Mar 31, 2018
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2018
Fair value sensitivity analysis for fixed-rate instruments
All the borrowings of company are at variable interest rates. Cash flow sensitivity analysis for variable-rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant. In cases where the related interest rate risk is capitalized to fixed assets, the impact indicated below may affect the Company''s income statement over the remaining life of the related fixed assets.
(Rs. in Million) |
||
Profit or loss before tax |
||
100 bp increase |
100 bp decrease |
|
March 31, 2018 |
(2,450.40) |
2,450.40 |
March 31, 2017 |
(2,161.99) |
2,161.99 |
January 1, 2016 |
(2,396.41) |
2,396.41 |
Note 42
Capital management
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.
The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total borrowings, comprising interest-bearing loans and borrowings, less cash and cash equivalents and bank deposits. Adjusted equity comprises all components of equity.
The Company''s adjusted net debt to equity ratio is as follows: |
(Rs. in Million) |
||
Particulars |
March 31, 2018 |
March 31, 2017 |
January 1, 2016 |
Total borrowings |
245,039.51 |
216,199.37 |
239,640.89 |
Less : Cash and cash equivalents |
2,247.64 |
441.51 |
1,407.27 |
Less : Bank deposits |
2,039.59 |
5,120.28 |
25,936.54 |
Adjusted net debt |
240,752.28 |
210,637.58 |
212,297.08 |
Total equity |
41,771.43 |
98,330.99 |
119,218.81 |
Adjusted net debt to adjusted equity ratio |
5.76 |
2.14 |
1.78 |
Note 43
Segement Reporting
Segment repoting will be presented in the consolidated financial statements. Note 44
Related Party Disclosures, as required by Indian Accounting Standard 24 (Ind AS 24) are given below: A. Relationships -Subsidiaries:
a) Chhattisgarh Power Ventures Private Limited (up to March 29, 2018)
b) Middle East Appliances LLC
c) Pipavav Energy Private Limited
d) Prosperous Energy Private Limited
e) Videocon Electronics (Shenzhen) Limited (Chinese Name - Weiyoukang Electronic (Shenzhen) Co., Ltd.)
f) Videocon Global Limited
g) VOVL Limited (formerly Videocon Oil Ventures Limited) and its subsidiaries Videocon Hydrocarbon Holdings Limited and its subsidiaries
Videocon JPDA 06-103 Limited
Videocon Indonesia Nunukan Inc.
Videocon Energy Brazil Limited
Videocon Australia WA-388-P Limited
Videocon Mauritius Energy Limited
Videocon International Cooperatie U.A. and its subsidiaries
Videocon Hydrocarbon Ventures B.V.
Videocon Brazil Ventures B.V. and its subsidiary
Videocon Brasil Petroleo Ltda
h) Electroworld Digital Solutions Limited (formerly Videocon International Electronics Limited) and its subsidiaries - Jumbo Techno Services Private Limited
Senior Consulting Private Limited
Videocon Telecommunications Limited and its subsidiary
Videocon Easypay Private Limited (formerly Datacom Telecommunications Private Limited) i) Videocon Energy Limited and its subsidiary
Proficient Energy Private Limited and its subsidiary (upto March 31, 2018)
Applied Energy Private Limited (upto March 31, 2018) Associates and Joint Ventures:
Radium Appliances Private Limited -Associate - 26%
Unity Power Private Limited -Associate - 26% (upto May 26, 2017)
VISPL LLP -Associate of Videocon Telecommunications Limited - 50% (w.e.f. January 2, 2018)
Videocon Infinity Infrastructure Private Limited - Joint Venture - 50%
IBV Brasil Petroleo Limitada - (50% Joint Venture of Videocon Energy Brazil Limited)
Liberty Videocon General Insurance Company Limited (up to March 14, 2018) Key Management Personnel:
Mr. Venugopal N. Dhoot - Managing Director & CEO
Mr. Sunil Tandon - Senior Vice President
Mr. Mandar C. Joshi - Company Secretary
B. Transactions with the related parties: |
||||
(Rs in Million) |
||||
Particulars |
Year |
Name of Related Party |
Subsidiaries |
Associates |
Sales of Product |
FY 2017-18 |
Middle East Appliances LLC |
2.01 |
|
FY 2016-17 |
Videocon Telecommunications Limited |
22.69 |
||
Middle East Appliances LLC |
14.03 |
|||
Other Operating Revenue |
FY 2017-18 |
Videocon Telecommunications Limited |
2.03 |
|
FY 2016-17 |
Videocon Telecommunications Limited Proficient Energy Private Limited |
1.68 0.03 |
||
Income from Investments and Securities Division |
FY 2016-17 |
Videocon Telecommunications Limited |
(143.29) |
|
Other Non Operating Income |
FY 2017-18 |
Videocon Energy Brazil Limited Videocon Hydrocarbon Holdings Limited |
15.61 4,067.68 |
|
FY 2016-17 |
Videocon Hydrocarbon Holdings Limited |
1,030.62 |
||
Videocon Telecommunications Limited |
2,250.00 |
|||
Videocon Energy Brazil Limited |
25.57 |
|||
Videocon Indonesia Nunukan Inc. |
3.79 |
|||
Interest Recovered |
FY 2017-18 |
Electroworld Digital Solutions Limited |
610.14 |
|
Videocon Oil Ventures Limited |
579.14 |
|||
FY 2016-17 |
Electroworld Digital Solutions Limited |
424.14 |
||
Videocon Hydrocarbon Holdings Limited |
7.84 |
|||
Videocon Oil Ventures Limited |
885.68 |
|||
SBLC charges & other expenses reiumbursed |
FY 2016-17 |
Videocon Hydrocarbon Holdings Limited |
3,764.57 |
|
Videocon Oil Ventures Limited |
764.90 |
|||
Videocon Energy Brazil Limited |
4.75 |
|||
Office and general expenses |
FY 2017-18 |
Videocon Telecommunications Limited |
4.28 |
|
Liberty Videocon General Insurance Company Limited |
0.26 |
|||
FY 2016-17 |
Videocon Oil Ventures Limited |
135.70 |
||
Videocon Global Limited |
25.51 |
|||
Videocon Telecommunications Limited |
0.90 |
|||
Liberty Videocon General Insurance Company Limited |
0.39 |
|||
Purchase of Investments |
FY 2016-17 |
Electroworld Digital Solutions Limited |
12,380.49 |
Long term advances given |
FY 2017-18 |
Electroworld Digital Solutions Limited |
1,111.93 |
|
Videocon Oil Ventures Limited |
2,133.17 |
|||
FY 2016-17 |
Videocon Oil Ventures Limited |
1,390.13 |
||
Long term advances received back |
FY 2016-17 |
Videocon Telecommunications Limited |
1,299.56 |
|
Electroworld Digital Solutions Limited |
985.78 |
|||
Short term advances given |
FY 2017-18 |
Prosperous Energy Private Limited |
1.87 |
|
Videocon Infinity Infrastructure Private Limited |
0.00 |
|||
FY 2016-17 |
Applied Energy Private Limited |
0.00 |
||
Radium Energy Private Limited |
0.01 |
|||
Short term advances received back |
FY 2017-18 |
Liberty Videocon General Insurance Company Limited |
0.00 |
|
Videocon Infinity Infrastructure Private Limited |
2.50 |
|||
FY 2016-17 |
Videocon Easypay Private Limited |
0.03 |
||
Prosperous Energy Private Limited |
18.17 |
|||
Increase in Other receivables |
FY 2017-18 |
Videocon Energy Brazil Limited |
15.77 |
|
Videocon Hydrocarbon Holdings Limited |
305.02 |
|||
Decrease in Other receivables |
FY 2016-17 |
Videocon Energy Brazil Limited |
9.68 |
|
Videocon Hydrocarbon Holdings Limited |
269.55 |
|||
Videocon Indonesia Nunukan Inc. |
0.50 |
|||
Videocon Telecommunications Limited |
145.64 |
|||
Increase in Other payables |
FY 2017-18 |
Videocon Mauritius Energy Limited |
24.25 |
|
Videocon Global Limited |
2.65 |
|||
Videocon Indonesia Nunukan Inc. |
0.01 |
|||
FY 2016-17 |
Videocon Telecommunications Limited |
18,452.32 |
||
Decrease in Other payables |
FY 2017-18 |
Videocon Telecommunications Limited |
550.43 |
|
FY 2016-17 |
Videocon Global Limited |
15.03 |
||
Comet Power Limited |
17.03 |
|||
Videocon Electronics (Shenzhen) Limited |
0.83 |
|||
Videocon Mauritius Energy Limited |
207.85 |
- Remuneration to Key Management Personnel Rs 33.20 Million (Previous Period Rs 84.70 Million) C. Balances due from/to the related parties:
(Rs. in Million) |
||||
Particulars |
Year |
Name of Related Party |
Subsidiaries |
Associates |
Long term advances given |
FY 2017-18 |
Electroworld Digital Solutions Limited |
5,333.77 |
|
Videocon Oil Ventures Limited |
8,460.66 |
|||
FY 2016-17 |
Electroworld Digital Solutions Limited |
4,221.84 |
||
Videocon Oil Ventures Limited |
6,327.48 |
|||
Short term advances given |
FY 2017-18 |
Applied Energy Private Limited |
3.27 |
|
Prosperous Energy Private Limited |
17.95 |
|||
Radium Energy Private Limited |
0.58 |
|||
Videocon Infinity Infrastructure Private Limited |
0.29 |
|||
FY 2016-17 |
Applied Energy Private Limited |
3.27 |
||
Prosperous Energy Private Limited |
16.08 |
|||
Liberty Videocon General Insurance Company Limited |
0.00 |
|||
Radium Energy Private Limited |
0.58 |
|||
Videocon Infinity Infrastructure Private Limited |
2.79 |
|||
Other receivables |
FY 2017-18 |
Videocon Energy Brazil Limited |
38.60 |
|
Videocon Hydrocarbon Holdings Limited |
621.94 |
|||
Videocon Indonesia Nunukan Inc. |
2.44 |
|||
FY 2016-17 |
Videocon Energy Brazil Limited |
22.83 |
||
Videocon Hydrocarbon Holdings Limited |
316.92 |
|||
Videocon Indonesia Nunukan Inc. |
2.44 |
|||
Other payables |
FY2017-18 |
Videocon Global Limited |
4.42 |
Videocon Mauritius Energy Limited |
7,675.20 |
||
Videocon Telecommunications Limited |
17,901.89 |
||
FY 2016-17 |
Videocon Global Limited |
1.77 |
|
Videocon Mauritius Energy Limited |
7,650.95 |
||
Videocon Telecommunications Limited |
18,452.32 |
Note 45
There are certain disputes with the Government of India ("GOI") with respect to the Production Sharing Contract dated October 28, 1994 ("Rawa PSC") pertaining to Ravva Oil & Gas Field which were referred to more than one international arbitration for resolution. The respective International Arbitral Tribunals have issued their respective Awards from time to time substantially in favour of the Company. However the GOI has preferred to challenge few of the Awards in various Courts in India and overseas but has not succeeded so far in any of the Courts. Pending final resolution of the disputes, certain amounts have been excess recovered, deducted or short paid by the GOI and / or its Nominees which have been challenged by the Company and the Company is seeking recovery of amounts excessively recovered, deducted or short paid by the GOI and/or its Nominees. Based on legal advice, the Company believes its contentions will be upheld. Any further sum required to be paid by the Company or recoverable by the Company in respect of any of these disputes in accordance with the determination of the amount by the Hon''ble Arbitral Tribunal/relevant courts in this regard shall be accounted for on the final outcome in those matters.
Note 46
The Company alongwith 13 other affiliates/entities (collectively referred to as ''Obligors'' or individually as ''Borrower'') executed Facility Agreement with the consortium of existing domestic rupee term lenders (RTL 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, Electroworld Digital Solutions Limited and Videocon Telecommunications Limited.
As per the said Facility Agreement, the Company is agent of the Obligors and has been referred to as ''Obligor Agent''. The Rupee Term Loans have to be utilised for the purpose mentioned in the Facility Agreement which is mainly for refinancing of existing Rupee Term Loans of the Obligors. Accordingly, the Rupee Term Loans were allocated to respective Obligors based on their outstanding amount as on December 31, 2011 and the lenders have also directly disbursed further amounts to some of the Obligors. 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 March 31, 2018 of Rs. 49,173.91 Million (As at March 31, 2017 Rs 50,822.98 Million).
Note 47
The Consortium of various banks have sanctioned the Letter of Comfort (LoC)/Stand-by Letters of Credit (SBLC) facility to the Company and its subsidiary VOVL Limited (VOVL) (collectively referred to as ''Obligors'') to secure the foreign currency facility raised / to be raised by Videocon Hydrocarbon Holdings Limited (VHHL), an overseas subsidiary, from its lenders. The LoC/SBLC facility is secured by first ranking pledge of 100% shares of VOVL, VHHL and shares of certain subsidiaries of VHHL and IBV Brasil Petroleo Limitada, a 50:50 joint venture of a subsidiary of VHHL, charge over fixed assets of certain subsidiaries of VHHL, VHHL''s share of cash flows from identified oil & gas assets through escrow of receivables, first ranking / exclusive charge on specified bank accounts for the benefit of the LoC/SBLC providers, exclusive charge on oil & gas facility servicing account of Obligors set-up under the onshore Trust and Retention Accounts, negative lien on shares of other subsidiaries of VHHL viz. Videocon JPDA06-103 Limited and Videocon Australia WA-388-P Limited, first pari-passu charge on Videocon brand and personal guarantee of Mr. Venugopal N. Dhoot, Mr. Pradipkumar N. Dhoot and Mr. Rajkumar N. Dhoot.
During the year, some of the LOC/SBLC Lenders released the Company from its obligations, as an obligor/co-obligor under the LoC/ SBLC facility. In turn, the Company issued a corporate guarantee in favour of such lenders. Accordingly, the Company is contingently liable in respect of the LoC/SBLC facility of VOVL to the extent of Rs 1,165.59 Million (As at March 31, 2017 Rs. 198,943.99 Million).
Note 48
The Directorate of Revenue Intelligence, Mumbai Zonal Unit (''DRI'') has issued Show Cause Notice(s) (''SCN'') dated September 10, 2014 and December 30, 2014 to the Company in connection with import of Colour Picture Tubes (''CPTs'') by the Company and other concerns. Vide SCNs, the Company has been asked to explain / as to why the declared value of CPTs imported should not be rejected and re-determined and why the amount of anti-dumping duty of Rs 1,657.21 Million and penalty thereon should not be recovered under the extended period under the provisions of the Customs Act, 1962.
In order to buy peace, the Company filed application with the Adjudication Authority who vide order dated April 20, 2017 determined that the declared value of the Company is liable to be rejected and re-determined under Customs Valuation Rules read with Section 14 of the Customs Act, 1962 and the Company is liable to payment of anti-dumping duty amounting to ? 687.49 Million payable on the import of CPTs and the penalty of equivalent amount along with interest thereon under Section 114A of the Customs Act, 1962. Further, the Adjudication Authority imposed a penalty of ? 0.50 Million on the Company on High Sea Sales under Section 112(a) of the Customs Act, 1962. Subsequently, the Company has filed an appeal against the Order passed by Adjudication Authority before The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) and the same is pending before the said CESTAT. The Company has been advised by its counsels that the Order passed by Adjudication Authority is untenable in the court of laws. Hence, no provision has been considered necessary in the financial statements.
Note 49
Intesa Sanpaolo S.p.A., an Italian bank, had initiated winding up proceedings against the Company on the basis of ''Patronage Letter'' issued by the Company to the said Italian bank in June, 2007 for financial assistance given to the then one level step down subsidiary, Mis. VDC Technologies S.p.A., an Italian defunct company acquired by another subsidiary of the Company, M/s. Eagle Corporation Limited registered in Cayman Island. Single judge vide judgement dated December 5, 2013 passed a conditional order of winding up of the Company on its failure to deposit in court the amount of ? 2,597.30 Million equivalent of Euro 38.00 Million, which was confirmed by the division bench of the High Court of Judicature at Bombay on July 18, 2014.
The Company had challenged the order of Bombay High Court by way of Special Leave Petition (''SLP'') in the Supreme Court. The Company had denied its liability out of the said ''Patronage Letter''. The Company, pending the final disposal of SLP, agreed to create lien on Fixed Deposit Receipts of Rs 1,363.82 Million and ? 1,210.40 Million in favour of the Registrar of Supreme Court. The Hon''ble Supreme Court had stayed the impugned order of the Bombay High Court and directed to issue notice for further hearing of the matter. The Hon''ble Supreme Court had also admitted SLP filed by the Company and final hearing was pending.
Intesa Sanpaolo S.p.A. had also obtained exparte decree against the Company from Turin Court of Italy and on the basis of said decree, Intesa Sanpaolo S.p.A. had filed suit bearing No.2434/2012 in Bombay High Court for obtaining decree against the Company. The Company had appeared in the matter and was contesting the said exparte decree on merit. While the aforesaid suits and litigation were in progress, the Company and Intesa settled the matter by filing the Consent Terms before the Hon''ble Supreme Court at Euro 21.00 Million equivalent to Rs. 1,434.31 Million. As per the Consent Terms the Company has paid Rs. 1,434.31 Million towards full and final repayment of principal sum and Intesa waived off all its other claims including interest due on loan availed by VDC Technologies S.p.A. in full and final settlement and all the pending suits / petitions are withdrawn by both the parties. Further, all rights, interest and claims against VDC Technologies S.p.A. have been assigned and transferred to the Company. However, considering that the said VDC Technologies S.p.A. is defunct and under liquidation, said amount paid on settlement is charged to revenue.
Note 50
The Company has, directly and through its subsidiaries, made investments of Rs. 75,339.53 Million in Videocon Telecommunications Limited (VTL), the subsidiary.
2016 as amended, its networth is positive and the management is confident of continuing its commercial operations in the National Long Distance (NLD) and International Long Distance (ILD) Business. Accordingly, in the opinion of the management, no provision is required for diminution in the value of aforesaid investments and advances to VTL.
Note 51
The confirmations and reconciliation of balances of certain secured and unsecured loans, balances with banks, trade receivables, trade and other payables and loans and advances are pending. The management is in the process of obtaining confirmations and reconciliation of balances. In the opinion of the management, there will not be any material impact on the standalone Ind AS financial statements.
