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Notes to Accounts of Solar Industries India Ltd.

Mar 31, 2017

Note 1: The entity has not commenced its business operations

Note 2: During the financial year under review, in continuation of the efforts to realign the group structure and consolidate the multi layered structure, the Board has decided to dissolve these Companies.

Note 3: Under liquidation

(a) Majority owned and controlled subsidiaries of Solar Overseas Netherlands Cooperative U.A.

(b) Majority owned and controlled subsidiaries of Solar Overseas Netherlands B.V.

(c) Majority owned and controlled subsidiaries of Solar Overseas Mauritius Limited

(d) Majority owned and controlled subsidiary of Solar Industries Africa Limited

(e) Majority owned and controlled subsidiary of Solar Overseas Singapore PTE Limited ‘Subsidiary since September, 2016

@ Subsidiary since April, 2015

* Subsidiary since July, 2016

Note 4: Employee Benefit obligations

(i) Post-employment obligations

a) Gratuity

The Company operate a defined benefit plan viz. namely gratuity for its employees. Under the gratuity plan, every employee who has completed at least 5 years of service gets a gratuity on departure @ 15 days (minimum) of the last drawn salary for each year of service. The scheme is funded with an insurance company in the form of qualifying insurance policy.

The following tables summarized the components of net benefit expense recognized in the statement of profit and loss, other comprehensive income, and the funded status and amount recognized in the balance sheet.

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 employment market.

The overall expected rate of return on assets is determined based on the interest rate prevailing in the market on that date, applicable to the period over which the obligation is to be settled.

Notes :

1. Liabilities are very sensitive to discount rate, salary inflation and attrition rate.

2. Liabilities are very less sensitive due to change in mortality assumptions. Hence, sensitivities due to change in mortality are ignored.

*The Company is contesting the demands and the management, including its tax/legal advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised.

Note 5: Related Party Disclosures

A Names of related parties and related party relationship :

I Subsidiaries and associates

Note no. 27 provides the information about the group''s structure including the details of the subsidiaries, step down subsidiaries and associate companies

II Key Management Personnel (KMP)

Shri S.N. Nuwal Shri K.C. Nuwal Shri Manish Nuwal Shri R D Vakil Shri Anil Kumar Jain Shri Nilesh Panpaliya Smt Khushboo Pasari

Note 6: Related Party Disclosures (Contd...)

III Non executive directors*

Shri Anant Sagar Awasthi Shri Dilip Patel Shri Ajai Nigam Shri Amrendra Verma Smt Madhu Vij

* Non Executive Independent Directors were only paid sitting fees for attending Board & Board Committee meetings for the year 2016-17.

Company has not entered into any other transactions with its Non Executive Independent Directors or the enterprises over which they have significant influence.

IV Enterprises, over which control or significant influence is exercised by individuals listed in ''II’ above (with whom transactions have taken place)

Solar Synthetics Private Limited Commercial Sales Corporation

V Enterprises, over which control or significant influence is exercised by individuals listed in ''II’ above (other than IV above)

Solar Initiating Systems Limited

Mahakal Infrastructures Private Limited

Mahakal Project Private Limited

Nagpur Infrastructure Private Limited

Solar Processors (Bhilwara) Limited

Gulmohar Developers and Constructions Private Limited

Sun Developers and Constructions Private Limited

Sunbeam Developers and Constructions Private Limited

Sundrop Realtors Private Limited

Sunland Infracon Private Limited

Sunlight Infraventures Private Limited

VI Other related party

Solar Industries India Limited employee group gratuity assurance scheme (Post employment benefit plan of the Company)

Refer to Note 28 for information on transactions with post employment benefit plan mentioned above

* Amount is less than H1 lakh in March 31, 2016.

* Amount is less than lakh in March 31, 2017.

Note 7: Segment Information

In accordance with paragraph 4 of Ind AS 108 "Operating Segments”, the Company has presented segmental information only on the basis

of the Consolidated financial statements.

Note 8: Fair Value Measurements

The fair value of the financial assets and liabilities is included 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:

1 The Company has not disclosed the fair values of financial instruments such as cash and cash equivalents, bank balances, bank deposits, trade receivables, other financial assets (except derivatives) , trade payables, other financial liabilities (except derivatives), current borrowings, because their carrying amounts are a reasonable approximation of fair value. Further, for financial assets, the Company has taken into consideration the allowances for expected credit losses and adjusted the carrying values where applicable.

2 The Company has not disclosed the fair value of Investments in subsidiaries, since the same are valued at cost. For carrying values refer note 4 of the financial statements.

3 For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

4 The Company holds derivative financial instruments to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank or a financial institution. These derivative financial instruments are valued based on inputs that are directly or indirectly observable in the marketplace. The valuation techniques used to value these derivatives include forward pricing and swap models, using present value calculations. These derivatives are marked to market as on the valuation date.

5 The fair values for loans given were calculated based on cash flows discounted using a current lending rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments are not materially different from their carrying values. They are classified as level 3 fair values in the fair value hierarchy.

6 Fair values of the Company''s interest-bearing borrowings are determined by using discounted cash flow method using the current borrowing rates. The non-current borrowings are classified as level 3 fair values in the fair value hierarchy due to inclusion of unobservable inputs including own credit risk. The own non-performance risk was assessed to be insignificant.

