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Notes to Accounts of Nava Bharat Ventures Ltd.

Mar 31, 2017

* The loans are secured by first charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the company and hypothecation of all movable properties including movable plant and machinery, spares, tools and accessories, both present and future and a second charge by way of hypothecation of all movable properties both present and futures (except book debts) subject to prior charges created/to be created in favour of Company''s Bankers on its stocks of raw materials, semi finished and finished goods, consumable stores for securing borrowings for working capital requirements. The mortgage/charge created above shall rank paripassu with the charges created/to be created in favour of other financial institutions/banks.

** Loan from State Bank of India is secured by pledge of 104,600,000 shares of USD 1/- each (being 51% of the shares) held by the company in its subsidiary, M/s Nava Bharat (Singapore) Pte Limited. The loan is repayable in 26 quarterly installments of '' 1,904.00 lakhs commencing from April 01, 2014. During the year company entered into a swap contract and converted the loan into FCNR Borrowing for a period of 6 months. After the expiry of the swap contract the loan will be re-converted into a rupee term loan.

*** The loan is repayable in monthly installments of Rs, 30.14 lakhs commencing from December 01, 2016.

The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognized within the Balance Sheet.

1. Other Information:

i. The company has invested plan assets with Life Insurance Corporation of India. Expected Return on Assets is based on rate of return declared by fund managers.

ii. Present value of defined benefit obligation:

Present value of the defined benefit obligation is calculated by using Projected Unit Credit method (PUC Method). Under the PUC method a "projected accrued benefit" is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active members of the Plan. The "projected accrued benefit" is based on the Plan''s accrual formula and upon service as of the beginning or end of the year, but using a member''s final compensation, projected to the age at which the employee is assumed to leave active service. The Plan Liability is the actuarial present value of the "projected accrued benefits" as of the beginning of the year for active members.

iii. Expected average remaining service Vs. Average Remaining Future Service:

The average remaining service can be arithmetically arrived by deducting current age from normal retirement age whereas the expected average remaining service is arrived actuarially by applying multiple decrements to the average remaining future service namely mortality and withdrawals. Thus, the expected average remaining service is always less than the average remaining future service.

iv. Current and Non- Current Liability:

The total of current and non-current liability must be equal with the total of PVO (Present value obligation) at the end of the period plus short term compensated liability if any. It has been classified in terms of "Schedule III" of the Companies Act, 2013.

Accordingly, below is the Current and Non-Current classification of Gratuity and Compensated Absences:

2. SEGMENT INFORMATION:

For management purposes, the company is organized into business units based on its products and services and has three reportable segments as follows:

a. Ferro Alloys (FAP) Segment which produces various Alloy Metals viz., Ferro Chrome, Silico Manganese and Ferro Silicon and also carrying conversion work on job work basis to others.

b. Power Segment which generates Thermal energy for captive use and also for outside sale.

c. Sugar Segment which produces Sugar and its integrated By-Products.

No operating segments have been aggregated to form the above reportable operative segments.

The Executive Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the consolidated financial statements. The company manages its financing and income taxes separately, company as a whole and are not allocated to operating segments.

Transfer pricing between operating segments are on an arm''s length basis in a manner similar to transactions with third parties wherever available.

The management assessed that cash and cash equivalents trade receivables, trade payables and other current assets/ liabilities approximate their carrying amount largely due to the short-term maturities of these instruments.

The fair value of the financials assets and liabilities is reported at the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

a. The fair values of the quoted shares are based on price quotations at the reporting dates. The fair value of unquoted equity shares are based on the Net Assets available for Equity Shareholders of the Companies.

b. Fair value of Interest free loan given to employees and security deposits have been calculated by discounting future cash flows using rates currently available for debt on similar terms credit risk and remaining maturities.

Description of significant observable inputs to valuation:

a. Loan given to employees'' trust:

Interest Rate factor has been considered at a rate of 12% p.a. by the company for discounting the loan to the date of transition.

b. Investments in Un-quoted equity shares:

The fair values have been ascertained based on data available from financial statements of the unlisted companies. The net asset available for equity shareholders have been considered.

c. Interest free employee staff advance:

Interest Rate factor has been considered at a rate of 12% p.a. by the company for discounting the cash flows by way of repayments by the employees.

e. Interest free Security Deposits (assets):

Interest Rate factor has been considered at a rate of 12% p.a. by the company for discounting the amount receivable at the time of maturity.

f. Interest free Security Deposits (liabilities):

Interest Rate factor has been considered at a rate of 12% p.a. by the company for discounting the amount receivable at the time of maturity.

3. RELATED PARTY TRANSACTIONS: DURING THE YEAR UNDER REFERENCE THE COMPANY HAS ENTERED FOLLOWING TRANSACTIONS WITH RELATED PARTIES:

Names of the Related parties and description of relationship:

i) Key Management Personnel

1. Mr. D. Ashok, Chairman

2. Mr. P. Trivikrama Prasad, Managing Director

3. Mr. G.R.K. Prasad, Executive Director

4. Mr. C.V. Druga Prasad, Director (Business Development)

ii) Relatives of Key Management Personnel

1. Smt. D. Ramaa - wife of Mr. D Ashok

2. Mr. D. Ashwin - son of Mr. D Ashok

3. Mr. D. Nikhil - son of Mr. D Ashok

4. Dr. D. Rajasekhar - brother of Mr. D Ashok

5. Smt. D. Bhaktapriya - mother of Mr. D Ashok

6. Smt. A. Nilima - sister of Mr. D Ashok

7. Smt. P. Rajashree - wife of Mr. P Trivikrama Prasad

8. Smt. P. Sruthi - daughter of Mr. P Trivikrama Prasad

9. Smt. G. S. P. Kumari - wife of Mr. G R K Prasad

10. Smt. C. Umamaheswari - wife of Mr. C V Durga Prasad

iii) Enterprises controlling the reporting enterprise:

