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Notes to Accounts of Universal Cables Ltd.
Mar 31, 2025
(n) Provisions, Contingent liabilities and Contingent Assets
The Company recognises a provision when there is a present obligation as a result of past event that probably
requires an outflow of resources and reliable estimates can be made of the amount of obligation The provisions are
reviewed at the end of each reporting period and are adjusted to reflect the current best estimates. The timing of
recognition requires application of judgement to existing facts and circumstances which may be subject to change. A
disclosure of contingent liability is made when there is possible obligation or a present obligation that will probably not
require outflow of resources or where a reliable estimate of the obligation cannot be made. Where there is a possible
obligation or a present obligation and likelihood of outflow of resources is remote, no provision or disclosure is made.
Provision for warranty related costs are recognised when the terms and conditions attached to and forming part of
the executed portion of the contract of sale of products and/or providing of services or both are assessed to have
underlying obligations to be met during the warranty period. The estimate of such warranty costs is revised annually.
Contingent assets are not recognised but disclosed in the Standalone Financial Statements , where economic inflow
is probable.
(o) Employee Benefits
(i) Defined Contribution Plans
Contributions to approved Superannuation Fund as per Companyâs scheme and Pension Fund/Employees
Recognised Provident Fund administered by Employees Provident Fund Organisation (EPFO), are recognised
as an expense in the Statement of Profit and Loss for the year when the employee renders the related service.
The Company recognises contributions payable under the relevant plan(s) as an expense, when an eligible
employee renders the related services.
(ii) Defined Benefit Plans
Gratuity, Pension and Compensated Absences benefits, payable as per Companyâs schemes are considered as
defined benefit schemes and are charged to Statement of Profit and Loss on the basis of actuarial valuation
carried out at the end of each financial year by independent actuaries using Projected Unit Credit Method. For
the purpose of presentation of defined benefit plans, the allocation between short term and long term provisions
is made as determined by the independent actuaries. Actuarial gains and losses are recognised in the Other
Comprehensive Income.
The Provident fund Contribution, other than Contribution to Employees Recognised Provident Fund administered
by EPFO, is made to an approved trust of the Company administered by the trustees. The Company has
representation on the board of trust. The Company is liable for shortfall, if any, in the fund assets based on the
government specified minimum rates of return and the same is recognised as an expense in the Statement of
Profit and Loss.
Ex-gratia or other amount disbursed on account of selective employees separation scheme or otherwise are
charged to Statement of Profit and Loss as and when incurred/determined.
(p) Operating Leases
(i) Where the Company is the Lessee
The Companyâs lease asset classes primarily consist of leases for Buildings. The Company, at the inception of
a contract, assesses whether the contract is a lease or not a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a time in exchange for a consideration. The
Company has elected not to recognise Right-of-use Assets and lease liabilities for short-term leases that have a
lease term of 12 months or less and leases of low-value assets and the corresponding lease rental paid are
directly charged to the Statement of Profit and Loss. The Company recognises the lease payments associated
with these leases as an expense over the lease term. The Company recognises a Right-of-use Asset and a
lease liability at the lease commencement date. The Right-of-use asset is initially measured at cost, which
comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial costs incurred. The Right-of-use Asset is subsequently depreciated using
the straight-line method from the commencement date to the end of the lease term. The lease liability is initially
measured at the present value of the lease payments that are not paid at the commencement date, discounted
using the Companyâs incremental borrowing rate. Subsequently, lease liabilities are measured on amortised
cost basis.
(ii) Where the Company is the Lessor
Lease under which the Company does not transfer substantially all the risks and benefits of ownership of the
asset is classified as operating lease. Assets subject to operating lease are included in Investment Property.
Lease income from operating lease is recognised in the Statement of Profit and Loss on a straight line basis over
the lease term except where the lease payments are structured to increase in line with expected general inflation.
Costs including depreciation are recognised as an expense in the Statement of Profit and Loss.
(q) Foreign Currency Transactions / Translations
Transactions in foreign currencies are initially recorded in the functional currency, by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items are translated into functional currency using the exchange rate prevailing at the
reporting date.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the exchange
rates different from those at which they were initially recorded during the year, or reported in previous Standalone
Financial Statements , are recognised as income or expenses in the Statement of Profit and Loss in the year in which
they arise.
(r) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders
of the Company by the weighted average number of the equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders
of the Company and the weighted average number of shares outstanding during the year is adjusted for the effect of
all dilutive potential equity shares.
(s) Cash and Cash Equivalents
Cash and Cash equivalent for the purposes of cash flow statement comprise cash on hand, cheques in hand, demand
deposits with banks and short-term investments with an original maturity of three months or less from the date of
acquisition which are subject to an insignificant risk of changes in value. Cash and Cash Equivalents consists of
balances with banks which are unrestricted for withdrawal and usage.
1.6 Indian Accounting Standard(s) Pronouncements
The Ministry of Corporate Affairs, Government of India notifies the new Indian Accounting Standards/Amendments to the
existing Indian Accounting Standards under Companies (Indian Accounting Standards) Rules, 2015 from time to time
which are evaluated for giving effect to in the preparation and presentation of Standalone Financial Statements to the
extent the same apply and extend to the Company.
Secured
(a) Loans from Banks are secured by way of hypothecation charge over movable Property, Plant and Equipment (excluding
assets specifically charged to specific project lender), both present and future, and charge created by way of mortgage by
deposit of title deeds of certain immoveable properties of the Company, ranking pari-passu interse amongst consortium
lender banks and term loan lenders (including Buyerâs Credit & Supplierâs Credit). Loans from Banks are further secured
by first or second pari-passu charge (specific to each term loan) by way of hypothecation of entire Current Assets, both
present and future, of the Company viz inventories, bills receivables, book debts, claims, etc. Rupee Term Loans from
Banks are repayable in equal quarterly instalments, over a period of five to seven years commencing from May, 2022 and
ending on March, 2031 and carry rate of interest varying from 9.25% to 10.60% per annum on the reporting date. Buyerâs
Credit/ Supplierâs Credit in Foreign Currency availed from Banks are due for repayment between April, 2025 to February,
2028 and carry rate of 3.25% to 5.21% per annum on the reporting date.
(b) Neither registration nor satisfaction of any charges are pending to be filed/registered with the Jurisdictional Registrar of
Companies beyond the statutory period in respect of security created by the Company in favour of lenders.
(c) Term Loans were applied for the purpose(s) for which the same were availed.
Unsecured
(d) Loans from Bodies Corporate and Related Parties presently carry rate of interest varying from 8.85% to 9.40% per annum
and are due for repayment between August, 2026 and March, 2028 as per the mutually agreed repayment schedule with
the concerned lenders. Further, the repayment of said Loans (excluding certain loan from a body corporate) is subject to
prior permission of the lead bank under a consortium banking arrangement of the Company for secured loans & borrowings.
