Mar 31, 2018
* Includes Rs, 61.57 lakhs (Previous year Rs, 36.77 lakhs) pertaining to gain/loss on exchange fluctuations adjusted to the cost of capital assets as per para 46A [Refer Note No. 2.6 (a)(iii)].
For details of assets pledged as security, refer Note No. 17.
Note: The despatch of share certificate(s) in physical form and credit in the respective demat account(s) in respect of 27,05,553 number of additional equity shares, in aggregate, allotted to certain allottees under category âCâ of the basis of allotment as per Letter of Offer dated 14th September, 2015 under the Rights Issue have not yet been completed in view of the status-quo order passed by the Honâble High Court of Delhi on 18th November, 2015. The additional equity shares to the extent alloted to each of the above listed shareholders but not yet credited in the respective demat account(s) have been included in the number of shares shown in the above table.
1. Rupee Term Loan and Foreign Currency Term Loan from a bank are secured by way of hypothecation of moveable Fixed Assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interse amongst consortium lenders. The said Term Loans are further secured by second charge by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts, claims, etc. These Term Loans are repayable over a period of four to seven years commencing from March, 2017 and ending on January, 2026. Rupee Term Loan and Foreign Currency Term Loan (fully hedged) carry rate of interest varying from 9.15% to 9.80% p.a. on the reporting date.
2. Other Unsecured Loans from Related Parties and a Body Corporate are repayable from February, 2019 onwards and these Loans carry rate of interest varying from 9.00% to 11.00% p.a. on the reporting date.
* The Company has recognized Deferred Tax Assets during the financial year ended 31st March, 2018 considering reasonable certainty of the likely timings and level of future taxable profits that will be available against which carry forward business loss/unabsorbed depreciation under the Income Tax Act, 1961 can be utilized. Since Deferred Tax Assets were not recognized in the periods prior to the current financial year, the effective tax reconciliation for the previous periods have not been given.
(a) Working Capital Loans from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
(b) Working Capital Loans/borrowings (both fund and non-fund based ) from Banks are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable Fixed Assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari passu inter se amongst the consortium lenders.
(c) Buyerâs Credit from a bank are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable Fixed Assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari passu interse amongst the consortium lenders. Buyerâs Credit (In Foreign Currency) are due for repayment between April, 2018 and December, 2018 and carry rate of interest of 0.5% to 2.65% p.a.
3. Capital and other commitments:
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for '' 573.08 lakhs (2016-17 '' 69.94 lakhs and 1st April, 2016 '' 647.73 lakhs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto. The governing terms and conditions whereof, interalia, provide for levy of liquidated damages, penalty, etc. on account of non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made on this account wherever considered necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 41 "Leasesâ.
4. In accordance with Ind AS 18 on "Revenueâ and Schedule III to the Companies Act, 2013, Revenue from Operations upto period ended 30th June, 2017 were reported gross of excise duty and net of value added tax (VAT)/central Sales tax (CST) and service tax. Excise duty was reported as separate expense. Consequent to the introduction of Goods & Services Tax (GST) with effect from 1st July, 2017 excise duty, VAT, sales tax, service tax, etc. have been subsumed into GST and the same is not recognized as a part of sales as per the requirement of Ind AS 18. Accordingly, Revenue from Operations in the current year is not comparable with that of the previous year.
5. The financial statements of the Company for the year ended March 31, 2018 has been approved by the Board of Directors in its meeting held on 23rd May, 2018. For the year ended 31st March, 2018, a dividend of '' 1.50 per Equity Share is proposed by Board of Directors at its meeting held on 23rd May, 2018. The same is subject to the approval of shareholders in the ensuing Annual General Meeting of the Company and therefore proposed dividend (including dividend distribution tax) has not been recognized as liability as at the Balance Sheet date in line with Ind AS-10 on "Events after the Reporting Periodâ.
Notes:
(i) The Company is contesting the demand for Terminal Tax Liability raised by the Municipal Corporation of Satna (M.P.) pertaining to financial years from 2002-03 to 2012-13, by challenging, interalia, the constitutional validity of alleged provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Honâble High Court of Madhya Pradesh, Jabalpur.
(ii) The Company received Show Cause Notice from the Commissioner, Central GST, Excise & Customs for cross utilization of CENVAT Credit on input and input services during the period April, 2012 to March, 2017 for payment of service tax on output services. Based on appraisal of the merits of the case, the management considers that the said Show Cause Notice is not tenable and there is no likelihood of any liability arising against the Company.
(iii) The future cash outflow in respect of Note No. 39 (a) & (b) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and adjudicating authorities concerned.
6. Operating Leases:
(a) As Lessee
The Company has taken certain offices and residential premises/facilities under operating lease/sub-lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease/sub-lease agreements. The aggregate lease rental has been charged to the Statement of Profit and Loss.
(b) As Lessor
The Company has entered into operating lease/sub-lease arrangements for certain pieces and parcel of Leasehold Land and Buildings thereon. The arrangements is non-cancellable in nature and is executed for twelve years since latest renewal. Lease rental income earned by the Company during the financial year 2017-18 is '' 288.48 lakhs. The future minimum lease/sub-lease rentals receivables (including rental increases) under non-cancellable operating leases are as under:
7. Segment Information:
The Company has only one reportable primary business segment i.e. Electrical and other Cables, Capacitors, Wires and Conductors, etc. and Turnkey Projects predominantly relating thereto, based on guiding principles given in Ind AS 108 âOperating Segmentsâ notified pursuant to Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.
(i) Information by Geographies -
(ii) The Company has business operations only in India and does not hold any assets outside India.
(iii) Revenue from one customer was '' 17558.85 lakhs for the financial year 2017-18 (previous year '' Nil), which accounts for more than 10% of the total revenue of the Company.
The management assessed that the fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, borrowings, trade payables, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments.
For Financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.
The following methods and assumptions were used to estimate the fair values:
a. The Equity Investments which are Quoted, the fair value has been taken at the market prices/NAV of the same as on the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
b. The derivative financial instruments which are unquoted, the fair value has been taken at based on value certificate given by respective Banks. They are classified as Level 2 fair values in fair value hierarchy.
c. The Equity Investments which are Unquoted, the fair value has been taken as per the valuation report certified by Chartered Accountant as on the reporting dates. They are classified as Level 3 fair values in fair value hierarchy.
Fair Value Hierarchy
The following are the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurementâ.
During the year ended March 31, 2018 and March 31, 2017, there were no transfers between Level 1 and Level 2 fair value measurements and no transfer into and out of Level 3 fair value measurements.