Subsidiaries 1. Nava Bharat Energy India Limited

2. Nava Bharat Projects Limited

3. Nava Bharat Realty Limited (upto 30.12.2016)

4. Nava Bharat Sugar and Bio Fuels Limited (upto 30.12.2016)

5. Brahmani Infratech Private Limited

6. Nava Bharat (Singapore) Pte. Limited

7. Maamba Collieries Limited

8. Kariba Infrastructure Development Limited (upto 17.02.2017)

9. NB Rufiji Private Limited

10. NB Tanagro Limited

11. Nava Energy Pte. Limited

12. Nava Bharat Lao Energy Pte. Limited (upto 30.10.2016)

13. Namphak Power Company Limited (upto 30.10.2016)

14. Nava Energy Zambia Limited

15. Nava Agro Pte. Limited

iv) Enterprises over which key management personnel/their relatives exercise significant influence:

1. Nav Developers Limited

2. S R T Investments Private Limited

3. A N Investments Private Limited

4. V9 Avenues Private Limited

5. A9 Homes Private Limited

6. AV Dwellings Private Limited

7. V9 Infra Ventures Private Limited

8. Malaxmi Highway Private Limited

9. Kinnera Power Company Private Limited

10. Dr. Devineni Subba Rao Trust

11. Gunnam Subbarao and Ramayamma Trust

12. Chapter One Books Pte. Limited

13. Kariba Sugar Limited

14. The Indian Ferro Alloys Producers Association

4.FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES:

The company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include interest rate risk foreign currency risk market risk credit risk and liquidity risk. The company''s risk management policies focus on the unpredictability of financial markets and seek to where appropriate minimize potential and guidelines and there has been no change to the company''s exposure to these financial risks or the manner in which it manages and measures the risks or the manner in which it manages and measures the risks.

The following sections provide the details regarding the Company''s exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives policies and processes for the management of these risks.

i. Market Risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk, currency rate risk, interest rate risk and other price risks such as equity risk. Financial instruments affected by market risk include loans and advances deposits investments in debt securities mutual funds and other equity funds.

a. Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of the Company and the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company''s exposure to interest rate risk arises primarily from the loans and advances given by the company investment in debt securities investment in debt mutual funds and cash and cash equivalents.

The company''s policy is to manage its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings

b. Foreign Currency Risk:

Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Currency risk arises when transactions are denominated in foreign currencies.

The Company has transactional currency exposures arising from services provided or availed that are denominated in a currency other than the functional currency. The foreign currencies in which these transactions are denominated are mainly in US Dollars ($). The Company''s trade receivable and trade payable balances at the end of the reporting period have similar exposures.

The Company does uses financial derivatives such as foreign currency forward contracts and swaps for hedging purposes.

c. Other price risk:

Other price risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk) whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.

The company based on working capital requirement keeps its liquid funds in current accounts. Excess funds are invested in long term instruments. Hence the company doesn''t have any significant other price risk.

ii. Credit risk:

Credit risk is the risk of loss that may arise on outstanding financial instruments when a counterparty default on its obligations. The Company''s exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities cash and short-term deposit) the Company minimize credit risk by dealing exclusively with high credit rating counterparties. The Company''s objective is to seek continual revenue growth while minimizing losses incurred due to increased credit risk exposure. The Company trades only with recognized and creditworthy third parties. It is the Company''s policy that all customers who wish to trade on credit terms are subject to credit verification procedures.

In addition, receivable balances are monitored on an ongoing basis with the result that the Company''s exposure to bad debts is not significant.

a. Exposure to credit risk:

At the end of the reporting period the Company''s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognized in the statement of financial position. No other financial assets carry a significant exposure to credit risk.

b. Credit risk concentration profile:

At the end of the reporting period there were no significant concentrations of credit risk. The maximum exposures to credit risk in relation to each class of recognized financial assets is represented by the carrying amount of each financial assets as indicated in the balance sheet.

c. Financial assets that are neither past due nor impaired:

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Company. Cash and short-term deposits investment securities that are neither past due nor impaired are placed with or entered with reputable banks financial institutions or companies with high credit ratings and no history of default.

d. Financial assets that are either past due or impaired:

The company doesn''t have any trade receivables or other financial assets which are either past due or impaired.

iii. Liquidity risk:

The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

The company ensures that it has sufficient cash on demand to meet expected operational demands including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted.

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

5. CAPITAL MANAGEMENT:

Capital includes equity attributable to the equity holders of the parent. The primary objective of the capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximize shareholder''s value.

The company manages its capital structure and make adjustments to it in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure company may adjust the dividend payment to shareholders return capital to shareholders or issue new shares.

The Company monitors capital using a debt to capital employed ratio which is debt divided by total capital plus debt. The Company''s policy is to keep this ratio at an optimal level to ensure that the debt related covenants are complied with.

# Total Borrowings include Long term borrowing short term maturities of long term borrowings and working capital loans like Cash Credit and Buyer''s Credit excluding Inter Corporate Deposit.

6. LEASE DISCLOSURE:

Operating Lease:

All the non-cancellable operating lease obligations are prepaid in nature and hence the company does not have any future obligation on account of such non-cancellable operating leases.

7. The dividends declared by the company are based on the profits available for distribution as reported in the financial statements of the company. The Board of Directors of the company have proposed a final dividend of Rs 1.00 per share in respect of the year ended March 31, 2017 subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs, 2,029.57 lakhs inclusive of dividend distribution tax of Rs, 343.29 lakhs.

8. FIRST TIME ADOPTION OF IND AS:

For all periods, up to and including the year ended March 31, 2016 the company has prepared its financial statements in accordance with generally accepted accounting principles and accounting standards notified under section 133 of the Companies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 ("Previous GAAP").

These financial statements for the year ended March 31, 2017 are the company''s first annual Ind AS complied financial statements.

The company has prepared financial statements which comply with Ind AS applicable for period beginning on or after April 01, 2015 (transition date) as described in the accounting policies. This note explains the principal adjustment made by the company in restating its Previous GAAP Balance Sheet.

Exemptions Applied: The company has applied following exemptions as per Ind AS 101 First Time Adoption:

i. For transition to Ind AS the company has elected to carry the values of Property Plant and Equipment as well as all of its intangible assets recognized as of March 31, 2015 measured as per previous GAAP and used that carrying value as its deemed cost.

ii. On the date of transition the Company has elected to designate all the investments in financial instruments at Fair Value through profit or loss that were acquired before the date of transition.