(e) Rupee Term Loan from a Non-Banking Financial Company presently carry rate of interest at 10.60% per annum and is
repayable in equal quarterly instalments commencing from June, 2024 and ending on March, 2027.
(either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions
or deterioration in the sanctioned loan accounts in any manner.
(b) Working Capital Loans/Borrowings (both fund and non fund based) from Banks are secured by first and/or second charge
by way of hypothecation of entire Current Assets (specific to each term loan), both present and future, of the Company
viz. inventories, bills receivables, book debts (trade receivables), claims, etc. ranking pari-passu amongst the lender
consortium banks and certain secured term loan lender Banks; and are further secured by way of hypothecation of
moveable Property, Plant and Equipment (excluding assets specifically charged to specific project lender), both present
and future, and charge created by way of mortgage by deposit of title deeds of certain immovable properties of the
Company, ranking pari-passu interse amongst the lender consortium Banks and certain term loan lender Banks.
(c) Funds raised on short term basis have not been utilised for long term purposes and deployed for the purpose(s) they were
obtained.
(d) Bank Returns/Stock Statements filed by the Company with its Bankers are materially in agreement with the books of
account.
(e) Neither registration nor satisfaction of any charges are pending to be filed/registered with the Jurisdictional Registrar of
Companies beyond the statutory period in respect of security created by the Company in favour of lenders.
39. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of capital advances)
'' 24832.00 lakhs (previous year '' 2505.72 lakhs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto. The
governing terms and conditions whereof, inter-alia, provide for levy of liquidated damages, penalty, etc. on account of
non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made
on this account wherever considered necessary.
40. The standalone financial statements of the Company for the year ended 31st March, 2025 were approved and authorised for
issuance by the Board of Directors in its Meeting held on 22nd May, 2025. The Board of directors has also recommended a
dividend of '' 4/- (previous year '' 3/-) per fully paid up equity shares of '' 10/- each of the Company for the financial year ended
on 31st March. 2025 involving a payment of '' 1387.82 lakhs, subject to approval by the shareholders in the ensuing Annual
General Meeting of the Company.
Note(s) :
(i) The Company is contesting the demand for Terminal Tax liability raised by the Municipal Corporation of Satna (M.P.)
pertaining to financial years from 2002-03 to 2012-13, by challenging, inter-alia, the constitutional validity of alleged
provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Honâble
High Court of Madhya Pradesh, Jabalpur. Based on the legal evaluation, the likelihood of any liability arising on the
Company from the outcome of the said pending litigation is remote.
(ii) The Company does not expect outcomes of pending appeals arising from certain disallowances made in the income tax
assessments of earlier years to have a material adverse effect on its financial conditions, result of operations or cash
flows.
(b) Pension payable to select category of ex-employees (or to spouse upon death of the employee concerned) as
per Companyâs Scheme being a defined benefits plan, a non-funded scheme, is provided for based on actuarial
valuations done as per Projected Unit Credit Method. The most recent actuarial valuation of the change in
defined benefits obligation and net defined benefit liability were carried out as at 31st March, 2025 through an
independent fellow member of the Institute of Actuaries of India.
(ii) Provident Fund
The Company contributes its share of Provident Fund (a defined contribution scheme) as determined based on
specified percentage of the eligible payroll costs in an approved provident fund trust viz. Universal Cable Limited
Employee Provident Fund (except pertaining to employees of Companyâs Goa unit). The Company is liable for
shortfall, if any, in the fund asset based on the government specified/notified minimum rate of return. Based on the
valuation made by an independent Actuary, there is no shortfall in the fund assets as at 31st March, 2025. The
Companyâs contributions to defined contribution scheme including that made to Government administered Provident/
Family Pension Fund pertaining to Goa Unit are charged to Statement of Profit and Loss as incurred. The Company
has no further obligations beyond its contribution.
Note(s) :
(a) The balance unspent CSR amount of '' 51.69 lakhs pertaining to Ongoing CSR Projects 2024-25 has been transferred
subsequent to the end of the year in a Special Bank Account within the time prescribed therefor as per the provisions
of sub-section (6) of Section 135 of the Companies Act, 2013 read with rules made and clarifications issued thereunder.
(b) Against the earmarked unspent CSR amount of '' 40.90 lakhs in respect of an Ongoing CSR Project pertaining to
financial year 2022-23, the aggregate amount of '' 21.74 lakhs and '' 19.16 lakhs were spent in the financial year
2023-24 and 2024-25 respectively.
(c) The amount earmarked and spent towards CSR Projects pertaining to financial year 2024-25 includes accrued
interest income of '' 0.33 lakh on unspent CSR amount of an Ongoing Project relating to financial year 2022-23,
which was kept in a sperate bank account as per the provisions of sub-section (6) of Section 135 of the Companies
Act, 2013 read with rules made and clarifications issued thereunder.
(d) Excess spent/earmarked amount of '' 0.23 lakh during the financial year 2024-25 on CSR Projects shall be carried
forward for set-off in the ensuing financial year 2025-26 in accordance with the third proviso to Section 135(5) of the
Companies Act, 2013 and rules made thereunder.
The following methods and assumptions were used to estimate the fair values:
(a) The Equity Investments which are Quoted, the fair value has been taken at the market prices/ NAV of the same as on the
reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
(b) The derivative financial instruments which are unquoted, the fair value has been taken at based on value certificate given
by respective Banks. They are classified as Level 2 fair values in fair value hierarchy.
(c) The Equity Investments which are Unquoted, the fair value has been taken as per the valuation report certified by Chartered
Accountant(s) as on the reporting dates save and except investments in a power producer company, the fair value of
which has been taken at cost as per the terms of the Power Purchase Agreement (Refer Note No. 7). They are classified
as Level 3 fair values in fair value hierarchy.
(d) The derivative financial instruments which are quoted, the fair value has been taken at the market-price of the same as on
the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a)
recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the
standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the
company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS
113 âFair Value Measurementâ.
49. Financial Risk Management:
The Companyâs activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Credit
Risk, Market Risk and Liquidity Risk. The Company also uses derivative instruments on selective basis prudently to manage
the volatility of financial markets and minimise the adverse impact on its financial performance in accordance Risk Management
Policy framework.
(a) Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due
causing financial loss to the Company. The Company is exposed to credit risk from its operating activities primarily arising
from trade receivables from customers and other financial instruments.
