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Notes to Accounts of Paramount Communications Ltd.

Mar 31, 2015

1. Rights, preferences and restrictions attached to Equity Shares

Equity Shares : The company has one class of equity shares having a face value of Rs. 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings.

2. Rights, preferences and restrictions attached to 0% Non-Convertible Redeemable Preference Shares (NCRPS)

Rate of Dividend: 0% rate of dividend. NCRPS are not convertible in equity shares. Redeemable on day and date falling next to date of expiry of a period of 10 years calculated from the date of allotment of these shares. Option of an earlier redemption after expiry of period of 6 months shall be open to Board and can be made by a Board resolution to this effect passed in a duly convened meeting and when consented by the NCRPS shareholders, where the premium payable on redemption shall be adjusted proportionately. Redemption Value & Premium: The redemption premium shall be @ 50% of par value and thereby the redemption value shall be 150% of face value after 10 (Ten) years term. There is no right to vote in general. The voting rights shall be restricted to the matters concerning their interest only. Right to share of Assets: In the event of winding up of the Company, the NCRPS shareholders shall be entitled to share of assets of the Company in proportion of the preference share capital to aggregate of total paid up capital after settlement of all the liabilities of the Company. The NCRPS shareholders shall have a preferential right on the assets of Company over the Equity shareholders while distribution of assets among shareholders in the event of winding up of Company.

3. Premium on redemption of FCCBs (Gross of tax) Rs. Nil (Previous Year Rs.229,607,788/-) has been set off against Securities Premium Account.

4. During the year Redemption Premium payable on prorata basis Rs. 3,825,000/- (Previous Year Rs. 3,825,000/-) on 0% Non- Convertible Redeemable Preference share (NCRPS) has been charged to Securities Premium Account.

5. In view of losses Capital Redemption Reserve required under Section 55 of the Companies Act, 2013 has not been created.

6. Are amortised over period of foreign currency monetary item or up to 31st March, 2020, whichever is earlier.

7. Amount of Depreciation pertaining to revaluation in case of Buildings has been transferred from Revaluation Reserve.

8. During the current year, depreciation has been provided on fixed assets as per the useful life specified in Part C of Schedule II of the Companies Act 2013 and as per internal assessment by the management and independent technical evaluation carried out by external valuers. In case of existing assets, depreciation has been provided based on remaining useful life of the assets. Assets whose useful life is already exhausted as on 1st April, 2014, amounting to Rs. 10,100,787/- has been recognised in the opening balance of Profit & Loss Account (debit).

9. Nature of Security

i. Term Loan from Banks:-

Term loans from banks are secured by 1st pari-passu charge on present and future fixed assets of the company and 2nd pari-passu charge on present and future current assets of the Company. Further they are secured through collateral by way of 2nd charge on a property owned by a Corporate, personal guarantees of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company and pledge of 100% equity shares of the company held by Promoters/ Promoters Group Companies.

ii. Term Loan from Financial Institution:-

Loan from Financial Institution is secured against surrender value/ maturity value of keyman insurance policy of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company.

10. Period and Amount of Default in Repayment :-

11. Nature of Security

Working Capital facilities from Banks are secured by 1st Pari-Passu charge by way of hypothecation on the entire current assets including raw material, stocks in process, finished goods, consumable stores & spares and receivables of the Company, 1st Pari-Passu charge on company's property situated at Prahaladpur, Bawana Road, Delhi, 2nd Pari- Passu charge on other present and future fixed assets. Further they are secured through collateral by way of 2nd charge on a property owned by a Corporate, personal guarantees of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company and pledge of 100% equity shares of the company held by Promoters/ Promoters Group Companies .

12. Period and amount of default:

* Working Capital Loans from banks are overdrawn to the extent of Rs. 598,744,744/- (Previous Year Rs. 97,434,093/-) due to devolvement of Letter of Credits since January, 2014.

* Working Capital Loans from a bank are in default Rs.281,665,199/- (Previous Year Rs.NIL) due to non repayment of recalled loan by a bank since November, 2014.

* Interest on Working Capital Loans from banks are overdrawn to the extent of Rs.246,705,450/- (Previous Year Rs.46,675,155/-) due since October, 2013.

13. Principal amount of Rs.470,700,000/- of 1% Foreign Currency Convertible Bonds ('FCCBs') is overdue for repayment since 23rd November, 2011. Interest on FCCBs Rs.21,284,901/- due up to 31st December, 2014 has also not been paid and is over due. Premium on redemption of FCCB's of '214,936,015/- is also over due for payment since 23rd November, 2011.

14. Refer Note 4.2 for default in repayment of Term Loans.

15. No amount is due as on 31st March, 2015 for credit to Investor Education and Protection Fund (Fund). Amount remaining due after adjustment of amounts to be claimed from the Company will be transferred on the respective due dates to the Fund.

16. Title deeds of factory land at prahladpur, Bawana Road, Delhi are in the name of erstwhile Paramount Cable Corporation.

17. Title deeds of a part of factory land measuring 954.50 sq. mtr. at prahladpur, Bawana Road, Delhi shown in Balance Sheet at '2,386,250 are yet to be registered in name of the Company.

18. Land (Freehold) of Rs.7,886,689/- as of 31st March, 2015 situated at Prahaladpur, Delhi is under acquisition as per the Land Acquisition Act, 1894. The matter is being contested.

19. During the current year, depreciation has been provided on fixed assets as per the useful life specified in Part C of Schedule II of the Companies Act 2013 and as per internal assessment by the management and independent technical evaluation carried out by external valuers. In case of existing assets, depreciation has been provided based on remaining useful life of the assets. Assets whose useful life is already exhausted as on 1st April, 2014, amounting to Rs.10,100,787/- has been recognised in the opening balance of Profit & Loss Account (debit). Had there been no change in useful life of the assets, depreciation expense for the year would have been higher by Rs.12,371,596/- .

20.As per changes made in AS 11 vide Companies(Accounting Standards) Amendment Rules 2009, further amended vide Amendment Rules 2011, during financial year 2008-09 the company exercised option of deferring foreign exchange difference arising on long term foreign currency monetary items viz 'FCCBs', Foreign Currency Term Loan to the Profit and Loss account, in respect of accounting periods commencing on or after December 22, 2006. As a result, such foreign exchange difference relating to the acquisition of depreciable capital assets have been adjusted with cost of such assets and would be depreciated over the balance life of the assets and in other cases has been accumulated in 'FCMITDA'. Exchange loss (net) '8,892,000/-(Previous year exchange loss (net) '20,448,000/-) has been adjusted in gross block of Fixed Assets. Exchange difference on External Commercial Borrowing (ECBs) raised for repurchasing FCCBs has been transferred to 'FCMITDA'

21. Aggregate Provision for diminution in value of investments in Paramount Holdings Limited, Cyprus,"06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom and AEI Power Cables Limited, United Kingdom has been made keeping in view negative net worth.

22. During the year company purchased Equity shares and preference shares of "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom and AEI Power Cables Limited, United Kingdom from Paramount Holdings Limited, Cyprus at the at aggregate value of euro 1. Hence, "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom and AEI Power Cables Limited, United Kingdom have become direct subsidiaries during the year.

23. The board of directors of Paramount Holdings Limited, Cyprus are taking steps to liquidate Paramount holdings Limited.

24. During the current year, depreciation has been provided on fixed assets as per the useful life specified in Part C of Schedule II of the Companies Act, 2013 and as per internal assessment by the management and independent technical evaluation carried out by external valuers. In case of existing assets, depreciation has been provided based on remaining useful life of the assets. Assets whose useful life is already exhausted as on 1st April, 2014, amounting to Rs. 10,100,787/- has been recognised in the opening balance of Profit & Loss Account (debit). Had there been no change in useful life of the assets, depreciation expense for the year would have been higher by Rs.12,371,596/-.

25. Amount of Excise Duty deducted from the turnover is for sales made during the year and the amount recognized separately in the statement of Profit & Loss is related to the difference between the closing stock and opening stock.