A. Fair Value Hierarchy

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

Level 2- Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3- Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Note 9: Financial risk management objectives and policies

The Company''s financial assets includes loans, trade receivables, cash and cash equivalents that comes directly from its operations and financial liabilities comprises of borrowings, trade and other payables, and financial guarantee contracts. It has an integrated financial risk management system which proactively identifies monitors and takes precautionary and mitigation measures in respect of various identified risks.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks, which evaluates and exercises independent control over the entire process of financial risks. All the derivative activities for risk management purposes are managed by experienced teams. It is the Company''s policy that no trading in derivatives for speculative purposes may be undertaken.

Market Risk

Market Risk is the risk that the future value of a financial instrument will fluctuate due to moves in the market factors. The most common types of market risks include

- interest rate risk,

- foreign currency risk and

- equity price risk.

Market risk is attributable to all market risk sensitive financial instruments. The finance department undertakes management of cash resources, hedging strategies for foreign currency exposures, borrowing mechanism and ensuring compliance with market risk limits.

Interest Rate Risk

Interest rate risk is the risk that the future cash flows or the fair value of a financial instrument will fluctuate because of changes in market interest rates. The Company manages its interest rate risk by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. The Company is not very significantly exposed to interest rate risks except the variations in LIBOR rates as most of borrowings are linked to LIBOR.

0.5% changes in Interest Rate will increase/ decrease the borrowing cost by H0.95 lacs.

The Company does not have significant investment in Bank Deposits and hence not significantly exposed to Interest rate sensitivity.

Foreign Currency Risk

Foreign Currency risk is the risk that the future earnings or fair values of future cash flows will fluctuate because of changes in foreign exchange rates. The Company operates globally and portion of the business is transacted in USD and Euro. The Company evaluates exchange rate exposure and manages it by using derivatives like Foreign-exchange forward contracts to hedge the foreign exchange risk.

Derivative instruments and unheeded foreign currency exposures

Equity price risk

The Company''s investments in quoted equity shares and mutual funds are subject to market price risk arising from uncertainties about future values of the invested securities. The Company manages the equity price risk through diversification. The portfolio reports are submitted to senior management on regular basis and the board of directors reviews and approves all investments.

The impact of increases/ decreases of the BSE/ NSE index on the Company''s equity shares and mutual funds and gain/ loss for the period would be RS,0.44 crore (March 31, 2016: RS,0.06 crore). The analysis is based on the assumption that the index has increased by 1% or decreased by 1% with all other variables held constant, and that all the Company''s investments having price risk moved in line with the index.

Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligation as agreed. To manage this, the Company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are periodically reviewed on the basis of such information.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.

Cash and cash equivalents and deposits: Balances and deposits with banks are subject to low credit risks due to good credit ratings assigned to the banks.

Note 10: Financial risk management objectives and policies (Contd...)

Investments: The Company limits its exposure to credit risk by generally investing in liquid securities and counterparties that have a good credit ratings. The group does not expect any credit losses from non-performance by these counter parties, and does not have any significant concentration of exposures to specific industry sectors.

Loans: The Company has given loans to associates and subsidiaries and certain unrelated parties. However there is no counter party risk. Except in case of some non-current loans where arbitration proceeding are on-going and the management believes that this amount would be recovered in full however the timing of recovery is uncertain. (Refer note no. 5 of the financial statements for details)

Trade and other receivables:

The Company measures the expected credit loss of trade receivables and loans from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.

No significant changes in estimation techniques or assumptions were made during the reporting period.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s finance department is responsible for liquidity, funding as well as settlement management and then processes related to such risks are overseen by senior management through rolling forecasts on the basis of expected cash flows.

Note 11 (a): Capital Management

For the purpose of Company''s capital management, capital includes issued share capital, share premium and all other equity reserves. The primary objective of capital management is to maximize shareholder value. The Company consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and risk managements of the underlying assets.

Note 12(b): Research & Development Expenditure:

1. Capital Expenditure incurred on R&D is included in Fixed Assets and depreciation is provided on the same at the respective applicable rates.

Note 13: First- time adoption of Ind AS

These financial statements, for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2015, the Group prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP)

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2015 and the financial statements as at and for the year ended March 31, 2016.

A Exemptions and exceptions applied

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

A.1 Ind AS optional exemptions

A.1.1 Business Combinations (Ind AS 103)

Ind AS 101 provides the option to apply Ind AS 103, prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated. The Company has applied same exemption for investment in associates.

A.1.2 Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities.

Accordingly, the Company has elected to measure all of its property, plant and equipment at their previous GAAP carrying value.

A.1.3 Use of deemed cost for investments in subsidiaries and associates

Ind AS 101 permits a first-time adopter to elect to continue the previous GAAP carrying amount at the date of transition and use that as its deemed cost of investment as at the date of transition.

Accordingly, the Company has elected to measure all its investments in subsidiaries and associates at their previous GAAP carrying value. A.2 Ind AS mandatory exceptions A.2.1 Estimates

An entity''s estimates in accordance with Ind AS as at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Indian GAAP:

Investment in equity instruments carried at FVPL or FVOCI; and Impairment of financial assets based on expected credit loss model.