Customer credit risk is managed as per the Companyâs established policy, procedures and control framework relating to
customer credit risk management. The Company assesses the credit quality of the counterparties taking into account
their financial position and credit worthiness, the age of specific receivable balance and the current and expected collection
trends, age of its contracts in progress, historically observed default over the expected life of trade receivables. Credit risk
on trade receivables is limited due to the Companyâs large and diverse customer base which includes public sector
enterprises (including metro railways), central/state power utilities, renowned private sector utilities and large industrial
customers having good credit rating(s). Credit risk is reduced to a significant extent if the turnkey project(s) have sufficient
financial closure in the form of assured funding/budgetary support from the Central/State Government(s) or its financing
agencies or commercial banks, etc. and achieving project milestone within the contracted completion schedule. Credit
risk is also actively managed to the extent feasible by securing payment through letter(s) of credit, advance payment and
(b) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices.
Market risk is attributable to all market risk sensitive financial instruments including foreign currency Trade Receivables
and Trade Payables. The Company is exposed to market risk primarily related to foreign exchange rate risk and interest
rate risk. Thus, exposure to market risk is a function of investing and borrowing acticities and revenue generating and
operating activities in foreign currency.
(i) Foreign Exchange Risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and
borrowings primarily with respect to USD, Euro and Chinese Yuan Renminbi (CNY). The Companyâs exports are
denominated generally in USD and Euro thereby providing a natural hedge to that extent against foreign currency payments
on account of imports of raw materials and/or the re-payment of borrowings and interest thereon. The foreign currency
transaction risk is also managed through selective hedging by way of forward contracts for underlying transactions having
firm commitments or highly probable forecast of crystalisation.
The Company has entered into certain derivative contracts for hedging the exposure in foreign currency and has recognised
a gain/loss in the Statement of Profit & Loss on measurement of said contracts at fair value on the reporting date. The fair
value of derivative instrument is measured based on valuation received from the authorised dealer (Bank).
Note(s) :
- In addition to foreign exchange risk exposure hedged through forward contracts as stated in (D) above, the Company
has also hedged by way of Forward Contracts certain firm commitments of import of raw materials, etc. as well as
value of certain confirmed export orders for an aggregate amount of USD 16.43 lakhs (Previous year USD 6.32
lakhs) which shall be crystallised beyond the reporting period and as such donot form part of Financial Liabilities and
Financial Assets as at 31st March, 2025.
- The disclosure of foreign exchange Derivative Contracts (Forward Contracts) entered into by the Company and
outstanding at the reporting date with respect to commodity prices hedging instruments is made in Note No. 49(d)
âDerivative financial instrumentâ.
(iv) Commodity Price Risk
The volatility in prices of certain key commodity raw materials, packing materials, etc. can significantly impact cost and
profitability of the Company. Its operating activities require the purchase of raw materials and other commodity products
for manufacturing of Cables, Capacitors, etc. and certain bought out components for execution of Turnkey Contract(s)
and related/incidental Services. It requires a continuous supply of certain raw materials and bought out components such
as copper, aluminum, polymers, steel, jointing kits, etc. The prices of certain commodities eg. copper, aluminium, steel
and polymers are subject to considerable volatility. Since the market prices in certain contracts are fixed on firm price
basis, the fluctuation in prices of these commodities can severely impact the cost of the product or turnkey project, as the
case may be. The Company gives priority to customers who allow price variation on major commodity input raw materials
to avoid such risks. The Commodity price risk for certain key commodity raw material items eg. copper and aluminium is
also managed through selective hedging by way of future contracts on London Metal Exchange (lMe) and also through
forward booking with the suppliers on a case to case basis after due assessment of underlying risk. Occasionally, scarcity
of polymers in the global market and price volatility due to geo political and variety of other reasons is a risk in terms of
meeting customerâs delivery commitments. To mitigate such risk, the Company procures materials in tranches to even out
price fluctuation. Also, the Company has tied up with globally renowned suppliers for timely supply at competitive prices
for meeting the requirement of imported polymer products to manage the cost in volatile environment without any
compromise on quality.
(c) Liquidity Risk
Liquidity risk is the risk where the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Companyâs approach is to ensure as far as
possible that it will have sufficient liquidity to meet its liabilities when due and accordingly it manages the risk in a manner
so as to meet its normal financial obligations without any significant delay or stress. Further, the management has arranged
for diversified funding sources and adopted a policy of managing assets with liquidity in mind. The Company has also
developed appropriate internal control system and contingency plans for managing liquidity risk by regular assessment of
expected cash flows and availability of alternative sources of additional funding, if required. As such, the Company
believes that sufficient working capital is available to meet its currently assessed requirements.
(d) Derivative financial instruments
The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency
exchange rates and commodity prices. The Company does not acquire or issue derivative financial instruments for trading
or speculative purposes. The fair values of all derivatives are separately recorded in the Balance Sheet within current and
non-current assets and liabilities. Derivatives that are designated as hedges are classified as current or non-current
depending on the maturity of the derivative. The use of derivatives can give rise to credit and market risk. The Company
as far as possible mitigates the risk by entering into contracts only with reputable banks and financial institutions. The use
of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The
limits, authorities and monitoring systems are periodically reviewed by the management and the Audit Committee and
Risk Management Committee of the Board. The market risk on derivatives is mitigated by changes in the valuation of the
underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.
(i) Cash flow hedges
The Company enters into forward exchange and commodity price contracts for hedging highly probable forecast
transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair
value are recognized in equity through OCI until the hedged transaction occurs, at which time, the respective gain or
losses are reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction
results in the recognition of a non-financial asset (e.g., inventory), the amount recognized in the cash flow hedge
reserve is adjusted against the carrying amount of the non-financial asset. These hedges have been effective for the
year ended 31st March 2025. The Company uses foreign exchange contracts from time to time to optimize commodity
related exchange rate risk. Fair value changes on such forward contracts are recognized in other comprehensive
income. The majority of cash flow hedges taken relates to hedging the foreign exchange rate of highly probable
forecast transactions and commodity price contracts for hedging the commodity price risk of highly probable forecast
transactions. The cash flows related to above are expected to occur during the year ended 31st March 2026 and
consequently may impact profit or loss for that year depending upon the change in the commodity prices and foreign
exchange rates movements.
(ii) Fair value hedge
The fair value hedges relate to forward covers taken to hedge currency exposure. The Company uses foreign exchange
contracts from time to time to optimize currency risk exposure on its foreign currency transactions. Fair value changes
on such forward contracts are recognized in the statement of profit and loss.
The fair value of the companyâs derivative positions recorded under derivative financial assets and derivative financial
liabilities are as follows.
