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Notes to Accounts of Value Industries Ltd.

Mar 31, 2016

1 Secured Loans:

a) Rupee Term Loans from Banks

The Company along with 12 other affiliates/entities (collectively referred to as ‘Obligors’ and individually referred to as ‘Borrower’) executed facility agreement with consortium of existing domestic rupee term lenders, in the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities covered are Value Industries Limited, Videocon Industries Limited (VIL), Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited, Evans Fraser and Co. (India) Limited and Videocon International Electronics Limited.

Rupee Term Loans from Banks are secured by first pari-passu charge on all present and future tangible/intangible assets of each of the Borrower, first pari-passu charge on the Trust and Retention Accounts of the Borrowers, second pari-passu charge on Identified Assets of Videocon Hydrocarbon Holdings Limited’s (VHHL) subsidiaries through pledge of entire shareholding of VHHL in these overseas subsidiaries, second charge on pledge of 100% shares of Videocon Oil Ventures Limited and VHHL held by VIL, second pari-passu charge on VHHL’s share of cash flows from Identified Assets and second pari-passu charge over current assets of each of the Borrowers. The Rupee Term Loans are also secured by first ranking pledge over specified numbers of equity shares of Videocon Industries Limited, Trend Electronics Limited and Value Industries Limited held by the promoters, the personal guarantee of Mr. Venugopal N. Dhoot, Mr. Pradipkumar N. Dhoot, Mr. Rajkumar N. Dhoot and first pari-passu charge on ‘Videocon’ brand (Also refer Note No. 35).

2 Working Capital Loans from Banks are secured against hypothecation of the Company’s stock of raw materials, packing materials, stock-in-process, finished goods, stores and spares, book debts and other current assets of the Company. The loans are further secured by personal guarantee of Mr. Venugopal N. Dhoot, Mr. Rajkumar N. Dhoot and Mr. Pradipkumar N. Dhoot.

Note: This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such vendors/parties have been identified on the basis of information available with the Company.

3. ADDITIONAL NOTES TO FINANCIAL STATEMENTS

4 The Company has kept the investment activities separate and distinct from the normal business. Consequently, all the income and expenditure pertaining to investment activities has been allocated to the Investments and Securities Division and the income after netting off the related expenditure has been shown as “Income from Investments and Securities Division”. The Income from Investments and Securities Division include dividend on long term investments of '' Nil (Previous year '' 0.01 Million).

5. RELATED PARTY DISCLOSURES:

As required under Accounting Standard 18 on “Related Party Disclosures”, the disclosure of transaction with related parties as defined in the Accounting Standard are given below:

A) List of Related Parties where control exists and related parties with whom transactions have taken place and relationship:

Key Management Personnel:

Mr. K. K. Sukumaran - Assistant General Manager (upto 13th August,2015)

Mr. Yogesh Deshmukh- Manager (w.e.f. 14th August, 2015)

B) Material Transactions with Related Parties during the year are:

Remuneration to Key Management Personnel - '' 1.39 Million (Previous year '' 2.57 Million)

6. The Company along with 12 other affiliates/entities (collectively referred to as ‘Obligors’ or individually as ‘Borrower’) executed Facility Agreement with the consortium of existing domestic rupee term lenders, under the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities are Videocon Industries Limited, Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited, Evans Fraser and Co. (India) Limited and Videocon International Electronics Limited. As the Company is a co-obligor, it is contingently liable in respect of the borrowings of other Obligors/ Borrowers to the extent of outstanding balance of Rupee Term Loans as on 31st March, 2016 of '' 192,780.96 Million (As on 31st December, 2014 of '' 195,181.84 Million).

7. The Directorate of Revenue Intelligence, Mumbai Zonal Unit (‘DRI’) has on 30th December, 2014, issued a Show Cause Notice (‘SCN’) in connection with import of Colour Picture Tubes (‘CPTs’) by the Company and other concerns. Vide SCN, the Company was called upon, amongst others, as to why the declared value of CPTs imported should not be rejected and the same should not be re-determined and why the amount of anti-dumping duty of '' 6.94 Million and penalty thereon should not be recovered under the extended period under the provisions of the Customs Act, 1962.

The Company has denied the allegation made by DRI for alleged evasion of duty. The Company has been advised by its counsels that as the goods in question are not domestically produced or manufactured in India, the question of levy of anti-dumping duty is untenable and, accordingly, there is no question of duty evasion or penalty thereon and no provision has been considered in the financial statements.

8. The Company is primarily engaged in manufacturing and trading of Electrical and Electronic Appliances and there is no other reportable segment as defined in Accounting Standard 17 on “Segment Reporting”.