Note 52
State Bank of India, the lead bank of the Company has initiated Corporate Insolvency Resolution Process (CIRP) for the Company under the Insolvency and Bankruptcy Code, 2016 as amended and has filed the petition in National Company Law Tribunal (NCLT), Mumbai. The matter is under consideration of the NCLT. In view of the above and in view of the persistent severe strains on the working capital for more than a year, there is a significant drop in the production and sale of products which raises doubt on the ability of the Company to continue as "Going Concern" for the purpose of activities and operations of the Company along with activities and operations of other co-obligor companies. Also, the referral of the Company, in line with the directives of Reserve Bank of India, to NCLT under the Insolvency and Bankruptcy Code by lenders, amounts to a very material event. On this background during the year, the Company has discarded and /or disposed of certain current assets in view of the same being irretrievable for the purpose of business. The Company continues the process for ascertaining the liquidation value for remaining current assets such as raw materials, finished goods, stock-in-process, receivables etc., justifiably assuming that the going concern concept stands vitiated and necessary adjustments will be effected in the due course.
Note 53
The manufacturing activity of Glass Shell division located at Bharuch, which manufactured panels and funnels used in colour picture tube for colour television, has been suspended from July, 2017 due to poor demand of these products due to changes in technology for colour televisions. The management is of the view that the said factory and facilities can be, with some modifications, used for production of solar panel glass, solar lense, glass fibre and glass blocks which have good demand in the market. In view of the above, no provision for impairment has been considered necessary for the assets of the glass shell division at this stage.
Note 54
There are no amounts due and outstanding, to be credited to the Investor Education and Protection Fund.
Note 55.1
Unincorporated Joint Ventures:
The Financial Statements reflect the share of the Company in the assets and the liabilities as well as the income and the expenditure of Joint Venture Operations on a line-by-line basis. The Company incorporates its share in the operations of the Joint Venture based on statements of account received from the Operator. The Company has, in terms of Significant Accounting Policy No. 1.3 (E), recognised abandonment costs based on the technical assessment of current costs as cost of producing properties and has provided depletion thereon under ''Unit of Production'' method as part of Producing Properties in line with Guidance Note on Accounting of Oil and Gas Producing Activities issued by the Institute of Chartered Accountants of India.
The Company has participating interest of 25% in Ravva Oil and Gas Field Joint Venture (JV) through a Production Sharing Contract (PSC). Other members of the JV are Oil and Natural Gas Corporation Limited, Cairn India Limited and Ravva Oil (Singapore) Pte. Limited. The parties have pursuant to the PSC, entered into a Joint Operating Agreement. Cairn India Limited is the Operator.
Note 55.2
Incorporated Jointly Controlled Entities:
i) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint Venture Company incorporated in India, with Infinity Infotech Parks Limited to carry on the business of infrastructure development like construction of IT/ITes Parks, Biotech Parks etc. The Joint Venture Company has not commenced its commercial operations.
ii) Liberty Videocon General Insurance Company Limited is a Joint Venture Company incorporated in India, to carry non life insurance business in India. Upto March 14, 2018 the Company holds 56.53% stake in joint venture and the remaining equity is owned by Liberty Mutual Insuance Group. As on March 14, 2018, the Company sold/exited its stake on this joint venture.
iii) The financial interest of the Company in the jointly controlled incorporated entity based on financial statement received is as under:
(Rs in Million) |
||
Company''s share in |
March 31, 2018 |
March 31, 2017 |
Assets |
6.73 |
5,455.35 |
Liabilities |
6.68 |
3,620.59 |
Income |
- |
3,225.56 |
Expenses |
- |
4,531.38 |
Tax |
- |
- |
Note 55.3
The estimated amount of commitment of the Company towards contribution in various Joint Ventures for next year based on minimum work program is Rs. 2,663.41 Million (As at March 31, 2017 Rs. 1,075.04 Million).
Note 56
The Company has kept the investment activities separate and distinct from other businesses. Consequently, all the income and expenditure pertaining to investment activities have been allocated to the Investments and Securities Division and the income/(loss) after netting of the related expenditure has been shown as "lncome/(Loss) from Investments and Securities Division" under "Other Income" which includes in respect of the long term investments, dividend of Rs. 1.39 Million (Previous year Rs. 0.95 Million), and profit on sale/disposal of investments of Rs. 65.31 Million (Previous year Rs. 27.26 Million).
C.I.F. Value of Imports, Expenditure and Earnings in Foreign Currency
(Rs. in Million) |
||
Particulars |
For the year ended March 31, 2018 |
For 15 months ended March 31, 2017 |
Note 57 |
||
a) C.I.F. Value of Imports: |
||
Raw Materials |
8,991.96 |
30,656.21 |
Capital Goods (including advances) |
0.23 |
190.15 |
b) Expenditure incurred in Foreign Currency: |
||
Interest and Bank Charges |
151.11 |
537.92 |
Royalty |
117.09 |
402.35 |
Travelling |
3.40 |
14.71 |
Others |
4.58 |
326.16 |
c) Other Earnings/Receipts in Foreign Currency: |
||
F.O.B. Value of Exports |
989.25 |
5,625.73 |
Others (including reimbursement of Expenses) |
4,145.10 |
4,837.00 |
Note 58
Share of the Company in remaining reserves on proved and probable basis (as per Operator''s estimates) in Ravva Oil & Gas field (Unincorporated) Joint Venture, relied upon by the auditors, being technical evaluation/matter.
Particulars |
Unit of measurement |
March 31, 2018 |
March 31, 2017 |
Crude Oil |
Million Metric Tonnes |
0.19 |
0.37 |
Natural Gas |
Million Cubic Metres |
- |
28.67 |
Note 59
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. Such conversion are considered to be anti-dilutive in nature and hence not considered for computation of the diluted earnings per share.
Note 60
The figures for the comparative period represents profit/loss for the 15 month period ended March 31, 2017 while the figures for the current period are for the 12 month ended March 31, 2018. Accordingly, in addition to the factors highlighted in the notes above, the figures for the comparative period are not strictly comparable to the profit/loss for the current year. Previous period figures have been reclassified, regrouped, recasted to confirm to the classification of the current year.
Note 61
The Company has received Grant from Ozone Cell, Ministry of Environment & Forests, Government of India for financing the machinery under the Ozone Project. As per the accounting policy followed by the Company, the Grant received for Ozone 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 Ozone Project. Accordingly, an amount of Rs. 4.07 Million (Previous period Rs. 5.10 Million) has been allocated to income and credited to other non-operating 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 for Ozone Project.
The accompanying notes are an integral part of the the financial statements |
|||
As Per our report of even date |
For and on behalf of the Board |
||
For S Z DESHMUKH & CO. |
|||
Chartered Accountants |
|||
D. U. KADAM |
MANDAR JOSHI |
V. N. DHOOT |
S. S. DAYAMA |
Partner |
Company Secretary |
Managing Director & CEO |
Director |
ICAI Membership No: 125886 |
Membership No. ACS 40533 |
DIN 00092450 |
DIN 00217692 |
Place : Mumbai |
|||
Date : June 5, 2018 |
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.
c) The preference shares do not have voting rights. They have
preference over equity shareholder as to dividend and in case of
liquidation.
2.1 Secured Loans:
a) Rupee Term Loans from Banks and Financial Institutions:
i) The Company alongwith 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, Techno Kart India Limited (formerly Next Retail
India Limited), Evans Fraser and Co. (India) Limited and Videocon
International Electronics Limited.
Loans amounting to Rs. 167,393.20 Million (As at 30th June, 2013 Rs.
144,178.53 Million) 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, 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. 36).
ii) Loans amounting to Rs. 150.00 Million (As at 30th June, 2013 Rs.
1,200.00 Million) is secured by first pari-passu charge over the fixed
assets situated at Bharuch and Aurangabad, both present and future.
iii) Loans amounting to Rs. 512.40 Million (As at 30th June, 2013 Rs.
581.03 Million) is secured by mortgage of immovable assets and first
charge on movable assets, cash flows and intangible assets pertaining
to the 5.75 MW Multi Crystalline Silicon Photovoltaic Technology
Project at Warora.
iv) Loans amounting to Rs. 10,750.00 Million (As at 30th June, 2013 Rs.
Nil) are secured by first pari-passu charge on book debts of consumer
electronics and home appliances division which are not charged to
bankers for securing working capital loans and first pari-passu charge
on equitable mortgage of specified properties owned by the Company and
owned by other 6 entities. The loans are further secured by personal
guarantee of Mr. Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot and
corporate guarantee of the entities whose properties have been
mortgaged.
v) Loans amounting to Rs. 2,250.00 Million (As at 30th June, 2013 Rs. Nil)
is secured by subservient charge on current assets of the Company,
pledge of equity shares of Videocon Industries Limited held by other
entities and personal guarantee of Mr. Venugopal N. Dhoot.
vi) Loans amounting to Rs. 2,500.00 Million (As at 30th June, 201 3 Rs.
Nil) is secured by subservient charge on current assets of the Company,
extension of pledge of equity shares of Videocon Industries Limited
mentioned in note no. (v) above and pledge of equity shares of Videocon
d2h Limited held by other entities, mortgage of properties owned by
other entities and personal guarantee of Mr. Venugopal N. Dhoot.
b) Vehicle Loan from Banks are secured by way of hypothecation of
Vehicles acquired out of the said loan. The loans are also secured by
personal guarantee of Mr. Venugopal N. Dhoot.
2.2 Unsecured Loans:
a) The Company had issued 2,000 Foreign Currency Convertible Bonds of
US$ 100,000 each (Bonds) during the year 2010, due on 16th December,
2015, out of which 1,944 (As at 30th June, 2013 - 1,944) Bonds are
outstanding.
i) The Bonds are convertible at the option of the bondholders at any
time on or after 25th January, 2011 to 7 days before maturity date i.e.
16th December, 2015, at a fixed exchange rate of Rs. 45.255 per 1 US$ and
at initial conversion price of Rs. 239.5265 per share being at premium of
3% over reference share price. The conversion price will be subject to
adjustment for, among other things, subdivision or consolidation of
shares, rights issues, capital distributions, stock dividends and other
dilutive events.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 15th December, 2013, if the closing price of
shares for each of the 30 consecutive trading days prior to the date on
which notice of such redemption is given was at least 130% of the
conversion price.
iii) The Bonds are redeemable at maturity date i.e. on 16th December,
2015 at its principal amount, if not redeemed or converted earlier.
b) The Company has availed interest free Sales Tax Deferral under
Special Incentive to Prestigious Unit (Modified) Scheme. Out of total
outstanding, Rs. 12.48 Million is repayable in the financial year 2015
and balance amount of Rs. 4.16 Million is repayable in the financial year
2016.
3.1 Secured Loans
a) Short Term Loans from Banks
i) Loans amounting to Rs. 1,900.00 Million (As at 30th June, 2013 Rs. Nil)
is secured by mortgage of specified property owned by the Company,
negative lien on property owned by other entities and personal
guarantee of Mr. Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.
ii) Loans amounting to Rs. 1,500.00 Million (As at 30th June, 2013 Rs. Nil)
are secured by first pari-passu charge on book debts of consumer
electronics and home appliances division which are not charged to
bankers for securing working capital loans. The loan is further secured
by personal guarantee of Mr. Venugopal N. Dhoot, Mr. Pradipkumar N.
Dhoot and Mr. Rajkumar N. Dhoot.
iii) Loans amounting toRs. 6,000.00 Million (As at 30th June, 2013 Rs. Nil)
is secured against fixed deposits held by the Company.
iv) Loans amounting to Rs. 1,000.00 Million (As at 30th June, 2013 Rs. Nil)
is secured by subservient charge on current assets of the Company,
pledge of equity shares of Videocond2h Limited held by other entities,
mortgage of specified properties owned by other entities, assignment of
receivables from these properties and personal guarantee of Mr.
Venugopal N. Dhoot. b) Working Capital Loans from Banks are secured by
hypothecation of the Company''s stock of raw materials, packing
materials, stock-in-process, finished goods, stores and spares, book
debts of Glass Shell Division and personal guarantee of Mr. Venugopal
N. Dhoot, Mr. Pradipkumar N. Dhoot and Mr. Rajkumar N. Dhoot. 7.2
Unsecured Loans
i) Unsecured Loans from Banks amounting to Rs. 9,250.00 Million (As at
30th June, 2013 Rs. Nil) is secured by exclusive charge over the land
situated at Dist. Rewa, Madhya Pradesh owned by other entities, stake
in PT. Gaung Alam Semesta''s coal concession in Indonesia owned by other
entities and personal guarantee of Mr. Venugopal N. Dhoot and Mr.
Pradipkumar N. Dhoot. ii) Unsecured Loans from Banks amounting to Rs.
1,249.93 Million (As at 30th June, 2013 Rs. Nil) is secured by equitable
mortgage of property owned by other entities and personal guarantee of
Mr. Venugopal N. Dhoot, Mr. Rajkumar N. Dhoot and Mr. Pradipkumar N.
Dhoot.
4. ADDITIONAL NOTES TO FINANCIAL STATEMENTS
4.1 During the period, there is a write backoff 15.45 Million
(Previous period Rs. 1.73 Million) against the diminution recognised in
earlier years in the value of investments.
4.2 The Company has kept the investment activities separate and
distinct from other businesses. Consequently, all the income and
expenditure pertaining to investment activities have been allocated to
the Investments and Securities Division and the income/(loss) after
netting of the related expenditure has been shown as "Income/ (Loss)
from Investments and Securities Division" under "Other Income" which
includes in respect of the long term investments, dividend of Rs. 1.97
Million (Previous period Rs. 1.89 Million), interest on bonds ofRs. 6.96
Million (Previous period Rs. 6.96 Million), profit on sale/disposal of
investments of Rs. 94.60 Million (Previous period Rs. 43.05 Million) and in
respect of current investments, dividend of Rs. Nil (Previous period Rs.
0.27 Million).
in Million)
As at As at
31st Dec, 30th June,
2014 2013
5. CONTINGENT LIABILITIES AND COMMITMENTS
A) Commitments
Estimated amount of contract 1,032.83 508.19
remaining to be executed on
capital account and not provided for
(net of advances)
B) Contingent Liabilities not provided for:
i) Letters of Guarantees 43,086.10 39,317.01
ii) Letters of Credit opened 82,394.06 61,216.92
(including Standby Letters
of Credit and Letter of
Comfort)
iii) Claims against the Company
not acknowledged as debts
a) Custom Duty demands 282.77 502.46
and penalties under
dispute
[Amount paid under protest Rs.
0.07 Million (As at 30th June,
2013 Rs. 3.41 Million)]
b) Income Tax demands 217.63 3,149.41
under dispute
c) Excise Duty and Service 1,230.79 1,034.95
Tax demands and
penalties under dispute [Amount
paid under protest Rs. 31.53
Million (As at 30th June, 2013
Rs. 30.86 Million)]
d) Sales Tax demands 1,135.24 1,131.51
under dispute
[Amount paid under protest Rs.
70.93 Million (As at 30th
June, 2013 Rs. 377.09 Million)]
e) Others 2,166.72 2,153.30
[Amount paid under
protest Rs. 50.00 Million (As at
30th June, 2013 Rs. 50.00 Million)]
f) Show Cause Notices (SCNs) have been served on the Operator of the
Rawa Oil & Gas Field Joint Venture (Rawa JV) for non payment of Service
Tax and Educational Cess on various services for the period July 2003
to 31 st March, 2013. The amount involved relating to Rawa Block is Rs.
419.71 Million (As at 30th June, 2013 Rs. 418.88 Million).
The Operator is contesting the SCNs/demands before Commissioner of
Service Tax and has filed appeal before CESTAT, Bangalore and also writ
petition before Hon''ble High Court of Madras challenging service tax
demands on some of the services and believes that its position is
likely to be upheld. The ultimate outcome of the matter cannot be
presently determined and no provision for any liability that may result
has been made in the accounts as the same is subject to agreement by
the members of the Joint Venture. Should it ultimately become payable,
the Company''s share as per the participating interest would be upto Rs.
104.93 Million (As at 30th June, 2013 Rs. 104.72 Million).
g) Disputed Income Tax demand amounting toRs. 22.29 Million (As at 30th
June, 2013 Rs. 22.29 Million) in respect of certain payments made by Rawa
Oil & Gas Field Joint Venture is currently pending before the Hon''ble
High Court of Madras. The ultimate outcome of the matter cannot
presently be determined and no provision for any liability that may
result has been made as the same is subject to agreement by the members
of the Joint Venture. Should it ultimately become payable, the
Company''s share as per the participating interest would be upto Rs. 5.57
Million (As at 30th June, 2013 Rs. 5.57 Million).
6. There are certain disputes with the Government of India ("GOI")
with respect to the Production Sharing Contract dated 28th October,
1994 ("Rawa PSC") pertaining to Rawa Oil & Gas Field which were
referred to more than one international arbitration for resolution. The
respective International Arbitral Tribunals have issued their
respective Awards from time to time substantially in favour of the
Company. However the GOI has preferred to challenge few of the Awards
in various Courts in India and overseas but has not succeeded so far in
any of the Courts. Pending final resolution of the disputes, certain
amounts have been excess recovered, deducted or short paid by the GOI
and / or its Nominees which have been challenged by the Company and the
Company is seeking recovery of amounts excessively recovered, deducted
or short paid by the GOI and/ or its Nominees. Based on legal advice,
the Company believes its contentions will be upheld. Any further sum
required to be paid by the Company or recoverable by the Company in
respect of any of these disputes in accordance with the determination
of the amount by the Hon''ble Arbitral Tribunal/relevant courts in this
regard shall be accounted for on the final outcome in those matters.
7. The Company alongwith 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 (formerly Next Retail India Limited), Evans
Fraserand Co. (India) Limited and Videocon International Electronics
Limited. As per the said Facility Agreement, the Company is agent of
the Obligors and has been referred to as ''Obligor Agent''. The Rupee
Term Loans have to be utilised for the purpose mentioned in the
Facility Agreement which is mainly for refinancing of existing Rupee
Term Loans of the Obligors. Accordingly, the Rupee Term Loans of Rs.
28,149.54 Million have been allocated to respective Obligors based on
their outstanding amount as on 31 st December, 2011 and the lenders
have also disbursed Rs. 2,520.00 Million to some Obligors. 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 31 st December, 2014 of Rs. 30,051.55 Million (As
at 30th June, 2013 Rs. 20,307.40 Million).
8. The Consortium of various banks have sanctioned the Letter of
Comfort (LoC)/Stand-by Letters of Credit (SBLC) facility to the Company
and its subsidiary Videocon Oil Ventures Limited (VOVL) (collectively
referred to as ''Obligors'') to secure the foreign currency facility
raised / to be raised by Videocon Hydrocarbon Holdings Limited (VHHL),
an overseas subsidiary, from its lenders. The LoC/SBLC facility is
secured by first ranking pledge of 100% shares of VOVL, VHHL and shares
of certain subsidiaries of VHHL, charge over their fixed assets, VHHL''s
share of cash flows from identified oil & gas assets through escrow of
receivables, first ranking / exclusive charge on specified bank
accounts forthe benefit of the relevant LoC/SBLC provider, exclusive
charge on oil & gas facility servicing account of Obligors set-up
underthe onshore Trust and Retention Accounts, negative lien for shares
of other subsidiaries of VHHL viz. Videocon JPDA 06-103 Limited and
Videocon Australia WA-388P Limited, first pari-passu charge on Videocon
brand and personal guarantee of Mr. Venugopal N. Dhoot, Mr. Pradipkumar
N. Dhoot and Mr. Rajkumar N. Dhoot.
Accordingly, the Company is contingently liable in respect of the
LoC/SBLC facility of VOVL to the extent of Rs. 86,504.82 Million (As at
30th June, 2013 Rs. 69,933.48 Million).
