10)

7 Impairment of investments

The management performed a detailed impairment assessment by engaging an independent valuer for its investments in and advances/other receivables from certain subsidiaries, viz. Helios Photo Voltaic Limited (HPVL), Moser Baer Solar Limited (MBSL), Photovoltaic Holdings Limited-and Moser Baer Investments Limited*and Moser Baer Entertainment Limited as at 31 December 2014. Estimates and judgments used in such assessment are related to future business projections which, amongst other factors, are dependent on acceptance of revised restructuring with lender banks, external market conditions of solar market and regulatory benefits. The developments since the last detailed assessment carried out by the Company indicate changes in liquidity position and an improved industry and regulatory environment. Basis such assessment, the management has recorded a provision for other than temporary diminution in investment of Rs. 788,191,666 and provision for doubtful receivables of Rs. 277,165,723 in respect of one of the subsidiary. Accordingly, net carrying values of investment, advances, trade and other receivables from these subsidiaries as at 31 December 2014 aggregates to Rs. 9,158,401,892 (previous period 10,484,295,746).

8 Going concern

The Company has incurred a loss of Rs 7,083,003,303 during the year ended 31 December 2014 (previous period Rs 4,466,627,030), and, as of that date, the Company''s accumulated losses amounts to Rs. 16,457,149,952 (previous period Rs. 9,374,146,649) and it has negative net worth of Rs. 9,139,176,589 (previous period Rs. 1,453,334,331). Further, as of 31 December 2014, the Company''s current liabilities exceeded its current assets by Rs. 14,877,708,565 (previous period Rs. 9,671,083,241)

Due to continued liquidity issues, the Company has been unable to comply with repayment terms of its borrowing arrangement with secured lenders as agreed in the Corporate Debt Restructuring package approved in 31 March 2013. The Company has now approached these lenders for a revised debt restructuring plan. The management has submitted its proposal which is under review at this stage. The revised debt restructuring plan submitted by the Company includes deferment of debt and interest repayment, disposal of surplus assets and infusion of fresh capital by the promoters. The management is hopeful of finalizing the restructuring package soon.

The Company also has outstanding foreign currency convertible bonds (FCCBs) with principal value of USD 88,500,000 (equivalent to Rs 5,579,040,000) which were due for redemption on 21 June 2012. As at 31 December 2014, such accrual for premium on FCCB aggregates Rs 3,879,418,653. The Company is in the process of negotiation with the bondholders to re- structure the terms of these bonds.

The Company has been operating at suboptimal levels due to working capital constraints, resulting in adverse impact on cash flow from operations in the current year as well as earlier years. With generation of funds through sale of surplus assets and promoter contribution, accompanied by restructuring of debt from banks and FCCB holders, the Company expects to achieve better utilization of its manufacturing facilities and consequently, generate positive cash flow from operations.

Conditions explained above, indicate existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern due to which the Company may not be able to realize its assets and discharge its liabilities in the normal course of business. However, considering management plans relating to restructuring of debt, infusion of capital and generation of funds through sale of surplus assets and expected improvement in the operating activities, these financial statements have been prepared on a going concern basis.

9 Under the Income Tax Act, 1961, for domestic Transfer Pricing transaction the Company is required to use specified methods for computing arm''s length price in relation to domestic transactions with its associated enterprises. Further, Company is required to maintain prescribed information and documents in relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions/class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The management confirms that all transactions with associated enterprises are undertaken at negotiated contracted prices on usual commercial terms, and adjustments if any, arising from the transfer pricing study shall be accounted for as and when the study is completed. The Company is in the process of conducting a transfer pricing study for the current financial year, however, management is of the view that the same would not have a material impact on the financial statements. Accordingly, these financial statements do not include any adjustments for the transfer pricing implications, if any.

10 During the previous period the Company had changed its financial year from 31 March to 31 December, hence previous financial year consisted of 9 months period from April 2013 to December 2013. Accordingly current financial year figures are not comparable with those of the previous period.


Dec 31, 2013

1 Basis of preparation

These abridged financial statements have been prepared in accordance with the requirements of Rule 7A of the Companies (Central Government''s) General Rules and Forms, 1956 and clause 32 of the Listing Agreement. These abridged financial statements have been prepared on the basis of the complete set of audited standalone financial statement for the year ended 31 December 2013.

2 Contingent liabilities

(Refer note 33 to complete set of audited standalone financial statement)

(a) Corporate guarantees given on behalf of the subsidiary companies: Rs. 20,430,975,000 (previous year Rs. 24,678,450,000). Against these guarantees, loans aggregating Rs. 15,867,946,862 (previous year Rs. 15,270,411,636) have been availed by the subsidiary companies.

(b) Disputed demands (gross) in respect of:

Particulars As at As at 31 December 2013 31 March 2013

Entry tax

[Amount paid under protest Rs. 11,928,443 (previous year Rs. 10,354,421) and bank guarantees furnished Rs. 15,558,616 (previous year Rs. 10,919,501)] 133,795,207 133,519,072

Service tax

[Amount paid under protest Rs. 2,953,470 (previous year Rs. 2,953,470)] 695,928,194 367,384,719

Sales tax

[Amount paid under protest Rs. 18,454,494 (previous year Rs. 17,010,790) and bank and Other guarantees furnished Rs. 104,723,040 (previous year Rs. 101,470,187)] 159,974,070 121,988,323

Custom duty and excise duty

[Amount paid under protest Rs. 5,805,819 (previous year Rs. 5,796,635)] 543,349,313 527,676,009

Income tax

[Amount paid under protest Rs. 34,500,000 (previous year Rs. 34,500,000)] 115,689,581 112,775,091

Total 1,648,736,365 1,263,343,214

(c) Claims against the Company not acknowledged as debts: Rs. 345,900 (previous year Rs. Nil).

(d) Letters of credit opened by banks on behalf of the Company: Rs. 244,331,479 (previous year Rs. 356,269,994).

(e) Recompense amount payable in lieu of bank sacrifice (mandarory disclosure as per RBI): Rs. 1,194,220,949 (previous year Rs. 855,284,159).

The amount shown in (a) above represents guarantees given in the normal course of the Company''s operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in (b) and (c) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

3 Capital commitments

(Refer note 34 to complete set of audited standalone financial statement)

Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 173,433,150 (previous year Rs. 155,128,173).

