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Notes to Accounts of Bhagyanagar India Ltd.

Mar 31, 2018

1. Corporate Information

Bhagyanagar India Ltd (“the company”) ia a Company registered under the companies act, 1956. It is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). It was incorporated on 2nd September, 1985 having its registered office at 5th Floor, Surya Towers, Sardar Patel Road, and Secunderabad-500003. The company’s CIN No. is L27201TG1985PLC012449. The company is engaged in the manufacture of copper products.

Basis of preparation

The financial statements are separate financial statements prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These standalone financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS. Refer to Note: 44 for information on how the Company adopted Ind AS.

These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.

2. Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make judgements, estimates and assumptions that affect the reported balances of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgements

In the process of applying the accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the financial statements:

i) Classification of property The Company determines whether a property is classified as investment property or inventory property:

Investment property comprises land and buildings (principally offices, commercial warehouse and retail property) that are not occupied substantially for use by, or in the operations of, the Company, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are substantially rented to tenants and not intended to be sold in the ordinary course of business.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

i) Classification of leases

The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset’s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

ii) Useful lives of depreciable/amortisable assets

Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain software, customer relationships, IT equipment and other plant and equipment.

iii) Fair value measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

c) Recent Amendments

Standards issued but not yet effective

a. Ind AS 115-Revenue from Contracts with Customers-The Ministry of Corporate Affairs (MCA) on March 28, 2018 has notified new Indian Accounting Standard as mentioned above .The new standard will come to into force from accounting period commencing on or after April 01, 2018.It replaces existing recognition guidance, including Ind AS 18 Revenue and Ind AS 11 Construction contract. The standard is likely to affect the measurement, recognition and disclosure of revenue. The Company has evaluated and there is no material impact of this amendment on the Financial Statement of the Company except disclosure. The Company will adopt the Ind AS 115 on the required effective date.

b. Ind AS 21, The Effect of Changes in Foreign Exchange Rates - The amendments to Ind AS 21 addresses issue to determine the date of transactions for the purpose of determining the exchange rate to be used on initial recognition of related assets, expenses or income when entity has received or paid advances in foreign currencies by incorporating the same in Appendix B to Ind AS 21. The amendment will come into force from accounting period commencing on or after April 01, 2018. The Company has evaluated this amendment and impact of this amendment will not be material.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

3. Related Party Disclosure

(a) Name of the Related Parties and related party relationship

Enterprises owned or significantly influenced by key management personnel or their relatives:

(i) Surana Telecom and Power Limited

(ii) Bhagyanagar Properties Limited

(iii) Bhagyanagar Ventures Private Limited

(iv) Surana Solar Systems Private Limited

(v) Metropolitan Ventures India Limited

(vi) Scientia Infocom India Private Limited

(vii) Surana Solar Limited

(viii) Solar Dynamics Private Limited

(ix) Bhagyanagar Metals Limited Subsidiary Companies

(i) Aanvik Mercantile Private Limited Key Managerial Personnel

(i) G.M Surana

(ii) Narender Surana

(iii) Devendra Surana

(iv) Narender Munoth

(v) N.K.Reddy

(vi) Surendra Bhutoria

(vii) Badarish H Chimalgi

Relatives of Key Managerial Personnel

(i) Namrata Surana

(ii) Nivriti Surana

(b) The following transactions were carried out with related parties in the ordinary course of business during the year:

4. Retirement and Other Employees Benefits

The Company’s employee benefits primarily cover provident fund, gratuity and leave encashment.

Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue.

Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done. The gratuity liability and the net periodic gratuity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ losses are immediately charged to the Profit & Loss account and are not deferred.

The following table summarizes the components of Net Benefit expenses recognized in the Profit & Loss account and amount recognized in the Balance Sheet for the respective plans.

5. Disclosure required under Section 186(4) of the Companies Act 2013

For details of loans, advances and guarantees given and securities provided to related parties refer Note 30.

6. Segment Reporting:

Factors used to identify the reportable segments:

The Company has following business segments, which are its reportable segments. These segments offer different products and services, and are managed separately because they require different technology and production processes. Operating segment disclosures are consistent with the information

7. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company’s operations. The Company’s principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances and refundable deposits that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including refundable joint development deposits, security deposits, loans to employees and other financial instruments.

Trade receivables

i. Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company’s credit risk in this respect.

ii. Receivables resulting from other than sale of properties: The firm has established credit limits for customers and monitors their balances on ongoing basis. Credit Appraisal is performed before leasing agreements are entered into with customers. The risk is also marginal due to customers placing significant amount of security deposits for lease and fit out rentals.