50. Capital Management:
The Companyâs primary objective with respect to capital management is to ensure continuity of business and support the
growth of the Company while at the same time provide reasonable returns to its various stakeholders and maximise shareholders
value. In order to achieve these objectives, requirement of capital is reviewed periodically with reference to operating and
business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through
judicious combination of equity/ internal accruals and borrowings, both short term and long term. The capital structure is
governed by policies approved by the Board of Directors and the Company monitors capital by applying net debt (total borrowings
less investments and cash and cash equivalents) to equity ratio. The Company manages its capital structure and make
adjustments in the light of changes in economic conditions and the requirements of financial covenants attached to the
interest bearing loans and borrowings that define capital structure requirements. No changes were made in the objectives,
policies or processes for managing capital during the year ended 31st March, 2025 or corresponding previous year.
Note :Explanation for changes in ratio by more than 25% - Decrease in Return on Investments is attributable to the
decrease in Fair Value of Investments.
(g) The Company has not traded or invested in Crypto Currency or Virtual Currency during the reporting financial year and
previous year.
53. No significant adjusting event occurred between the Balance Sheet date and the date of approval of the standalone financial
statements by the Board of Directors of the Company requiring adjustment or disclosure.
54. Previous year figures have been regrouped/ re-classified, wherever considered necessary to conform to current yearâs
classification.
As per our attached report of even date.
For BGJC & Associates LLP For and on behalf of the Board of Directors
Chartered Accountants
ICAI Firm Registration No.003304N/N500056
Pranav Jain Harsh V. Lodha Y.S.Lodha
Partner Chairman Managing Director & Chief Executive Officer
Membership No. 098308 (DIN : 00394094) (DIN : 00052861)
Place: New Delhi Amit Kumar Chopra Sudeep Jain
Date :22nd May, 2025 Chief Financial Officer Company Secretary
Place : New Delhi
Date : 22nd May, 2025
Mar 31, 2024
(a) Trade Receivables are net of amount realised through Bill discounting aggregating to '' 2854.54 lakhs (31st March, 2023 : '' 2391.87 lakhs).
(b) No Trade Receivables are due from directors or other officers of the Company or any of them either severally or jointly with any other person nor from firms or private companies respectively in which any director is a partner or a director or a member, save and except outstanding Trade Receivables aggregating to '' 27.91 lakhs (previous year '' 63.44 lakhs) out of which due amount at the year end stood at '' 2.57 lakhs (previous year '' 2.11 lakhs) from a private company (previous year two private companies) in which one of the directors of the Company is also a director as at the year end.
(c) Payment terms agreed with the customers are as per business practice and Trade Receivables have no significant financing components. The Trade Receivables have been hypothecated as security against bank borrowings/loans, the terms relating to which have been described in Note No.18 and 23.
(a) Terms/Rights attached to Equity Shares
The Company has issued only one class of shares referred to as equity share having a face value of '' 10/- each ranking pari-passu and holders thereof are entitled to one vote per equity share.
(d) Final dividend on equity shares are recorded as a liability on the date of approval by the shareholders of the Company and Interim dividends are recorded as a liability on the date of declaration by the Companyâs Board of Directors. The Company declares and pays Dividend in Indian Rupees.
(e) There were no buy back of equity shares, issue of bonus shares or issue of shares pursuant to contract without payment being received in cash during the previous five years.
(a) Loans from Banks are secured by way of hypothecation charge over movable Property, Plant and Equipment, both present and future, and charge created by way of mortgage by deposit of title deeds of certain immoveable properties of the Company, ranking pari-passu interse amongst consortium lender banks and term loan lenders (including Buyerâs Credit & Supplierâs Credit). Loans from Banks are further secured by first or second pari-passu charge (specific to each term loan) by way of hypothecation of entire Current Assets, both present and future, of the Company viz inventories, bills receivables, book debts, claims, etc. Rupee Term Loans from Banks are repayable in equated monthly/quarterly instalments, as the case may be, over a period of five to seven years commencing from February, 2018 and ending on March, 2028 and carry rate of interest varying from 9.55% to 10.35% per annum on the reporting date. Buyerâs Credit/ Supplierâs Credit in Foreign Currency availed from a Bank are due for repayment between April, 2025 to December, 2026 and carry rate of 4.63% to 5.75% per annuam on the reporting date.
(b) Neither registration nor satisfaction of any charges are pending to be filed/registered with the Jurisdictional Registrar of Companies beyond the statutory period in respect of security created by the Company in favour of lenders.
(c) Term Loans were applied for the purpose(s) for which the same were availed.
(d) Loans from a Body Corporate and Related Parties presently carry interest at the rate at 8.85% per annuam and are due for repayment between September, 2024 and November, 2026 as per the mutually agreed repayment schedule with the concerned lenders. Further, the repayment of said Loans is subject to prior permission of the lead bank under a consortium banking arrangement of the Company for secured loans & borrowings.
(e) Rupee Term Loan from a Non-Banking Financial Company presently carry rate of interest at 10.40% per annuam and is repayable in equated quarterly instalments commencing from June, 2024 and ending on March, 2027.
includes interest free security deposit of '' 450.00 lakhs by a power producer against uninterrupted and regular supply of renewable energy to the Company. This security deposit is to be refunded gradually upon the power producer extending/ maintaining aggregate credit limit of equvalent amount against the power supply invoices during the currency of Power Purchase Agreement.
(a) Working Capital Loans/Borrowings from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal date, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
(b) Working Capital Loans/Borrowings (both fund and non fund based) from Banks are secured by first charge 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. ranking pari-passu amongst the lender consortium banks and certain secured term loan lender Banks; and are further secured by way of hypothecation of moveable Property, Plant and Equipment, both present and future, and charge created by way of mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interse amongst the lender consortium Banks and certain term loan lender Banks.
(c) Funds raised on short term basis have not been utilised for long term purposes and deployed for the purpose(s) they were obtained.
(d) Bank Returns/Stock Statements filed by the Company with its Bankers are materially in agreement with the books of account.
(e) Neither registration nor satisfaction of any charges are pending to be filed/registered with the Jurisdictional Registrar of Companies beyond the statutory period in respect of security created by the Company in favour of lenders.
37. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for '' 2505.72 lakhs (previous year '' 2300.15 lakhs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto. The governing terms and conditions whereof, inter-alia, provide for levy of liquidated damages, penalty, etc. on account of non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made on this account wherever considered necessary.
38. The standalone statements of the Company for the year ended 31st March, 2024 were approved and authorised for issuance by the Board of Directors in its Meeting held on 17th May, 2024. The Board of directors has also recommended a dividend of '' 3/- (previous year '' 3/-) per fully paid up equity shares of '' 10/- each of the Company for the financial year ended on 31st
March. 2024 involving a payment of '' 1040.86 lakhs, subject to approval by the shareholders in the ensuing Annual General Meeting of the Company.
