Mar 31, 2018
1. (a) In accordance with Ind AS 18 on "Revenueâ and Schedule III to the Companies Act, 2013, sales up to 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 are 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.
(b) The Company had certain pending/unexecuted turnkey contracts on the date of implementation of Goods and Services Tax (GST) as of 1st July, 2017, wherein contract prices were arrived at based on taxes and duty structure prevailing before implementation of GST. Pending revision/reset of contract prices in accordance with GST regime, the Revenue from Operations pertaining to such turnkey contracts has been recognized based on fair assessment and evaluation of impact of GST on the contract prices. In the opinion of the Management, this is not likely to have any material impact upon revision/resetting of the contract prices by the customers.
(c) The Trade Receivables as at 31st March, 2018 include an amount of Rs, 174.68 lakhs receivable from a customer against whom the insolvency proceedings have been initiated as per Insolvency and Bankruptcy Code, 2016. Considering the terms and conditions of optical fibre cable network provided by the Company on Indefeasible Right of Usage basis and the consequential operations and maintenance contract(s), the Management believes that the said Trade Receivables are good and the carrying amount of the same is appropriate.
2. Contingent Liabilities and Commitments (to the extent not provided for) -
(a) Contingent liabilities:
(i) Pending cases with income tax appellate authorities where income tax department has preferred appeals - Liability not ascertainable.
(ii) Sales tax & Service tax matters under litigation Rs, NIL (Rs, 114.61 lakhs ; 31st March, 2017) (Rs,149.54 lakhs; 1st April, 2016).
(iii) The Company has an ongoing process for collection and submission of the relevant declaration forms under the VAT Act to the concerned authorities and the Company does not foresee any material liability in this regard.
(b) Commitments:
Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs, 3966.01 lakhs (Rs, 462.50 lakhs; 31st March, 2017) (Rs, 205.19 lakhs; 1st April, 2016).
(c) The financial statements of the Company for the year ended 31st March, 2018 has been approved by the Board of Directors in its meeting held on 23rd May, 2018. For the year ended 31st March, 2018, dividend of Rs, 10 per share (Total dividend of Rs,1428.68 lakhs including dividend distribution tax of Rs, 243.60 lakhs) has been 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 "Events after the Reporting Periodâ.
(b) Provident Fund :
The Company contributes its share in an approved provident fund trust viz. Universal Cable Limited Employee Provident Fund. The Company is liable for shortfall, if any, in the fund asset based on the government specified minimum rate of return. Based on the valuation made by an independent Actuary, there is no shortfall as at 31st March, 2018. The Companyâs aggregate Contribution to the said fund of Rs,199.84 lakhs (? 175.01 lakhs) is charged to the Statement of Profit and Loss.
(c) Defined Contribution Plan:
Companyâs contribution to an approved Superannuation Fund as per the scheme formulated by the Company and Contribution to Employeeâs Regional Provident Fund are charged to the Statement of Profit and Loss in the year in which an eligible employee renders the service. The Company has recognized the following contributions as expense in the Statement of Profit and Loss.
3. Segment Information:
Details of the each operating segment are as under:
Cable - The Company manufactures and markets telecommunication cables, other
types of wires & cables and FRP rods/glass rovings, etc.
EPC(Engineering, Procurement and Construction) - The Company undertakes and executes contracts and/or provide
infrastructure related services with or without materials, as the case may be.
Notes:
(i) The remuneration to Key Managerial Personnel(s) other than Non-Executive Directors 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.
4. Disclosure as required under the Micro Small and Medium Enterprises Development Act 2006 to the extent ascertained and as per notification number GSR 679 (E) dated 4th September, 2015
5. Leases:
(a) Operating Lease :
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 of Rs, 173.46 lakhs (? 168.36 lakhs) have been charged to the Statement of Profit and Loss.
(b) Finance Lease:
The Company has entered into Indefeasible Right of Usage (IRU) Agreements with certain customers for providing telecommunication cable network connectivity. The required disclosure is given herein:
Note :
The Company has also accepted Cross Corporate Guarantee from BCL of Rs, 218361.00 lakhs (Rs, 184561.00 lakhs) against total credit facilities and term loan(s) availed from the consortium of banks.
The fair value of financial assets and liabilities is included at the amount at which instruments could be exchanged in a current
transaction between the willing parties. The following methods and assumptions were used to estimate the fair value:
(A) The Company has opted to fair value its quoted equity instruments at its market quoted price through Other Comprehensive Income(OCI).
(B) The Company has opted to fair value its unquoted equity instruments at its Net Asset Value/Adjusted Net Asset Value through OCI.
(C) The fair values of cash and cash equivalents, other bank balances, trade receivables, other current financial assets, short term borrowings, trade payables and other current financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. The Company has adopted Effective Interest Rate Method (EIR) for fair valuation of long term borrowings, and non-current financial assets and non-currentfinancial liabilities.
(D) The fair value of forward exchange and swap contracts is based on valuation certificate given by respective banks.
Fair Value Hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
6. Financial Risk Management Objectives and Policies:
The Companyâs activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Market Risk,
Credit Risk and Liquidity Risk.
(i) Market Risk: Market Risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market Risk comprises mainly three types of Risk: Foreign currency Risk, Interest rate Risk and Other Price Risk such as Equity Price Risk and Commodity Price risk.
(a) Foreign Currency Risk:
Foreign Currency Risk has underlying risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD and Euro. The 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.
(c) 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 and Turnkey Contract & Services respectively. It requires a continuous supply of certain raw materials & brought out components such as optical fibre, copper, aluminum, plastic and polymers, telecom ducts, power cables, conductors, transformers, fabricated steel, poles etc. To mitigate the commodity price risk, 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.
(d) 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 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.
(ii) Credit Risk:
Credit risk is the risk that counterparty might not honour its obligations under a financial instrument or customer contract leading to financial loss. The Company is exposed to credit risk from its operating activities (primarily Trade Receivables).
Customer credit risk is managed by each business unit and is subject to the Companyâs established policy, procedures and control 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. The Companyâs Turnkey Contract business customers profile include Government owned utilities/ entities/ and both public and private telecom sector operators and service provides, and accordingly its credit risk is low. 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. Impairment allowance for trade receivables if any, is provided on the basis of respective credit risk of individual customer as on the reporting date.
Deposits with Bank:
The deposits with banks constitute mostly the investment made by the Company against bank guarantees and are generally not exposed to credit risk.
(iii) 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.
7. Capital Management:
The Companyâs policy is to maintain an adequate capital base so as to maintain creditors and market confidence and to sustain future development. Capital includes issued capital, securities premium and all other equity reserves attributable to equity holders.
The Company monitors capital using a gearing ratio which is net debt divided by total capital plus net debt. Net Debt is calculated as borrowings less cash and cash equivalents.
8. Exceptions and Exemptions applied for Transition to Ind AS
Ind AS 101 âFirst-time adoption of Indian Accounting Standardsâ (hereinafter referred to as Ind AS 101) allows first time adopters few mandatory and optional exemptions from the retrospective application of certain Ind AS. In preparing these financial statements, the Company has applied the below mentioned exemptions-
(a) Optional Exemptions Availed:
(i) Property Plant and Equipment, Intangible Assets and Investment Properties
As permitted by para D5-D8B of Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of Property, Plant and Equipment. The same election has been made in respect of investment property and Intangible Assets also.
(ii) Designation of Investments in Equity Instrument
Investment in Subsidiaries, Joint Ventures and Associates are recognized at deemed cost, i.e. carrying cost of the previous GAAP, as at the date of transition. All other equity instruments are designated at fair value through OCI on the date of transition.
(b) Mandatory Exceptions:
(i) Estimates
Upon an assessment of the estimates made under Previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS except where revision in estimates was necessitated by Ind AS. The estimates used by the Company to present the amounts in accordance with Ind AS reflect conditions existing as at 1st April, 2016 the date of transition to Ind AS and as at 31st March, 2017.
(ii) Derecognition of financial assets and financial liabilities
The Company has elected to apply the Derecognition requirements for financial assets and financial liabilities in accordance with Ind AS 109, prospectively for transactions occurring on or after the date of transition to Ind AS.
(iii) Classification and measurement of financial assets
The company has classified the financial assets in accordance with Ind AS 109, on the basis of facts and circumstances that exist at the date of transition to Ind AS.
9. Reconciliations of Transition to Ind AS:
The following reconciliation provides a quantification of the effect of significant differences arising as a result of transition from Previous GAAP to Ind AS in accordance with Ind AS 101:
(a) Effect of Ind AS adoption on the Balance Sheet as at 31st March, 2017 and 1st April, 2016:
Reference Notes to point no. (a), (b), (c) & (d) of Note No. 52 above :
(i) Property Plant and Equipment: The Company has elected the option to continue with the carrying value for all its Property, Plant & Equipment as recognized in the financial statements as at the date of transition to Ind AS measured as per previous GAAP and used it as the deemed cost on the date of transition.
