Mar 31, 2018
1. Corporate Information
Bhagyanagar India Ltd (âthe companyâ) 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 companyâs 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, lesseeâs option to purchase and estimated certainty of exercise of such option, proportion of lease term to the assetâs 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 armâs 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 Companyâs 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 Companyâs principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Companyâs operations. The Companyâs 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 Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs 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 Companyâs 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 Companyâs Finance department in accordance with the Companyâs policy. Investments of surplus funds are reviewed and approved by the Companyâs Board of Directors on an annual basis The Companyâs 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 Companyâs 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 Companyâs financial liabilities based on contractual undiscounted payments:
8. Capital Management
For the purpose of the Companyâs 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 Companyâs 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 Companyâs opening balance sheet was prepared as at April 1, 2016, the Companyâs 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 yearâs 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-ÃÂ -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-ÃÂ -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.