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Notes to Accounts of Birla Cable Ltd.

Mar 31, 2018

1.1 Company Overview

Birla Cable Limited (BCL) (Formerly Birla Ericsson Optical Ltd.) ("the Company”) is a public limited listed company incorporated under the Companies Act, 1956 (now replaced by the Companies Act, 2013). The Company is engaged in manufacturing and sale of Cables (comprising of telecommunications cables, other types of wires & cables etc.). The registered office of the Company is located at Udyog Vihar, P.O. Chorhata, Rewa- 486006 (M.P.), India and its CIN No. is L31300MP1992PLC007190.

2. Basis of Preparation and Presentation

The financial statements of the Company have been prepared in accordance with and to comply in all material aspects with Indian Accounting Standards (Ind AS) as notified under the relevant provisions of the Companies Act, 2013 ("the Act”), Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act, as applicable.

These financial statements for the year ended 31st March, 2018 are the first financial statements of the Company prepared under Ind AS. The financial statements up to the year ended 31st March’ 2017, were prepared in accordance with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 ("Previous GAAP”) and other relevant provisions of the Act. The figures of the year ended 31st March 2017 have been restated as per Ind AS to provide comparability. All accounting policies and applicable Ind AS have been applied consistently and retrospectively to the financial statements of all periods presented which include the previous financial year and opening Balance Sheet as at 1st April, 2016 (Transition Date) after availing certain exemptions and exceptions to the retrospective application of certain requirements under Ind AS 101 as stated in Note No.46. The resulting difference between the carrying amounts under Ind AS and Previous GAAP as on the Transition Date has been recognised directly in retained earnings. An explanation of the effect of the transition from Previous GAAP to Ind AS on the Company’s Assets, Liabilities, Equity and Profit is provided in Note No. 47.

The financial statements have been prepared on accrual and going concern basis under historical cost convention, except for the items that have been measured at fair value as required by relevant Ind AS.

Company’s financial statements are presented in Indian Rupees, which is also its functional currency. All amounts in the financial statements and accompanying notes are presented in lakhs (Indian Rupees) and have been rounded-off to two decimal place in accordance with the provisions of Schedule III of the Companies Act, 2013 unless stated otherwise.

3. Basis of Classification of Current and Non-Current

Assets and Liabilities are classified as either current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III of the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash & cash equivalents, 12 months period has been considered by the company as its normal operating cycle.

4. Use of Estimates and Critical Judgements

The preparation of financial statements in conformity with generally accepted accounting principles in India requires management to make judgements, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and the results of operations during the reporting year. Although these estimates and associated assumptions are based upon historical experiences and various other factors besides management’s best knowledge of current events and actions, actual results could differ from these estimates. The estimates and underlying assumptions are reviewed on a periodic basis. Any revision in the accounting estimates is recognised in the period in which the results are known/materialise.

Notes: For Assets pledged as security - Refer Note 16(a), 16 (b) and 20(b).

* Foreign exchange loss of Rs. 146.18 lakhs (Gain of Rs. 100.74 lakhs) arising on long term foreign currency monetary items related to acquisition of depreciable plant and equipment being carried forward from previous GAAP, are adjusted to cost of such assets.

(b) Term/Right attached to Equity Shares:

The Company has issued only one class of shares referred to as equity share having a par value (face value) of Rs.10/- per share ranking paripassu. The holders of equity shares are entitled to one vote per share.

Secured from:

(a) Buyer’s Credit from Banks are secured by way of hypothecation of entire Current Assets both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable Fixed Assets, both present and future and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking paripassu interse amongst the consortium lenders. As a collateral security, the Buyer’s Credit are also backed by cross corporate guarantee of Vindhya Telelinks Ltd., a body corporate.

(b) Buyer’s Credit (In Foreign Currency) are due for repayment between April, 2018 and July, 2020 and carry rate of interest of 0.20% p.a.to 2.79% p.a.. The Company has an option on due date, to convert a part of Buyer’s Credit into Rupee Term Loan sanctioned by a Bank, repayable in 17 quarterly installments after expiry of Buyer’s Credit.

Unsecured from (Others):

Supplier’s Credit carry rate of interest of 1.42% p.a. and is repayable in 10 half yearly installments commencing from December, 2015 and ending on June, 2020.

(a) Working Capital Loans from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.

(b) Working Capital Loans and Buyer’s Credit from Banks are secured by way of hypothecation of entire Current Assets both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of movable Fixed Assets, both present and future and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking paripassu interse amongst the consortium lenders. As a collateral security, the Working Capital Loans and Buyer’s Credit are also backed by cross corporate guarantee of Vindhya Telelinks Ltd., a body corporate.

(c) Buyer’s Credit carry rate of interest of 2.00% p.a. and is due for payment in May, 2018.

5. In accordance with Ind AS 18 on “Revenue” and Schedule III to the Companies Act, 2013, sales upto period ended 30th June, 2017 were reported gross of excise duty and net of value added tax (VAT)/central sales tax (CST). Excise duty was reported as separate expense. Consequent to the introduction of Goods & Services Tax (GST) with effect from 1st July, 2017 excise duty, VAT, sales tax, service Tax, etc. have been subsumed into GST and the same are not recognised as a part of sales as per the requirement of Ind AS 18. Accordingly Revenue from operations from sale of products in the current year is not comparable with that of the previous year.

6. Contingent Liabilities and Commitments (to the extent not provided for) -

(a) Contingent Liabilities:

(i) Sales tax matters under litigation Rs.108.58 lakhs (''108.58 lakhs; 31st March, 2017) (Rs.108.58 lakhs; 1st April, 2016).