8. Financial Risk Management
The Company has a Risk Management Policy which covers risk associated with the financial assets and liabilities. The Risk Management Policy is approved by the Directors. The different types of risk impacting the fair value of financial instruments are as below:
(a) Credit Risk:
Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily Trade Receivables).
Customer credit risk is managed in accordance with the Companyâs established policy, procedures and controls relating to customer credit risk management. The Company assesses the credit quality of the counterparties taking into account their financial position, past experience and other factors. Credit risk is reduced to a significant extent if the projects(s) are funded by the Central and state Government and also by receiving pre-payments (including mobilization advances) and achieving project completion milestone within the contracted delivery schedule. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss allowance for trade receivables. Impairment, if any, is provided as per the respective credit risk of individual customer as on the reporting date.
(b) 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 risk comprises three type of risks: Foreign exchange risk, Interest rate risk and other price risk.
(i) Foreign Exchange Risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports and borrowing primarily with respect to USD and Euro. The Companyâs exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts, currency swaps and interest rate swaps including for underlying transactions having firm commitments or highly probable forecast of crystallization.
The Company has entered into certain derivative contracts hedging the borrowings in foreign currency and has recognized a gain/loss in the Statement of Profit & Loss on measurement of said contracts at fair value on the reporting date. The fair value of derivative instrument is measured based upon valuation received from the authorized dealer (Bank).
(iii) Equity Price Risk
The Companyâs exposure to equity securities price risk arises from quoted Investments held by the Company and classified in the balance sheet at deemed cost and at fair value through OCI. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities, fluctuation in their prices are considered acceptable and do not warrant any management estimation.
Exposure to other market price risk
(iv) Commodity Price Risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw materials and bought out components for manufacturing of Cables, Capacitors, etc. and Turnkey Contract & Services respectively. It requires a continuous supply of certain raw materials & brought out components such as copper, aluminum, polymers, steel, jointing kits etc. The prices of international commodities e.g. copper, aluminum and polymers are subject to considerable volatility. Since the market prices of cables are generally on firm price basis, the seesawing prices of these commodities can severely impact the cost of the product. The Company gives priority to customers who allow price variation on input raw materials to avoid such risks. Occasionally scarcity of polymers in a global market is a risk in terms of meeting customerâs delivery commitments. Over and above these polymers prices are sensitive to the crude oil prices where the volatility in the recent time has been unprecedented. To mitigate such risks, the Company procures materials in crunches to even out price fluctuation. Also the Company has an approved supplier base to get the best competitive prices for the commodities and also to manage the cost without any compromise on quality.
(c) Liquidity Risk
Liquidity risk is the risk where the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when due.
The table below summarizes the maturity profile of Companyâs financial liabilities based on contractual undiscounted payments:
9. Capital Management
The Companyâs objective with respect to capital management is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity/internal accruals and borrowings, both short term and long term. Net debt (total borrowings less investments and cash and cash equivalents) to equity ratio is used to monitor capital.
10. Disclosures in respect of Related Parties as defined in Indian Accounting Standard (Ind AS)-24, with whom transactions were entered into at an armâs length and in the normal/ordinary course of business during the year are given below:
(i) Joint Ventures (Joint Arrangements) Birla Furukawa Fibre Optic Pvt. Limited (BFFOPL)
Birla Cable Limited (BCL) (Formerly Birla Ericsson Optical Limited) (ceased to be Joint Venture with effect from 23rd August, 2016)
(ii) Associate Company Vindhya Telelinks Limited (VTL)
(iii) Joint Venture of an Associate Company Birla Visabeira Private Limited (BVPL)
(iv) Wholly owned Subsidiaries of an Associate Company August Agents Ltd.(AAL)
Insilco Agents Ltd.(IAL)
Laneseda Agents Ltd.(LAL)
(v) Key Management Personnel (KMP) Shri Harsh V.Lodha Chairman
Shri S.S.Kothari Shri S.C.Jain Shri Dinesh Chanda
Non Executive Directors
Shri B.R. Nahar Dr. Kavita A.Sharma Shri Dilip Ganesh Karnik
Shri Y.S.Lodha Chief Executive Officer
Shri Prasanta pandit Chief Financial Officer
(w.e.f. 15.11.2017)
Shri O.P.Pandey Company Secretary
Shri Pankaj Gupta Chief Financial Officer __(Upto 25.08.2017)_
(vi) Post Employment Benefit Plan Entities Universal Cables Limited Employees Gratuity Fund (UEGF)
Universal Cables Limited Employees Provident Fund (UEPF)
Universal Cables Superannuation Fund (USF)
Notes:
(i) The remuneration to Key Managerial Personnel(s) does not include provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.
(ii) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/ to above Related Parties.
(iii) Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered.
(iv) Inter corporate loans/advances have been given for business purposes.
11. Previous year figures have been regrouped/rearranged, wherever considered necessary to conform to current year classification.
Mar 31, 2017
1. Terms/Rights attached to Equity Shares :
The Company has issued only one class of Shares referred to as Equity Shares having a par value of Rs. 10/- per share ranking pari-passu. The holders of Equity Shares are entitled to one vote per share.
The dispatch of share certificate(s) in physical form and credit in the respective demat account(s) in respect of 27,05,553 number of additional equity shares, in aggregate, allotted to certain allottees under category "Câ of the basis of allotment as per Letter of Offer dated 14th September, 2015 under the Rights Issue have not yet been completed in view of the status-quo order passed by the Honâble High Court of Delhi on 18th November, 2015.
2. Rupee Term Loan and Foreign Currency Term Loan from a bank are secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interest amongst consortium lenders. The said Term Loans are further secured by second charge by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts, claims etc. These Term Loans are repayable in 16 quarterly installments commencing from March, 2017 and ending on December, 2020. Rupee Term Loan and Foreign Currency Term Loan (fully hedged) carry rate of interest 10.10% and 9.80% per annum respectively on the reporting date.
3. Buyerâs Credit from a bank are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable fixed assets, both present and future and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari passu interest amongst consortium lenders. Buyerâs Credit are repayable after 31st March, 2018 with an option of further rollover of one year from respective maturity and carry rate of interest ranging from 0.50% to 1.83% per annum.
4. Loans from Bodies Corporate are repayable from February, 2019 and onwards and these Loans carry rate of interest varying from 9.00% to 11.00% per annum on the reporting date.
5. Working Capital Loans from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
6. Working Capital Loans (both fund and non-fund based) from Banks are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc., and are further secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interest amongst consortium lenders.