26. Insurance Premium of Rs.3,823,586/- (Previous Year Rs.3,801,438/-) on Keyman Insurance Policy has been charged to Profit & Loss. Maturity value of such policies will be accounted for on receipt basis.

27. Following reimbursements from "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom for the portion of expenses attributable to them have been netted off from respective account heads:

28. "Related party disclosures", for the year ended 31s1 March, 2015, as required by Accounting Standard-18 ("AS-18") are given below:

Relationships:

i) Subsidiaries of the Company:

"06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (in Administration)

AEI Power Cables Limited, United Kingdom

ii) Associate of the Company:

Paramount Wires & Cables Limited (upto 26th May, 2014)

iii) Other related parties in the Group where common control exists:

Sanjay Aggarwal (HUF)

Sandeep Aggarwal (HUF)

S.S. Aggarwal (HUF)

April Investment & Finance Private Limited Worth Finance & Leasing Private Limited Paramount Telecables Limited

S.S. Aggarwal Foundation

iv) Key Managerial Personnel:

Shri Sanjay Aggarwal, Chairman and CEO Shri Sandeep Aggrawal, Managing Director

Shri Shambhu Kumar Agarwal, Chief Financial Officer (w.e.f 1st October, 2014)

Ms. Tannu Sharma,Company Secretary (w.e.f 1st October, 2014)

v) Relatives of Key Managerial Personnel with whom transactions have taken place:

Shri Dhruv Aggarwal

Shri Tushar Aggarwal

Ms. Parul Aggarwal

vi) Enterprises over which relatives of Key Managerial Personnel have significant influence and with whom transactions have taken place:

Paramount Wires & Cables Limited (w.e.f 27th May, 2014)

Surya Laboratories Private Limited (w.e.f 1st April, 2014)

b. Non-Financial Transactions:

i. Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal have given personal guarantees to banks/financial institutions for Company's borrowings and also have pledged their share holding in the company with banks.

ii. Guarantee of Rs.10,000,000/- (Previous Year Rs.10,000,000/-) given to a Bank for credit facilities sanctioned to Paramount Wires & Cables Limited. Credit facilities availed by the said company as on 31.03.2015 Rs.867,329/- (Previous year Rs. 7,586,617/-).

iii. The Company has executed a Parental Guarantee of Rs.Nil (sterling pounds Nil) [Previous Year Rs. 1,634,655,000/- (sterling pounds 1,65,00,000/-)] given to a Bank for credit facilities ((sanctioned limit (sterling pounds 11,500,000/-)) sanctioned to "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (Subsidiary).

iv. Paramount Telecables Limited has given its property as collateral by way of 2nd charge to the banks of the company.

v. The remuneration does not include Gratuity and Provision for Leave Encashment under Accounting Standard -15 (Revised) and personal accident insurance premium, since same is not available for individual employees.

29. In opinion of the management Company's business activity mainly falls within a single primary business segment "Cables", the disclosures requirements of Accounting Standard-17 ("AS-17") "Segment Reporting" are not applicable.

30. Contingent Liabilities & Commitments

(to the extent not provided for) Figures in Rs.

Contingent Liabilities

Particulars As At 31st March, 2015

31. Claims Against the Company not acknowledged as Debt 8,970,854

32. Guarantees

i. Financial Bank Guarantees outstanding 15,255,296

ii. Guarantee of Rs.10,000,000/-

(Previous Year Rs.10,000,000/-) given to a Bank for credit facilities sanctioned to Paramount Wires & Cables Ltd.

* Credit Facilities availed by

Paramount Wires & Cables Ltd. 867,329

iii. Parental Guarantee of ' Nil (sterling pounds Nil)

[Previous Year Rs. 1,634,655,000/- (sterling pounds £1,65,00,000/-)] given to a Bank for credit facilities ((sanctioned limit (sterling pounds 11,500,000/-)) sanctioned to "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (Subsidiary).

* Credit Facilities availed (Rs.) - (Sterling Pound £) -

33. Duties & Taxes

i. Income Tax

* Demands under appeal 44,298,650 -

* Matter which have been decided in favour of the Company in first appeal stage, however, Income tax department has filed appeal against orders of first appellate authority. 27,008,740 71,307,390

ii. Excise demands under appeal 87,307,710

iii. Service tax demands under appeal 22,108,874

iv. Custom duty demand due to denial of concessional custom duty, under appeal 6,434,896

34. Other money for which company is contingently liable

i. Unutilised Letter of Credits 33,400,477

ii. Outstanding Bill discounted 94,312,312

iii Right of recompense of CDR lenders for reliefs/ Amount sacrifices/waivers extended by respective CDR unascertainable lenders to the company.

iv. Letter of demand from a bank due to guarantee given for borrowings (Rs.) 33,733,615 of "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (Subsidiary). In opinion of the company the amount of demand is yet to be finalised and agreed by the company. (This is co guaranteed by the Chairman and CEO and Managing Director of the Company in their individual capacity due to which company expects no final liability will arise on the company).

- (Sterling 345,846 Pound)

35. Commitments

i. Estimated amount of contracts (net of advances) remaining to be executed on Capital Account. 2,067,000





Particulars As At 31st March, 2014

31. Claims Against the Company not acknowledged as Debt 8,822,654

32. Guarantees

i. Financial Bank Guarantees outstanding 33,661,802

ii. Guarantee of Rs.10,000,000/-

(Previous Year Rs.10,000,000/-) given to a Bank for credit facilities sanctioned to Paramount Wires & Cables Ltd.

* Credit Facilities availed by

Paramount Wires & Cables Ltd. 7,586,617

iii. Parental Guarantee of ' Nil (sterling pounds Nil)

[Previous Year Rs. 1,634,655,000/- (sterling pounds £1,65,00,000/-)] given to a Bank for credit facilities ((sanctioned limit (sterling pounds 11,500,000/-)) sanctioned to "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (Subsidiary).

* Credit Facilities availed 5,646,990

57,000

33. Duties & Taxes

i. Income Tax

* Demands under appeal

* Matter which have been decided in favour of the Company in first appeal stage, however, Income tax department has filed appeal against orders of first appellate authority. 27,008,740 27,008,740

ii. Excise demands under appeal 79,448,401

iii. Service tax demands under appeal 22,593,046

iv. Custom duty demand due to denial of concessional custom duty, under appeal 6,434,896

34. Other money for which company is contingently liable

i. Unutilised Letter of Credits 112,518,884

ii. Outstanding Bill discounted 81,477,573

iii Right of recompense of CDR lenders for reliefs/ sacrifices/waivers extended by Amount respective CDR lenders to the company. unascertainable iv. Letter of demand from a bank due to guarantee given for borrowings of "06196375 Cables Limited"

(formerly AEI Cables Limited), United Kin gdom (Subsidiary). In opinion of the company the amount of demand is yet to be finalised and agreed by the company. (This is co guaranteed by the Chairman and CEO and Managing Director of the Company in their individual capacity due to which company expects no final liability will arise - on the company).

35. Commitments

i. Estimated amount of contracts (net of advances) 8,270,000 remaining to be executed on Capital Account.

36. Outstanding 1% Foreign Currency Convertible Bonds (FCCBs) amounting to USD 7.5 million were due for redemption on 23rd November, 2011 and are yet to be redeemed. The Company was to redeem these FCCBs at a Premium equal to 145.54% of the outstanding principal amount. The said premium amounts to Rs.239,014,509/- (Gross of tax). A winding up petition was filed against the Company on behalf of the FCCB holders which has been dismissed by the court during the year.