(ii) Investment in Equity Instruments: Under previous GAAP, Non-Current Investment in Equity Instruments were carried at cost less provision for other than temporary diminution in the value of such investment. Under Ind AS, Investments (except investment in subsidiaries, associates and joint venture) have been measured at Fair Value through OCI.
(iii) Government Grants: Under previous GAAP, Government Grant in relation to Plant & Equipments was recognized as a part of Capital Reserve. Under Ind AS such Grant have been treated as a deferred income under liability and recognized in the Statement of Profit and Loss on a systematic basis over the useful life of such assets.
(iv) Borrowings: Under previous GAAP, Borrowings were measured at transaction value, with transaction cost recognized in the Statement of Profit and Loss immediately, Under Ind AS borrowings have been recognized at amortized cost using Effective Interest Rate (EIR) method.
(v) Re-measurement of Defined Benefit Plan: Under Previous GAAP, re-measurement of retirement defined benefit plans i.e. actuarial gains/ (losses) arising due to experience, adjustments and change in assumptions were recognized in the Statement of Profit and Loss. Under Ind AS re-measurement of retirement defined benefit plans (net of tax) is recognized in the âOther Comprehensive Incomeâ.
(vi) Forward Contracts: Under Previous GAAP the premium paid on forward contracts was recognized as expense or income over the life of the contract. Further in case of Forward Contract for firm Commitments, mark to market losses were recognized in the Statement of Profit and Loss and gain, if any were ignored. Under Ind AS mark to market Gain/ Loss on forward contract have been recognized in the Statement of Profit and Loss.
(vii) Security Deposit : The Company has given certain interest free security deposit under long term lease agreement. Under IND AS, these security deposit needs to be fair valued. The difference between fair value and previous GAAP carrying value has been recognized as advance rent under Current Asset. The same has been charged as rent expense to the Statement of Profit and Loss over the period of lease. Interest Income has been recognized yearly on interest free security deposit.
(viii) Deferred Taxes: Under Previous GAAP, deferred taxes were accounted for based on the income statement approach which requires creation of deferred tax asset/ liability on temporary differences between the taxable income and accounting income. Under Ind AS, deferred taxes are accounted for based on the balance sheet approach, which requires creation of deferred tax asset/ liability on temporary differences between the carrying amount of an asset/ liability in the Balance Sheet and its corresponding tax base. Application of Ind AS has also resulted in recognition of deferred taxes on new temporary differences arising due to adjustments made on transition to Ind AS.
(ix) Dividend: Under previous GAAP (up to 31st March 2016), proposed dividend was recognized as liability in the period to which it was related (if subsequently approved by Board of Directors). Under Ind AS, proposed dividend is recognized as liability in the period in which it is approved by shareholders.
(x) Revaluation Reserve: The Company had revalued few fixed assets as per the previous GAAP and a balance ofRs, 1.85 lakhs was outstanding in revaluation reserve as on 31.03.2016. The revaluation reserve had been set off from the net block of the respective assets as on 01.04.2016 on consequential change in the governing Accounting Standards (AS).
10. Previous year figures have been regrouped/ rearranged, wherever considered necessary to conform to current year classification.
Mar 31, 2017
1. Working Capital Loans/borrowings 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.
2. 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 movable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interest amongst consortium lenders. As a collateral security, the Working Capital Loans/borrowings from Banks are additionally secured by way of pledge of 12,50,000 equity shares held by the Company in Birla Cable Limited (Formerly Birla Ericsson Optical Limited) and cross Corporate Guarantee of Birla Cable Limited.
3. Contingent liabilities and Commitments (to the extent not provided for):
4. Contingent liabilities:
5. Pending cases with income tax appellate authorities where income tax department has preferred appeals - Liability not ascertainable.
6. Sales tax and Service tax matters under litigation Rs.114.61 lacs (Rs.149.54 lacs).
7. Appeals preferred by the Company against the claim/levy of differential sales tax due to timely non-submission of declaration forms for concessional sales tax, demand/levy whereof has been stayed and appeals are pending with appellate authorities for their decision. The Company is contesting the demand/levy on merits, liabilities against which are unascertainable until final outcome in the pending cases.
8. Cross corporate guarantee given in connection with loans/working capital credit facilities aggregating to Rs.17965.00 lacs (Rs.18450.00 lacs) (outstanding as at 31st March, 2017, Rs.5059.55 lacs (Rs.8863.33 lacs))sanctioned by consortium of banks to a body corporate(Refer Note No. 45).
The future cash outflow in respect of items (i), (ii) and (iii) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and authorities concerned. The management, however, believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Companyâs financial position and results of operations.
9. Commitments:
10. Estimated amount of contracts remaining to be executed on Capital Account (Net of advances) and not provided for Rs.462.50 lacs (Rs.205.19 lacs).
11. Commitments relating to Derivatives are disclosed in Note No. 34.
12. During the year the Company has changed its accounting policy relating to recognition of Proposed Dividend as per requirement of the revised Accounting Standard (AS) - 4 on âContingencies and Events Occurring After the Balance Sheet Dateâ. The Company will recognize the liability for proposed dividend (including dividend distribution tax) in the period when the dividend is approved by the shareholders as against the previous accounting policy of recognizing the same in the financial year to which it related. The Board of Directors of the Company has recommended a dividend at the rate of Rs.7/- per fully paid-up equity share of face value of Rs.10/- each for the financial year 2016-17.
13. Derivative Instruments:
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowing primarily with respect to USD and Euro. The 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 taken certain Swap instruments for hedging the borrowings in foreign currency and has recognized a gain/loss in the Statement of Profit and Loss on measurement of said 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).
14. Employee Benefits:
15. Defined Benefit Plan:
The Companyâs 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 Pension scheme (applicable only to select category of ex employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, carried out by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on 31st March, 2017 are summarized below:
The estimates of future salary increases, considered in actuarial valuation, take into account the effect of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall expected rate of return on plan assets is determined based on the market prices prevailing as on Balance Sheet date, applicable to the period over which the obligation is to be settled.
Information relating to experience adjustments to plan assets and liabilities as required by Para 120(n)(ii) of the Accounting Standard (AS)-15 (revised) on employee Benefits is not available with the Company. However, the impact of the same is not likely to be material.
16. Defined Contribution Plan:
Companyâs contribution to defined contribution schemes such as approved and recognized Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred for the year when an employee renders the relevant service. The Company has no further obligations beyond its contributions. The Company has recognized the following contributions paid/payable to Provident/Family Pension Fund and Superannuation Fund as an employee benefits expense in the Statement of Profit and Loss.
17. Segment Information:
In accordance with the Accounting Standard (AS)-17 on âSegment Reportingâ, the Company has identified two reportable business segments as the primary segment viz. Cables and Engineering, Procurement and Construction (EPC). Segments have been identified and reported taking into account nature of products and services, the differing risks and returns, the organization structure and the internal business reporting systems. A brief description of the types of products and services provided by each reportable segment is as follows:
âCablesâ- The Company manufactures and sale telecommunication cables, other types of wires & cables and FRP rods/glass rovings, etc.
âEPCâ (Engineering, Procurement and Construction) -The Company undertakes and executes contracts and/or provide services with or without materials, as the case may be.
18. Primary Segment Information (by business segments):
The following table presents revenue and profit/(loss) information regarding business segments for the year(s) ended 31st March, 2017 and 31st March, 2016 and certain liabilities information regarding business segments as at 31st March, 2017 and 31st March, 2016 :
19. All the assets of the Company, except the carrying amount of assets aggregating to Rs.560.93 lacs (Rs.763.09 lacs) are within India.
20. The Company has common fixed assets for manufacturing goods/providing services in the Domestic Market as well as for the Overseas Markets. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished.
21. Disclosure of related party transactions with Birla Cable Limited (Formerly Birla Ericsson Optical Limited) is given from 1st April, 2016 to 23rd August, 2016, being the date up to which joint venture agreement was in force. BCL ceased to be a joint venture w.e.f. 24th August, 2017.
22. The remuneration to Key Managerial Personnel as stated above does not include provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation for the same is done for the Company as a whole.
23. 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.
24. Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered.
25. All the transactions with Related Parties were alarmâs length basis and in the ordinary/normal course of business.
26. Inter corporate loans/advances were taken/given for business purposes.
27. Leases:
28. Operating Lease:
The Company has taken certain office and residential premises/facilities under operating lease/sub-lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease/sub-lease agreements. The aggregate lease rental of Rs.168.36 lacs (Rs.169.03 lacs) has been charged to the Statement of Profit and Loss.