Financial Instrument and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s Finance department in accordance with the Company’s policy. Investments of surplus funds are reviewed and approved by the Company’s Board of Directors on an annual basis The Company’s maximum exposure to credit risk for the components of the statement of financial position at 31 March 2018 and 2017 is the carrying amounts.

C. Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

The table below summarizes the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

8. Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

9. First-time adoption of Ind AS

These financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 1, 2016, the Company’s date of transition to Ind AS.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

(a) Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment and investment property at their previous GAAP carrying value.

(b) Ind AS 27 requires investments in subsidiaries to be recorded at cost or in accordance with Ind AS 109 in its separate financial statements. However Ind AS 101 provides an option in case the Company decides to measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) at that date. The Company can avail the above exemption and recognize the investment in firms at the previous GAAP carrying amount at the date of transition to Ind AS.

The Company has also prepared a reconciliation of equity as at March 31, 2017 and April 1, 2016 under the Previous GAAP with the equity as reported in these financial statements under Ind AS, that reflect the impact of Ind AS on the components of statement of balance sheet which is presented below:

The Company has prepared a reconciliation of the net profit for the previous year ended March 31, 2017 under the Previous GAAP with the total comprehensive income as reported in these financial statements under Ind AS, that reflect the impact of Ind AS on the components of statement of profit and loss which is presented below:

Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit/loss to profit/loss as per Ind AS. Further, Indian GAAP profit/loss is reconciled to total comprehensive income as per Ind AS.

10. Previous year’s figures have been regrouped and rearranged, wherever found necessary.


Mar 31, 2016

Notes:1

(a) Foreign Currency Monetary Item Translation Difference Account

1 Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation, being a loss on transaction (i.e. Rs.66.33 per USD. as on 31st March,2016 from Rs. 62.59 per USD. as on 31st March,2015) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notification no.GSR.913(E)/914(E) dated 31st December,2011 issued by the Ministry of Corporate Affairs.

Notes:2

(a) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item

3 ICICI Bank provided ECB amounting to USD 13,560,000 carrying a fixed interest rate of 6.96%. ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors. Long Term ECB liability as at 31.03.2016 amounting to USD 6,873,564 is valued at Rs.66.33 per USD as on 31st March,2016 against Rs.62.59 per USD. as on 31st March,2015.

4 The principal is repayable in 28 quarterly installments. The company has repaid 13 quarterly installments, 4 installments being repaid during the current Financial Year amounting to USD 1,741,104 . Total amount repayable towards principal during the Financial Year 2016-2017 is USD 1,833,312 (Rs. 121,603,585 on conversion @ Rs. .66.33 per USD as on 31st March,2016) and the same has been classified under Other Current Liabilities.

5(b) Deferred Sales Tax

6 Deferred Sales Tax Loan is interest free , repayment of which started from Financial Year 2013-14 . An amount of Rs.15,729,561/- is repaid during the current Financial Year. Accordingly due within a Year is Rs.430,753/- which is classified under Other Current Liabilities.

Notes:

7 (a) (i) Buyer''s credit from banks

Buyers Credit is secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

8(b) As per the information available with the company about the industrial status of the Creditor there are no dues to any micro and small enterprises under the micro small and medium enterprises development act 2006

Current maturities on long term debt 2.6(a) The principal amount of ECB from ICICI Bank repayable during the Financial Year 2016-2017 is grouped under the head Current Liabilities (Also See Note.2.3(a))

9(b) The amount of Deferred Sales Tax repayable during the Financial Year 2016-2017 is grouped under the head Current Liabilities (Also See Note.2.3 (c))

Provision for Interest on Term Loan

10(c) Provision for interest on ECB from ICICI Bank has been made till 31.03.2016.Payment of interest is due on 15th April,2016

Merger of Solar Power Unit of the company with M/s Surana Telecom and Power Limited

Persuant to Scheme of Arrangement under section 391 to 394 of the Companies Act,1956 , According to the scheme, the Solar Power unit of the company would merge and vest in to M/s Surana Telecom and Power Limited , on going concern basis. The Scheme has been approved by the Board of Directors at their meeting held on 12th October 2015, and subject to necessary consents and other approvals as may be required including that of shareholders of the company.

Company has filed an application with Bombay Stock Exchange Limited and National Stock Exchange of India Limited seeking approval in terms of the provisions of the provisions of Clause 24(f) of the Listing Agreement and with Securities Exchange Board of India. The application has been accorded by them.