(ii) The Company has an ongoing process for collection and submission of the relevant declaration forms under the VAT Act to the concerned authorities and the Company does not foresee any liability in this regard.

(b) Commitments:

Estimated amount of contracts remaining to be executed on Capital Account (Net of advances and not provided for Rs.1295.49 ('' 896.27 lakhs; 31st March, 2017) (Rs. 35.79 lakhs; 1st April, 2016).

(c) The financial statements of the Company for the year ended 31st March, 2018 has been approved by the Board of Directors in its meeting held on 24th May, 2018. For the year ended 31st March, 2018, the dividend of Rs.1 per share (Total dividend of Rs.361.67 lakhs including dividend distribution tax of Rs.61.67 lakhs) is proposed by Board of Directors at its meeting held on 24th May, 2018. The same is subject to the approval of shareholders in the ensuing Annual General Meeting of the Company and therefore proposed dividend (including dividend distribution tax) has not been recognised as liability as at the Balance Sheet date in line with Ind AS-10 on “Events after the Reporting Period”.

The estimates of future salary increases, considered in actuarial valuation, take into account the effect of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall expected rate of return on plan assets is determined based on the market prices prevailing as on Balance Sheet date, applicable to the period over which the obligation is to be settled.

7. Segment Information:

(a) The Company has only one reportable primary business segment i.e. Cable, based on guiding principles given in Ind AS 108” Operating Segments” notified pursuant to Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.

(b) The following table shows the distribution of Company’s Revenue from operations by geographical market, regardless of where the goods were produced:

(c) Revenue from two customers of the Company is Rs.12810.17 lakhs (Rs.8144.64 lakhs), which is more than 10% of the Company’s total revenue.

Notes:

(i) The remuneration to Key Managerial Personnel(s) other than Non-Executive Directors stated above does not include provision/ payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.

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

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

(iv) Inter corporate loans/advances have been given for business purposes.

8. Operating Leases:

The Company has taken certain office and residential premises/facilities under operating lease/sub-lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease/sub-lease agreements. The aggregate lease rental of Rs.45.75 lakhs (Rs.57.84 lakhs) have been charged to the Statement of Profit and Loss.

9. Disclosure on Corporate Social Responsibility Expenses:

(a) Gross amount required to be spent by the Company during the year 2017-18 in pursuance to the provision of Section 135 of the Companies Act, 2013 and rules made there under- Rs.21.48 lakhs (Rs.35.04 lakhs).

The fair value of financial assets and liabilities are included at the amount at which instruments could be exchanged in a current transaction between the willing parties. The following methods and assumptions were used to estimate the fair value:

(A) The Company has opted to fair value its quoted equity instruments at its market quoted price through OCI.

(B) The Company has opted to fair value its unquoted equity instruments at its Net Asset Value through OCI.

(C) The fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, short term borrowings, trade payables, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. Company has adopted Effective Interest Rate Method (EIR) for fair valuation of long term borrowings and non-current financial assets and non-current financial liabilities.

(D) The Fair Value of forward exchange and swap contracts is based on certificate given by respective banks.

Fair Value Hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - I nputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

10. Financial Risk Management Objectives and Policies:

The Company’s activities are exposed to a variety of financial risks from its operations. The key Financial Risks include Market Risk, Credit Risk and Liquidity Risk.

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 mainly three types of risk:, Foreign currency risk, Interest rate risk and other price risk such as Equity price Risk and Commodity Price Risk.

(a) Foreign Currency Risk:

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD and EURO. The Company’s exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts including for underlying transactions having firm commitments or highly probable forecast of crystalisation.

The Company uses forward exchange contracts to hedge its exposure in foreign currency. The details of foreign currency exposures hedged by derivative instruments and those have not been hedged are as follows:

Foreign Currency Sensitivity:

The following table demonstrates the sensitivity to a reasonably possible change in USD/EURO with all other variables held constant. The impact on company’s profit before tax is due to changes in the foreign exchange rate for:

(b) Interest Rate Risk and Sensitivity:

Interest rate risk has underlying risk that the fair value of future cash flows of a financial instrument will fuctuate because of changes in market interest rates. Any changes in the interest rates environment may impact future rates of borrowing. The Company mitigates this risk by regularly assessing the market scenario, finding appropriate financial instruments, interest rate negotiations and low cost instruments.

(c) Commodity Price Risk:

The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw material for manufacturing of Cables and therefore, require a continuous supply of certain raw materials such as optical fibre, plastic and polymers, copper etc. To mitigate the commodity price risk, the company has an approved supplier base to get the best competitive prices for the commodities and to manage the cost without any compromise on quality.

(d) Equity Price Risk:

The Company’s exposure to equity instruments price risk arises from investments held by the company and classified in the balance sheet at fair value through OCI. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities held by the company, fuctuation in their prices are considered acceptable and do not warrant any management estimation.

(e) Credit Risk:

Credit risk is the risk that counter party might not honor 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).

Trade Receivables:

Customer credit risk is managed based on company’s established policy, procedures and controls relating to customer credit risk management. Company assesses the credit quality of the counter parties, taking into account their financial position, past experience and other factors.

Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss and the same, if any, is provided as per its respective customer’s credit risk as on the reporting date.

Deposits with Bank:

The deposits with banks constitute mostly the investment made by the company against bank guarantee and are generally not exposed to credit risk .

(f) Liquidity Risk:

Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company’s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due. The table below summarises the maturity profile of company’s financial liabilities based on contractual undiscounted payments:

11. Capital Management:

The Company’s policy is to maintain an adequate capital base so as to maintain creditor and market confidence and to sustain future development. Capital includes issued capital, share premium and all other equity reserves attributable to equity holders.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.