9. The outstanding balances of certain Trade Receivables, Trade Payables, Deposits, Advances and Other Current Assets/ Liabilities are subject to confirmation and reconciliation, if any. However, in the opinion of the management, adjustment, if any, will not be material.

10. In the opinion of the Board, the value on realization of Current Assets, Loans and Advances in the ordinary course of the business would not be less than the amount at which they are stated in the Balance Sheet and the provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

11. There are no amounts due and outstanding, to be credited to the Investor Education and Protection Fund.

12. The figures for the current period are for a period of 15 months whereas the figures of the previous year were for 12 months and hence are not comparable. Previous year figures have been reclassified, restated, recanted to conform to the classification of the current period.


Dec 31, 2014

1.1 Rights, preference and restrictions:

a) The Company has only one class of equity shares having par value of Rs.10/- per share. Each holder of equity shares is entitled to equal right of voting and dividend.

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

2.1 Secured Loans:

a) Rupee Term Loans from Banks

The Company alongwith 12 other affi liates/entities (collectively referred to as ''Obligors'' and individually referred to as ''Borrower'') executed facility agreement with consortium of existing domestic rupee term lenders, in the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities covered are Value Industries Limited, Videocon Industries Limited (VIL), Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited (formerly Next Retail India Limited), Evans Fraser and Co. (India) Limited and Videocon International Electronics Limited.

Rupee Term Loans from Banks are secured by fi rst pari-passu charge on all present and future tangible/intangible assets of each of the Borrower, fi rst pari- passu charge on the Trust and Retention Accounts of the Borrowers, second pari-passu charge on Identifi ed Assets of Videocon Hydrocarbon Holdings Limited''s (VHHL) subsidiaries through pledge of entire shareholding of VHHL in these overseas subsidiaries, second charge on pledge of 100% shares of Videocon Oil Ventures Limited and VHHL held by VIL, second pari-passu charge on VHHL''s share of cash fl ows from Identifi ed Assets and second pari-passu charge over current assets of each of the Borrowers. The Rupee Term Loans are also secured by fi rst ranking pledge over specifi ed numbers of equity shares of Videocon Industries Limited, Trend Electronics Limited and Value Industries Limited held by the promoters, the personal guarantee of Mr. Venugopal N. Dhoot, Mr. Pradipkumar N. Dhoot, Mr. Rajkumar N. Dhoot and fi rst pari-passu charge on ''Videocon'' brand (Also refer Note No. 35).

b) Vehicle Loan from Banks are secured by way of hypothecation of vehicles acquired out of the said loan.

3. ADDITIONAL NOTES TO FINANCIAL STATEMENTS

3.1 The Company has kept the investment activities separate and distinct from the normal business. Consequently, all the income and expenditure pertaining to investment activities has been allocated to the Investments and Securities Division and the income after netting off the related expenditure has been shown as "Income from Investments and Securities Division". The Income from Investments and Securities Division include dividend on long term investments of ` 0.01 Million (Previous year ` Nil).

4. RELATED PARTY DISCLOSURES:

As required under Accounting Standard 18 on "Related Party Disclosures", the disclosure of transaction with related parties as defi ned in the Accounting Standard are given below:

A) List of Related Parties where control exists and related parties with whom transactions have taken place and relationship: Key Management Personnel:

Mr. Mukesh Batra - General Manager (upto 30th June, 2014)

Mr. K. K. Sukumaran - Assistant General Manager (w.e.f. 1st July, 2014)

B) Material Transactions with Related Parties during the year are:

Remuneration to Key Management Personnel - Rs. 2.57 Million (Previous year Rs. 4.98 Million)

(Rs. in Million) As at As at 31st Dec, 2014 31st Dec, 2013

5. CONTINGENT LIABILITIES AND COMMITMENTS

A) Contingent Liabilities not provided for:

i) Letters of Credit opened 244.60 799.21

ii) Letters of Guarantees 2,485.12 1,506.17

iii) Claims against the Company not acknowledged as debts

a) Custom Duty demands and penalties under dispute 15.68 16.73 [Amount paid under protest Rs. 2.59 Million (Previous year Rs. 2.59 Million)]

b) Excise Duty and Service Tax demands and penalties under dispute 62.62 53.10 [Amount paid under protest Rs. 1.00 Million (Previous year Rs. 1.00 Million)]

c) Sales Tax demands and penalties under dispute 115.65 82.37 [Amount paid under protest Rs. 28.82 Million (Previous yearRs. 27.24 Million)]

d) Others - 32.16

iv) Income Tax matters in respect of which appeals are pending 57.85 19.26 [Amount paid under protest/adjusted by DepartmentRs. 18.15 Million (Previous year Rs. Nil)]

