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Notes to Accounts of Vindhya Telelinks Ltd.

Mar 31, 2015

1. NATURE OF OPERATIONS

The Company is engaged in the business of manufacturing and sale of telecommunication cables, other types of wires & cables, FRP rods/glass rovings, etc. and Engineering, Procurement and Construction (EPC) business.

2. Contingent liabilities and Commitments (to the extent not provided for) -

(a) Contingent liabilities :

(i) Claims against the Company/disputed liabilities not acknowledged as debts Rs.96.75 lacs (Rs. 96.75 lacs).

(ii) Pending cases with income tax appellate authorities where income tax department has preferred appeals - liability not ascertainable.

(iii) Sales tax matter under litigation Rs. 18.96 lacs (Rs 18.96 lacs).

(iv) Appeals preferred by the Company against the claim/levy of differential sales tax due to timely non-submission of declaration forms for concessional sales tax. The demand(s)/levy on merits of the cases have been stayed and are pending before the appellate authorities, liabilities against which are unascertainable until final outcome in the pending cases.

(v) Cross corporate guarantee given in connection with loan/ credit facilities aggregating to Rs. 13750.00 lacs (outstanding as on March 31, 2015 Rs.8023.16 lacs) to a joint venture and corporate guarantee given of Rs.5800.00 lacs in connection with performance of obligations assumed by a body corporate under a supply contract. [(Refer Note No. 46(b)].

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

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs. 690.19 lacs (Rs. 277.79 lacs).

(ii) Commitment relating to Derivatives are disclosed in Note No. 37.

3. The Company has filed a law suit against an overseas supplier and its Indian agent. The supplier in order to overreach the said law suit invoked alleged arbitration agreement which is subject matter of the suit filed by the Company, interalia, claiming recovery of an aggregate amount equivalent to Rs.3544.13 lacs as at 31st March, 2015, as damages for the unsupplied goods for the period from October, 2002 to September, 2006. The Civil Court stayed the Arbitration proceedings and the said stay order has been confirmed by the High Court of Madhya Pradesh at Jabalpur and also by the Hon''ble Supreme Court. An order of the High Court of Madhya Pradesh referring the parties to Arbitration has also been stayed by the Hon''ble Supreme Court in the Special Leave Petitions filed by the Company, which are pending before the Hon''ble Supreme Court. Based on appraisal of the matter, the Company has been legally advised that the said claim against the Company is unsustainable and there is no likelihood of any liability arising against the Company.

4. The Company is eligible for certain incentives in respect of its investment in plant and machinery towards expansion/technical upgradation of the OFC Unit pursuant to confirmation received under the Industrial Promotion Policy, 2014 read with Madhya Pradesh Nivesh Protsahan Yojna, 2014 of the Government of Madhya Pradesh. Accordingly, the Company has accrued, interalia, VAT and CST assistance by way of reimbursement (net of input tax rebate on the amount of VAT and CST) effective from 27th March, 2014, for a period of 10 years, subject to compliance with certain eligibility conditions attached thereto. The same shall be appropriately dealt with in the Books of Account as and when the Company''s claim for reimbursement from time to time during the eligibility period is formally approved by the designated competent authority of the State Government.

5. The Provision for tax has been made as per Minimum Alternate Tax(MAT) under section 115JB of the Income Tax Act, 1961. The Company is entitled to avail credit under section 115JA(1A). Accordingly, MAT credit entitlement has been considered as an asset.

6. In the opinion of the management, the decline in the market value of quoted Non-current investment (trade) in a Company (carrying cost Rs.3193.75 lacs) by Rs. 1347.32 lacs (Rs. 1937.79 lacs) at the year end is temporary, in view of the strategic long term nature of the investment and having regard to intrinsic asset base/net worth and future growth potential anchored on state-of- the-art manufacturing facilities of the investee company and hence, does not call for any provision there against. However, there is no diminution in the value of quoted Non-current investments, if market value of all Non-current investments is taken together.