12. Exceptions and Exemptions applied for Transition to Ind AS

Ind AS 101 "First-time adoption of Indian Accounting Standards” (hereinafter referred to as Ind AS 101) allows first time adopters certain mandatory exceptions and optional exemptions from the retrospective application of certain Ind AS effective for 1st April, 2016 opening balance sheet. In preparing these financial statements the company has applied the below mentioned optional exemptions and mandatory exceptions.

(a) Optional Exemptions Availed:

(i) Property Plant and Equipment and Intangible Assets

As permitted by para D5-D8B of Ind AS 101 the Company has opted to continue with the carrying values under previous GAAP for all the items of Property Plant and Equipment. The same election has been made in respect of investment property also.

(ii) Designation of Investment in Equity Instrument

All equity instruments are designated at fair value through OCI on the date of transition.

(iii) Foreign Exchange difference on Long Term Foreign Currency Borrowings

In respect of foreign exchange difference on Long Term Foreign Currency Monetary Items, Ind AS 101 provides an option to continue the policy adopted for accounting of such exchange differences in financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP. Accordingly, as per para 46/46A of AS 11, the Company continues to adjust the exchange gain/loss on such foreign currency loan from the cost of fixed assets.

(b) Mandatory Exceptions:

(i) Estimates

Upon an assessment of the estimates made under Previous GAAP, the company has concluded that there was no necessity to revise such estimates under Ind AS except where revision in estimates was necessitated as required by Ind AS. The estimates used by the company to present the amounts in accordance with Ind AS reflect conditions existing as at 1st April, 2016 the date of transition to Ind aS and as at 31st March, 2017 and 31st March, 2018.

(ii) Derecognition of Financial Assets and Financial Liabilities

The Company has opted to apply the derecognition requirements for financial assets and financial liabilities in accordance with Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

(iii) Classification and Measurement of Financial Assets

The company has classified the financial assets in accordance with Ind AS-109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

13. Reconciliations:

The following reconciliation provide a quantification of the effect of significant differences arising as a result of transition from Previous GAAP to Ind AS in accordance with Ind AS-101:

Reference Notes to point no. (a), (b), (c) & (d) of Note No. 46 above :

(i) Property Plant and Equipment: The Company has elected the option to continue with the carrying value for all its Property Plant & Equipment as recognised in the financial statement as at the date of transition to Ind AS measured as per previous GAAP and used it as the deemed cost on the date of transition.

(ii) Investment in Equity Instrument: Under previous GAAP Non-Current Investment in Equity Instruments were carried at cost less provision for other than temporary diminution in the value of such investment. Under Ind AS, Investment are measured at Fair Value through OCI.

(iii) Government Grants: Under previous GAAP, the Government Grant in relation to Plant & Equipments was recognised as a part of Capital Reserve. Under Ind AS such Grant has been treated as a deferred subsidy and is recognised in the Statement of Profit and Loss on a systematic basis over the useful life of such assets.

(iv) Borrowings: Under previous GAAP Borrowings measured at transaction value; whereas under Ind AS these have been recognised at amortised cost using Effective Interest Rate (EIR) method.

(v) Re-measurement of Defined Benefit Obligations: Under Previous GAAP re-measurement of retirement defined benefit plans i.e. actuarial gains/(losses) arising due to experience adjustments and change in assumptions were recognised in the Statement of Profit and Loss. Under Ind AS re-measurement of retirement defined benefit plans is recognised in the "Other Comprehensive Income”.

(vi) Forward Contracts: Under Previous GAAP the premium paid on forward contracts was recognised as expense or income over the life of the contract. Difference between the exchange rate on the date of inception and at the settlement date of the forward contract was recognised as exchange difference. Further in case of Forward Contract for firm Commitments, mark to market losses were recognised in the statement of Profit and Loss and gain, if any were ignored. Under Ind AS mark to market Gain/ Loss of forward contract as at the reporting date has been recognised in the Statement of Profit and Loss.

(vii) Dividend: Under Previous GAAP (upto 31st March 2016), Proposed dividend was recognised as liability in the period to which it was related. Under Ind AS, Proposed dividend is recognised as liability in the period in which it is approved by shareholders.

(viii) Deferred Taxes: Under Previous GAAP, deferred taxes were accounted for based on income statement approach which requires creation of deferred tax asset/liability on temporary differences between the taxable income and accounting income. Under Ind AS deferred taxes are accounted for based on the balance sheet approach which requires creation of deferred tax asset/liability on temporary differences between the carrying amount of an asset/liability in the Balance Sheet and its corresponding tax base. Application of Ind AS has also resulted in recognition of deferred taxes on new temporary differences arising due to adjustments made on transition to Ind AS.

(ix) Security Deposit: The Company has given certain interest free security deposit under long term lease agreement. Under IND AS, the security deposit needs to be fair valued. The difference between fair value and previous GAAP carrying value has been recognised as advance rent under Other Current Asset. The same has been charged as rent expense to the Statement of Profit and Loss over the period of lease. Interest Income has been recognised yearly on interest free security deposit.

14. Previous year figures have been regrouped/rearranged, wherever considered necessary to conform to current year’s classification.


Mar 31, 2017

* The Company has exercised option provided in Para - 46A of Accounting Standard - 11 on Effects of Changes in Foreign Exchange Rates with regard to the treatment of gain/(loss) in foreign exchange fluctuation on long term monetary liabilities related to acquisition of fixed assets, in which case gain/loss is adjusted to the carrying cost of such assets. This has resulted in decrease in profit by Rs.91.25 lacs (net of depreciation of Rs.9.49 lacs) for year ended 31st March, 2017. {Previous year increase in profit of Rs.110.24 lacs (net of depreciation of Rs.3.64 lacs)}.