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39. |
Contingent Liabilities (not provided for) : |
('' in lakhs) |
||
|
Sl. No. |
Particulars |
As at 31st March, 2024 |
As at 31st March, 2023 |
|
|
(a) |
Terminal Tax Liability |
227.37 |
227.37 |
|
|
(b) |
Central Excise and GST matters |
18.01 |
44.75 |
|
|
(c) |
Income Tax Cases |
402.02 |
402.02 |
|
|
(d) |
Corporate Guarantee towards collateral security (Refer Note No. 45) |
715.12 |
741.49 |
|
(i) The Company is contesting the demand for Terminal Tax liability raised by the Municipal Corporation of Satna (M.P.) pertaining to financial years from 2002-03 to 2012-13, by challenging, inter-alia, the constitutional validity of alleged provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Honâble High Court of Madhya Pradesh, Jabalpur. Based on the legal evaluation, the likelihood of any liability arising on the Company from the outcome of the said pending litigation is remote.
(ii) The Company is in process of filing an appeal against a demand notice received under Goods and Services Tax for an amount of '' 18.01 lakhs within the statutory time as prescribed under the applicable law. As per the opinion of external consultants/subject matter experts, the Company hold good grounds on merit in respect of above demand notice and no material liability is expected to arise thereagainst.
(iii) The Company does not expect the outcomes of matters stated above to have a material adverse effect on its financial conditions, result of operations or cash flows.
Outstanding Trade Receivables are usually non-interest bearing and are generally on credit terms upto 90 days except retention money and certain other recoverable amounts withheld by the customer(s) as per the governing terms and conditions of the underlying contract(s)/turnkey contracts. The outstanding Trade Receivables relating to turnkey contracts are generally non-interest bearing and credit terms thereunder are specific to each of such contracts. During the Current year, the Company has recognised a provision for expected credit loss on Trade Receivables of '' 50.16 lakhs (previous year '' 78.03 lakhs).
Contract Assets include Unbilled Revenue as receipt of customersâ acceptances are conditional upon successful completion of milestones and certification of installation. Contract Liabilities include advances received from customers and Excess of Billing over the Revenue.
41. Leases (Ind AS 116)
(a) As Lessee
(1) The Companyâs significant leasing arrangements are in respect of leases for premises (residential, office, stores, godown, etc.) These leasing arrangements are usually renewable by mutual consent on mutually agreeable terms.
(2) The Company has applied the practical expedient for accounting of short term leases i.e. it has recognised lease payments as expense as per para 6 of Ind AS-116 instead of recognising the lease transaction as right of use asset with corresponding lease liability as required under para 22 of Ind AS-116.
(a) The Company has only one reportable primary business segment i.e. Electrical and other Cables, Capacitors, Wires and Conductors, etc. and Turnkey Projects predominantly relating thereto, based on guiding principles given in Ind AS-108 âOperating Segmentsâ notified pursuant to Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the disclosure requirements of Ind AS-108 are not applicable.
The Company has common infrastructure including Property, Plant & Equipment, etc for manufacturing and supply of goods and services in domestic market as well as in overseas market places and accordingly separate figures for Property, Plant and Equipment/addition to Property, Plant and Equipment have not been furnished.
(c) Revenue from one customer was '' 33131.33 lakhs for the financial year 2023-24 (previous year '' 31779.42 lakhs), which accounts for more than 10% of the total revenue of the Company.
(a) The Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, a funded defined benefits plan for qualified employees. The Scheme provides for lumpsum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The Company has provided for gratuity based on the actuarial valuation done as per Projected Unit Credit Method. A separate Trust Fund is created to manage the Gratuity Plan and the contributions towards the Trust Fund is done as guided by Rule 103 of the Income Tax Rules, 1962. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall expected date 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. The Company expects to contribute '' 50.00 lakhs (previous year '' 110.00 lakhs) to the approved Gratuity Fund during the year 2024-25.
(b) Pension payable to select category of ex-employees (or to spouse upon death of the employee concerned) as per Companyâs Scheme being a defined benefits plan, a non-funded scheme, is provided for based on actuarial valuations done as per Projected Unit Credit Method. The most recent actuarial valuation of the change in defined benefits obligation and net defined benefit liability were carried out as at 31st March, 2024 through an independent fellow member of the Institute of Actuaries of India.
(ii) Provident Fund
The Company contributes its share of Provident Fund (a defined contribution scheme) as determined based on specified percentage of the eligible payroll costs in an approved provident fund trust viz. Universal Cable Limited Employee Provident Fund (except pertaining to employees of Companyâs Goa unit). The Company is liable for shortfall, if any, in the fund asset based on the government specified/notified minimum rate of return. Based on the valuation made by an independent Actuary, there is no shortfall in the fund assets as at 31st March, 2024. The Companyâs contributions to defined contribution scheme including that made to Government administered Provident/ Family Pension Fund pertaining to Goa Unit are charged to Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contribution.
44. Disclosure on Corporate Social Responsibility Expenses:
(a) The gross amount required to be spent by the Company during the year pursuant to the provisions of Section 135 of the Companies Act, 2013 and rules made thereunder is '' 91.87 lakhs (previous year '' 87.63 lakhs) after setting off the carried forward excess amount of '' 0.67 lakh spent during the financial year 2022-23, in accordance with the provisions of Section 135(5) of the Companies Act, 2013, and rules made thereunder.
(a) Against the earmarked unspent CSR amount of '' 40.90 lakhs in respect of an Ongoing CSR Project pertaining to financial year 2022-23, an aggregate amount of '' 21.74 lakhs was spent during the financial year 2023-24 and the balance amount is expected to be spent in the financial year 2024-25.
(b) The amount earmarked and spent towards CSR activities pertaining to financial year 2023-24 includes accrued interest income of '' 1.63 lakhs on unspent CSR funds of an ongoing project relating to financial year 2022-23, which were kept in a sperate bank account as per the provisions of sub-section (6) of Section 135 of the Companies Act, 2013 read with rules made and clarifications issued thereunder.
The management assessed that the fair value(s) of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, borrowings, trade payables, and other financial liabilities approximates the respective carrying amounts largely due to the short-term maturities of these instruments. For Financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.
The following methods and assumptions were used to estimate the fair values:
(a) The Equity Investments which are Quoted, the fair value has been taken at the market prices/ NAV of the same as on the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
(b) The derivative financial instruments which are unquoted, the fair value has been taken at based on value certificate given by respective Banks. They are classified as Level 2 fair values in fair value hierarchy.
(c) The Equity Investments which are Unquoted, the fair value has been taken as per the valuation report certified by Chartered Accountant(s) as on the reporting dates save and except investments in a power producer company, the fair value of which has been taken at cost as per the terms of the Power Purchase Agreement (Refer Note 6). They are classified as Level 3 fair values in fair value hierarchy.
(d) The derivative financial instruments which are quoted, the fair value has been taken at the market-price of the same as on the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the standalone financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS-113 âFair Value Measurementâ.