4 Related party transactions:

(Refer note 40 to complete set of audited standalone financial statement)

In accordance with the requirements of Accounting Standard - 18 ''Related Party Disclosures'' the names of the related party where control/ability to exercise significant influence exists, along with the aggregate amount of transactions and period end balances with them as identified and certified by the management are given below:

5 Segment information

(Refer note 42 to complete set of audited standalone financial statement)

The Company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the Company comprise creation/ replication and distribution of content, sales of consumer electronic products and operations and maintenance of sector specific Special Economic Zone for non-conventional energy.

As the single financial report contains both consolidated financial statements and the separate financial statements of Moser Baer India Limited (the parent), segment information has been presented only on the basis of consolidated financial statements of the period ended 31 December 2013.

6 Foreign currency convertible bonds

(Refer note 44 to complete set of audited standalone financial statement)

Premium payable on redemption of foreign currency convertible bonds accrued up to 31 December 2013 calculated on prorata basis Rs. 3,176,579,698 (previous year Rs. 2,399,718,659 has been fully provided for and charged to securities premium account. In the event that the conversion option is exercised by the holders of foreign currency convertible bonds in the future, the amount of premium charged to the securities premium account shall be written back to the securities premium account.

(d) The outstanding foreign currency convertible bonds (FCCBs) aggregating to principal value of USD 88,500,000 (equivalent to Rs 5,471,955,000) matured for redemption on 21 June 2012, which have since been claimed by the trustee of the bondholders. The Company has received approval from the Reserve Bank of India to extend the redemption date of bonds and is in discussions with the bondholders, through the Trustee, to re-structure the terms of these bonds. Pending acceptance by the bondholders and approval from the concerned regulatory authorities of the terms proposed by the Company, the financial obligations of the Company, other than premium on redemption, are presently not reasonably determinable, and hence have not been provided for. The petition under section 434 of the Companies Act, 1956, filed by the trustee on behalf of certain bondholders with the Hon''ble High Court of Delhi, which has since been admitted, and continues to be sub-judice.

7 Corporate debt restructuring scheme

(Refer note 7(c) to complete set of audited standalone financial statement)

During the year ended 31 March 2013, the Company accounted for corporate debt restructuring scheme (reclassifications and interest calculations) in the books for the year ended 31 March 2013. As per the corporate debt restructuring scheme, Company recorded amounts receivable from banks on account of installment paid prior to implementation of corporate debt restructuring, excess interest paid by the Company and release of additional limits as per the scheme. As of 31 December 2013, a total of Rs. 855,841,627 (previous year Rs. 1,334,391,231) is outstanding to be received from banks. Recovery of this balance is subject to completion of reconciliation of corporate debt restructuring adjustments with some of the lender banks. Based on acceptance of management''s calculation by certain lender banks, the management is of the view there will not be any material adjustment to this receivable.

The Borrowers and the CDR Lenders executed a MRA during the previous year. The MRA as well as the provisions of the Master Circular on Corporate Debt Restructuring issued by the Reserve Bank of India, give a right to the CDR Lenders to get a recompense of their waivers and sacrifices made as part of the CDR Proposal. The recompense payable by the borrowers is contingent on various factors including improved performance of the borrowers and many other conditions, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as a contingent liability. The aggregate present value of the sacrifice made/ to be made by CDR Lenders as per the MRA is approximately Rs 160.72 crore for the Company.

8 Going concern

The Company has incurred loss of Rs 4,466,627,030 during the nine months period ended 31 December 2013, which along with the accumulated losses as of 31 December 2013 has completely eroded its net worth as on 31 December 2013. The Company''s corporate debt restructuring scheme to re-structure the borrowings from secured lenders has already been approved and is confident of re-structuring the FCCB obligation as described in note 44(d), in the terms proposed by the Company. Pending the outcome of aforementioned discussions with the bondholders and the related litigation, successful implementation of corporate debt restructuring scheme in terms proposed by the Company, which are materially uncertain, the financial statements of the Company have been prepared on going concern basis.

Such assessment is based on certain assumptions inter-alia, successful implementation of new technologies, new product initiatives, external market conditions, regulatory benefits and conclusion of debt restructuring in the terms as proposed by HPVL and MBSL, which are materially uncertain. Based on such assessment, the management has recorded a provision for diminution of Rs. 111,510,000 in the investment of HPVL, and has written off Rs. 397,918,175 and Rs. 2,081,825 from loans and advances and trade and other receivables respectively of MBEL for the period ended 31 December 2013.

9 Corresponding figures for the previous year have been regrouped / rearranged, wherever necessary to conform to current period classification.

10 The Company changed its financial year from 31 March to 31 December and consequently, current financial year consist of nine months period from April 2013 to December 2013. Accordingly, current financial year figures are not comparable with those of the previous year.

11 Complete balance sheet, statement of profit and loss, cash flow statement and notes thereto prepared as per the requirements of Schedule VI to the Companies Act, 1956 are available at the Company''s website at link - www.moserbaer.in


Mar 31, 2013

1 Basis of preparation

The financial statements have been prepared to comply with the Accounting Standards referred to in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government in exercise of the power conferred under sub-section (1) (a) of section 642, the relevant provisions of the Companies Act, 1956 (the ''Act'') and relevant pronouncements issued by the Institute of Chartered Accountants of India. The financial statements have been prepared on a going concern basis under the historical cost convention on accrual basis. The accounting policies have been consistently applied by the Company.

2 Use of estimates

The preparation of financial statements in conformity with the principles generally accepted in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Example of such estimates include provisions for doubtful debts/ advances, employee retirement benefit plans, warranty, provision for income taxes, useful life of fixed assets, diminution in value of investments, other probable obligations and inventory write down. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

3 Contingent liabilities

(a) Corporate guarantees given on behalf of the subsidiary companies: Rs.24,678,450,000 (previous year Rs. 24,099,600,000). Against these guarantees, loans aggregating Rs.15,270,411,636 (previous year Rs. 15,573,866,190) have been availed by the subsidiary companies.

(b) Disputed demands (gross) in respect of:

Particulars As at As at March 31, 2013 March 31, 2012

Entry tax

[Amount paid under protest Rs. 10,354,421 (previous year Rs. 1,863,606) and bank guarantees furnished Rs. 10,919,501 (previous year Rs. 10,366,154)] 133,519,072 127,761,075

Service tax

[Amount paid under protest Rs. 2,953,470 (previous year Rs. 2,953,470)] 367,384,719 351,157,722

Sales tax

[Amount paid under protest Rs. 17,010,790 (previous year Rs. 10,725,595) and bank and other guarantees furnished Rs. 101,470,187 (previous year Rs. 13,645,780)] 121,988,323 121,658,833

Custom duty and excise duty

[Amount paid under protest Rs. 5,796,635 (previous year Rs. 5,103,586) and bank guarantees furnished Rs. Nil (previous year Rs. Nil)] 527,676,009 486,001,268

Income tax

[Amount paid under protest Rs. 34,500,000 (previous year Rs. 34,500,000)] 108,889,105 108,889,105

Total 1,259,457,228 1,195,468,003

(c) Claims against the Company not acknowledged as debts: Rs. Nil (previous year Rs. 78,048).