37. Going Concern:

The company has recorded a net loss of Rs.1,031,384,218/- for the year and has accumulated losses of Rs.3,164,680,113/- as at 31st March, 2015, resulting in negative net worth. The company has also over dues in payments of interest and redemption amount of Foreign Currency Convertible Bonds (FCCBs) and interest and term loans installments to banks and other working capital facilities from banks. The management is confident that the company will be able to generate profits in future years and meet its financial obligations as may arise.The Management is also exploring inducting financial investor/s in the company and/or joint venture with foreign companies. The accompanying financial statements have been prepared on a going concern basis based on cumulative impact of following mitigating factors:

a) The company has not over dues in payment of statutory dues or its trade creditors etc.

b) CDR package was approved during financial year 2010-11 and further "Rework Package" has been approved by CDR- EG vide Letter of Approval (LOA) dated 11th July, 2012. The Company has again proposed banks to reschedule term loans repayments.

c) The Company and promoters have undertaken to raise and had raised adequate finances by way of disposal of assets and induction of fresh funds by promoters and/or promoter group companies. The Management is also exploring inducting financial investor in the company and/or joint venture with foreign companies.

d) The Company has strong order book position.

38. Company has been registered with the Board for Industrial and Financial Reconstruction (BIFR) under section 15 (1) of Sick Industrial Companies (Special Provisions) Act, 1985 vide order dated 31.10.2013, BIFR has restrained company from disposing of or alienating in any manner any fixed assets of the Company without consent of BIFR.

39. Name of AEI Cables Limited, United Kingdom was changed to "06196375 Cables Limited" w.e.f. 28th February, 2014. This Company is "in Administration" (as per UK laws).

40. Previous Year's figures have been regrouped / rearranged wherever necessary


Mar 31, 2014

1.1 Rights, preferences and restrictions attached to Equity Shares

Equity Shares : The company has one class of equity shares having a par value of Rs. 2/- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings.

Rights, preferences and restrictions attached to 0% Non-Convertible Redeemable Preference Shares (NCRPS)

Rate of Dividend: 0% rate of dividend. NCRPS are not convertible in equity shares. Redeemable on day and date falling next to date of expiry of a period of 10 years calculated from the date of allotment of these shares. Option of an earlier redemption after expiry of period of 6 months shall be open to Board and can be made by a Board resolution to this effect passed in a duly convened meeting and when consented by the NCRPS shareholders, where the premium payable on redemption shall be adjusted proportionately. Redemption Value & Premium: The redemption premium shall be @ 50% of par value and thereby the redemption value shall be 150% of par value after 10 (Ten) years term. There is no right to vote in general. The voting rights shall be restricted to the matters concerning their interest only. Right to share of Assets: In the event of winding up of the Company, the NCRPS shareholders shall be entitled to share of assets of the Company in proportion of the preference share capital to aggregate of total paid up capital after settlement of all the liabilities of the Company. The NCRPS shareholders shall have a preferential right on the assets of Company over the Equity shareholders while distribution of assets among shareholders in the event of winding up of Company.

1.2.1 Nil (Previous Year 32,206,500) Equity Shares of par value of Rs. 2/- each have been allotted on Preferential basis at Securities Premium of Rs. 0.30 per share as per SEBI (ICDR) regulations, 2009 and as amended from time to time in terms of Regulation 10(2) of SEBI (SAST) Regulations, 2011.

1.2.2 Equity Shares of par value of Rs.2/- each have been allotted to warrant holders at Securities Premium of Rs.11/- each upon exercise of option by them.

1.2.3 Nil (Previous Year 765,000) Preference Shares of par value of Rs.100/- each have been allotted at par to M/s Paramount Telecables Limited.

2.1 Premium on redemption of FCCBs (Gross of tax) Rs. 229,607,788/- (Previous Year Rs. Nil ) has been set off against Securities Premium Account.

2.2 During the year Redemption Premium payable on prorata basis Rs. 3,825,000/- (Previous Year Rs. 20,959/-) on 0% Non- Convertible Redeemable Preference share (NCRPS) has been charged to Securities Premium Account.

2.3 In view of losses Capital Redemption Reserve required under Section 80 of the Companies Act, 1956 has not been created.

2.4 Are amortised over period of foreign currency monetary item or up to 31st March, 2020, whichever is earlier.

3.1 Nature of Security

i Term Loan from Banks:-

Term loans from banks are secured by 1st pari-passu charge on present and future fixed assets of the company and 2nd pari-passu charge on present and future current assets of the Company. Further they are secured through collateral by way of 2nd charge on a property owned by a Corporate, personal guarantees of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company and pledge of 100% equity shares of the company held by Promoters/Promoters Group Companies.

ii Term Loan from Financial Institution:-

Loan from Financial Institution is secured against surrender value/ maturity value of keyman insurance policy of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company.

iii Finance Lease Obligations:-

Hire Purchase Finance is secured against assets financed from it.

3.2 Period and Amount of Default in Repayment :-

Due to continuing losses and delays in monetization of an asset stipulated in Corporate Debt Restructuring, EG approved Rework Package, Company is in default as per details given below:

4.1 As required by Accounting Standard-22 (''AS-22'') in view of existence of Carried forward losses and unabsorbed depreciation under tax laws, Deferred Tax Assets have been recognised only to the extent they are virtually certain to be realised.

5.1 Nature of Security

Working Capital facilities from Banks are secured by 1st Pari-Passu charge by way of hypothecation on the entire current assets including raw material, stocks in process, finished goods, consumable stores & spares and receivables of the Company, 1st Pari-Passu charge on company''s property situated at Prahaladpur, Bawana Road, Delhi, 2nd Pari-Passu charge on other present and future fixed assets. Further they are secured through collateral by way of 2nd charge on a property owned by a Corporate, personal guarantees of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company and pledge of 100% equity shares of the company held by Promoters/Promoters Group Companies.

5.2 Period and amount of default:

— Working Capital Loans from banks are overdrawn to the extent of Rs. 97,434,093/- (Previous Year Rs. NIL) due to devolvement of Letter of Credits since January, 2014.

— Interest on Working Capital Loans from banks are overdrawn to the extent of Rs. 46,675,155/- (Previous Year Rs. NIL) due since October, 2013.

6.1 Period and Amount of Default in repayment and interest

i. Principal amount of Rs. 452,175,000/- of 1% Foreign Currency Convertible Bonds (''FCCBs'') is overdue for repayment since 23rd November, 2011. Interest on FCCBs Rs. 13,865,875/- due up to 31st December, 2013 has also not been paid and is over due. Premium on redemption of FCCB''s of Rs. 205,958,186/- is also over due for payment since 23rd November, 2011.

ii. Refer Note 4.2 for default in repayment of Term Loans.

6.2 No amount is due as on 31st March, 2014 for credit to Investor Education and Protection Fund (Fund). Amount remaining due after adjustment of amounts to be claimed from the Company will be transferred on the respective due dates to the Fund.

6.3 Land includes addition made due to revaluation as on 31st March, 1994 in erstwhile Paramount Cable Corporation Rs. 7650950

Building includes addition made due to revaluation as on 31st March, 1994 in erstwhile Paramount Cable Corporation Rs. 7406534 Amount of Depreciation pertaining to revaluation in case of Buildings Rs. 110754

6.4 Title deeds of factory land at Prahladpur, Bawana Road, Delhi are in the name of erstwhile Paramount Cable Corporation.

6.5 Title deeds of a pari of factory land measuring 954.50 sq. mtr. at Prahladpur, Bawana Road, Delhi shown in Balance Sheet at Rs.2,386,250 are yet to be registered in name of the Company.

6.6 Land (Freehold) of Rs. 7,886,689/- as of 31st March, 2014 situated at Prahaladpur, Delhi is under acquisition as per the Land Acquisition Act, 1894. The Company has decided to contest the acquisition proceedings.

6.7 Carrying value of Assets acquired under hire purchase as on 31.03.2013 exclude the amount related to hire purchase agreement settled during the current year.

6.8 As per changes made in AS 11 vide Companies (Accounting Standards) Amendment Rules 2009, further amended vide Amendment Rules 2011, during financial year 2008-09 the company exercised option of deferring foreign exchange difference arising on long term foreign currency monetary items viz ''FCCBs'', Foreign Currency Term Loan to the Profit and Loss Account, in respect of accounting periods commencing on or after December 22, 2006. As a result, such foreign exchange difference relating to the acquisition of depreciable capital assets have been adjusted with cost of such assets and would be depreciated over the balance life of the assets and in other cases has been accumulated in ''FCMITDA''. Exchange loss (net) Rs. 20,448,000/- (Previous year exchange loss (net) Rs. 11,664,000/-) has been adjusted in gross block of Fixed Assets. Exchange difference on External Commercial Borrowing (ECBs) raised for repurchasing FCCBs has been transferred to ''FCMITDA''.