During the year ended 31st March, 2024 and 31st March, 2023, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfer into and out of Level 3 fair value measurements.
47. Financial Risk Management:
The Companyâs activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Credit Risk, Market Risk and Liquidity Risk. The Company also uses derivative instruments on selective basis prudently to manage the volatility of financial markets and minimise the adverse impact on its financial performance in accordance Risk Management Policy framework.
(a) Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the Company. The Company is exposed to credit risk from its operating activities primarily arising from trade receivables from customers and other financial instruments.
Customer credit risk is managed as per the Companyâs established policy, procedures and control framework relating to customer credit risk management. The Company assesses the credit quality of the counterparties taking into account their financial position and credit worthiness, the age of specific receivable balance and the current and expected collection trends, age of its contracts in progress, historically observed default over the expected life of trade receivables. Credit risk
on trade receivables is limited due to the Companyâs large and diverse customer base which includes public sector enterprises (including metro railways), central/state power utilities, renowned private sector utilities and large industrial customers having good credit rating(s). Credit risk is reduced to a significant extent if the turnkey project(s) have sufficient financial closure in the form of assured funding/budgetary support from the Central/State Government(s) or its financing agencies or commercial banks, etc. and achieving project milestone within the contracted completion schedule. Credit risk is also actively managed to the extent feasible by securing payment through letter(s) of credit, advance payment and bill discounting facility. The Companyâs exposure (unsecured trade receivables) and credit ratings of its counterparties are continuously monitored and assessed while ensuring that the aggregate value of transactions is reasonably spread amongst counterparties. The Company uses expected credit loss model to assess the impairment allowance on trade receivables, if any, on the reporting date and accordingly applied the same for measurement and recognition of impairment losses on trade receivables.
(b) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
(i) Foreign Exchange Risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowings primarily with respect to USD and Euro. The Companyâs exports are denominated generally in USD and Euro thereby providing a natural hedge to that extent against foreign currency payments on account of imports of raw materials and/or the re-payment of borrowings and interest thereon. The foreign currency transaction risk is also managed through selective hedging by way of forward contracts for underlying transactions having firm commitments or highly probable forecast of crystalisation.
The Company has entered into certain derivative contracts for hedging the exposure in foreign currency and has recognised a gain/loss in the Statement of Profit & Loss on measurement of said contracts at fair value on the reporting date. The fair value of derivative instrument is measured based on valuation received from the authorised dealer (Bank).
Note: Besides above, the Company has also taken USD forward cover of $ 6.32 lakhs as on 31st March, 2024 for payments of firm commitments not included in Trade Payables above. Also, refer Note 47(d) for details of foreign currency hedging through forward contract(s) on commodity futures on LME exchange.
Sensitivity Analysis
This analysis is based on assumption that there is an increase/decrease in foreign currency exchange rates by 5% with all other variables held constant, on the unhedged foreign currency exposure.
The Company is also exposed to interest rate risk as changes in interest rates may affect future cash flows or the fair values of its financial instruments, principally debt/borrowings. Such debts/borrowings are based on fixed as well as floating interest rate(s). The Company mitigates this risk by regularly assessing the market scenario and if considered appropriate based on market opportunities, it uses derivatives to hedge interest rate exposure on selective basis.
The exposure to equity price risk arises from Investments in quoted equity shares held by the Company and classified in the Balance Sheet at cost and at fair value through OCI. Having regard to the nature of quoted equity investments, intrinsic worth, intent and long term nature of investments, fluctuation in market price(s) are considered acceptable and do not warrant any management estimation.
The volatility in prices of certain key commodity raw materials, packing materials, etc. can significantly impact cost and profitability of the Company. Its operating activities require the purchase of raw materials and other commodity products for manufacturing of Cables, Capacitors, etc. and certain bought out components for execution of Turnkey Contract(s) and related/incidental Services. It requires a continuous supply of certain raw materials and bought out components such as copper, aluminum, polymers, steel, jointing kits, etc. The prices of certain commodities eg. copper, aluminium, steel and polymers are subject to considerable volatility. Since the market prices in certain contracts are fixed on firm price basis, the fluctuation in prices of these commodities can severely impact the cost of the product or turnkey project, as the case may be. The Company gives priority to customers who allow price variation on major commodity input raw materials to avoid such risks. The Commodity price risk for certain key commodity raw material items eg. copper and aluminium is also managed through selective hedging by way of future contracts on London Metal Exchange (lMe) and also through forward booking with the suppliers on a case to case basis after due assessment of underlying risk. Occasionally, scarcity of polymers in the global market and price volatility due to geo political and variety of other reasons is a risk in terms of meeting customerâs delivery commitments. To mitigate such risk, the Company procures materials in tranches to even out price fluctuation. Also, the Company has tied up with globally renowned suppliers for timely supply at competitive prices for meeting the requirement of imported polymer products to manage the cost in volatile environment without any compromise on quality.
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 and accordingly it manages the risk in a manner so as to meet its normal financial obligations without any significant delay or stress. Further, the management has arranged for diversified funding sources and adopted a policy of managing assets with liquidity in mind. The Company has also
developed appropriate internal control system and contingency plans for managing liquidity risk by regular assessment of expected cash flows and availability of alternative sources of additional funding, if required. As such, the Company believes that sufficient working capital is available to meet its currently assessed requirements.
(d) Derivative financial instruments
The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates and commodity prices. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The fair values of all derivatives are separately recorded in the Balance Sheet within current and non-current assets and liabilities. Derivatives that are designated as hedges are classified as current or non-current depending on the maturity of the derivative. The use of derivatives can give rise to credit and market risk. The Company as far as possible mitigates the risk by entering into contracts only with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by the management and the Audit Committee and Risk Management Committee of the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.
(i) Cash flow hedges
The Company enters into forward exchange and commodity price contracts for hedging highly probable forecast transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognized in equity through OCI until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction results in the recognition of a non-financial asset (e.g., inventory), the amount recognized in the cash flow hedging reserve is adjusted against the carrying amount of the non-financial asset. These hedges have been effective for the year ended 31st March 2024. The Company uses foreign exchange contracts from time to time to optimize commodity related exchange rate risk. Fair value changes on such forward contracts are recognized in other comprehensive income. The majority of cash flow hedges taken relates to hedging the foreign exchange rate of highly probable forecast transactions and commodity price contracts for hedging the commodity price risk of highly probable forecast transactions. The cash flows related to above are expected to occur during the year ended 31st March 2025 and consequently may impact profit or loss for that year depending upon the change in the commodity prices and foreign exchange rates movements.
(ii) Fair value hedge
The fair value hedges relate to forward covers taken to hedge currency exposure. The Company uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. Fair value changes on such forward contracts are recognized in the statement of profit and loss.