7. EMPLOYEE BENEFIT PLANS
8. Defined Benefit Plans -
The Companyâs defined benefit plans, interalia, include the approved funded Gratuity scheme which is administered through Group Gratuity Scheme with Life Insurance Corporation of India and non-funded scheme viz. Pension (applicable only to certain ex-employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. The following tables summaries the components of net benefits expense recognized in the Statement of Profit and Loss, the funded status and the amounts recognized in the Balance Sheet for the respective plans.
9. Defined Contribution Plans -
10. Companyâs contribution to defined contribution plans such as approved and recognized Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contribution except to the extent as stated in Note (ii) herein. The Company has recognized the following contributions as an expense and included in Employee Benefits Expense in the Statement of Profit and Loss :
11. The Provident Fund except pertaining to employees of Companyâs Goa Unit, being administered by a Trust, whereby the Company deposits an amount determined as a fixed percentage of basic pay of eligible employees to the Fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that Provident Funds set up by employers, which require interest shortfall to be met by the employer, needs to be treated as Defined Benefit Plan. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The Actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31st March, 2017. Details of Fund and Plan Assets Position as of 31st March, 2017, are as follows :
12. Segment Reporting (As per Accounting Standard (AS)-17) :
In the opinion of the management, there is only one reportable segment ("Manufacturing and Sale of Electrical and other Cables, Capacitors, Wires and Conductors etc. and turnkey projects predominantly relating theretoâ) as envisaged by Accounting Standard 17 "Segment Reportingâ. Further, from a geographical segment perspective, export sales constitute less than 10% of enterprise revenues. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.
13. Leases :
Assets Given on Operating Lease -
The Company has leased/sub-leased out certain parcel of Land and Buildings situated thereon to Birla Furukawa Fibre Optics Private Limited on Operating Lease. The lease term is for 55 months and thereafter renewable on mutually agreed terms. There is an escalation clause of 3% in the Lease Agreement for every subsequent period of 11 months. There is no restriction imposed by Lease Agreement. The leases are cancellable.
During the year, the Company has received lease rent of Rs. 282.18 lakhs (Previous year Rs. 273.28 lakhs) which is disclosed as Rent received under Note No. 21 âOther Incomeâ.
Assets Taken on Operating Lease :
The Company has taken various residential, office and warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no sub-leases. These leases are generally cancellable and are renewable on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/ payable are charged as "Rentâ under Note No. 27 "Other Expensesâ.
14. The Company is contesting the demand for Terminal Tax Liability raised by the Municipal Corporation of Satna (M.P.) pertaining to financial years from 2002-03 to 2012-13, by challenging, interalia, the constitutional validity of alleged provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Honâble High Court of Madhya Pradesh, Jabalpur.
15. The future cash outflow in respect of Note No. 36 (a) & (b) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and adjudicating authorities concerned.
16. Disclosure of particulars of Guarantee given or security provided as per Section 186(4) of the Companies Act, 2013 is covered under Note No.36(c).
17. The Company has exercised option provided in Para 46A of Accounting Standard - 11 on Effects of changes in Foreign Exchange rates with regard to the treatment of gain/loss on foreign currency transactions and translation. Accordingly, gain on exchange fluctuation on long-term foreign currency monetary items amounting to Rs. 36.77 lakhs (Previous year loss of Rs. 13.60 lakhs) have been adjusted to the cost of capital asset and depreciated over the balance life of the relevant asset. This has resulted in decrease in profit of the year by Rs. 34.22 lakhs (net of depreciation of Rs. 2.55 lakhs) [Previous year increase in profit by Rs. 13.09 lakhs (net of depreciation of Rs. 0.51 lakh)].
18. Derivative Instruments and Unhedged Foreign Currency Exposure:
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports and exports primarily with respect to USD and Euro. The Companyâs exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts primarily for underlying transactions having firm commitments or highly probable forecast of crystallization.
During the year, the Company has taken certain derivative instruments for hedging the borrowings in foreign currency and has recognized a loss of Rs. 73.21 lacs in the statement of Profit & Loss on measurement of derivative instruments at fair value. On the reporting date, the fair value of derivative instrument is measured based upon valuation received from the authorized dealer (Bank).
19. The amount of tax credit available to the Company in pursuance to Section 115JAA of the Income Tax Act, 1961, against provision for Current Tax (MAT) during the year shall be accounted for as and when permissible under the governing Guidance Note issued by The Institute of Chartered Accountants of India.
20. There is no impairment of Assets during the year.
21. Previous Year Figures :
The Company has reclassified/regrouped previous year figures wherever necessary, to confirm to this yearâs classification. Figures shown in brackets, represent those of the previous year.
Mar 31, 2016
1. Employee Benefit Plans :
(a) Defined Benefit Plans -
The Companyâs defined benefit plans, interalia, include the approved funded Gratuity scheme which is administered through Group Gratuity Scheme with Life Insurance Corporation of India and non-funded schemes viz. Pension (applicable only to certain ex-employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss, the funded status and the amounts recognized in the Balance Sheet for the respective plans.
2. Segment Reporting (As per Accounting Standard (AS)-17) :
In the opinion of the management, there is only one reportable segment (âManufacturing, and Sales of Electrical and other Cables, Capacitors, Conductors and turnkey projects relating theretoâ) as envisaged by Accounting Standard 17 âSegment Reportingâ. Further, from a geographical segment perspective, export sales constitute less than 10% of enterprise revenues. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.
3. Leases :
Assets Given on Operating Lease -
The Company has leased/sub-leased out certain Land and Buildings to Birla Furukawa Fibre Optics Private Limited on Operating Lease. The lease term is for 55 months and thereafter renewable by mutual consent on mutually agreed terms. There is an escalation clause of 3% in the Lease Agreement for every subsequent period of 11 months. There is no restriction imposed by Lease Agreements. The leases are cancellable.
During the year, the Company has received lease rent of Rs. 273.28 lacs (Previous year Rs. 268.53 lacs) which is disclosed as Rent received under Note No. 21 âOther Incomeâ.
Assets Taken on Operating Lease -
The Company has taken various residential, office facilities and warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no sub-leases. These leases are generally cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/payable are charged as âRentâ under Note No. 27 âOther Expensesâ.
4. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 647.73 lacs (Previous year Rs. 200.45 lacs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto, the governing terms and conditions whereof, interalia, provide for levy of liquidated damages, penalty, etc. on account of non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made on this account wherever considered necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 32 âLeasesâ.