The reconciliation of equity as at April 01, 2015 and March 31, 2016 and profit for the year ended March 31, 2016 is as follows:

Explanatory Notes:

1 Leasehold land:

Under Previous GAAP leasehold lands were recognized as assets under PPE. As per Ind AS 17, the company has treated leasehold lands as operating leases and premium paid is considered as pre-paid lease rentals.

2 Intangible Assets:

Under previous GAAP intangibles were generally amortized for 10 years. Based on Ind AS 38 Intangibles are amortized based on effective useful life.

As a result, the written down value of Water drawing rights have been premeasured and shown under intangible assets.

3 Guarantee Commission:

The company has issued financial guarantees on behalf of its subsidiaries for borrowings taken by them and also for performance guarantees. As on the date of transition the company has recognized financial guarantee obligation at fair value and considered the same as an additional investment in subsidiaries.

4 Non-current investments:

As on the date of transition, the company decided to classify non-current investments other than investment in subsidiaries as Financial Assets which are measured at fair value with gains or losses recognized in profit and loss (FVTPL).

As per previous GAAP these are carried at cost. However, provision for permanent diminution in value is made to recognize any decline other than temporary in value of investments. As per Ind AS 109 all Equity Investments within the scope of Ind AS 109 are measured at Fair Value with the default recognition of gains and losses in Profit and Loss (FVTPL).

5 Loan to employees and Non-corporate entities:

Company has given interest free loans to employees. Further loans have been provided to non-corporate entities at below market interest rates. Under previous GAAP these loans have been accounted at transaction price. Based on Ind AS 109 such loans have been fair valued and measured at amortized cost. The resultant difference between carrying amount of those loans and the fair value as on date of transition are to be recognized in retained earnings.

6 Security deposits:

Rental and water security deposits were recognized at transaction value under previous GAAP. Based on Ind AS 109 these security deposit has to be recognized at amortized cost and the difference between fair value and carrying cost is to be treated as prepaid lease rental. Further the difference amount relating to period before date of transition to Ind AS is charged to retained earnings.

7 Treasury Shares:

Own fully paid equity shares held by the company, pursuant to order of Hon''ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the company, which are vested in a Trustee for the benefit of the Company and which are to be sold and net sale proceeds are to be paid to the company are and treated as treasury shares and reduced from other equity.

8 Borrowings:

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in statement of profit or loss over the tenure of the borrowings as part of the interest expense by applying the effective interest method.

Under the previous GAAP these transactions costs were amortized on a straight-line basis over the period of loan.

9 Security Deposit and Employee Retention Deposits

Security deposits and Employee Retention Deposits were recognized at transaction value under previous GAAP. ¦

Based on Ind AS 109 these have been recognized at amortized cost. The resultant Ind AS adjustments have been - given in retained earnings.

10 Deferred Tax [

The company under previous GAAP calculated deferred tax based on income statement approach whereby - tax effect of timing differences as a consequence of any mismatch between accounting income and taxable \ income were recognized. Based on Ind AS 12 the company has calculated deferred tax based on balance j sheet approach which focuses on temporary differences between carrying amount of an asset or liability in the : balance sheet and its tax base.

11 Proposed Dividends:

Under the previous GAAP dividends proposed by the board of directors after the balance sheet date but before ¦ the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed ¦ dividend was recognized as a liability. Under Ind AS such dividends are recognized when the same is approved by the shareholders in the general meeting.

Explanatory Notes:

1 Revenue recognition:

Under previous GAAP sale of goods was presented as net of excise duty. However, under Ind AS sale of goods includes excise duty. Thus, sale of goods under Ind AS has increased with a corresponding increase in other expenses.

Further prompt payment rebate extended to energy customers which was reported as finance cost under previous GAAP is netted of from Sale of energy as per Ind AS.

2 Other Income - Fair Valuation Gain:

Interest and other income arising as a result differences on account of fair valuation of various financial assets and liabilities have been credited to Profit and Loss.

3 Guarantee Commission:

Guarantee Commission net of forex gain has been recognized based on Ind AS 109.

4 Defined Benefit:

Under Ind AS actuarial gains on remeasurement of defined benefit obligations are recognized in other comprehensive income. Under previous GAAP the company recognized such remeasurements in profit or loss. However, this has no impact on total comprehensive income

Explanatory Notes:

1 Capital Spares:

Spares which meet the recognition criteria of Property Plant and Equipment has been reduced from Inventories and reclassified as Property Plant and Equipment (net of accumulated depreciation).

2 Intangible Assets:

Under previous GAAP intangibles were generally amortized for 10 years. Based on Ind AS 38 Intangibles are amortized based on effective useful life.

As a result, the written down value of Water drawing rights have been premeasured and shown under intangible assets.

3 Guarantee Commission:

The company has issued financial guarantees on behalf of its subsidiaries for borrowings taken by them and also for performance guarantees. As on the date of transition the company has recognized financial guarantee obligation at fair value and considered the same as an additional investment in subsidiaries.

4 Non-current investments:

The company has decided to classify non-current investments other than investment in subsidiaries as Financial Assets which are measured at fair value with gains or losses recognized in profit and loss (FVTPL).

As per previous GAAP these are carried at cost. However, provision for permanent diminution in value is made to recognize any decline other than temporary in value of investments. As per Ind AS 109 all Equity Investments within the scope of Ind AS 109 are measured at Fair Value with the default recognition of gains and losses in Profit and Loss (FVTPL).

5 Loan to employees and Non-corporate entities:

Company has given interest free loans to employees. Further loans have been provided to non-corporate entities at below market interest rates. Under previous GAAP these loans have been accounted at transaction price. Based on Ind AS 109 such loans have been fair valued and measured at amortized cost. The resultant difference between carrying amount of those loans and the fair value as on date of transition is recognized in retained earnings.

6 Security deposits:

Rental and water security deposits were recognized at transaction value under previous GAAP. Based on Ind AS 109 these security deposits have to be recognized at amortized cost and the difference between fair value and carrying cost is to be treated as prepaid lease rental. Further the difference amount relating to period before date of transition to Ind AS is recognized in retained earnings.