(d) Letters of credit opened by banks on behalf of the Company: Rs. 356,269,994 (previous year Rs. 285,514,138).

The amount shown in (a) above represents guarantees given in the normal course of the Company''s operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in (b) and (c) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

4 Capital commitments

Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 155,128,173 (previous year Rs. 205,501,851).

5 (a) Lease obligations

The Company has entered into operating leases for its offices, guest houses and employee''s residences that are renewable on a periodic basis and are cancellable at Company''s option. Total lease payments recognized in the statement of profit and loss with respect to aforementioned premises is Rs. 94,482,855 (previous year Rs. 86,654,491). The total rent recovered on sub lease during the year is Rs. 63,005,040 (previous year Rs. 63,005,040).

6 Derivative instruments

The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

7 Segment information

The Company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the company comprise creation/ replication and distribution of content, sales of consumer electronic products and operations and maintenance of sector specific Special Economic Zone for non-conventional energy.

As the single financial report contains both consolidated financial statements and the separate financial statements of Moser Baer India Limited (the parent), segment information has been presented only on the basis of consolidated financial statements of the year ended March 31, 2013.

8 Employee benefits

The Company has classified the various benefits provided to employees as under : A Defined contribution plans

During the year, the Company has recognised the following amounts in the statement of profit and loss: (i) Provident fund

B Defined benefit plans

(i) In accordance with Accounting Standard 15, the liability in respect of defined benefit plans, namely gratuity and unavailed earned leaves has been determined based on actuarial valuation based on the following assumptions:

9 Based on the information available with the Company, the Company has identified 32 vendors as micro, small and medium enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006. The balance due to such vendors has been disclosed separately under trade payables. (refer note 11)

10 Impairment of Investments

(a) The Company has performed a detailed assessment, using valuations performed by an independent valuer, to determine whether its investments in and advances or other receivables from MBPV and MBSL are recoverable. Such assessment is based on successful implementation of new technologies, external market conditions, regulatory benefits and conclusion of debt restructuring in the terms as proposed by these subsidiaries. The management has concluded that no adjustments to the carrying values of underlying investments in and advances or other receivables from these subsidiaries aggregating to Rs 7,635,698,665 are required to be made in the results for the year ended March 31, 2013.

(b) The Company has an investment in and certain amounts recoverable from another subsidiary, Moser Baer

Entertainment Limited (MBEL) amounting to Rs 1,574,996,840 as at March 31, 2013. A business valuation of MBEL has been carried out by the management internally based on MBEL''s business plans, which include new initiatives to be undertaken by the Company and MBEL to leverage the market. Based on this valuation, no provision for impairment of either the investment or amounts recoverable has been made in the stand alone financial statements of the Company for the year ended March 31, 2013.

11 Corresponding figures for the previous year have been regrouped / rearranged, wherever necessary to conform to current year classification.


Mar 31, 2012

(A) Term and rights attached to equity shares:

The Company has one class of equity shares having par value of Rs. 10 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, if any is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

750,000 Preferrence shares of Rs. 100 each have been cancelled during the year and reclasified into eqity share of Rs. 10 each. Further, the authorised share capital of the Company has been increased during the year vide shareholders resolution passed in the annual general meeting of the company held on September 29, 2011

(B) Stock option plans

The Company has two Stock Option Plans:

(a) Employee Stock Option Plan-2004 & Director's Stock Option Plan-2005

The Company has granted options to its non-executive directors and employees of the Company and its subsidiaries, to be settled through issue of equity shares.

The Options granted vest over a period of maximum of four years from the date of grant.

In case of Employee Stock Option Plan-2004, the exercise price shall be as follows:-

(i) Normal allocation:- Rs. 125 per option or prevailing market price, whichever is higher.

(ii) Special allocation:- 50% of the options at Rs. 125 per option or prevailing market price, whichever is higher and the balance 50% of the options at Rs. 170 per option or prevailing market price, whichever is higher.

In case of Directors' Stock Option Plan, the exercise price shall be Rs. 170 per option or prevailing market price, whichever is higher."

Two options granted before the record date under the above plans entitles the holder to three equity shares of the Company.

The options outstanding at the end of year had exercise prices in the range of Rs. 125 to Rs. 491.90 (previous year Rs. 125 to Rs. 491.90) and a weighted average remaining contractual life of 0.79 years (previous year 1.39 years).

(a) Employee Stock Option Plan-2009

The Company established a stock option plan called " Moser Baer India Limited Stock Option Plan 2009". The plan was setup to offer and grant stock options, in one or more tranches, to employees and directors of the Company as the compensation committee of the Company may determine. The granted options shall be settled through issue of equity shares. The exercise price shall be as follows:-

(i) Normal allocation:- Market price on the date of grant

(ii) Special allocation:- 50% of the options at Rs. 125 per option or prevailing market price, whichever is higher and the balance 50% of the options at Rs. 170 per option or prevailing market price, whichever is higher.

All options, whether vested or unvested, granted to grantee shall in any case expire after a period of seven years from the offer date.

During the current year, the Company has issued Nil (previous year 497,600) options to eligible employees. The vesting period for the option granted varies from 12 to 48 months from the date of the grant. No options have been exercised during the year.

Fair values used for above computations have been calculated by taking into account the weighted average vesting period of the options.

(d) The following assumptions were used for calculation of fair value of grants:

(i) Moser Baer Employees Stock Option Plan(ESOP) 2004 and Director's Stock Option Plan (DSOP) 2005*

* No options granted during the year.

b) corporate debt restructuring scheme

During the year the Company applied for Corporate debt restructuring (CDR) to re-structure its existing debt obligations. The Company received the final Letter of Approval (LoA) dated October 22, 2012 from the Corporate Debt Restructuring Empowered Group (CDR-EG) to re-structure existing debt obligations, including interest, additional funding and other terms (hereafter referred to as "the CDR Scheme"). The board of directors of the Company at their meeting held on November 09, 2012 approved the terms of the CDR Scheme for implementation. The effect of the CDR Scheme has not been given in the financial results of the Company as of March 31, 2012, since the execution of the Master Restructuring Agreement (MRA) by all the lenders is pending and the Company in the process of complying with the conditions precedent to the implementation of the CDR Scheme.