5. Contingent Liabilities (not provided for) :
Notes :
(i) Terminal Tax liability is in respect of demand raised by the Municipal Corporation of Satna (M.P.) under provisions of the Madhya Pradesh Municipal Corporation Act, 1956. The Company has contested the demand interalia by challenging its constitutional validity. The Company has been legally advised that the said demand against the Company is unsustainable and therefore there is no likelihood of the Company being subjected to any Terminal Tax Liability.
(ii) The future cash outflow in respect of No. (b) and (c) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and authorities concerned.
6. The Company has exercised option provided in Para 46A of Accounting Standard - 11 on Effects of changes in Foreign Exchange rates with regard to the treatment of gain/loss on foreign currency transactions and translation. Accordingly, loss on exchange fluctuation on long-term foreign currency monetary items amounting to Rs. 13.60 lacs (Previous year Rs. 23.37 lacs) have been adjusted to the cost of capital asset and depreciated over the balance life of the asset. This has resulted in decrease in loss of the year by Rs. 13.09 lacs (net of depreciation of Rs. 0.51 lac) [Previous year Rs. 23.08 lacs (net of depreciation of Rs. 0.29 lac)].
7. Previous Year Figures :
The Company has reclassified/regrouped previous year figures wherever necessary, to confirm to this yearâs classification. Figures shown in brackets, represent those of the previous year.
Mar 31, 2014
Nature of Operations
UNIVERSAL CABLES LIMITED is engaged in the manufacturing, laying,
selling of Power Cables and Capacitors.
Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the notified Accounting Standards issued by
Companies Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956 read with the General Circular
8/2014 dated 4th April, 2014 of the Ministry of Corporate Affairs. The
financial statements have been prepared under the historical cost
convention modified by revaluation of fixed assets, on an accrual
basis. The accounting policies have been consistently applied by the
Company and are consistent with those used in the previous year.
1.(a) Terms/Rights attached to Equity Shares :
The Company has only one class of Shares referred to as Equity Shares
having a par value of Rs. 10/- per share. Each holder of Equity Share
is entitled to one vote per share.
(b) Foreign Currency Loan - Buyer''s Credit from Bank(s) are secured by
hypothecation of entire present and future current assets of the
Company. As collateral security, these facilities are additionally
secured by way of first charge on certain immovable properties of the
Company as continuing security by deposit of title deeds of such
immovable properties. It is repayable within 2 years from the Balance
sheet date and carries rate of Interest ranging from 1.50% - 3.00%.
Long Term Foreign Currency Loan - Buyer''s Credit are repayable in 3
equal Installments.
(c)As per the renewed/revised terms and conditions loans from Bodies
Corporate amounting to Rs. 8000 lacs are repayable in full in the year
2015, Rs. 1500 lacs are repayable in the year 2016 and Rs. 1500 lacs
are repayable in 2017. These loans carry interest @ 10.50% - 11.00%
(rate as on reporting date).
* The Company has recognized deferred tax assets on carry forward
business losses and unabsorbed depreciation, as the Company is having
timing differences, the reversal of which will result in sufficient
income to realise the deferred tax asset.
Working Capital Loans from Bank(s) are secured by hypothecation of
entire present and future current assets of the Company. As collateral
security, these facilities are additionally secured by way of first
charge on certain immovable properties of the Company as continuing
security by deposit of title deeds of such immovable properties.
* Includes Rs. 46.56 lacs (Previous year Nil) on account of Borrowing
Costs capitalised during the quarter.
# Includes Rs. 103.05 lacs (Previous year Nil) pertaining to exchange
loss capitalised as per para 46A of AS 11.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The Company expects to contribute Rs. 70 lacs (Previous year Rs. 80
lacs) to the Gratuity Fund during the year 2014-15.
The Provident Fund being administered by a Trust is a Defined Benefit
Scheme whereby the Company deposits an amount determined as a fixed
percentage of basic pay to the Fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of
the employees is adjusted on an annual basis to confirm to the interest
rate declared by the government for the Employees Provident Fund. The
Guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standard Board (ASB) states that Provident
Funds set up by employers, which require interest shortfall to be met
by the employer, needs to be treated as Defined Benefit Plan. The
Actuarial Society of India has issued the final guidance for
measurement of provident fund liabilities. The Actuary has accordingly
provided a valuation and based on the below provided assumptions, there
is no shortfall as at 31st March, 2014.
2. Segment Reporting AS-17 :
In the opinion of the management, there is only one reportable segment
("Manufacturing, Laying, Selling of Power Cables and Capacitors") as
envisaged by Accounting Standard 17 "Segment Reporting". Further, from
a geographical segment perspective, export sale constitute less than
10% of enterprise revenues. Accordingly, no separate disclosure for
segment reporting is required to be made in the financial statements of
the Company.
*As the liability of Gratuity and Leave encashment is provided on an
actuarial basis for the Company as a whole, amount pertaining to Shri
D.R. Bansal (Key Management Personnel), is therefore not included
above.
Note : (1) No amount has been provided as doubtful debts or
advances/written off or written back in respect of debts due from/to
above parties.
(2) Transactions with related parties are done on arm''s length basis in
the ordinary course of business.
3. Leases :
Assets Given on Operating Lease :
The Company has leased out Land and Buildings to Birla Furukawa Fibre
Optics Limited on Operating Lease. The lease term is for 55 months and
thereafter renewable by mutual consent on mutually agreed terms. There
is an escalation clause of 3% in the Lease Agreement for every
subsequent period of 11 months. There is no restriction imposed by
Lease Agreements. The leases are cancelable.
During the year, the Company has received lease rent of Rs. 203.92 lacs
(Previous year Rs. 195.04 lacs) which is disclosed as rent received
under Note No. 22 "Other Income".
Assets Taken on Operating Lease :
The Company has taken various Residential, Office and Warehouse
premises under operating Lease Agreement(s). The Lease Agreement(s)
generally do not have an escalation clause and there are no subleases.
These leases are generally cancelable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
Lease Agreement(s). The aggregate lease rentals paid/payable are
charged as "Rent" under Note No. 26 "Other Expenses".
4. In view of excise duty tariff rates on the Company''s finished
products being lower than cenvatable Customs Duty on imported inputs,
the Company has accumulated CENVAT credits aggregating to Rs. 729.63
lacs (Previous year Rs. 550.96 lacs). Since there is no time limit for
utilization of these balances and based on the alternative mechanism
devised for reduction of cenvat credit balances on a year on year
basis, in the opinion of the managment this does not call for any
provision there against.
5. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 320.82 lacs (Previous year Rs. 1215.00
lacs).