7.1 Aggregate Provision for diminution in value of investments in Paramount Holdings Limited, Cyprus has been made keeping in view that step down subsidiary "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom is under Administration as per UK Laws and negative net worth in AEI Power Cables Limited, United Kingdom. In case of Associate, no provision for diminution in value is required since the investment of Company has been sold off at book value subsequent to the year end.

8.1 Managerial Remuneration of Rs. 9,032,489/- and Rs. 853,720/- to Chairman & CEO and Managing Director for year ended 31st March, 2014 and for March, 2013 respectively, is as approved by the shareholders by way of postal ballot. However, this is subject to final approval from the Central Government.

8.2 The disclosures required under Accounting Standard 15 "Employee Benefits" ("AS-15") are given below:

Defined Benefit Plan

The company is having following Defined Benefit Plans:

Gratuity (Funded)

Leave Encashment (Unfunded)

9.1 Amount of Excise Duty deducted from the turnover is for sales made during the year and the amount recognized separately in the statement of Profit & Loss is related to the difference between the closing stock and opening stock.

9.2 Insurance Premium of Rs. 3,801,438/-(Previous Year Rs. 3,793,545/-) on Keyman Insurance Policy has been charged to Profit & Loss. Maturity value of such policies will be accounted for on receipt basis.

9.3 Following reimbursements from "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom for the portion of expenses attributable to them have been netted off from respective account heads: Figures in Rs. 28.1 Exceptional item of Rs. Nil (Previous Year Rs. 208,201,325/-) is on account of write back of secured loan from some banks upon one time settlement.

10.1 Exceptional item of Rs. Nil (Previous Year Rs.211,883,864/-) is on account of profit on sale of assets (net of WDV and expenses) consisting of factory land, building and some plant & machineries situated at SP - 76, 77 & 77 A, Khushkhera Industrial Area, Alwar (Rajasthan). These assets were sold as per the terms of approved CDR Rework Package dated 11th July, 2012.

10.2 "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom, a step down subsidiary of the Company, is under ''Administration'' and AEI Power Cables Limited, United Kingdom has negative net worth. In view of this development, management has made following provisions pertaining to subsidiaries during the year:

11 "Related party disclosures", for the year ended 31st March, 2014, as required by Accounting Standard-18 ("AS-18") are given below:

Relationships:

i) Subsidiaries of the Company:

Paramount Holdings Limited, Cyprus "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (in Administration) AEI Power Cables Limited, United Kingdom

ii) Associate of the Company: Paramount Wires & Cables Limited

iii) Other related parties in the Group where common control exists:

Sanjay Aggarwal (HUF)

Sandeep Aggarwal (HUF)

5.5. Aggarwal (HUF)

April Investment & Finance Private Limited

Worth Finance & Leasing Private Limited

Paramount Telecables Limited

s.s. Aggarwal Foundation

iv) Key Managerial Personnel:

Shri Sanjay Aggarwal, Chairman and CEO

Shri Sandeep Aggrawal, Managing Director

v) Relatives of Key Managerial Personnel with whom transaction have taken place:

Smt. Kamla Aggarwal

Shri. Dhruv Aggarwal

Shri. Tushar Aggarwal

Smt. Shashi Aggarwal

Smt. Archana Aggarwal

Ms Parul Aggarwal

b) Non-Financial Transactions:

i. Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal have given personal guarantees to banks/financial institutions for Company''s borrowings and also have pledged their share holding in the company with banks.

ii. Guarantee of Rs. 10,000,000/-(Previous Year Rs. 10,000,000/-) given to a Bank for credit facilities sanctioned to Paramount Wires & Cables Limited. Credit facilities availed by the said company as on 31.03.2014Rs.7,586,617/- (Previous year Rs. 7,153,292/-).

iii. The Company has executed a parental guarantee of Rs. 1,634,655,000/- (sterling pounds 16,500,000) (Previous Year Rs. 1,347,885,000/- (sterling pounds 16,500,000) given to a Bank for credit facilities sanctioned to its wholly owned subsidiary, "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom. Credit facilities availed by the said company as on 31.03.2014 was Rs. 5,646,990/- (sterling pounds 57,000) (Previous year Rs.805,231,504/- (sterling pounds 9,858,263).

iv. Paramount Telecables Limited has given its property as collateral by way of 2nd charge to the banks of the company.

v. The remuneration does not include Gratuity and Provision for Leave Encashment under Accounting Standard -15 (Revised) and personal accident insurance premium ,since same is not available for individual employees.

12 Future lease obligation by way of lease rental:

Fixed Assets taken on lease on or after April 1, 2001 include motor vehicles at an aggregate cost of Rs. 57,61,531/- (Previous year Rs. 5,761,531/-) with future lease obligation by way of lease rental as follows:

12.1 Operating Leases:

The Company has entered into lease transactions during the current financial year mainly for leasing of storage/office premises and company leased accommodations for its employees for periods up to 10 years. Terms of Lease include terms of renewal, increase in rents in future periods and terms of cancellation. There are no subleases. The Operating lease payments recognized in the Profit & Loss account amount to Rs. 22,064,899/- (Previous year Rs. 22,867,167/-) for the leases, which commenced on or after April 1, 2001. Minimum lease payments under non-cancellable operating leases are:

13 In opinion of the management Company''s business activity mainly falls within a single primary business segment "Cables", the disclosures requirements of Accounting Standard-17 ("AS-17") "Segment Reporting" are not applicable.

14 Contingent Liabilities & Commitments (to the extent not provided for)

Figures in ''Rs

Particulars As at 31st As at 31st March 2014 March 2014

Contingent Liabilities

Claims Against the Company not acknowledged 8,822,654 6,097,504 as Debt

Guarantees

i. Financial Bank Guarantees outstanding 33,661,802 46,986,124

ii. Guarantee of Rs. 10,000,000/- (Previous Year Rs. 10,000,000/-) given to a Bank for credit facilities sanctioned to Paramount Wires & Cables Ltd. (Associate) - Credit Facilities availed by Paramount Wires & Cables Ltd. 7,586,617 7,153,292

iii. Parental Guarantee of Rs. 1,634,655,000/- (sterling pounds 16,500,000/-) [Previous Year Rs 1,347,885,000/- (sterling pounds 1,65,00,000/ given to a Bank for credit facilities (sanctioned limit (sterling pounds 11,500,000/- sanctioned to "06196375 Cables Limited" (formerly AEI Cables Limited), United Kingdom (Subsidiary).

- Credit Facilities availed (Rs) 5,646,990 805,321,504

(£) 57,000 9,858,263

iv. Right of recompense of CDR lenders for Amount Amount reliefs / sacrifices / waivers extended by unascer- unascer- tainable tainable respective CDR lenders to the company.

15. Outstanding 1% Foreign Currency Convertible Bonds (FCCBs) amounting to USD 7.5 million were due for redemption on 23s1 November, 2011 and are yet to be redeemed. The Company was to redeem these FCCBs at a Premium equal to 145.54% of the outstanding principal amount. The said premium amounts to Rs. 229,607,788/-(Gross of tax). A winding up petition has been filed against the Company on behalf of the the FCCB holders, wherein an interim order has been passed by the Hon''ble High Court of Delhi restricting the Company from alienation, disposal or creation of third party interest or charge on any of its immovable assets. The Company is contesting the case. The matter is presently subjudice.

16. Till Previous Year Company had not provided Premium due on redemption on FCCBs. During the year Company has provided Premium due on redemption on FCCBs Rs. 229,607,788/- (Gross of Tax) and the same has been adjusted against the Securities Premium Account. Had Company followed earlier practice of non provision of Premium due on redemption on FCCBs. Current Liabilities would have been lower by Rs. 229,607,788/- and balance in Securities Premium Account would have been higher by Rs. 229,607,788/-.