9. Intesa Sanpaolo S.p.A., an Italian bank, initiated winding up
proceedings against the Company on the basis of ''Patronage Letter''
issued by the Company to the said Italian bank in June, 2007 for
financial assistance given to one level step down subsidiary, M/s. VDC
Technologies S.p.A., an Italian defunct company acquired by another
subsidiary of the Company, M/s. Eagle Corporation Limited registered in
Cayman Island. Single judge vide judgement dated 5th December, 2013
passed a conditional order of winding up of the company on its failure
to deposit in court the amount of Rs. 2,597.30 Million equivalent of Euro
38.00 Million, which was confirmed by the division bench of the High
Court of Judicature at Bombay on 18th July, 2014.
The Company has challenged the order of Bombay High Court by way of
Special Leave Petition (''SLP'') in the Supreme Court. The Company has
denied its liability out of the said ''Patronage Letter''. The Company,
pending the final disposal of SLR agreed to create lien on Fixed
Deposit Receipts of Rs. 1,363.82 Million and Rs. 1,210.40 Million in favour
of the Registrar of Supreme Court. The Hon''ble Supreme Court has
stayed the impugned order of the Bombay High Court and directed to
issue Notice for further hearing of the matter. The Company has been
advised by the legal counsels that the Italian bank does not have
sustainable claim against the Company and as such no provision has been
considered in the financial statements.
10. The Directorate of Revenue Intelligence, Mumbai Zonal Unit (''DRI'')
has issued Show Cause Notice(s) (''SCN'') dated 10th September, 2014 and
30th December, 2014 to the Company in connection with import of Colour
Picture Tubes (''CPTs'') by the Company and other concerns. Vide SCNs,
the Company has been asked to explain / as to why the declared value of
CPTs imported should not be rejected and re-determined and why the
amount of anti-dumping duty of Rs. 1,657.21 Million and penalty thereon
should not be recovered under the extended period underthe provisons of
the Customs Act, 1962.
The Company has denied the allegation made by DRI for alleged evasion
of duty before the adjudicating authority. Further, 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 in the court of laws and, accordingly,
there is no question of duty evasion or penalty thereon and no
provision has been considered necessary in the financial statements.
11. The Company has, directly and through its subsidiaries, made
investments aggregating to Rs. 65,002.03 Million (As at 30th June, 2013 Rs.
49,337.50 Million) and also given advances of Rs. 340.46 Million (As at
30th June, 2013 Rs. 782.74 Million) to Videocon Telecommunications
Limited (VTL), the subsidiary. VTL was granted the license for
providing Unified Access Services (UAS) in 21 circles by the Department
of Telecommunications, Government of India (DoT) in 2008 and was also
allotted spectrum in 20 circles. The Hon''ble Supreme Court of India,
vide its judgment dated 2nd February, 2012, quashed all the UAS
licenses granted on or after 10th January, 2008 and the subsequent
allocation of spectrum to these licensees, which also included the 21
UAS licenses granted to VTL and the spectrum allotted to it. The
Hon''ble Supreme Court of India, also directed the Telecom Regulatory
Authority of India (TRAI) to make fresh recommendations for grant of
licenses and allocation of spectrum and the Central Government to grant
fresh licenses and allocation of spectrum by auction thereafter.
The Central Government conducted the auction of spectrum in November,
2012. VTL participated in the auction and has been awarded spectrum in
6 circles. VTL is continuing its business as a going concern. As VTL
has huge accumulated losses, its ability to continue as going concern
is dependent on its ability to fund its operating and capital
requirements. VTL is confident of mobilizing necessary resources for
continuing its operations as per the business plan. Accordingly, in the
opinion of the management, no provision is required for diminution in
the value of aforesaid investments and advances to VTL.
12. A) Unincorporated Joint Ventures:
The Financial Statements reflect the share of the Company in the assets
and the liabilities as well as the income and the expenditure of Joint
Venture Operations on a line- by-line basis. The Company incorporates
its share in the operations of the Joint Venture based on statements of
account received from the Operator. The Company has, in terms of
Significant Accounting Policy No. 1 (E), recognised abandonment costs
based on the technical assessment of current costs as cost of producing
properties and has provided depletion thereon under ''Unit of
Production'' method as part of Producing Properties in line with
Guidance Note on Accounting of Oil and Gas Producing Activities issued
by the Institute of Chartered Accountants of India.
The Company has participating interest of 25% in Rawa Oil and Gas Field
Joint Venture (|V) through a Production Sharing Contract (PSC). Other
members of the JV are Oil and Natural Gas Corporation Limited, Cairn
India Limited and Rawa Oil (Singapore) Pte. Limited. The parties have
pursuant to the PSC, entered into a Joint Operating Agreement. Cairn
India Limited is the Operator.
B) Incorporated Jointly Controlled Entities:
i) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint
Venture Company incorporated in India, with Infinity Infotech Parks
Limited to carry on the business of infrastructure development like
construction of IT/ITes Parks, Biotech Parks etc. The Joint Venture
Company has not commenced its commercial operations.
C) The estimated amount of commitment of the Company towards
contribution in various Joint Ventures for next year based on minimum
work program is Rs. 1,708.77 Million (As at 30th June, 2013 Rs. 3,656.49
Million).
13. 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.
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. 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:
i) Subsidiaries:
a) Chhattisgarh Power Ventures Private Limited
b) Liberty Videocon General Insurance Company Limited
c) Middle East Appliances LLC
d) Pipavav Energy Private Limited
e) Prosperous Energy Private Limited
f) Videocon Electronics (Shenzhen) Limited (Chinese Name - Weiyoukang
Electronic (Shenzhen) Co., Ltd.)
g) Videocon Global Limited
h) Videocon Oil Ventures Limited and its subsidiaries Videocon Estelle
Limited (up to 26th March, 2014)
Videocon Ivory Limited (up to 15th February 2014)
Videocon Hydrocarbon Holdings Limited and its subsidiaries
- Videocon JPDA 06-103 Limited Videocon Indonesia Nunukan Inc.
Videocon Energy Brazil Limited Videocon Australia WA-388-P Limited
Videocon Mauritius Energy Limited and its subsidiary
Videocon Mozambique Rovuma 1 Limited (upto 7th January, 2014) i)
Videocon International Electronics Limited and its subsidiaries
Jumbo Techno Services Private Limited
Senior Consulting Private Limited
Videocon Telecommunications Limited and its subsidiary
Datacom Telecommunications Private Limited
j) Videocon Energy Limited and its subsidiary
Proficient Energy Private Limited and its subsidiary
Applied Energy Private Limited and its subsidiaries
Unity Power Private Limited (up to 15th May, 2014)
Comet Power Private Limited and its subsidiaries
Indigo Energy Private Limited Percept Energy Private Limited ii)
Associates and Joint Ventures:
Radium Energy Private Limited - Associate - 26%
Unity Power Private Limited - Associate - 26% (Associate of Applied
Energy Private Limited w.e.f. 16th May, 2014)
Videocon Infinity Infrastructure Private Limited - Joint Venture - 50%
IBV Brasil Petroleo Limitada - (50% Joint Venture of Videocon Energy
Brazil Limited)
iii) Key Management Personnel:
Mr. Venugopal N. Dhoot - Chairman & Managing Director
Mr. Sunil Kumar Jain - Senior Vice President
Mr. Sunil Tandon - Senior Vice President (w.e.f. 1st July, 2013)
Mr. Chandramani M. Singh -Vice President
Mr. Abhijit Kotnis - Vice President
Mr. Arun Pal - Vice President
C) Material transactions with Related Parties during the period are:
i) Revenue from Operations from Videocon Telecommunications Limited Rs.
215.58 Million (Previous period Rs. 51.21 Million).
ii) Other Income and Reimbursement of Expenses received from Videocon
Hydrocarbon Holdings Limited Rs. 23,918.55 Million (Previous period Rs.
2,920.51 Million), Videocon International Electronics Limited Rs.
5,351.17 Million (Previous period Rs. 4,456.13 Million) and Videocon Oil
Ventures Limited Rs. 4,145.43 Million (Previous period Rs. 741.11 Million).
iii) Other Expenses paid to Videocon Telecommunications Limited Rs. 0.79
Million (Previous period Rs. Nil).
iv) Investments in equity shares of Videocon Telecommunications Limited
Rs. 4,526.91 Million (Previous period Rs. 3,264.55 Million) and Liberty
Videocon General Insurance Company Limited Rs. 2,765.00 Million (Previous
period Rs. 2,749.90 Million).
v) Long Term Advances/Loans Given to Videocon Oil Ventures Limited Rs.
419.12 Million (Previous period Rs. 9,713.01 Million).
vi) Long Term Advances/Loan received back from Videocon
Telecommunications Limited Rs. 442.28 Million (Previous period Rs.
16,415.97 Million) and to Videocon International Electronics Limited Rs.
2,987.21 Million (Previous period Long Term Advances Given Rs. 19,103.13
Million).
vii) Short Term Advances/Loans Given to Comet Power Private Limited Rs.
1.50 Million (Previous period Rs. 0.10 Million).
viii) Short Term Advances/Loan Received back from Chhattisgarh Power
Ventures Private Limited Rs. 1,449.27 Million (Previous period Short Term
Advances Given Rs. 536.92 Million), Pipavav Energy Private Limited Rs.
1,420.81 Million (Previous period Rs. 75.57 Million) and Prosperous
Energy Private Limited Rs. 388.58 Million (Previous period Short Term
Advances Given Rs. 7.94 Million).
ix) Short Term Advances/Loans Received from Videocon Mauritius Energy
Limited Rs. 7,528.40 Million (Previous period Rs. Nil).
x) Repayment of Short Term Advances/Loans Received from Liberty
Videocon General Insurance Company Limited Rs. 3.49 Million (Previous
period Advances Received Rs. 3.49 Million).
xi) Increase in Other Receivables from Videocon Telecommunication
Limited Rs. 161.91 Million (Previous period Rs. Nil).
xii) Decrease in Other Receivables from Videocon Hydrocarbon Holdings
Limited Rs. 1,936.11 Million (Previous period Increase in Other
Receivables Rs. 2,380.65 Million).
48. 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.
17. The Company has prepared the Consolidated Financial Statements as
per Accounting Standard (AS) 21 and accordingly the segment information
as per AS-17 "Segment Reporting" has been presented in the Consolidated
Financial Statements.
18. Previous period figures have been reclassified, restated, recasted
to conform to the classification of the current period.
Jun 30, 2013
1. ADDITIONAL NOTES TO FINANCIAL STATEMENTS
1.1 During the period, there is a write back of Rs. 1.73 Million
(Previous year charge of Rs. 180.82 Million) against the diminution
recognised in earlier years in the value of investments.
1.2 The Company has kept the investment activities separate and
distinct from other businesses. Consequently, all the income and
expenditure pertaining to investment activities have been allocated to
the Investments and Securities Division and the income/(loss) after
netting of the related expenditure has been shown as "lncome/(Loss)
from Investments and Securities Division" under "Other Income" which
includes in respect of the long term investments, dividend of Rs. 1.89
Million (Previous year Rs. 6.63 Million), interest on bonds of Rs. 6.96
Million (Previous year Rs. 4.23 Million), profit on sale/disposal of
investments of Rs. 43.05 Million (Previous year loss of Rs. 46.29 Million)
and in respect of current investments, dividend of Rs. 0.27 Million
(Previous yearRs. Nil).
2. There were certain disputes with the Government r." ¦. :¦:-<.
^COI") with respect to the Production Sharing Contract dated Rs. - ''¦ C .
obe.. 1994 ("Ravva PSC") pertaining to Ravva Oil & Gas Field wh;cii
were referred to international arbitration for resolution. The Arbitral
"rr,t>unal has issued a Partial Award and is still seized of the matter
and is yet to issue a Final Award, other than for the dispute relating
to Base Development Costs ("BDC") for which a final award was issued on
18th January, 2011 substantially in favour of the Company. Issue
relating to deductibility of ONGC Carry Costs arising out of the
Partial Award was appealed by the GOI before the Malaysian Appellate
Authorities which has since been rejected (on grounds, inter-alia, of
jurisdiction and maintainability) by such authorities and is now before
the final appellate authority i.e. the Federal Court of Malaysia.
Issue relating to deductibility of the BDC was appealed by the GOI
before the Malaysian Appellate Authority which has since been rejected
by such authority and is now before the Court of Appeal at Malaysia.
Pending final resolution of the disputes, certain amounts have been
short paid by GOI Nominees which have been disputed by the Company and
the Company is seeking refund of amounts excessively deducted. Based on
legal advice, the Company believes its contentions will be upheld. Any
further sum required to be paid or returnable in respect of such
disputes in accordance with the determination of the amount by the
Hon''ble Arbitral Tribunal/relevant courts in this regard shall be
accounted for on the final outcome in those matters.
3. The Company alongwith 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 per the said Facility Agreement,
the Company is agent of the Obligors and has been referred to as
''Obligor Agent''. The Rupee Term Loans have to be utilised for the
purpose mentioned in the Facility Agreement which is mainly for
refinancing of existing Rupee Term Loans of the Obligors. Accordingly,
the Rupee Term Loans of Rs. 20,439.54 Million have been allocated to
respective Obligors based on their outstanding amount as on 31 st
December 2011. As the Company is a co-obligor, it is contingently
liable in respect of the borrowings of other Obligors/Borrowers to the
extent cf c jtstanding balance of Rupee Term Loans as on 30th June,
2013 of Rs. 20,307 40 Million (Previous year Rs. Nil).
4. The Consortium of various banks have sanctioned the Letter of
Comfort (LoC)/Stand-by Letters of Credit (SBLC) facility to the Company
and its subsidiary Videocon Oil Ventures Limited (VOVL) (collectively
referred to as ''Obligors'') to secure the foreign currency facility
raised / to be raised by Videocon Hydrocarbon Holdings Limited (VHHL),
an overseas subsidiary, from its lenders. The LoC/SBLC facility is
secured by first ranking pledge of 100% shares of VOVL, VHHL and shares
of certain subsidiaries of VHHL, charge over their fixed assets, VHHL''s
share of cash flows from identified oil & gas assets through escrow of
receivables, first ranking / exclusive charge on specified bank
accounts for the benefit of the relevant LoC/SBLC provider, exclusive
charge on oil & gas facility servicing account of Obligors set-up under
the onshore Trust and Retention Accounts, negative lien for shares of
other subsidiaries of VHHL viz. Videocon JPDA 06-103 Limited and
Videocon Australia WA-388P Limited, first pari-passu charge on Videocon
brand and personal guarantees of Mr. Venugopal N. Dhoot, Mr.
Pradipkumar N. Dhoot and Mr. Rajkumar N. Dhoot. However, charge has not
been created in favor of Consortium of banks (A) for the credit
facility to the Obligors on the assets by way of pledge of shares of
the subsidiaries viz. Videocon Mauritius Energy Limited and Videocon
Mozambique Rovuma 1 Limited which have been pledged to Standard
Chartered Bank for the loans availed by VHHL; (B) for any other
receivables from Videocon Mozambique Rovuma 1 Limited and (C) on any
assets of Videocon Mozambique Rovuma 1 Limited.
Accordingly, the Company is contingently liable in respect of the LoC/
SBLC facility of VOVL to the extent of Rs. 69,933.48 Million (Previous
year Rs.Nil).
5. The Company has, directly and through its subsidiaries, made
investments aggregating to Rs. 49,337.50 Million and also given advances
ofRs. 782.74 Million to Videocon Telecommunications Limited (VTL), the
subsidiary. VTL was granted the license for providing Unified Access
Services (UAS) in 21 circles by the Department of Telecommunications,
Government of India (DoT) in 2008 and was also allotted spectrum in 20
circles. The Hon''ble Supreme Court of India, vide its judgment dated
2nd February, 2012, quashed all the UAS licenses granted on or after
10th January, 2008 and the subsequent allocation of spectrum to these
licensees, which also include the 21 UAS licenses granted to VTL and
the spectrum allotted to it. The Hon''ble Supreme Court of India, also
directed the Telecom Regulatory Authority of India (TRAI) to make fresh
recommendations for grant of licenses and allocation of spectrum and
the Central Government to grant fresh licenses and allocation of
spectrum by auction thereafter.
The Central Government conducted the auction of spectrum in November,
2012. VTL participated in the auction and has been declared as a
successful bidder in 6 circles and has been awarded spectrum in these
circles. VTL is continuing its business as a going concern. As VTL has
huge accumulated losses, its ability to continue as going concern is
dependent on its ability to fund its operating requirements. VTL is
confident of mobilizing necessary resources for continuing its
operations as per the business plan. Accordingly, in the opinion of the
management, no provision is required for diminution in the value of
aforesaid investments and advances to VTL.
6. A) Unincorporated Joint Ventures:
The Financial Statements reflect the share of the Company in the assets
and the liabilities as well as the income and the expenditure of Joint
Venture Operations on a line-by-line basis. The Company incorporates
its share in the operations of the Joint Venture based on statements of
account received from the Operator. The Company has, in terms of
Significant Accounting Policy No. 1 (E), recognised abandonment costs
based on the technical assessment of current costs as cost of producing
properties and has provided depletion thereon under ''Unit of
Production'' method as part of Producing Properties in line with
Guidance Note on Accounting of Oil and Gas Producing Activities issued
by the Institute of Chartered Accountants of India.
i) The Company has participating interest of 25% in Ravva Oil and Gas
Field Joint Venture (JV) through a Production Sharing Contract (PSC).
Other members of the JV are Oil and Natural Gas Corporation Limited,
Cairn India Limited (formerly Cairn Energy India Pty Limited) and Ravva
Oil (Singapore) Pte. Limited. The parties have pursuant to the PSC,
entered into a Joint Operating Agreement. Cairn India Limited is now
the Operator (Cairn Energy India Pty Limited was the Operator upto 15th
October, 2012).
ii) The Company had participating interest of 8.4% in Block WA-388-P in
xploration permit for a term of 6 years from 28th August, 2006. The
Joint Venture (JV) comprised of the Company, Oilex Limited, Gujarat
State Petroleum Corporation Limited, Hindustan Petroleum Corporation
Limited, Bharat Petroleum Corporation Limited, Sasol Petroleum
Australia Limited and Apache Northwest Pty Limited ("Apache"). Apache
was the Operator with 40% interest in JV. The Petroleum Exploration
Permit WA-388-P expired on 27th August, 2012 and ceased to be inforce.