B) Commitments

Estimated amount of contract remaining to be executed on capital account and not provided for (net of advances) 1.30 30.45

6. The Company alongwith 12 other affi liates/entities (collectively referred to as ''Obligors'' or individually as ''Borrower'') executed Facility Agreement with the consortium of existing domestic rupee term lenders, under the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities are Videocon Industries Limited, Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Techno Kart India Limited (formerly Next Retail India Limited), Evans Fraser and Co. (India) Limited and Videocon International Electronics Limited. As the Company is a co-obligor, it is contingently liable in respect of the borrowings of other Obligors/Borrowers to the extent of outstanding balance of Rupee Term Loans as on 31st December, 2014 ofRs. 195,181.84 Million (Previous yearRs. 193,053.42 Million).

7. The Directorate of Revenue Intelligence, Mumbai Zonal Unit (''DRI'') has on 30th December, 2014, issued a Show Cause Notice (''SCN'') in connection with import of Colour Picture Tubes (''CPTs'') by the Company and other entities. Vide SCN, the Company was called upon, amongst others, as to why the declared value of CPTs mported should not be rejected and the same should not be re-determined and why the amount of anti-dumping duty ofRs. 6.94 Million and penalty thereon should not be recovered under the extended period under the provisons of the Customs Act, 1962.

The Company has denied the allegation made by DRI for alleged evasion of duty. The Company has been advised by its counsels that as the goods in question are not domestically produced or manufactured in India, the question of levy of anti-dumping duty is untenable and, accordingly, there is no question of duty evasion or penalty thereon and no provision has been considered in the financial statements.

37. The Company is primarily engaged in manufacturing and trading of Electrical and Electronic Appliances and there is no other reportable segment as defi ned in Accounting Standard 17 on "Segment Reporting".

38. The outstanding balances of certain Trade Receivables, Trade Payables, Deposits, Advances and Other Current Assets/ Liabilities are subject to confi rmation and reconciliation, if any. However, in the opinion of the management, adjustment, if any, will not be material.

8. In the opinion of the Board, the value on realisation of Current Assets, Loans and Advances in the ordinary course of the business would not be less than the amount at which they are stated in the Balance Sheet and the provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

9. There are no amounts due and outstanding, to be credited to the Investor Education and Protection Fund.

10. Figures of previous year have been reclassified, restated, recasted to conform to the classification of the current year.


Dec 31, 2013

1. As per the accounting policy followed by the Company, the Grant received from Ozone Projects Trust Fund for financing the machinery under the project has been treated as "deferred income" to be recognised in the Statement of Profit and Loss over the useful life of the assets under the project. Accordingly, an amount of Rs. 2.01 Million (Previous year Rs. 2.52 Million) has been allocated to income and credited to miscellaneous income, in proportion to the depreciation charged on those assets for the year. The balance deferred income has been carried to Balance Sheet as Grant from Ozone Projects Trust Fund.

2. Secured Loans:

a) Rupee Term Loans from Banks

The Company along with 12 other affiliates/entities (collectively referred to as ''Obligors'' and individually referred to as ''Borrower'') executed facility agreement with consortium of existing domestic rupee term lenders, in the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities covered are Videocon Industries Limited (VIL), Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Next Retail India Limited, Evans Fraser and Co. (India) Limited and Videocon International Electronics Limited.

Rupee Term Loans from Banks are secured by first pari-passu charge on all present and future tangible/intangible assets (excluding the Identified Properties) of each of the Borrower, first pari-passu charge on the Trust and Retention Accounts of the Borrowers, second pari-passu charge on Identified Assets of Videocon Hydrocarbon Holdings Limited''s (VHHL) subsidiaries through pledge of entire shareholding of VHHL in these overseas subsidiaries, second charge on pledge of 100% shares of Videocon Oil Ventures Limited and VHHL held by VIL, second pari-passu charge on VHHL''s share of cash flows from Identified Assets and second pari-passu charge over current assets of each of the Borrowers. The Rupee Term Loans are also secured by first ranking pledge by the promoters over equity shares of Videocon Industries Limited, Trend Electronics Limited and Value Industries Limited held by them, the personal guarantees of Mr. Venugopal N. Dhoot, Mr. Pradipkumar N. Dhoot, Mr. Rajkumar N. Dhoot and first pari-passu charge on ''Videocon'' brand. However, charge has not been created in favor of such Consortium of banks (A) for the credit facility to the Obligors on the assets by way of pledge of shares of the subsidiaries of VIL viz. Videocon Mauritius Energy Limited and Videocon Mozambique Rovuma 1 Limited (VMRL), which have been pledged to Standard Chartered Bank for the loans avalied by VHHL; (B) for any other receivables from VMRL; and (C) on any assets of VMRL. (Also refer Note No. 36).

b) External Commercial Borrowings are secured by a first charge ranking pari-passu on the movable and immovable fixed assets. The same is further secured by corporate guarantee given by Videocon Industries Limited.

c) Vehicle Loans from Banks are secured by way of hypothecation of vehicles acquired out of the said loan.