29. Remittance in Foreign Currency on account of Dividend:
No remittance in foreign currency on account of dividend was made by the Company directly. The Company has, however, paid dividend in respect of equity shares held by certain Non-resident shareholders on repatriation basis. These, interalia, include portfolio investment and direct investment where the amount is also credited to Non-Resident External Account (NRE A/c). The amount of dividend indirectly remitted to such non-resident shareholders cannot be ascertained.
30.. The Company has regrouped/reclassified previous yearâs figures to conform to current yearâs classification/disclosures. The figures in brackets are those in respect of the previous accounting year.
Mar 31, 2016
1. Contingent Liabilities and Commitments (to the extent not provided for) -
(a) Contingent Liabilities :
(i) Claims against the Company/disputed liabilities not acknowledged as debts - Rs. Nil (Rs. 96.75 lacs).
(ii) Pending cases with income tax appellate authorities where income tax department has preferred appeals -Liability not ascertainable.
(iii) Sales tax & service tax matters under litigation Rs. 149.54 lacs (Rs. 115.20 lacs).
(iv) Appeals preferred by the Company against the claim/levy of differential sales tax due to timely non-submission of declaration forms for concessional sales tax demand(s)/levy whereof have been stayed and are pending with appellate authorities for their decision. The Company is contesting the demand(s)/levy on merits, liabilities against which are unascertainable until final outcome in the pending cases.
(v) Cross Corporate Guarantee given in connection with Loans/Working Capital Credit Facilities aggregating to Rs. 18450.00 lacs (outstanding as at 31st March, 2016 Rs. 8863.33 lacs) sanctioned by consortium of banks to a joint venture [(Refer Note No. 45(b)(i)].
The future cash outflow in respect of items (i) to (iv) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and authorities concerned. The management, however, believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Companyâs financial position and results of operations.
(b) Commitments:
(i) Estimated amount of contracts remaining to be executed on Capital Account (net of advances) and not provided for Rs. 205.19 lacs (Rs. 690.19 lacs).
(ii) Commitments relating to Derivatives are disclosed in Note No. 35.
2. The Exceptional Item for the year ended 31st March, 2016, amounting to Rs. 477.76 lacs, represents settlement of claim(s) of an overseas supplier through an out of court settlement of various long standing disputes/claims pending in different courts in India and Arbitration in Japan.
3. Derivative Instruments:
The Company has entered into the following derivative instruments :
(a) Details of outstanding forward exchange contracts entered into by the Company for hedge purpose and unheeded foreign currency exposures as at the yearend:
(c) A sum of Rs. 6.20 lacs (Rs. 0.51 lac) on account of unamortized foreign exchange premium on outstanding Forward Exchange Contracts is being carried forward to be debited to the Statement of Profit and Loss of the subsequent period.
4. Employee Benefits:
(a) Defined Benefit Plan :
The Companyâs 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 Pension scheme (applicable only to certain categories of ex-employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, carried out by independent actuaries. Disclosures for defined benefit plans based on actuarial reports as on 31st March, 2016 are summarized below:
The estimates of future salary increases, considered in actuarial valuation, take into account the effect of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall expected rate of return on plan assets is determined based on the market prices prevailing as on Balance Sheet date, applicable to the period over which the obligation is to be settled.
Information relating to experience adjustments to plan assets and liabilities as required by Para 120(n)(ii) of the Accounting Standard (AS)-15 (revised) on âEmployee Benefitsâ is not available with the Company. However, the impact of the same is not likely to be material.
(b) Defined Contribution Plan :
Companyâs contribution to defined contribution schemes such as approved and recognized Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred for the year when an employee renders the relevant service. The Company has no further obligations beyond its contributions. The Company has recognized the following contributions paid/payable to Provident/Family Pension Fund and Superannuation Fund as an employee benefits expense in the Statement of Profit and Loss.
5. Segment Information:
In accordance with the Accounting Standard (AS)-17 on âSegment Reportingâ, the Company has identified two reportable business segments as the primary segment viz. Cables and Engineering, Procurement and Construction (EPC). Segments have been identified and reported taking into account nature of products and services, the deferring risks and returns, the organization structure and the internal business reporting systems. A brief description of the types of products and services provided by each reportable segment is as follows:
âCablesâ- The Company manufactures and markets telecommunication cables, other types of wires & cables and FRP rods/ glass ravings, etc.
âEPCâ (Engineering, Procurement and Construction) -The Company undertakes and executes contracts and/or provide services with or without materials, as the case may be.
(a) Primary Segment Information (by business segments):
The following table presents revenue and profit/(loss) information regarding business segments for the year(s) ended 31st March, 2016 and 31st March, 2015 and certain liabilities information regarding business segments as at 31st March, 2016 and 31st March, 2015 :
(i) All the assets of the Company, except the carrying amount of assets aggregating to Rs. 763.09 lacs (Rs. 1973.25 lacs) are within India.
(ii) The Company has common fixed assets for manufacturing goods/providing services in the Domestic Market as well as for the Overseas Markets. Hence, separate figures for fixed assets/additions to fixed assets have not been furnished.
6. Disclosures in respect of Related Parties as defined in Accounting Standard (AS)-18, 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) Subsidiaries : August Agents Ltd. (AAL), Insilco Agents Ltd.(IAL),
Laneseda Agents Ltd. (LAL)
(ii) Joint Ventures : Birla Ericsson Optical Ltd. (BEOL) Birla Visabeira Private Limited (BVPL)
(w.e.f 15th September 2015)
(iii) Enterprise over which a director is able : Shakun Polymers Limited (SPL) to exercise significant influence
(iv) Enterprise in which the Company has : Universal Cables Limited (UCL) significant influence (w.e.f 15th May, 2015)
(v) Key Management Personnel (KMP) : Shri Y.S. Lodha ( Managing Director)
(vi) The Company by itself and/or along-with its subsidiaries hold more than 20% of the voting power of certain bodies corporate. The Company has been legally advised that it does not have any âsignificant influenceâ in the said bodies corporate as defined in Accounting Standard (AS)-18 - âRelated Party Disclosuresâ and accordingly, has not considered the above investees as related parties under the said Accounting Standard.
(a) Details of transactions with related parties (other than Key Management Personnel) :
Notes:
(i) The remuneration to Key Managerial Personnel as stated above does not include provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.
(ii) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/ton above Related Parties.
(iii) Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered.
(iv) All the transactions with Related Parties were on Armâs Length Basis and in the ordinary/normal course of business.
(v) Inter corporate loans/advances have been given for business purposes.
7. Leases:
(a) Operating Lease :
The Company has taken certain office and residential premises/facilities under operating lease/sub-lease agreements.
The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease/sub-lease agreements. The aggregate lease rental of Rs. 169.03 lacs (Rs. 108.51 lacs) have been charged to the Statement of Profit and Loss.
(b) Finance Lease :
The Company has entered into Indefeasible Right of Usage (IRU) agreements with certain customers for providing telecommunication cable network connectivity. The required disclosure is given herein:
8. There is no Impairment of Assets during the year.
9. Disclosure on Provision relating to Warranty in accordance with Accounting Standard (AS)- 29 âProvisions, Contingent Liabilities and Contingent Assetsâ:
10. Disclosure on Corporate Social Responsibility Expenses :
(a) Gross amount required to be spent by the Company during the year in pursuance to the provisions of Section 135 of the Companies Act, 2013 and rules made there under - Rs. 68.46 lacs (Rs. 12.58 lacs).
(b) Amount spent during the year 2015-16 and included under Miscellaneous Expenses in the Statement of Profit and Loss (Refer Note No. 30)
(d) Remittance in Foreign Currency on account of Dividend :
No remittance in foreign currency on account of dividend was made by the Company directly. The Company has, however, paid dividend in respect of equity shares held by certain Non-resident shareholders on repatriation basis. These, inter alia, include portfolio investment and direct investment where the amount is also credited to Non-Resident External Account (NRE A/c). The amount of dividend indirectly remitted to such Non-resident shareholders cannot be ascertained.
* The Company has also accepted Cross Corporate Guarantee from BEOL of Rs. 148461.00 lacs against total Credit Facilities availed from banks.
11. The Company has regrouped/reclassified previous yearâs figures to conform to current yearâs classification/disclosures. The figures in brackets are those in respect of the previous accounting year.
Mar 31, 2015
1. NATURE OF OPERATIONS
The Company is engaged in the business of manufacturing and sale of
telecommunication cables, other types of wires & cables, FRP rods/glass
rovings, etc. and Engineering, Procurement and Construction (EPC)
business.
2. Contingent liabilities and Commitments (to the extent not provided
for) -
(a) Contingent liabilities :
(i) Claims against the Company/disputed liabilities not acknowledged as
debts Rs.96.75 lacs (Rs. 96.75 lacs).
(ii) Pending cases with income tax appellate authorities where income
tax department has preferred appeals - liability not ascertainable.
