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Notes to Accounts of Universal Cables Ltd.

Mar 31, 2014

Nature of Operations

UNIVERSAL CABLES LIMITED is engaged in the manufacturing, laying, selling of Power Cables and Capacitors.

Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the notified Accounting Standards issued by Companies Accounting Standard Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956 read with the General Circular 8/2014 dated 4th April, 2014 of the Ministry of Corporate Affairs. The financial statements have been prepared under the historical cost convention modified by revaluation of fixed assets, on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

1.(a) Terms/Rights attached to Equity Shares :

The Company has only one class of Shares referred to as Equity Shares having a par value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per share.

(b) Foreign Currency Loan - Buyer''s Credit from Bank(s) are secured by hypothecation of entire present and future current assets of the Company. As collateral security, these facilities are additionally secured by way of first charge on certain immovable properties of the Company as continuing security by deposit of title deeds of such immovable properties. It is repayable within 2 years from the Balance sheet date and carries rate of Interest ranging from 1.50% - 3.00%. Long Term Foreign Currency Loan - Buyer''s Credit are repayable in 3 equal Installments.

(c)As per the renewed/revised terms and conditions loans from Bodies Corporate amounting to Rs. 8000 lacs are repayable in full in the year 2015, Rs. 1500 lacs are repayable in the year 2016 and Rs. 1500 lacs are repayable in 2017. These loans carry interest @ 10.50% - 11.00% (rate as on reporting date).

* The Company has recognized deferred tax assets on carry forward business losses and unabsorbed depreciation, as the Company is having timing differences, the reversal of which will result in sufficient income to realise the deferred tax asset.

Working Capital Loans from Bank(s) are secured by hypothecation of entire present and future current assets of the Company. As collateral security, these facilities are additionally secured by way of first charge on certain immovable properties of the Company as continuing security by deposit of title deeds of such immovable properties.

* Includes Rs. 46.56 lacs (Previous year Nil) on account of Borrowing Costs capitalised during the quarter.

# Includes Rs. 103.05 lacs (Previous year Nil) pertaining to exchange loss capitalised as per para 46A of AS 11.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Company expects to contribute Rs. 70 lacs (Previous year Rs. 80 lacs) to the Gratuity Fund during the year 2014-15.

The Provident Fund being administered by a Trust is a Defined Benefit Scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the Fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that Provident Funds set up by employers, which require interest shortfall to be met by the employer, needs to be treated as Defined Benefit Plan. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The Actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31st March, 2014.

2. Segment Reporting AS-17 :

In the opinion of the management, there is only one reportable segment ("Manufacturing, Laying, Selling of Power Cables and Capacitors") as envisaged by Accounting Standard 17 "Segment Reporting". Further, from a geographical segment perspective, export sale constitute less than 10% of enterprise revenues. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.

*As the liability of Gratuity and Leave encashment is provided on an actuarial basis for the Company as a whole, amount pertaining to Shri D.R. Bansal (Key Management Personnel), is therefore not included above.

Note : (1) No amount has been provided as doubtful debts or advances/written off or written back in respect of debts due from/to above parties.

(2) Transactions with related parties are done on arm''s length basis in the ordinary course of business.

3. Leases :

Assets Given on Operating Lease :

The Company has leased out Land and Buildings to Birla Furukawa Fibre Optics Limited on Operating Lease. The lease term is for 55 months and thereafter renewable by mutual consent on mutually agreed terms. There is an escalation clause of 3% in the Lease Agreement for every subsequent period of 11 months. There is no restriction imposed by Lease Agreements. The leases are cancelable.

During the year, the Company has received lease rent of Rs. 203.92 lacs (Previous year Rs. 195.04 lacs) which is disclosed as rent received under Note No. 22 "Other Income".

Assets Taken on Operating Lease :

The Company has taken various Residential, Office and Warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no subleases. These leases are generally cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/payable are charged as "Rent" under Note No. 26 "Other Expenses".

4. In view of excise duty tariff rates on the Company''s finished products being lower than cenvatable Customs Duty on imported inputs, the Company has accumulated CENVAT credits aggregating to Rs. 729.63 lacs (Previous year Rs. 550.96 lacs). Since there is no time limit for utilization of these balances and based on the alternative mechanism devised for reduction of cenvat credit balances on a year on year basis, in the opinion of the managment this does not call for any provision there against.