3. Unsecured Rupee Loans from Bank is guaranteed by personal guarantee of Mr. Venugopal N. Dhoot and corporate guarantee of Videocon Industries Limited.

4. The Working Capital Loans from Banks are secured by hypothecation of inventories, book-debts and other receivables, both present and future.

5. EMPLOYEE BENEFITS:

Disclosure pursuant to Accounting Standard (AS) 15 (Revised):

A) Defined Contribution Plans:

Amount of Rs. 27.68 Million (Previous year Rs. 22.55 Million) is recognised as an expense and shown under the head "Employee Benefits Expense" (Note No. 26) in the Statement of Profit and Loss.

6. RELATED PARTY DISCLOSURES:

As required under Accounting Standard 18 on "Related Party Disclosures", the disclosure of transaction with related parties as defined in the Accounting Standard are given below:

A) List of Related Parties where control exists and related parties with whom transactions have taken place and relationship: Key Management Personnel:

Mr. Mukesh Batra - General Manager (Previous year Mr. Sanjay R. Patil - Assistant General Manager)

B) Material Transactions with Related Parties during the year are:

Remuneration to Key Management Personnel -Rs.4.98 Million (Previous year Rs. 2.27 Million)

(Rs. in Million)

As at As at

7. CONTINGENT LIABILITIES AND COMMITMENTS 31st Dec, 2013 31st Dec, 2012

A) Contingent Liabilities not provided for:

i) Letters of Credit opened 799.21 1,033.99

ii) Letters of Guarantees 1,506.17 1,334.67

iii) Claims against the Company not acknowledged as debts

a) Custom Duty demands and penalties under dispute 16.73 19.17 [Amount paid under protest Rs. 2.59 Million (Previous year Rs. 2.59 Million)]

b) Excise Duty and Service Tax demands and penalties under dispute 53.10 42.20 [Amount paid under protest Rs. 1.00 Million (Previous year Rs. 1.00 Million)]

c) Sales Tax demands and penalties under dispute 82.37 89.37 [Amount paid under protest Rs. 27.24 Million (Previous year Rs. 29.29 Million)]

d) Others 32.16 -

iv) Income Tax matters in respect of which appeals are pending 19.26 7.07

B) Commitments

Estimated amount of contract remaining to be executed on capital account and not provided for (net of advances) 30.45 5.22

8. The Company is a Co-guarantor in respect of borrowings of group companies. The aggregate amount of said guarantees, extended along with 8 other Co-guarantors are Rs. 1,245.20 Million (Previous year Rs. 5,240.20 Million). The said guarantees are extended on the basis of support in the form of undertaking provided by certain other Group Companies to the extent of the amount of the guarantees.

9. A) The Company along with 12 other affiliates/entities (collectively referred to as ''Obligors'' or individually as ''Borrower'') executed Facility Agreement with the consortium of existing domestic rupee term lenders, under the obligor/co-obligor structure, wherein all the Rupee Term Loans of the Obligors are pooled together. The Borrower entities are Videocon Industries Limited, Value Industries Limited, Trend Electronics Limited, KAIL Limited, Millennium Appliances India Limited, Applicomp (India) Limited, Sky Appliances Limited, Techno Electronics Limited, Century Appliances Limited, PE Electronics Limited, Next Retail India Limited, Evans Fraser and Co. (India) Limited and Videocon International Electronics Limited. As the Company is a co-obligor, it is contingently liable in respect of the borrowings of other Obligors/Borrowers to the extent of outstanding balance of Rupee Term Loans as on 31st December, 2013 ofRs. 193,053.42 Million (Previous yearRs.141,630.61 Million).

B) The Company is a co-obligor along with 12 other affiliates/entities in respect of Term Loans amounting to Rs. 1,875.00 Million (Previous year Rs. 44,250.00 Million) granted to Videocon Industries Limited. The same is secured by subservient charge on entire movables and current assets, both present and future of the Company and 12 other co-obligors/borrowers except for the assets of Ravva Oil Field. The loans are further secured by subservient charge on ''Videocon'' and Kenstar'' brands and irrevocable and unconditional personal guarantees of Mr. Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.