B) Incorporated Jointly Controlled Entities:
i) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint
Venture Company incorporated in India, with Infinity Infotech Parks
Limited to carry on the business of infrastructure development like
construction of IT/ITes Parks, Biotech Parks etc. The Joint Venture
Company has not commenced its commercial operations.
C) The estimated amount of commitment of the Company towards
contribution in various Joint Ventures for next year based on minimum
work program is Rs. 3,656.49 Million (Previous year Rs. 239.96 Million).
7. 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.
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. 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:
i) Subsidiaries:
a) Chhattisgarh Power Ventures Private Limited
b) Eagle ECorp Limited (upto 20th June, 2013)
c) Liberty Videocon General Insurance Company Limited
d) Middle East Appliances LLC ¦
e) Pipavav Energy Private Limited
f) Prosperous Energy Private Limited
g). Videocon Electronics (Shenzhen) Limited (Chinese
Name - Weiyoukang Electronic (Shenzhen) Co., Ltd.) h) Videocon Global
Limited i) Videocon Oil Ventures Limited and its subsidiaries
- Videocon Estelle Limited
- Videocon Ivory Limited
- Videocon Hydrocarbon Holdings Limited and its subsidiaries
- Videocon JPDA 06-103 Limited
- Videocon Indonesia Nunukan Inc.
- Videocon Energy Brazil Limited
- Videocon Australia WA-388-P Limited
- Oil Services International S.A.S. (Liquidated on 10th July, 2012)
- Videocon Mauritius Energy Limited (w.e.f. 17th December, 2012) and
its subsidiary
- Videocon Mozambique Rovuma 1 Limited *
j) Emerald Corporate Ventures Limited (formerly Videocon Energy
Ventures Ltd) (upto 20th June, 2013) and its subsidiary
- Mercury Corporate Ventures Limited (formerly Videocon Oman 56
Limited) (upto 20th June, 2013)
k) Videocon International Electronics Limited and its subsidiaries
- Jumbo Techno Services Private Limited
- Senior Consulting Private Limited
- Videocon Telecommunications Limited and its subsidiary
- Datacom Telecommunications Private Limited I) Videocon Energy Limited
and its subsidiary
- Proficient Energy Private Limited and its subsidiary
- Applied Energy Private Limited and its subsidiaries
- Unity Power Private Limited
- Comet Power Private Limited and its subsidiaries
- Indigo Energy Private Limited (w.e.f. 16th January, 2012)
- Percept Energy Private Limited (w.e.f. 16th January, 2012)
* Videocon Mozambique Rovuma 1 Limited was a wholly owned subsidiary of
Videocon Hydrocarbon Holdings Limited upto 27th December, 2012. It
became a wholly owned subsidiary of Videocon Mauritius Energy Limited
w.e.f. 28th December, 2012.
ii) Associates and Joint Ventures''.
Goa Energy Private Limited - Associate - 26% (upto 1 st March, 2012)
Northwest Energy Private Limited - (Associate of Proficient Energy
Private Limited - 47%, upto 7th January, 2013)
Radium Energy Private Limited - Associate - 26%
Videocon Infinity Infrastructure Private Limited - Joint Venture - 50%
IBV Brasil Petroleo Limitada - (50% Joint Venture of Videocon Energy
Brazil Limited)
iii) Key Management Personnel:
Mr. Venugopal N. Dhoot - Chairman & Managing Director
Mr. Pradipkumar N. Dhoot - Whole Time Director (upto
14th August, 2012)
Mr. Sunil Kumar Jain - Senior Vice President
Mr. Shekhar Jyoti- Vice President
Mr. Chandramani M. Singh- Vice President
Mr. Jaideep R. Rathore- Senior Vice President (upto 31st
March, 2013)
Mr. Abhijit Kotnis - Vice President
Mr. Arun Pal - Vice President
C) Material transactions with Related Parties during the period are:
i) Revenue from Operations from Videocon Telecommunications Limited Rs.
51.21 Million (Previous year Rs. 335.80 Million on high seas basis).
ii) Other Income received from Videocon Hydrocarbon Holdings Limited Rs.
2,225.27 Million (Previous year Rs. Nil).
iii) Reimbursement of Expenses from Videocon International Electronics
Limited Rs. 4,456.13 Million (Previous year Rs. Nil), Videocon Hydrocarbon
Holdings Limited Rs. 695.24 Million (Previous year Rs. Nil) and Videocon
Oil Ventures Limited X 741.11 Million (Previous yearRs. Nil).
iv) Subscription to Shares of Videocon International Electronics
Limited Rs. 10,000.00 Million (Previous year Rs. Nil), Videocon
Telecommunications Limited net of Share Application Money Rs. 3,264.55
Million (Previous year Rs. Nil) and Liberty Videocon General Insurance
Company Limited Rs. 2,749.90 (Previous year Rs. 49.10 Million). Refund of
Share Application Money from Videocon Oil Ventures Limited Rs. 9,000.00
Million (Previous year Rs. Nil) and Chhattisgarh Power Ventures Private
Limited Rs. 1,000.00 Million (Previous yearRs. Nil).
v) Long Term Advances/Loans Given to Videocon International Electronics
LimitedRs. 19,103.13 Million (Previous year 2,444.64 Million) and
Videocon Oil Ventures Limited Rs. 9,713.01 Million (Previous year Rs.
5,296.22 Million).
vi) Short Term Advances/Loans Given to Videocon Hydrocarbon Holdings
Limited Rs. 2,380.65 Million (Previous year Rs. Nil) and Chhattisgarh Power
Ventures Private Limited Rs. 536.92 Million (Previous yearRs. Nil).
vii) Long Term Advances/Loan Received back from Videocon
Telecommunications Limited Rs. 16,415.97 Million (Previous year Rs.Nil).
viii) Short Term Advances/Loan Received back from Videocon Global
Limited Rs. 9,993.30 Million (Previous years Rs. Nil) and Videocon Energy
Ventures Limited Rs. 1,340.50 Million (Previous yearRs. Nil).
ix) Short Term Advances/Loans Received from Liberty Videocon General
Insurance Company Limited Rs. 3.49 Million (Previous year Rs. Nil) and
Videocon Global Limited Rs. 1.64 Million (Previous yearRs. Nil).
x) Repayment of Short Term Advances/Loans Received from Proficient
Energy Private Limited Rs. 62.96 Million (Previous year Rs. Nil) and
Videocon Electronics (Shenzen) Limited Rs. 13.99 Million (Previous yearRs.
Nil).
11. 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 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.
12. The Company has prepared the Consolidated Financial Statements as
per Accounting Standard (AS) 21 and accordingly the segment information
as per AS-17 "Segment Reporting" has been presented in the Consolidated
Financial Statements.
13. These financial statements have been prepared in the format
prescribed by the Revised Schedule VI to the Companies Act, 1956. The
figures for the current period are for a period of 18 months as against
12 months in previous year and hence are not comparable. Previous year
figures have been reclassified, restated, recasted to conform to the
classification of the current period.
Dec 31, 2011
(Rs in Million)
As at As at
31st Dec., 31st Dec.,
2011 2010
1. Contingent Liabilities not
provided for:
a) Letters of Guarantees 76,432.95 47,465.62
b) Letters of Credit opened including 29,921.44 17,806.63
standby letters of credit
c) Customs Penalty 6.00 11.00
d) Customs Duty demands under dispute 441.02 400.74
[Amount paid under protest Rs 0.07
Million (Previous period Rs 0.07 Million)]
e) Income Tax demands under dispute 494.74 351.13
f) Excise Duty and Service Tax demand 610.88 324.55
under dispute [Amount paid under protest
Rs 4.21 Million (Previous period Rs 4.21
Million)]
g) Sales Tax demands under dispute 919.84 108.04
[Amount paid under protest Rs 360.08
Million (Previous period Rs 30.92 Million)]
h) Others 1,062.64 422.30
[Amount paid under protest Rs 50.00
Million (Previous period Rs 50.00 Million)]
i) Show Cause Notices (SCNs) have been served on the Operator of the
Ravva Oil & Gas Field Joint Venture (Ravva JV) for non payment of
Service Tax and Educational Cess on various services for the period
July 2003 to 31st March, 2011. The amount involved relating to Ravva
Block is Rs 412.56 Million (Previous period Rs 420.55 Million).
The Operator is contesting the SCNs/demands before Commissioner of
Service Tax and has filed writ petition before Hon'ble High Court of
Madras challenging service tax demands on some of the services and
believes that its position is likely to be upheld. The ultimate outcome
of the matter cannot be presently determined and no provision for any
liability that may result has been made in the accounts as the same is
subject to agreement by the members of the Joint Venture. Should it
ultimately become payable, the Company's share as per the
participating interest would be upto Rs 103.14 Million (Previous period
Rs 105.14 Million).
j) Disputed Income Tax demand amounting to Rs 22.29 Million (Previous
period Rs 22.29 Million) in respect of certain payments made by Ravva
Oil & Gas Field Joint Venture is currently pending before the Hon'ble
High Court of Madras. The ultimate outcome of the matter cannot
presently be determined and no provision for any liability that may
result has been made as the same is subject to agreement by the members
of the Joint Venture. Should it ultimately become payable, the
Company's share as per the participating interest would be upto Rs
5.57 Million (Previous period Rs 5.57 Million).
2. a) There is a dispute regarding the deductibility of certain cost
in the computation of post tax rate of return. A Partial/Interim Award
was issued by an International Arbitration Tribunal under the UNCITRAL
Rules on 31st March, 2005 in favour of the Company in respect of a
dispute between the Company and Government of India ("GOI") inter-
alia regarding deductibility of Oil and Natural Gas Corporation Limited
Carry costs ("ONGC Carry") while computing the Post Tax Rate of
Return ("PTRR") under the Ravva Production Sharing Contract
("PSC"). However, the Company and the GOI were not able to agree
upon the amounts due to /payable by the Company in terms of the
Partial/Interim Award, and therefore the Company on 7th July, 2005
filed Interim Applications before the Arbitral Tribunal seeking a
determination of the amounts due to/payable by the Company on the basis
of the calculations made by the Company in these Applications and
interest payable/receivable on such final determined amounts. The said
Partial/ Interim Award was challenged by GOI on 10th May, 2005 before
the High Court in Malaysia with a prayer for setting aside the Partial
Award dated 31st March, 2005. The Company challenged the jurisdiction
of the High Court in Malaysia and therefore the maintainability of such
a proceeding before that Court. The High Court in Malaysia, by a
pronouncement dated 5th August, 2009, upheld the contentions of the
Company and dismissed the challenge filed by the GOI to the Award dated
31st March, 2005 on the ONGC Carry issue. The GOI filed a Notice of
Appeal in December, 2010 before the Appellate Court at Malaysia. The
Company has also moved an application on 13th October, 2009 before the
High Court of Justice, Queen's Bench Division, Commercial Court at
London seeking a declaration that the Seat of the arbitration in
respect of the said Arbitration matter between the Company and the GOI
is London, England.
b) GOI has filed OMP 255 of 2006 dated 30th May, 2006 before the
Hon'ble Delhi High Court under section 9 of the Arbitration and
Conciliation Act, 1996, seeking a declaration that the seat of the
arbitration as regards the disputes between the Company and the GOI is
Kuala Lumpur and not London. The Hon'ble Arbitral Tribunal vide
its' letter dated 11th April, 2007 has indicated that it shall
continue with the arbitration proceedings, in respect of the disputes
referred above, after receiving the judgement of the Hon'ble Delhi
Court in OMP 255 of 2006. The Hon'ble Delhi High Court has held, vide
judgement dated 30th April, 2008, that it has the jurisdiction to hear
the matters arising out of arbitration process and that the matter be
heard on merits as against the Company's contention that the said
petition itself was not maintainable. The Company has, in this respect,
filed Special Leave Petition (SLP) (Civil) No. 16371 of 2008 before the
Hon'ble Supreme Court of India to decide the issue of maintainability
of OMP 255 of 2006. The Hon'ble Supreme Court, after hearing the
Parties, has on 11 th May, 2011, passed judgement in the matter
allowing the Company's SLP while setting aside the judgement dated
30th April, 2008 of the Hon'ble Delhi High Court and dismissing OMP
No. 255 of 2006.
c) GOI has filed Suit being C.S. (OS) No. 3314/2011 dated 22nd
December, 2011 before the High Court of Delhi seeking, inter alia, an
injunction against the Company from proceeding with the English Court
Proceedings filed by the Company, inter alia, on the ground that the
judgment of the Hon'ble Supreme Court of India dated 11th May, 2011
observing that seat of arbitration remains at Kuala Lumpur cannot be
the subject matter of any further adjudication in any court whatsoever
including the High Court of Justice, Queens Bench Division, Commercial
Court, London. On 23rd December, 2011, after hearing parties, the Delhi
High Court passed an ad-interim order to the effect, inter alia, that
the parties shall not take any further steps in the English Court
Proceedings. The Delhi High Court by judgment dated 5th March, 2012
passed in I.A. No.21069 of 2011 in C.S. (OS) No. 3314 of 2011, passed
an interim injunction restraining the Company from proceeding with the
English Court Proceedings. The Company has filed an Appeal against the
judgment dated 5th March, 2012 being F.A.O. (OS) No. 132 of 2012
before Divisional Bench, Delhi High Court, which has been admitted and
is listed for hearing on 27th August, 2012.
d) In the Appeal filed by the GOI before the Court of Appeal, Malaysia,
the GOI has filed a notice of motion to amend the grounds of appeal.
The amendment is sought on the GOI's submission that the judgement
dated 11th May, 2011 of the Supreme Court of India is res-judicata
between the parties on the issue of seat of arbitration. The Court of
Appeal has granted permission to the Company to file reply and the
Company has filed its reply to the Applications and Affidavits. The
matter is next listed for hearing before the Court of Appeal on 18th
June, 2012.
e) There is a dispute with regards to conversion of US$ into Indian
Rupees for payment of invoice for sale of crude. A dispute regarding
the rate of conversion from US$ into Indian rupees applicable to the
Nominees of the GOI for the purpose of payment of amount of the
invoices for sale of the Crude Oil by the Company under the Ravva PSC
was referred to an International Arbitral Tribunal under the UNCITRAL
Rules in accordance with the provisions of the Ravva PSC. The Tribunal
by its Partial / Interim Award dated 31st March, 2005 held that the
payment to the Company should be made after converting the US$ amount
into Indian Rupees at the average of the State Bank of India TT Buying
and TT Selling Rate (the "Middle Rate"). While accepting the said
Award, the Company has worked out and submitted a computation on 30th
June, 2005 to GOI indicating the amount receivable at Rs 121.43 Million
being the amount short paid by GOI nominees up to 19th June, 2005 and
interest thereon also calculated up to 19th June, 2005. The Company
further sent various communications updating its claim receivable from
GOI Nominees. The last updated claim was made vide its' letter dated
31st January, 2012 wherein total amount receivable from GOI Nominees is
computed at Rs 839.70 Million, being the amount short paid by GOI
Nominees up to 31st December 2011 including interest thereon of Rs
120.10 Million also calculated up to 31st December, 2011. The payments
to be made by the GOI's nominees in terms of the Award dated 31st
March, 2005 is also pending before the Arbitral Tribunal in terms of
the Interim Applications filed. The GOI has filed an Original
Miscellaneous Petition (OMP) 329 of 2006 dated 20th July, 2006 before
Hon'ble Delhi High Court challenging the award in respect of this
issue. Another OMP 223 of 2006 dated 9th May, 2006 has been filed by
GOI's nominees HPCL and BRPL in the Hon'ble Delhi High Court
challenging the Partial Award dated 31st March, 2005 in respect of
Conversion/ Exchange Rate Matter. The Hon'ble Delhi High Court has on
31st October, 2011 reserved its judgement in respect of both OMP 223 of
2006 and OMP 329 of 2006. The Ministry of Petroleum and Natural Gas
(MoPNG) vide its letter dated 11th October, 2011, advised the GOI
nominees to make payment against the amounts claimed by the Company on
ad-hoc basis after obtaining appropriate indemnity from the Company.
Accordingly, during the year such short payment of Rs 719.60 Million
calculated till 31st December, 2011, has been accounted for as
Sales/Income from Operations and amount of Rs 120.10 Million has been
recognised as Interest. However, the GOI nominees have not released
such amounts as yet and continue to make payments at the exchange rate
without considering the directives of the Hon'ble Arbitral Tribunal
and the MoPNG in this regard.
f) In respect of disputes with regards to additional profit petroleum,
the GOI had vide its' letter dated 3rd November, 2006 raised a
collective demand of Rs 334.13 Million on account of additional profit
petroleum payable and interest on delayed payments of profit petroleum
calculated up to 30th September, 2006 pursuant to the Partial Arbitral
Award dated 31st March, 2005 in the Dispute stated above and Interim
Award dated 12th February, 2004 and Partial Award dated 23rd December,
2004. The Company has disputed such demand and is instead seeking
refund of US$ 16.70 Million equivalent to Rs 668.67 Million already
excess paid by the Company to the GOI with interest thereon.
Subsequently, GOI has in June 2008 through its Nominees deducted a
further sum of Rs 372.21 Million being its' claim of additional profit
petroleum and interest on delayed payment of profit petroleum computed
up to 30th April, 2008. Such deduction, also being in contravention of
the above referred Arbitral Awards, is disputed by the Company.
g) Dispute with regards to quantum allowed as the Base Development
Costs (the "BDC") and consequent effect of the same to additional
profit petroleum payable on account of disputed BDC was referred to
international arbitration. The GOI had contended that the Contractors
had claimed BDC to the extent of US$ 499 Million which is in excess of
the admissible BDC of US$ 261.57 Million thus impacting the profit
petroleum figures for the period upto FY 2008-09. The GOI had contended
that it was eligible for sharing profit petroleum, to be calculated
each year upto FY 2008-09 in respect of excessive BDC claimed by the
Contractors. The Hon'ble Arbitration Tribunal has passed the Arbitral
Award on 18th January, 2011 substantially in favour of the Company.
However, the Arbitration Tribunal held that the GOI is entitled to be
credited by the Contractors with US$ 22.31 Million (out of which the
Company's share is US$ 5.58 Million being 25% of US$ 22.31 Million)
in the final settlement of cost recovery accounts in relation to
Development Costs incurred during contract year 1994-95 to 1999-2000 in
excess of US$ 198.43 Million. Accordingly the Operator on behalf of the
Company has revised the cost recovery accounts statement and
calculation of the Companies' PTRR, in the DGH format, for the years
1997-98 till 2009-10, based on the findings of the Arbitration Award,
and such revised statements are submitted on 29th April, 2011. The GOI
has not yet responded to such communication of the Operator. Instead,
the GOI has preferred an appeal against the said Arbitral Order before
the Hon'ble Malaysian Federal Court at Kuala Lumpur in April 2011 and
also before the Hon'ble High Court of Delhi in April 2011 seeking
quashing of the Arbitral Award. The Hon'ble High Court of Delhi has
vide its judgement dated 25th April, 2012 dismissed such petition.