(iii) Sales tax matter under litigation Rs. 18.96 lacs (Rs 18.96 lacs).
(iv) Appeals preferred by the Company against the claim/levy of
differential sales tax due to timely non-submission of declaration
forms for concessional sales tax. The demand(s)/levy on merits of the
cases have been stayed and are pending before the appellate
authorities, liabilities against which are unascertainable until final
outcome in the pending cases.
(v) Cross corporate guarantee given in connection with loan/ credit
facilities aggregating to Rs. 13750.00 lacs (outstanding as on March
31, 2015 Rs.8023.16 lacs) to a joint venture and corporate guarantee
given of Rs.5800.00 lacs in connection with performance of obligations
assumed by a body corporate under a supply contract. [(Refer Note No.
46(b)].
The future cash outflow in respect of items (i) to (iv) above is
determinable only on receipt of the decisions/judgements in the cases
pending at various forums and authorities concerned.
(b) Commitments:
(i) Estimated amount of contracts remaining to be executed on Capital
Account (Net of advances) and not provided for Rs. 690.19 lacs (Rs.
277.79 lacs).
(ii) Commitment relating to Derivatives are disclosed in Note No. 37.
3. The Company has filed a law suit against an overseas supplier and
its Indian agent. The supplier in order to overreach the said law suit
invoked alleged arbitration agreement which is subject matter of the
suit filed by the Company, interalia, claiming recovery of an aggregate
amount equivalent to Rs.3544.13 lacs as at 31st March, 2015, as damages
for the unsupplied goods for the period from October, 2002 to
September, 2006. The Civil Court stayed the Arbitration proceedings and
the said stay order has been confirmed by the High Court of Madhya
Pradesh at Jabalpur and also by the Hon''ble Supreme Court. An order
of the High Court of Madhya Pradesh referring the parties to
Arbitration has also been stayed by the Hon''ble Supreme Court in the
Special Leave Petitions filed by the Company, which are pending before
the Hon''ble Supreme Court. Based on appraisal of the matter, the
Company has been legally advised that the said claim against the
Company is unsustainable and there is no likelihood of any liability
arising against the Company.
4. The Company is eligible for certain incentives in respect of its
investment in plant and machinery towards expansion/technical
upgradation of the OFC Unit pursuant to confirmation received under the
Industrial Promotion Policy, 2014 read with Madhya Pradesh Nivesh
Protsahan Yojna, 2014 of the Government of Madhya Pradesh. Accordingly,
the Company has accrued, interalia, VAT and CST assistance by way of
reimbursement (net of input tax rebate on the amount of VAT and CST)
effective from 27th March, 2014, for a period of 10 years, subject to
compliance with certain eligibility conditions attached thereto. The
same shall be appropriately dealt with in the Books of Account as and
when the Company''s claim for reimbursement from time to time during
the eligibility period is formally approved by the designated competent
authority of the State Government.
5. The Provision for tax has been made as per Minimum Alternate
Tax(MAT) under section 115JB of the Income Tax Act, 1961. The Company
is entitled to avail credit under section 115JA(1A). Accordingly, MAT
credit entitlement has been considered as an asset.
6. In the opinion of the management, the decline in the market value
of quoted Non-current investment (trade) in a Company (carrying cost
Rs.3193.75 lacs) by Rs. 1347.32 lacs (Rs. 1937.79 lacs) at the year end
is temporary, in view of the strategic long term nature of the
investment and having regard to intrinsic asset base/net worth and
future growth potential anchored on state-of- the-art manufacturing
facilities of the investee company and hence, does not call for any
provision there against. However, there is no diminution in the value
of quoted Non-current investments, if market value of all Non-current
investments is taken together.
7. Employee Benefits:
(a) The Company''s defined benefit plans include the approved funded
gratuity scheme which is administered through group gratuity scheme
with Life Insurance Corporation of India and non-funded schemes viz.
Pension (applicable only to certain categories of employees). Such
defined benefits are provided for in the Statement of Profit and Loss
based on valuations, as at the Balance Sheet date, made by independent
actuaries. Disclosures for defined benefit plans based on actuarial
reports as on March 31,2015 are summarised below:
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
Information relating to experience adjustments to plan assets and
liabilities as required by Para 120(n)(ii) of the Accounting Standard
(AS-15) (revised) on employee Benefits is not available with the
Company. However, the impact of the same is not likely to be material.
(b) Company''s contribution to defined contribution schemes such as
approved and recognised Provident/Family Pension Fund, approved
Superannuation Fund and contribution to Employees State Insurance (on
selective basis as applicable) are charged to the Statement of Profit
and Loss as incurred. The Company has no further obligations beyond its
contributions. The Company has recognised the following contributions
to Provident/Family Pension and Superannuation Funds and towards
Employees State Insurance as an expense and included in employee
benefits expense in the Statement of Profit and Loss:
8. Segment Information:
The Company has identified two reportable business segments as the
primary segment viz. Cables and EPC (Engineering, Procurement and
Construction). Segments have been identified and reported taking into
account nature of products and services, the deferring risks and
returns, the organisation structure and the internal business reporting
systems. A brief description of the types of products and services
provided by each reportable segment is as follows:
"Cables"- The Company manufactures and markets various types of
cables including telecommunication cables, other types of wires &
cables and FRP rods/glass rovings, etc.
"EPC" (Engineering, Procurement and Construction) -The Company
undertakes and executes contracts and provide services with or without
materials, as the case may be.
(a) Primary Segment Information (by business segments):
The following table presents revenue and profit/(loss) information
regarding business segments for the year(s) ended March 31, 2015 and
March 31, 2014 and certain liabilities information regarding business
segments as at March 31, 2015 and March 31,2014.
(i) All the assets of the Company, except the carrying amount of assets
aggregating to Rs. 1973.25 lacs (Rs. 770.30 lacs) are within India.
(ii) The Company has common fixed assets for producing goods/providing
services to Domestic Market as well as for Overseas Market. Hence,
separate figures for fixed assets/additions to fixed assets have not
been furnished.
9. Disclosures in respect of related parties as defined in Accounting
Standard (AS-18), with whom transactions were entered into at an
arm''s length basis and in the ordinary course of business during the
year are given below:
Subsidiaries : August Agents Ltd.(AAL), Insilco Agents Ltd.(IAL),
Laneseda Agents Ltd.(LAL)
Joint Venture : Birla Ericsson Optical Ltd.(BEOL)
Enterprise over which a director is able : Shakun Polymers Ltd. (SPL)
to exercise significant influence
Key Management Personnel : Shri Y.S. Lodha ( Managing Director)
The Company by itself or along-with its subsidiaries hold more than 20%
of the voting power of certain bodies corporate. The Company has been
legally advised that it does not have any "significant influence"
in the said bodies corporate as defined in Accounting Standard (AS-18)
- "Related Party Disclosure" and accordingly, has not considered
the above investees as related parties under (AS-18).
(i) Provision for contribution to gratuity fund or otherwise, leave
encashment (compensated absences) on retirement which are based on
actuarial valuation on an overall Company basis are not included in the
remuneration to key managerial personnel.
(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) All the transactions with related parties were on arm''s length
basis and in the ordinary course of business.
10. Leases:
(a) Operating Lease
The Company has taken certain office premises under operating lease
agreements. The lease agreements generally have an escalation clause
and are not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by lease
agreements. The aggregate lease rental of Rs. 108.51 lacs (Rs. 81.44
lacs) are charged to the Statement of Profit and Loss.
(d) Remittance in Foreign Currency on account of Dividend:
No remittance in foreign currency on account of dividend was made by
the Company directly. The Company has, however, paid dividend in
respect of equity shares held by certain non-resident shareholders on
repatriation basis. These, interalia, include portfolio investment and
direct investment where the amount is also credited to Non-Resident
External Account (NRE A/c). The amount of dividend indirectly remitted
to such non-resident shareholders cannot be ascertained.
11. The Company has reclassified previous year''s figures to conform
to current year''s classification. The figures in brackets are those
in respect of the previous accounting year.
12. The salient features of the Financial Statements of Subsidiaries
and a Joint Venture are given in a separate statement attached hereto.
The information relating to the subsidiaries and a Joint Venture has
also been included in the Consolidated Financial Statements to the
extent necessary and relevant.
Mar 31, 2014
1. NATURE OF OPERATIONS
The Company is engaged in the business of manufacturing and sale of
Telecommunication cables, other types of wires & cables, FRP rods/Glass
rovings, etc. and Engineering, Procurement and Construction (EPC)
business.
2. The Company has only one class of shares referred to as equity
shares having nominal value of Rs.10/- each. The holders of equity
shares are entitled to one vote per share. The Company declares and
pays dividend in Indian Rupees. The dividend proposed by Board of
Directors is subject to approval of shareholders in the ensuing Annual
General Meeting. For the year ended 31st March 2014, the amount of per
share dividend recognised for distribution to equity shareholders was
Rs.2/- per share, subject to approval of shareholders.