The Proposed Scheme of Arrangement is between M/s Bhagyanagar India Limited (BIL) and M/s Surana Telecom and Power Limited (STPL). The scheme is subject to approval of the Hon''ble High Court of Judicature of Telangana and Andhra Pradesh at Hyderabad and regulators , the share holders , and creditors , if any of BIL and STPL and any others as may be directed by the Hon''ble High Court of Judicature of Telangana and Andhra Pradesh at Hyderabad. The approval is awaited.

Note : 11(a)

Management has preferred an appeal against the above demand before the CIT(Appeals).

Note : 12

Retirement and other Employee Benefits

13 The Company''s employee benefits primarily cover provident fund, gratuity and leave encashment.

14 Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

15 Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

16 The company has an overfunded position for its gratuity plans and accordingly, no provision has been made as at 31.03.2016

The following Table sets out the status of the gratuity plan as required under AS-15.

Note : 17

As per Accounting Standard(AS) 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.


Mar 31, 2015

1.1(a) Foreign Currency Monetary Item Translation Difference Account

Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation, being a loss on transaction (i.e. Rs. 62.59 per USD. as on 31st March,2015 from Rs 60.10 per USD. as on 31st March,2014) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notification no.GSR.913(E)/914(E) dated 31st December,2011 issued by the Ministry of Corporate Affairs.

Notes: 1.2(a) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item 1 ICICI Bank provided ECB amounting to USD 13,560,000 carrying a fixed interest rate of 6.96%. ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors. Long Term ECB liability as at 31.03.2015 amounting to USD 8,706,875 is valued at Rs. 62.59 per USD as on 31st March,2015 against Rs. 60.10 per USD. as on 31st March,2014.

2 The principal is repayable in 28 quarterly installments. The company has repaid 9 quarterly installments, 4 installments being repaid during the current Financial Year amounting to Rs. 89,037,639.Total amount repayable towards principal during the financial year 2014-2015 is USD 1,741,104 (Rs. 108,975,699 on conversion @Rs. 62.59 per USD as on 31st March,2015) and the same has been classified under Other Current Liabilities.

3.(a) As per the information about the industrial status of the Creditor there are no dues to any micro and small enterprises under the micro small and medium enterprises development act 2006

4.(a) Current maturities on long term debt

The principal amount of ECB from ICICI Bank repayable during the Financial Year 2015-2016 is grouped under the head Current Liabilities (Also See Note.2.3(a))

5.(.b) Car loan from Axis Bank Ltd is secured against hypnotization of Car. The loan was taken during the Financial Year 2012-13 and is repayable in monthly installment ofRs. 215,263/- each. The final installment repayable in 2015-16 is classified under Other Current Liabilities.

6. (a) (i) Buyer's credit from banks

Buyers Credit is secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

7.(b) Deferred Sales Tax

1 Deferred Sales Tax Loan is interest free , repayment of which started from Financial Year 2013-14 . An amount of Rs. 10,154,409/- is repaid during the current Financial Year. Accordingly due within a Year is Rs. 16,160,314/- which is classified under Other Current Liabilities.

8.(c) The amount of Deferred Sales Tax repayable during the Financial Year 2015-2016 is grouped under the head Current Liabilities (Also See Note.2.3 (c))

Provision for Interest on Term Loan 2.6(d) Provision for interest on ECB from ICICI Bank has been made till 31.03.2015.Payment of interest is due on 15th April,2015

Note: 9.(a) Out of the Total demand of Rs. 28,576,863/-, a sum of Rs. 16,053,076/- has been paid and the same is shown in note 2.11 of the Balance Sheet under the Head " Taxes Paid Under Protest".

Note: 10(b) Management has preferred an appeal against the above demand before the CIT(Appeals).

Note: 11.

Retirement and other Employee Benefits

1 The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.

2 Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3 Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

4 The company has an overfunded position for its gratuity plans and accordingly, no provision has been made as at 31.03.2015

The following Table sets out the status of the gratuity plan as required under AS-15.


Mar 31, 2014

1.(a) Foreign Currency Monetary Item Translation Difference Account

Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation,being a loss on transaction ( i.e. USD 60.10 per Re. as on 31st March,2014 from USD 54.39 per Re. as on 31st March,2013) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notification no.GSR.913(E)/914(E) dated 31st December,2011 issued by the Ministry of Corporate Affairs.

2. (a) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item

1 ICICI Bank provided ECB amounting to USD 1,35,60,000 carrying a fixed interest rate of 6.96%. ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors. Long Term ECB liability as at 31.03.2014 amounting to USD 1,04,47,980 is valued at USD 60.10 per Re. as on 31st March,2014 against USD 54.39 per Re. as on 31st March,2013.