Also, the Contractors (including the Company) had filed an Anti-Suit
application before the Hon'ble Malaysian Federal Court at Kuala
Lumpur in June 2011 which has since been dismissed. The Contractors
(including the Company) has filed an appeal against such order and the
same is listed for case management on 1st June, 2012.
Any further sum required to be paid or returnable in respect of dispute
referred above at (a) to (g) in accordance with the determination of
the amount by the Hon'ble Arbitral Tribunal/relevant courts in this
behalf shall be accounted for on the final outcome in those matters.
3. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs 772.79 Million
(Previous period Rs 274.67 Million).
4. Capital Work-in-Progress includes advances for capital assets of Rs
466.35 Million (Previous period Rs 2,120.97 Million) and interest and
other finance charges capitalised during the year Rs 827.97 Million
(Previous period Rs 1,082.45 Million).
5. Secured Loans
a) The Non-Convertible Debentures are secured by first 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 ranking pari-passu with the charge created/ to be
created in favour of Financial Institutions/Banks in respect of their
existing and future financial assistance. Also guaranteed by Mr.
Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.
The Debentures are redeemable at par on 1st January, 2012.
b) The Term Loans are secured by mortgage of immovable assets, existing
and future, of the Company and a floating charge on all movable assets,
present and future, except book debts, subject to prior charge of the
Bankers on stock of raw materials, finished, semi finished goods and
other movables, for securing working capital loans in the ordinary
course of business, and exclusive charge created on specific items of
machinery financed by the respective lenders. The above charges rank
pari-passu inter-se for all intents and purposes. The above loans are
guaranteed by Mr. Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.
A part of loans from banks are secured by first pari-passu charge on
book debts of consumer electronics and home appliances division which
are not charged to bankers for securing working capital loans.
A part of loans from banks are secured by the assignment of fixed and
floating charge on all moneys received/to be received by the Company in
relation to and from the Ravva Joint Venture, including all receivables
of the Ravva Oil and Gas field, subject to the extent necessary, to the
charge in favour of the Joint Ventures in terms of the Production
Sharing Contract/Joint Operating Agreement in respect of Ravva Joint
Venture; and the assignment/fixed and floating charge of all the right,
title and interest into and under all project documents, including but
not limited to all contracts, agreements or arrangements which the
Company is a part to, and all leases, licenses, consents, approvals
related to the Ravva Joint Venture, insurance policies in the name of
the Company, in a form and manner satisfactory to the Trustee.
A part of loan is secured by Equitable Mortgage on pari-passu basis on
immovable property situated at Videocon Tower, New Delhi and Equitable
Mortgage on pari-passu basis on immovable property including land,
building and machinery situated at Village Manjra, Warora, Dist.
Chandrapur.
A part of loan is secured by mortgage of immovable assets and first
charge on movable assets, cash flows and intangible assets pertaining
to the 5.75 MW Multi Crystelline Silicon Photovoltaic Technology
Project at Warora.
Some of the loans are also secured by pledge of certain investments of
the Company.
c) External Commercial Borrowings are secured by a first ranking
pari-passu charge over all the present and future movable and immovable
fixed assets. The loan is further secured by personal guarantees of Mr.
Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.
d) Vehicle Loans from Banks are secured by way of hypothecation of
Vehicles acquired out of the said loan. The loans are also secured by
personal guarantee of Mr. Venugopal N. Dhoot.
e) Working Capital Loans from Banks are secured by hypothecation of the
Company's stock of raw materials, packing materials, stock-in-
process, finished goods, stores and spares, book debts of Glass Shell
Division only and personal guarantees of Mr. Venugopal N. Dhoot and Mr.
Pradipkumar N. Dhoot.
6. Unsecured Loans
a) Unsecured Rupee Loans from Banks are guaranteed by Mr. Venugopal N.
Dhoot and Mr. Pradipkumar N. Dhoot, the directors of the Company.
b) The Company has availed interest free Sales Tax Deferral under
Special Incentive to Prestigious Unit (Modified) Scheme. Out of total
outstanding, Rs 31.02 Million is repayable in two equal annual
installments commencing from 30th May, 2012, Rs 8.78 Million is
repayable in seven monthly installments commencing from 20th October,
2013, Rs 12.48 Million is repayable in seven monthly installments
commencing from 20th October, 2014 and Rs 4.16 Million is repayable on
31st March, 2016.
7. The Company had, during the year 2010, issued 2,000 Foreign
Currency Convertible Bonds of US$ 100,000 each (Bonds) due on 16th
December, 2015, out of which 1,944 (Previous period 2,000) Bonds are
outstanding.
i) The Bonds are convertible at the option of the bondholders at any
time on or after 25th January, 2011 to 7 days before maturity date i.e.
16th December, 2015, at a fixed exchange rate of Rs 45.255 per 1 US$ and
at initial conversion price of Rs 239.5265 per share being at premium of
3% over reference share price. The conversion price will be subject to
adjustment for, among other things, subdivision or consolidation of
shares, rights issues, capital distributions, stock dividends and other
dilutive events.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 15th December, 2013, if the closing price of
shares for each of the 30 consecutive trading days prior to the date on
which notice of such redemption is given was at least 130% of the
conversion price.
iii) The Bonds are redeemable at maturity date i.e. on 16th December,
2015 at its principal amount, if not redeemed or converted earlier.
8. The Company has made a provision of Rs 1,295.40 Million (Previous
period Rs 1,810.00 Million) towards Current Income Tax, after taking
into consideration the benefits admissible under the provisions of the
Income Tax Act, 1961. The Company has also made a provision of Rs 1.14
Million (Previous period Rs 1.25 Million) towards Wealth Tax. The same
are, in the opinion of the Management, adequate.
9. The Company has, directly and through its subsidiaries, made
investments of Rs 15,000.00 Million, given share application money of Rs
5,000.00 Million and advanced loans of Rs 19,620.84 Million to Videocon
Telecommunications Limited (VTL), the subsidiary. VTL was granted
Unified Access Services (UAS) Licenses in 21 circles on 10th January,
2008 and had also been allotted spectrum in 20 circles out of which it
has launched its services in 16 circles.
The Hon'ble Supreme Court of India, vide its judgment dated 2nd
February, 2012 in two separate writ petitions filed by Centre for
Public Interest Litigation and by another, has quashed all the UAS
licenses granted on or after 10th January, 2008 and the subsequent
allocation of spectrum to these licencees. This includes the 21
licenses issued to VTL and the spectrum allotted to it in 20 circles.
The Hon'ble Supreme Court of India had directed that its aforesaid
order shall be operative after four months from 2nd February, 2012. On
24th April, 2012, the Hon'ble Supreme Court of India modified its
order and postponed the operation of its order of quashing the Telecom
Licenses and related allocation of spectrum to 7th September, 2012. The
Hon'ble Supreme Court of India has, vide order dated 2nd February,
2012, also directed TRAI to make fresh recommendations for grant of
licenses and allocation of spectrum and the Central Government to grant
fresh licenses and allocation of spectrum by auction thereafter. The
Central Government has announced that it will complete the auction of
licenses and related spectrum on or before 31st August, 2012.
Pending the fresh auction as mentioned above, VTL is continuing its
business. It proposes to participate in the fresh auction and is
hopeful of continuing the business thereafter. Accordingly, in the
opinion of the management, no provision is required for diminution in
the value of aforesaid investments, share application money and
advances.
10. a) Unincorporated Joint Ventures:
The Financial Statements reflect the share of the Company in the assets
and the liabilities as well as the income and the expenditure of Joint
Venture Operations on a line-by-line basis. The Company incorporates
its share in the operations of the Joint Venture based on statements of
account received from the Operator. The Company has, in terms of
Accounting Policy No. A-5 above, recognised abandonment costs based on
the technical assessment of current costs as cost of producing
properties and has provided depletion thereon under 'Unit of
Production' method as part of Producing Properties in line with
Guidance Note on Accounting of Oil and Gas Producing Activities issued
by the Institute of Chartered Accountants of India.
i) The Company has participating interest of 25% in Ravva Oil and Gas
Field Joint Venture (JV) through a Production Sharing Contract (PSC).
Other members of the JV are Oil and Natural Gas Corporation Limited,
Cairn Energy India Pty Limited and Ravva Oil (Singapore) Pte. Limited.
The parties have pursuant to the PSC, entered into a Joint Operating
Agreement. Cairn Energy India Pty Limited is the Operator.
ii) The Company has participating interest of 8.4% in Block WA- 388-P
in exploration permit for a term of 6 years from 28th August, 2006. The
Joint Venture (JV) comprises of the Company, Oilex Limited, Gujarat
State Petroleum Corporation Limited, Hindustan Petroleum Corporation
Limited, Bharat Petroleum Corporation Limited, Sasol Petroleum
Australia Ltd and Apache Northwest Pty Limited ("Apache"). Apache
is the Operator with 40% interest in JV. The Capital Commitments based
on estimated minimum work programme in relation to it's participating
interest is Rs 1.96 Million (Previous period Rs 7.69 Million).
b) Incorporated Jointly Controlled Entities:
i) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint
Venture Company incorporated in India, with Infinity Infotech Parks
Limited to carry on the business of infrastructure development like
construction of IT/IT es Parks, Biotech Parks etc. The Joint Venture
Company has not commenced its commercial operations. The capital
commitment of Videocon Infinity Infrastructures Private Limited is Rs
93.75 Million (Previous period Rs Nil).
11. The Company has kept the investment activities separate and
distinct from the normal business. Consequently, all the income and
expenditure pertaining to investment activities have been allocated to
the Investments and Securities Division and the income/(loss) after
netting of the related expenditure has been shown as "Income/(Loss)
from Investments and Securities Division" under "Other Income"
which includes in respect of the long term investments, dividend of Rs
6.63 Million (Previous period Rs 8.50 Million), loss on sale/ disposal
of investments of Rs 46.29 Million (Previous period Rs 2.98 Million),
interest on debentures/bonds of Rs 4.23 Million (Previous period Rs 86.27
Million) and in respect of current investments, dividend of Rs Nil
(Previous period Rs 1.26 Million).
12. There are no amounts due to be credited to the Investor Education
and Protection Fund.
13. 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.
14. The Balances of some of the Debtors, Creditors, Deposits, Advances
and Other Current Assets are subject to confirmation.
15. 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 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.
16. Employee Benefits:
Disclosure pursuant to Accounting Standard (AS) 15 (Revised)
I) Defined Contribution Plans:
Amount of Rs 121.77 Million (Previous period Rs 127.07 Million) is
recognised as an expense and shown under the head "Salary, Wages and
Employees' Benefits" (Schedule 12) in the Profit and Loss Account.
II) Defined Benefit Plans:
a) The amounts recognised in the Balance Sheet as at the end of the
year/period
i) Present Value of Defined Benefit Obligation
ii) Fair value of Plan Assets
iii) Funded Status - Surplus/(Deficit)
iv) Net Assets/(Liability)
b) The amounts recognised in Profit and Loss Account for the
year/period
i) Current Service Cost
ii) Interest Cost
iii) Actuarial (Gains)/Losses
iv) Actual Return on Plan Assets
v) Total Expenses
c) The changes in Obligations during the year/period
i) Present value of Defined Benefit Obligation at the beginning of the
year
ii) Current Service Cost
iii) Interest Cost
iv) Actuarial (Gains)/Losses
v) Benefit Payments
vi) Present value of Defined Benefit Obligation at the end of the
year/period
d) The changes in Plan Assets during the year/period
i) Plan Assets at the beginning of the year
ii) Contribution by Employer
iii) Actual Benefit paid
iv) Plan Assets at the end of the year/period
v) Actual return on Plan Assets
e) Actuarial Assumptions
i) Discount Rate
ii) Mortality
iii) Turnover Rate
iv) Future Salary Increase
17. 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 Standards are given below:
A) List of Related Parties where control exists and related parties
with whom transactions have taken place and relationship:
i) Subsidiaries:
a) Chhattisgarh Power Ventures Private Limited
b) Eagle ECorp Limited
c) Flair Energy Private Limited (w.e.f. 2nd March, 2011 to 20th
October, 2011)
d) Liberty Videocon General Insurance Company Limited (w.e.f. 19th
December, 2011)
e) Middle East Appliances LLC
f) Pipavav Energy Private Limited
g) Prosperous Energy Private Limited (w.e.f. 1st March, 2011)
h) Senator Energy Private Limited (upto 20th October, 2011)
i) Triumph Energy Private Limited (upto 20th October, 2011)
j) Videocon Electronics (Shenzhen) Limited
(Chinese Name - Weiyoukang Electronic (Shenzhen) Co., Ltd.)
k) Videocon Global Limited
l) Videocon Oil Ventures Limited and its subsidiaries *
- Videocon Estelle Limited (w.e.f. 14th January, 2011)
- Videocon Ivory Limited (w.e.f. 14th January, 2011)
- Videocon Hydrocarbon Holdings Limited and its subsidiaries **
- Videocon JPDA 06-103 Limited
- Videocon Mozambique Rovuma 1 Limited
- Videocon Indonesia Nunukan Inc.
- Videocon Energy Brazil Limited
- Videocon Australia WA-388-P Limited
- Oil Services International S.A.S.
m) Videocon Energy Ventures Limited and its subsidiary
- Videocon Oman 56 Limited
n) Videocon International Electronics Limited and its subsidiaries
- Jumbo Techno Services Private Limited
- Senior Consulting Private Limited
- Videocon Telecommunications Limited and its subsidiary
- Datacom Telecommunications Private Limited
o) Videocon Energy Limited and its subsidiaries
- Videocon Power Ventures Limited and its subsidiaries (upto 20th
October, 2011)
- Aim Energy Private Limited (upto 20th October, 2011)
- Marvel Energy Private Limited (upto 20th October, 2011)
- Viable Energy Private Limited (upto 20th October, 2011)
- Vital Power Private Limited (upto 20th October, 2011)
- Proficient Energy Private Limited and its subsidiaries ***
- Instant Energy Private Limited (upto 20th October, 2011)
- Orchid Energy Private Limited (upto 20th October, 2011)
- Applied Energy Private Limited and its subsidiaries
- Comet Power Private Limited
- Galaxy Power Private Limited (upto 20th October, 2011)
- Percept Energy Private Limited (upto 20th October, 2011)
- Unity Power Private Limited
* Videocon Oil Ventures Limited was a subsidiary of Videocon Energy
Limited up to 1st July, 2011. It became a wholly owned subsidiary of
Videocon Industries Limited w.e.f. 2nd July, 2011.
** Videocon Industries Limited w.e.f. 21st December, 2010 acquired
97.54% of the share capital of Videocon Hydrocarbon Holdings Limited
(VHHL). w.e.f. 12th July, 2011 VHHL became step down subsidiary of
Videocon Industries Limited since Videocon Industries Limited
transferred 96.54% of shareholding in VHHL to Videocon Oil Ventures
Limited.
*** Proficient Energy Private Limited was a subsidiary of Marvel Energy
Private Limited up to 19th October, 2011. It became a subsidiary of
Videocon Energy Limited w.e.f. 20th October, 2011.
ii) Associates and Joint Ventures:
- Goa Energy Private Limited - Associate - 26%
- Radium Energy Private Limited - Associate - 26%
- Videocon Infinity Infrastructure Private Limited - Joint Venture -
50%
- IBV Brasil Petroleo Limitada - (50% Joint Venture of Videocon Energy
Brazil Limited)
- Northwest Energy Private Limited - (Associate of Proficient Energy
Private Limited - 47%, w.e.f. 15th September, 2011)
iii) Key Management Personnel:
- Mr. Venugopal N. Dhoot - Chairman & Managing Director
- Mr. Pradipkumar N. Dhoot - Whole Time Director
- Mr. S. K. Jain - Senior Vice President
- Mr. Shekhar Jyoti - Vice President
- Mr. C. M. Singh - Vice President (w.e.f. 1st January, 2011)
- Mr. J. R. Rathore - Senior Vice President (w.e.f. 1st January, 2011)
- Mr. Abhijit Kotnis - Vice President
C) Material transactions with Related Parties during the year are:
Sales to Videocon Telecommunications Limited (on high seas basis) Rs
335.80 Million (Previous period Rs 6,338.33 Million), Instant Energy
Private Limited Rs 88.95 Million (Previous period Rs Nil); Purchases from
Middle East Appliances LLC Rs 89.75 Million (Previous period Rs 67.04
Million); Subscription to Shares/Share Application Money (Investments)
of Videocon Oil Ventures Limited Rs 10,000.00 Million (Previous period Rs
Nil), Sale of Shares of Videocon Hydrocarbon Holdings Limited to
Videocon Oil Ventures Limited Rs 8,908.82 Million (Previous period Rs
Nil); Interest recovered from Videocon Telecommunications Limited Rs
2,435.16 Million (Previous period Rs 459.75 Million) and Goa Energy
Private Limited Rs 90.42 Million (Previous period Rs 44.63 Million);
Advances/Loans given to Videocon Telecommunications Limited Rs 10,870.05
Million (Previous period Rs 681.32 Million), Videocon Oil Ventures
Limited Rs 5,296.22 Million (Previous period Rs 0.43 Million), Videocon
Global Limited Rs 2,840.30 Million (Previous period Rs 707.82 Million);
Advances/Loans received back from Videocon Energy Limited Rs 1,939.08
Million (Previous period Rs Nil), Chhattisgarh Power Ventures Private
Limited Rs 556.64 Million (Previous period Rs Nil); Advances/ Loans
received from Proficient Energy Private Limited Rs 67.70 Million
(Previous period Rs Nil), Videocon Electronics (Shenzhen) Limited Rs
13.99 Million (Previous period Rs Nil).
18. The Company has prepared the Consolidated Financial Statements as
per Accounting Standard (AS) 21 and accordingly the segment information
as per AS-17 "Segment Reporting" has been presented in the
Consolidated Financial Statements.
Loans and Advances shown above, to subsidiaries fall under the category
of 'Loans and Advances' in nature of Loans where there is no
repayment schedule and are repayable on demand.
b) Investment by the loanee in the shares of the Company:
None of the loanees have made investments in the shares of the Company.