5. Capital and other commitments :

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 320.82 lacs (Previous year Rs. 1215.00 lacs).

(b) The Company has entered into EPC contracts and contracts for sale of cables. Non-fulfillment of contract within specified period will lead to payment of Liquidated Damages ranging from 5% to 10%. Provision has been made on this account wherever necessary.

(c) For commitment relating to Lease arrangement, Refer to Note No. 33 "Leases".

6. Contingent Liabilities (not provided for) :

(Rs. in lacs)

Sl. As at As at No. Particulars 31st March, 2014 31st March, 2013

1 Income Tax 274.93 415.58

2 Terminal Tax Liability 227.37 227.37

3 Excise and Service Tax Cases 241.32 91.84

4 Bills of exchange discounted with Banks 1854.51 1269.91

5 Corporate Guarantee issued in favour of SBI on behalf of the Joint 3520.00 3520.00 Venture Company viz. "Birla Furukawa Fibre Optics Ltd."

Notes :

(a) Income Tax demand comprise demand from the Indian Tax Authorities for payment of additional tax of Rs. 274.93 lacs (Previous year Rs. 386.69 lacs), upon completion of tax assessments for the financial years 2007-08, 2008- 09, 2009-10 and 2010-11. The Tax demands are mainly on account of disallowance of benefits which is linked to Capital Investments (determined @ 75% of total Commercial Tax (VAT CST) paid and exemption from Entry Tax), Additional Depreciation, and other expenses under the Income Tax Act, 1961.

The Company is contesting the demands and the Management, believes that its position is likely to be upheld in the appellate process. The Company has accrued Rs. 1165.93 lacs (Previous year Rs. 1264.98 lacs) in the financial statements for the tax demand raised and balance of Rs. 274.93 lacs (Previous year Rs. 415.58 lacs) has been disclosed as contingent liability. The management also believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and results of operations.

(b) Terminal Tax liability is in respect of demand raised by the Municipal Corporation of Satna (M.P.) under provisions of the Madhya Pradesh Municipal Corporation Act, 1956. The Company has contested the demand interalia by challenging its constitutional validity. The Company has been legally advised that the said demand against the Company is unsustainable and therefore there is no likelihood of the Company being subjected to any Terminal Tax Liability.

(c) The future cash outflow in respect of items 1 to 3 above is determinable only on receipt of the decisions/ judgements in the cases pending at various forums and authorities concerned.

7. The Company has exercised option provided in Para 46A of Accounting Standard - 11 on Effects of changes in Foreign Exchange rates with regard to the treatment of foreign exchange fluctuation gain/loss. Accordingly, loss on exchange fluctuation on long-term foreign currency monetary items amounting to related Rs. 103.05 lacs have been adjusted to the cost of capital asset and depreciated over the balance life of the asset. This has resulted in increase in profit of the year by Rs. 93.81 lacs (net of depreciation of Rs. 9.24 lacs).

(a) A sum of Rs. 2.26 lacs (Previous year Rs. 7.55 lacs) on account of unamortized foreign exchange premium on outstanding forward exchange contracts is being carried forward to be charged to Statement of Profit and Loss of the subsequent period.

8. There is no impairment of Fixed Assets during the year.

9. Previous Year Figures

The Company has reclassified/regrouped previous year figures wherever necessary, to conform to this year''s classification. Figures shown in brackets, represent those of the previous year.


Mar 31, 2013

1. Nature of Operations

UNIVERSAL CABLES LIMITED, an M. P. Birla Group Company is engaged in the manufacturing, laying, selling of Power Cables and Capacitors.

2. Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared to comply in all material respects with the notified Accounting Standards issued by Companies (Accounting Standard) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention modified by revaluation of fixed assets, on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

3. Employee Benefit Plans :

The Company''s defined benefit plans include the approved funded Gratuity scheme which is administered through Group Gratuity Scheme with Life Insurance Corporation of India and non-funded schemes viz. Pension (applicable only to certain employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries.