7. Employee Benefits:

(a) The Company''s defined benefit plans include the approved funded gratuity scheme which is administered through group gratuity scheme with Life Insurance Corporation of India and non-funded schemes viz. Pension (applicable only to certain categories of employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on March 31,2015 are summarised below:

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

Information relating to experience adjustments to plan assets and liabilities as required by Para 120(n)(ii) of the Accounting Standard (AS-15) (revised) on employee Benefits is not available with the Company. However, the impact of the same is not likely to be material.

(b) Company''s contribution to defined contribution schemes such as approved and recognised Provident/Family Pension Fund, approved Superannuation Fund and contribution to Employees State Insurance (on selective basis as applicable) are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions. The Company has recognised the following contributions to Provident/Family Pension and Superannuation Funds and towards Employees State Insurance as an expense and included in employee benefits expense in the Statement of Profit and Loss:

8. Segment Information:

The Company has identified two reportable business segments as the primary segment viz. Cables and EPC (Engineering, Procurement and Construction). Segments have been identified and reported taking into account nature of products and services, the deferring risks and returns, the organisation structure and the internal business reporting systems. A brief description of the types of products and services provided by each reportable segment is as follows:

"Cables"- The Company manufactures and markets various types of cables including telecommunication cables, other types of wires & cables and FRP rods/glass rovings, etc.

"EPC" (Engineering, Procurement and Construction) -The Company undertakes and executes contracts and provide services with or without materials, as the case may be.

(a) Primary Segment Information (by business segments):

The following table presents revenue and profit/(loss) information regarding business segments for the year(s) ended March 31, 2015 and March 31, 2014 and certain liabilities information regarding business segments as at March 31, 2015 and March 31,2014.

(i) All the assets of the Company, except the carrying amount of assets aggregating to Rs. 1973.25 lacs (Rs. 770.30 lacs) are within India.

(ii) The Company has common fixed assets for producing goods/providing services to Domestic Market as well as for Overseas Market. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished.

9. Disclosures in respect of related parties as defined in Accounting Standard (AS-18), with whom transactions were entered into at an arm''s length basis and in the ordinary course of business during the year are given below:

Subsidiaries : August Agents Ltd.(AAL), Insilco Agents Ltd.(IAL), Laneseda Agents Ltd.(LAL)

Joint Venture : Birla Ericsson Optical Ltd.(BEOL)

Enterprise over which a director is able : Shakun Polymers Ltd. (SPL) to exercise significant influence

Key Management Personnel : Shri Y.S. Lodha ( Managing Director)

The Company by itself or along-with its subsidiaries hold more than 20% of the voting power of certain bodies corporate. The Company has been legally advised that it does not have any "significant influence" in the said bodies corporate as defined in Accounting Standard (AS-18) - "Related Party Disclosure" and accordingly, has not considered the above investees as related parties under (AS-18).

(i) Provision for contribution to gratuity fund or otherwise, leave encashment (compensated absences) on retirement which are based on actuarial valuation on an overall Company basis are not included in the remuneration to key managerial personnel.

(ii) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

(iii) Transactions and balances relating to reimbursement of expenses to/from the above related parties have not been considered.

(iv) All the transactions with related parties were on arm''s length basis and in the ordinary course of business.

10. Leases:

(a) Operating Lease

The Company has taken certain office premises under operating lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs. 108.51 lacs (Rs. 81.44 lacs) are charged to the Statement of Profit and Loss.

(d) Remittance in Foreign Currency on account of Dividend:

No remittance in foreign currency on account of dividend was made by the Company directly. The Company has, however, paid dividend in respect of equity shares held by certain non-resident shareholders on repatriation basis. These, interalia, include portfolio investment and direct investment where the amount is also credited to Non-Resident External Account (NRE A/c). The amount of dividend indirectly remitted to such non-resident shareholders cannot be ascertained.

11. The Company has reclassified previous year''s figures to conform to current year''s classification. The figures in brackets are those in respect of the previous accounting year.

12. The salient features of the Financial Statements of Subsidiaries and a Joint Venture are given in a separate statement attached hereto. The information relating to the subsidiaries and a Joint Venture has also been included in the Consolidated Financial Statements to the extent necessary and relevant.


Mar 31, 2014

1. NATURE OF OPERATIONS

The Company is engaged in the business of manufacturing and sale of Telecommunication cables, other types of wires & cables, FRP rods/Glass rovings, etc. and Engineering, Procurement and Construction (EPC) business.