A.2.2 Reconciliations between previous GAAP and Ind AS

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

equity as at April 1, 2015; equity as at March 31, 2016;

total comprehensive income for the year ended March 31, 2016; and

explanation of material adjustments to cash flow statements In the reconciliations mentioned above, certain reclassifications have been made to Previous GAAP financial information to align with the Ind AS presentation.

Notes to First-time adoption:

Note 14 Fair valuation of mutual fund and equity investments

Under Ind AS, investments in equity instruments (other than investments in subsidiaries) and mutual funds are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended March 31, 2016.

Note 15 Fair valuation of derivatives

Under Ind AS, derivatives which are not designated as hedging instruments are fair valued with resulting changes being recognized in profit or loss. The impact in equity and profit is on account of fair valuation of forward foreign exchange contracts.

Note 16 Trade receivables

As per Ind AS 109, the Company is required to apply expected credit loss model for recognizing the allowance for doubtful debts. Consequently, the total equity as at March 31, 2016 and April 1, 2015 decreased and profit for the year ended March 31, 2016 has also been decreased

Note 17 Proposed dividend

Under Ind AS, dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity has been increased.

Note 18 Deferred tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

Also, deferred tax have been recognized on the adjustments made on transition to Ind AS.

Note 19 Retained earnings

Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS transition adjustments.

Note 20 Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP. Further the Company has reconciled Indian GAAP profit or loss to total comprehensive income as per Ind AS.

Note 21 Statement of cash flows

The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended March 31, 2016 as compared with the previous GAAP.

Note 22 Discount and incentives directly relatable to revenue

Under previous GAAP, the discounts and incentives on sales were shown as other expenses. Under Ind AS, these are required to be netted off against revenue. There is no impact on the total equity and profit.

Specified Bank Notes (SBNs) is defined as Bank Notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees.

The disclosures with respect to '' Permitted receipts'' , ''Permitted payments'' , ''Amount deposited in Banks'' and ''Closing Cash in Hand as on Dec 30, 2016 is understood to be applicable in case of SBN''s only.


Mar 31, 2016

Note - 1.

As Per Accounting Standard (AS) 17 on "Segment Reporting "we are having only one segment hence segment reporting not applicable.

2.(1) The Board of Directors of the Company in previous years decided to write off interest income from companies related to
Bhatgaon Coal Blocks. The company has written off interest income of Rs. 30.00 Crores in earlier years. The Board of Directors
decided not to charge the interest on outstanding loans.

2. (2) During the year company has purchased shares of its subsidiary M/s. Emul Tek Pvt Ltd at value of Rs. 0.80 Crores, Blastec
(India) Pvt Limited of Rs. 0.50 Crores. and M/s. Solar Defence Ltd at value of Rs. 0.05 Crores.

2. (3) Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s
classification /disclosure.

2 (4) Significant accounting policies and practice adopted by the company are disclosed in the statement annexed to these
financial statement as Annexture-1

2 (5) Expenditure related to Corporate Social Responsibility as per Section 135 of the Companies Act, 2013 read with Schedule
VII thereof : of Rs. 2.23 Crores

2 (8) During the year Purchases of Stock in trade shown on consumption basis.

2(9) As on 31.03.16 company has given Financial Guarantee of $3.38 Crores for its wholly owned overseas subsidiary.

IV Notes

1 Every Employee who has completed Minimum five years of service is entitled to Gratuity at 15 days salary for each completed
year of services. The scheme is funded with insurance companies in the form of Qualified insurance Policies.

2 Provident fund for certain eligible employees is managed by the Providend fund authorities.The contribuition by the employer
and employee together with the interest accumulated thereon are payable to employees at the time of seperation from the company
or retirement, whichever is earlier. The benefits vest immediately on rendering of the services by the employee.

3 The minimum interest rate payable by the LIC to the beneficiaries every year is being notified by the LIC.


Mar 31, 2014

1 (1) RELATED PARTY DISCLOSURES :-

As Per Accounting Standard 18, the disclosures of transactions with the related parties are given below :- (i) List of related parties where control exists & related parties with whom transactions have taken place & relationships:-

SR NAME OF RELATED PARTY NO.