3. The loans of Parent Company from banks are secured by way of
hypothecation of stock of Inventories, cash and other current assets,
book debts, outstanding moneys, receivables, claims, etc., both present
and future, and are further secured by way of hypothecation of moveable
fi xed assets, both present and future, ranking pari-passu interse and
fi rst charge created by way of joint mortgage by deposit of title
deeds of certain immovable properties of the Company. As a collateral
security, Parent Company loans are additionally secured by way of
pledge of 12,50,000 equity shares and cross corporate guarantee of
Joint venture. SupplierÂs credit (in foreign currency) is repayable
in full in the year 2016 and carries interest @ 2.04% (rate as on the
reporting date).
4. The loans of Joint venture from banks are secured
by way of hypothecation of stock of Inventories, cash and other current
assets, book debts, outstanding moneys, receivables, claims, etc., both
present and future, and are further secured by way of hypothecation of
movable fi xed assets, both present and future, and fi rst charge
created by way of joint mortgage by deposit of title deeds of certain
immovable properties of the Company. As a collateral security these
loans are also backed by a cross corporate guarantee of the Parent
Company. Term loan is repayable in eight quarterly instalments
commencing from March, 2014 and carries interest @ 13.30% (rate as on
the reporting date). SupplierÂs credit (in foreign currency) is
repayable in full in the year 2016 and carries interest @ 1.98% - 2.04%
(rate as on the reporting date).
5. As per renewed/revised terms and
conditions, loans taken by Parent Company from bodies corporate
amounting to Rs. 3000.00 lacs are repayable in full in the year 2015
and Rs. 2400.00 lacs are repayble in the year 2017 respectively. These
loans carry interest @ 10.50% and 11.00% (rate as on the reporting
date).
6. Loans taken by Joint venture from bodies corporate are
repayable in full in the year 2015 and carries interest @ 10.50% (rate
as on the reporting date).
7. Working capital loans/trade credits from banks being working
capital credit facilities, sanctioned by 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, interalia,
demand repayment in case of non-compliance of terms and conditions of
sanctions or deterioration in the loan accounts in any manner.
8. Working capital loans (both fund and non-fund based) from State
Bank of India (SBI) and State Bank of Patiala (SBP) are secured by
hypothecation of the stock of inventories, cash and other current
assets, book debts, outstanding moneys, receivables, claims, etc., both
present and future, and are further secured by way of hypothecation of
moveable fi xed assets, both present and future, ranking pari-passu and
fi rst charge created by way of joint mortgage by deposit of title
deeds of certain immovable properties of the Parent Company and Joint
Venture. As a collateral security, the credit facilities from SBI of
Parent Company are additionally secured by way of pledge of 12,50,000
equity shares and cross corporate guarantee of Joint Venture.
9. Contingent liabilities and Commitments (to the extent not provided
for) -
(a) Contingent liabilities :
(i) Claims against the Company not acknowledged as debts Rs.96.75 lacs
(Rs. Nil).
(ii) Pending cases with income tax appellate authorities where income
tax department has preferred appeals - liability not ascertainable.
(iii) Sales tax matter under litigation Rs. 18.96 lacs (Rs Nil).
(iv) Appeals preferred by the Company against the claim/levy of
differential sales tax due to timely non-submission of declaration
forms for concessional sales tax. The demand(s)/levy on merits of the
cases have been stayed and are pending before the appellate
authorities, liabilities against which are unascertainable until final
outcome in the pending cases.
(v) Cross corporate guarantee given by the Company as a collateral
security against working capital credit facilities aggregating to
Rs.10700.00 lacs (outstanding as on March 31, 2014 Rs.6845.51 lacs)
sanctioned by a bank to Birla Ericsson Optical Limited, a joint
venture.
The future cash outflow in respect of items (i) to (iii) above is
determinable only on receipt of the decisions/judgements in the cases
pending at various forums and authorities concerned.
(b) Commitments:
(i) Estimated amount of contracts remaining to be executed on Capital
Account (Net of advances) and not provided for Rs. 277.79 lacs
(Rs.352.49 lacs).
(ii) Commitment relating to Derivatives and lease arrangements are
disclosed in Note No. 37 and Note No. 41 respectively.
10. The Company has filed a law suit against an overseas supplier and
its Indian agent. The supplier in order to overreach the said law suit
invoked alleged arbitration agreement which is subject matter of the
Suit filed by the Company, interalia, claiming recovery of an aggregate
amount equivalent to Rs.3974.88 lacs as at 31st March, 2014, as damages
for the unsupplied goods for the period from October, 2002 to
September, 2006. The Civil Court stayed the Arbitration proceedings and
the said stay order has been confirmed by the High Court of Madhya
Pradesh at Jabalpur and also by the Hon''ble Supreme Court. An order of
the High Court of Madhya Pradesh referring the parties to Arbitration
has also been stayed by the Hon''ble Supreme Court in the Special Leave
Petitions filed by the Company, which are pending before the Hon''ble
Supreme Court. Based on appraisal of the matter, the Company has been
legally advised that the said claim against the Company is
unsustainable and there is no likelihood of any liability arising
against the Company.
11. Trade receivables (considered good) and outstanding include Rs.
195.86 lacs (Rs. 191.93 lacs) withheld by a customer against various
bills which has been appropriately contested by the Company. Based on
the relevant contract, the Company does not expect any material
adjustments, in the books of the account.
12. 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
allowed.
13. In the opinion of the management, the decline in the market value
of quoted Non-current investment (trade) in a Company (carrying cost
Rs.3193.75 lacs) by Rs.1937.79 lacs at the year end is temporary, in
view of the strategic long term nature of the investment and having
regard to intrinsic asset base/net worth and future growth potential
anchored on state-of-the-art manufacturing facilities of the investee
company and hence, does not call for any provision there against.
However, there is no diminution in the value of quoted Non-current
investments, if market value of all Non-current investments is taken
together.
14. Employee Benefits:
(a) The Company''s defined benefit plans include the approved funded
Gratuity scheme which is administered through Group Gratuity scheme
with Life Insurance Corporation of India and non- funded schemes viz.
Pension (applicable only to certain categories of employees). Such
defined benefits are provided for in the Statement of Profit and Loss
based on valuations, as at the Balance Sheet date, made by independent
actuaries. Disclosures for defined benefit plans based on actuarial
reports as on March 31, 2014 are summarised below:
15. Segment Information:
The business segment of the Company is divided into two categories i.e.
Cables and EPC (Engineering, Procurement and Construction). A brief
Description of the types of products and Services provided by each
reportable segment is as follows:
"Cables"- The Company manufactures and markets various types of
cables including Telecommunication cables, other types of wires &
cables and FRP rods/Glass rovings, etc.
"EPC" (Engineering, Procurement and Construction) -The Company
undertakes and executes contracts and provide services with or without
materials, as the case may be.
39. Disclosures in respect of related parties as defined in Accounting
Standard (AS-18), with whom transactions were carried out in the
ordinary course of business during the year are given below:
Subsidiaries : August Agents Ltd.(AAL), Insilco Agents Ltd.(IAL),
Laneseda Agents Ltd.(LAL)
Joint Venture : Birla Ericsson Optical Ltd.(BEOL)
Enterprise over
which a director
is able to
exercise significant
influence : Shakun Polymers Limited (SPL)
Key Management
Personnel : Shri Y.S. Lodha ( Managing Director)
The Company by itself or along-with its subsidiaries hold more than 20%
of the voting power of certain bodies corporate. The Company has been
legally advised that it does not have any "significant influence in
the said bodies corporate as defined in Accounting Standard (AS-18) -
"Related Party Disclosure and accordingly, has not considered the
above investees as related parties under (AS-18).
16. The Company has reclassified previous year''s figures to conform to
current year''s classification. The figures in brackets are those in
respect of the previous accounting year.
17. 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 a general exemption from compliance with
Section 212 of the Companies Act, 1956, subject to fulfillment of
conditions stipulated in the circular. The Company has satisfied the
conditions stipulated in the circular and hence is entitled to the
exemption. Necessary information relating to the subsidiaries has been
included in the Consolidated Financial Statements.
Mar 31, 2013
1. NATURE OF OPERATIONS
The Company is engaged in the business of manufacturing and sale of
Telecommunication cables, other types of wires & cables, FRP rods/Glass
rovings, etc. and Engineering, Procurement and Construction (EPC)
business.
(a) Working capital loans/trade credits from banks being working
capital credit facilities, sanctioned by 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, interalia,
demand repayment in case of non-compliance of terms and conditions of
sanctions or deterioration in the loan accounts in any manner.