7 Treasury Shares:

Own fully paid equity shares held by the company, pursuant to order of Hon''ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the company, which are vested in a Trustee for the benefit of the Company and which are to be sold and net sale proceeds are to be paid to the company are and treated as treasury shares and reduced from other equity.

8 Borrowings:

Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in statement of profit or loss over the tenure of the borrowings as part of the interest expense by applying the effective interest method.

Under the previous GAAP these transactions costs were amortized on a straight-line basis over the period of loan.

9 Security Deposits and Employee Retention Deposits:

Security deposits and Employee Retention Deposits were recognized at transaction value under previous GAAP. Based on Ind AS 109 these have been recognized at amortized cost. The resultant Ind AS adjustments have been given in retained earnings.

10 Deferred Tax:

The company under previous GAAP calculated deferred tax based on income statement approach whereby tax effect of timing differences as a consequence of any mismatch between accounting income and taxable income were recognized. Based on Ind AS 12 the company has calculated deferred tax based on balance sheet approach which focuses on temporary differences between carrying amount of an asset or liability in the balance sheet and its tax base.

11 Proposed Dividends:

Under the previous GAAP dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS such dividends are recognized when the same is approved by the shareholders in the general meeting.


Mar 31, 2016

A. Rights attached to equity Shares:

The company has only one class of equity shares having a face value of Rs. 2/- per share with one vote per each equity share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The amount of dividend proposed to be distributed for the year ended 31st March 2016, to equity shareholders is Rs. 3.00 per share (31st March 2015 Rs. 5.00 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b The paid up share capital includes 49,73,510 equity shares of Rs. 2/- each fully paid-up, owned by the company, pursuant to the order of Hon''ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the Company, which are vested in a Trustee for the benefit of the Company which are to be sold and net sale proceeds are to be paid to the Company and such shares are not considered for dividend.

* The loans are secured by first charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the Company and hypothecation of all movable properties including movable Plant and Machinery, spares, tools and accessories, both present and future and a second charge by way of hypothecation of all movable properties both present and future (except book debts) subject to prior charges created/to be created in favour of Company''s bankers on its stocks of raw materials, semi-finished and finished goods, consumable stores for securing borrowings for working capital requirements. The mortgage/charge created above shall rank pari-passu with the charges created/to be created in favour of other Financial Institutions/Banks.

** Loan from State Bank of India is secured by pledge of 104,600,000 shares of USD 1/- each (being 51% of shares) held by the Company in its subsidiary, M/s. Nava Bharat (Singapore) Pte. Limited.

i) Carries floating rate of interest (at present 11.00% p.a. and previous year 11.80% p.a.) payable monthly. The Loan is repayable in 26 quarterly installments of Rs. 1,904.00 lakhs commencing from 1st April, 2014.

ii) Carries floating rate of interest (at present 11.40% p.a. and previous year 12.10% p.a.) payable monthly. The principal is repayable in 12 quarterly installments of Rs. 90.42 lakhs commencing from 1st December, 2016.

1. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

2. Considering the projects being implemented and in view of expected cash inflows in subsidiaries in coming years, the management is of the opinion that there is no need to provide for the losses so far incurred by the subsidiaries.

3. i) Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

ii) Details of total outstanding dues to Micro and Small Enterprises as per "Micro, Small and Medium Enterprises Development Act, 2006".

4. The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and all financial and derivative contracts entered into by the Company are for hedging purpose only.

The information on derivative instruments are as follows:

a) Derivative contracts outstanding as at the year end: nil (previous year: USD 25.00 lakhs)

b) Foreign currency exposure not hedged by derivative instruments:

5. SEGMENT INFORMATION AS PER AS 17:

A. Primary disclosures:

The company has identified the reportable primary business segments considering:

i) the nature of products and services;

ii) the differing risks and returns;

iii) the organisation structure; and

iv) the internal financial reporting system.

6. As required by Accounting Standard (AS 28) "Impairment of Assets", the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/ dismantled and written off.

7. Previous year figures have been re-grouped and/or reclassified wherever necessary to make them comparable with those of current year.


Mar 31, 2015

01 NATURE OF OPERATIONS:

Nava Bharat Ventures Limited (the Company) has been incorporated on 7th November, 1972. At present the Company is engaged in the business of manufacture of ferro alloys, sugar and generation of power.

02 BASIS OF ACCOUNTING:

The financial statements have been prepared to comply in all material respects with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013, and in accordance with the generally accepted Accounting Principles in India under the historical cost convention and on accrual basis, except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies are consistent with those used in the previous year.

03 SHARE CAPITAL:

a. Rights attached to equity Shares:

The company has only one class of equity shares having a face value of RS. 2/- per share with one vote per each equity share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

The amount of dividend proposed to be distributed for the year ended 31st March 2015, to equity shareholders is RS. 5.00 per share (31st March 2014 RS. 5.00 per share).

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. The paid up share capital includes 49,73,510 equity shares of RS. 2/- each fully paid-up, owned by the company, pursuant to the order of Hon''ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the Company, which are vested in a Trustee for the benefit of the Company which are to be sold and net sale proceeds are to be paid to the Company and such shares are not considered for dividend.

04. Depreciation for the year is provided as per Schedule II of the Companies Act, 2013, accordingly RS. 510.24 lakhs being the remaining carrying amount of the assets whose remaining useful life is nil and the deferred tax thereon amounting to RS. 84.72 lakhs are recognised in the opening balance of retained earnings.

05. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

06. Considering the projects being implemented and in view of expected cash inflows in subsidiaries in coming years, the management is of the opinion that there is no need to provide for the losses so far incurred by the subsidiaries.

07. i) Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

ii) Details of total outstanding dues to Micro and Small Enterprises as per "Micro, Small and Medium Enterprises Development Act, 2006".

08. The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and all financial and derivative contracts entered into by the Company are for hedging purpose only.