The following tables summarise the components of net benefit expense recognized in the Statement of Profit and Loss, the funded status and the amounts recognized in the Balance Sheet for the respective plans.

4. Segment Information :

Business Segments :

Power Cables & Capacitors account for the majority of business of the Company. Power Cables are of different types viz. Extra High Voltage, Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These are used for the transmission and distribution of electricity in power plants and other organisations/engineering industries like railways, shipping, refineries etc. PVC winding wires are used for submersible pumps. Capacitor consists of high/low voltage capacitors.

5. Leases :

Assets Given on Operating Lease :

The Company has leased out Land and Buildings on Operating Lease. The lease term is for 55 months and thereafter renewable by mutual consent on mutually agreed terms. There is an escalation clause of 3% in the Lease Agreement for every subsequent period of 11 months. There is no restriction imposed by Lease Agreements. The leases are cancelable.

During the year, the Company has received lease rent of Rs. 195.04 lacs (Previous year Rs. 104.92 lacs) which is disclosed as rent received under Note No. 22 `"Other Income`".

Assets Taken on Operating Lease :

The Company has taken various Residential, Office and Warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no subleases. These leases are generally cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/payable are charged as `"Rent`" under Note No. 26 "Other Expenses".

6. In view of excise duty tariff rates on the Company''s finished products being lower than cenvatable Customs Duty on imported inputs, the Company has accumulated CENVAT credits aggregating to Rs. 550.96 lacs (Previous year Rs. 965.81 lacs). Since there is no time limit for utilization of these balances and based on the alternative mechanism devised for reduction of cenvat credit balances on a year on year basis, in the opinion of the managment this does not call for any provision thereagainst.

7. Capital and other commitments :

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 1215.00 lacs (Previous year Rs. 1528.63 lacs).

(b) The Company has entered into EPC contracts and contracts for sale of cables. Non-fulfillment of contract within specified period will lead to payment of Liquidated Damages ranging from 5% to 10%. Provision has been made on this account wherever necessary.

(c) For commitment relating to Lease arrangement, Refer to Note No. 33 "Leases".

8. Contingent Liabilities (not provided for) :

(Rs. in lacs)

Sl. As at As at Particulars No 31st March, 2013 31st March, 2012

1 Income Tax* 415.58 259.27

2 Terminal Tax Liability** 227.37 195.30

3 Excise and Service Tax Cases 91.84 170.60

4 Bills of exchange discounted with Banks 1269.91 3308.91

5 Corporate Guarantee issued in favour of SBI on behalf of the 3520.00 3520.00

Joint Venture Company viz.`"Birla Furukawa Fibre Optics Ltd.`"

* Income Tax demand comprise demand from the Indian Tax Authorities for payment of additional tax of Rs. 386.69 lacs (Previous year Rs. 233.54 lacs), upon completion of tax assessments for the financial years 2007-08, 2008-09 and 2009-10. Further for the years 2010-11, 2011-12 and 2012-13, the Management has considered Rs. 28.89 lacs (Previous year Rs. 25.73 lacs) as contingent liability based on the issues raised in the tax assessments of earlier years. The Tax demands are mainly on account of disallowance of benefits which is linked to Capital Investments (determined @ 75% of total Commercial Tax (VAT CST) paid and exemption from Entry Tax), Additional Depreciation, and other miscellaneous expenses under the Income Tax Act, 1961.

The Company is contesting the demands and the Management, believes that its position is likely to be upheld in the appellate process. The Company has accrued Rs. 1264.98 lacs (Previous year Rs. 1050.09 lacs) in the financial statements for the tax demand raised and balance of Rs. 415.58 lacs (Previous year Rs. 259.27 lacs) has been disclosed as contingent liability. The management also believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and results of operations.

**Terminal Tax liability is in respect of demand raised by the Municipal Corporation of Satna (M.P.) under provisions of the Madhya Pradesh Municipal Corporation Act, 1956. The Company has contested the demand interalia by challenging its constitutional validity. The Company has been legally advised that the said demand against the Company is unsustainable and therefore there is no likelihood of the Company being subjected to any Terminal Tax Liability.