10. The Company is primarily engaged in manufacturing and trading of Electrical and Electronic Appliances and there is no other reportable segment as defined in Accounting Standard 17 on "Segment Reporting"

11. The outstanding balances of certain Trade Receivables, Trade Payables, Deposits, Advances and Other Current Assets/ Liabilities are subject to confirmation and reconciliation, if any. However, in the opinion of the management, adjustment, if any, will not be material.

12. In the opinion of the Board, the value on realisation of Current Assets, Loans and Advances in the ordinary course of the business would not be less than the amount at which they are stated in the Balance Sheet and the provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

13. There are no amounts due and outstanding, to be credited to the Investor Education and Protection Fund.

14. Figures of previous year have been reclassified, restated, recanted to conform to the classification of the current year.


Dec 31, 2011

(Rs. in Million)

As at As at 31st Dec., 2011 31st Dec. 2010

1. Contingent Liabilities not provided for in respect of:

a) Letters of Guarantees 19.87 27.67

b) Letters of Credit opened 332.99 146.18

c) Excise Duty demands under dispute 5.10 2.29

(Amount paid under protest Rs 1.00 million. Previous period Rs. 1.00 million)

d) Custom Duty demands under dispute 13.27 12.38 (Amount paid under protest Rs. 2.59 million. Previous period Rs. 2 59 million)

e) Service Tax demands under dispute 18.18 100

f) Sales Tax demands under dispute 86.18 86.18 (Amount paid under protest Rs. 27.93 million. Previous period Rs. 27.93 million)

g) The Company is a Co-guarantor in respect of borrowings of group companies. The aggregate amount of said guarantees, extended along with 8 other Co- guarantors are Rs. 8,311.10 million (Previous period Rs. 9,056.00 million). The said guarantees are extended on the basis of support in the form of undertaking provided by certain other group companies to the extent of the amount of the guarantees. Further, the Company is a Co-guarantor along with 14 other Co- guarantors in respect of borrowings of group companies amounting to Rs. 3,500.00 million (Previous period Rs. 3,500.00 million).

2. Secured Loans:

a) The Non-Convertible Debentures are secured by first mortgage and charge on immovable and movable properties, both present and future, subject to prior charge on specified movables created/to be created in favour of Company's Bankers for securing borrowings for working capital requirements and excluding equipments charged to Financial Institutions for their equipment finance, ranking pari-passu with the charge created and/or to be created in favour of Financial Institutions/ Banks in respect of their existing and future financial assistance. .

The Debentures referred above are redeemable at par in one or more installments on or before 1st April, 2012.

b) Rupee Term Loans from Banks and Financial Institutions of Rs. 1,167.73 million are secured by mortgage and charge on the immovable and movable properties, both present and future (subject to the charges created and/or to be created in favour of bankers on specified movables/current assets for securing borrowings for working capital requirements), ranking pari-passu with the charges created and/or to be created in favour of other lenders and guaranteed by Mr. Venugopai N. Dhoot and Mr. Pradipkumar N. Dhoot.

Rupee Term Loan from Bank of Rs. 1,011.15 million is secured by pari-passu charge over all the inventories and book debts of the Company and an exclusive charge over the inventories and book debts created out of that loan and personal guarantees of Mr. Venugopai N. Dhoot and Mr. Pradipkumar N. Dhoot.

c) External Commercial Borrowings are secured by a first charge ranking pari-passu on the movable and immovable fixed assets. The loan is further secured by corporate guarantee given by Videocon Industries Limited.

d) Vehicle Loans from Banks are secured by way of hypothecation of vehicles acquired out of the said loan.

e) The Working Capital Loans from Banks are secured by hypothecation of inventories, book debts and other receivables, both present and future.

3. Unsecured Loans from Banks are guaranteed by Mr. Venugopal N. Dhoot.

4. Estimated amount of contract remaining to be executed on capital account and not provided for (net of advances) Rs. 31.82 million (Previous period Rs. 5.07 million).

5. Capital Work-in-Progress includes advances for capital assets of Rs. 1.00 million (Previous period Rs. 12.54 million).

6. The Company has made a provision of Rs. 14.00 million (Previous period Rs. 43.90 million) towards current income tax, after taking into consideration, the benefits admissible under the provisions of the Income Tax Act, 1961 and the same is, in the opinion of the Management, adequate.