The information on derivative instruments are as follows:

a) Derivative contracts outstanding as at the year end: USD 25.00 lakhs (previous year: nil)

b) Foreign currency exposure not hedged by derivative instruments:

09. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

Particulars 31st March,2015 31st March,2014

i) Contingent liabilities:

a) Claims against the Company not acknowledged as debts 2,863.22 2,625.29

b) Guarantees 62,415.92 50,720.20

c) Other money for which the Company is contingently liable:

i) Demand from Income Tax department 926.63 660.08 disputed

ii) Showcause notices received from 1,313.80 1,339.05 Central Excise Dept.*

iii) Others 198.81 198.81

d) As per the "Renewal Power Purchase obligation (Compliance by Purchase of Renewal Energy/Renewable Energy Certificates) Regulations 2012" of APERC, the Company is under obligation for the year to comply with the said regulations. However as the Company contested the applicability of regulations to the Company in the Hon''ble High Court of A.P., compliance cost is not provided to the extent of 849.69 548.46

ii) Commitments:

Estimated amount of contracts remaining 124.55 104.68 to be executed on capital account and not provided for

* Represent showcause notices received to issue demands and pending for final consideration. The Company has already submitted its objections in writing against the said notices.

10. As required by Accounting Standard (AS 28) "Impairment of Assets", the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/ dismantled and written off.

11. Previous year figures have been re-grouped and/or reclassified wherever necessary to make them comparable with those of current year.


Mar 31, 2012

01 Nature of operations:

Nava Bharat Ventures Limited (the Company) has been incorporated on 7th November 1972. At present the Company is engaged in the business of manufacture of ferro alloys, sugar and generation of power.

02 Basis of Accounting:

The financial statements have been prepared to comply in all material respects with the notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared in accordance with the generally accepted Accounting Principles in India under the historical cost convention and on accrual basis, except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies are consistent with those used in the previous year.

NOTE 34

In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

NOTE 35

i) Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and relied upon by the Auditors

ii) Details of total outstanding dues to Micro and Small Enterprises as per “Micro, Small and Medium Enterprises Development Act, 2006”.

NOTE 36

The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and Japanese Yen and all financial and derivative contracts entered into by the Company are for hedging purpose only.

The information on derivative instruments are as follows:

a) Derivative contracts outstanding as at the year end: nil (previous year: nil)

NOTE 37 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(Rs. in lakhs)

31st March, 31st March, i) Contingent liabilities: 2012 2011

a) Claims against the Company not acknowledged as debts 1,328.22 1,033.08

b) Guarantees 57,319.70 33,057.16

c) Other money for which the Company is contingently liable:

i) Demand from Income Tax department disputed 2,555.00 1,191.51

ii) Showcause notices received from Central Excise Dept. 12,149.96 10,169.35

iii) Others 386.12 585.95

NOTE 37 CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) (Contd.)

(Rs. in lakhs)

31 st March, 31st March, 2012 2011

ii) Commitments:

a) Estimated amount of contracts remaining to be executed on capital 31.72 944.33 account and not provided for

b) Other commitments:

Customs duty payable on imports-in-transit - 0.62

c) Export obligation 1,362.28 3,097.23

(c) (ii) Contingent liabilities represents showcause notices received to issue demand notices are pending for final consideration and the Company has already submitted its objections in writing against the said demands.

NOTE 41

As required by Accounting Standard (AS 28) “Impairment of Assets”, the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/dismantled and written off to Statement of Profit and Loss.

NOTE 44 PREVIOUS YEAR FIGURES HAVE BEEN RE-GROUPED AND/OR RECLASSIFIED WHEREVER NECESSARY TO MAKE THEM COMPARABLE WITH THOSE OF CURRENT YEAR.


Mar 31, 2011

1. Nava Bharat Ventures Limited (the Company) has been incorporated on 7th November,1972. At present the Company is engaged in the business of manufacture of ferro alloys, sugar and generation of power.

2. The following are the signifcant Accounting Policies adopted by the Company in preparation and presentation of financial statements.

3. i) Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defned under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors.

4. In terms of Accounting Standard 22 "Accounting for Taxes on Income" (AS 22) issued by The Institute of Chartered Accountants of India, the Company has accounted for the deferred taxes during the year. The following are the major components of deferred tax (asset)/liability.

5. Out of 76,364,668 (previous year 76,255,458) Equity Shares of Rs 2/- each fully paid-up of the Company:

i) 14,167,095 shares were allotted as fully paid-up pursuant to schemes of amalgamation without receiving the payment in cash.

ii) 12,137,095 shares are allotted as fully paid-up by way of bonus shares by capitalising Reserves.

iii) Pursuant to the order of Hon’ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the Company, 4,973,510 equity shares of Rs 2/- each fully paid up owned by the Company are vested in a Trustee for the benefit of the Company which are to be sold and net sale proceeds are to be paid to the Company and such shares are not considered for dividend.

iv) During the year, the Company has allotted 109,210 (Previous Year 282,730) Equity Shares of Rs 2/- each at a premium of Rs 111.15 (including the difference between the fair value and the exercise price) per share on exercise of 109,210 (Previous Year 282,730) Employees Stock options.

v) Dividend for the year is provided on the equity shares arising out of proposed conversion of FCCBs into capital also, as the conversion is expected to take place before book closure.

6. a) During the year 2006-07, the Company has issued Zero Coupon Foreign Currency Convertible Bonds for an amount of JPY 6.00 billion at par. These bonds are convertible into Equity Shares with a fixed rate of exchange of Rs 0.3976 per 1 JPY at an initial conversion price of Rs 136.50 per Share at the option of bondholders at any time on or after 14th October, 2006 and on or before the close of business hours (i.e. 5.00 P.M.) on 31st August 2011. The Company also has an option to convert all these bonds on or after 29th September 2009 and prior to 30th September 2011 at the then prevailing conversion price as per the terms of issue. Out of the above, 2.48 billion Bonds were converted during the year 2007-08 and if all the remaining bonds are converted into Equity Shares, the paid up Equity Share Capital of the Company will increase by 9,700,620 Equity Shares of Rs 2/- each. If no such conversion takes place, the Bonds are redeemable on 30th September 2011 at a redemption premium of 25.96% so as to give the bondholders gross yield to maturity of 4.67% per annum compounded semi-annually.

b) The Company issued Conversion notice on 17th January 2011 to the Trustees for Bondholders fixing the date of conversion as 28th February 2011. The Issuers’ Conversion Right will be restricted to the conversion of Bonds into Equity Shares which works out to less than 14.5% of the enhanced Capital for each bondholder. The Bondholders have to comply with the procedures to enable the Company to complete the conversion process.

c) As the variables are indeterminate at present, the premium on actual redemption is not computable and hence will be recognised, as and when the redemption option is exercised, as a charge to the Securities Premium Account in terms of Section 78(2)(d) of the Companies Act,1956.