The future cash outflow in respect of items 1 to 3 above is determinable only on receipt of the decisions/judgements in the cases pending at various forums and authorities concerned.

10. The market value of a long term strategic quoted Non-current investment (trade) in a Joint Venture Company namely, Birla Ericsson Optical Limited is Rs. 368 lacs as at 31st March, 2013, thus having a temporary decline of Rs. 482 lacs as compared to the carrying amount of the said investment. Having regard to the future growth potential anchored on core competencies, intrinsic assets base/net worth and state-of-the-art manufacturing facilities of the investee company, in the opinion of the management the decline in the market value of Company''s investment is not considered to be of other than temporary nature and hence does not call for any provision thereagainst.

11. There is no impairment of Fixed Assets during the year.

12. Previous Year Figures

The Company has reclassified/regrouped previous year figures wherever necessary, to conform to this year''s classification. Figures shown in brackets, represent those of the previous year.


Mar 31, 2012

(A) Terms/Rights attached to Equity Shares :

The Company has only one class of Shares referred to as Equity Shares having a par value of Rs.10/- per share. Each holder of Equity Share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of shareholders in the Annual General Meeting. For the year ended 31st March, 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs. Nil (Previous year Rs. 2/-).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion to the amount paid up or credited as paid up on such equity shares respectively, after distribution of all preferential amounts.

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

(B) Aggregate number of shares issued for consideration other than cash during the period of five years immediately preceding the reporting date :

30,92,310 (Previous year 30,92,310) Equity Shares of Rs. 10/- each amounting to Rs. 3,09,23,100/- were allotted on September 7, 2006 to the Shareholders of erstwhile Optic Fibre Goa Limited pursuant to the Scheme of Amalgamation without payment being received in cash.

1. Employee Benefit Plans :

The Company has a defined benefit Gratuity Plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying Insurance Policy.

The Company has a Pension Scheme in place for some of its employees who had opted for this Scheme in the past. Presently, there are 23 employees covered under the Scheme, out of which one employee is continuing his employment as on 31.03.2012 and the remaining 22 are retired ones.

The pension entitlement is based on the final salary and period of service put in by the pensioners as per the Pension Scheme of the Company. No escalation in the terminal salary is considered after retirement. The Pension is paid to the employee till his/her survival and thereafter it is paid to the surviving spouse as per the rate prescribed under the Scheme. No post-employment medical plans are covered under the Pension Scheme of the Company.

The following tables summarise the components of net benefit expense recognized in the Statement of Profit and Loss, the funded status and the amounts recognized in the Balance Sheet for the respective plans.

The Provident Fund being administered by Trusts is a Defined Benefit Scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the Fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standards Board (ASB) states that Provident Funds set up by employers, which require interest shortfall to be met by the employer, needs to be treated as Defined Benefit Plan. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The Actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31st March, 2012.

2. Segment Information :

Business Segments :

Power Cables & Capacitors account for the majority of business of the Company. Power cables are of different types viz. Extra High Voltage, Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These are used for the transmission and distribution of electricity in power plants and other organisations/engineering industries like railways, shipping, refineries, etc. PVC winding wires are used for submersible pumps. Capacitor consists of high/low voltage capacitors.

Optical Fibre consists of single mode and multimode Telecommunication Grade Optical Fibres.

(a) Primary Segment Information (by Business Segments) :

The following table presents revenue and profit/(loss) information regarding industry segments for the years ended 31st March, 2012 and 31st March, 2011 and certain assets and liabilities information regarding industry segments at 31st March, 2012 and 31st March, 2011 :

*As the liability of Gratuity and Leave encashment is provided on an actuarial basis for the Company as a whole, amount pertaining to Shri D.R. Bansal (Key Management Personnel), is therefore not included above.

Note : No amount has been provided as doubtful debts or advances written off or written back in respect of debts due from/to above parties.

3. Leases :

Assets Given on Operating Lease :

The Company has leased out Land and Buildings on Operating Lease. The lease term is for 55 months and thereafter renewable by mutual consent on mutually agreed terms. There is an escalation clause in the Lease Agreement that rent shall be increased for every subsequent period of 11 months by an amount equal to 6% of the lease rent. There is no restriction imposed by Lease Agreements. The rent is not based on any contingency. The leases are cancelable.