17. Going Concern :

The company has recorded a net loss of Rs. 1,034,334,169/- for the year and has accumulated losses of Rs. 2,123,195,108/- as at 31st March, 2014, resulting in negative net worth. The company has also defaulted in payments of interest and redemption amount of Foreign currency Convertible Bonds (FCCBs) and interest and term loans installments to banks and other working capital facilities from banks. A winding up petition has also been filed against the Company on behalf of the FCCB holders, whereas an interim order has been passed by the Hon''ble High Court of Delhi restricting the Company from alienation, disposal or creation of third party interest or charge on any of its immovable assets. The management is confident that the company will be able to generate profits in future years and dispose off some assets to meet its financial obligations as may arise. The accompanying financial statements have been prepared on a going concern basis based on cumulative impact of following mitigating factors:

a) The company has not defaulted in payment of statutory dues or its trade creditors etc.

b) CDR package was approved during financial year 2010-11 and further "Rework Package" has been approved by CDR-EG vide Letter of Approval (LOA) dated 11th July, 2012. The Company has again proposed banks to reschedule term loans repayments.

c) The Company and promoters have undertaken to raise and have raised adequate finances by way of disposal of assets and induction of fresh funds by promoters and/or promoter group companies.

d) The Company is contesting the Winding up petition filed against it. The matter is presently subjudice.

e) The Company has strong order book position.

18. Company has been registered with the Board for Industrial and Financial Reconstruction (BIFR) under section 15 (1) of Sick Industrial Companies (Special Provisional Act, 1985 vide order dated 31.10.2013, BIFR has restrained company from disposing of or alienating in any manner any fixed assets of the Company without consent of BIFR.

19. Name of AEI Cables Limited, United Kingdom was changed to "06196375 Cables Limited" w.e.f. 28th February, 2014. This Company is "in Administration" (as per UK laws).

20. Previous Year''s figures have been regrouped / rearranged wherever necessary.


Mar 31, 2013

1.1 Amount of Excise Duty deducted from the turnover is for sales made during the year and the amount recognized separately in the statement of Profit & Loss is related to the difference between the closing stock and opening stock.

1.2 Insurance Premium of Rs. 3,793,545/-(Previous Year Rs. 3,793,545/-) on Keyman Insurance Policy has been charged to Profit & Loss. Maturity value of such policies will be accounted for on receipt basis.

2.1 Exceptional item of Rs. 208,201,325/- for the year ended 31st March, 2013 is on account of write back of secured loan from some banks upon one time settlement.

2.2 Exceptional item of Rs. 211,883,864/- for the year ended 31st March, 2013 is on account of profit on sale of assets (net of WDV and expenses) consisting of factory land, building and some plant & machineries situated at SP - 76 ,77 & 77 A, Khushkhera Industrial Area, Alwar (Rajasthan). These assets were sold as per the terms of approved CDR Rework Package dated 11th July, 2012.

3 ''Related party disclosures'', for the year ended 31st March, 2013, as required by Accounting Standard-18 (''AS-18'') are given below:

Relationships:

i) Subsidiaries of the Company:

Paramount Holdings Limited, Cyprus AEI Cables Limited, United Kingdom AEI Power Cables Limited, United Kingdom

ii) Associate of the Company:

Paramount Wires & Cables Limited

iii) Other related parties in the Group where common control exists:

Sanjay Aggarwal (HUF)

Sandeep Aggarwal (HUF)

S.S. Aggarwal (HUF)

April Investment & Finance Private Limited

Worth Finance & Leasing Private Limited

Paramount Telecables Limited

S.S. Aggarwal Foundation

iv) Key Managerial Personnel:

Shri Sanjay Aggarwal, Chairman and CEO Shri Sandeep Aggrawal, Managing Director

v) Relatives of Key Managerial Personnel with whom transaction have taken place:

Smt. Kamla Aggarwal Shri. Dhruv Aggarwal Shri. Tushar Aggarwal Smt. Shashi Aggarwal Smt. Archana Aggarwal Ms Parul Aggarwal

4.1 Operating Leases:

The Company has entered into lease transactions during the current financial year mainly for leasing of storage / office premises and company leased accommodations for its employees for periods upto 10 years. Terms of Lease include terms of renewal, increase in rents in future periods and terms of cancellation. There are no subleases. The Operating lease payments recognized in the Profit & Loss account amount to Rs. 22,640,818/- (Previous year Rs. 22,867,167/-) for the leases, which commenced on or after April 1, 2001. Minimum lease payments under non-cancellable operating leases are:

5 In opinion of the management Company''s business activity mainly falls within a single primary business segment Rs.Cables'', the disclosures requirements of Accounting Standard-17 (''AS-17'') "Segment Reporting" are not applicable.

6. Outstanding 1% Foreign Currency Convertible Bonds (FCCBs) amounting to USD 7.5 million were due for redemption on 23rd November, 2011 and are yet to be redeemed. The Company was to redeem these FCCBs at a Premium equal to 145.54% of the outstanding principal amount. The said premium amounts to Rs. 207,976,137/-(Gross of tax) and the same has not been provided. A winding up petition has been filed against the Company on behalf of the the FCCB holders, wherein an interim order has been passed by the Hon''ble High Court of Delhi restricting the Company from alienation, disposal or creation of third party interest or charge on any of its immovable assets. The Company is contesting the case. The matter is presently subjudice. Pending settlement /outcome of Court case no provision for premium on Redemption has been made in the accounts. The premium, if paid, would be adjusted against the Securities Premium Account ,hence ,will not have any effect on loss for the year.

7. Going Concern :

The company has recorded a net loss of Rs. 46,430,784/- for the year and has accumulated losses of Rs. 1,088,860,938/- as at 31st March, 2013, resulting in substantial erosion of the net worth. The company has also defaulted in payments of interest and redemption amount of Foreign currency Convertible Bonds (FCCBs). A winding up petition has also been filed against the Company on behalf of the FCCB holders, whereas an interim order has been passed by the Hon''ble High Court of Delhi restricting the Company from alienation, disposal or creation of third party interest or charge on any of its immovable assets. The management is confident that the company will be able to generate profits in future years and dispose off some assets to meet its financial obligations as may arise. The accompanying financial statements have been prepared on a going concern basis based on cumulative impact of following mitigating factors:

a) The company has not defaulted in payment of statutory dues or its trade creditors etc.

b) CDR package was approved during financial year 2010-11 and further "Rework Package" has been approved by CDR-EG vide Letter of Approval (LOA) dated 11th July, 2012. As per the Rework Package, there is no default in payment of Principal and/or interest to banks as on date.

c) The Company and promoters have undertaken to raise and have raised adequate finances by way of disposal of assets and induction of fresh funds by promoters and/or promoter group companies.

d) The Company is contesting the Winding up petition filed against it. The matter is presently subjudice.

8. Previous Year''s figures have been regrouped/rearranged wherever necessary.


Mar 31, 2012

1.1 Rights, preferences and restrictions attached to Equity Shares

Equity Shares : The company has one class of equity shares having a par value of Rs 2 /- per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation , the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings.

2.1 Nature of Security :-

i Term Loan from Banks:-

Term loans from banks are secured by 1st pari-passu charge on present and future fixed assets of the company and 2nd pari-passu charge on present and future current assets of the Company. Further they are secured through collateral by way of 2nd charge on a property owned by a Corporate, personal guarantees of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company and pledge of 100% equity shares of the company held by Promoters/ Promoters Group Companies.

ii Term Loan from Financial Institution:-

Loan from Financial Institution is secured against surrender value/ maturity value of keyman insurance policy of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company.

iii Finance Lease Obligations :-

Hire Purchase Finance is secured against assets financed from it.