7. Fixed Deposit Receipts for Rs 504.86 Lakhs (Previous year Rs 391.81 Lakhs) are in lien with Bankers towards Margin Money for Bank Guarantees and Letters of Credit issued by them.

8. a) The Company’s land of about 5.08 acres was given possession to M/s.Hyderabad Vanaspathi Limited. The sale price of the same is yet to be adjusted pending permission from the Government of Andhra Pradesh.

b) The title in respect of the land costing Rs 1.23 Lakhs (previous year Rs 1.23 Lakhs) admeasuring 6 acres and 23 guntas (previous year 6 acres 23 guntas) is yet to be transferred in the name of the Company.

c) Land costing Rs 26.06 Lakhs admeasuring 5.05 acres allotted by APIIC Limited during the year 2009-10, is not yet transferred in the name of the Company.

d) Cost of leasehold land amounting to Rs 140.33 Lakhs shown under the head Fixed Assets represents the premium paid to the State Government of Orissa for alienation of 56.36 acres in favour of the Company by virtue of lease deeds for 90/99 years and the said land can be resumed by the said Government by giving 6 months notice in writing during the tenure of lease.

9. As required by Accounting Standard (AS 28) "Impairment of Assets", the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/ dismantled and written off to profit and Loss Account.

c) 6 year National Savings Certifcates of the face value of Rs 3.24 Lakhs (Previous year Rs 2.91 Lakhs) shown under the investments are in the names of employees of the Company and the certifcates in respect of face value of Rs 3.19 Lakhs (Previous year Rs 2.86 Lakhs) were pledged with various Government Departments as security.

10. a) In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

b) Sundry Debtors due for less than six months amounting to Rs 19,570.75 Lakhs (Previous year Rs 14,502.52 Lakhs) include Rs 14,171.53 Lakhs (Previous year Rs 8,731.82 Lakhs) due from a foreign subsidiary Company viz., M/s.Nava Bharat (Singapore) Pte. Limited, Singapore.

The rate of escalation in salary considered in actuarial valuation is estimated taking into account infation, seniority, promotion and other relevant factors.

The above information is certifed by an actuary.

11. The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and Japanese Yen and all financial and derivative contracts entered into by the Company are for hedging purpose only.

12. a) Working Capital Loans from Banks are secured by hypothecation of raw materials, work-in-progress, fnished goods, stores and spares and book debts to the extent of Rs 20,000 Lakhs and a second charge on fixed assets of the Company.

b) The Term Loans from IDBI Bank Limited, Infrastructure Development Finance Company Limited, Andhra Bank, State Bank of India, Bank of India, State Bank of Hyderabad, UCO Bank are secured by First Charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the Company and hypothecation of all movable properties including movable Plant and Machinery, spares, tools and accessories, both present and future and a second charge by way of hypothecation of all movable properties both present and future (except book debts) subject to prior charges created/to be created in favour of Companys bankers on its stocks of raw materials, semi-fnished and fnished goods, consumable stores for securing borrowings for working capital requirements. The mortgage/charges created above shall rank pari-passu with the charges created/ to be created in favour of other Financial Institutions/Banks.

c) The Term Loan availed from Andhra Bank amounting to Rs 6,000.00 Lakhs out of the sanction of Rs 20,000 Lakhs for funding a foreign subsidiary Company, i.e. Nava Bharat (Singapore) Pte Limited is also secured by pledge of 6,300,000 equity shares of US$1/- each held by Company in the said subsidiary and hypothecation of mineral and mining rights of subsidiary.

d) All the above said loans are also guaranteed by some of the directors of the Company in their personal capacity.

13. Contingent liabilities not provided for on account of:

(Rs in Lakhs)

As at As at

31st March 2011 31st March 2010

a) Guarantees given by the Bankers 941.96 543.37

b) Guarantees given by the Company on behalf of others 32,115.20 10.40

c) Claims against the Company not acknowledged as debts 1,033.08 883.92

d) Demand raised by A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Limited) towards additional charges on power tariff difference between HT I and HT

III categories and surcharge on belated payments disputed by the 136.45 136.45

Company, pending in appeal with High Court of A.P.

e) Interest on dues to A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Limited). 62.35 62.35

f) Demand from Income-tax department disputed 1,191.51 684.41

g) Customs duty payable on imports-in-transit 0.62 -

14. The Company has imported certain goods under the Export Promotion Capital Goods Scheme of the Government of India at concessional rates of duty on an undertaking to fulfl quantifed exports against which the remaining future obligations aggregate to Rs 1,362.27 Lakhs and Rs 1,734.95 Lakhs which is to be fulflled within next 2 years and 5 years respectively. Non-fulflment of the balance obligation within the said period render the Company liable to pay the balance duty of Rs 387.15 Lakhs and other penalties under the above referred Scheme.

15. Showcause notices received from Central Excise Department to issue demand notices for an amount of Rs 10,169.35 Lakhs (Previous year Rs 9,064.91 Lakhs) are pending for fnal consideration and the Company has already submitted its objections in writing against the said demands.

16. The amount of contracts remaining to be executed on capital account and not provided for are estimated at Rs 944.33 Lakhs (previous year Rs 29,366.91 Lakhs).

17. Excise Duty included in Rates and Taxes and debited to profit and Loss Account represents the aggregate of Excise Duty borne by the Company and the difference between Excise Duty on opening and closing stock of fnished/saleable goods.

18. Segment reporting as per AS 17 issued by the Institute of Chartered Accountants of India.

A. Primary disclosures:

The company has identifed the reportable primary business segments considering:

i) the nature of products and services;

ii) the differing risks and returns;

iii) the organisation structure; and

iv) the internal financial reporting system.