2. The Company has only one class of shares referred to as equity shares having nominal value of Rs.10/- each. The holders of equity shares are entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by Board of Directors is subject to approval of shareholders in the ensuing Annual General Meeting. For the year ended 31st March 2014, the amount of per share dividend recognised for distribution to equity shareholders was Rs.2/- per share, subject to approval of shareholders.

3. The loans of Parent Company from banks are secured by way of hypothecation of stock of Inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of moveable fi xed assets, both present and future, ranking pari-passu interse and fi rst charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company. As a collateral security, Parent Company loans are additionally secured by way of pledge of 12,50,000 equity shares and cross corporate guarantee of Joint venture. Supplier’s credit (in foreign currency) is repayable in full in the year 2016 and carries interest @ 2.04% (rate as on the reporting date).

4. The loans of Joint venture from banks are secured by way of hypothecation of stock of Inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of movable fi xed assets, both present and future, and fi rst charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company. As a collateral security these loans are also backed by a cross corporate guarantee of the Parent Company. Term loan is repayable in eight quarterly instalments commencing from March, 2014 and carries interest @ 13.30% (rate as on the reporting date). Supplier’s credit (in foreign currency) is repayable in full in the year 2016 and carries interest @ 1.98% - 2.04% (rate as on the reporting date).

5. As per renewed/revised terms and conditions, loans taken by Parent Company from bodies corporate amounting to Rs. 3000.00 lacs are repayable in full in the year 2015 and Rs. 2400.00 lacs are repayble in the year 2017 respectively. These loans carry interest @ 10.50% and 11.00% (rate as on the reporting date).

6. Loans taken by Joint venture from bodies corporate are repayable in full in the year 2015 and carries interest @ 10.50% (rate as on the reporting date).

7. Working capital loans/trade credits from banks being working capital credit facilities, sanctioned by banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits(either fully or partially) and, interalia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the loan accounts in any manner.

8. Working capital loans (both fund and non-fund based) from State Bank of India (SBI) and State Bank of Patiala (SBP) are secured by hypothecation of the stock of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of moveable fi xed assets, both present and future, ranking pari-passu and fi rst charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Parent Company and Joint Venture. As a collateral security, the credit facilities from SBI of Parent Company are additionally secured by way of pledge of 12,50,000 equity shares and cross corporate guarantee of Joint Venture.

9. Contingent liabilities and Commitments (to the extent not provided for) -

(a) Contingent liabilities :

(i) Claims against the Company not acknowledged as debts Rs.96.75 lacs (Rs. Nil).

(ii) Pending cases with income tax appellate authorities where income tax department has preferred appeals - liability not ascertainable.

(iii) Sales tax matter under litigation Rs. 18.96 lacs (Rs Nil).

(iv) Appeals preferred by the Company against the claim/levy of differential sales tax due to timely non-submission of declaration forms for concessional sales tax. The demand(s)/levy on merits of the cases have been stayed and are pending before the appellate authorities, liabilities against which are unascertainable until final outcome in the pending cases.

(v) Cross corporate guarantee given by the Company as a collateral security against working capital credit facilities aggregating to Rs.10700.00 lacs (outstanding as on March 31, 2014 Rs.6845.51 lacs) sanctioned by a bank to Birla Ericsson Optical Limited, a joint venture.

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

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs. 277.79 lacs (Rs.352.49 lacs).

(ii) Commitment relating to Derivatives and lease arrangements are disclosed in Note No. 37 and Note No. 41 respectively.

10. The Company has filed a law suit against an overseas supplier and its Indian agent. The supplier in order to overreach the said law suit invoked alleged arbitration agreement which is subject matter of the Suit filed by the Company, interalia, claiming recovery of an aggregate amount equivalent to Rs.3974.88 lacs as at 31st March, 2014, as damages for the unsupplied goods for the period from October, 2002 to September, 2006. The Civil Court stayed the Arbitration proceedings and the said stay order has been confirmed by the High Court of Madhya Pradesh at Jabalpur and also by the Hon''ble Supreme Court. An order of the High Court of Madhya Pradesh referring the parties to Arbitration has also been stayed by the Hon''ble Supreme Court in the Special Leave Petitions filed by the Company, which are pending before the Hon''ble Supreme Court. Based on appraisal of the matter, the Company has been legally advised that the said claim against the Company is unsustainable and there is no likelihood of any liability arising against the Company.