2.2 Period and Amount of Default in repayment :-

i Principal amount of Rs 360,616,477 (Previous Year Rs Nil) of Term Loan from Banks included in Current Maturities of Term Loan were due for repayment on 31st March, 2012 and have not been paid. Corporate Debt Restructuring- EG has approved "Rework Package" vide letter of Approval (LOA) dated 11th July, 2012. As per the Rework Package, there is no default as on date.

ii During previous year interest of Rs 3,964,725 on loan from a financial institution overdue as on 31st March, 2011 was subsequently paid during F.Y. 2011-12.

iii During previous year, Company defaulted in payment of interest of Rs 157,673,859/- and principal of Rs 832,808,360/- to banks on various dates. Corporate Debt Restructuring (CDR) for the company was approved by CDR-EG and LOA was issued on 22nd November, 2010. The CDR inter-alia includes restructuring of repayment schedule, reduction in interest rates, additional securities and pledge of 100% promoter's shareholding. Master Restructuring Agreement (MRA) has been executed by all the CDR lenders and the CDR Scheme has been implemented. The banks that were not part of the CDR scheme, have also restructured their credit facilities in line with CDR scheme with varied terms and conditions regarding repayment schedule and interest rates. As at 31st March, 2011 there was no default of interest and principle to the banks.

3.1 As required by Accounting Standard-22 ('AS-22') in view of existence of Carried forward losses and unabsorbed depreciation under tax laws, Deferred Tax Assets have been recognised only to the extent they are virtually certain to be realised.

4.1 Nature of Security :-

Working Capital facilities from Banks are secured by 1st Pari-Passu charge by way of hypothecation on the entire current assets including raw material, stocks in process, finished goods, consumable stores & spares and receivables of the Company, 1st Pari-Passu charge on company's property situated at Prahaladpur, Bawana Road, Delhi, 2nd Pari-Passu charge on other present and future fixed assets. Further they are secured through collateral by way of 2nd charge on a property owned by a Corporate, personal guarantees of Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal, Directors of the Company and pledge of 100% equity shares of the company held by Promoters/ Promoters Group Companies.

5.1 1% Foreign Currency Convertible Bonds ('FCCBs') had an option to convert bonds into Equity Shares at Conversion Price Rs 42.60 per share(adjusted for sub-division of equity shares & subsequent reset of conversion price pursuant to Clause 5 of the Terms & Conditions of Bonds) at a fixed exchange rate ( Rs 44.99=US$1) between 22nd November, 2006 and 13th November, 2011. Unless previously converted, redeemed or repurchased or cancelled, the Company is liable to redeem these bonds at 145.54 percent of the principal amount on 23rd November, 2011.

5.2 Period and Amount of Default in repayment and interest :-

i. Principal amount of Rs 385,275,000/- of 1% Foreign Currency Convertible Bonds ('FCCBs') is overdue for repayment since 23rd November,2011. Interest on FCCBs Rs 675,042/- due as on 31st December,2011 has also not been paid and is over due. Premium on redemption of FCCB's of Rs 195,636,955/- is also over due for payment since 23rd November,2011.

ii. Refer Note 4.2 for default in repayment of Term Loans.

6.1 No amount is due as on 31st March, 2012 for credit to Investor Education and Protection Fund (Fund). Amount remaining due after adjustment of amounts to be claimed from the Company will be transferred on the respective due dates to be Fund.

7.1 Land includes addition made due to revaluation as on 31st March, 1994 in erstwhile Paramount Cable Corporation Rs 7,650,950 Building includes addition made due to revaluation as on 31st March, 1994 in erstwhile Paramount Cable Corporation Rs 7,406,534 Amount of Depreciation pertaining to revaluation in case of Buildings Rs 132,514

7.2 Title deeds of factory land at Prahladpur, Bawana Road, Delhi-110 042 are in the name of erstwhile Paramount Cable Corporation.

7.3 Title deeds of a pari of factory land measuring 954.50 sq. mtr. at Prahladpur, Bawana Road, Delhi-110042 shown in Balance Sheet at Rs 2,386,250 are yet to be registered in name of the Company.

7.4 Carrying value of Assets acquired under hire purchase as on 31.03.2011 exclude the amount related to hire purchase agreement settled during the current year.

7.5 As per changes made in AS 11 vide Companies(Accounting Standards) Amendment Rules 2009, further amended vide Amendment Rules 2011, during financial year 2008-09 the company exercised option of deferring foreign exchange difference arising on long term foreign currency monetary items viz 'FCCBs', Foreign Currency Term Loan to the Profit and Loss account, in respect of accounting periods commencing on or after December 22, 2006. As a result, such foreign exchange difference relating to the acquisition of depreciable capital assets have been adjusted with cost of such assets and would be depreciated over the balance life of the assets and in other cases has been accumulated in 'FCMITDA'. Exchange loss (net) Rs 23,607,000/-(Previous year exchange gain (net)Rs 882,000/-) has been adjusted in gross block of Fixed Assets. Exchange difference on External Commercial Borrowing (ECBs) raised for repurchasing FCCBs has been transferred to 'FCMITDA'.

8.1 Although the book value of investments in subsidiary and associate companies (book value amounting to Rs 166,021,133/- previous year Rs 176,652,560/- ) is lower than the cost, In opinion of the management, diminution in the value of investment in shares of Paramount Wires & Cables Limited (Associate) and Paramount Holdings Limited (Subsidiary) is temporary in nature considering in case of AEI Cables Limited, United Kingdom CVA scheme has been implemented, business restructuring undertaken , expected cash flows from operations, possibility of successfully additional arranging finance from the bankers and /or alternate finance providers and /or potential investors, orders in hand and assets base .In case of Associate considering future prospects ,orders in hand and assets base of the investee company , no provision for diminution in value is required.

9.1 Amount of Excise Duty deducted from the turnover is for sales made during the year and the amount recognized separately in the statement of Profit & Loss is related to the difference between the closing stock and opening stock.

9.2 Insurance Premium of Rs 3,793,545/-(Previous Year Rs 3,793,545/-) on Keyman Insurance Policy has been charged to Profit & Loss Account. Maturity value of such policies will be accounted for on receipt basis.

10 "Related party disclosures", for the year ended 31st March, 2012, as required by Accounting Standard-18 ("AS-18") are given below:

Relationships:

i) Subsidiaries of the Company:

Paramount Holdings Limited, Cyprus

AEI Cables Limited, United Kingdom

AEI Power Cables Limited, United Kingdom

ii) Associate of the Company:

Paramount Wires & Cables Limited

iii) Other related parties in the Group where common control exists:

Sanjay Aggarwal (HUF)

Sandeep Aggarwal (HUF)

S.S. Aggarwal (HUF)

April Investment & Finance Private Limited

Worth Finance & Leasing Private Limited

Paramount Telecables Limited

S.S. Aggarwal Foundation

iv) Functional Directors:

Mr. Sanjay Aggarwal Mr. Sandeep Aggarwal

v) Relatives of functional Directors:

Mrs. Kamla Aggarwal Mr. Dhruv Aggarwal Mr. Tushar Aggarwal Mrs. Shashi Aggarwal Mrs. Archana Aggarwal Ms Parul Aggarwal

b) Non-Financial Transactions:

i. Mr. Sanjay Aggarwal and Mr. Sandeep Aggarwal have given personal guarantees to banks/financial institutions for Company's borrowings and also have pledged their share holding in the company with banks.

ii. Guarantee of Rs 10,000,000/-(Previous Year Rs 10,000,000/-) given to a Bank for credit facilities given to Paramount Wires & Cables Limited. Credit facilities availed by the said company as on 31.03.2012 Rs 9,301,250/- (Previous year Rs 8,780,673/-) for fund based limits and Rs Nil (Previous year Rs NIL) for non-fund based limits.

iii. The Company has executed a parental guarantee in favour of One North East, U.K., an agency of British Government responsible for promoting investment in U.K., on behalf of its wholly owned subsidiary, AEI Cables Limited for guaranteeing the repayment of Grant of Rs 40,555,000/- (sterling pounds 500,000) (previous year Rs 35,601,250/- (sterling pounds 500,000)) extended to it together with the interest at the rate of 1.5 percentage points above the UK base rate of Bank of England calculated from the date of first demand to AEI Cables Limited till the date of actual payment, in case AEI Cables Limited fails to observe the terms and conditions stipulated in the offer letter while giving the Grant.

iv. The Company has executed a parental guarantee of Rs 1,338,315,000/- (sterling pounds16,500,000) (Previous Year Rs 1,174,841,250/- (sterling pounds 16,500,000) given to a Bank for credit facilities given to its wholly owned subsidiary, AEI Cables Limited. Credit facilities availed by the said company as on 31.03.2012 was Rs 817,106,908/- (sterling pounds 10,074,059) (Previous year Rs 1,107,693,804 (sterling pounds 15,556,951).

v. Paramount Telecables Limited has given its property as collateral by way of 2nd charge to the banks of the company.

vi. During the year Paramount Telecables Limited and Worth Finance & Leasing Private Limited have been alloted 4,391,795 Equity Shares of par value of Rs 2/- each at Securities Premium of Rs 11/- each upon conversion of warrants. Full amount was received against this allotment in previous year.