(b) The Company has entered into EPC contracts and contracts for sale
of cables. Non-fulfillment of contract within specified period will
lead to payment of Liquidated Damages ranging from 5% to 10%. Provision
has been made on this account wherever necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 33
"Leases".
6. Contingent Liabilities (not provided for) :
(Rs. in lacs)
Sl. As at As at
No. Particulars 31st March, 2014 31st March, 2013
1 Income Tax 274.93 415.58
2 Terminal Tax Liability 227.37 227.37
3 Excise and Service Tax Cases 241.32 91.84
4 Bills of exchange
discounted with Banks 1854.51 1269.91
5 Corporate Guarantee issued
in favour of SBI on behalf
of the Joint 3520.00 3520.00
Venture Company viz.
"Birla Furukawa Fibre
Optics Ltd."
Notes :
(a) Income Tax demand comprise demand from the Indian Tax Authorities
for payment of additional tax of Rs. 274.93 lacs (Previous year Rs.
386.69 lacs), upon completion of tax assessments for the financial
years 2007-08, 2008- 09, 2009-10 and 2010-11. The Tax demands are
mainly on account of disallowance of benefits which is linked to
Capital Investments (determined @ 75% of total Commercial Tax (VAT
CST) paid and exemption from Entry Tax), Additional Depreciation, and
other expenses under the Income Tax Act, 1961.
The Company is contesting the demands and the Management, believes that
its position is likely to be upheld in the appellate process. The
Company has accrued Rs. 1165.93 lacs (Previous year Rs. 1264.98 lacs)
in the financial statements for the tax demand raised and balance of
Rs. 274.93 lacs (Previous year Rs. 415.58 lacs) has been disclosed as
contingent liability. The management also believes that the ultimate
outcome of these proceedings will not have a material adverse effect on
the company''s financial position and results of operations.
(b) Terminal Tax liability is in respect of demand raised by the
Municipal Corporation of Satna (M.P.) under provisions of the Madhya
Pradesh Municipal Corporation Act, 1956. The Company has contested the
demand interalia by challenging its constitutional validity. The
Company has been legally advised that the said demand against the
Company is unsustainable and therefore there is no likelihood of the
Company being subjected to any Terminal Tax Liability.
(c) The future cash outflow in respect of items 1 to 3 above is
determinable only on receipt of the decisions/ judgements in the cases
pending at various forums and authorities concerned.
7. The Company has exercised option provided in Para 46A of Accounting
Standard - 11 on Effects of changes in Foreign Exchange rates with
regard to the treatment of foreign exchange fluctuation gain/loss.
Accordingly, loss on exchange fluctuation on long-term foreign currency
monetary items amounting to related Rs. 103.05 lacs have been adjusted
to the cost of capital asset and depreciated over the balance life of
the asset. This has resulted in increase in profit of the year by Rs.
93.81 lacs (net of depreciation of Rs. 9.24 lacs).
(a) A sum of Rs. 2.26 lacs (Previous year Rs. 7.55 lacs) on account of
unamortized foreign exchange premium on outstanding forward exchange
contracts is being carried forward to be charged to Statement of Profit
and Loss of the subsequent period.
8. There is no impairment of Fixed Assets during the year.
9. Previous Year Figures
The Company has reclassified/regrouped previous year figures wherever
necessary, to conform to this year''s classification. Figures shown in
brackets, represent those of the previous year.
Mar 31, 2013
1. Nature of Operations
UNIVERSAL CABLES LIMITED, an M. P. Birla Group Company is engaged in
the manufacturing, laying, selling of Power Cables and Capacitors.
2. Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the notified Accounting Standards issued by
Companies (Accounting Standard) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared under the historical cost convention
modified by revaluation of fixed assets, on an accrual basis. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
3. Employee Benefit Plans :
The Company''s defined benefit plans include the approved funded
Gratuity scheme which is administered through Group Gratuity Scheme
with Life Insurance Corporation of India and non-funded schemes viz.
Pension (applicable only to certain employees). Such defined benefits
are provided for in the Statement of Profit and Loss based on
valuations, as at the Balance Sheet date, made by independent
actuaries.
The following tables summarise the components of net benefit expense
recognized in the Statement of Profit and Loss, the funded status and
the amounts recognized in the Balance Sheet for the respective plans.
4. Segment Information :
Business Segments :
Power Cables & Capacitors account for the majority of business of the
Company. Power Cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organisations/engineering industries like railways,
shipping, refineries etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
5. Leases :
Assets Given on Operating Lease :
The Company has leased out Land and Buildings on Operating Lease. The
lease term is for 55 months and thereafter renewable by mutual consent
on mutually agreed terms. There is an escalation clause of 3% in the
Lease Agreement for every subsequent period of 11 months. There is no
restriction imposed by Lease Agreements. The leases are cancelable.
During the year, the Company has received lease rent of Rs. 195.04 lacs
(Previous year Rs. 104.92 lacs) which is disclosed as rent received under
Note No. 22 `"Other Income`".
Assets Taken on Operating Lease :
The Company has taken various Residential, Office and Warehouse
premises under operating Lease Agreement(s). The Lease Agreement(s)
generally do not have an escalation clause and there are no subleases.
These leases are generally cancelable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
Lease Agreement(s). The aggregate lease rentals paid/payable are
charged as `"Rent`" under Note No. 26 "Other Expenses".
6. In view of excise duty tariff rates on the Company''s finished
products being lower than cenvatable Customs Duty on imported inputs,
the Company has accumulated CENVAT credits aggregating to Rs. 550.96 lacs
(Previous year Rs. 965.81 lacs). Since there is no time limit for
utilization of these balances and based on the alternative mechanism
devised for reduction of cenvat credit balances on a year on year
basis, in the opinion of the managment this does not call for any
provision thereagainst.
7. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 1215.00 lacs (Previous year Rs. 1528.63
lacs).
(b) The Company has entered into EPC contracts and contracts for sale
of cables. Non-fulfillment of contract within specified period will
lead to payment of Liquidated Damages ranging from 5% to 10%. Provision
has been made on this account wherever necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 33
"Leases".