During the year, the Company has received lease rent of Rs. 104.92 lacs (Previous year Rs. 219.03 lacs) which is disclosed as rent received under Note No. 22 "Other Income".

Assets Taken on Operating Lease :

The Company has taken various Residential, Office and Warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no subleases. These leases are generally cancelable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/payable are charged as "Rent" under Note No. 26 "Other Expenses".

The future minimum lease payments under non-cancelable operating lease is Rs. Nil (Previous year Rs. Nil).

4. In view of excise duty tariff rates on the Company's finished products being lower than cenvatable Customs Duty on imported inputs, the Company has accumulated CENVAT credits aggregating to Rs. 965.81 lacs (Previous year Rs. 459.24 lacs). Since there is no time limit for utilization of these balances and based on the alternative mechanism devised for reduction of cenvat credit balances on a year on year basis, in the opinion of the management this does not call for any provision there against.

5. Capital and other commitments :

(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 1528.63 lacs (Previous year Rs. 123.87 lacs).

(b) The Company has entered into EPC contracts and contracts for sale of cables. Non-fulfillment of contract within specified period will lead to payment of Liquidated Damages ranging from 5% to 10%.

(c) For commitment relating to Lease arrangement, Refer to Note No. 33 "Leases".

6. Contingent Liabilities (not provided for) :

(Rs. in lacs)

Sl. Particulars As at As at No. 31st March, 2012 31st March, 2011

1 Income Tax* 259.27 428.04

2 Terminal Tax Liability** 214.37 -

3 Excise and Service Tax Cases*** 170.60 -

4 Bills of exchange discounted with Banks 3308.91 1183.77

5 Corporate Guarantee issued in favour of SBI on behalf of the 3520.00 3520.00 Joint Venture Company viz. "Birla Furukawa Fibre Optics Ltd."

* Income Tax demand comprise demand from the Indian Tax Authorities for payment of additional tax of Rs. 233.54 lacs (Previous year Rs. 428.04 lacs) upon completion of tax assessments for the financial years 2007-08 and 2008-09. Further for the years 2009-10, 2010-11 and 2011-12, the Management has considered Rs. 25.73 lacs as contingent liability based on the issues raised in the tax assessments of earlier years. The Tax demands are mainly on account of disallowance of benefits which is linked to Capital Investments (determined @ 75% of total Commercial Tax (VAT CST) paid and exemption from Entry Tax), Additional Depreciation, and other miscellaneous expenses under the Income Tax Act, 1961.

The Company is contesting the demands and the Management, believes that its position is likely to be upheld in the appellate process. The Company has accrued Rs. 1050.09 lacs (Previous year Rs. 869.33) in the financial statements for the tax demand raised and balance of Rs. 259.27 lacs has been disclosed as contingent liability. The management also believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company's financial position and results of operations.

** Terminal Tax liability is in respect of demand raised by the Municipal Corporation of Satna (M.P.) under provisions of the Madhya Pradesh Municipal Corporation Act, 1956. The Company has contested the demand interalia by challenging its constitutional validity. The Company has been legally advised that the said demand against the Company is unsustainable and therefore there is hardly any likelihood of the Company being subjected to any Terminal Tax Liability.

*** On the basis of current status of individual cases and as per legal advice obtained by the Company, wherever applicable, the Company is confident that no provision is required in respect of these cases at this point in time.

7. The market value of a long term strategic quoted Non-current investment (trade) in a Joint Venture Company namely, Birla Ericsson Optical Limited is approximately Rs. 389 lacs as at 31st March, 2012, thus having a temporary decline of Rs. 461 lacs as compared to the carrying amount of the said investment. Having regard to the future growth potential of the investee company, in the opinion of the management the decline in the market value of Company's investment is not considered to be of permanent nature and hence does not call for any provision there against.

8. In view of unexpected losses incurred by the company during the year, mainly on account of sharp weakening of Indian Rupee vis-a-vis US Dollar and other foreign currencies, elevated input prices amid high volatility and soaring interest rates, the Managerial Remuneration paid to Shri D.R. Bansal, Chief Executive Officer of the Company, has exceeded the limits prescribed under paragraph A Section II Part II of Schedule XIII to the Companies Act, 1956 which needs to be ratified, confirmed and approved by the Company in General Meeting in terms of paragraph B Section II Part II of Schedule XIII to the Companies Act, 1956.