(b) Working capital loans (both fund and non-fund based) from State
Bank of India (SBI) and State Bank of Patiala (SBP) are secured by
hypothecation of the stock of inventories, cash and other current
assets, book debts, outstanding moneys, receivables, claims, etc., both
present and future, and are further secured by way of hypothecation of
moveable fixed assets, both present and future, ranking pari-passu
interse and first charge created by way of joint mortgage by deposit of
title deeds of certain immovable properties of the Company. As a
collateral security, the credit facilities from SBI are additionally
secured by way of pledge of 12,50,000 equity shares and cross corporate
guarantee of Birla Ericsson Optical Limited, a joint venture.
2. Contingent liabilities and Commitments (to the extent not provided
for) -
(a) Contingent liabilities
(i) Claims against the Company not acknowledged as debts Rs. Nil
(Rs.6.17 lacs).
(ii) Pending cases with income tax appellate authorities where income
tax department has preferred appeals - liability not ascertainable.
(iii) Appeals preferred by the Company against the claim/levy of
differential sales tax due to timely non-submission of declaration
forms for concessional sales tax. The demand(s)/levy on merits of the
cases have been stayed and are pending before the appellate
authorities, liabilities against which are unascertainable until final
outcome in the pending cases.
(iv) Bills of exchange under letter of credit discounted with a bank
and outstanding at the end of the year Rs. Nil (Rs. 47.72 lacs).
(v) Cross corporate guarantee given by the Company as a collateral
security against working capital credit facilities aggregating to
Rs.7000.00 lacs (outstanding as on March 31, 2013 Rs. 4470.66 lacs)
sanctioned by a bank to Birla Ericsson Optical Limited, a joint
venture.
The future cash outflow in respect of items (i) to (iii) above is
determinable only on receipt of the decisions/judgements in the cases
pending at various forums and authorities concerned.
(b) Commitments:
(i) Estimated amount of contracts remaining to be executed on Capital
Account (Net of advances) and not provided for Rs. 352.49 lacs (Rs.
71.53 lacs).
(ii) Commitment relating to Derivatives and lease arrangements are
disclosed in Note No. 36 and Note No. 40 respectively.
3. The Company has filed a law suit against an overseas supplier and
its Indian agent. The supplier in order to overreach the said law suit
invoked alleged arbitration agreement which is subject matter of the
Suit filed by the Company, interalia, claiming recovery of an aggregate
amount equivalent to Rs.3945.31 lacs as at 31st March, 2013, as damages
for the unsupplied goods for the period from October, 2002 to
September, 2006. The Civil Court stayed the Arbitration proceedings and
the said stay order has been confirmed by the High Court of Madhya
Pradesh at Jabalpur and also by the Hon''ble Supreme Court. An order
of the High Court of Madhya Pradesh referring the parties to
Arbitration has also been stayed by the Hon''ble Supreme Court in the
Special Leave Petitions filed by the Company, which are pending before
the Hon''ble Supreme Court. Based on appraisal of the matter, the
Company has been legally advised that the said claim against the
Company is unsustainable and there is no likelihood of any liability
arising against the Company.
4. Trade receivables (considered good) and outstanding include Rs.
191.93 lacs (Rs. 300.41 lacs) withheld by a customer against various
bills which has been appropriately contested by the Company. Based on
the relevant contract, the Company does not expect any material
adjustments, in the books of the account.
5. 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
allowed.
6. In the opinion of the management, the aggregate decline in the
market value of quoted Non-current investments (trade) in a joint
venture and in another Company (carrying cost Rs. 4093.76 lacs) by
Rs.1877.98 lacs at the year end is temporary, in view of the strategic
long term nature of the investment and having regard to intrinsic asset
base/net worth and future growth potential anchored on state-of-the-art
manufacturing facilities of the investee companies and hence, does not
call for any provision there against. However, there is no diminution
in the value of quoted Non-current investments, if market value of all
Non-current investments is taken together.
7. Employee Benefits:
(a) The Company''s defined benefit plans include the approved funded
Gratuity scheme which is administered through Group Gratuity scheme
with Life Insurance Corporation of India and non- funded schemes viz.
Pension (applicable only to certain categories of employees). Such
defined benefits are provided for in the Statement of Profit and Loss
based on valuations, as at the Balance Sheet date, made by independent
actuaries. Disclosures for defined benefit plans based on actuarial
reports as on March 31, 2013 are summarised below:
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
Information relating to experience adjustments to plan assets and
liabilities as required by Para 120(n)(ii) of the Accounting Standard
(AS-15) (revised) on employee Benefits is not available with the
Company. The impact of the same is not material.
(b) Company''s contribution to defined contribution schemes such as
Government administered Provident/Family Pension Fund and approved
Superannuation Fund are charged to the Statement of Profit and Loss as
incurred. The Company has no further obligations beyond its
contributions. The Company has recognised the following contributions
to Provident/ Family Pension and Superannuation Funds as an expense and
included in employee benefits expense in the Statement of Profit and
Loss.
8. Segment Information:
The business segment of the Company is divided into two categories i.e.
Cables and EPC (Engineering, Procurement and Construction). A brief
Description of the types of products and Services provided by each
reportable segment is as follows:
"Cables"- The Company manufactures and markets various types of
cables including Telecommunication cables, Other types of wires &
cables and FRP rods/Glass rovings, etc.
"EPC" (Engineering, Procurement and Construction) -The Company
undertakes and executes contracts and provide services with or without
materials, as the case may be.
(a) Primary Segment Information (by business segments):
The following table presents revenue and profit/(loss) information
regarding business segments for the year(s) ended March 31, 2013 and
March 31, 2012 and certain liabilities information regarding business
segments as at March 31, 2013 and March 31, 2012.
9. Disclosures in respect of related parties as defined in Accounting
Standard (AS-18), with whom transactions were carried out in the
ordinary course of business during the year are given below:
Subsidiaries : August Agents Ltd. (AAL), Insilco Agents Ltd. (IAL),
Laneseda Agents Ltd. (LAL)
Joint Venture : Birla Ericsson Optical Ltd. (BEOL)
Enterprise over which a director is able : Shakun Polymers Limited
(SPL) to exercise significant influence
Key Management Personnel : Shri Y.S. Lodha ( Managing Director)
The Company by itself or along-with its subsidiaries hold more than 20%
of the voting power of certain bodies corporate. The Company has been
legally advised that it does not have any "significant influence"
in the said bodies corporate as defined in Accounting Standard (AS-18)
- "Related Party Disclosure" and accordingly, has not considered
the above investees as related parties under (AS-18).
* As the liability of gratuity and leave encashment is provided on an
actuarial basis for the company as a whole, therefore amount not
included above.
(i) 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.
(ii) Transactions and balances relating to reimbursement of expenses
to/from the above related parties have not been considered.
(iii) Transactions with related parties are done at arm''s length
basis.
10. Leases:
(a) Operating Lease:
The Company has taken certain office premises under operating lease
agreements. The lease agreements generally have an escalation clause
and are not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by lease
agreements. The aggregate lease rental of Rs. 66.98 lacs (Rs.75.48
lacs) are charged to the Statement of Profit and Loss.
11. There is no impairment of assets during the year.
12. The Company has reclassified previous year''s figures to conform
to current year''s classification. The figures in brackets are those
in respect of the previous accounting year.
13. 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 a general exemption from compliance with
Section 212 of the Companies Act, 1956, subject to fulfillment of
conditions stipulated in the circular. The Company has satisfied the
conditions stipulated in the circular and hence is entitled to the
exemption. Necessary information relating to the subsidiaries has been
included in the Consolidated Financial Statements.
Mar 31, 2012
1. NATURE OF OPERATIONS
The Company is engaged in the business of manufacturing and sale of
Telecommunication cables, other types of wires & cables, FRP rods/Glass
rovings, etc. and Engineering, Procurement and Construction (EPC)
business.
(a) There is no variation or change in the issued, subscribed and fully
paid-up equity share capital structure during the year. Therefore, no
seperate disclosure of reconciliation of the number of equity share
outstanding as at the beginning and at the end of the year is required.
(b) The Company has only one class of shares referred to as equity
shares having nominal value of Rs.10/-. The holders of equity shares
are entitled to one vote per share.
(a) Working capital loans/trade credits from banks being working
capital credit facilities, sanctioned by 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, interalia,
demand repayment in case of non-compliance of terms and conditions of
sanctions or deterioration in the loan accounts in any manner
whatsoever, etc.
(b) Working capital loans (both fund and non-fund based) from State
Bank of India (SBI) and State Bank of Patiala (SBP) are secured by
hypothecation of the stock of inventories, cash and other current
assets, book debts, outstanding moneys, receivables, claims, bills,
invoices, documents, contracts, etc., both present and future, and are
further secured by way of hypothecation of moveable fixed assets, both
present and future, ranking pari-passu interse and first charge created
by way of joint mortgage by deposit of title deeds of immovable
properties of the Company. As a collateral security, the credit
facilities from SBI are additionally secured by way of pledge of
12,50,000 equity shares and cross corporate guarantee of Birla Ericsson
Optical Limited, a joint venture.