8. Contingent Liabilities (not provided for) :
(Rs. in lacs)
Sl. As at As at
Particulars
No 31st March,
2013 31st March,
2012
1 Income Tax* 415.58 259.27
2 Terminal Tax Liability** 227.37 195.30
3 Excise and Service Tax Cases 91.84 170.60
4 Bills of exchange
discounted with Banks 1269.91 3308.91
5 Corporate Guarantee issued
in favour of SBI on behalf of the 3520.00 3520.00
Joint Venture Company viz.`"Birla Furukawa Fibre Optics Ltd.`"
* Income Tax demand comprise demand from the Indian Tax Authorities for
payment of additional tax of Rs. 386.69 lacs (Previous year Rs. 233.54
lacs), upon completion of tax assessments for the financial years
2007-08, 2008-09 and 2009-10. Further for the years 2010-11, 2011-12
and 2012-13, the Management has considered Rs. 28.89 lacs (Previous year
Rs. 25.73 lacs) as contingent liability based on the issues raised in the
tax assessments of earlier years. The Tax demands are mainly on account
of disallowance of benefits which is linked to Capital Investments
(determined @ 75% of total Commercial Tax (VAT CST) paid and
exemption from Entry Tax), Additional Depreciation, and other
miscellaneous expenses under the Income Tax Act, 1961.
The Company is contesting the demands and the Management, believes that
its position is likely to be upheld in the appellate process. The
Company has accrued Rs. 1264.98 lacs (Previous year Rs. 1050.09 lacs) in
the financial statements for the tax demand raised and balance of Rs.
415.58 lacs (Previous year Rs. 259.27 lacs) has been disclosed as
contingent liability. The management also believes that the ultimate
outcome of these proceedings will not have a material adverse effect on
the company''s financial position and results of operations.
**Terminal Tax liability is in respect of demand raised by the
Municipal Corporation of Satna (M.P.) under provisions of the Madhya
Pradesh Municipal Corporation Act, 1956. The Company has contested the
demand interalia by challenging its constitutional validity. The
Company has been legally advised that the said demand against the
Company is unsustainable and therefore there is no likelihood of the
Company being subjected to any Terminal Tax Liability.
The future cash outflow in respect of items 1 to 3 above is
determinable only on receipt of the decisions/judgements in the cases
pending at various forums and authorities concerned.
10. The market value of a long term strategic quoted Non-current
investment (trade) in a Joint Venture Company namely, Birla Ericsson
Optical Limited is Rs. 368 lacs as at 31st March, 2013, thus having a
temporary decline of Rs. 482 lacs as compared to the carrying amount of
the said investment. Having regard to the future growth potential
anchored on core competencies, intrinsic assets base/net worth and
state-of-the-art manufacturing facilities of the investee company, in
the opinion of the management the decline in the market value of
Company''s investment is not considered to be of other than temporary
nature and hence does not call for any provision thereagainst.
11. There is no impairment of Fixed Assets during the year.
12. Previous Year Figures
The Company has reclassified/regrouped previous year figures wherever
necessary, to conform to this year''s classification. Figures shown in
brackets, represent those of the previous year.
Mar 31, 2012
(A) Terms/Rights attached to Equity Shares :
The Company has only one class of Shares referred to as Equity Shares
having a par value of Rs.10/- per share. Each holder of Equity Share is
entitled to one vote per share. The Company declares and pays dividend
in Indian Rupees. The dividend proposed by the Board of Directors is
subject to approval of shareholders in the Annual General Meeting. For
the year ended 31st March, 2012, the amount of per share dividend
recognized as distributions to equity shareholders is Rs. Nil (Previous
year Rs. 2/-).
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company in
proportion to the amount paid up or credited as paid up on such equity
shares respectively, after distribution of all preferential amounts.
As per records of the Company, including its register of
shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares.
(B) Aggregate number of shares issued for consideration other than cash
during the period of five years immediately preceding the reporting
date :
30,92,310 (Previous year 30,92,310) Equity Shares of Rs. 10/- each
amounting to Rs. 3,09,23,100/- were allotted on September 7, 2006 to the
Shareholders of erstwhile Optic Fibre Goa Limited pursuant to the
Scheme of Amalgamation without payment being received in cash.
1. Employee Benefit Plans :
The Company has a defined benefit Gratuity Plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an Insurance Company in the form of a
qualifying Insurance Policy.
The Company has a Pension Scheme in place for some of its employees who
had opted for this Scheme in the past. Presently, there are 23
employees covered under the Scheme, out of which one employee is
continuing his employment as on 31.03.2012 and the remaining 22 are
retired ones.
The pension entitlement is based on the final salary and period of
service put in by the pensioners as per the Pension Scheme of the
Company. No escalation in the terminal salary is considered after
retirement. The Pension is paid to the employee till his/her survival
and thereafter it is paid to the surviving spouse as per the rate
prescribed under the Scheme. No post-employment medical plans are
covered under the Pension Scheme of the Company.
The following tables summarise the components of net benefit expense
recognized in the Statement of Profit and Loss, the funded status and
the amounts recognized in the Balance Sheet for the respective plans.
The Provident Fund being administered by Trusts is a Defined Benefit
Scheme whereby the Company deposits an amount determined as a fixed
percentage of basic pay to the Fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of
the employees is adjusted on an annual basis to confirm to the interest
rate declared by the government for the Employees Provident Fund. The
Guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standards Board (ASB) states that Provident
Funds set up by employers, which require interest shortfall to be met
by the employer, needs to be treated as Defined Benefit Plan. The
Actuarial Society of India has issued the final guidance for
measurement of provident fund liabilities. The Actuary has accordingly
provided a valuation and based on the below provided assumptions, there
is no shortfall as at 31st March, 2012.
2. Segment Information :
Business Segments :
Power Cables & Capacitors account for the majority of business of the
Company. Power cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organisations/engineering industries like railways,
shipping, refineries, etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
Optical Fibre consists of single mode and multimode Telecommunication
Grade Optical Fibres.
(a) Primary Segment Information (by Business Segments) :
The following table presents revenue and profit/(loss) information
regarding industry segments for the years ended 31st March, 2012 and
31st March, 2011 and certain assets and liabilities information
regarding industry segments at 31st March, 2012 and 31st March, 2011 :
*As the liability of Gratuity and Leave encashment is provided on an
actuarial basis for the Company as a whole, amount pertaining to Shri
D.R. Bansal (Key Management Personnel), is therefore not included
above.
Note : No amount has been provided as doubtful debts or advances
written off or written back in respect of debts due from/to above
parties.
3. Leases :
Assets Given on Operating Lease :
The Company has leased out Land and Buildings on Operating Lease. The
lease term is for 55 months and thereafter renewable by mutual consent
on mutually agreed terms. There is an escalation clause in the Lease
Agreement that rent shall be increased for every subsequent period of
11 months by an amount equal to 6% of the lease rent. There is no
restriction imposed by Lease Agreements. The rent is not based on any
contingency. The leases are cancelable.
During the year, the Company has received lease rent of Rs. 104.92 lacs
(Previous year Rs. 219.03 lacs) which is disclosed as rent received under
Note No. 22 "Other Income".