* The Company received a Letter of Allotment confirming allotment of 7,85,967 equity shares on 20th October, 2015, subscribed in the Rights Issue of Universal Cables Ltd. (UCL) out of which 2,32,263 equity shares are pending to be credited to Company’s designated demat account, in view of the status-quo Order passed by the Hon’ble High Court of Delhi on 18th November, 2015, as intimated by UCL.

1. Contingent Liabilities and Commitments (to the extent not provided for):

(a) Contingent liabilities:

(i) Disputed Sales tax claim under appeal Rs.108.58 lacs (Rs.108.58 lacs).The future cash outflow is determinable only on receipt of the decisions/judgments in the cases pending at various forums and authorities concerned.

(ii) The Company has an ongoing process for collection and submission of the relevant declaration forms under the Sales Tax Act to the concerned authorities and the Company does not foresee any liability in this regard.

(iii) Bills of exchange discounted with a bank and outstanding at the end of the year Rs.22.43 lacs (Rs.Nil).

(iv) Cross Corporate Guarantee given in connection with Loan/ Credit facilities aggregating to Rs.184561.00 lacs (Rs.148461.00 lacs) (outstanding as on 31st March, 2017, Rs.87856.22 lacs (Rs.47838.47 lacs))to a body corporate[Refer Note No. 39(a)].

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs.896.27 lacs (Rs.35.79 lacs).

(ii) Derivatives related commitments are disclosed in Note No. 30.

2. Foreign Currency Exposures as at the Balance Sheet date:

The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD and Euro. The Company’s exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts including for underlying transactions having firm commitments or highly probable forecast of crystallization.

(a) The Company uses forward exchange contracts to hedge its exposure in foreign currency. The details of foreign currency exposures hedged by derivative instruments and those have not been hedged are as follows:

(b) A sum of Rs.3.25 lacs (Rs.3.01 lacs) on account of unamortized foreign exchange premium on outstanding Forward Contracts is being carried forward to be charged to Statement of Profit and Loss of the subsequent period.

3. Employee Benefits Plans:

(a) Defined Benefit Plans:

The Company’s defined benefit plans include the approved funded gratuity scheme which is administered through Group Gratuity scheme with The Life Insurance Corporation of India and non-funded Pension Scheme (applicable only to select category of employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on 31st March, 2017 are summarized below:

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

Information relating to experience adjustments to plan assets and liabilities as required under para120 (n) (ii) of the Accounting Standard (AS-15) (revised) on employee benefits is not available with the Company. The impact of the same is not material.

(b) Defined Contribution Plans:

Company’s contribution to defined contribution schemes such as Government administered Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions.

The Company has recognized the following contributions to Provident/Family Pension and Superannuation Funds as an expense and included in employee benefits expense in the Statement of Profit and Loss.

4. Segment Information:

(a) The Company has only one reportable primary business segment. Hence, no separate segment wise information of revenue, results and capital employed is given.

(b) The following table shows the distribution of Company’s Revenue from operations by geographical market, regardless of where the goods were produced:

All the assets of the Company, except the carrying amount of trade receivables aggregating to Rs.1337.62 lacs (Rs.486.43 lacs), are within India.

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

Venturers in respect of which the Company is a joint venture : Universal Cables Ltd. (UCL)@

Vindhya Telelinks Ltd. (VTL)@

Ericsson Cables AB, Sweden (ECA)@

@ Ceased to be joint venturers w.e.f. 24th August, 2016 Enterprise over which a director is able to exercise significant influence : Shakun Polymers Ltd. (SPL)

Key Management Personnel : Mr. R. Sridharan,

Manager & Chief Executive Officer

* As the liability of Gratuity and Leave Encashment is provided on an actuarial basis for the Company as a whole, therefore amount not included above.

Notes:

(i) Disclosure of Related Party transactions is given from 1st April, 2016 to 23rd August, 2016, being the date upto which joint venture agreement was in force.

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

(iii) Transactions and Balances relating to reimbursement of expenses to/from Related Parties have not been considered in the above disclosures.

(iv) All transactions with related parties as above have been entered into at arm’s length basis in the ordinary course of business.

(v) Inter corporate loans/advances were taken/given for business purposes.

6. The Company has taken certain warehouses/ office premises under operating lease agreements. The lease agreements generally have an escalation clause and are renewable or cancellable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs.57.84 lacs (Rs.53.51 lacs) has been charged to the Statement of Profit and Loss.

In respect of an office premise taken on operating lease by the Company, the Company had charged to the Statement of Profit and Loss Rs.9.00 lacs (Rs.10.63 lacs). [Net of rent recovered of Rs.86.80 lacs (Rs.85.32 lacs)].

7. There is no Impairment of Fixed Assets during the year.

8. Disclosure on Corporate Social Responsibility Expenses:

(a) Gross amount required to be spent by the Company during the year in pursuance to the provisions of Section 135 of the Companies

Act, 2013 and rules made there under -Rs.35.04 lacs (Rs.23.10 lacs)

(b) Amount spent during the year 2016-17 and included under Miscellaneous Expenses in the Statement of Profit and Loss (Refer Note No. 27)

* The Company has also accepted cross corporate guarantee from VTL of Rs.17965.00 lacs (Rs.18450.00 lacs) against total credit facilities availed from the banks.

9. Remittance in Foreign Currency on account of Dividend :

The company has paid dividend in respect of share held by Non-Resident on repatriation basis. The total amount remitted in this respect is as under:

10. The Company has regrouped/reclassified previous year’s figures to conform to current year’s classification/disclosures. The figures in brackets are those in respect of the previous accounting year.