11. Trade receivables (considered good) and outstanding include Rs. 195.86 lacs (Rs. 191.93 lacs) withheld by a customer against various bills which has been appropriately contested by the Company. Based on the relevant contract, the Company does not expect any material adjustments, in the books of the account.

12. The amount of tax credit available to the Company in pursuance to section 115JAA of the Income Tax Act, 1961, against provision for Current Tax (MAT) during the year shall be accounted for as and when allowed.

13. In the opinion of the management, the decline in the market value of quoted Non-current investment (trade) in a Company (carrying cost Rs.3193.75 lacs) by Rs.1937.79 lacs at the year end is temporary, in view of the strategic long term nature of the investment and having regard to intrinsic asset base/net worth and future growth potential anchored on state-of-the-art manufacturing facilities of the investee company and hence, does not call for any provision there against. However, there is no diminution in the value of quoted Non-current investments, if market value of all Non-current investments is taken together.

14. Employee Benefits:

(a) The Company''s defined benefit plans include the approved funded Gratuity scheme which is administered through Group Gratuity scheme with Life Insurance Corporation of India and non- funded schemes viz. Pension (applicable only to certain categories of employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on March 31, 2014 are summarised below:

15. Segment Information:

The business segment of the Company is divided into two categories i.e. Cables and EPC (Engineering, Procurement and Construction). A brief Description of the types of products and Services provided by each reportable segment is as follows:

"Cables"- The Company manufactures and markets various types of cables including Telecommunication cables, other types of wires & cables and FRP rods/Glass rovings, etc.

"EPC" (Engineering, Procurement and Construction) -The Company undertakes and executes contracts and provide services with or without materials, as the case may be.

39. Disclosures in respect of related parties as defined in Accounting Standard (AS-18), with whom transactions were carried out in the ordinary course of business during the year are given below:

Subsidiaries : August Agents Ltd.(AAL), Insilco Agents Ltd.(IAL), Laneseda Agents Ltd.(LAL) Joint Venture : Birla Ericsson Optical Ltd.(BEOL)

Enterprise over which a director is able to exercise significant influence : Shakun Polymers Limited (SPL)

Key Management Personnel : Shri Y.S. Lodha ( Managing Director)

The Company by itself or along-with its subsidiaries hold more than 20% of the voting power of certain bodies corporate. The Company has been legally advised that it does not have any "significant influence” in the said bodies corporate as defined in Accounting Standard (AS-18) - "Related Party Disclosure” and accordingly, has not considered the above investees as related parties under (AS-18).

16. The Company has reclassified previous year''s figures to conform to current year''s classification. The figures in brackets are those in respect of the previous accounting year.

17. The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.


Mar 31, 2013

1. NATURE OF OPERATIONS

The Company is engaged in the business of manufacturing and sale of Telecommunication cables, other types of wires & cables, FRP rods/Glass rovings, etc. and Engineering, Procurement and Construction (EPC) business.

(a) Working capital loans/trade credits from banks being working capital credit facilities, sanctioned by banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits(either fully or partially) and, interalia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the loan accounts in any manner.

(b) Working capital loans (both fund and non-fund based) from State Bank of India (SBI) and State Bank of Patiala (SBP) are secured by hypothecation of the stock of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of moveable fixed assets, both present and future, ranking pari-passu interse and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company. As a collateral security, the credit facilities from SBI are additionally secured by way of pledge of 12,50,000 equity shares and cross corporate guarantee of Birla Ericsson Optical Limited, a joint venture.

2. Contingent liabilities and Commitments (to the extent not provided for) -

(a) Contingent liabilities

(i) Claims against the Company not acknowledged as debts Rs. Nil (Rs.6.17 lacs).

(ii) Pending cases with income tax appellate authorities where income tax department has preferred appeals - liability not ascertainable.

(iii) Appeals preferred by the Company against the claim/levy of differential sales tax due to timely non-submission of declaration forms for concessional sales tax. The demand(s)/levy on merits of the cases have been stayed and are pending before the appellate authorities, liabilities against which are unascertainable until final outcome in the pending cases.