(c) Interest rates

- Interest rate on long term loan varies from 12% to 16.50% p.a.

- Interest rate on foreign currency loan is 5.50% p.a.

* The Company's foreign currency convertible bonds (FCCBs) having face value of Rs. 45,038 lacs (equivalent to USD 88.5 million) were due for redemption on June 21, 2012, along with the premium on redemption of Rs. 17,931 lacs. The Company is in the process of re-structuring these FCCBs and has accordingly, received approval from the Reserve Bank of India (RBI) to extend the term of these FCCBs up to December 20, 2012, subject to the consent of bond holders. The Company is in discussions with the FCCB holders to restructure its obligation (both the face value and the premium) along with certain terms inter-alia, exchange of old bonds with new bonds, maturity of new bonds, redemption premium and conversion option.

Note :

Ministry of New and Renewable Energy of the Government of India, as part of its Jawaharlal Nehru Nation Solar Mission 2010 sanctioned a Research and Development ('R&D') grant to the Company for its project 'Development of CIGS solar cell pilot plant to achieve grid parity solar cells'. One of the objectives of the grant is to develop low cost solar cell module with an aim to meet grid parity by using Cu(InGa)Se2 solar cells. During the previous year, the company received R&D grant of Rs. 35,000,000 out of the total grant of Rs. 71,050,000 being 50 % of the total project equipment cost of Rs. 142,100,000. Pending acquisition of the equipment, the grant received has been disclosed in the financial statements as 'Government Grant' which shall be adjusted to the cost of the specific fixed assets.

* Warranty provision relates to the estimated outflow in respect of warranty for products sold by the Company. Due to very nature of such costs, it is not possible to estimate the timing/uncertainties relating to their outflows as well as expense from such estimates.

** Probable obligations provision relates to the estimated outflow in respect of possible liabilities expected to arise in future. Due to very nature of such costs, it is not possible to estimate the timing/uncertainties relating to their outflows as well as expense from such estimates.

1 contingent liabilities

(a) Corporate guarantees given on behalf of the subsidiary companies: Rs. 24,099,600,000 (previous year Rs. 21,253,587,500). Against these guarantees, loans aggregating Rs. 15,573,866,190 (previous year Rs. 18,083,789,271) have been availed by the subsidiary companies.

(b) Disputed demands (gross) in respect of:

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

Rs. Rs.

Entry Tax 127,761,075 127,297,833

[Amount paid under protest Rs. 1,863,606 (previous year Rs. 1,863,606) and bank guarantees furnished Rs. 10,366,154 (previous year Rs. 2,058,688)]

Service Tax 351,157,722 154,559,343

[Amount paid under protest Rs. 2,953,470 (previous year Rs. 2,953,470)

Sales Tax 121,658,833 16,728,917

[Amount paid under protest Rs. 10,725,595 (previous year Rs. 4,543,604) and bank guarantees furnished Rs. 13,645,780 (previous year Rs. 11,408,640)]

custom duty and excise duty 486,001,268 32,668,448 [Amount paid under protest Rs. 5,103,586 (previous year Rs. 4,500,696) and bank guarantees furnished Rs. Nil (previous year Rs. 12,000,000)

Income Tax 108,889,105 105,003,119 [Amount paid under protest Rs. 34,500,000 (previous year Rs. 34,500,000)]

Total 1,195,468,003 436,257,659

(c) Claims against the Company not acknowledged as debts: Rs. 78,048 (Previous year Rs. 2,317,645).

The amount shown in (a) above represents guarantees given in the normal course of the Company's operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in (b) and (c) above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

(d) Letters of credit opened by banks on behalf of the Company: Rs. 285,514,138 (previous year Rs. 859,758,073).

2 capital commitments

Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 205,501,851 (previous year Rs. 447,328,684).

3 (a) Lease obligations

The Company has entered into operating leases for its offices, guest houses and employee's residences that are renewable on a periodic basis and are cancellable at Company's option. Total lease payments recognized in the statement of profit and loss with respect to aforementioned premises is Rs. 86,654,491 (previous year Rs. 61,856,036). The total rent recovered on sub lease during the year is Rs. 63,005,040 (previous year Rs.21,001,679).

(c) Assets given on finance lease

The Company has given buildings and utilities on financial lease to units operating in its SEZ division.

Buildings are given on lease for a period of 20 years and utilities are given for a period of 7-10 years. Apart from the regular lease rental the Company has also taken interest free refundable security deposits of Rs. 1,605,000,000 ( Previous Year Rs. 1,605,000,000) from the lessees which is refundable at the end of the lease term.

4 Taxation

Provision for taxation has not been made in the absence of assessable taxable income as per the Income Tax Act,1961.

Notes:

1) The tax impact for the above purpose has been arrived at by applying a tax rate of 32.445% (previous year 32.445%) being the prevailing tax rate for Indian Companies under the Income Tax Act, 1961

2) Deferred tax asset has been recognised only to the extent of the deferred tax liability.

5 Derivative instruments

The Company uses forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading or speculative purposes.

6 Related Party Transactions:

In accordance with the requirements of Accounting Standard - 18 'Related Party Disclosures' the names of the related party where control/ability to exercise significant influence exists, along with the aggregate amount of transactions and year end balances with them as identified and certified by the management are given below:

(c) During the previous year, the terms of the existing investment of 7,500,000, 9% redeemable preference shares of Rs. 10 each (optionally redeemable at the option of the issuer at premium of Rs. 90/- per share subject to compulsory redemption within 20 years from the date of allotment), invested in MB SEZ Developer Limited, the subsidiary company have been altered (with retrospective effect from April 1, 2009) to 7,500,000 9% compulsorily cumulative convertible preference shares of Rs. 10 each fully paid up into equity shares with in a period of 10 years from the original date of allotment i.e. April 1, 2009 at the option of the Company. The ratio of conversion would be decided at the time of conversion.

(d) The terms of the existing 63,114,660, redeemable preference shares of Rs.10 each invested in Moser Baer Investments Limited, the subsidiary company, during the previous year, have been altered to compulsorily convertible preference shares into equity shares with in a period of 10 years from the original date of allotment i.e. May 4, 2010 at the option of the Company. The ratio of conversation shall be 1:1.