Mar 31, 2016

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs. 35.79 lacs (Rs.1739.43 lacs)

(ii) Derivatives related commitments are disclosed in Note No. 35.

1. Exceptional Item for the year ended 31st March, 2016, amounting to Rs. 477.52 lacs, represents settlement of claim(s) of an overseas supplier through an out of court settlement of various long standing disputes/claims pending in different courts in India and Arbitration in Japan.

2. The Company is eligible for certain incentives in respect of its investment in plant and machinery towards expansion/ technical upgradation of the OFC Unit pursuant to confirmation received under the Industrial Promotion Policy, 2014 read with Madhya Pradesh Nivesh Protsahan Yojna, 2014 of the Government of Madhya Pradesh. Accordingly, the Company is eligible, interalia, VAT and CST assistance by way of reimbursement (Net of input tax rebate on the amount of VAT and CST) effective from 27th October, 2015, for a period of 10 years, subject to compliance with certain conditions attached thereto. The same shall be appropriately dealt with in the Books of Account as and when the Company''s claim for reimbursement from time to time during the eligibility period is formally approved by the designated competent authority of the State Government.

3. The Company has exercised option provided in Para - 46A of Accounting Standard - 11 on "Effects of Changes in Foreign Exchange Rates" with regard to the treatment of foreign exchange fluctuation on long term monetary liabilities relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets. This has resulted in increase in profit by Rs.110.24 lacs (net of depreciation of Rs.3.64 lacs) for year ended 31st March, 2016.

4. In the opinion of the management, the decline in the market value of a quoted Non-current Investment (trade) (carrying cost Rs.1804.88 lacs) by Rs.403.78 lacs (Rs.981.56 lacs) at the year end is temporary, in view of the strategic long term nature of the investment and assets base/intrinsic worth of the investee company and hence, does not call for any provision there against.

5. During the previous year, a fire accident occurred in the factory premises on October 27, 2014. The Company has lodged claim with the Insurance Company towards value of raw material damaged, replacement value of damaged equipments and expenses incurred on repairing of building. The Surveyor has filed interim report with the Insurance Company. Pending settlement of final claim, during the financial year the Company has received on account payment of Rs. 500.00 lacs from the insurer. The Management is hopeful of settlement and recovery of remaining claim amount.

6. Employee Benefits Plans:

(a) Defined Benefit Plans:

The Company''s defined benefit plans include the approved funded Gratuity Scheme which is administered through Group Gratuity scheme with The Life Insurance Corporation of India and non-funded Pension Scheme (applicable only to certain categories of employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on 31st March, 2016.

(b) Defined Contribution Plans:

Company''s contribution to defined contribution schemes such as Government administered Provident/Fami Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contributions.

The Company has recognized the following contributions to Provident/Family Pension and Superannuation Func as an expense and included in employee benefits expense in the Statement of Profit and Loss.

7. Segment Information:

(a) The Company has only one reportable primary business segment. Hence, no separate segment wise infc of revenue, results and capital employed is given.

(b) The following table shows the distribution of Company''s Revenue from Operations by geographical market, regardless of where the goods were produced:

All the assets of the Company, except the carrying amount of trade receivables aggregating to Rs. 485.10 lacs (Rs. 888.34 lacs), are within India.

8. Disclosures in respect of Related Parties as defined in Accounting Standard (AS-18), with whom transactions

were carried out in the ordinary course of business during the year are given below:

Venturers in respect of which the

: Universal Cables Ltd. (UCL)

Company is a joint venture

Vindhya Telelinks Ltd. (VTL)

Ericsson Cables AB, Sweden (ECA)

Enterprise over which a director is able

to exercise significant influence

: Shakun Polymers Ltd. (SPL)

Key Management Personnel

: Mr. R. Sridharan, Manager & Chief Executive Officer

(a) Transactions with related parties (other than Key Management Personnel) :

(i) Under the renewed technical collaboration agreement with Ericsson Cables AB, Sweden, no royalty or lump sum fee is payable.

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

(iii) Transactions and balances relating to reimbursement of expenses to/from Related Parties have not been considered in the above disclosures.

(iv) All transactions with related parties as above have been entered into at Arm''s Length Basis in the ordinary course of business.

(v) Inter corporate loans/advances have been given for business purposes.

9. The Company has taken certain warehouses/ office premises under operating lease agreements. The lease agreements generally have an escalation clause and are renewable or cancellable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs. 53.51 lacs (Rs. 31.46 lacs) are charged to the Statement of Profit and Loss.

In respect of an office premise taken on operating lease by the Company, the Company had charged to the Statement of Profit and Loss Rs.10.63 lacs (Rs. 23.95 lacs). [Net of rent recovered of Rs. 85.32 lacs(Rs. 20.95 lacs)].

10. There is no Impairment of Assets during the year.

11. Disclosure on Corporate Social Responsibility Expenses:

(a) Gross amount required to be spent by the Company during the year in pursuance to the provisions of Section 135 of the Companies Act, 2013 and rules made there under -Rs.23.10 lacs (Rs.4.57 lacs).

(b) Amount spent during the year 2015-16 and included under Miscellaneous Expenses in the Statement of Profit and Loss (Refer Note No. 27).


Mar 31, 2015

1. NATURE OF OPERATIONS

The Company''s operations are predominantly classified into Wires and Cables comprising primarily Telecommunications Cables and other types of Wire and Cables.