Assets Taken on Operating Lease :
The Company has taken various Residential, Office and Warehouse
premises under operating Lease Agreement(s). The Lease Agreement(s)
generally do not have an escalation clause and there are no subleases.
These leases are generally cancelable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
Lease Agreement(s). The aggregate lease rentals paid/payable are
charged as "Rent" under Note No. 26 "Other Expenses".
The future minimum lease payments under non-cancelable operating lease
is Rs. Nil (Previous year Rs. Nil).
4. In view of excise duty tariff rates on the Company's finished
products being lower than cenvatable Customs Duty on imported inputs,
the Company has accumulated CENVAT credits aggregating to Rs. 965.81 lacs
(Previous year Rs. 459.24 lacs). Since there is no time limit for
utilization of these balances and based on the alternative mechanism
devised for reduction of cenvat credit balances on a year on year
basis, in the opinion of the management this does not call for any
provision there against.
5. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 1528.63 lacs (Previous year Rs. 123.87
lacs).
(b) The Company has entered into EPC contracts and contracts for sale
of cables. Non-fulfillment of contract within specified period will
lead to payment of Liquidated Damages ranging from 5% to 10%.
(c) For commitment relating to Lease arrangement, Refer to Note No. 33
"Leases".
6. Contingent Liabilities (not provided for) :
(Rs. in lacs)
Sl. Particulars As at As at
No. 31st March,
2012 31st March, 2011
1 Income Tax* 259.27 428.04
2 Terminal Tax Liability** 214.37 -
3 Excise and Service Tax Cases*** 170.60 -
4 Bills of exchange discounted
with Banks 3308.91 1183.77
5 Corporate Guarantee issued in
favour of SBI on behalf of the 3520.00 3520.00
Joint Venture Company viz.
"Birla Furukawa Fibre Optics
Ltd."
* Income Tax demand comprise demand from the Indian Tax Authorities for
payment of additional tax of Rs. 233.54 lacs (Previous year Rs. 428.04
lacs) upon completion of tax assessments for the financial years
2007-08 and 2008-09. Further for the years 2009-10, 2010-11 and
2011-12, the Management has considered Rs. 25.73 lacs as contingent
liability based on the issues raised in the tax assessments of earlier
years. The Tax demands are mainly on account of disallowance of
benefits which is linked to Capital Investments (determined @ 75% of
total Commercial Tax (VAT CST) paid and exemption from Entry Tax),
Additional Depreciation, and other miscellaneous expenses under the
Income Tax Act, 1961.
The Company is contesting the demands and the Management, believes that
its position is likely to be upheld in the appellate process. The
Company has accrued Rs. 1050.09 lacs (Previous year Rs. 869.33) in the
financial statements for the tax demand raised and balance of Rs. 259.27
lacs has been disclosed as contingent liability. The management also
believes that the ultimate outcome of these proceedings will not have a
material adverse effect on the company's financial position and results
of operations.
** Terminal Tax liability is in respect of demand raised by the
Municipal Corporation of Satna (M.P.) under provisions of the Madhya
Pradesh Municipal Corporation Act, 1956. The Company has contested the
demand interalia by challenging its constitutional validity. The
Company has been legally advised that the said demand against the
Company is unsustainable and therefore there is hardly any likelihood
of the Company being subjected to any Terminal Tax Liability.
*** On the basis of current status of individual cases and as per legal
advice obtained by the Company, wherever applicable, the Company is
confident that no provision is required in respect of these cases at
this point in time.
7. The market value of a long term strategic quoted Non-current
investment (trade) in a Joint Venture Company namely, Birla Ericsson
Optical Limited is approximately Rs. 389 lacs as at 31st March, 2012,
thus having a temporary decline of Rs. 461 lacs as compared to the
carrying amount of the said investment. Having regard to the future
growth potential of the investee company, in the opinion of the
management the decline in the market value of Company's investment is
not considered to be of permanent nature and hence does not call for
any provision there against.
8. In view of unexpected losses incurred by the company during the
year, mainly on account of sharp weakening of Indian Rupee vis-a-vis US
Dollar and other foreign currencies, elevated input prices amid high
volatility and soaring interest rates, the Managerial Remuneration paid
to Shri D.R. Bansal, Chief Executive Officer of the Company, has
exceeded the limits prescribed under paragraph A Section II Part II of
Schedule XIII to the Companies Act, 1956 which needs to be ratified,
confirmed and approved by the Company in General Meeting in terms of
paragraph B Section II Part II of Schedule XIII to the Companies Act,
1956.
The Company therefore is in the process of getting a Special Resolution
passed in the ensuing Annual General Meeting to ratify, confirm and
approve the Managerial Remuneration paid in excess to Shri D.R. Bansal,
Chief Executive Officer of the Company, as aforesaid.
9. Previous Year Figures
Till the year ended 31st March, 2011, the Company was using pre-revised
Schedule VI to the Companies Act, 1956 for preparation and presentation
of its financial statements. During the year ended 31st March, 2012,
the Revised Schedule VI notified under the Companies Act, 1956 has
become applicable to the Company. The Company has
reclassified/regrouped previous year figures to confirm to this year's
classification. The adoption of Revised Schedule VI does not impact
recognition and measurement principles followed for presentation of
financial statements. However, it impacts presentation and disclosure
made in financial statements, particularly presentation of Balance
Sheet. Figures shown in brackets, represent those of the previous year.
Mar 31, 2011
1. Nature of Operations
UNIVERSAL CABLES LIMITED, a M. P. Birla Group Company is engaged in the
manufacturing, laying, selling of Power Cables, Capacitors and Optical
Fibre.
2. Segment Information :
Business Segments :
Power Cables & Capacitors account for the majority of business of the
Company. Power cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organizations/engineering industries like railways,
shipping, refineries etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
Optic Fibre consists of single mode and multimode Telecommunication
Grade Optical Fibres.
(a) Primary Segment Information (by Business Segments)
The following table presents revenue and profit/(loss) information
regarding industry segments for the years ended March 31, 2011 and
March 31, 2010 and certain assets and liabilities information regarding
industry segments at March 31, 2011 and March 31, 2010 :
3. Related Party Disclosure :
Mr. D.R. Bansal
Key Management Personnel (Chief Executive Officer)
Joint Ventures Birla Ericsson Optical Limited (BEOL)
Birla Furukawa Fibre Optics Limited (BFL)
Other Parties which
significantly Influence/
are influenced by Vindhya Telelinks Limited (VTL)
the Company (either
individually or with
others) Shakun Polymers Limited (SPL)
4. Leases :
In case of the Assets given on lease
Operating Lease :
The Company has leased out Land and Buildings on Operating Lease. The
lease term is for 55 months and thereafter renewable as per the mutual
terms. There is an escalation clause in the lease agreement. There is
no restriction imposed by lease agreements. The rent is not based on
any contingency. The leases are cancellable.