7 Segment information

The company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the company comprise creation/ replication and distribution of content, sales of consumer electronic products and operations and maintenance of sector specific Special Economic Zone for non-conventional energy. As the single financial report contains both consolidated financial statements and the separate financial statements of Moser Baer India Limited(the parent), segment information has been presented only on the basis of consolidated financial statements of the year ended March 31, 2012.

8 Employee benefits

The Company has classified the various benefits provided to employees as under :- A Defined contribution plans

During the year, the Company has recognised the following amounts in the statement of profit and loss:

# Restated as at year end.

**Excludes issue expencess paid without utilising FCCB funds.

* Net of foreign exchange gain of Rs. 958,895 for the year ended March 31, 2012 and loss of Rs. 46,525 for the year ended March 31, 2011.

Premium payable on redemption of FCCB accrued up to March, 31, 2012 calculated on prorata basis Rs. 1,793,150,173 (previous year Rs. 1,064,331,621) has been fully provided for and charged to securities premium account. In the event that the conversion option is exercised by the holders of FCCB in the future, the amount of premium charged to the securities premium account shall be written back to security premium account.

(c) Pursuant to the notification issued by The Ministry of Corporate Affairs dated May 11, 2011 read with the notification issued on March 31, 2009, the company has chosen to avail the option to accumulate exchange differences arising on long term foreign currency monetary items in the "Foreign Currency Monetary Item Translation Difference Account". Amount remaining to be amortised in this account is as under:

9 Based on the information available with the Company, the Company has identified 34 vendors as micro, small and medium enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006. The balance due to such vendors has been disclosed separately under trade payables. (refer note 10)

10 Impairment of investments

(a) A subsidiary of the Company, Moser Baer Solar Limited (MBSL) and its subsidiary Moser Baer Photovoltaic Limited (MBPV) were also referred for debt restructuring with the Corporate Debt Restructuring Cell (CDR cell). MBPV received the final letter of approval dated September 27, 2012 to re-structure existing debt obligations, including interest, additional funding and other terms. The debt re-structuring proposal of Moser Baer Solar Limited (MBSL) is under discussion amongst its lenders. In anticipation of the successful implementation of the CDR scheme, the financial statements of MBSL have been prepared on a going concern basis. Further, the management of these subsidiaries has obtained business valuations as of March 31, 2012 by an independent valuer, with the information and projections used for Techno Economic Viability (TEV) assessment by the consortium of banks participating in the CDR schemes of the respective subsidiaries. The aforementioned business valuation has been done using the discounted cash flows method with significant underlying assumptions, including, conclusion of Corporate Debt Restructuring in the terms proposed or accepted by CDREG, as the case may be, implementation of regulatory measures by the appropriate authority and successful implementation of new technologies by these companies.

Based on the business valuations, the Company has concluded that no adjustment is necessary to the underlying investments in and advances to these subsidiaries aggregating to Rs. 7,189,249,810 in the standalone financial results for year ended March 31, 2012.

(b) The Company has an investment in and certain amounts recoverable from another subsidiary, Moser Baer Entertainment Limited (MBEL) amounting to Rs. 1,482,236,259 as at March 31, 2012. A business valuation of MBEL has been carried out by an external valuer based on Company's business plans, which include new initiatives to be undertaken by the Company and MBEL to leverage the market. Based on this valuation, no provision for impairment of either the investment or amounts recoverable has been made in the stand alone financial statements of the Company as at March 31, 2012.

11 During the year ended March 31, 2012, the revised schedule VI notified under the Companies Act, 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.


Mar 31, 2011

1 Contingent Liabilities

In respect of:-

1.1 Corporate guarantees given on behalf of the Subsidiary Companies: Rs.21,253,587,500 (Previous Year Rs. 17,383,425,000). Against these guarantees, loans aggregating Rs.18,083,789,271 (Previous Year Rs. 16,042,958,865) have been availed by the subsidiary companies. (Refer Note 11.4 below)

1.2 Disputed demands (Gross) in respect of:-

2010-11 2009-10

(Rs.) (Rs.)

Entry Tax

[Amount paid under protest Rs. 1,863,606 (Previous Year Rs. 1,688,086);

bank guarantees furnished Rs. 2,058,688 (Previous Year Rs. 1,882,668)] 127,297,833 126,302,825

Service Tax

[Amount paid under protest Rs. 2,953,470 (Previous Year Rs. 2,953,470) 154,559,343 148,498,311

Sales Tax

[Amount paid under protest Rs. 4,543,604 (Previous Year Rs. 7,003,604);

bank guarantees furnished Rs. 11,408,640 (Previous Year Rs. 24,987,468)] 16,728,917 101,925,563

Custom duty and Excise duty

[Amount paid under protest Rs. 4,500,696

(Previous Year Rs. 594,598) ; bank guarantees furnished Rs. 12,000,000

(Previous Year Rs. 12,000,000) 32,668,448 26,865,664

Income Tax

[Amount paid under protest Rs. 34,500,000

(Previous Year Rs. 34,500,000)] 85,294,174 85,294,174

Total 416,548,715 488,886,537

1.3 Claims against the Company not acknowledged as debts: Rs. 2,317,645 (Previous Year Rs. 2,317,645).

The amount shown in 1.1 above represents guarantees given in the normal course of the Company's operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in 1.2 and 1.3 above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be estimated accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

2 In February 2003, Moser Baer India Limited (Moser Baer), and Imation Corporation Inc., USA (Imation), formed an associate Company called Global Data Media FZ LLC (GDM). GDM is owned 51% by Imation, and 49% by Moser Baer. On October 27, 2006, Imation filed a suit in Minnesota, USA against Koninkiljke Philips Electronics NV (Philips) seeking a Declaratory Judgement on the validity of the Cross License Agreement (CLA) entered into with Minnesota Mining and Manufacturing Co. (3M) and its assignment to Imation and its subsidiaries (including GDM). Moser Baer supplies recordable media to GDM and Imation under the ambit of CLA.

Philips filed a suit against Moser Baer in The Hague, Netherlands challenging the status and validity of the CLA under which supplies of recordable media have been made to Imation and its subsidiaries. With a view to reinforce its stand on the CLA , Imation joined the proceedings in the Netherlands as a party, to contest the suit.

In order to protect the rights arising out of various patent license agreements executed between Moser Baer and Phillips, Moser Baer filed a suit against Philips challenging the default notices issued by Philips thereby pre-empting any possibility of termination of the aforementioned license agreements.