2. LONG-TERM BORROWINGS

(a) Suppliers Credit and Term Loan from a bank are secured by way of hypothecation of movable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company and are further secured by hypothecation of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future. As a collateral security the term loan is also backed by a cross corporate guarantee of Vindhya Telelinks Limited, a joint venturer. The outstanding term loan of Rs.37.50 lacs is repayable in 3 equal quarterly instalments payable on 30.06.2015 and thereafter and carries interest 13.15% (rate as on the reporting date).

(b) Suppliers Credit (in foreign currency) is due for payment in two instalments in February, 2016 and April, 2016 and carries interest rate 1.84% - 2.11% (rate as on reporting date). The Company has an option on the due date, to convert the said Supplier''s Credit into Rupee Term Loan to be repaid in 17 quarterly instalments and accordingly the said Supplier''s Credit is classified under long-term borrowings.

(c) Loans from a body corporate are repayable in full on or after March 31, 2017 in one or more instalments and carries interest 10.50% (rate as on reporting date).

3. SHORT-TERM BORROWINGS

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

(b) Working capital loans (both fund and non-fund based) from State Bank of India (SBI), State Bank of Patiala (SBP) and IDBI Bank Ltd. are secured by way of hypothecation of stock of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of movable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company. As a collateral security, working capital loans are also backed by a cross corporate guarantee of Vindhya Telelinks Limited, a joint venturer.

4. Contingent Liabilities and Commitments (to the extent not provided for):

(a) Contingent Liabilities:

(i) Claims against the Company not acknowledged as debts Rs.0.32 lac (Rs.0.32 lac).

(ii) Disputed sales tax claim under appeal Rs. 108.58 lacs (Rs.108.58 lacs).

(iii) The Company has an ongoing process for collection and submission of the relevant declaration forms under the Sales Tax Act to the concerned authorities and the Company does not forsee any liability in this regard.

(iv) Bills of exchange under letter of credit discounted with a bank and outstanding at the end of the year Rs. 380.31 lacs (Rs. 2443.67 lacs).

(v) Cross corporate guarantee given in connection with loan/credit facilities aggregating to Rs. 86687.00 lacs (outstanding as on March 31, 2015 Rs. 37759.82 lacs) to a joint venturer and corporate guarantee of Rs. 3000.00 lacs given in connection with supply of Raw Material to a joint venturer [Refer Note No. 41(b)].

The future cash outflow in respect of items (i) to (ii) above is determinable only on receipt of the decisions/

judgements in the cases pending at various forums and authorities concerned.

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs. 1739.43 lacs (Rs. 142.74 lacs)

(ii) Derivatives related commitments are disclosed in Note No. 33.

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

6. In the opinion of the management, the decline in the market value of a quoted Non-Current Investment (trade) (carrying cost Rs.1404.04 lacs) by Rs. 981.56 lacs (Rs. 1116.67 lacs) at the year end is temporary, in view of the strategic long term nature of the investment and assets base/intrinsic worth of the investee company and hence, does not call for any provision thereagainst.

7. During the year, a fire accident occurred in the factory premises on October 27, 2014. The Company has lodged claim with the insurance company towards value of raw material damaged, replacement value of damaged equipments and expenses incurred on repairing of building. The surveyor has filed interim report with the insurance company pending settlement of final claim, the Company has received on account payment of Rs. 500.00 lacs from the insurer, subsequent to the end of financial year. The management is hopeful of settlement and recovery of remaining claim amount.

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

Venturers in respect of which the : Universal Cables Ltd. (UCL)

Company is a joint venture Vindhya Telelinks Ltd. (VTL)

Ericsson Cables AB, Sweden (ECA)

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

Key Management Personnel : Mr. R. Sridharan, Manager & Chief Executive Officer

(i) Under the renewed technical collaboration agreement with Ericsson Cables AB, Sweden, no royalty or lumpsum fee is payable.

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

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

(iv) All transactions with related parties as above have been entered into at arm''s length basis in the ordinary course of business.

9. The Company has taken certain warehouses/ office premises under operating lease agreements. The lease agreements generally have an escalation clause and are renewable or cancellable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs. 27.96 lacs (Rs. 2.64 lacs) are charged to the Statement of Profit and Loss.

In respect of an Office premise taken on operating lease by the Company, the Company had charged to the statement of Profit and Loss Rs. 23.95 lacs(Nil). (Net of rent recovered Rs. 20.95 lacs).

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

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


Mar 31, 2014

1. NATURE OF OPERATIONS

The Company''s operations are predominantly classified into Wires and Cables comprising primarily Telecommunications Cables and other types of Wire and Cables.

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

(a) Contingent liabilities

(i) Claims against the Company not acknowledged as debts Rs.0.32 lac (Rs.0.32 lac).

(ii) Sales tax matter under litigation Rs. 108.58 lacs (Rs.108.58 lacs).

(iii) The Company has an ongoing process for collection and submission of the relevant declaration forms to the concerned authorities and the Company does not forsee any liability in this regard.

(iv) Bills of exchange under letter of credit discounted with a bank and outstanding at the end of the year Rs. 2443.67 (Rs. Nil).

(v) Cross corporate guarantee given by the Company as a collateral security against working capital credit facilities aggregating to Rs.22950.00 lacs (outstanding as on March 31, 2014 Rs. 19716.69 lacs) sanctioned by a bank to Vindhya Telelinks Limited, a joint venturer.

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

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs.142.74 lacs (Rs. 210.23 lacs)

(ii) Derivatives related commitments are disclosed in Note No. 33.

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

4. In the opinion of the management, the decline in the market value of a quoted Non-current Investment (trade) (carrying cost Rs.1404.04 lacs) by Rs.1116.67 lacs at the year end is temporary, in view of the strategic long term nature of the investment and assets base/intrinsic worth of the investee company and hence, does not call for any provision thereagainst.