11.1 Operating Leases:

The Company has entered into lease transactions during the current financial year mainly for leasing of storage / office premises and company leased accommodations for its employees for periods upto 10 years. Terms of Lease include terms of renewal, increase in rents in future periods and terms of cancellation. There are no subleases. The Operating lease payments recognized in the Profit & Loss account amount to Rs 22,867,167/- (Previous year Rs 23,361,456/-) for the leases, which commenced on or after April 1, 2001. Minimum lease payments under non-cancellable operating leases are:

11 In opinion of the management Company's business activity mainly falls within a single primary business segment 'Cables', the disclosures requirements of Accounting Standard-17 ("AS-17") "Segment Reporting" are not applicable.

12 Contingent Liabilities & Commitments

(to the extent not provided for) Figures in Rs

Particulars As At As At 31st March, 31st March, 2012 2011

Contingent Liabilities

Claims Against the Company not acknowledged as Debt 5,662,454 2,580,254

Guarantees

i. Financial Bank Guarantees outstanding 72,634,926 12,986,404

ii. Guarantee of Rs 10,000,000/- (Previous Year Rs 10,000,000/-) given to a Bank for credit facilities given to Paramount Wires & Cables Ltd (Associate)

- Credit Facilities availed by Paramount Wires & Cables Ltd. 9,301,250 8,780,673

iii. Parental guarantee in favour of One North East, UK, an agency of British Government responsible for promoting investment in U.K., on behalf of its wholly owned subsidiary, AEI Cables Limited for guaranteeing the repayment of Grant extended to it together with the interest at the rate of 1.5 percentage points above the UK base rate of Bank of England calculated from the date of first demand to AEI Cables Limited till the date of actual payment, in case AEI Cables Limited fails to observe the terms and conditions stipulated in the offer letter while giving the Grant.

- Grant Facilities availed by AEI Cables Ltd. (Rs) 40,555,000 35,601,250

(GBP) 500,000 500,000

iv. Parental Guarantee of Rs 1,338,315,000/- (sterling pounds 16,500,000/-)[Previous Year Rs 1,174,841,250/- (sterling pounds 1,65,00,000/-)] given to a Bank for credit facilities given to AEI Cables Limited (Subsidiary).

- Credit Facilities availed by AEI Cables Ltd. (Rs) 817,106,908 1,107,693,804

(GBP) 10,074,059 15,556,951

v. Right of recompense of CDR lenders for reliefs/sacrifices/ waivers extended by respective CDR lenders to the company. Amount Amount unascertainable unascertainable

Other money for which company is contingently liable

i. Unutilised Letter of Credits 131,663,116 348,435,379

ii. Outstanding Bill discounted 155,435,607 -

iii. Income Tax

- Demand under appeal/rectification arising out of disallowances and non-credit of tax deduction at source 1,726,165 3,309,048

- Matter which have been decided in favour of the Company in first appeal stage, however, Income tax department has filed appeal against orders of first appellate authority. 27,008,740 28,734,905 30,317,788

iv. Excise demands under appeal 76,480,446 70,318,388

v. Service tax demands under appeal 24,760,595 1,328,068

vi. Custom duty demand due to denial of concessional custom duty, under appeal 1,836,570 1,836,570

vii. Premium on Redemption of 1% Foreign Currency Convertible Bonds (FCCBs) - 128,893,428

Commitments

i. Estimated amount of contracts (net of advances) remaining to be executed on Capital Account. - 22,500,000

13. Outstanding 1% Foreign Currency Convertible Bonds (FCCBs) amounting to USD 7.5 million were due for redemption on 23rd November, 2011 and are yet to be redeemed. The Company was to redeem these FCCBs at a Premium equal to 145.54% of the outstanding principal amount. The said premium amounts to Rs 195,636,955/- (gross of tax) and the same has not been provided. The Company has duly informed the FCCBs holders about its financial position and is in discussion with the FCCBs hofslders, through the trustee, for re-schedulement of payment due on the outstanding FCCBs. In view of this redemption amount is subject to re-scheduling / final settlement with FCCBs holders. The premium, if paid, would be adjusted against the Securities Premium Account.

14. Going Concern :

The company has recorded a net loss of Rs 583,546,626/- for the year and has accumulated losses of Rs 1,042,430,155/- as at 31st March, 2012, resulting in substantial erosion of the net worth. During the year the company has also defaulted in payments of interest and redemption amount of Foreign currency Convertible Bonds (FCCBs) and principal amount of term loan from banks. The management is confident that the company will be able to generate profits in future years and dispose off some assets to meet its financial obligations as may arise. The accompanying financial statements have been prepared on a going concern basis based on cumulative impact of following mitigating factors:

a) The company has not defaulted in payment of statutory dues or its trade creditors etc.

b) CDR package was approved during previous year and further "Rework Package" has been approved by CDR- EG vide Letter of Approval (LOA) dated 11th July, 2012. As per the Rework Package, there is no default in payment of Principal and/or interest to banks as on date.

c) The Company and promoters have undertaken to raise adequate finances by way of disposal of assets and induction of fresh funds by promoters and/or promoter group companies.

15 Previous Year's figures have been regrouped / rearranged wherever necessary.


Mar 31, 2010

1. CONTINGENT LIABILITIES

i. Guarantee of Rs. 5,00,00,000/- (Previous Year Rs. 5,00,00,000/-) given to a Bank for credit facilities given to Paramount Wires & Cables Limited. Credit facilities availed by the said company as on 31.03.2010 Rs. 97,63,962/- (Previous year Rs.95,05,496/-) for fund based limits and Rs. NIL (Previous year Rs.NIL) for non-fund based limits.

ii. The Company has executed a parental guarantee in favour of One North East, UK, an agency of British Government responsible for promoting investment in U.K., on behalf of its wholly owned subsidiary, AEI Cables Limited for guaranteeing the repayment of Grant of Rs. 3,43,50,000/- (sterling pounds 5,00,000) (previous year Rs. 3,69,15,000/- (sterling pounds 5,00,000)) extended to it together with the interest at the rate of 1.5 percentage points above the UK base rate of Bank of England calculated from the date of first demand to AEI Cables Limited till the date of actual payment, in case AEI Cables Limited fails to observe the terms and conditions stipulated in the offer letter while giving the Grant.

iii. Unused letter of credit outstanding Rs. 28,28,44,807/- (Previous year Rs. 6,36,87,737/-)

iv. Financial Bank Guarantees outstanding Rs. 2,94,33,278/- (Previous year Rs. 2,50,11,913/-)

v. Outstanding Bills discounted Rs. 12,10,44,102/- (Previous year Rs. 20,70,72,925/-).

vi. Effect of Income tax demands/disallowances against which appeal/rectifications have been filed by the company is Rs. 2,95,18,775/- (Previous year Rs.31,05,522/-)

vii. Excise and Service tax demands under appeal Rs. 5,61,33,651/-(Previous year Rs. 2,73,32,535/-)

viii. Custom duty demand under appeal Rs. 18,36,570/- ( Previous year Rs. NIL)

ix. Claim pending against company not acknowledged as debt Rs. 25,80,254/- ( Previous year Rs. NIL)