The Company therefore is in the process of getting a Special Resolution passed in the ensuing Annual General Meeting to ratify, confirm and approve the Managerial Remuneration paid in excess to Shri D.R. Bansal, Chief Executive Officer of the Company, as aforesaid.

9. Previous Year Figures

Till the year ended 31st March, 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956 for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the Revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company. The Company has reclassified/regrouped previous year figures to confirm to this year's classification. The adoption of Revised Schedule VI does not impact recognition and measurement principles followed for presentation of financial statements. However, it impacts presentation and disclosure made in financial statements, particularly presentation of Balance Sheet. Figures shown in brackets, represent those of the previous year.


Mar 31, 2010

1. Nature of Operations

UNIVERSAL CABLES LIMITED, a M. P. Birla Group Company is engaged in the manufacturing and selling of Power Cables, Capacitors and Optical Fibre.

2. Segment Information

Business Segments:

Power Cables & Capacitors account for the majority of business of the Company. Power cables are of different types viz. Extra High Voltage, Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These are used for the transmission and distribution of electricity in power plants and other organizations/engineering industries like railways, shipping, refineries etc. PVC winding wires are used for submersible pumps. Capacitor consists of high/low voltage capacitors.

Optic Fibre consists of single mode and multimode Telecommunication Grade Optical Fibres.

(a) Primary Segment Information (by Business Segments)

The following table presents revenue and profit/(loss) information regarding industry segments for the years ended March 31, 2010 and March 31, 2009 and certain assets and liabilities information regarding industry segments at March 31,2010 and March 31,2009.

3. Related Party Disclosure

Key Management Personnel

Mr. D.R Bansal (Chief Executive Officer)

Joint Venture Birla Ericsson Optical Limited (BEOL)

Birla Furukawa Fibre Optics Limited (BFFOL)

Other Parties which significantly Influence/are influenced by Vindhya Telelinks Limited (VTL) the Company (either individually or with others) Shakun Polymers Limited (SPL)

4. Optic Fibre Unit of the Company at Goa has accumulated CENVAT credit aggregating to Rs. 229.42 lacs as at March 31,2010 (as appearing in Schedule 11 of Loans and Advances) for which the management has devised an alternate mechanism for utilization of the accumulated Cenvat credit as going concern over a reasonable period of time and hence this does not call for any provision there against.

5. Capital Commitments:

Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs.2131.49 lacs (Rs. 426.16 lacs).

6. In the opinion of the management, the decline in market value of the quoted investments by Rs.239.64 lacs (Rs.563.35 lacs) in a joint venture company at the year end is temporary and hence, does not call for any provision there against.

7. In accordance with Explanation below Para 10 of Notified Accounting Standard 9: Revenue Recognition, Excise duty on sales amounting to Rs. 3187.88 lacs (Rs. 6348.10 lacs) has been reduced from sales in the Profit and Loss Account and excise duty on increase in stocks amounting to Rs. 252.46 lacs considered as expense (Rs. 681.47 lacs on decrease in stocks has been considered as income) in Schedule 18 of the financial statements.

8. Employee Benefit plans (Notified AS 15)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Company has also agreed to provide pension to certain employees. These benefits are unfunded.

The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

9. Subsequent Events

On 11 th May, 2010, the Board of Directors, with a view to concentrate on the core business segment of the Company i.e. Power Cables & Capacitors, proposed to sell, Lease and/or transfer Optic Fibre Goa Unit of the Company to Birla Furukawa Fibre Optics Limited, a Joint Venture Company, subject to necessary approval from the Shareholders and other compliances as may be needed. The Unit will, however, continue its operations till the transfer actually takes place. No impairment provision is required to be made as the Management expects to realize a price higher than the Written Down Value of the Fixed Assets to be transferred.

10. Previous Year Comparatives

Previous years figures, are shown in brackets in the Schedules and have been regrouped wherever necessary to confirm to this years classification.

 
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