During the previous year, the company had entered into a" Settlement Agreement "with Phillips and Imation thus bringing an end to all disputes and also entered inti a Capacity based Licencing Agreement with Philips for payment of licence fees on recordable media for a period of four year, the finical impact of which has been considered in these financial statement.

3 During the Previous Year 2009-10, the Company had entered into a "Business Transfer Agreement" with Moser Baer Entertainment Limited, a wholly owned subsidiary, for transfer of its entertainment business on a slump sale basis. The consideration was determined based on an valuation done by an independent valuer appointed by the Company. As a result, the following assets and liabilities were transferred to the subsidiary on a going concern basis. Surplus arising from transfer of business aggregating Rs 64,041,243 is included in "Other income".

4 4.1 Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 447,328,684 (Previous Year Rs. 382,458,388).

4.2 Letters of Credit opened by banks on behalf of the Company: Rs. 859,758,073 (Previous Year Rs. 906,671,619).

5 (A) Lease Obligations

The Company has entered into operating leases for its offices, guest houses and employee's residences that are renewable on a periodic basis and are cancellable at Company's option. Total lease payments recognized in the statement of Profit and Loss Account: Rs. 61,856,036 (Previous Year Rs. 62,084,330). The total rent recovered on sub lease during the year is Rs. 21,001,680 (Previous Year Rs.141,924).

5 General Description of Lease terms :

a. The Company has provided buildings and utilities on financial lease to units operating in its SEZ division.

b. Buildings are given on lease for a period of 20 years and utilities are given for a period of 7-10 years. Apart from the regular lease rental the Company has also taken interest free refundable security deposits of Rs. 1,605,000,000 (Previous Year Rs 1,605,000,000) from the lessees which is refundable at the end of the lease term.

7 Taxation

Provision for taxation has not been made in the absence of assessable taxable profits as per Income Tax Act, 1961.

Deferred tax in respect of timing differences for undertakings enjoying tax holiday period under section 10A and section 10B of the Income Tax Act, 1961 have been recognised in the year in which they originate, to the extent that such differences reverse after the tax holiday period.

8 Employees Stock Option Plan (ESOP) and Directors' Stock Option Plan (DSOP)

a) Employee Stock Option Plan-2004 & Director's Stock Option Plan-2005

The Company has granted options to its non-executive directors and employees of the Company and its subsidiaries, to be settled through issue of equity shares, The options granted vest over period of maximum of four years from the date of grant.

In case Employee Stock Option Plan -2004, The Exercise Price shall be as follows:- (I) Normal allocation- Rs125 per Option or prevailing Market Price, whichever is higher.

(ii) Special allocation- 50% of the Options at Rs 125 per Option or prevailing market price ,whichever is higher and the balance 50%of the Options at Rs 170 Per Option or prevailing market price ,whichever is higher.

In case of Director's Stock Option Plan, the Exercise Price shall be Rs. 170 per Option or prevailing Market Price, whichever is higher.

Two options granted before the record date under the above plans entitles the holder to three equity shares of the Company.

The options outstanding at the end of year had exercise prices in the range of Rs. 125 to Rs. 491.90 (Previous Year Rs. 125 to Rs. 491.90) and a weighted average remaining contractual life of 1.39 years (Previous Year 2.24 years).

During the year Nil (Previous Year Nil Nos. ) options were exercised resulting in a premium of Nil (Previous Year Rs. Nil) which is the excess of exercise price of the options and nominal value of shares allotted.

Employee Stock Option Plan-2009

During the year the Company established a stock option plan called. "Moser Baer India Limited Stock Option Plan 2009" The plan was established on September 8, 2009.The plan was setup to offer and grant stock options, in one or more tranches, to employees and directors of the Company as the compensation committee of the Company determine. The granted options shall be settled through issue of equity shares. The exercise price shall be as follows:- (I) Normal allocation- Market price on the date of grant.

(ii) Special allocation- 50% of the Options at Rs 125 per Option or prevailing market price ,whichever is higher and the balance 50%of the Options at Rs 170 Per Option or prevailing Market Price, whichever is higher.

All Options, whether vested or unvested, granted to grantee shall in any case expire after a period of 7 years from the offer date.

During the current year, the Company under the 2009 plan has issued 497,600 Nos options to eligible employees. No options have been exercised during the year. The vesting period for the option granted varies from 12 to 48 months from the date of the grant.

The options outstanding at the end of year had exercise prices in the range of Rs. 46.30 to Rs. 170.00 (Previous Year Rs. 75.95 to Rs. 170.00) and a weighted average remaining contractual life of 3.04 years (Previous Year 3.94 years).

Fair values used for above computations have been calculated by taking into account the weighted average vesting period of the options.

10.3 The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301(E) dated 8th February 2011 issued under Section 211(3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their Notes to Accounts. The Company being an 'export oriented company' is entitled to the exemption. Accordingly , disclosures mandated by paragraphs 3(i)(a) and 3(ii)(d) of Part II, Schedule VI to Companies Act, 1956 has not been disclosed.

11.2 (a) During the year, the terms of the existing investment of 7,500,000, 9% Redeemable Preference Shares of Rs 10 each (optionally redeemable at the option of the issuer at premium of Rs 90/- per share subject to compulsory redemption within 20 years from the date of allotment), invested in MB SEZ Developer Limited, the subsidiary company have been altered (with retrospective effect from 1st April 2009) to 7,500,000 9% Compulsorily Cumulative Convertible Preference Shares of Rs 10 each fully paid up into Equity Shares with in a period of 10 years from the original date of allotment i.e. 1st April, 2009 at the option of the Company. The ratio of conversion would be decided at the time of conversion.

11.2 (b) The terms of the existing 63,114,660, Redeemable Preference Shares of Rs 10 each invested in Moser Baer Investments Limited, the subsidiary company, during the year, have been altered to Compulsorily Convertible Preference Shares into Equity Shares with in a period of 10 years from the original date of allotment i.e. 4th May, 2010 at the option of the Company. The ratio of conversation shall be 1:1

13 Segment information

The company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the company comprise creation/ replication and distribution of content, sales of consumer electronic products and operations and maintenance of sector specific Special Economic Zone for non-conventional energy.

As the single financial report contains both consolidated financial statements and the seperate financial statements of Moser Baer India Limited(the parent), segment information has been presented only on the basis of consolidated financial statements of the year ended 31st March 2011. For details, refer Note no. 17 of consolidated financial statement.