SUBSIDIARIES :-

1 Economic Explosives Ltd

2 Solar Mines & Minerals Ltd

3 Solar Mining Resources Ltd

4 Navbharat Coalfields Ltd

OVERSEAS SUBSIDIARIES:-

1 Solar Overseas Mauritius Ltd

2 Solar Explochem Mauritius Ltd

3 Solar Overseas Netherlands Cooperative U.A_

4 Solar Overseas Netherlands B.V.

5 ILCI Patlayici Maddeler Sanayi Ve Ticaret Anonim Sirketi

6 PATSAN Pattlayici Maddeler Sanayi Ve Ticaret

7 Solar Overseas Singapore Pte Ltd

8 Solar Nigachem Nigeria Ltd

9 Nigachem Nigeria Ltd

10 Solar Explochem Zambia Ltd

11 Solar Mining Services Australia Pty Ltd

12 Solar Nitrochemicals Ltd

13 Solar Industries Mocambique LDA

14 Solar Explochem (Ghana) Ltd

15 PT. Solar Mining Services

16 Australian Explosive Technologies Group Pty Ltd

ASSOCIATES:-

1 Solar Synthetics Private Limited

2 Mahakal Infrastructures Pvt Ltd

3 Mahakal Project Pvt Ltd

4 Nagpur Infrastructure Pvt Ltd

5 Solar Bhatgaon Extension Mines Pvt Ltd

6 SMS Bhatgaon Mines Extension Pvt Ltd

7 Bhatgaon Extension Mines Pvt Ltd_

8 Bhatgaon Mines Pvt Ltd

9 Solar Initiating Systems Ltd

10 Madanpur North Coalfelds Ltd

11 Solar Processors Ltd_

KEY MANAGEMENT PERSONNEL:-

1 Shri S.N. Nuwal

2 Shri K.C. Nuwal

3 Shri Manish Nuwal

4 Shri K.S. Talesra

5 Shri R.D. Vakil

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

3) Research and Developement expenses incurred during the year :-

a. Rs. 270.75/- Lakhs (Previous year Rs. 274.63 Lakhs) in the nature of revenue expenditure.

b. Rs. 711.73/- Lakhs (Previous year Rs. 950.49 Lakhs) in the nature of capital expenditure have been included under the appropriate account heads.

4) cONTINGENT LIABILITIES & cOMMITMENTS :-

Particular 2014 2013

1) In respect of counter guarantees given by bank 5,815.12 7,020.38

2) In respect of excise matters in dispute / under appeal 623.94 530.78

3) In respect of SALES tax deferement 947.01 947.01

4) In respect of income tax matters in dispute/ under appeal 149.51 135.26

5) In respect of SALES tax matters in dispute/ under appeal 353.96 100.07

5 (1) Company has given Long term Loan to M/s. Bhatgaon extension Mines Pvt. Ltd Rs. 3877.38 Lakhs and Bhatgaon Mines Pvt Ltd Rs. 4724.38 Lakhs. Management has taken decision not to charge interest for the current FINANCIAL year.

6 (2) During the year Company has made provision for doubtful advances in respect of interest provided in earlier year of Rs. 1000.14 Lakhs of Bhatgaon extension Mines Pvt Ltd and Bhatgaon Mines Pvt.Ltd. the total provision made till date is Rs. 2000.28 Lakhs.

7 (1) During the year Company has acquired 24,500 shares of M/s. Solar Mines & Minerals Ltd at value of Rs. 2.45 Lakhs.

8 (2) During the year Company has executed a contract with ilci Patlayici Maddeler Sanayi Ve ticaret Anonim Sirketi, turkey of Rs. 823.16 Lakhs for supply of Continuous emulsion Plant for manufacturing of package explosives.

9) FINANCIAL & Derivative Instruments

a) Derivative contracts entered into by the Company as on 31st March,2014

10) the Ministry of Corporate Affairs, Government of india, vide General Circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted exemption from COMPLIANCE with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circulars and hence is entitled to the exepmtion. Necessary information relating to the SUBSIDIARIES has been included in the Consolidated FINANCIAL Statement.


Mar 31, 2013

Note - 1

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

Note - 2 RESEARCH AND DEVELOPMENT EXPENSES INCURRED DURING THE YEAR

a. Rs.274.63 lacs (Previous year Rs.153.91 lacs) in the nature of revenue expenditure.

b. Rs.950.49 lacs (Previous year Rs.567.97 lacs) in the nature of capital expenditure have been included under the appropriate account heads.

Note - 3 CONTINGENT LIABILITIES & COMMITMENTS

(Amount in Rs. lacs)

Particulars F.Y. F.Y. 2012-13 2011-12

1) In respect of counter guarantees given by bank 7020.38 3077.62

2) In respect of excise matters in dispute / under appeal 530.78 488.52

3) In respect of sales tax deferment 947.01 1,323.56

4) In respect of income tax matters in dispute/ under appeal 135.26 18.24

5) In respect of sales tax matters in dispute/ under appeal 100.07 136.50

Note - 4

1) Company has given Long Term Loan to M/s. Bhatgaon Extension Mines Pvt. Ltd. Rs.3876.47 lacs and Bhatgaon Mines Pvt. Ltd. Rs.4713.60 lacs. Management has taken decision not to charge interest for the current financial year.

2) Company has made provision for doubtful advances in respect of interest provided in earlier year of Rs.1000.14 lacs of Bhatgaon Extension Mines Pvt. Ltd. and Bhatgaon Mines Pvt. Ltd.

Note - 5 FINANCIAL & DERIVATIVE INSTRUMENTS

a) Derivative contracts entered into by the Company as on 31st March, 2013

I) For hedging Currency and interest rate related risks:

Nominal amounts of derivative contracts entered into by the Company and outstanding as on 31st March, 2013 amounting to Rs.3648.29 Lacs (Previous year Rs.9217 lacs) Category wise breakup is given below:-

Note - 6

The Ministry of Corporate Affairs, Government of India, vide General Circular No.2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfilment of conditions stipulated in the circulars and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statement.


Mar 31, 2012

# Working Capital loans are secured by hypothecation of entire stocks, raw material, stock in process, finished goods, consumables, stores & spares, book debts, outstanding money receivables, entire current asset of company- current & future, paripassu second charges on fixed assets, claims & bills, receivables.

* (i) Fixed Deposit with bank include deposit of Rs 235.52 lacs maturity more than 12 months & held as security against borrowing of less than 12 months period.