19. Previous year fgures have been re-grouped and/or reclassifed wherever necessary to make them comparable with those of current year.


Mar 31, 2010

1. Nava Bharat Ventures Limited (the Company) has been incorporated on 7th November,1972. At present the Company is engaged in the business of manufacture of ferro alloys, sugar and generation of power.

2. The following are the significant Accounting Policies adopted by the Company in preparation and presentation of financial statements.

3. i. Disclosure of Sundry Creditors under Current Liabilities is based on the information availabe with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. During the year the Company has paid no interest in terms of Section 16 of the said Act.

ii. Details of total outstanding dues to Micro and Small Enterprises as per "Micro, Small and Medium Enterprises Development Act, 2006".

4. a) During the year the Company has bought back 1,52,596 (Previous year 17,79,904) Equity Shares of Rs.2/- each at an average price of Rs.140.60 (Previous year Rs.119.20) per share and accordingly

i) The face value of shares has been reduced from the paid up Equity Share Capital.

ii) The balance of Rs.138.60 (Previous year Rs.117.20) paid on these shares aggregating to Rs.211.50 lakhs (Previous year Rs.2,086.10 lakhs) has been adjusted against General Reserve.

iii) As required under the provisions of the Companies Act 1956, Rs.3.05 lakhs (Previous year Rs.35.60 lakhs) has been transferred to Capital Redemption Reserve from current year Surplus.

b) Out of 7,62,55,458 (previous year 7,61,25,324) Equity Shares of Rs.2/- each fully paid-up of the Company:

i) 1,41,67,095 shares were allotted as fully paid-up pursuant to schemes of amalgamation without receiving the payment in cash.

ii) 1,21,37,095 shares are allotted as fully paid-up by way of bonus shares by capitalising Reserves.

iii) Pursuant to the order of Hon’ble High Court of Andhra Pradesh dated 30.12.1996 in the Scheme of amalgamation of Nav Chrome Limited with the Company, 49,73,510 equity shares of Rs.2/- each fully paid up owned by the company are vested in a Trustee for the benefit of the Company which are to be sold and net sale proceeds are to be paid to the Company and such shares are not considered for dividend.

iv) During the year, the Company has allotted 2,82,730 (Previous Year 31,560) Equity Shares of Rs.2/- each at a premium of Rs.111.15 (incl -uding the difference between the fair value and the exercise price) per share on exercise of 2,82,730 (Previous Year 31,560) Employees Stock options. Consequent to the above allotment and buy back of Shares during the year, the paid up Equity Share Capital of the Company stands increased from Rs.1,522.51 lakhs to Rs.1,525.11 lakhs and the Securities Premium stands increased from Rs.13,732.49 lakhs to Rs.14,046.74 lakhs.

c) The Company has granted 6,00,000 stock options under the Company’s Employees Stock Option Scheme 2006 (ESOS) during the year ended 31st March, 2007 to be converted into 6,00,000 Equity Shares at a premium of Rs.88.52 per share and stock options outstanding as at 31 March, 2010 are 1,09,210. During the year 2,82,730 (Previous Year 31,560) options were exercised and 4,560 (Previous Year 53,750) options were cancelled.

7. a) During the year 2006-07, the Company has issued Zero Coupon Foreign Currency Convertible Bonds for an amount of JPY 6.00 billion at par. These bonds are convertible into Equity Shares with a fixed rate of exchange of Rs.0.3976 per 1 JPY at an initial conversion price of Rs.136.50 per Share at the option of bondholders at any time on or after 14th October, 2006 and on or before the close of business hours (i.e. 5.00 P.M.) on 31st August, 2011. The Company also has an option to convert all these bonds on or after 29th September, 2009 and prior to 30th September, 2011 at the then prevailing conversion price as per the terms of issue. Out of the above, 2.48 billion Bonds were converted during the year 2007-08 and if all the remaining bonds are converted into Equity Shares, the paid up Equity Share Capital of the Company will increase by 97,00,620 Equity Shares of Rs.2/- each. If no such conversion takes place, the Bonds are redeemable on 30th September, 2011 at a redemption premium of 25.96% so as to give the bondholders gross yield to maturity of 4.67% per annum compounded semi-annually.

c) As the variables are indeterminate at present, the premium on actual redemption is not computable and hence will be recognised, as and when the redemption option is exercised, as a charge to the Securities Premium Account in terms of Section 78(2)(d) of the Companies Act,1956.

8. Fixed Deposit Receipts for Rs.391.81 lakhs (Previous year Rs.429.34 lakhs) are in lien with Bankers towards Margin Money for Bank Guarantees and Letters of Credit issued by them.

9. a) The Company’s land of about 5.08 acres was given possession to M/s. Hyderabad Vanaspathi Limited. The sale price of the same is yet to be adjusted pending permission from the Government of Andhra Pradesh.

b) Land costing Rs.1.23 lakhs (previous year Rs.1.23 lakhs) admeasuring 6 acres and 23 guntas (previous year 6 acres 23 guntas) is not in the name of the Company.

c) Land costing Rs.26.06 lakhs admeasuring 5.05 acres allotted by APIIC Ltd during the year, is not yet transferred in the name of the Company.

d) Cost of leasehold land amounting to Rs.140.33 lakhs shown under the head Fixed Assets represents the premium paid to the State Government of Orissa for alienation of 56.36 acres in favour of the Company by virtue of lease deeds for 90/99 years and the said land can be resumed by the said Government by giving 6 months notice in writing during the tenure of lease.

e) Motor Vehicles costing Rs.1.09 lakhs shown under the head Fixed Assets are not in the name of the Company.

10. As required by Accounting Standard (AS 28) "Impairment of Assets”, the management has carried out the assessment of impairment of assets and no impairment loss has been recognised during the year other than the assets discarded/dismantled

c) 6 year National Savings Certificates of the face value of Rs.2.91 lakhs (Previous year Rs.3.01 lakhs) shown under the investments are in the names of employees of the Company and the certificates in respect of face value of Rs.2.86 lakhs (Previous year Rs.2.79 lakhs) were pledged with various Government Departments as security.