7. The Minimum Alternate Tax (MAT) paid by the Company is entitled to be carried forward and utilised in subsequent years. In the opinion of Management, on the basis of projections and the estimates of future taxable income, the Company would have normal tax liability within the specified period to avail such MAT credit. Consequently, the Company has recognized the MAT credit entitlement of Rs. 1.96 million (Previous period Rs. 4.94 million).

8. The Company has kept the investment activities separate and distinct from the normal business. Consequently, all the income and expenditure pertaining to investment activities has been allocated to the Investments and Securities Division and the income after netting off the related expenditure has been shown as "Income from Investments and Securities Division" under "Other Income". The lncome/(Loss) from Investments and Securities Division includes:

9. As per the accounting policy followed by the Company, the Grant received from Ozone Projects Trust Fund for financing the machinery under the project has been treated as "deferred income" to be recognised in Profit and Loss Account over the useful life of the assets under the project. Accordingly, an amount of t 3.15 million (Previous period Rs. 5.22 million) has been allocated to income and credited to miscellaneous income, in proportion to the depreciation charged on those assets for the period. The balance deferred income has been carried to Balance Sheet as Grant from Ozone Projects Trust Fund.

10. The Company is primarily engaged in manufacturing of Electrical and Electronic Appliances and there is no other reportable segment as defined in Accounting Standard 17 "Segment Reporting".

11. Related Party Disclosures:

a) Key Management Personnel

- Mr. Sanjay R. Patil (Asst. General Manager)

b) Transactions with Related Parties:

Remuneration to Key Management Personnel Rs. 2.31 Million (Previous period Rs. 2.37 Million)

i) Defined Contribution Plans:

Amount of Rs. 17.99 million (Previous period Rs. 14.05 million) is recognised as an expense and shown under the head "Salary, Wages and Employees' Benefits" (Schedule-11) in the Profit and Loss Account.

12. a) The Financial Institutions have a right to convert, at their option, the whole outstanding amount of term loans or a part not exceeding 20% of defaulted amount of loan, whichever is lower, into fully paid up Equity Shares of the Company at par on default in payments/repayments of three consecutive installments of principal and/or interest thereon or on mismanagement of the affairs of the Company.

b) The Financial Institutions have a right to convert at their option, the whole or a part of the outstanding amount of Preference Shares, into fully paid up Equity Shares of the Company as per SEBI guidelines, on default in payment of dividend or a default in redemption of Preference Shares or any combination thereof.

13. The outstanding balances of certain Debtors, Creditors, Deposits and Advances are subject to confirmation.

14. In the opinion of the Board, the value on realisation of Current Assets, Loans and Advances in the Ordinary course of the business would not be less than the amount at which they are stated in the Balance Sheet and the Provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

15. There are no amounts due and outstanding, to be credited to the Investor Education and Protection Fund.

16. The figures for the current year are for a period of 12 months as against 15 months in previous period and hence, are not comparable. Figures in respect of previous period have been regrouped, reclassified and recasted wherever necessary to make them comparable with those of current year.


Dec 31, 2010

(Rs. Million)

As at As at 31st Dec, 2010 30th Sept., 2009

1. Contingent Liabilities not provided for in respect of:

a) Letters of Guarantees 27.67 23.32

b) Letters of Credit opened 146.18 135.27

c) Excise Duty demands under dispute 2.29 3.41

(Amount paid under protest Rs. 1.00 million, Previous year Rs. 1.00 million)

d) Custom Duty demands under dispute 12.38 7.40 (Amount paid under protest Rs. 2.59 million, Previous year Rs. 1.50 million)

e) Service Tax demands under dispute 1.00 1.00 f) Sales Tax demands under dispute 86.18 120.55 (Amount paid under protest Rs. 27.93 million, Previous year Rs. 26.06 million)

g) The Company is a Co-guarantor in respect of borrowings of group companies. The aggregate amount of said guarantees, extended along with 8 other Co- guarantors are Rs. 9,056.00 million (Previous year Rs. 9,694.00 million). The said guarantees are extended on the basis of support in the form of undertaking provided by certain other group companies to the extent of the amount of the guarantees. Further, the Company is a Co-guarantor along with 14 other Co- guarantors in respect of borrowings of group companies amounting to Rs. 3,500.00 million (Previous year Nil).

2. Secured Loans:

a) The Non-Convertible Debentures are secured by first mortgage and charge on immovable and movable properties, both present and future, subject to prior charge on specified movables created/to be created in favour of Companys Bankers for securing borrowings for working capital requirements and excluding equipments charged to Financial Institutions for their equipment finance, ranking pari passu with the charge created and/or to be created in favour of Financial Institutions/ Banks in respect of their existing and future financial assistance.