(iv) Bills of exchange under letter of credit discounted with a bank and outstanding at the end of the year Rs. Nil (Rs. 47.72 lacs).

(v) Cross corporate guarantee given by the Company as a collateral security against working capital credit facilities aggregating to Rs.7000.00 lacs (outstanding as on March 31, 2013 Rs. 4470.66 lacs) sanctioned by a bank to Birla Ericsson Optical Limited, a joint venture.

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

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs. 352.49 lacs (Rs. 71.53 lacs).

(ii) Commitment relating to Derivatives and lease arrangements are disclosed in Note No. 36 and Note No. 40 respectively.

3. The Company has filed a law suit against an overseas supplier and its Indian agent. The supplier in order to overreach the said law suit invoked alleged arbitration agreement which is subject matter of the Suit filed by the Company, interalia, claiming recovery of an aggregate amount equivalent to Rs.3945.31 lacs as at 31st March, 2013, as damages for the unsupplied goods for the period from October, 2002 to September, 2006. The Civil Court stayed the Arbitration proceedings and the said stay order has been confirmed by the High Court of Madhya Pradesh at Jabalpur and also by the Hon''ble Supreme Court. An order of the High Court of Madhya Pradesh referring the parties to Arbitration has also been stayed by the Hon''ble Supreme Court in the Special Leave Petitions filed by the Company, which are pending before the Hon''ble Supreme Court. Based on appraisal of the matter, the Company has been legally advised that the said claim against the Company is unsustainable and there is no likelihood of any liability arising against the Company.

4. Trade receivables (considered good) and outstanding include Rs. 191.93 lacs (Rs. 300.41 lacs) withheld by a customer against various bills which has been appropriately contested by the Company. Based on the relevant contract, the Company does not expect any material adjustments, in the books of the account.

5. The amount of tax credit available to the Company in pursuance to section 115JAA of the Income Tax Act, 1961, against provision for Current Tax (MAT) during the year shall be accounted for as and when allowed.

6. In the opinion of the management, the aggregate decline in the market value of quoted Non-current investments (trade) in a joint venture and in another Company (carrying cost Rs. 4093.76 lacs) by Rs.1877.98 lacs at the year end is temporary, in view of the strategic long term nature of the investment and having regard to intrinsic asset base/net worth and future growth potential anchored on state-of-the-art manufacturing facilities of the investee companies and hence, does not call for any provision there against. However, there is no diminution in the value of quoted Non-current investments, if market value of all Non-current investments is taken together.

7. Employee Benefits:

(a) The Company''s defined benefit plans include the approved funded Gratuity scheme which is administered through Group Gratuity scheme with Life Insurance Corporation of India and non- funded schemes viz. Pension (applicable only to certain categories of employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on March 31, 2013 are summarised below:

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

Information relating to experience adjustments to plan assets and liabilities as required by Para 120(n)(ii) of the Accounting Standard (AS-15) (revised) on employee Benefits is not available with the Company. The impact of the same is not material.

(b) Company''s contribution to defined contribution schemes such as Government administered Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions. The Company has recognised the following contributions to Provident/ Family Pension and Superannuation Funds as an expense and included in employee benefits expense in the Statement of Profit and Loss.

8. Segment Information:

The business segment of the Company is divided into two categories i.e. Cables and EPC (Engineering, Procurement and Construction). A brief Description of the types of products and Services provided by each reportable segment is as follows:

"Cables"- The Company manufactures and markets various types of cables including Telecommunication cables, Other types of wires & cables and FRP rods/Glass rovings, etc.

"EPC" (Engineering, Procurement and Construction) -The Company undertakes and executes contracts and provide services with or without materials, as the case may be.

(a) Primary Segment Information (by business segments):

The following table presents revenue and profit/(loss) information regarding business segments for the year(s) ended March 31, 2013 and March 31, 2012 and certain liabilities information regarding business segments as at March 31, 2013 and March 31, 2012.