2 The principal is repayable in 28 quarterly instalments.The company has repaid 5 quarterly instalments, 4 instalments being repaid during the current Financial Year amounting to Rs. 7,82,18,608.Total amount repayable towards principal during the financial year 2014-2015 is USD 14,64,480 (Rs.8,80,15,248 on conversion @ Rs..60.10 per USD as on 31st March,2014) and the same has been classified under Other Current Liabilities.

3. (b) Car Loan from Bank

Car loan from Axis Bank Ltd is secured against hyphotication of Car. The loan was taken during the Financial Year 2012-13 and is repayable in monthly installment of Rs. 2,15,263/- each. Accordingly due with in a year is Rs 25,83,156/- which is clasified under Other Current Liabilities.

4. (c) Deferred Sales Tax

1 Deferred Sales Tax Loan is interest free , repayment of which started from Financial Year 2013-14. An amount of Rs.10,82,565/- is repaid during the current Financial Year. Accordingly due with in a Year is Rs. 1,01,54,409/- which is classified under Other Current Liabilities.

Current maturities on long term debt

5. (a) The principal amount of ECB from ICICI Bank repayable during the Financial Year 2014-2015 is grouped under the head Current Liabilities (Also See Note.2.3(a))

(b) The amount of Deferred Sales Tax repayable during the Financial Year 2014-2015 is grouped under the head Current Liabilities (Also See Note.2.3 (c)) Provision for Interest on Term Loan

(c) Provision for interest on ECB from ICICI Bank has been made till 31.03.2014.Payment of interest is due on 15th April,2014

6. (a) During the year,the company acquired 1,30,000 shares at the rate of Rs.15 each in Metropolitan Ventures India Limited making it a wholly owned subsidiary of the company.

(b) During the year,the company acquired 14,72,600 shares at the rate of Rs.10 each in Solar Dynamics Private Limited by way of conversion of loan into equity.

7. (a) Income tax Receivable(TDS and Advance Tax)

During the current Financial Year,the company won appeals relating to Assessment Year 2008-2009 and 2009-2010 pending before ITAT.Consequently, tax amount of Rs.68,00,000 which was paid under pro- test pending appeal, is transferred to Income Tax Receivable Account.

(b) Deferred Revenue Expenditure

Represents Processing fees paid to ICICI Bank for availing ECB which is amortised over a period of 3 years starting from Financial Year 2011-2012.Current Financial Year being the last year of Amortisation,balance expenditure amounting to Rs. 55,20,653 has been charged off to Profit & Loss Account during the current Financial Year. [Refer Note No.2.23(a)]

Note: 8 As at As at Commitments and Contingent Liabilities 31.03.2014 31.03.2013 Rs. Rs.

(i) Counter Guarantees given to the Banks against Guarantee issued by them 33,600,000 28,650,000

(ii) Letters of Credit opened by Banks 44,884,679 -

(iii) Customs Duty/Excise Duty matters under Dispute (Net of Taxes Paid under Protest) 12,523,787 12,569,007

(iv) Demand raised by Income-Tax Authorities contested by the Company (Net of Taxes Paid under Protest) 13,733,766 13,733,766

Note : 9

Retirement and other Employee Benefits

1. The Company''s employee benefits primarily cover provident fund, gratuity and leave encashment.

2. Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3. Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

4. The company has an overfunded position for its gratuity plans and accordingly,no provision has been made as at 31.03.2014


Mar 31, 2013

Note :1.1

Retirement and other Employee Benefits

1. The Company''s employee benefits primarily cover provident fund, gratuity and leave encashment.

2. Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3. Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.


Mar 31, 2012

1.1 (a) The company has bought back 44,10,000 Equity shares of the face value of Rs. 2/- each for total consideration of Rs. 8,20,53,689 during the year In accordance with the Scheme of Buy-back of equity shares approved by the competent authorities, the company has closed the scheme on 09.03.2012 as it has fulfilled all the requirements. Equity share capital of the company after the buy-back stands at 6,39,90,000 shares of the face value of Rs. 2-each.

1.2 (a) FCCB:

1 On 14th October,2011, the company redeemed the entire outstanding Foreign Currency Convertible Bonds amounting to Rs. 49,09,00,000 along with YTM and withholding tax of Rs. 23,68,83,795 and Rs. 2,63,20,422 respectively resulting in a total outflow of Rs. 75,41,04,217 (Refer note 2.23(b))

2 The obligation of repayment was met partly by availing ECB from ICICI Bank to the extent of Rs. 66,57,96,000 (US$ 1,35,60,000) and balance Rs. 8,55,00,000 have been paid through internal accrual of the company lying in mutual fund.