19. 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., 30th Sept.,
2010 2009
1. Contingent Liabilities not provided for:
a) Letters of Guarantees 47,465.62 59,757.26
b) Letters of Credit opened 17,806.63 4,015.05
c) Customs Penalty 11.00 23.96
d) Customs Duty demands under dispute 400.74 156.09
[Amount paid underprotest Rs. 0.07 million
(Previous year Rs. 0.82 million)]
e) Income Tax demands under dispute 351.13 349.38
f) Excise Duty and Service Tax demands 324.55 189.37
under dispute[Amount paid under protest
Rs. 4.21 million
(Previous year Rs. 4.21million)]
g) Sales Tax demands under dispute 108.04 156.38
[Amount paid under protest Rs. 30.92 million
(Previous year Rs. 57.91 million)]
h) Others 422.30 422.30
[Amount paid under protest Rs. 50.00 million
(Previous year Rs. 50.00 million)]
i) Show Cause Notices (SCNs) have been served on the Operator of the
Ravva Oil & Gas Field Joint Venture (Ravva JV) for non payment of
Service Tax and Educational Cess on various services for the period
16th August, 2002 to 31st March, 2010. The amount involved relating to
Ravva Block is Rs. 420.55 million (Previous year Rs. 415.28 million).
The Operator is contesting the SCNs/demands before Commissioner of
Service Tax and has fled writ petition before Honble High Court of
Madras challenging service tax demands on some of the services and
believes that its position is likely to be upheld. The ultimate outcome
of the matter cannot be presently determined and no provision for any
liability that may result has been made in the accounts as the same is
subject to agreement by the members of the Joint Venture. Should it
ultimately become payable, the CompanyÃs share as per the participating
interest would be upto Rs. 105.14 million (Previous year Rs. 103.82
million).
j) Disputed Income Tax demand amounting to Rs. 22.29 million (Previous
year Rs. 22.29 million) in respect of certain payments made by Ravva
Oil & Gas Field Joint Venture is currently pending before the Income
Tax Appellate Tribunal. The ultimate outcome of the matter cannot
presently be determined and no provision for any liability that may
result has been made as the same is subject to agreement by the members
of the Joint Venture. Should it ultimately become payable, the
Companys share as per the participating interest would be upto Rs.
5.57 million (Previous year Rs. 5.57 million).
2. a) There is a dispute regarding the deductibility of certain cost in
the computation of post tax rate of return. A Partial / Interim Award
was issued by an International Arbitration Tribunal under the UNCITRAL
Rules on 31st March, 2005 in favour of the Company in respect of a
dispute between the Company and Government of India ("GOI") inter- alia
regarding deductibility of Oil and Natural Gas Corporation Limited
Carry costs ("ONGC Carry") while computing the Post Tax Rate of Return
("PTRR") under the Ravva Production Sharing Contract ("PSC"). However,
the Company and the GOI were not able to agree upon the amounts due to
/payable by the Company in terms of the Partial/Interim Award, and
therefore the Company on 7th July, 2005 fled Interim Applications
before the Arbitral Tribunal seeking a determination of the amounts due
to/payable by the Company on the basis of the calculations made by the
Company in these Applications and interest payable/receivable on such
final determined amounts. The said Partial/ Interim Award was
challenged by GOI on 10th May, 2005 before the High Court in Malaysia
with a prayer for setting aside the Partial Award dated 31st March,
2005. The Company challenged the jurisdiction of the High Court in
Malaysia and therefore the maintainability of such a proceeding before
that Court. The High Court in Malaysia, by a pronouncement dated 5th
August, 2009, upheld the contentions of the Company and dismissed the
challenge fled by the GOI to the Award dated 31st March, 2005 on the
ONGC Carry issue. The GOI fled a Notice of Appeal in December, 2010
before the Appellate Court at Malaysia. Simultaneously the Company
moved an application on 13th October, 2009 before the High Court of
Justice, QueenÃs Bench Division, Commercial Court at London seeking a
declaration that the Seat of the arbitration in respect of the said
Arbitration matter between the Company and the GOI is London, England.
The GOI and the Company had in the SLP (Civil) No. 16371 of 2008 before
the HonÃble Supreme Court of India (see note (c) below) agreed that
except for completion of pleadings, neither party will proceed with the
hearing of their respective matters before the Appellate Court at
Malaysia and the High Court at London till the disposal of the SLP
(Civil) No. 16371 of 2008.
b) There is a dispute with regards to conversion of US$ into Indian
Rupees for payment of invoice for sale of crude. A dispute regarding
the rate of conversion from US$ into Indian rupees applicable to the
Nominees of the GOI for the purpose of payment of amount of the
invoices for sale of the Crude Oil by the Company under the Ravva PSC
was referred to an International Arbitral Tribunal under the UNCITRAL
Rules in accordance with the provisions of the Ravva PSC. The Tribunal
by its Partial / Interim Award dated 31st March, 2005 held that the
payment to the Company should be made after converting the US$ amount
into Indian Rupees at the average of the State Bank of India TT Buying
and TT Selling Rate (the "Middle Rate"). While accepting the said
Award, the Company has worked out and submitted a computation on 30th
June, 2005 to GOI indicating the amount receivable at Rs. 121.43
million being the amount short paid by GOI nominees up to 19th June,
2005 and interest thereon also calculated up to 19th June, 2005. The
Company further sent various communications updating itsà claim
receivable from GOI Nominees. During the period, the Company further
updated itsà claim in this respect vide itsà letter dated 27th
November, 2010 wherein total amount receivable from GOI Nominees is
computed at Rs. 665.37 million, being the amount short paid by GOI
Nominees up to 30th September, 2010 and interest thereon also
calculated up to 30th September, 2010. The payments to be made by the
GOIÃs nominees in terms of the Award dated 31st March, 2005 is also
pending before the Arbitral Tribunal in terms of the Interim
Applications fled. The GOI has fled an Original Miscellaneous Petition
(OMP) 329 of 2006 dated 20th July, 2006 before HonÃble Delhi High Court
challenging the award in respect of this issue. Another OMP 223 of
2006 dated 9th May, 2006 has been fled by GOIÃs nominees HPCL and BRPL
in the HonÃble Delhi High Court challenging the Partial Award dated
31st March, 2005 in respect of Conversion/ Exchange Rate Matter. Both
OMP 223 of 2006 and OMP 329 of 2006 are presently sub-judice before the
HonÃble Delhi High Court. The GOI nominees continue to make payments at
the exchange rate without considering the directives of the HonÃble
Arbitral Tribunal in this regard.
c) GOI has fled OMP 255 of 2006 dated 30th May, 2006 before the HonÃble
Delhi High Court under section 9 of the Arbitration and Conciliation
Act, 1996, seeking a declaration that the seat of the arbitration as
regards the disputes between the Company and the GOI is Kuala Lumpur
and not
London. The HonÃble Arbitral Tribunal vide itsà letter dated 11th
April,2007 has indicated that it shall continue with the arbitration
proceedings, in respect of the disputes referred above, after receiving
the judgement of the HonÃble Delhi Court in OMP 255 of 2006. The
HonÃble Delhi High Court has held, vide judgement dated 30th April,
2008, that it has the jurisdiction to hear the matters arising out of
arbitration process and that the matter be heard on merits as against
the CompanyÃs contention that the said petition itself was not
maintainable. The Company has, in this respect, fled Special Leave
Petition (SLP) (Civil) No. 16371 of 2008 before the HonÃble Supreme
Court of India to decide the issue of maintainability of OMP 255 of
2006. The HonÃble Supreme Court, after hearing the Parties, has on 11th
May, 2011, passed judgement in the matter upholding the CompanyÃs
contentions while quashing the judgement dated 30th April, 2008 of the
HonÃble Delhi High Court.
d) In respect of disputes with regards to additional profit petroleum,
the GOI had vide itsà letter dated 3rd November, 2006 raised a
collective demand of Rs. 334.13 Million on account of additional profit
petroleum payable and interest on delayed payments of profit petroleum
calculated up to 30th September, 2006 pursuant to the Partial Arbitral
Award dated 31st March, 2005 in the Dispute stated above and Interim
Award dated 12th February, 2004 and Partial Award dated 23rd December,
2004. The Company has disputed such demand and is instead seeking
refund of US$ 16.70 million equivalent to Rs. 668.67 million already
excess paid by the Company to the GOI with interest thereon.
Subsequently, GOI has in June 2008 through its Nominees deducted a
further sum of Rs. 372.21 million being itsà claim of additional profit
petroleum and interest on delayed payment of profit petroleum computed
up to 30th April, 2008. Such deduction, also being in contravention of
the above-referred Arbitral Awards, is disputed by the Company.
e) Dispute with regards to Base Development Costs. The matter with
respect to additional profit petroleum payable on account of disputed
Base Development Costs was referred to international arbitration. The
GOI had contended that the Contractors had claimed base development
costs to the extent of US$ 499 million which is in excess of the
admissible base development costs of US$ 261.57 million thus impacting
the profit petroleum figures for the period upto Financial Year
2008-09. The GOI had contended that it was eligible for sharing profit
petroleum, to be calculated each year upto FY 2008-09 in respect of
excessive base development costs claimed by the Contractors. The
HonÃble Arbitration Tribunal has passed the Arbitral Award on 18th
January, 2011 substantially in favour of the Company. However, the
Arbitration Tribunal held that the GOI is entitled to be credited with
US$ 22.31 million (out of which the CompanyÃs share is US$ 5.58
million) in the final settlement of cost recovery accounts in relation
to Development Costs incurred during contract year 1994-95 to 1999-2000
in excess of US$ 198.43 million. Accordingly the Operator on behalf of
the Company has revised the cost recovery accounts statement and
calculation of the Companiesà PTRR, in the DGH format, for the years
1997-98 till 2009-10, based on the findings of the Arbitration Award,
and such revised statements are submitted on 29th April, 2011. The GOI
has not yet responded to such communication of the Operator. Instead,
the GOI has preferred an appeal against the said Arbitral Order before
the HonÃble Malaysian Federal Court at Kuala Lumpur in April 2011 and
also before the HonÃble High Court of Delhi in April 2011 seeking
quashing of the Arbitral Award.
Any further sum required to be paid or returnable in respect of
disputes referred above at (a) to (e) in accordance with the
determination of the amount by the HonÃble Arbitral Tribunal/relevant
courts in this behalf shall be accounted for on the final outcome in
this regard.
3. Estimated amounts of contracts remaining to be executed on Capital
account and not provided for (net of advances) Rs. 274.67 million
(Previous year Rs. 324.16 million).
4. Capital Work-in-Progress includes advances for capital assets of
Rs. 2,120.97 million (Previous year Rs. 2,465.46 million) and Interest
and other finance charges capitalised during the period Rs. 1,082.45
million (Previous year Rs. 883.70 million).
5. Secured Loans
a) The Non-Convertible Debentures are secured by first 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 ranking pari passu with the charge created/ to be
created in favour of Financial Institutions/Banks in respect of their
existing and future financial assistance. Also guaranteed by Mr.
Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.
The Debentures are redeemable at par, in four equal quarterly
installments with the earliest redemption being on 31st March, 2011 and
last redemption date being 31st December, 2011.
b) The Term Loans are secured by mortgage of existing and future assets
of the Company and a floating charge on all movable assets, present and
future except book debts, subject to prior charge of the Bankers on
stock of raw materials, finished, semi finished goods and other
movables, for securing working capital loans in the ordinary course of
business, and exclusive charge created on specific items of machinery
financed by the respective lenders. The above charges rank pari passu
inter-se for all intents and purposes. The above loans are guaranteed
by Mr. Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot. A part of loans
from banks are secured by first pari passu charge on book debts of
consumer electronics and home appliances division which are not charged
to bankers for securing working capital loans.
A part of loans from banks are secured by the assignment of fixed and
floating charge on all moneys received/to be received by the Company in
relation to and from the Ravva Joint Venture, including all receivables
of the Ravva Oil and Gas field, subject to the extent necessary, to the
charge in favour of the Joint Ventures in terms of the Production
Sharing Contract/ Joint Operating Agreement in respect of Ravva Joint
Venture; and the assignment/ fixed and floating charge of all the
right, title and interest into and under all project documents,
including but not limited to all contracts, agreements or arrangements
which the Company is a part to, and all leases, licenses, consents,
approvals related to the Ravva Joint Venture, insurance policies in the
name of the Company, in a form and manner satisfactory to Trustee.
c) External Commercial Borrowings are secured by a first charge ranking
pari-passu over all the present and future movable and immovable fixed
assets. The loan is further secured by personal guarantees of Mr.
Venugopal N. Dhoot and Mr. Pradipkumar N. Dhoot.
d) Vehicle Loans from Banks are secured by way of hypothecation of
Vehicles acquired out of the said loan. The loans are also secured by
personal guarantee of Mr. Venugopal N. Dhoot.
e) Working capital loans from banks are secured by hypothecation of the
Companys stock of raw materials, packing materials, stock-in- process,
finished goods, stores and spares, book debts of Glass Shell Division
only and personal guarantees of Mr. Venugopal N. Dhoot and Mr.
Pradipkumar N. Dhoot.
6. Unsecured Loans
a) Unsecured Rupee Loans from Banks are guaranteed by Mr. Venugopal N.
Dhoot and/or Mr. Pradipkumar N. Dhoot, the directors of the Company.
b) The Company has availed interest free Sales Tax Deferral under
Special Incentive to Prestigious Unit (Modifed) Scheme. Out of total
outstanding, Rs. 46.53 million is repayable in three equal annual
installments commencing from 30th May, 2011, Rs. 8.78 million in seven
monthly installments commencing from 20th October, 2013 and Rs. 12.48
million in seven monthly installments commencing from 20th October,
2014.
7. The Company had, during the year 2006, issued:
a) 90,000 Foreign Currency Convertible Bonds of US$ 1,000 each (Bonds)
due on 7th March, 2011, out of which 41,820 (Previous year 41,820)
Bonds are outstanding.
i) The Bonds are convertible at the option of the bondholders at any
time on and after 20th March, 2006, upto the close of business on 28th
February, 2011 at a fixed exchange rate of Rs. 44.145 per 1 US$ and at
initial conversion price of Rs. 545.24 per share being at premium of
15% over the reference share price. The conversion price shall be
adjusted downwards in the event that the average closing price of
shares for 15 consecutive trading days immediately prior to the reset
date is less than conversion price, subject to a floor price of Rs.
410/- as adjusted in accordance with the anti-dilution provisions.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 7th February, 2009 but prior to 28th February,
2011, if aggregate value on each of 30 consecutive trading days ending
not earlier than 14 days prior to the date upon which notice of such
redemption is given was at least 130% of the accreted principal amount.
iii) The Bonds are redeemable at maturity date i.e. on 7th March, 2011
at 116.738% of its principal amount, if not redeemed or converted
earlier.
b) 105,000 Foreign Currency Convertible Bonds of US$ 1,000 each (Bonds)
due on 25th July, 2011, out of which 66,651(Previous year 66,651) Bonds
are outstanding.
i) The Bonds are convertible at the option of the bondholders at any
time on or after 2nd September, 2006, until 18th July, 2011, except for
certain closed periods, at a fixed exchange rate of Rs. 46.318 per 1
US$ and at initial conversion price of Rs. 511.18
per share being at premium of 22% over reference share price. The
conversion price shall be adjusted downwards in the event that the
average closing price of shares for 15 consecutive trading days
immediately prior to the reset date is less than conversion price,
subject to a floor price of Rs. 410/- as adjusted in accordance with
the anti-dilution provisions.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 24th August, 2009, if aggregate value on each
of 30 consecutive trading days ending not earlier than 14 days prior to
the date upon which notice of such redemption is given was at least
130% of the accreted principal amount.
iii) The Bonds are redeemable at maturity date i.e. on 25th July, 2011
at 127.65% of its principal amount, if not redeemed or converted
earlier.
8. The Company has, during the period, issued 2,000 Foreign Currency
Convertible Bonds of US$ 100,000 each (Bonds) due on 16th December,
2015 amounting to US$ 200 million:
i) The Bonds are convertible at the option of the bondholders at any
time on or after 25th January, 2011 to 7 days before maturity date i.e.
16th December, 2015, at a fixed exchange rate of Rs. 45.255 per 1 US$
and at initial conversion price of Rs. 239.5265 per share being at
premium of 3% over reference share price. The conversion price will be
subject to adjustment for, among other things, subdivision or
consolidation of shares, rights issues, capital distributions, stock
dividends and other dilutive events.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 15th December, 2013, if the closing price of
shares for each of the 30 consecutive trading days prior to the date on
which notice of such redemption is given was at least 130% of the
conversion price.
iii) The Bonds are redeemable at maturity date i.e. on 16th December,
2015 at its principal amount, if not redeemed or converted earlier.
9. a) The Company had issued and allotted 11,765,000 Warrants on 1st
June, 2009 for a consideration of Rs. 42.50 per warrant being the
warrant subscription price. Each Warrant entitled the holder to
subscribe to one Equity Share within a period of 18 months from the
date of allotment at the price of Rs. 170/- per equity share.
Accordingly, during the period, the Company has allotted 11,765,000
Equity Shares of face value of Rs. 10 each, at a price of Rs. 170/- per
Equity Share to Warrant Holder pursuant to option exercised by them.
b) During the period, the Company has allotted:
i) 1,858,275 and 7,541,300 Equity Shares of face value of Rs. 10/-
each, at a price of Rs. 242.16 per Equity Share and Rs. 211.96 per
Equity Share, respectively, on Preferential Basis.
ii) 51,392,243 Equity Shares of face value of Rs. 10/- each at a price
of Rs. 225/- per Equity Share on Rights Basis. As on 31st December,
2010, first and final call of Rs. 112.50 (including Rs. 107.50 towards
Securities Premium) per Equity Share on 30,915 Equity Shares are in
arrears.
11. The Company has made a provision of Rs. 1,810.00 million (Previous
year Rs. 880.20 million) towards current Income Tax, after taking into
consideration the benefits admissible under the provisions of the
Income Tax Act, 1961. The Company has also made a provision of Rs.
1.25 million (Previous year Rs. 1.00 million) towards Wealth Tax. The
same are, in the opinion of the Management, adequate.
12. During the period, 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.
14. A. Unincorporated Joint Ventures:
The Financial Statements refect the share of the Company in the assets
and the liabilities as well as the income and the expenditure of Joint
Venture Operations on a line by line basis. The Company incorporates
its share in the operations of the Joint Venture based on statements of
account received from the Operator. The Company has, in terms of
Accounting Policy No. A-5 above, recognised abandonment costs based on
the technical assessment of current costs as cost of producing
properties and has provided depletion thereon under Unit of
Production method as part of Producing Properties in line with
Guidance Note on Accounting of Oil and Gas Producing Activities issued
by the Institute of Chartered Accountants of India.
a) The Company has participating interest of 25% in Ravva Oil and Gas
Field Joint Venture (JV) through a Production Sharing Contract (PSC).