(ii) FDR of Rs 14870.02 lacs held as margin money or security against the borrowing & other commitments of

Note 1 RELATED PARTY DISCLOSURES

As Per Accounting Standard 18 , the disclosures of transactions with the related parties are given below

(I) List of related parties where control exists & related parties with whom transactions have taken place & relationships :

SR NO. NAME OF RELATED PARTY

SUBSIDIARIES :

1. Economic Explosives Ltd

2. Solar Mines & Minerals Ltd

3 Solar Mining Resources Ltd

4 Navbharat Coalfields Ltd

OVERSEAS SUBSIDIARIES:

1. Solar Overseas Mauritius Ltd

2. Solar Explochem Mauritius Ltd

3. Solar Netherlands Corporate U.A

4. Solar Netherlands Overseas B.V.

5. ILCI Patlayici Maddeler Sanayi Ve Ticaret Anonim Sirketi

6. PATSAN Pattlayici Maddeler Sanayi Ve Ticaret

7. Solar Overseas Singapore Pte Ltd

8. Solar Nigachem Nigeria Ltd

9. Nigachem Nigeria Ltd

10. Solar Explochem Zambia Ltd

11. Solar Mining Services Australia Pty Ltd

12. Solar Nitrochemicals Ltd

13. PT. Solar Mining Resources

14. Solar Agro Florestal LDA

15. Solar Induatries Mocambique LDA

16. Solar Recursos Minerals LDA

17. Solar Explochem (Ghana) Ltd

ASSOCIATES:

1 Solar Synthetic Pvt Ltd

2 Mahakal Infrastructures Pvt Ltd

3 Mahakal Project Pvt Ltd

4 Nagpur Infrastructure Pvt Ltd

5 Solar Bhatgaon Extension Mines Pvt Ltd

6 SMS Bhatgaon Mines Extension Pvt Ltd

7 Bhatgaon Extension Mines Pvt Ltd

8 Bhatgaon Mines Pvt Ltd

9 Solar Initiating Systems Ltd

10 Madanpur North Coalfields Ltd

11 Solar Processors Ltd

12 Australian Explosive Technologies Group Pty Ltd

13 Navbharat Fuse

KEY MANAGEMENT PERSONNEL:

1. Shri S.N. Nuwal

2. Shri K.C. Nuwal

3. Shri Manish Nuwal

4. Shri K.S. Talesra

5. Shri R.D. Vakil

Note 2

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

Note 3

Research and Development expenses incurred during the year :

a. Rs. 153.91 lacs (Previous year Rs. 81.35 lacs) in the nature of revenue expenditure;

b. Rs. 567.97 lacs (Previous year Rs. 37.53 lacs) in the nature of capital expenditure have been included under the appropriate account heads.

Note 4 CONTINGENT LIABILITIES & COMMITMENTS

(Rs. in Lacs)

Particulars F.Y. 11-12 F.Y.10-11

1) IN RESPECT OF COUNTER GUARANTEES GIVEN BY BANK 3,077.62 3,038.79

2) IN RESPECT OF EXCISE MATTERS IN DISPUTE / UNDER APPEAL 488.52 261.71

3) IN RESPECT OF SALES TAX DEFEREMENT 1,323.56 2,076.18 PAYABLE AS PER NPV BASIS - 536.05

4) IN RESPECT OF INCOME TAX MATTERS IN DISPUTE/ UNDER APPEAL 18.24 18.24

5) IN RESPECT OS SALES TAX MATTERS IN DISPUTE/ UNDER APPEAL 136.50 85.87

6) DUTY IMPOSED BY CCI FOR VOILATING SEC 3 OF COMPETION ACT ** 1,134.00 -

** The Competition Commission Of India (CCI) has upheld the contention of Coal India Ltd (CIL) against explosive manufactures. CIL had contended by the manufactures for collective boycott of electronic reverse auction held by CIL in January 2010 covered as violation under sec 3 of Competiton Act.

CCI has fined the ten explosives manufacturers 3% of the average of their annual turnover for the last three financial years , for violating sec 3 of the Competition Act.

The unanimous order of the CCI held that there was a concerted action among the explosives manufacturers not to participate in the CIL reverse auction , which resulted in a collective boycott of the auction & manipulation of the bidding process , in violation of sec 3(3)(b) of the Competition Act.

Note 5 Financial & Derivales Instruments

a) Derivative contracts entered into by the Company and outstanding as on 31st March,2012.

i.) For hedging Currency and Interest Rate Related Risks:

Nominal amounts of derivative contracts entered into by the Company and outstanding as on 31st March amount to Rs. 9217 Lacs

b) Foreign Currency exposures that are not hedged by derivative instruments as on 31st March, 2012 amount to Rs NIL (Previous Year Rs. NIL).

Note 6

The Ministry of Corporate Affiaris , Government of India , vide General Circular No. 2 and 3 dated 8th February 2011 and 21 st February 2011 respectively has granted a general exemption from complaiance with section 212 of the Companies Act , 1956 , subject to fulfillent of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemptiion. Necessary informationrelating to the subsidiaries has been included in the Consolidated Financial Statement.