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

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


Mar 31, 2013

1. NATURE OF OPERATIONS

The Company''s operations are predominantly classified into Wires and Cables comprising primarily Telecommunications Cables and other types of Wire and Cables.

(a) The buyer''s credit is secured by way of hypothecation of stock of Inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company. The buyer''s credit is repayable in six half yearly instalments commencing from 6th December, 2010 and carries interest @ 2.75% (rate as on the reporting date).

(b) Sales tax loans are as per scheme of State Government and for administration of these loans, Madhya Pradesh State Industrial Development Corporation Limited (MPSIDC Ltd.) has been specified by the State Government as the Implementing Agency. As per the governing scheme for conversion of deferred sales tax into loan, the final sales tax loan liability subsists upto a period of ten years, commencing from the expiry of each financial year covered by the period of eligibility and is payable thereafter within 30 days in one instalment subject to compliance with the terms and conditions as specified in the scheme.

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

(b) Working capital loans (both fund and non-fund based) are secured by way of hypothecation of stock of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, etc., both present and future, and are further secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company. As a collateral security, working capital loans are also backed by a cross corporate guarantee of Vindhya Telelinks Limited, a joint venturer.

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

(a) Contingent liabilities

(i) Claims against the Company not acknowledged as debts Rs.0.32 lac (Rs.5.16 lacs).

(ii) Income tax matters under litigation Rs. Nil (Rs.5.47 lacs).

(iii) Sales tax matter under litigation Rs. 108.58 lacs (Rs. Nil).

(iv) The Company has an ongoing process for collection and submission of the relevant declaration forms to the concerned authorities and the Company does not forsee any liability in this regard.

(v) Bills of exchange under letter of credit discounted with a bank and outstanding at the end of the year Rs. Nil (Rs.59.37 lacs).

(vi) Cross corporate guarantee given by the Company as a collateral security against working capital credit facilities aggregating to Rs.17450.00 lacs (outstanding as on March 31, 2013 Rs.15616.49 lacs) sanctioned by a bank to Vindhya Telelinks Limited, a joint venturer.

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

(b) Commitments:

(i) Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs.210.23 lacs (Rs.0.55 lac)

(ii) Derivatives related commitments are disclosed in Note No. 32.

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

4. In the opinion of the management, the decline in the market value of a quoted Non-current Investment (trade) (carrying cost Rs.1404.04 lacs) by Rs.1060.74 lacs at the year end is temporary, in view of the strategic long term nature of the investment and assets base/intrinsic worth of the investee company and hence, does not call for any provision thereagainst.

5. As there is no taxable income for the year both under normal provisions as well as under Section 115JB (MAT) of the Income Tax Act,1961, no provision for taxation has been made.

6. Employee Benefits:

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

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Information relating to experience adjustments to plan assets and liabilities as required under para 120(n)(ii) of the Accounting Standard (AS-15) (revised) on employee benefits is not available with the Company. The impact of the same is not material.

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

7. (a) The Company has only one reportable primary business segment. Hence, no separate segment wise information of revenue, results and capital employed is given. (b) The following table shows the distribution of Company''s Revenue from operations by geographical market, regardless of where the goods were produced:

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

(i) Significant Related Party Transactions with venturers during the year 2012-13 have been disclosed in brackets under the appropriate nature of transaction head.

(ii) Under the renewed technical collaboration agreement with Ericsson Cables AB, Sweden, no royalty or lumpsum fee is payable.

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

(iv) Transactions relating to reimbursement of expenses to/from related parties have not been considered in the above disclosures.

(v) All transactions with related parties as above have been entered into at arm''s length basis in the ordinary course of business.

8. The Company has taken certain warehouses under operating lease agreements. The lease agreements generally have an escalation clause and are renewable or cancellable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs.2.48 lacs (Rs.3.30 lacs) are charged to the Statement of Profit and Loss.

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


Mar 31, 2011

(1) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advance) Rs.8.02 lacs (Rs.335.58 lacs).

(2) Contingent liabilities not provided for:

(a) Claims against the Company, not acknowledged as debts Rs.5.16 lacs (Rs.2.23 lacs).

(b) Appeal preferred by the Income Tax Department against appellate decisions in favour of the Company, wherein should the ultimate decision be unfavourable to the Company, the liability/demand is estimated to be Rs.11.67 lacs (Rs.11.67 lacs).

The future cash flow on these accounts [(a) & (b) above] is determinable only on receipt of the decision/ judgements pending before the authorities.

(3) The Company has filed a law suit against an overseas supplier and its agent relating to the validity and existence of an alleged agreement before a competent court which is already seized of the said suit. An interim application was moved by the said supplier under the said law suit which was disposed off by the competent court as well as the first appellate court. Aggrieved by the order of the first appellate court, the said supplier as well as the Company preferred writ petitions before the High Court of Madhya Pradesh at Jabalpur which disposed off the writ petitions but the order of the High Court does not in any way reflect upon merits or otherwise of the claim of the overseas supplier for any recovery. The supplier in order to overreach the said law suit had initiated an arbitration interalia claiming recovery of value of the unsupplied goods for the period from October, 2002 to September, 2006 aggregating to Rs.6171.55 lacs (value as on March 31, 2011). Based on appraisal of the matter, the Company has been legally advised that the said claim against the Company is unsustainable and there is no likelihood of any liability arising against the Company.

(4) In the opinion of the management, the decline in the market value of a quoted long term investment (trade) (carrying cost Rs.1404.04 lacs) by Rs.584.56 lacs at the year end is temporary, in view of the strategic long term nature of the investment and asset base of the investee company and hence, does not call for any provision thereagainst.