11. a) In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts. b) Sundry Debtors due for less than six months amounting to Rs.14,502.52 lakhs (Previous year Rs.9,392.34 lakhs) include Rs.8,731.82 lakhs (Previous year Rs.2,292.76 lakhs) due from a foreign subsidiary Company viz., M/s.Nava Bharat (Singapore) Pte. Ltd, Singapore.

The rate of escalation in salary considered in actuarial valuation is estimated taking into account inflation, seniority, promotion and other relevant factors.

The Company has determined the liability for employee benefits as at 31st March, 2008 in accordance with the revised Accounting Standard 15 - Employee benefits issued by ICAI and the transitional liability in respect of gratuity is recognised as an expense on straight line basis over a period of 3 years commencing from the year 2007-08 in terms of the said Standard

The above information is certified by an actuary. 14. The Company uses derivative financial instruments such as forward contracts and currency swap to hedge currency exposures, present and anticipated, denominated mostly in US Dollars and Japanese Yen and all financial and derivative contracts entered into by the Company are for hedging purpose only.

12. a) Working Capital Loans from Banks are secured by hypothecation of raw materials, work-in-progress, finished goods, stores and spares and book debts to the extent of Rs.20,000 lakhs and a second charge on fixed assets of the Company.

b) The Term Loans from IDBI Bank Limited, Infrastructure Development Finance Company Limited, Andhra Bank, State Bank of India, HDFC Bank Limited, Bank of India, State Bank of Hyderabad, UCO Bank are secured by First Charge by way of equitable mortgage by deposit of title deeds to cover all immovable properties of the Company and hypothecation of all movable properties including movable Plant and Machinery, spares, tools and accessories, both present and future and a second charge by way of hypothecation of all movable properties both present and future (except book debts) subject to prior charges created/to be created in favour of Company’s bankers on its stocks of raw materials, semi-finished and finished goods, consumable stores for securing borrowings for working capital requirements. The mortgage/charges created above shall rank pari-passu with the charges created/to be created in favour of other Financial Institutions/Banks.

c) The Term Loan availed from Andhra Bank amounting to Rs.6,000.00 lakhs out of the sanction of Rs.20,000 lakhs for funding a foreign subsidiary Company, i.e. Nava Bharat (Singapore) Pte Ltd is also secured by pledge of 6,300,000 equity shares of US$1/- each held by Company in the said subsidiary and hypothecation of mineral and mining rights of subsidiary.

d) All the above said loans are also guaranteed by some of the directors of the Company in their personal capacity.

13. Contingent liabilities not provided for on account of:

(Rs. in lakhs)

Particulars As at 31.3.2010 As at 31.3.2009

a) Guarantees given by the Bankers 543.37 1,007.09

b) Guarantees given by the Company on behalf of others 10.40 10.40

c) Claims against the Company not acknowledged as debts 883.92 727.59

d) Demand raised by A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Ltd) towards additional charges on power tariff difference between HT I and HT III categories and surcharge on belated payments disputedby the Company, pending in appeal with High Court of A.P. 136.45 136.45

e) Interest on dues to A. P. State Electricity Board (reconstituted as Transmission Corporation of Andhra Pradesh Ltd). 62.35 62.35

f) Demand from Income-tax department disputed 684.41 1,377.71

14. The Company has imported certain goods under the Export Promotion Capital Goods Scheme of the Government of India at concessional rates of duty on an undertaking to fulfill quantified exports against which the remaining future obligations aggregate to Rs.1362.27 lakhs and Rs.1734.95 lakhs which is to be fulfilled within next 3 years and 6 years respectively. Non-fulfillment of the balance obligation within the said period render the Company liable to pay the balance duty of Rs.387.15 lakhs and other penalties under the above referred Scheme.

15. Showcause notices received from Central Excise Department to issue demand notices for an amount of Rs.9064.91 lakhs (Previous year Rs.5374.89 lakhs) are pending for final consideration and the Company has already submitted its objections in writing against the said demands.

16. The amount of contracts remaining to be executed on capital account and not provided for are estimated at Rs.29366.91lakhs (previous year Rs.385.75 lakhs).

17. Excise Duty included in Rates and Taxes and debited to Profit and Loss Account represents the aggregate of Excise Duty borne by the Company and the difference between Excise Duty on opening and closing stock of finished/saleable goods.

18. Segment reporting as per AS 17 issued by the Institute of Chartered Accountants of India.

A. Primary disclosures:

The company has identified the reportable primary business segments considering:

i) the nature of products and services;

ii) the differing risks and returns;

iii) the organisation structure; and

iv) the internal financial reporting system.

19. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows:

a) Names of related parties and description of relationship:

Name of the related party Nature of relationship

i) Key Management Personnel:

Sri D Ashok Chairman

Sri P.Trivikrama Prasad Managing Director

Sri C.V. Durga Prasad Director (Business Development)

Sri G.R.K.Prasad Director (Finance & Corporate Affairs)

ii) Relatives of key management personnel:

Smt D Bhakta Priya Mother of Sri D Ashok

Dr D Rajasekhar Brother of Sri D Ashok

Smt C Umamaheswari Wife of Sri C V Durga Prasad

Smt G S P Kumari Wife of Sri G.R.K.Prasad

Mr G Raghu Chaitanya Son of Sri G.R.K.Prasad

Kum G Ramya Sudha Daughter of Sri G.R.K.Prasad

iii) Subsidiaries:

M/s.Nava Bharat (Singapore) Pte Ltd M/s.Brahmani Infratech Private Limited M/s.Nava Bharat Projects Limited M/s.Nava Bharat Realty Limited

M/s.Kinnera Power Company Limited

M/s.Nava Bharat Energy India Limited

M/s.Nava Bharat Sugar and Bio Fuels Limited

M/s.Malaxmi Highway Private Limited

M/s.PT Nava Bharat Sungaicuka, Indonesia

M/s.PT Nava BharatIndonesia

iv) Associates/Enterprises over which shareholders, key management personnel and their relatives exercise control or significant influence:

Dr. Devineni Subbarao Trust Promoter Group Entity

M/s.Navabharat Power Private Limited Associate Company

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