14 Service Income shown in the profit and loss account includes income earned by the SEZ division of the Company in the form of lease rental for assets given on lease and utility services provided to the entities situated in the SEZ.

15 Employee Benefits

The Company has classified the various benefits provided to employees as under - I Defined Contribution Plans Provident Fund

II State Plans

a. Employers' Contribution to Employee's State Insurance Act, 1948

b. Employers' Contribution to Employee's Pension Scheme, 1995

III Defined Benefit Plans

a). Contribution to Gratuity Funds – Life Insurance Corporation of India

b). Leave Encashment

16 Foreign Currency Convertible Bonds

(a) The Company has bought back and cancelled Nil (Previous Year 35) Zero Coupon Tranche A Convertible Bonds and Nil (Previous Year

70) Zero Coupon Tranche B Convertible Bonds (FCCBs) of the face value of USD 100,000 each, the purchase being made with the approval of the Reserve Bank of India, at a discount to the face value. This has resulted in a saving (net of brokerage) of Rs. Nil (Previous Year Rs. 180,762,906) which has been reflected as part of Exceptional items. (Refer Schedule 21) Consequent upon such buy back and cancellation, the Company's obligation to convert the said Bonds into shares, if so claimed by the Bond Holder and/or to redeem the same in foreign currency, has come to an end vis-à-vis the cancelled bonds.

Premium payable on redemption of FCCB accrued up to March, 31, 2011 calculated on prorata basis Rs. 1,064,331,621 (Previous Year Rs. 762,653,374) has been fully provided for and charged to Securities Premium Account. In the event that the conversion option is exercised by the holders of FCCB in the future, the amount of premium charged to the Securities Premium Account shall be written back to Security Premium Account.

19 Government Grant:

Ministry of New and Renewable Energy of the Government of India, as part of its Jawaharlal Nehru Nation Solar Mission 2010 sanctioned a Research and Development ('R&D') grant to the company for its project 'Development of CIGS solar cell pilot plant to achieve grid parity solar cells'. One of the objectives of the grant is to develop low cost solar cell module with an aim to meet grid parity by using Cu(InGa)Se2 solar cells. During the year, the company has received R&D grant of Rs 35,000,000 out of the total grant of Rs 71,050,000 being 50 % of the total project equipment cost of Rs 14.21 crores.

Pending acquisition of the equipment, the grant received has been disclosed in the financial statements as 'Government Grant' which shall be adjusted to the cost of the specific fixed assets.

21 The Company has availed non-fund based limits from State Bank of India, State Bank of Patiala, State Bank of Bikaner and Jaipur, Union Bank of India, State Bank of Travancore, Punjab National bank, Vijaya Bank, ING Vysya Bank Limited, Bank of Baroda, Exim Bank, State Bank of Hyderabad and HDFC Bank aggregating to Rs. 3,669,168,311 (Previous Year Rs. 4,483,200,000) which are secured by a first pari-passu charge on the current assets of the Company and further secured by a second pari - passu charge on fixed assets of the Company.

22 Corresponding figures for the previous year have been regrouped/recast, wherever necessary to conform to current year classification.


Mar 31, 2010

1 Contingent Liabilities

In respect of :-

1.1 Corporate guarantees given on behalf of the Subsidiary Companies: Rs. 17,383,425,000 (Previous Year Rs. 22,405,393,000). Against these guarantees loan amounts of Rs. 16,042,958,865 (Previous Year Rs. 16,119,391,787) have been availed by the subsidiary companies. (Refer Note 11.3 below)

1.2 Disputed demands (Gross) in respect of:- 2009-10 2008-09

(Rs.) (Rs.)

Entry tax

[Amount paid under protest Rs. 1,688,086 (Previous Year Rs. 1,372,586) 126,302,825 125,320,785 paid through bank guarantee Rs. 1,882,668 (Previous Year Rs. NIL)]

Service Tax

[Amount paid under protest Rs. 2,953,470 (Previous Year Rs. 2,953,470) 148,498,311 148,498,311

Sales Tax

[Amount paid under protest Rs. 7,003,604 (Previous Year Rs. 4,597,150); paid through bank guarantee Rs. 24,987,468 (Previous Year Rs.26,596,226)] 101,925,563 79,030,621

Custom duty and Excise duty (including penalties)

[Amount paid under protest Rs. 594,598 (Previous Year Rs. 500,000); paid through bank guarantee Rs. 12,000,000 (Previous Year Rs.12,000,000)] 317,114,020 304,594,526

Income Tax

[Amount paid under protest Rs. 34,500,000 (Previous Year Rs. 34,500,000)] 101,117,134 97,231,147

Total 794,957,853 754,675,390



1.3 Claims against the Company not acknowledged as debts: Rs. 21,743,068 (Previous Year Rs. 23,581,688).

The amount shown in 1.1 above represents guarantees given in the normal course of the Companys operations and are not expected to result in any loss to the Company on the basis of the beneficiary fulfilling its ordinary commercial obligations.

The amounts shown in 1.2 and 1.3 above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such disputes.

2 (A) In February 2003, Moser Baer India Limited (Moser Baer), and Imation Corporation Inc., USA (Imation), formed an associate Company called Global Data Media FZ LLC (GDM). GDM is owned 51 % by Imation, and 49% by Moser Baer. On October 27,2006, Imation filed a suit in Minnesota, USA against Koninkiljke Philips Electronics NV (Philips) seeking a Declaratory Judgement on the validity of the Cross License Agreement (CLA) entered into with Minnesota Mining and Manufacturing Co. (3M) and its assignment to Imation and its subsidiaries (including GDM). Moser Baer supplies recordable media to GDM and Imation under the ambit of CLA.

Philips filed a suit against Moser Baer in The Hague, Netherlands challenging the status and validity of the CLA under which supplies of recordable media have been made to Imation and its subsidiaries. With a view to reinforce its stand on the CLA, Imation joined the proceedings in the Netherlands as a party, to contest the suit.

In order to protect the rights arising out of various patent license agreements executed between Moser Baer and Phillips, Moser Baer filed a suit against Philips challenging the default notices issued by Philips thereby pre-empting any possibility of termination of the aforementioned license agreements.

The Company has during the year entered into a "Settlement Agreement" with Philips and Imation thus bringing an end to all the disputes.

(B) The Company has also entered into a Capacity based Licensing Agreement with Philips for payment of license fees on recordable media for a period of four years, financial impact of which has been considered in these financial statements.

2.2 Estimated value of contracts remaining to be executed on capital account and not provided for (net of advances): Rs. 382.458,388 (Previous Year Rs. 457,684,344).