1.3 (b) Term Loan From ICICI Bank: Long Term Foreign Currency Monetary Item

1 ICICI Bank provided ECB carrying a fixed interest rate of 6.96% to the extent of Rs. 66,57,96,000 (US$ 1,35,60,000 @ Rs. 49.10 per US$). ECB is secured by first charge on certain fixed assets of the company and personal guarantee of Managing Directors.ECB liability as at 31.03.2012 is in- creased due to Foreign Exchange Fluctuation(i.e. USD 51.16 per Rs. as on 31st March,2012 against USD 49.10 per Rs., rate prevailing at the time of receipt of ECB)(Refer note.2.17(a))

2 The principal is repayable in 28 quarterly instalments beginning from 14th January, 2013.Total amount repayable towards principal during the financial year 2012-2013 is US$ 3,29,508 (Rs. 1,68,57,629 on conversion @ Rs., 51.16 per US$ as on 31st March, 2012)

1.4 (c) Deferred Sales Tax

1 Deferred Sales Tax Loan is interest free and payable in 84 monthly installments, starting from Financial Year 2013-14 & ending in 2019-20.

1.5 (a) Cash Credit is secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

1.6 (a) Sundry creditors include Rs. 12,47,59,330 secured by way of Letter of Credit/ Buyers credit. Letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation. Further, as per the information about the industrial status of the Creditor there are no dues to any micro and small enterprises under the micro small and medium enterprises development act 2006.

Current maturities on long term debt

1.7 (a) Term Loan from HDFC Bank is secured by Corporate Guarantee given by one of its Associate Companies.The loan is repayable during the Financial Year 2012-2013.

1.7 (b) The principal amount of ECB from ICICI Bank repayable during the Financial Year 2012-2013 is grouped under the head Current Liabilities.

Provision for Interest on Term Loan 2.6 (c) Provision for interest on ECB from ICICI Bank has been made till 31.03.2012. Payment of interest is due on 16th April,2012.

1.8 (a) The Board of Directors have recommended a dividend of Rs. 0.40 per share for the year ended 31st March, 2012 (Previous Year Rs. 0.40 per share).

In case of balances in Trade Receivables, letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation.

1.9 (a) Deferred Revenue Expenditure

Represents Processing fees paid to ICICI Bank for availing ECB which is amortised over a period of 3 years.one third of the expenditure amounting to Rs. 55,20,653 have been charged off to Profit & Loss Account during the current financial year. (Refer Note No.2.23(a))

1.9 (b) Foreign Currency Monetary Item Translation Difference Account

Increase in liability of ECB from ICICI Bank due to Foreign Exchange Fluctuation,being a loss on transaction (i.e. USD 51.16 per Rs. as on 31st March, 2012 from USD 49.10 per Rs. prevailing rate at the time of receipt of ECB) is debited to Foreign Currency Monetary Item Translation Difference Account as per the notification no.GSR.225(E) dated 31st March,2009 further amended by Notifi- cation no.GSR.913(E)/914(E) dated 31st December, 2011 issued by the Ministry of Corporate Affairs.

1.10 (a) Interest on Loans, Deposits and Others

Interest amounting to Rs. 7,03,43,053 has been Debited to Subsidiary Companies in accordance with section 372A of the Companies Act,1956 and is reflected in Advances to Subsidiary cos.

1.11(a) Financial Charges

Financial Charges includes Rs. 55,20,653 towards amortisation of Deferred Revenue Expenditure. (Refer Note No.2.17(a))

1.11 (b) Interest on FCCB Bonds

The Company had a commitment to the Foreign Currency Convertible Bond holders to pay Yield to Maturity at the rate of 8% compounded half year for the tenure of the bond i.e.5 years in case the option of conversion is not exercised by them,before the maturity of bond.As the interest has accrued on maturity of bond due to non-exercise of option of conversion interest amounting to Rs. 26,32,57,834 along with withholding tax is accounted in the Current Year.(Refer note no.2.3(a)).

1 Sales tax paid is net of the sales tax incentive of Rs. 1,74,28,877 sanctioned by Commissionerate of Industries

Note : 1.12

Retirement and other Employee Benefits

1 The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.

2 Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

3 Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

4 The company has an overfunded position for its gratuity plans and accordingly,no provision has been made as at 31.03.2012.


Mar 31, 2011

1. A. Equity Share Capital:

The company has bought back 5,26,614 Equity shares of the face value of Rs.2/- each for total consideration of Rs.135.17 lacs during the year in accordance with the Scheme of Buy-back of equity shares approved by the competent authorities, the company has closed the scheme on 17.05.2010 as it has fulfilled all the requirements. Total number of shares bought back under the scheme are 61,00,000 for a total consideration of Rs.1616.82 lacs. Equity share capital of the company after the buy-back stands at 684 lacs shares of the face value of Rs. 2-each.