9. Disclosures in respect of related parties as defined in Accounting Standard (AS-18), with whom transactions were carried out in the ordinary course of business during the year are given below:

Subsidiaries : August Agents Ltd. (AAL), Insilco Agents Ltd. (IAL),

Laneseda Agents Ltd. (LAL)

Joint Venture : Birla Ericsson Optical Ltd. (BEOL)

Enterprise over which a director is able : Shakun Polymers Limited (SPL) to exercise significant influence

Key Management Personnel : Shri Y.S. Lodha ( Managing Director)

The Company by itself or along-with its subsidiaries hold more than 20% of the voting power of certain bodies corporate. The Company has been legally advised that it does not have any "significant influence" in the said bodies corporate as defined in Accounting Standard (AS-18) - "Related Party Disclosure" and accordingly, has not considered the above investees as related parties under (AS-18).

* As the liability of gratuity and leave encashment is provided on an actuarial basis for the company as a whole, therefore amount not included above.

(i) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

(ii) Transactions and balances relating to reimbursement of expenses to/from the above related parties have not been considered.

(iii) Transactions with related parties are done at arm''s length basis.

10. Leases:

(a) Operating Lease:

The Company has taken certain office premises under operating lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs. 66.98 lacs (Rs.75.48 lacs) are charged to the Statement of Profit and Loss.

11. There is no impairment of assets during the year.

12. The Company has reclassified previous year''s figures to conform to current year''s classification. The figures in brackets are those in respect of the previous accounting year.

13. The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.


Mar 31, 2012

1. NATURE OF OPERATIONS

The Company is engaged in the business of manufacturing and sale of Telecommunication cables, other types of wires & cables, FRP rods/Glass rovings, etc. and Engineering, Procurement and Construction (EPC) business.

(a) There is no variation or change in the issued, subscribed and fully paid-up equity share capital structure during the year. Therefore, no seperate disclosure of reconciliation of the number of equity share outstanding as at the beginning and at the end of the year is required.

(b) The Company has only one class of shares referred to as equity shares having nominal value of Rs.10/-. The holders of equity shares are entitled to one vote per share.

(a) Working capital loans/trade credits from banks being working capital credit facilities, sanctioned by banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits(either fully or partially) and, interalia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the loan accounts in any manner whatsoever, etc.

(b) Working capital loans (both fund and non-fund based) from State Bank of India (SBI) and State Bank of Patiala (SBP) are secured by hypothecation of the stock of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, bills, invoices, documents, contracts, etc., both present and future, and are further secured by way of hypothecation of moveable fixed assets, both present and future, ranking pari-passu interse and first charge created by way of joint mortgage by deposit of title deeds of immovable properties of the Company. As a collateral security, the credit facilities from SBI are additionally secured by way of pledge of 12,50,000 equity shares and cross corporate guarantee of Birla Ericsson Optical Limited, a joint venture.

2. Contingent liabilities and Commitments (to the extent not provided for) :

(a) Contingent liabilities :

(i) Claims against the Company not acknowledged as debts Rs.6.17 lacs (Rs.6.17 lacs).

(ii) Pending cases with income tax appellate authorities where income tax department has preferred appeals - liability not ascertainable.

(iii) Appeals preferred by the Company against the claim/levy of differential sales tax due to timely non-submission of declaration forms for concessional sales tax. The demand(s)/levy on merits of the cases have been stayed and are pending before the appellate authorities, liabilities against which are unascertainable until final outcome in the pending cases.

(iv) Bills of exchange under letter of credit discounted with a bank and outstanding at the end of the year Rs. 47.72 lacs (Nil) (Since received Rs. 23.82 lacs).

(v) Cross corporate guarantee given by the Company as a collateral security against working capital credit facilities aggregating to Rs.5400.00 lacs (outstanding as on March 31, 2012 Rs. 2819.27 lacs) sanctioned by a bank to Birla Ericsson Optical Limited, a joint venture.

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

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs. 71.53 lacs (Rs. 43.57 lacs).

(ii) Commitment relating to Derivatives and lease arrangements are disclosed in Note No. 35 and Note No. 39 respectively.