Other members of the JV are Oil and Natural Gas Corporation Ltd., Cairn
Energy India Pty Limited and Ravva Oil (Singapore) Pte. Ltd. The
parties have pursuant to the PSC, entered into a Joint Operating
Agreement. Cairn Energy India Pty Ltd. is the Operator.
b) The Consortium comprising the Company, Oilex Limited, Gujarat State
Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited
and Bharat Petroleum Corporation Limited has been awarded Block
WA-388-P for a term of 6 years by Government of Western Australia.
Joint Operating Agreement has been signed in March 2007. A Farm-out
Agreement was entered into with Sasol Petroleum Australia Ltd. on 12th
August 2008 whereby, Sasol acquired 30% participating interest in the
Block. In November 2010, the WA-388-P Joint Venture entered into a
Farm-in Agreement with Apache Northwest Pty Ltd ("Apache"). As per the
terms of the said Farm-in Agreement, Apache has obtained 40%
participating interest in the WA-388-P permit. Apache has replaced
Oilex as the permit operator. The participating interest of the Company
after this Farm-in Agreement is 8.4%. The Capital Commitments based on
estimated minimum work programme in relation to its participating
interest is Rs. 7.69 million (Previous year Rs. 450.77 million).
c) The Consortium comprising the Company, Oilex Oman Ltd., GAIL India
Ltd., Hindustan Petroleum Corporation Ltd. and Bharat Petroleum
Corporation Ltd. has been awarded the Block #56, on the Eastern Flank
of the Central Salt Producing Oil Field in Oman. The Exploration
Production Sharing Agreement and Joint Operating Agreement have been
executed on 28th June, 2006. The participating interest of the Company
in the said Joint Venture was 25%. The said interest of the Company has
been transferred to Videocon Oman 56 Limited, a wholly owned subsidiary
of Videocon Energy Ventures Limited, which, in turn is a wholly owned
subsidiary of the Company.
B. Incorporated Jointly Controlled Entities:
a) Erstwhile VB (Brasil) Petroleo Private Limitada ("VB Brasil") was a
50 : 50 joint venture company incorporated in Brazil with Bharat Petro
Resources Limited ("BPRL"), a wholly owned subsidiary of Bharat
Petroleum Corporation Ltd. VB Brasil in turn held 100%
equity in IBV Brasil Petroleo Limitada ("IBV"). During the period, VB
Brasil merged with IBV. IBV has interests in four concessions with ten
deep water offshore exploration blocks in Brazil. Petroleo Brasiliero
S.A., is the Operator in three of the four concessions whereas Anadarko
Corporation U.S.A. through its Brazilian subsidiary is the operator in
one concession. The Company has transferred its shareholding in IBV to
Videocon Energy Brazil Limited, a stepdown subsidiary of the Company
incorporated in British Virgin Islands.
b) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint
Venture Company incorporated in India, with Infinity Infotech Parks
Limited to carry on the business of infrastructure development like
construction of IT/ITes Parks, Biotech Parks etc. The Joint Venture
Company has not commenced its commercial operations and has no capital
commitments as on the Balance Sheet date.
15. The Company has kept the investment activities separate and
distinct from the normal business. Consequently, all the income and
expenditure pertaining to investment activities have been allocated to
the Investments and Securities division and the income/(loss) after
netting of the related expenditure has been shown as "Income/(Loss)
from Investments and Securities Division" under "Other Income" which
includes in respect of the long-term investments, dividend of Rs. 8.50
million (Previous year Rs. 7.58 million), loss on sale/disposal of
investments of Rs. 2.98 million (Previous year gain of Rs. 597.60
million), interest on debentures/bonds of Rs. 86.27 million (Previous
year Rs. 10.71 million) and in respect of current investments, dividend
of Rs. 1.26 million (Previous year Rs. 0.20 million).
18. The proceeds of Foreign Currency Convertible Bonds have been
utilised for the object of the issue.
19. There are no amounts due to be credited to Investor Education and
Protection Fund.
20. 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.
21. The Balances of some of the Debtors, Creditors, Deposits, Advances
and Other Current Assets are subject to confirmation.
22. 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 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.
23. Employee Benefits:
Disclosure pursuant to Accounting Standard (AS) 15 (Revised)
I) Defned Contribution Plans:
Amount of Rs. 127.07 million (Previous year Rs. 117.00 million) is
recognised as an expense and shown under the head "Salary, Wages and
Employees Benefits" (Schedule 12) in the Profit and Loss Account.
25. Related Party Disclosures:
As required under Accounting Standard 18 on "Related Party
Disclosures", the disclosure of transaction with related parties as
defned 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:
i) Subsidiaries:
a) Chhattisgarh Power Ventures Private Limited (w.e.f. 3rd May, 2010)
b) Eagle ECorp Limited
c) Godavari Consumer Electronics Appliances Private Limited (Upto 15th
January, 2010)
d) Mayur Household Electronics Appliances Private Limited (Upto 15th
January, 2010)
e) Middle East Appliances LLC
f) Paramount Global Limited (Upto 23rd December, 2010)
g) Pipavav Energy Private Limited
h) Powerking Corporation Limited (Upto 30th November, 2009)
i) Senator Energy Private Limited (w.e.f. 18th May, 2010)
j) Sky Billion Trading Limited (Upto 30th December, 2010)
k) Triumph Energy Private Limited (w.e.f. 5th April, 2010)
l) Venus Corporation Limited (Upto 30th November, 2009)
m) Videocon Display Research Co. Limited (Liquidated w.e.f. 1st
September, 2010)
n) Videocon Electronic (Shenzen) Limited (Chinese Name - Wei You Kang
Electronic (Shenzhen) Co. Limited)
o) Videocon Global Limited
p) Videocon Energy Ventures Limited and its subsidiary
- Videocon Oman 56 Limited
q) Videocon International Electronics Limited and its subsidiaries
- Jumbo Techno Services Private Limited
- Senior Consulting Private Limited
- Videocon Telecommunications Limited and its subsidiary - Datacom
Telecommunications Private Limited
r) Videocon Hydrocarbon Holdings Limited
(w.e.f. 21st December, 2010) and its subsidiaries*
- Videocon JPDA 06-103 Limited (w.e.f. 12th May, 2010)**
- Videocon Mozambique Rovuma 1 Limited (w.e.f. 12th May, 2010)**
- Videocon Indonesia Nunukan Inc. (w.e.f. 30th June, 2010)**
- Videocon Energy Brazil Limited (w.e.f. 7th July, 2010)**
- Videocon Australia WA-388-P Limited (w.e.f. 27th August, 2010)***
- Oil Services International S.A.S. (w.e.f. 9th November, 2010)
s) Videocon Energy Limited (w.e.f. 13th January, 2010) and its
subsidiaries
- Videocon Oil Ventures Limited (w.e.f. 19th January, 2010)
- Videocon Power Ventures Limited (w.e.f. 30th January, 2010) and its
subsidiaries
Aim Energy Private Limited (w.e.f. 12th October, 2010) Viable Energy
Private Limited (w.e.f. 12th October, 2010) Vital Power Private Limited
(w.e.f. 12th October, 2010) Marvel Energy Private Limited (w.e.f. 17th
July, 2010) and its subsidiaries
- Proficient Energy Private Limited (w.e.f. 17th July, 2010) and its
subsidiaries
- Instant Energy Private Limited (w.e.f. 17th July, 2010)
- Orchid Energy Private Limited (w.e.f. 30th August, 2010)
- Applied Energy Private Limited (w.e.f. 17th July, 2010) and its
subsidiaries
Comet Power Private Limited (w.e.f. 17th July, 2010)
Galaxy Power Private Limited (w.e.f. 17th July, 2010)
Percept Energy Private Limited (w.e.f. 17th July, 2010)
Unity Power Private Limited (w.e.f. 17th July, 2010)
*Videocon Hydrocarbon Holdings Limited was incorporated as a subsidiary
of Videocon Energy Ventures Limited on 30th November, 2009. It became
subsidiary of Videocon Oil Ventures Limited on 29th April, 2010. From
21st December, 2010, it became subsidiary of the Company, Videocon
Industries Limited, and directly holds 97.54% of ownership.
** Prior to this date subsidiary of Videocon Industries Limited.
*** Incorporated as a subsidiary of Videocon Energy Ventures Limited on
30th November, 2009. It became subsidiary of Videocon Hydrocarbon
Holdings Limited w.e.f. from 27th August, 2010.
ii) Associates and Joint Ventures:
-Ravva Oil & Gas Field Joint Venture-Participating Interest 25%
-WA-388-P Joint Venture-Participating Interest 8.4%
-Block 56 Oman Joint Venture - Participating interest 25%
(Upto 9th January 2010)
-VB (Brasil) Petroleo Private Ltda. - Joint Venture - 50%
(Merged with IBV Brasil Petroleo Limitada w.e.f. 1st April 2010)
-IBV Brasil Petroleo Limitada - Joint Venture - 50%
(Was subsidiary of VB (Brasil) Petroleo Private Ltda upto 31st
March, 2010 which merged with this Company, w.e.f. 1st
April, 2010. The Company has transferred its shareholding
in VB Brasil to Videocon Energy Brazil Limited, a stepdown
subsidiary of the Company incorporated in British Virgin
Islands.)
-Videocon Infinity Infrastructure Private Limited - Joint
Venture - 50%
-Goa Energy Private Limited - Associate - 26%
-Radium Energy Private Limited - Associate - 26% (w.e.f. 1st
November, 2010)
iii) Key Management Personnel:
-Mr. Venugopal N. Dhoot - Chairman & Managing Director
-Mr. Pradipkumar N. Dhoot - Whole Time Director
-Mr. K. R. Kim - Chief Executive Officer
-Mr. S. K. Jain - Senior Vice President (w.e.f. 1st April, 2010)
-Mr. P. K. Gupta - Vice President (upto 31st January, 2010)
-Mr. Amit Gupta - Vice President (upto 31st January, 2010)
-Mr. Shekhar Jyoti - Vice President
-Mr. Abhijit Kotnis - Associate Vice President
C) Material transactions with Related Party during the period are:
Sales to Videocon Telecommunications Limited Rs. 6,338.33 million
(Previous year Rs. 1,331.47 million); Purchases from Middle East
Appliances LLC Rs. 67.04 million (Previous year Rs. 1.11 million) and
Purchase of Services from Videocon Telecommunications Limited Rs. 10.78
million; Subscription to Shares/Share Application Money (Investments)
of Videocon Hydrocarbon Holdings Limited Rs. 9,046.62 million (Previous
year Rs. Nil), Pipavav Energy Private Limited Rs. 3,999.90 million
(Previous year Rs. 1,500.00 million) and Videocon Telecommunications
Limited Rs. 1,810.32 million (Previous year Rs. 410.00 million);
Interest from Videocon Telecommunications Limited Rs. 459.75 million
(Previous year Rs. 2,326.54 million); Advances/Loans given to Videocon
International Electronics Limited Rs. 10,172.06 million (Previous year
Rs. Nil), Sky Billion Trading Limited Rs. 3,251.22 million (Previous
year Rs. 12.37 million) and Videocon Energy Limited Rs. 1,939.08
million (Previous Rs. Nil); Advances/Loans Received back from Pipavav
Energy Private Limited Rs. 579.55 million (Previous year Rs. 1,271.70
million), Videocon JPDA 06-103 Limited Rs. 305.31 million (Previous
year Rs. Nil) and Videocon Mozambique Rovuma 1 Limited Rs. 121.18
million (Previous year Rs. Nil); Contribution towards CompanyÃs share
of Expenditure (Joint Venture) to Ravva Oil & Gas field Rs. 1,178.04
million (Previous year Rs. 590.03 million).
26. The Company has prepared the Consolidated Financial Statements as
per Accounting Standard (AS) 21 and accordingly the segment information
as per AS-17 "Segment Reporting" has been presented in the Consolidated
Financial Statements.
27. Loans and Advances in the nature of Loans given to Subsidiaries
and Associates etc.
B) Investment by the loanee in the shares of the Company:
None of the loanees have made investments in the shares of the Company.
31. 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
(Rs. in Million)
As at As at
30th 30th Sept.,
Sept., 2009 2008
1. Contingent Liabilities not provided for:
a) Letters of Guarantees 59,767.26 45,206.98
b) Letters of Credit opened 4,015.05 1,337.13
c) Customs Penalty 23.96 0.88
d) Customs Duty demands under dispute 156.09 249.49
[Amount paid under
protest Rs. 0.82
million (Previous year Rs. 0.40 million)]
e) Income Tax demands under dispute 349.38 349.38
f) Excise Duty and Service Tax demand 189.37 275.57
under dispute
[Amount paid under
protest Rs. 4.21 milHpn (Previous
year Rs, 2.87 million)]
g) Sales Tax demands under dispute 188.38 326.36
[Amount paid under
protest Rs. 57.91
million (Previous year Rs. 23.96 million)
h) Others - 51.42
I) Show Cause Notices (SCNs) have been served on the Operator of the
Rawa Oil & Gas Field Joint Venture (Rawa JV) for non payment of Service
Tax and Educational Cess on various services for the period 16th
August, 2002 to 31st March, 2009. The amount involved relating to Rawa
Block is Rs. 415.28 million (Previous year Rs. 101.55 million).
The Operator Is contesting the show cause notices/demands before
Commissioner of Service Tax and has filed writ petition before Honble
High Court of Chennai challenging service tax demands on same of the
services and believes that its position is likely to be uphejg. The
ultimate outcome of the matter cannot be presently determined and no
provision for any liability that may.result has been made in the
accounts as the same is subject to agreement by the members of the
Joint Ventures. Should it ultimately become payable, the Companys
share as per the participating interest would be upto Rs. 103.82
million (Previous year Rs. 25.38 million).
)) Ravva Oil & Gas Field Joint-Venture has received a demand notioe for
Rs. 21.53 million for delay In payment of cess for the period April
2001 to February 2004. The Rawa JV fHed an appeal with Honble High
Court of Andhra Pradesh and has received an interim stay order against
the demand. The Ravva Oil 4 Gas Field Joint- Venture believes that its
position is likely to be upheld. However, should the liability
ultimately arise, the Companys share as per the participating interest
would be upto Rs. 5.38 million (Previous year Rs. 5.38 million).
k) Disputed Income Tax demand amounting to Rs. 22.29 million in respect
of certain payments made by Rawa Oil & Gas Field Joint Venture is
currently pending before the Income Tax Appellate tribunal. The
ultimate outcome of the matter cannot presently be determined and no
provision for any liability that may result has been made as the same
is subject to agreement by the members of the Joint Venture. Should it
ultimately become payable, the Companys share as per the participating
interest would be upto Rs. 5.57 million (Previous year Rs. 5.57
million).
2. a) There was a dispute regarding (i) deductibility of Oil and
Natural Gas Corporation Limited Carry (ONGC Carry) while computing the
Post Tax Rate of Return (PTRR) under the Rawa Production Sharing
Contract (PSC); (ii) deductibility of provision of Site Restoration
Costs for computation of Cost Petroleum and PTRR; (iii) deductibility
of inventory purchased for computation of Cost Petroleum and PTRR; (iv)
deductibility of notional Dividend Distribution Tax under Jhs Income
Tax Act, 1961 for computation of PTRR; (v) deductibility of deposits,
advances and pre-payments made for the purpose of Petroleum Operations
in the business of Raws OH & Gas Field for computation of Cost
Petroleum and PTRR; and (vi) the conversion rate to be applied by the
Government of India (GOI) while converting the USD amount into Indian
Rupees against the invoices raised for sale of crude oil. The Dispute
was referred to an International Arbitration in accordance with the
provisions of the Rawa PSC. Vide the Interim award dated 31st March,
2005, the Tribunal has upheld the Companys claims stated in (i) and
(v) above whereas the claim of the Company stated in (ii), (iii) and
(iv) above were rejected by the Tribunal. As regards claim stated at
(vi) above, the Tribunal held that the payment to the Company is to be
made after converting the USD amount into Indian Rupees at the State
Bank of India MiddleRat* i.e. the average of the buying and selling
rate. Further, the Supplementary Claim of the Company for payment of
interest for delayed payment against invoices raised for sale of crude
oil is yet to be decided by the Arbitral Tribunal. While accepting the
Interim Award, the Company computed and submitted the calculation on
31st May, 2005 to GOI indicating the amount payable by theCompany
after applying the said Arbitration Award at US$ 27.02 million
equivalent to Rs. 1,081.88 million, which was not accepted by GOI and
it claimed that the Company needs to pay US$ 43.72 million equivalent
to Rs. 1,901.79 million and interest thereon applying the same
Arbitration Award. Since the Company and the GOI were not able to agree
upon the amounts due to/payable by the Company, the Company on 7th
July, 2005 filed Interim Applications followed by an amendment
application on 8th August, 2005 before the Arbitral Tribunal seeking a
determination of the amounts due to/payable by the Company. The dispute
between the Company and GOI with regard-to the computation of interest
on delayed payment of profit petroleum to the extent of US$ 67,636
equivalent to Rs. 2.71 million is also covered. Pending the final
decision of the Honble Arbitral Tribunal, the Company has accounted
for and paid the sum of US$ 43.72 million equivalent to Rs. 1,901.79
million to GOI on ad hoc basis.