The Debentures referred above are redeemable at par in one or more installments on various dates with the earliest redemption being on 1st April, 2011 and last date being 1st April, 2012. The debentures are redeemable as follows: Rs. 21.83 million in financial year 2011 and Rs. 5.21 million in financial year 2012.

b) Rupee Term Loans from Banks and Financial Institutions are secured by mortgage and charge on the immovable and movable properties, both present and future (subject to the charges created and/or to be created in favour of bankers on specified movables/current assets for securing borrowings for working capital requirements), ranking pari passu with the charges created and/or to be created in favour of other lenders and guaranteed by Mr. Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.

c) External Commercial Borrowings are secured by a first charge ranking pari passu on the movable and immovable fixed assets. The loan is further secured by corporate guarantee given by Videocon Industries Limited.

d) The Working Capital Loans from Banks are secured by hypothecation of inventories, book-debts and other receivables, both present and future.

3. Unsecured Loan from Bank is guaranteed by Mr. Venugopal N. Dhoot, the director of the Company.

4. The gross block of the Fixed Assets includes Rs. 1,232.14 million (Previous year Rs. 1,232.14 million) on account of revaluation of Plant and Machinery made as at 1st April, 1998. The additional depreciation of Rs. 8.75 million (Previous year Rs. 13.74 million) consequent to the said revaluation has been withdrawn from Revaluation Reserves and credited to the Profit and Loss Account.

5. Estimated amount of contract remaining to be executed on capital account and not provided for (net of advances) Rs. 5.07 million (Previous Year Nil).

6. Capital Work in Progress includes advances for capital assets of Rs. 12.54 million (Previous year Nil), Interest and Finance Charges capitalised during the period Rs. Nil (Previous year Rs. 7.68 million).

7. As per the accounting policy followed by the Company, the Grant received from Ozone Projects Trust Fund for financing the machinery under the project has been treated as "deferred income" to be recognised in Profit and Loss Account over the useful life of the assets under the project. Accordingly, an amount of Rs. 5.22 million (Previous year Rs. 5.22 million) has been allocated to income and credited to miscellaneous income, in proportion to the depreciation charged on those assets for the period. The balance deferred income has been carried to Balance Sheet as Grant from Ozone Projects Trust Fund.

8. The Company has made a provision of Rs. 43.90 million (Previous year Rs. 12.45 million) towards current income tax, after taking into consideration, the benefits admissible under the provisions of the Income Tax Act, 1961 and the same is, in the opinion of the Management, adequate.

9. The Minimum Alternate Tax (MAT) paid by the Company is entitled to be carried forward and utilised in subsequent years. In the opinion of Management, on the basis of projections and the estimates of future taxable income, the Company would have normal tax liability within the specified period to avail such MAT credit. Consequently, the Company has recognized the MAT credit entitlement of Rs. 4.94 million in respect of current period.

10. The Company is primarily engaged in manufacturing of Electrical and Electronic Appliances and there is no other reportable segment as defined in Accounting Standard 17 "Segment Reporting".

11. Related Party Disclosures:

a) Key Management Personnel

- Mr. Manjunath P. Bhosale (General Manager) upto 31st March, 2010

- Mr. Sanjay R. Patil (Asst. General Manager) w.e.f. 1st April, 2010

12. Employee Benefits:

i) Defined Contribution Plans:

Amount of Rs. 14.05 million (Previous year Rs. 11.70 million) is recognised as an expense and shown under the head "Salary, Wages and Employees Benefts" (Schedule-11) n the Profit and Loss Account

13. a) The Financial Institutions have a right to convert at their option the whole outstanding amount of term loans or a part not exceeding 20% of defaulted amount of loan, whichever is lower, into fully paid up Equity Shares of the Company at par on default in payments/repayments of three consecutive installments of principle and/or interest thereon or on mismanagement to the affairs of the Company.

b) The Financial Institutions have a right to convert at their option, the whole or a part of outstanding amount of Preference Shares, into fully paid up Equity Shares of the Company as per SEBI guidelines, on default in payment of dividend or a default in redemption of Preference Shares or any combination thereof.

14. The outstanding balances of certain Debtors, Creditors, Deposits and Advances are subject to confirmation.

15. In the opinion of the Board, the value on realisation of Current Assets, Loans and Advances in the Ordinary course of the business would not be less than the amount at which they are stated in the Balance Sheet and the Provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

16. There are no amounts due and outstanding, to be credited to Investor Education and Protection Fund.

17. The figures for the current period are for a period of 15 months as against 12 months in previous period and hence, are not comparable. Figures in respect of previous year have been regrouped, reclassified and recasted wherever necessary to make them comparable with those of current period.