2. 1% Foreign Currency Convertible Bonds (FCCBs) have an option to convert these bonds into Equity Shares at an initial conversion rate of Rs.265/- per share (Rs.53/- per share post-split) at a fixed exchange rate (Rs.44.99 = US$1). The conversion price will be reset on the first, second and third anniversaries of the Bonds. The conversion price has been reset on the first anniversary of the Bonds at Rs. 213 (Rs. 42.60 per share post-split). The reset conversion price can not be lower than Rs. 213 (Rs. 42.60 per share post-split) or the applicable reset floor price as prescribed by SEBI from time to time. The conversion price will be subject to certain adjustments as detailed in the offering circular such as dilution, bonus, dividends, right issue, special dividend etc. Unless previously converted, redeemed or repurchased or cancelled, the Company will redeem these bonds at 145.54 percent of the principal amount on 23rd November, 2011. Up to March 31, 2010 out of the total issue, FCCBs aggregating to USD 19.50 Million have been repurchased at discount. Balance of FCCBs of USD 7.50 Million outstanding as on March, 31, 2010 have been included and disclosed in the schedule of "Unsecured Loans". In view of these developments the Company expects that no premium would be payable and on that basis the same is not provided for. However, the premium, if paid would be adjusted against the Securities Premium Account. Accordingly maximum premium amount payable being Rs. 15,38,93,891/- (Previous year Rs. 62,94,22,002/-) would be accounted for and adjusted against Securities Premium Account in the year of such redemption or repurchase or cancellation.

3. Estimated amount of contracts (net of advances) remaining to be executed on capital account Rs. 15,25,67,000/- (Previous year Rs. 26,08,14,000/-)

4. i. Working Capital facilities from Banks are secured by 1st Pari-Passu charge by way of hypothecation on the entire current assets including raw material, stocks in process, finished goods, consumable stores & spares and receivables of the Company and 2nd Pari-Passu charge on present and future fixed assets other than land and building at Prahaladpur, Bawana Road, Delhi. Further they are secured by personal guarantees of Shri Sanjay Aggarwal and Shri Sandeep Aggarwal, Directors of the Company.

ii. Term loans from banks are secured by 1st pari-passu charge on present and future fixed assets of the company other than land and building at Prahaladpur, Bawana Road, Delhi and 2nd pari-passu charge on present and future current assets of the Company. Further they are secured by personal guarantees of Shri Sanjay Aggarwal and Shri Sandeep Aggarwal, Directors of the Company.

iii. Hire Purchase Finance is secured against assets financed from it.

iv. Loan from Financial Institution is secured against surrender value/ maturity value of keyman insurance policy of Shri Sanjay Aggarwal and Shri Sandeep Aggarwal, Directors of the Company.

5. Fixed Deposits with banks amounting to Rs. 7,80,44,077/- (Previous year Rs. 7,73,64,311/-) are under lien/custody with banks/ sales tax department.

6. During the year the Company has allotted 5,000,000 (Fifty Lakhs) Warrants on Preferential basis. The Warrant holders have option of subscribing one equity shares of face value of Rs.2/- each per Warrant at a price of Rs.13/- per equity share any time up to 8th June, 2011. Proceeds from issue of warrants have been utilized as per objects of the issue.

7. Interest on working capital facilities has been shown net of interest earned by the company Rs. 1,08,90,394/-(Previous Year Rs.1,66,65,698/-).

8. During the year 1% Foreign Currency Convertible Bonds (FCCBs) of USD 19.50 million have been bought back. This has resulted in profit of Rs. 45,64,91,290/- (Previous Year Rs.NIL) which has been included under Other Income. Prorata exchange difference on these FCCBs transferred to Foreign Currency Monetary Item Translation Difference Account ("FCMITDA") has been written off to Profit & loss account.

9. As per changes made in AS 11 vide Companies(Accounting Standards) Amendment Rules 2009, during financial year 2008-09 the company exercised option of deferring foreign exchange difference arising on long term foreign currency monetary items viz FCCBs, Foreign Currency Term Loan to the Profit and Loss account, in respect of accounting periods commencing on or after December 22, 2006. As a result, such foreign exchange difference relating to the acquisition of depreciable capital assets have been adjusted with cost of such assets and would be depreciated over the balance life of the assets and in other cases has been accumulated in FCMITDA. Exchange gain (net) Rs. 5,52,42,598/-(Previous year Exchange Loss(Net) Rs. 9,61,63,200/-) has been adjusted in gross block of fixed assets.

Exchange difference on External Commercial Borrowing (ECBs) raised for repurchasing FCCBs has been transferred to FCMITDA

10. Insurance Premium of Rs.37,93,545/- (Previous Year Rs. 37,96,025/-) on Keyman Insurance Policy has been charged to Profit & Loss Account. Maturity value of such policies will be accounted for on receipt basis.

11. Amount of Excise Duty deducted from the turnover is for sales made during the year and the amount recognized separately in the statement of Profit & Loss is related to the difference between the closing stock and opening stock.

12. In view of the inadequate profit, minimum managerial remuneration as approved and as per the Companies Act, 1956 has been paid / provided.

13. Sundry Debtors include due from Paramount Wires & Cables Limited, in which Company holds 44.49% of shareholding, Rs. 5,58,62,311/- (Previous year Rs. 25,75,30,697/-)

14. Sundry Debtors include due from AEI Cables Limited, a subsidiary of the company Rs.10,28,93,415/- (Previous year Rs 4,84,31,738/-) and Sundry Creditors include due to AEI Cables Limited, a subsidiary of the company Rs. 19,61,403/-(Previous year Rs 4,90,622/-).

15. Loans & advances include due from Paramount Holdings Limited, a subsidiary of the company Rs. 23,73,880/- (Previous year Rs 6,33,225/-) Maximum Balance outstanding during the year Rs. 23,73,880/- (Previous year Rs. 6,33,225/-).

16. Loans & Advances include Security Deposit given to Paramount Telecables Limited for premises taken on rent Rs. 1,80,00,000/- (Previous year Rs. 1,80,00,000) Maximum Balance outstanding during the year Rs. 1,80,00,000/- (Previous year Rs. 1,80,00,000/-).

17. Loans and Advances include recoverable from Shri Sanjay Aggarwal, Chairman & CEO and Shri Sandeep Aggarwal, Managing Director of the Company on account of remuneration paid in excess of minimum remuneration due to unforeseen losses during the year Rs. NIL (Previous year Rs.6,95,776). Maximum Balance outstanding during the year Rs. 6,95,776/- (Previous year Rs. 6,95,776/-).

Note: Security deposit for premises taken on rent by the Company and adjustable/refundable as per terms & conditions. Paramount Telecables Limited has not invested in shares of the company.

18. In opinion of the management Companys business activity mainly falls within a single primary business segment `Cables, the disclosures requirements of Accounting Standard-17 ("AS-17") "Segment Reporting" are not applicable.

(b) Operating Leases- Other than non-cancelable

The Company has entered into lease transactions during the current financial year mainly for leasing of factory / office premises and company leased accommodations for its employees for periods upto 10 years. Terms of Lease include terms of renewal, increase in rents in future periods and terms of cancellation. The Operating lease payments recognized in the Profit & Loss account amount to Rs. 2,53,35,284/- (Previous year Rs. 2,70,40,041/-) for the leases, which commenced on or after April 1, 2001.

19. Due to Micro, Small and Medium Enterprises

Sundry creditors include Rs. 1,46,82,712/- (Previous year Rs. 4,22,612/-) due to micro and small enterprises covered under The Micro, Small and Medium Enterprises Development Act, 2006 to the extent such parties have been identified from the available information. The Company has not received any claim for interest from any party covered under the said Act.

Note: The Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extend to which remittances, if any, in foreign currencies on account of dividend have been made by / on behalf of non-resident shareholders.

20. Related Party disclosures, as required by Accounting Standard-18 ("AS-18") are enclosed as per Annexure-1.

21. Previous years figures have been regrouped / rearranged where necessary.

22. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956 has been given under "Balance Sheet Abstract and Companys General Business Profile".

 
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