2. Contingent liabilities and Commitments (to the extent not provided
for) :
(a) Contingent liabilities :
(i) Claims against the Company not acknowledged as debts Rs.6.17 lacs
(Rs.6.17 lacs).
(ii) Pending cases with income tax appellate authorities where income
tax department has preferred appeals - liability not ascertainable.
(iii) Appeals preferred by the Company against the claim/levy of
differential sales tax due to timely non-submission of declaration
forms for concessional sales tax. The demand(s)/levy on merits of the
cases have been stayed and are pending before the appellate
authorities, liabilities against which are unascertainable until final
outcome in the pending cases.
(iv) Bills of exchange under letter of credit discounted with a bank
and outstanding at the end of the year Rs. 47.72 lacs (Nil) (Since
received Rs. 23.82 lacs).
(v) Cross corporate guarantee given by the Company as a collateral
security against working capital credit facilities aggregating to
Rs.5400.00 lacs (outstanding as on March 31, 2012 Rs. 2819.27 lacs)
sanctioned by a bank to Birla Ericsson Optical Limited, a joint
venture.
The future cash outflow in respect of items (i) to (iii) above is
determinable only on receipt of the decisions/judgements in the cases
pending at various forums and authorities concerned.
(b) Commitments:
(i) Estimated amount of contracts remaining to be executed on Capital
Account (Net of advances) and not provided for Rs. 71.53 lacs (Rs.
43.57 lacs).
(ii) Commitment relating to Derivatives and lease arrangements are
disclosed in Note No. 35 and Note No. 39 respectively.
3. The Company has filed a law suit against an overseas supplier and
its Indian agent. The supplier in order to overreach the said law suit
invoked alleged arbitration agreement which is subject matter of the
Suit filed by the Company, interalia, claiming recovery of an aggregate
amount equivalent to Rs.4245.70 lacs as at 31st March, 2012, as damages
for the unsupplied goods for the period from October, 2002 to
September, 2006. The Civil Court stayed the Arbitration proceedings and
the said stay order has been confirmed by the High Court of Madhya
Pradesh at Jabalpur and also by the Hon'ble Supreme Court. An order of
the High Court of Madhya Pradesh referring the parties to Arbitration
has also been stayed by the Hon'ble Supreme Court in the Special Leave
Petitions filed by the Company, which are pending before the Hon'ble
Supreme Court. Based on appraisal of the matter, the Company has been
legally advised that the said claim against the Company is
unsustainable and there is no likelihood of any liability arising
against the Company.
4. Trade receivables (considered good) and outstanding include Rs.
300.41 lacs (Rs. 201.51 lacs) withheld by a customer against various
bills which has been appropriately contested by the Company. Based on
the relevant contract, the Company does not expect any material
adjustments, in the books of the account.
5. In the opinion of the management, the aggregate decline in the
market value of quoted Non-current investments (trade) in a joint
venture and an other Company (carrying cost Rs. 4093.76 lacs) by
Rs.1819.09 lacs at the year end is temporary, in view of the strategic
long term nature of the investment and having regard to intrinsic asset
base/net worth and future growth potential anchored on state-of-
the-art manufacturing facilities of the investee companies and hence,
does not call for any provision there against. However, there is no
diminution in the value of quoted Non-current investments, if market
value of all Non-current investments is taken together.
6. Employee Benefits:
(a) The Company's defined benefit plans include the approved funded
Gratuity scheme which is administered through Group Gratuity scheme
with Life Insurance Corporation of India and non- funded schemes viz.
Pension (applicable only to certain categories of employees). Such
defined benefits are provided for in the Statement of Profit and Loss
based on valuations, as at the Balance Sheet date, made by independent
actuaries.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
Information relating to experience adjustments to plan assets and
liabilities as required by Para 120(n)(ii) of the Accounting Standard
(AS-15) (revised) on employee Benefits is not available with the
Company. The impact of the same is not material.
(b) Company's contribution to defined contribution schemes such as
Government administered Provident/Family Pension Fund and approved
Superannuation Fund are charged to the Statement of Profit and Loss as
incurred. The Company has no further obligations beyond its
contributions. The Company has recognised the following contributions
to Provident/ Family Pension and Superannuation Funds as an expense and
included in employee benefits expense in the Statement of Profit and
Loss.
7. Segment Information:
The business segment of the Company is divided into two categories i.e.
Cables and EPC (Engineering, Procurement and Construction). A brief
Description of the types of products and Services provided by each
reportable segment is as follows:
"Cables"- The Company manufactures and markets various types of cables
including Telecommunication cables, Other types of wires & cables and
FRP rods/Glass rovings, etc.
"EPC" (Engineering, Procurement and Construction) -The Company
undertakes and executes contracts and provide services with or without
materials, as the case may be.
(a) Primary Segment Information (by business segments):
The following table presents revenue and profit/(loss) information
regarding business segments for the year(s) ended March 31, 2012 and
March 31, 2011 and certain liabilities information regarding business
segments as at March 31, 2012 and March 31, 2011.
(i) All the assets of the Company, except the carrying amount of assets
aggregating to Rs.1616.23 lacs (Rs.1939.18 lacs) are within India.
(ii) The Company has common fixed assets for producing goods/providing
services to Domestic Market as well as for Overseas Markets. Hence,
separate figures for fixed assets/additions to fixed assets have not
been furnished.
8. Disclosures in respect of related parties as defined in Accounting
Standard (AS-18), with whom transactions were carried out in the
ordinary course of business during the year are given below:
Subsidiaries : August Agents Ltd., Insilco Agents Ltd., Laneseda Agents
Ltd.
Joint Venture : Birla Ericsson Optical Ltd.(BEOL)
Key Management Personnel : Shri Y.S.Lodha (Managing Director)
The Company by itself or along-with its subsidiaries hold more than 20%
of the voting power of certain bodies corporate. The Company has been
legally advised that it does not have any "significant influence" in
the said bodies corporate as defined in Accounting Standard (AS-18) -
"Related Party Disclosure" and accordingly, has not considered the
above investees as related parties under (AS-18).
(i) 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.
(ii) Transactions and balances relating to reimbursement of expenses
to/from the above related parties have not been considered.
(iii) Transactions with related parties are done at arm's length basis.
9. The Company has taken certain office premises under operating
lease agreements. The lease agreements generally have an escalation
clause and are not non-cancellable and are renewable by mutual consent
on mutually agreed terms. There are no restrictions imposed by lease
agreements. The aggregate lease rental of Rs. 75.48 lacs (Rs.71.12
lacs) are charged to the Statement of Profit and Loss.
10. The Company has reclassified previous year's figures to conform to
current year's classification as per revised Schedule VI notified under
the Companies Act, 1956. The adoption of revised Schedule VI does not
impact recognition and measurement principles followed for preparation
of financial statements save and except presentation and disclosure as
prescribed therein. The figures in brackets are those in respect of
the previous accounting year.
11. 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 a general exemption from compliance with
Section 212 of the Companies Act, 1956, subject to fulfillment of
conditions stipulated in the circular. The Company has satisfied the
conditions stipulated in the circular and hence is entitled to the
exemption. Necessary information relating to the subsidiaries has been
included in the Consolidated Financial Statements.
Mar 31, 2011
1. NATURE OF OPERATIONS
Vindhya Telelinks Limited is engaged in the business of manufacturing
and sale of ÃCablesà including Jelly Filled Telephone Cables, Optic
Fibre Telephone Cables, Aerial Bunched Cable and Fibre Ribbon, etc. and
Engineering, Procurement and Construction (ÃEPCÃ) business.
2. Contingent liabilities (not provided for) in respect of:
i. Estimated amount of contracts remaining to be executed on Capital
Account (Net of advances) and not provided for Rs.43.57 lacs (Rs.152.02
lacs).
ii Claims against the Company not acknowledged as debts Rs.Nil
(Rs.Nil).
iii Pending cases with Income-Tax Appellate authorities where Income
Tax Department has preferred Appeals - liability not ascertainable*.
*Based on the discussions with the solicitors and interpretation of
relevant provisions, the management believes that these appeals are not
sustainable against the Company.