2.3 Letters of Credit opened by banks on behalf of the Company: Rs. 906,671,619 (Previous Year Rs. 591,249,975).

3 (A) Lease Obligations

The Company has entered into operating leases for its offices, guest houses and employees residences that are renewable on a periodic basis and are cancellable at Companys option. Total lease payments recognized in the statement of Profit and Loss Account: Rs. 62,084,330 (Previous year Rs. 57,421,770). The total rent recovered on sub lease during the year is Rs. 141,924 (Previous year Rs.478,341).

(B) Assets given on operating lease

During the previous year 2008-09, the Company had provided buildings on lease to units operating in its SEZ division upto June 30,2008. Gross carrying amount of buildings provided on lease is NIL (Previous Year as on 30.06.2008 Rs.903,269,720) and accumulated depreciation is NIL (Previous Year as on 30.06.2008 Rs. 16,831,406) Total depreciation expense recognized in the statement of Profit and Loss Account: NIL (Previous year Rs. 6,048,283).

4 General Description of Lease terms :

a. The Company has provided buildings and utilities on financial lease to units operating in its SEZ division

b. Buildings are given on lease for a period of 20 years and utilities are given for a period of 7-10 years. Apart from the regular lease rental the Company has also taken interest free refundable security deposits of Rs. 1,605,000,000 (Previous Year Rs 765,000,000) from the lessee which is refundable at the end of the lease term.

5 Taxation

Provision for taxation has been made based on the relevant provisions of the Income Tax Act,1961.

Deferred tax in respect of timing differences for undertakings enjoying tax holiday period under section 10A and section 10B of the Income Tax Act, 1961 have been recognised in the year in which they originate, to the extent that such differences reverse after the tax holiday period.

6 Employees Stock Option Plan (ESOP) and Directors Stock Option Plan (DSOP)

a) Employee Stock Option Plan-2004 & Directors Stock Option Plan-2005

The Company has granted options to its non-executive directors and employees of the Company and its subsidiaries, to be settled through issue of equity shares, at exercise prices that are equal to the market price of the share on the date of the grant. The Options granted vest over a period of maximum of four years from the date of grant.

Employee Stock Option Plan-2009

During the year the Company established a stock option plan called" Moser Baer India Limited Stock Option Plan 2009". The plan was established on September 8, 2009. The plan was setup to offer and grant stock options, in one or more tranches, to employees and directors of the Company as the compensation committee of the Company determine. The exercise price of such options shall be market price on the date of grant. All options, whether vested or unvested, granted to grantee shall in any case expire after a period of seven years from the offer date.

7 Related Party Transactions:

Key Management Personnel

Managing Director Mr. Deepak Puri

Whole Time Directors Mrs. Nita Puri, Mr. Ratul Puri

8 Earnings per share (EPS)

a) Calculation of Weighted Average number of equity shares

1. For Basic EPS

9 Segment information

The Company is primarily in the business of manufacture and sale of Optical Storage Media. The other activities of the Company comprise creation/ replication and distribution of content, sales of consumer electronic products and operation and maintenance of sector specific Special Economic Zone for non-conventional energy. The segment revenues, results and assets of the other activities do not constitute reportable segments under AS-17 and accordingly no disclosure is required.

10 Service Income shown in the profit and loss account includes income earned by the SEZ division of the Company in the form of lease rental for assets given on lease and utility services provided to the entities situated in the SEZ.

11 Foreign Currency Convertible Bonds

(a) The Company has bought back and cancelled 35 (Previous Year 260) Zero Coupon Tranche A Convertible Bonds and 70 (Previous Year 250) Zero Coupon Tranche B Convertible Bonds (FCCBs) of the face value of USD 100,000 each, the purchase being made with the approval of the Reserve Bank of India, at a discount to the face value. This has resulted in a saving (net of brokerage) of Rs. 180,762,906 (Previous Year Rs. 1,845,864,067) which has been reflected as part of Exceptional items. (Refer Schedule 21) Consequent upon such buy back and cancellation, the Companys obligation to convert the said Bonds into shares, if so claimed by the Bond Holder and/or to redeem the same in foreign currency, has come to an end vis-a-vis the cancelled bonds.

12 Pursuant to the notification issued by the Ministry of Corporate Affairs dated March 31, 2009, the Company changed its accounting policy relating to Foreign currency transaction as mentioned in accounting policy 10 schedule 22 Part-A and exercised the option available under the newly inserted paragraph 46 to the Accounting Standard AS-11 "The Effect of Changes in Foreign Exchange Rates". As a result of this change the Company had, during the previous year 2008-09,

i) in respect of exchange differences relating to long term liabilities in foreign currency amounting to Rs. 221,094,421 (net of depreciation and amortisation of Rs. 48,408,473 ) recognised in the Profit and Loss Account for the previous year ended March 31,2008 adjusted against opening revenue reserves as provided in the rules.

ii) capitalised exchange differences arising during the previous year 2008-09 amounting to Rs 661,534,060 and charged additional depreciation for the previous year 2008-09 amounting to Rs 15,432,202 in respect of the same.

iii) in respect of other cases, debited exchange differences arising during the previous year 2008-09 amounting to Rs. 1,298,612,986, to "Foreign Currency Monetary Item Translation Difference Account" and amortised/ released exchange differences for the previous year 2008-09 amounting to Rs 488,305,074.

Had the accounting treatment as per Accounting Standard -AS 11 (Revised) been continued to be followed by the Company in the previous year 2008-09, the net loss after tax for the previous year 2008-09 would have been higher by Rs. 1,456,409,774.

13 Based on the information available with the Company, the Company has identified 47 vendors as Micro and small enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006. The balance due to such vendors as at 31.03.2010 has been disclosed separately under "Current Liabilities and Provisions" (Refer Schedule 12).

14 The Company has availed non-fund based limits from State Bank of India, State Bank of Patiala, State Bank of Bikaner and Jaipur, Union Bank of India, State Bank of Travancore, The Bank of Nova Scotia, Punjab National bank, Vijaya Bank, ING Vysya Bank Limited, Bank of Baroda, Exim Bank, State Bank of Hyderabad and HDFC Bank aggregating to Rs. 4,483,200,000 (Previous Year Rs. 2,932,500,000) which are secured by a first pari-passu charge on the current assets of the Company and further secured by a second pari - passu charge on fixed assets of the Company.

15 Corresponding figures for the previous year have been regrouped/rearranged, wherever necessary to conform to current year classification.

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