The Companyâs primary objective with respect to capital management is to ensure continuity of business and support the growth of the Company while at the same time provide reasonable returns to its various stakeholders and maximise shareholders value. In order to achieve these objectives, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity/ internal accruals and borrowings, both short term and long term. The capital structure is governed by policies approved by the Board of Directors and the Company monitors capital by applying net debt (total borrowings less investments and cash and cash equivalents) to equity ratio. The Company manages its capital structure and make adjustments in the light of changes in economic conditions and the requirements of financial covenants attached to the interest bearing loans and borrowings that define capital structure requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2024 or corresponding previous year.
(i) The remuneration to Key Managerial Personnel (excluding Non-Executive Directors) as stated above is exclusive of provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.
(ii) Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered.
(iii) No amount has been provided as doubtful debts or written off/written back (allowance for expected credit loss) during the year in respect of debts/advances due from/to above Related Parties.
(c) Disclosure as required under SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 in respect of transactions with an entity viz. âThe Punjab Produce & T rading Company Pvt. Ltd.â belonging to the promoters/ promoter group which holds 10% or more shareholding in the Company (excluding entities already covered under Note No.49) :
(c) Undisclosed income:
No transactions have been recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 - '' Nil (previous year '' Nil)
(d) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(e) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Note(s):Explanation for changes in ratio by more than 25%
(i) Decrease in Return on Equity ratio due to lower Profit After Tax during the year as compared to corresponding previous year.
(ii) Decrease in Return on Investments is attributable to the increase in Fair Value of Average Investments forming part of the denominator.
51. No significant adjusting event occurred between the Balance Sheet date and the date of approval of these financial statements by the Board of Directors of the Company requiring adjustment or disclosure.
52. Previous year figures have been regrouped/ re-classified, wherever considered necessary to conform to current yearâs classification.
Mar 31, 2023
Secured
(a) Loans from Banks are secured by way of hypothecation charge over moveable Property, Plant and Equipment, both present and future, and charge created by way of mortgage by deposit of title deeds of certain immoveable properties of the Company, ranking pari-passu interse amongst consortium lender banks and term loan lenders (including Supplier''s Credit). Loans from Banks are further secured by first and/or second pari-passu charge (specific to each term loan) by way of hypothecation of entire Current Assets, both present and future, of the Company viz inventories, bills receivables, book debts, claims, etc. The outstanding Rupee Term Loans are repayable over a period of five to seven years commencing from February, 2018 and ending on March, 2028 and carry rate of interest varying from 9.15% to 9.60% p.a. on the reporting date. Supplier''s Credit in Foreign Currency availed from a Bank is due for repayment in April, 2025 and carry rate of interest 0.80% p.a. on the reporting date.
(b) Neither registration nor satisfaction of any charges are pending to be filed/registered with the Jurisdictional Registrar of Companies beyond the statutory period in respect of security created by the Company in favour of lenders.
(c) Term Loans were applied for the purpose(s) for which the loans were obtained.
(d) Loans from a Body Corporate and Related Parties amounting to '' 14800.00 lakhs presently carry interest at the rate of 8.85% p.a. and are due for repayment between August, 2023 and March, 2025 as per the mutually agreed repayment schedule with the concerned lenders. Further, the repayment of said Unsecured Loans is subject to prior permission of the lead bank under a consortium banking arrangement of the Company for secured loan(s) & borrowings.
(a) Working Capital Loans/Borrowings from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal date, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
(b) Working Capital Loans/borrowings (both fund and non fund based) from Banks are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. ranking pari-passu amongst working capital consortium banks; and are further secured by way of hypothecation of moveable Property, Plant and Equipment, both present and future, and charge created byway of mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interse amongst the consortium lenders.
(c) Funds raised on short term basis have not been utilised for long term purposes and deployed for the purpose(s) they were obtained.
(d) Bank Returns/Stock Statements filed by the Company with its Bankers are materially in agreement with books of account.
(e) Neither registration nor satisfaction of any charges are pending to be filed/registered with the Jurisdictional Registrar of Companies beyond the statutory period in respect of security created by the Company in favour of lenders.
37. Capital and other commitments:
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for'' 2300.15 lakhs (previous year'' 2960.26 lakhs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto. The governing terms and conditions whereof, inter-alia, provide for levy of liquidated damages, penalty, etc. on account of non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made on this account wherever considered necessary.
38. The standalone statements of the Company for the year ended 31st March, 2023 were approved and authorised for issuance by the Board of Directors in its Meeting held on 18th May, 2023. The Board of directors has also recommended a dividend of '' 3/-(previous year'' 1.50) per fully paid up equity shares of '' 10/- each of the Company for the financial year ended on 31st March. 2023, subject to approval by the shareholders in the ensuing Annual General Meeting of the Company.
39. Contingent Liabilities (not provided for):
|
('' in lakhs) |
|||
|
S. No. |
Particulars |
As at 31st March, 2023 |
As at 31st March, 2022 |
|
(a) |
Terminal Tax Liability |
227.37 |
227.37 |
|
(b) |
Central Excise and GST matters |
44.75 |
48.75 |
|
(c) |
Corporate Guarantee towards collateral security (Refer Note No. 45) |
741.49 |
721.66 |
|
(d) |
Income Tax Cases |
402.02 |
232.21 |
(i) The Company is contesting the demand for Terminal Tax liability raised by the Municipal Corporation of Satna (M.P.) pertaining to financial years from 2002-03 to 2012-13, by challenging, inter-alia, the constitutional validity of alleged provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Hon''ble High Court of Madhya Pradesh, Jabalpur. Based on the legal evaluation, the likelihood of any liability arising on the Company from the outcome of the said pending litigation is remote.
(ii) Demand Notice under Goods and Services Tax for an amount of '' 44.75 lakhs received by the Company and is pending adjudication with the concerned Adjudicating Authority/Appellate Authority. As per the opinion of external consultants/subject matter experts, the Company holds good grounds on merit in the pending case.
(iii) The Company does not expect the outcomes of matters stated above to have a material adverse effect on its financial conditions, result of operations or cash flows.
40. Information pursuant to Ind AS 115 "Revenue from Contracts with Customers" are furnished hereunder:
Trade Receivables are usually non-interest bearing and are generally on credit terms upto 90 days except retention money and certain other recoverable amounts withheld by the customer(s) as per the governing terms and conditions of the underlying contract(s)/turnkey contracts. The trade receivables relating to turnkey contracts are generally non-interest bearing and credit terms thereunder are specific to each of such contracts. During the Current year, the Company has recognised a provision for expected credit losses on trade receivables of'' 78.03 lakhs (previous year'' 100 lakhs)
Contract Assets include Unbilled Revenue as receipt of customers'' acceptances are conditional upon successful completion of milestones and certification of installation. Contract Liabilities include advances received from customers and Excess of Billing over the Revenue.