(5) Employee Benefits:

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

Note:

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

(6) (a) As the entire operations of the Company relate to a single business segment of "Wire & Cables", the disclosure requirement of Accounting Standard (AS-17) on "Segment Reporting" is not applicable.

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

Associate Bodies Corporate (Associates) : Universal Cables Ltd. (UCL)

Vindhya Telelinks Ltd. (VTL)

Ericsson Cables AB, Sweden and its holding Companies (ECA)

Key Management Personnel : Mr. D.R. Bansal, Managing Director

Notes: (i) Significant Related Party Transactions with associates during the year 2010-11 have been disclosed in brackets under the appropriate Nature of Transaction head.

(ii) Under the renewed Technical Collaboration Agreement with Ericsson Cables AB, Sweden, no royalty or lumpsum fee is payable.

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

(iv) Transactions relating to reimbursement of expenses to/from related parties have not been considered in the above disclosures.

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

(8) (b) The Deferred Tax Assets amounting to Rs.335.30 lacs (Rs.366.30 lacs) in respect of carry forward unabsorbed depreciation has been recognised considering the possible reversal of deferred tax liabilities in future years.

(9) The Company has taken certain office premises under operating lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease agreements. The aggregate lease rental of Rs.4.20 lacs (Rs.1.85 lacs) are charged to the Profit and Loss Account.

(10) There is no impairment of Assets during the year.

(11) Figures of previous year have been shown in brackets and regrouped/reclassified wherever necessary.


Mar 31, 2010

(1) Estimated amount of contracts remaining to be executed on capital accounts and not provided for (net of advance) Rs. 335.58 lacs (Rs. 77.97 lacs).

(2) Contingent liabilities not provided for:

(a) Claims against the Company, not acknowledged as debts Rs. 2.23 lacs (Rs. 1.91 lacs).

(b) Appeal preferred by the Income Tax Department against appellate decisions in favour of the Company, wherein should the ultimate decision be unfavourable to the Company, the liability/demand is estimated to be Rs. 11.67 lacs (Rs. 11.67 lacs).

(c) Unredeemed Bank Guarantees Rs.1771.28 lacs (Rs. 2122.10 lacs).

(d) Unredeemed Bonds given to Customs/Central Excise Authorities Rs.1081.01 lacs (Rs. 968.51 lacs). There is, however, no default to date.

The future cash flow on these accounts [(a) & (b) above] is determinable only on receipt of the decision/judge- ments pending before the authorities.

(3) The Company has filed a Law Suit against a supplier and its agent relating to the validity and existence of an alleged Agreement before a competent Court which is already seized of the said Suit. The supplier in order to over reach the said Law Suit has initiated an arbitration claiming recovery of value of the unsupplied goods for the period from October, 2002 to September, 2006 aggregating to Rs.5514.52 lacs (value 31.03.2010) [Rs. 5919.97 lacs (value 31.03.2009)]. The said arbitration proceedings have been stayed by the Order of the competent Court. The Company has been legally advised that the said claim against the Company is unsustainable and there is no likelihood of any liability arising against the Company.

(4) Disclosure of Derivative Instruments and Unhedged Foreign Currency Exposure:

(5) In the opinion of the Management, the decline in the market value of quoted investments at the year end is temporary and hence does not call for any provision there against.

(6) Based on the information available with the Company, the balance due to Micro & Small Enterprises is Nil (Rs.0.29 lac). The provision for interest made is Nil (Rs.0.03 lac) on delayed payments as per provisions of Micro, Small & Medium Enterprises Development Act, 2006.

(7) Employee Benefits:

(a) Company’s contribution to defined contribution schemes such as Government administered Provident/ Family Pension Fund and approved Superannuation Fund are charged to the Profit and Loss Account as incurred as the Company has no further obligations beyond its contributions. The Company’s defined benefit plans include the approved funded Gratuity scheme which is administered through Group Gratuity scheme with Life Insurance Corporation of India and non-funded schemes viz. Pension (applicable only to certain categories of employees). Such defined benefits are provided for in the Profit and Loss Account based on valuations, as at the Balance Sheet date, made by independent actuaries.

(b) Contributions to Provident/Family Pension and Superannuation Funds is recognised as an expense and included in Personnel Cost (refer Schedule 18) in the Profit and Loss Account. Disclosures for defined benefit plans based on actuarial reports as on March 31, 2010 are summarised below.

(8) (a) As the entire operations of the Company relate to a single business segment of “Wire & Cables”, the disclosure requirement of Accounting Standard (AS-17) on “Segment Reporting” is not applicable.

(b) The following table shows the distribution of Company’s sales (net of excise duty) by geographical market, regardless of where the goods were produced.

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

Associate Bodies Corporate (Associates) : Universal Cables Ltd. (UCL)

Vindhya Telelinks Ltd. (VTL)

Ericsson Cables AB, Sweden and its holding Companies (ECA) Key Management Personnel : Mr. D.R. Bansal, Managing Director

(10) (a) Pursuant to Accounting Standard (AS-22) “Accounting for Taxes on Income”, the Component and classification of deferred tax liability and deferred tax assets on account of timing differences are given below:

(b) The Deferred Tax Assets amounting to Rs.366.30 lacs (Rs. 371.19 lacs) in respect of carry forward unabsorbed depreciation has been recognised considering the possible reversal of deferred tax liabilities in future years.

(11) There is no impairment of Assets during the year.

(12) Figures of previous year have been shown in brackets and regrouped/reclassified wherever necessary.

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