3. The Company has filed a law suit against an overseas supplier and
its agent relating to the validity and existence of an alleged
agreement before a competent court which is already seized of the said
suit. An interim application was moved by the said supplier under the
said law suit which was disposed off by the competent court as well as
the first appellate court. Aggrieved by the order of the first
appellate court, the said supplier as well as the Company preferred
writ petitions before the High Court of Madhya Pradesh at Jabalpur
which disposed off the writ petitions but the order of the High Court
does not in any way reflect upon merits or otherwise of the claim of
the overseas supplier for any recovery. The supplier in order to
overreach the said law suit had initiated an arbitration interalia
claiming recovery of value of the unsupplied goods for the period from
October, 2002 to September, 2006 aggregating to Rs.6171.55 lacs (value
as on March 31, 2011). Based on appraisal of the matter, the Company
has been legally advised that the said claim against the Company is
unsustainable and there is no likelihood of any liability arising
against the Company.
4. Sundry Debtors (considered good) and outstanding include Rs.201.51
lacs (Rs.86.73 lacs) withheld by a customer against various bills which
has been appropriately contested by the Company. Based on the relevant
contract, the Company does not expect any material adjustments, in the
books of the account.
5. 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.558.49
lacs (Rs. 628.54 lacs). Since there is no time limit for utilization of
these balances and based on the alternative mechanism already devised
and keeping in view the reduction of cenvat credit balances on a year
on year basis, in the opinion of the management there will not be any
impact on the profit of the reporting period.
6. In the opinion of the management, the decline in the market value of
a quoted long term investment (trade) (carrying cost Rs.900.01 lacs) by
Rs.192.79 lacs at the year end is temporary, in view of the strategic
long term nature of the investment and asset base of the investee
company and hence, does not call for any provision there against.
However, there is no diminution in the value of long term quoted
investments, if market value of all investments is taken together.
7. As there is no taxable income for the year both under regular and
as per Section 115JB (MAT) of the Income Tax Act, 1961, no provision
for taxation has been made.
8. Employee Benefits:
(a) The Company's defined benefit plans include the approved funded
Gratuity scheme which is administered through Group Gratuity scheme
with Life Insurance Corporation of India and non-funded schemes viz.
Pension (applicable only to certain categories of employees). Such
defined benefits are provided for in the Profit and Loss Account based
on valuations, as at the Balance Sheet date, made by independent
actuaries.
Note:
Information relating to experience adjustments to plan assets and
liabilities as required by Para 120(n)(ii) of the Accounting Standard
15 (Revised) on Employee Benefits is not available with the Company.
The impact of the same is not material.
9. Segment Information:
The business segment of the Company is divided into two categories i.e.
Cables and EPC (Engineering, Procurement and Construction). A brief
Description of the types of products and Services provided by each
reportable segment is as follows:
"Cables"- The Company manufactures and markets various types of cables
including Jelly Filled Telephone Cables, Optical Fibre Cables, Aerial
Bunched Cable and Fibre Ribbon and others, etc.
"EPC" (Engineering, Procurement and Construction) -The Company
undertakes and executes contracts and provide services with or without
materials, as the case may be.
(i) Primary Segment Information (by business segments):
The following table presents revenue and profit/(loss) information
regarding business segments for the year(s) ended March 31, 2011 and
March 31, 2010 and certain liabilities information regarding business
segments as at March 31, 2011 and March 31, 2010.
Notes:
(a) All the assets of the Company, except the carrying amount of assets
aggregating to Rs.1939.18 lacs (Rs.831.60 lacs) are within India.
(b) The Company has common fixed assets for producing goods/providing
services to Domestic Market as well as for Overseas Markets. Hence,
separate figures for fixed assets/additions to fixed assets have not
been furnished.
10. Related Party Disclosure
Subsidiaries : August Agents Ltd., Insilco Agents Ltd., Laneseda Agents
Ltd.
Joint Venture : Birla Ericsson Optical Ltd.(BEOL)
Key Management Personnel : Shri Y.S.Lodha (Managing Director)
Note: The Company by itself or along-with its subsidiaries hold more
than 20% of the voting power of certain bodies corporate. The Company
has been legally advised that it does not have any Ãsignificant
influenceà in the said bodies corporate as defined in Accounting
Standard (AS-18)- ÃRelated Party Disclosureà and accordingly, has not
considered the above investees as related parties under (AS-18).
Notes:
(a) 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.
(b) Transactions and balances relating to reimbursement of expenses
to/from the above related parties have not been considered.
(c) Transactions with related parties are done at arm's length basis.
11. The Company has taken certain office premises under operating lease
agreements. The lease agreements generally have an escalation clause
and are not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by lease
agreements. The aggregate lease rental of Rs.71.12 lacs (Rs.51.59 lacs)
are charged to the Profit and Loss Account.
Mar 31, 2010
1. NATURE OF OPERATIONS
Vindhya Telelinks Limited is engaged in the business of manufacturing
and sale of ÃCablesà including Jelly Filled Telephone Cables, Optic
Fibre Telephone Cables, Aerial Bunched Cable and Fibre Ribbon, etc. and
Engineering, Procurement and Construction (ÃEPCÃ) business.
2. Segment Information
The business segment of the Company is divided into two categories i.e.
Cables and EPC (Engineering, Procurement and Construction). A brief
Description of the types of products and Services provided by each
reportable segment is as follows:
1. Cables- The Company manufactures and markets various types of
cables including Jelly Filled Telephone Cables, Optic Fibre Cables,
Aerial Bunched Cable and Fibre Ribbon, etc.
2. EPC (Engineering, Procurement and Construction) ÃThe Company
undertakes and executes Contracts and provide services with or without
materials, as the case may be.
3. Related Party Disclosure
Subsidiaries : August Agents Ltd.*, Insilco Agents Ltd.*, Laneseda
Agents Ltd.*
Joint Venture : Birla Ericsson Optical Ltd. (BEOL)
Key Management Personnel : Shri Y.S. Lodha (Managing Director) * No
transaction has taken place during the year.
4. The Company has accumulated CENVAT credit aggregating to Rs. 628.54
lacs as at March 31, 2010 (as appearing in Schedule 11 of Loans and
Advances) due to inverted duty structure. The management has devised
alternative mechanism for utilisation of the accumulated Cenvat credit
as going concern over a reasonable period of time and hence this does
not call for any provision thereagainst.
5. Contingent liabilities (not provided for) in respect of:
(i) Estimated amount of contracts remaining to be executed on Capital
Account (Net of advances) and not provided for Rs.152.02 lacs (Rs.10.66
lacs).
(ii) Claims against the Company not acknowledged as debts Rs. Nil (Rs.
8.09 lacs).
(iii) Pending cases with Income-Tax Appellate authorities where Income
Tax Department has preferred Appeals - liability not ascertainable*.
* Based on the discussions with the solicitors/meeting the terms and
conditions by the Company, the management believes that the Company has
a strong chance of success in the cases and hence no provision
thereagainst is considered necessary.
6. In the opinion of the management, the decline in the market value
of certain quoted long term investments (trade) (aggregate carrying
cost amount Rs.900.01 lacs) by Rs. 273.99 lacs at the year end is
temporary and hence, does not call for any provision thereagainst.
However, there is no diminution in the value of long term quoted
investments if market value of all investments is taken together.
7. The Company has filed a law suit against an overseas supplier and
its agent relating to the validity and existence of an alleged
agreement before a competent court which is already seized of the said
suit. The supplier in order to overreach the said Law Suit has
initiated an arbitration for claiming recovery of value of the
unsupplied goods for the period from October, 2002 to September, 2006
aggregating to Rs.5514.52 lacs (value as on March 31, 2010). The said
arbitration proceedings have been stayed by the order of the Competent
Court. The Company has been legally advised that the said claim against
the Company is unsustainable and there is no likelihood of any
liability arising against the Company.
8. Sundry Debtors (considered good) and outstanding for a period
exceeding six months include Rs. 86.73 lacs withheld by the customer
against various bills which has been appropriately contested by the
Company. Based on the relevant contract, the Company does not expect
any material adjustments, in the books of the account.
9. The Company has during the year, written back liability for
interest amounting to Rs. 29.51 lacs, no longer required as legally
advised on the basis of interpretation of various provisions of
relevant statutes and the rules made thereunder.
10. 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 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 one senior employee. These benefits are unfunded.
11. Pursuant to Accounting Standard (AS) 22 ÃAccounting for Taxes on
IncomeÃ, the Company, has, based on prudence, not recognized deferred
tax assets amounting to Rs. 625.27 lacs (Rs.873.96 lacs) on all the
timing differences including Rs. 172.98 lacs (Rs 180.38) on unabsorbed
depreciation.
11.1 In accordance with Explanation below Para 10 of Notified
Accounting Standard 9: Revenue Recognition, excise duty on sales
amounting to Rs.822.18 lacs (Rs.2677.47 lacs) has been reduced from
sales in the Profit and Loss Account and excise duty on decrease in
stocks amounting to Rs.7.98 lacs has been considered as income
(Rs.61.97 lacs as income on decrease in stocks) in Schedule 19 of the
financial statements.
12. Figures of previous year have been shown in brackets and regrouped
wherever necessary.
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