2. Secured Loans:

- Cash Credit and Medium term loans from Banks are secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

3. Unsecured Loans - Foreign Currency Convertible Bonds:

- During the year 2006-07, the company issued at par, 5 years Zero Coupon US $ denominated Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 15 millions comprising of 150 bonds of US $ 1,00,000 each to finance capital expenditure. Out of the issued bonds, the company bought back 50 bonds of US $ 1,00,000 each during the year 2009-10.

- The remaining bond-holders have an option of converting these bonds into equity shares at the conversion price of Rs 44 per share (Face value Rs 2 each) and the bond-holders are entitled to get 104.45 lacs shares at any time prior to close of business on 17th October, 2011 unless redeemed.

- The company has a commitment towards the remaining FCCB bondholders to pay 8% half yearly compounded yield-to-maturity (YTM), in case the option of conversion is not exercised by them, within 5 years from the date of issue of the Bonds. The YTM accrues to the Bond-holders only at the time of repayment. Contingent liability on account of YTM is Rs 2063.63 lacs as on 31.03.2011 including withholding Tax @ 10%. This will undergo a change in accordance to the currency conversion rates and Income tax rates prevailing on the date of repayment if it is made on non- conversion.

- In compliance with the Companies (Accounting Standards) Rules,2009 issued the Ministry of Cor- porate Affairs, the notional exchange gain of Rs 40 lacs during the year due to appreciation in Rupee rate vis-à-vis US$ amounting to Rs 0.40 per US$ has been considered as income in the Profit & Loss Account

- Liability on account of Foreign Currency Convertible Bonds as on 31.03.2011 is valued at the exchange rate of that date which was Rs 44.65 = 1 US $ as against exchange rate of 31.03.2010 which was Rs 45.05 = 1 US$

- The company is obliged to pay dividend even to those FCCB Holders who convert their bonds into equity after adoption of the financial statements and up to the book closure date for dividend purposes. Incremental dividend payable, if any, will be paid out of the balance available in the Profit & Loss Account. No provision for dividend payable to the FCCB bondholders has been made in the books of accounts.

4. Contingent Liability not provided for (As certified by the management): 31-03-2011 31-03-2010 Rs.in lakhs Rs. In lakhs

a) Counter guarantees given to the Banks against Guarantee Issued by them 364.31 723.69

b) Letters of Credit opened by Banks/ Buyers' credit 326.02 124.91

c) YTM payable to the FCCB bond-holders 2063.63 1551.17

d) Custom duty/Excise duty matters under dispute 228.59 265.21

5. Fixed Assets - Impairment:

The management has carried out a detailed internal review of the assets with respect value in use, recoverable amount and carrying cost in books and is of the firm opinion that there is no impairment in the value of assets of the company.Hence no provision as required under AS-27,Impairment of Asset is made.

6. Minimum Aleternate Tax - MAT (Non-Current Asset)

The Management after a detailed review of future business growth prospect of the company, the provisions of applicable accounting standards to the company and the Guidance Note issued by Institute of Chartered Accountants of India on Accounting and Disclosure of MAT Credit, is of the opinion that the MAT credit would be reversed by way of adjustment to Income Tax Payable in the forthcoming years.

In the previous year this amount has been treated as Deferred Tax Asset now this has been reclassified as such in the Schedule of Loans and Advances.

7. Sundry Debtors & other balances:

- In case of balances in Sundry Debtors, Loans and Advances, other current assets and Sundry Creditors, letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation.

- Sundry creditors include Rs 661.95 lacs secured by way of Letter of Credit/ Buyers' credit. Further, the Company does not owe any sum to Micro & small enterprises as at the end of the accounting year on account of principal and interest under the Micro, Small and Medium Enterprises Development Act, 2006 as per the information and records available with the company about their industrial status which has been relied upon by the auditors.

8. Loss of Material in Transit

- During the year 2009-10, the company paid an advance of Rs 214.22 lacs to M/s United Interna- tional Shipping Agent (T) Ltd, Tanzania, towards part payment for cost of Copper cathode which is principal raw material for the copper manufacturing units. The payment thus made was disclosed as Advances to Suppliers under Schedule-11 of "Loans & Advances". However, Copper was stolen and replaced with worthless material on the sea-way.

- The Company lodged claims with Insurance Company and the shipping agent. The Insurance Com- pany has rejected the claim during the year in the month of October 2010.