The Company has received lease rent of Rs. 219.03 lacs (previous year
Rs. 189.11 lacs) disclosed as rent received under Schedule 15 "Other
Income".
Assets Taken on Operating Lease :
The Company has taken various residential, office, warehouse premises
under operating lease agreements. The lease agreements generally not
have an escalation clause and there are no subleases. These leases are
generally not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by lease
agreements. The aggregate lease rentals payables are charged as "Rent"
in Schedule 18.
The future minimum lease payments under non-cancellable operating lease
Rs. Nil (Previous Year Rs. Nil).
5. Capital Commitments :
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 123.87 lacs (Rs. 2131.49 lacs).
6. Contingent Liabilities (not provided for) :
Sl. Particulars As at As at
No. March 31, 2011 March 31, 2010
1. Unredeemed Bank Guarantees 11803.37 9492.76
2. Corporate Guarantee issued
to SBI for loan taken by the 3520.00 Ã
Joint Venture Company "Birla
Furukawa Fibre Optics Ltd."
3. Income Tax 428.04 Ã
7. Derivative Instruments and Unhedged Foreign Currency Exposure
(c) A sum of Rs. 38.00 lacs (Previous year Rs. 99.14 lacs) on account
of unamortised foreign exchange premium on outstanding forward exchange
contracts is being carried forward to be charged to Profit and Loss
Account of the subsequent period.
8. In the opinion of the management, the decline in market value of
the quoted investments by Rs. 160.47 lacs (Rs. 239.64 lacs) in a joint
venture company at the year end is temporary and hence, does not
require any provision thereagainst.
9. In accordance with Explanation below Para 10 of Notified
Accounting Standard 9 : Revenue Recognition, Excise Duty on sales
amounting to Rs. 4570.04 lacs (Rs. 3187.88 lacs) has been reduced from
sales in the Profit and Loss Account and excise duty on decrease in
stocks amounting to Rs. 116.78 lacs considered as income (Rs. 252.46
lacs on increase in stock has been considered as expense) in Schedule
18 of the financial statements.
10. Employee Benefit Plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The Company has also agreed to provide pension to certain employees.
These benefits are unfunded.
The following tables summarize the components of net benefit expense
recognized in the profit and loss account and the funded status and
amounts recognised in the balance sheet for the respective plans.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The Company expects to contribute Rs. 125 lacs (Rs. 100 lacs) to
gratuity fund during the year 2011-12.
11. The Board of Directors in their meeting held on July 27, 2010,
decided to sell the manufacturing operations of Optic Fibre Goa Unit of
the Company to Birla Furukawa Fibre Optics Ltd., a Joint Venture
Company. Accordingly, on October 23, 2010, the Company has sold the
specified assets having cost of Rs. 3418.70 lacs (WDV of Rs. 1345.08
lacs) at Rs. 1413.51 lacs.
12. Previous Year Comparatives
Previous years figures, are shown in brackets in the Schedules and
have been regrouped wherever necessary to confirm to this years
classification.
Mar 31, 2010
1. Nature of Operations
UNIVERSAL CABLES LIMITED, a M. P. Birla Group Company is engaged in the
manufacturing and selling of Power Cables, Capacitors and Optical
Fibre.
2. Segment Information
Business Segments:
Power Cables & Capacitors account for the majority of business of the
Company. Power cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organizations/engineering industries like railways,
shipping, refineries etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
Optic Fibre consists of single mode and multimode Telecommunication
Grade Optical Fibres.
(a) Primary Segment Information (by Business Segments)
The following table presents revenue and profit/(loss) information
regarding industry segments for the years ended March 31, 2010 and
March 31, 2009 and certain assets and liabilities information regarding
industry segments at March 31,2010 and March 31,2009.
3. Related Party Disclosure
Key Management Personnel
Mr. D.R Bansal (Chief Executive Officer)
Joint Venture Birla Ericsson Optical Limited (BEOL)
Birla Furukawa Fibre Optics Limited (BFFOL)
Other Parties which significantly
Influence/are influenced by Vindhya Telelinks Limited (VTL)
the Company (either individually
or with others) Shakun Polymers Limited (SPL)
4. Optic Fibre Unit of the Company at Goa has accumulated CENVAT credit
aggregating to Rs. 229.42 lacs as at March 31,2010 (as appearing in
Schedule 11 of Loans and Advances) for which the management has devised
an alternate mechanism for utilization of the accumulated Cenvat credit
as going concern over a reasonable period of time and hence this does
not call for any provision there against.
5. Capital Commitments:
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs.2131.49 lacs (Rs. 426.16 lacs).
6. In the opinion of the management, the decline in market value of
the quoted investments by Rs.239.64 lacs (Rs.563.35 lacs) in a joint
venture company at the year end is temporary and hence, does not call
for any provision there against.
7. In accordance with Explanation below Para 10 of Notified
Accounting Standard 9: Revenue Recognition, Excise duty on sales
amounting to Rs. 3187.88 lacs (Rs. 6348.10 lacs) has been reduced from
sales in the Profit and Loss Account and excise duty on increase in
stocks amounting to Rs. 252.46 lacs considered as expense (Rs. 681.47
lacs on decrease in stocks has been considered as income) in Schedule
18 of the financial statements.
8. Employee Benefit plans (Notified AS 15)
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The Company has also agreed to provide pension to certain employees.
These benefits are unfunded.
The following tables summarize the components of net benefit expense
recognized in the profit and loss account and the funded status and
amounts recognized in the balance sheet for the respective plans.
9. Subsequent Events
On 11 th May, 2010, the Board of Directors, with a view to concentrate
on the core business segment of the Company i.e. Power Cables &
Capacitors, proposed to sell, Lease and/or transfer Optic Fibre Goa
Unit of the Company to Birla Furukawa Fibre Optics Limited, a Joint
Venture Company, subject to necessary approval from the Shareholders
and other compliances as may be needed. The Unit will, however,
continue its operations till the transfer actually takes place. No
impairment provision is required to be made as the Management expects
to realize a price higher than the Written Down Value of the Fixed
Assets to be transferred.
10. Previous Year Comparatives
Previous years figures, are shown in brackets in the Schedules and
have been regrouped wherever necessary to confirm to this years
classification.