3. The Company has filed a law suit against an overseas supplier and its Indian agent. The supplier in order to overreach the said law suit invoked alleged arbitration agreement which is subject matter of the Suit filed by the Company, interalia, claiming recovery of an aggregate amount equivalent to Rs.4245.70 lacs as at 31st March, 2012, as damages for the unsupplied goods for the period from October, 2002 to September, 2006. The Civil Court stayed the Arbitration proceedings and the said stay order has been confirmed by the High Court of Madhya Pradesh at Jabalpur and also by the Hon'ble Supreme Court. An order of the High Court of Madhya Pradesh referring the parties to Arbitration has also been stayed by the Hon'ble Supreme Court in the Special Leave Petitions filed by the Company, which are pending before the Hon'ble Supreme Court. Based on appraisal of the matter, the Company has been legally advised that the said claim against the Company is unsustainable and there is no likelihood of any liability arising against the Company.

4. Trade receivables (considered good) and outstanding include Rs. 300.41 lacs (Rs. 201.51 lacs) withheld by a customer against various bills which has been appropriately contested by the Company. Based on the relevant contract, the Company does not expect any material adjustments, in the books of the account.

5. In the opinion of the management, the aggregate decline in the market value of quoted Non-current investments (trade) in a joint venture and an other Company (carrying cost Rs. 4093.76 lacs) by Rs.1819.09 lacs at the year end is temporary, in view of the strategic long term nature of the investment and having regard to intrinsic asset base/net worth and future growth potential anchored on state-of- the-art manufacturing facilities of the investee companies and hence, does not call for any provision there against. However, there is no diminution in the value of quoted Non-current investments, if market value of all Non-current investments is taken together.

6. Employee Benefits:

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

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

Information relating to experience adjustments to plan assets and liabilities as required by Para 120(n)(ii) of the Accounting Standard (AS-15) (revised) on employee Benefits is not available with the Company. The impact of the same is not material.

(b) Company's contribution to defined contribution schemes such as Government administered Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions. The Company has recognised the following contributions to Provident/ Family Pension and Superannuation Funds as an expense and included in employee benefits expense in the Statement of Profit and Loss.

7. Segment Information:

The business segment of the Company is divided into two categories i.e. Cables and EPC (Engineering, Procurement and Construction). A brief Description of the types of products and Services provided by each reportable segment is as follows:

"Cables"- The Company manufactures and markets various types of cables including Telecommunication cables, Other types of wires & cables and FRP rods/Glass rovings, etc.

"EPC" (Engineering, Procurement and Construction) -The Company undertakes and executes contracts and provide services with or without materials, as the case may be.

(a) Primary Segment Information (by business segments):

The following table presents revenue and profit/(loss) information regarding business segments for the year(s) ended March 31, 2012 and March 31, 2011 and certain liabilities information regarding business segments as at March 31, 2012 and March 31, 2011.

(i) All the assets of the Company, except the carrying amount of assets aggregating to Rs.1616.23 lacs (Rs.1939.18 lacs) are within India.

(ii) The Company has common fixed assets for producing goods/providing services to Domestic Market as well as for Overseas Markets. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished.

8. Disclosures in respect of related parties as defined in Accounting Standard (AS-18), with whom transactions were carried out in the ordinary course of business during the year are given below:

Subsidiaries : August Agents Ltd., Insilco Agents Ltd., Laneseda Agents Ltd.

Joint Venture : Birla Ericsson Optical Ltd.(BEOL)

Key Management Personnel : Shri Y.S.Lodha (Managing Director)

The Company by itself or along-with its subsidiaries hold more than 20% of the voting power of certain bodies corporate. The Company has been legally advised that it does not have any "significant influence" in the said bodies corporate as defined in Accounting Standard (AS-18) - "Related Party Disclosure" and accordingly, has not considered the above investees as related parties under (AS-18).

(i) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

(ii) Transactions and balances relating to reimbursement of expenses to/from the above related parties have not been considered.

(iii) Transactions with related parties are done at arm's length basis.

9. The Company has taken certain office premises under operating lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs. 75.48 lacs (Rs.71.12 lacs) are charged to the Statement of Profit and Loss.

10. The Company has reclassified previous year's figures to conform to current year's classification as per revised Schedule VI notified under the Companies Act, 1956. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements save and except presentation and disclosure as prescribed therein. The figures in brackets are those in respect of the previous accounting year.

11. The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

 
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