- On the basis of legal opinion received and on the recommendations of the Board of Directors the amount is written off as irrecoverable business loss..

9. Interest on Loans, Deposits and others as appearing in Schedule-17 - Other Income is net of irrecov- erable interest amounting to Rs 148.68 lacs

10. Retirement and other Employees Benefits:

- The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.

- Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

- Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

- The company has provided for leave encashment liability at year end on account of unavailed earned leave as per the actuarial valuation done by Life Insurance Corporation of India.

- The following Table summaries the components of Net Benefit expenses recognized in the Profit & Loss Account and amount recognized in the Balance Sheet for the respective Plans

11. No Commission is paid to managerial personnel or provided for in the accounts for the year ended 31- 03-11 and hence the calculation for the same under section 349 of the company's act is not given.

12. Previous years figures have been regrouped/ rearranged wherever necessary.


Mar 31, 2010

1. A. Equity Share Capital:

The company has bought back 55,73,386 Equity shares, till 31st March, 2010, of the face value of Rs 2/- each for total consideration of Rs 1482 lakhs. In accordance with the Scheme of Buy-back of equity shares approved by the competent authorities, the company has closed the scheme on 17.05.2010 as it has fulfilled all the requirements. Total number of shares bought back under the scheme till the date of approval of the Accounts are 61,00,000 for a total consideration of Rs 1616.82 lakhs. Equity share capital of the company after the buy-back stands at 684 lakhs shares of the face value of Rs 2-each.

1. B. Dividend on share capital

Dividend is payable only on the Equity shares outstanding after closure of buy-back scheme being 684 lakhs shares and hence, provided for accordingly.

2. Secured Loans:

* Cash Credit and Medium term loans from Banks are secured by hypothecation of stocks, Debtors and first charge on pari-passu basis on specific fixed assets of the company respectively and personal guarantee of the Managing Directors.

3. Unsecured Loans - Foreign Currency Convertible Bonds:

* During the year 2006-07, the company issued at par, 5 years Zero Coupon US $ denominated Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 15 millions comprising of 150 bonds of US $ 1,00,000 each to finance capital expenditure.

* During the year under review, i.e. 2009-10, the Company has bought back 50 bonds of US $ 1,00,000 each, in accordance with the guidelines issued by the Reserve Bank of India from time to time. Out of total book profit of Rs 449.82 lakhs on buy-back of FCCBs, Rs 327.22 lakhs has been adjusted against cost of Fixed Assets in the ratio of application of FCCB proceeds and balance of Rs 122.60 lakhs has been adjusted against the "Foreign Currency Monetary Items Translation Difference Account" Reserve, created during the financial year 2008-09 in accordance with the Revised AS-11 adopted by the Company.

( The remaining bond-holders have an option of converting these bonds into equity shares at the conversion price of Rs 44 per share (Face value Rs 2 each) and the bond-holders are entitled to get 104.45 lakhs shares at any time prior to close of business on 10th October, 2011 unless redeemed.

* The company has a commitment towards the remaining FCCB bondholders to pay 8% half yearly compounded yield-to-maturity (YTM), in case the option of conversion is not exercised by them, within 5 years from the date of issue of the Bonds. As the liability on this account has not crystallized as on the date of Balance Sheet, no provision has been made in the books of accounts. Contingent liability on account of YTM is Rs 1551.17 lakhs as on 31.03.2010.

* In compliance with the Companies (Accounting Standards) Rules,2009 issued the Ministry of Corpo- rate Affairs, the notional exchange gain of Rs 590 lakhs during the year due to appreciation in Rupee rate vis-à-vis US$ amounting to Rs 5.9 per US$ has been adjusted partly against cost of Depreciable Fixed Assets in the ratio of FCCB proceeds utilized for acquiring those Assets and partly against cost of non-depreciable assets in the ratio of FCCB proceeds utilized for acquiring those assets. Detailed working of the impact of revised AS-11 is given in Note no. 14 to 17

* Liability on account of Foreign Currency Convertible Bonds as on 31.03.2010 is valued at the exchange rate of that date which was Rs 45.05 = 1 US $ as against exchange rate of 31.03.2009 which was Rs 50.95 = 1 US$

* The company is obliged to pay dividend even to those FCCB Holders who convert their bonds into equity after adoption of the financial statements and up to the book closure date for dividend purposes. Incremental dividend payable, if any, will be paid out of the balance available in the Profit & Loss Account. No provision for dividend payable to the FCCB bondholders has been made in the books of accounts.