Mar 31, 2011

1. Contingent Liability

Amount in Rs. Lacs

FY 2010-11 FY 2009-10

01 In respect of counter guarantees given to Bank Rs. 3,038.79 3,701.43

02 In respect of Excise matters in dispute / under Appeal Rs. 261.71 140.74

03 In respect of Sales Tax Deferment Rs. 2,076.18 3,233.17 Payable as per NPV basis - 820.80 Lacs

04 In respect of Income Tax matters in dispute / under Appeal Rs. 18.24

05 In respect of Sales Tax matters in dispute / under Appeal Rs. 85.87

5. Related party disclosures required as per AS-18 on ` Related Parties disclosures' issued by the Institute of Chartered Accountants of India, are below for the year ended on 31st March, 2011.

1. Holding Company : NIL

2. Subsidiaries : a) Economic Explosives Limited

b) Solar Mines & Minerals Ltd.

c) Solar Mining Resources Ltd.

d) Navbharat Coalfields Ltd.

3. Fellow Subsidiaries : NIL

4. Overseas Subsidiaries : a) Solar Overseas Mauritius Limited

b) Solar Agro Florestal LDA*

c) Solar Industries Mocambique LDA*

d) Solar Recursos Minerals LDA*

5. Fellow Overseas Subsidiaries a) Solar Explochem Mauritius Ltd.*

b) Solar Netherlands Corporatie U.A.

c) Solar Netherlands Overseas B.V.

d) Ilci Patlayici Maddeler Sanayi VeTicaret Anonim Sirketi

e) PATSAN Pattlayici Maddeler Sanayi Ve Ticaret

f) Solar Overseas Singapore Pte Limited

g) Solar Nigachem Nigeria Limited*

h) Nigachem Nigeria Limited

i) Solar Explochem Zambia Limited

j) Solar Mining Services Australia Pty Ltd.*

k) Solar Nitrochemicals Limited*

l) P T. Solar Mining Resources*

6. Associates a) Solar Synthetics Private Limited

b) Mahakal Infrastructures Private Limited

c) Mahakal Project Private Limited

d) Nagpur Infrastructure Private Limited

e) Solar Bhatgaon Extension Mines Private Limited

f) SMS Bhatgaon Mines Extension Private Limited

g) Bhatgaon Extension Mines Private Limited

h) Bhatgaon Mines Private Limited

i) Sunbeam Explosives Limited

j) Sunrise Explosives Limited

k) Solar Initiating Systems Limited

l) Madanpur North Coal Fields Limited

m) Solar Processors Limited

n) Commercial Sales Corporation

o) Australian Explosive Technologies Group PtyLtd

* Note: The Company has not commenced any business operations, hence financial performance is not available.

6. Key Management Personnel : a) Shri.S.N.Nuwal

b) Shri K.C.Nuwal

c) Shri Manish Nuwal

d) Shri K.S. Talesra

e) Shri R.D.Vakil

7. Employee retirement benefits

Contributions to Provident Fund are deposited with the appropriate authorities and charged to the Profit and Loss Account as incurred. The Company has made provision for gratuity based on 15 days' salary for each completed year of service.

8. In earlier year the Company has supplied explosives to Coal India Ltd from 1st March, 2006 to 30th June, 2006 as per old rate contract rates on confirmation from Coal India Ltd that new rate contract will be issued effective from 1st March, 2006 Coal India Ltd has issued new rate contract w.e.f 29th July, 2006 without covering the period From 1st March, 2006 to 30th June, 2006. The Company has protested and now this is sub Juidice at Hon. Calcutta High Court on the ground that since no rate contract has been issued for 01.03.06 to 30.06.06 so rates of old rate contract shall be applied. During the year Hon. Calcutta High Court has given an order asking Bank Guarantee against such deductions and company has submitted the same which is included in contingent liability. The court has passed an order for release of payment against Bank Guarantee for Cartridge & Accessories Division only and allowed full deduction for Bulk Division pending final decision in the matter by the Hon. Calcutta High Court.

9. During the year company has traded Ammonium Nitrate of Rs. 5101.71 Lacs.

10. Company has made investment during FY 2008-09 in two SPV companies along with SMS Infrastructure Pvt.Ltd. to enter into Joint Venture with CMDC for mining work and separate Joint venture companies is formed in which the stake of CMDC is 51%. The stake of Solar Industries India ltd. in SPV Company is as follows.

Solar Bhatgaon Ext.Mines Pvt.Ltd. 49%

SMS Bhatgaon Mines Extension Pvt.Ltd. 49%

11. During the year the Company has invested $ 70.00 Lacs in its foreign subsidiary Solar Overseas Mauritius Ltd.further Solar Overseas Mauritius Ltd.has invested in Solar Netherlands Corporatie U.A., Solar Netherlands Overseas B.V., Ilci Patlayici Maddeler Sanayi VeTicaret Anonim, PATSAN Pattlayici Maddeler Sanayi Ve Ticaret, Solar Overseas Singapore Pte Limited , Nigachem Nigeria Limited, Solar Explochem Zambia Limited

12. During the year the Company has executed the turnkey project of installation of Bulk Explosive Manufacturing Plant for its associate company Nigachem Nigeria Limited. of Rs. 626.79 Lacs

13. During the year the Company has provided Rs. 546.90 Lacs against Powder Factor deductions for its supplies of explosives to Coal India Ltd.