The GOI had further filed a Petition on 10th May, 2005 before the High
Court in Malaysia challenging the Arbitration Award and praying for
setting aside the Partial Award dated 31st March, 2005 only in respect
of ONGC Carry issue. The Company challenged the jurisdiction of the
said High Court and therefore the maintainability of such an appeal
before that Court. The High Court has in this matter, by a
pronouncement dated 5th August, 2009, upheld the contentions of the
Company and dismissed the challenge filed by the GOI to the Award dated
31st March 2005 on the ONGC Carry issue. The GOI has filed a Notice of
Appeal before the Appellate Court at Malaysia. The GOI Appeal is yet to
be listed for hearing. The Company believes that its position is likely
to be upheld.
b) There is a dispute regarding the rate of conversion from US$ into
Indian Rupees applicable to the Nominees of the GOI for the purpose of
payment of amount of the invoices for sale of the Crude Oil by the
Company under the Rawa PSC. Vide the interim award dated 31st March,
2005, the, Tribunal has partly upheld the Companys claim. While
accepting the Award, the Company has worked out and submitted a
computation on 30th June, 2005 to GOI claiming the amount receivable at
Rs. 121.43 million being the amount short paid by GOI nominees up to
19th June, 2005 and interest thereon also calculated up to 19th June,
2005. The Company further vide its letter dated 22nd August, 2005
updated its claim claiming the total amount receivable from GOI
Nominees at Rs. 124.42 million being the amount short paid by GOI
nominees up to 31 st July, 2005 and interest thereon also calculated up
to 31st July, 2005. The Company further vide Its IStter dated 28th
April, 2008 updated its claim indicating the total amount receivable
from GOI Nominees at Rs. 349.85 million, being the amount short paid by
GOI Nominees upto 31st March, 2008 and interest thereon also calculated
up to 31 st March, 2008. On 25th November, 2009 the Company has further
updated its claim in this respect vide its letter dated 25th November,
2009, wherein total amount receivable from GOI Nominees is computed at
Rs. 498.15 million, being the amount short paid by GOI Nominees upto 31
st March, 2009 and interest thereon also calculated up to 31 st March,
2009. The dispute regarding the payments to be made by the GOIs
nominees in terms of the Award dated 31st March, 2005 is also pending
before the Arbitral Tribunal in terms of the Interim Applications
filed. The GOI has filed an Original Miscellaneous Petition (OMP) 329
of 2006 dated 20th July, 2006 before Honble Delhi High Court
challenging the award in respect of this Dispute. Another OMP 223 of
2006 dated May, 2006 has been filed by GOIs nominees HPCL and BRPL in
the Honble Delhi High Court challenging the Partial Award dated 31st
March, 2005 in respect of Conversion/Exchange Rate Matter. Both OMP 223
Of 2006 and OMP 329 of 2006 are presently sub-judice before the Honble
Delhi High Court. The GOI nominees continue to make payments at the
exchange rate without considering the directives of the Honble
Arbitral Tribunal in this regard.
c) GO! has filed OMP 255 of 2006 dated 30th May, 2006 before the
Honble Delhi High Court under section 9 of the Arbitration and
Conciliation Act, 1996, seeking a declaration that the seat of the
arbitration as regards the disputes between the Company and the GOI is
Kuala Lurripur and not London. The Honble Arbitral Tribunal vide its
letter dated 28th March, 2007 has indicated that it shall continue with
the arbitration proceedings, in respect of the disputes referred above,
after receiving the judgement of the Honble Delhi High Court in OMP
255 of 2006. The Honble Delhi High Court has held, vide order dated
30th April, 2008, that it has the jurisdiction to hear the matters
arising out of arbitration process and that the matter be heard on
merits as against the Companys contention that the said petition
itself was not maintainable. The Company has, in this respect, filed
Special Leave Petition (SLP) (Civil) No. 16371 of 2008 before the
Honble Supreme Court of India to decide the issue of maintainability
of OMP 255 of 2006. The Honble Supreme Court after hearing the
Parties, has on 11th November 2009, reserved judgement in the matter.
The Company believes that its position Is likely to be upheld.
d) In respect of disputes with regard to additional profit petroleum
stated in (a) above, the GOI had vide its letter dated 3rd November,
2006 raised a collective demand of Rs. 334.13 million on account of
additional profit petroleum payable and interest on delayed payments of
profit petroleum calculated up to 30th September, 2006 pursuant to the
Partial Arbitral Award dated 31st March, 2005 in the dispute stated
above. Interim Award dated 12th February, 2004 and Partial Award dated
23rd December, 2004. The Company has disputed such demand and is
instead seeking refund of USD 16.70 million equivalent to Rs. 668.67
million already excess paid by the Company to the GOI with interest
thereon. Subsequently, GOI has in June 2008 through its Nominees
deducted a further sum of Rs. 372.21 million being its claim of
additional profit petroleum and interest on delayed payment of profit
petroleum computed up to 30th April, 2008. Such deduction, also being
in contravention of the above-referred Arbitral Awards, is disputed by
the Company.
Any further sum required to be paid or returnable in respect of dispute
above at (a) to (d) in accordance with the determination of the amount
by Honble Arbitral Tribunal/Supreme Court/High Courts in this behalf
shall be accounted for on the final outcome in this regard.
3. Estimated amount of contracts remaining to be executed on Capital
account and not provided for (net of advances) Rs. 324.16 million
(Previous year Rs. 528.59 million).
4. Capital Work-in-Progress includes advances for capital assets Rs.
2,465.46 million (Previous year Rs. 3,489.92 million), Interest and
other finance charges capitalised during the year Rs. 883.70 million
(Previous year Rs. 544.61 million).
5. The Company had, during the year 2006, issued
a) 90,000 Foreign Currency Convertible Bonds of US$ 1000 each (Bonds)
due on 7th March 2011 out of which 41,820 (Previous year 41,820) Bonds
are outstanding.
i) The Bonds are convertible at the option of the bondholders at any
time on and after 20th March, 2006 upto the close of business on 28th
February, 2011 at a fixed exchange rate of Rs. 44.145 per 1 US$ and at
initial conversion price of Rs. 545.24 per share being at premium of
15% over the reference share price. The conversion price shall be
adjusted downwards in the event that the average closing price of
shares for 15 consecutive trading days immediately prior to the reset
date is less than conversion price, subject to a floor price of Rs.
410/- as adjusted in accordance with the anti-dilution provisions.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 7th February, 2009 but prior to 28th February,
2011 if aggregate value on each of 30 consecutive trading days ending
not earlier than 14 days prior to the date upon which notice of such
redemption is given was at least 130% of the accreted principal amount.
iii) The Bonds are redeemable at maturity date i.e. on 7th March, 2011
at 116.738% of its principal amount, if not redeemed or converted
earlier.
b) 105,000 Foreign Currency Convertible Bonds of US$ 1000 each (Bonds)
due on 25th July, 2011 out of which 66,651 (Previous year 66,651) Bonds
are outstanding.
i) The Bonds are convertible at the option of the bondholders at any
time on or after 2nd September, 2006 until 18th July, 2011 except for
certain closed periods, at a fixed exchange rate of Rs. 46.318 per 1
US$ and at initial conversion price of Rs. 511.18 per share being at
premium of 22% over reference share price. The conversion price shall
be adjusted downwards in the event that the average closing price of
shares for 15 consecutive trading days immediately prior to the reset
date is less than conversion price, subject to a floor price of Rs.
410/- as adjusted in accordance with the anti-dilution provisions.
ii) The Bonds are redeemable in whole but not in part at the option of
the Company on or after 24th August, 2009, if aggregate value on each
of 30 consecutive trading days ending not earlier than 14 days prior to
the date upon which notice of such redemption is given was at least
130% of the accreted principal amount. Redeemable in whole but not in
part at the option of the Company on or after 24th August, 2009, if
aggregate value on each of 30 consecutive trading days ending not
earlier than 14 days prior to the date upon which notice of such
redemption is given was at least 130% of the accreted principal amount.
iii) The Bonds are redeemable at maturity date i.e. on 25th July, 2011
at 127.65% of its principal amount, if not redeemed or converted
earlier.
6. The Company has issued and allotted 11,765,000 Warrants on 1 st
June, 2009 for a consideration of Rs. 42.50 per warrant being the
warrant subscription price. Each Warrant entitles the holder to
subscribe to one equity share within a period of 18 months from the
date of allotment at the price of Rs. 170/- per equity share. In the
event, the holder of Warrant does not exercise the option within the
aforesaid period, the Warrant Subscription amount in respect of such
warrants shall be forfeited and the Warrants shall lapse.
7. The Company has made a provision of Rs. 880.20 million (Previous
year Rs. 1,349.00 million) towards current Income Tax, after taking
into consideration the benefits admissible under the provisions of the
Income Tax Act, 1961. The Company has also made a provision of Rs. 1.00
million (Previous year Rs. 1.00 million) towards Wealth Tax. The same
are, in the opinion of the Management, adequate.
8. The Company has reviewed fixed assets for Impairment and has
identified some of the machinery and equipments, which have been
impaired. Consequently, an amount of Rs. 449.45 million (Previous year
Rs. 998.90 million) has been assessed as impairment loss and has been
recognized in the Profit and Loss Account. The related Deferred Tax
Credit of Rs. 152.77 million (Previous year Rs. 339.52 million) has
been considered in the Provision for Deferred Tax in the Profit and
Loss Account. Further, 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. Joint Venture Disclosure :
A. The Financial Statements reflect the share of the Company in the
assets and the liabilities as well as the income and the expenditure of
Joint Venture Operations on a line by line basis. The Company
incorporates its share in the operations of the Joint Venture based on
statements of account received from the Operator. The Company has, in
terms of Accounting Policy No. A-5 above, recognised abandonment costs
based on the technical assessment of current costs as cost of producing
properties and has provided Depletion thereon under Unit of
Production method as part of Producing Properties in line with
Guidance Note on Accounting of Oil and Gas Producing Activities issued
by the Institute of Chartered Accountants of India.
B. Unincorporated Joint Ventures:
a) The Company has participating interest of 25% in Ravva Oil and Gas
Field Joint Venture (JV) through the Production Sharing Contract (PSC).
Other members of the JV are Oil and Natural Gas Corporation Ltd, Cairn
Energy India Pty Limited and Rawa Oil (Singapore) Pte. Ltd.
The parties have pursuant to the PSC, entered into a Joint Operating
Agreement. Cairn Energy India Pty Ltd. is the Operator.
b) The Consortium comprising the Company, Oilex Oman Ltd., GAIL India
Ltd., Hindustan Petroleum Corporation Ltd. and Bharat Petroleum
Corporation Ltd. has been awarded the Block #56, on the Eastern Plank
of the Central Salt Producing Oil Field in Oman. The Exploration
Production Sharing Agreement and Joint Operating Agreement have been
executed on 28th June, 2006. 2D and 3D seismic data are being
reprocessed in Permian Flank and the exploration drilling in Sarha-1
well is in progress. Two of the three exploration wells have been
successfully drilled. The Participating interest of the Company in the
said venture is 25%. The said interest of the Company has been,
subsequent to the balance sheet date, transferred to Videocon Oman 56
Limited, a wholly owned subsidiary of Videocon Energy Ventures Limited,
which, in turn is a wholly owned subsidiary of the Company. The
Capital Commitments based on estimated minimum work programme in
relation to its participating interest is Rs. 336.62 million (Previous
year Rs. 492.18 million).
c) The Consortium comprising the Company, Oilex Ltd., Gujarat State
Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd. and
Bharat Petroleum Corporation Ltd. has been awarded Block WA- 388-P for
a term of 6 years by Government of Western Australia. Joint Operating
Agreement has been signed in March 2007 and acquisition of Seismic Data
is in progress. A Farm-out Agreement has been entered into with Sasol
Petroleum Australia Ltd. on 12th August 2008 whereby, Sasol has
acquired 30% participating interest in the Block and will become
operator in place of Oilex, subject to fulfillment of all obligations
under the said Agreement. In return, Sasol will carry the JV partners
for certain costs in respect of Rose 3D seismic data. The participating
interest of the Company after this Farm-out Agreement is 14%. The
Capital Commitments of the Company for next three years based on six
year work programme is Rs. 450.77 million (Previous year Rs. 61.61
million).
d) The Company had 20% interest in EPP 27 offshore Otway Basin, South
Australia through Joint Venture. Other members of the JV were Great
Artesian Oil and Gas Ltd. (GOG), Oilex NL and Gujarat State Petroleum
Corporation Ltd. Permit for the said concession has expired on 24th
August, 2008. In March 2009, the JV partners have entered into a Good
Standing Arrangement with the Government of South Australia committing
to spend an amount of A$ 5,253,061 towards acquisition and
interpretation of new geophysical and geochemical data and/or drilling
activities during the first three years of new permits obtained from
re-released areas. The Company has already provided for its share in
the aforesaid amount, to the extent of A$ 1.58 million i.e. Rs. 62.08
million.
C. Incorporated Jointly Controlled Entities :
a) VB (Brasil) Petroleo Private Limitada ("VB Brasil") is a 50 : 50
joint venture company incorporated in Brazil with Bharat PetroResources
Limited ("BPRL"), a wholly owned subsidiary of Bharat Petroleum
Corporation Ltd. VB Brasil in turn holds 100% equity in IBV Brasil
Petroleo Limitada (IBV) (formerly EnCana Brasil Petroleo Limitada).
IBV has interests in four concessions with ten deep water offshore
exploration blocks in Brazil. Petroleo Brasiliero S.A., is the operator
in three of the four concessions whereas Anadarjjo Corporation U.S.A.
through its Brazilian subsidiary is the operator in one concession. The
pre-salt exploration programme is continuing in the deep water Campos
and Espirito Santos basins, with a pre-salt discovery at the Wahoo
prospect, offshore Brazil in the Campos Basin. The Capital commitment
of the Company for next year based on minimum work program is Rs.
3,316.76 million.
b) Videocon Infinity Infrastructures Private Limited is a 50 : 50 Joint
Venture Company incorporated in India, with Infinity Infotech Parks
Limited to carry on the business of infrastructure development like
construction of IT/ITes Parks, Biotech Parks etc. The Joint Venture
Company has not commenced its commercial operations and has no Capital
commitments as on the Balance Sheet date.
10. The Company has kept the investment activities separate and
distinct from the normal business. Consequently, all the income and
expenditure pertaining to investment activities have been allocated to
the Investments & Securities division and the income/(loss) after
netting of the related expenditure has been shown as "lncome/(Loss)
from Investments & Securities Division" under "Other Income" which
includes in respect of the long term investment dividend of Rs. 7.58
million (Previous year Rs. 9.88 million), gain on sale Rs. 597.60
million (Previous year Rs. 78.66 million) interest/premium on
debentures/bonds Rs. 10.71 million (Previous year Rs. 3.18 million) and
in respect of current Investments, dividend of Rs. 0.20 million
(Previous year Rs. 2.56 million)
11. Employee Benefits:
Disclosure pursuant to Accounting Standard (AS) 15 (Revised)
I) Defined Contribution Plans :
Amount of Rs. 117.00 million (Previous year Fts. 89.11 million) is
recognised as an expense and shown under the head "Salary, Wages and
Employees Benefits" (Schedule 12) 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/of 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 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 Balances of some of the Debtors, Creditors, Deposits, Advances
and Other Current Assets are subject to confirmation.
14. During the year, the Company has forfeited and cancelled 43,948
shares (Previous year Nil) issued on amalgamation of erstwhile Videocon
International Ltd., due to non receipt of allotment and/or call money
from shareholders. The amount paid-up on these shares amounting to Rs.
2.72 million has been transferred to Capital Reserve.
15. There are no amounts due to be credited to Investor Education and
Protection Fund.
16. 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 : i) Subsidiary Companies :
- Datacom Telecommunications Private Limited (Subsidiary of Videocon
Telecommunications Limited)
- Eagle ECorp Limited
- Qodavari Consumer Electronics Appliances Private Limited
- Investcon Singapore Holdings Limited [Subsidiary of Videocon
(Mauritius) Infrastructure Ventures Limited] (Upto 7th January, 2009)
- Jumbo Techno Services Private Limited (Subsidiary of Videocon
International Electronics Limited) (w.e.f. 22nd September, 2009)
- Mayur Household Electronics Appliances Private Limited
- Middle East Appliances LLC
- Paramount Global Limited
- Pipavav Energy Private Limited
- Powerking Corporation Limited
- Senior Consulting Private Limited (Subsidiary of Videocon
International Electronics Limited (w.e.f. 18th September, 2009)
- Sky Billion Trading Limited
- Venus Corporation Limited
- Videocon Display Research Co. Limited
- Videocon Electronics (Shenzhen) Limited (Chinese Name - Wei You Kang
Electronic (Shenzhen) Co. Limited)
- Videocon Energy Brazil Limited (Formerly Videocon Global Energy
Holdings Limited)
- Videocon Energy Ventures Limited
- Videocon Global Limited
- Videocon Indonesia Nunukan Inc. (w.e.f. 5th August, 2009)
- Videocon International Electronics Limited
- Videocon JPDA 06-103 Limited (Formerly Global Energy Inc.)
- Videocon (Mauritius) Infrastructure Ventures Limited (Upto 7th
January, 2009)
- Videocon Mozambique Rovuma 1 Limited (Formerly Videocon Energy
Resources Limited)
- Videocon Oman 56 Limited (Formerly Videocon Hydrocarbon Holdings
Ltd.) (Subsidiary of Videocon Energy Ventures Limited)
- Videocon Telecommunications Limited (Formerly Datacom Solutions Ltd.)
(Subsidiary of Videocon International Electronics Limited)
ii) Associates and Joint Ventures :
- Rawa Oil & Gas Field Joint Venture-Participating Interest 25%
- WA-388-P Joint Venture-Participating Interest 14%
- EPP27 Joint Venture-Participating Interest 20%
- Block 56 Oman Joint Venture - Participating interest 25%
- VB (Brasil) Petroleo Private Ltda. - Joint Venture - 50%
- IBV Brasil Petroleo Limitada (Subsidiary of VB (Brasil) Petroleo
Private Ltda.)
- Videocon Infinity Infrastructure Private Limited - Joint Venture -
50%
- Goa Energy Pvt. Ltd. - (Associate w.e.f. 27th October, 2008) iii) Key
Management Personnel:
- Mr. Venugopal N. Dhoot - Chairman & Managing Director
- Mr. Pradipkumar N. Dhoot - Whole Time Director
- Mr. K. R. Kim - Chief Executive Officer
- Mr. P. K. Gupta - Vice President
- Mr. Amit Gupta - Vice President
- Mr. Shekhar Jyoti - Vice President
17. The Company has prepared the Consolidated financial Statements as
per Accounting Standard (AS) 21 and accordingly the segment information
as per AS-17 "Segment Reporting" has been presented in the Consolidated
Financial Statements.
18. Hitherto, the Company was following the "successful efforts" method
of accounting in respect of oil and natural gas exploration,
development and producing activities. During the year the Company has
changed the method of accounting for such activities from "successful
efforts" method to "full cost" method.
These activities are carried out in diverse locations, using various
techniques. All costs incurred at any time and at any place in a cost
centre in an attempt to add commercial reserves are an essential part
of the cost of any reserves added in the cost centre. As a result they
are directly associated with the enterprises reserves in that centre
and all the costs should be treated as part of the cost of the mineral
assets in the cost centre. The full cost method of accounting, in
respect of such activities, provides better matching of income and
expenses, if total costs are depreciated on pro-rata basis as the
reserves in large cost centres are produced. Further, oil and gas
reserves are similar to long term inventory item. Under the full cost
method the annual distortions of income resulting from expensing the
charges for unsuccessful pre-production activities are eliminated
whereas the successful efforts method of accounting assesses success or
failure too early in a project and is likely to result in an
understatement of assets and net income of a growing enterprise.
In view of the above and considering the characteristics of the
participating interests of the Company in joint ventures for oil and
gas exploration and production in large cost centres, either directly
or indirectly through subsidiaries, it has been advised to the Company
that the full cost method will be more appropriate, as it provides
better matching of income and expenses.
Consequent to the above change, there is no material impact on the
financial statements for the year. The Production and Exploration
Expenses - Oil and Gas are lower by 4.68 million and the net profit
for the year, Reserves & Surplus and Capital Work-in-Progress are
higher by the said amount.
19. Figures in respect of previous year have been regrouped and
recasted wherever necessary to make them comparable with those of
current year.