4. Contingent Liability not provided for (As certified by the management):

31-03-2010 31-03-2009

Rs.in lakhs Rs. In lakhs

a) Counter guarantees given to the Banks against

Guarantee Issued by them 723.69 2537.20

b) Letters of Credit opened by 124.91 1352.59 Banks/Buyers credit

c) YTM payable to the FCCB bond-holders 1551.17 1812.93

d) Sales Tax matters under dispute Nil 11.28

e) Custom duty/Excise duty matters 265.21 265.21 under disput

5. Fixed Assets -

- Decrease in Cost of Free-hold Land, part of which is on account of capitalization of Information Technology Park, amounting to Rs 241 lakhs as shown in Schedule-5 to the Balance Sheet includes decrease of Rs 75.60 lakhs due to apportionment of Book Profit on buy-back of FCCB Bonds in the ratio of utilization of FCCB proceeds.

- Decrease in Cost of Lease-Hold Land amounting to Rs 7.52 lakhs as shown in Schedule-5 to the Balance Sheet includes decrease of Rs 2.39 lakhs due to apportionment of Book Profit on buy-back of FCCB in the ratio of utilization of FCCB proceeds.

* Decrease in cost of Plant & Machinery amounting to Rs 2318 lakhs as shown in Schedule-5 to the Balance Sheet includes decrease of Rs 38.90 lakhs and Rs 21.57 lakhs (Previous year increase of Rs 68.48 lakhs due to notinal loss) due to notional gain on foreign exchange fluctuation on account of FCCB liability and apportionment of Book Profit on buy-back of FCCB respectively during the year 2009-10. Further, the company has sold the entire Plant & Machinery of one of its oldest Units, situated in Hyderabad, engaged in manufacturing of Jelly Filled Telephone Cables. Cost and WDV of the same was Rs 2181.87 lakhs and Rs 45.74 lakhs respectively.

* Decrease in cost of Wind Power Plant amounting to Rs 638.13 lakhs as shown in Schedule-5 to the Balance Sheet is on account of decrease of Rs 410.47 lakhs and Rs 227.66 lakhs (Previous year increase of Rs 640.68 lakhs due to notional loss) due to notional gain on foreign exchange fluctuation on account of FCCB liability and apportionment of Book Profit on buy-back of FCCB respectively during the year 2009-10.

6. Fixed Assets - Impairment:

In the view of the management, there is no impairment of the assets of the company and the management is fully confident of realizing the book value of the assets in cash or in kind. Hence, no provision for the same has been made in the books of accounts.

7. Depreciation:

Depreciation on fixed assets has decreased by Rs 31.24 lakhs and Rs 5.26 due to adoption of The Companies (Accounting Standards) Rules,2009 issued by the Ministry of Corporate Affairs on 31.03.2009 and apportionment of Book profit on account of buy-back of FCCB respectively, thereby resulting into net decrease of 36.83 in depreciation.

8. Sundry Debtors & other balances:

* In case of balances in Sundry Debtors, Loans and Advances, other current assets and Sundry Creditors, letters seeking confirmation of year-end balances are sent to the concerned parties. The Balances are subject to confirmation and reconciliation.

* Advances to Suppliers under Schedule-11 of "Loans & Advances" include Rs 214.22 lakhs paid to Ms United International Shipping Agent (T) Ltd, Tanzania, towards cost of Copper cathode. However,

Copper was stolen and replaced with worthless material on the sea-way. The Company has lodged claim with Insurance Company which is under process. As the Management is confident of recovering the entire amount from the Insurance Company/Shipping Agent, no provision for loss of goods has been made in the books of Account.

* Sundry creditors include Rs 124.91 lakhs secured by way of Letter of Credit/Buyers credit. Further, the Company does not owe any sum to Micro & small enterprises as at the end of the accounting year on account of principal and interest under the Micro, Small and Medium Enterprises Development Act, 2006 as per the information and records available with the company about their industrial status which has been relied upon by the auditors.

9. Retirement and other Employees Benefits:

* The Companys employee benefits primarily cover provident fund, gratuity and leave encashment.

* Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss Account in the year in which they accrue.

* Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation. The gratuity liability and the net periodic gratuity cost is actually determined after considering discount rates, expected long-term return on plan assets and increase in compensation level. All actuarial gain/Losses are immediately charged to the Profit & Loss Account and are not deferred.

* The company has provided for leave encashment liability at year end on account of unavailed earned leave as per the actuarial valuation done by Life Insurance Corporation of India.

* The following Table summaries the components of Net Benefit expenses recognized in the Profit & Loss Account and amount recognized in the Balance Sheet for the respective Plans

10. Previous years figures have been regrouped/ rearranged wherever necessary.

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