14. Sundry Creditor includes outstanding balance of M/s Citco Waren Handel Sgesellschaft & Quantum Fertilizers Ltd. Rs. 6787.26 Lacs which includes payment outstanding against Buyers Credit is Rs. 6787.26 Lacs.

15. Some of the customers and suppliers accounts are pending for confirmation/reconciliation and the same have been taken as per the balances appearing in the books. Any differences arising on account of such reconciliations, which are not likely to be material, will be accounted for as and when these reconciliations are completed.

16. Capital work in progress in Fixed Assets

Company has got status of "Mega Project" from Government of Maharashtra. Company has made investment in Fixed Assets. Project work is not completed, hence shown under Capital WIP.

Civil Construction worth Rs. 471.36 Lacs, Plant & Machinery worth Rs. 693.78 Lacs, Electric Installation worth Rs. 49.65 Lacs, and other work in progress Rs. 409.67 Lacs.

17. Excise Duty shown under expenditure represents the aggregate of the difference between Excise Duty on the Opening and Closing Stock of Finished Goods.Excise Duty deducted from Sales represents Excise Duty paid.

18. Sundry Creditors for goods and expenses include dues to Micro Small & Medium Scale Business Entities aggregating to Rs. 95.44 Lacs The names of Micro Small & Medium Scale Business Entities (to the extent of information available with the management- to whom the Company owes a sum exceeding Rs. 1 lac each Basic Chemical Industry, Kalinga Wrappers, Sunrise Technologies,Welset Plast Extrusion Pvt.Ltd.,Sankhala Industries,Bharat Solar Cable,Rudraksha Allied Chemical Pvt.Ltd.,Hindustan Gum & Chemicals Ltd.,Gujrat Polymers,Anupam Colours Pvt.Ltd.,Geeta Packaging Industries, Shree Gajanan Agro Industries,Maxwell Poly Products,Sachin Polypack & Gayatri Packaging Industries. None of the aforesaid outstanding is due for payment as at 31st March, 2011 as per agreed terms.

19. Export Incentive receivable under duty free credit entitlement included under the head Loans & Advances is pending due to disposal for some procedural aspects with Government. Shortfall / excess if any will be taken into accounts as and when it is determined.

20. Manufacturing sales includes input material sales

21. Disclosure as required by Accounting Standard 19 "Leases" issued by the institute of Chartered Accounts of India are given below:

Being the Company is Lessee:

(i) The Company's significant leasing arrangements are in respect of godown / residential / office premises (including furniture and fittings therein, as applicable-. The aggregate lease rental payable is charged to Profit and Loss Account as Rent.

(ii) The Leasing arrangements, which are cancelable at any time on month to month basis and in some cases between 11 months to 5 years, are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements generally refundable interest free deposits have been given.

22. All known liabilities have been taken into consideration.

23. The previous years figures have been regrouped/reclassified where necessary, to conform to the current year's presentation.


Mar 31, 2010

1. Contingent Liability

01 In respect of of counter guarantees given to Bank Rs. 3701.43 Lacs

02 In respect of Excise matters in dispute / under Appeal Rs. 140.74 Lacs

03 In respect of Sales Tax Deferment Rs. 3233.17

Lacs Payable as per NPV basis -1117.17 Lacs



2. Related party disclosures required as per AS-18 on Related Parties disclosures issued by the Institute of Chartered Accountants of India, are below for the year ended on 31.03.2010

1. Holding Company: NIL

2. Subsidiaries: a) Economic Explosives Limited. b) Solar Components Private.Limited

c) Solar Mines & Minerals Ltd

d) Solar Mining Resources Ltd

e) Navbharat Coalfields Ltd.

3. Fellow Subsidiaries NIL

4. Overseas Subsidiaries a) Solar Nitrochemicals Limited *

b) Solar Nigachem Nigeria Limited *

c) PT.Solar Mining Resources *

d) Solar Recursos Minerals LDA *

e) Solar Industrias Mocambique LDA *

f) Solar Agro Florestal LDA *

g) Solar Overseas Mauritius Limited

h) Solar Overseas Netherlands Cooperatie U.A.

5. Associates :

a) Solar Synthetics Private Limited

b) Commercial Sales Corporation

c) Mahakal Infrastructures Private Limited

d) Mahakal Projects Private Limited

e) Nagpur Infrastructure Pvt. Ltd.

f) Solar Bhatgaon Extension Mines Pvt. Ltd.

g) SMS Bhatgaon Mines Extension Pvt. Ltd

h) Bhatgaon Extension Mines Pvt. Ltd.

i) Bhatgaon Mines Pvt. Ltd.

j) Sunbeam Explosives Ltd.

k) Sunrise Explosives Ltd.

I) Solar Initiating Systems Ltd.

m) Madanpur North Coal Fields Ltd.

n) Solar Processors Ltd.

o) Solar Explochem Zambia Limited

p) Solar Mining Services Pty. Limited

q) Solar Overseas Singapore Pte Limited

*Note : The Company has not commenced any business operations, hence financial performance is not available.

6. Key Management Personnel a) Shri.S.N.Nuwal

b) Shri K.C.Nuwal

c) Shri Manish Nuwal

d) Shri K.S. Talesra

e) Shri R.D.Vakil

8. Employee retirement benefits

Contributions to Provident Fund are deposited with the appropriate authorities and charged to the Profit and Loss Account as incurred. The Company has made provision for gratuity based on 15 days salary for each completed year of service.