Sep 30, 2009

(Rupees in Million)

As at As at 30th Sept., 30th Sept., 2009 2008

1. Contingent Liabilities not provided for in respect of:

a) Letters of Guarantees including 23.32 5.20 Bank Guarantees

b) Letters of Credit opened 135.27 109.04

c) Excise Duty Demands under dispute 3.41 3.80

(Amount paid under protest Rs 1.00 million, Previous year Rs. 1.00 million)

d) Custom Duty Demands under dispute 7.40 12.26 (Amount paid under protest Rs. 1.50 million, Previous year Rs. 2.51 million)

e) Service Tax Demands under dispute 1.00 1.00

f) Sales Tax Demands under dispute 120.55 87.54 (Amount paid under protest Rs. 26.06 million, Previous year Rs. 26.15 million)

g) The Company is a co-guarantor in respect of borrowing of a group company. The aggregate amount of the said guarantee extended alongwith 8 other co-guarantors is Rs. 9,694.00 million (Previous year Rs. 9,464.00 million). The said guarantee is extended on the basis of support in the form of undertaking obtained from certain other group companies to the extent of the amount of the guarantee.

2. The gross block of the Fixed Assets includes Rs. 1,232.14 million (Previous year Rs. 1,232.14 million) on account of revaluation of Plant and Machinery made as at 1st April, 1998. The additional depreciation of Rs. 13.74 million (Previous year Rs. 16.35 million) consequent to the said revaluation has been charged to the Profit and Loss Account.

3. The Company has kept the investment activities separate and distinct from the normal business. Consequently, all the income and expenditure pertaining to investments activities has been allocated to the Investments & Securities Division and the income after netting off the related expenditure has been shown as "Income from Investments & Securities Division" under "Other Income".

4. As per the accounting policy followed by the Company, the Grant received from Ozone Projects Trust Fund for financing the machinery under the project has been treated as "deferred income" to be recognised in Profit and Loss Account over the useful life of the assets under the project. Accordingly, an amount of Rs. 5.22 million (Previous year Rs. 6.52 million) has been allocated to income and credited to miscellaneous income, in proportion to the depreciation charged on those assets for the year. The balance deferred income has been carried to Balance Sheet as Grant from Ozone Projects Trust Fund .

5. The Company has made a provision of Rs. 12.45 million (Previous year Rs. 14.00 million) towards current income tax, after taking into consideration, the benefits admissible under the provisions of the Income Tax Act, 1961 and the same is, in the opinion of the Management, adequate.

6. The Company is primarily engaged in manufacturing of Electrical and Electronic Appliances and there is no other reportable segment as defined in Accounting Standard 17 "Segment Reporting".

7. Capital Work-in-Progress includes, Interest and Finance charges Capitalised during the year Rs. 7.68 million (Previous year Rs. 90.05 million).

8. During the year, the Company has discarded/disposed off certain fixed assets which were out of active use and accordingly have been eliminated from the financial statements. The resultant gain or loss has been recognised in the profit and loss account.

9. During the year, the Company has forfeited and cancelled 127,684 shares (Previous year Nil) issued and allotted as part of the public issue due to non receipt of allotment and/or call money from shareholders. The amount paid on these shares amounting to Rs. 0.64 million has been transferred to Capital Reserve.

10. Employees Benefits:

i) Defined Contribution Plans:

Amount of Rs. 11.70 million (Previous year Rs. 11.20 million) is recognised as an expense and shown under the head "Salary, Wages and Employees Benefits" (Schedule-11) in the Profit and Loss Account.

11. The Financial Institutions have a right to convert at their option the whole outstanding amount of term loans or a part not exceeding 20% of defaulted amount of loan, whichever is lower, into fully paid up equity shares of the Company at par on default in payments/repayments of three consecutive installments of principle and/or interest thereon or on mismanagement to the affairs of the company.

12. The Financial Institutions have a right to convert at their option the whole or a part of outstanding amount of Preference Shares, into fully paid up equity shares of the Company at par as per SEBI guidelines on default in payment of dividend or a default in redemption of Preference Shares thereon or any combination thereof.

13. The outstanding balances of certain Debtors, Creditors, Deposits and Advances are subject to confirmation.

14. In the opinion of the Board, the value on realisation of Current Assets, Loans and Advances in the Ordinary course of the business would not be less than the amount at which they are stated in the Balance Sheet and the Provision for all known and determined liabilities is adequate and not in excess of the amount reasonably required.

15. There are no amounts due and outstanding, to be credited to Investor Education and Protection Fund.

16. Figures of the previous year have been regrouped/ reclassified wherever necessary.

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