9. Sales Tax Provision at NPV basis of Rs.353.81 Lacs is included in Sales Tax Expenses.

11. PAYMENT MADE TO AUDITORS :

i) As Audit fees - Rs.16.00 Lacs

ii) Legal matters - Rs. 5.42 Lacs

iii) As VAT Audit Fees - Rs. 1.25 Lacs

10. In earlier year the Company has supplied explosives to Coal India Ltd from 01.03.06 to 30.06.06 as per old rate contract rates on confirmation from Coal India Ltd that new rate contract will be issued effective from 01.03.06 Coal India Ltd has issued new rate contract w.e.f 29.07.06 without covering the period From 01.03.06 to 30.06.06. The Company has protested and now this is sub Juidice at Hon.Calcutta High Court on the ground that since no rate contract has been issued for 01.03.06 to 30.06.06.so rates of old rate contract shall be applied.During the year Hon. Calcutta High Court has given an order asking Bank Guarantee against such deductions and company has submitted the same which is included in contingent liability. The court has passed an order for release of payment against Bank Guarantee for Cartridge & Accessories Division only and allowed full deduction for Bulk Division pending final decision in the matter by the Hon.Calcutta High Court.

11. During the year company has written off bad debts of Rs. 521.09 Lacs.

12. During the year company has traded Ammonium Nitrate of Rs 9544.67 Lacs.

13. Company has made investment during 2008-09 in two SPV companies along with SMS Infrastucture Pvt. Ltd. to enter into Joint Venture with CMDC for mining work and seprate Joint venture companies is formed in which the stake of CMDC is 51 %. The stake of Solar Industries India ltd. in SPV Company is as follows.

Solar Bhatgaon Ext.Mines Pvt.Ltd. 49%

SMS Bhatgaon Mines Extension Pvt.Ltd. 49%

14. Company has raised ECB for itsexpansion project of domestic as well as overseas USD 9 Million (Rs 41,19,22,500/-) from DBS Bank Singapore. The proposed utilization of this fund will be 3 Million USD in overseas JV/WOS. The ECB is approved by RBI under automatic route. Balance 6 Million will be used in Domestic expansion work.

15. Company got rated P1+ for Short term Borrowings/ Commercial Paper. Company has issued Commercial Papers by earmarking existing working capital limits of State Bank of India & Bank of India worth Rs. 25 crore from Allahabad Bank.

16. During the year the Company has invested $ 1500000 in its foreign subsidiary Solar Overseas Mauritius Ltd

17. Solar Overseas Mauritius has invested $ 500000 in Solar Overseas Netherland.

18. During the year the Company has executed the turnkey project of installation of Bulk Explosive Manufacturing Project of Rs. 277.60 Lacs for its associate company Solar Explochem Zambia Ltd.

19. During the year the Company has provided Rs. 746.95 Lacs against Powder Factor deductions for its supplies of explosives to Coal India Ltd.

20. Sundry Creditor includes outstanding balance of M/s Transmmonia AG Rs. 7828.72 Lacs which includes payment outstanding against Buyers Credit is Rs. 5246.31 Lacs.

21. POWER CONSUMPTION

Electricity consumption : 3942211 Units

22. Some of the customers and suppliers accounts are pending for confirmation/reconciliation and the same have been taken as per the balances appearing in the books. Any differences arising on account of such reconciliations, which are not likely to be material, will be accounted for as and when these reconciliations are completed.

23. Capital work in progress in Fixed Assests Company has got status of "Mega Project" from Government of Maharashtra. Company has made investment in Fixed Assets. Project work is not completed, hence shown under Capital WIP.

Civil Construction worth Rs. 522.12 Lacs, Plant & Machinery worth Rs. 823.53, Electric Installation worth Rs. 97.06 Lacs, and other work in progress Rs. 137.98 Lacs. :

24. Excise Duty shown under expenditure represents the aggregate of Excise Duty borne by the Company and the difference between Excise Duty on the Opening and Closing Stock of Finished Goods.

25. Sundry Creditors for goods and expenses include dues to Small Scale Industrial Undertakings aggregating to Rs. 20.47 Lacs The names of Small Scale Industrial Undertakings (to the extent of information available with the management) to whom the Company owes a sum exceeding Rs. 1 Lacs each Basic Chemical Industry, Kalinga Wrappers, Sunrise Technologies. None of the aforesaid outstanding are due for payment as at 31st March, 2010.

26. Export Incentive receivable under duty free credit entitlement included under the head Loans & Advances is pending due to disposal for some procedural aspects with Government. Shortfall / excess if any will be taken into accounts as and when it is determined.

27. Disclosure as required by Accounting Standard 19 "Leases" issued by the institute of Chartered Accounts of India are given below:

Being the Company is Lessee:

(i) The Companys significant leasing arrangements are in respect of godowns / residential / office premises (including furniture and fittings therein, as applicable). The aggregate lease rental payable are charged to Profit an Loss Account as Rent.

(ii) The Leasing arrangements, which are cancelable at any time on month to month basis and in some cases between 11 months to 5 years, are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements generally refundable interest free deposits have been given.

28. All known liabilities have been taken into consideration.

29. The previous years figures have been regrouped/ reclassified where necessary, to conform to the current years presentation.

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