(c) Reconciliation of the amount of revenue recognised in the statement of Profit and Loss with the contracted prices:
(a) As Lessee
The Company has taken certain offices and residential premises/facilities under operating lease/sub-lease agreements for short period and applied the practical expedient for accounting of short term leases i.e. it has recognised lease payments as expense as per para 6 of Ind AS-116 instead of recognising the lease transaction as right of use asset with corresponding lease liability as required under para 22 of Ind AS-116. Accordingly, the aggregate lease rental of'' 189.67 lakhs (previous year'' 180.04 lakhs) has been charged to the Statement of Profit and Loss.
(b) As Lessor
The Company has entered into operating lease/ sub-lease arrangements for certain pieces and parcel of Leasehold Land and Buildings thereon. The arrangements are non-cancellable in nature and is executed for twelve years since latest renewal. Lease rental income earned by the Company on such operating lease/ sub-lease during the financial year 2022-23 is '' 527.90 lakhs (previous year'' 511.26 lakhs). The future rentals receivables under non-cancellable operating leases are as under:
(a) The Company has only one reportable primary business segment i.e. Electrical and other Cables, Capacitors, Wires and Conductors, etc. and Turnkey Projects predominantly relating thereto, based on guiding principles given in Ind AS 108 "Operating Segments" notified pursuant to Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.
The Company has common infrastructure including Property, Plant & Equipments etc for manufacturing and supply of goods and services in domestic market as well as in overseas market places and accordingly separate figures for Property, Plant and Equipment/addition to Property, Plant and Equipment have not been furnished. c) Revenue from one customer was '' 31779.42 lakhs for the financial year 2022-23 (previous year '' 28094.00 lakhs), which accounts for more than 10% of the total revenue of the Company.
(a) The Company makes annual contribution to the employee group gratuity scheme of the Life Insurance Corporation of India, a funded defined benefits plan for qualified employees. The Scheme provides for lumpsum payments to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The Company has provided for gratuity based on the actuarial valuation done as per Projected Unit Credit Method. A separate Trust Fund is created to manage the Gratuity Plan and the contributions towards the Trust Fund is done as guided by Rule 103 of the Income Tax Rules, 1962. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. The overall expected date 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. The Company expects to contribute '' 110 lakhs (Previous year'' 120.00 lakhs) to the approved Gratuity Fund during the year 2023-24.
(b) Pension payable to select category of ex-employees (or to spouse upon death of the employee concerned) as per Company''s Scheme being a defined benefits plan, a non-funded scheme, is provided for based on actuarial valuations done as per Projected Unit Credit Method. The most recent actuarial valuation of the change in defined benefits obligation and net defined benefit liability were carried out as at 31st March, 2023 through an independent fellow member of the Institute of Actuaries of India.
(ii) Provident Fund
The Company contributes its share of Provident Fund (a defined contribution scheme) as determined based on specified percentage of the eligible payroll costs in an approved provident fund trust viz. Universal Cable Limited Employee Provident Fund (except pertaining to employees of Company''s Goa unit). The Company is liable for shortfall, if any, in the fund asset based on the government specified/notified minimum rate of return. Based on the valuation made by an independent Actuary, there is no shortfall in the fund assets as at 31st March, 2023. The Company''s contributions to defined contribution scheme including that made to Government administered Provident/ Family Pension Fund pertaining to Goa Unit are charged to Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contribution.
Note(s):
(a) The balance unspent CSR amount of'' 40.90 Lakhs pertaining to an Ongoing CSR Project 2022-23 has been transferred subsequent to the end of the year in a Special Bank Account within the time prescribed therefor as per the provisions of sub-section (6) of Section 135 of the Companies Act, 2013 read with rules made and clarifications issued thereunder.
(b) The balance unspent CSR amount of'' 40.29 lakhs pertaining to an Ongoing CSR Project 2021-22 has been duly spent on the project concerned during the financial year 2022-23.
(c) Excess spent/earmarked amount of '' 0.67 lakh during the financial year 2022-23 on CSR activities will be carried forward for set-off in next fiscal year in accordance with the third proviso to Section 135(5) of the Companies Act, 2013 and rules made thereunder.
(b) Details of Investments made have been furnished in Note No.6. Further, no loans within the meaning of Section 186 of the Companies Act,2013 have been given by the Company requiring disclosure, save and except loans and/or advances made by the Company to its employees (other than Managing Director) in accordance with the conditions of service applicable to employees read together with remuneration policy of the Company as disclosed in Note No. 8 & Note No.14.
The management assessed that the fair value(s) of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, borrowings, trade payables, and other financial liabilities approximates the respective carrying amounts largely due to the short-term maturities of these instruments. For Financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.
The following methods and assumptions were used to estimate the fair values:
(a) The Equity Investments which are Quoted, the fair value has been taken at the market prices/NAV of the same as on the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
(b) The derivative financial instruments which are unquoted, the fair value has been taken at based on value certificate given by respective Banks. They are classified as Level 2 fair values in fair value hierarchy.
(c) The Equity Investments which are Unquoted, the fair value has been taken as per the valuation report certified by Chartered Accountant as on the reporting dates. They are classified as Level 3 fair values in fair value hierarchy.
(d) The derivative financial instruments which are quoted, the fair value has been taken at the market-price of the same as on the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
Fair Value Hierarchy
The following are the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurement".
The Company''s activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Credit Risk, Market Risk and Liquidity Risk. The Company also uses derivative instruments on selective basis prudently to manage the volatility of financial markets and minimise the adverse impact on its financial performance in accordance Risk Management Policy framework.
(a) Credit Risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing financial loss to the Company. The Company is exposed to credit risk from its operating activities primarily arising from trade receivables from customers and other financial instruments.
Customer credit risk is managed as per the Companyâs established policy, procedures and control framework relating to customer credit risk management. The Company assesses the credit quality of the counterparties taking into account their financial position and credit worthiness, the age of specific receivable balance and the current and expected collection trends, age of its contracts in progress, historically observed default over the expected life of trade receivables. Credit risk on trade receivables is limited due to the Companyâs large and diverse customer base which includes public sector enterprises (including metro railways), central/state power utilities, renowned private sector utilities and large industrial customers having good credit rating(s). Credit risk is reduced to a significant extent if the turnkey project(s) have sufficient financial closure in the form of assured funding/budgetary support from the Central/State Government(s) or its financing agencies or commercial banks, etc. and achieving project milestone within the contracted completion schedule. Credit risk is also actively managed to the extent feasible by securing payment through letter(s) of credit, advance payment and bill discounting facility. The Company''s exposure (unsecured trade receivables) and credit ratings of its counterparties are continuously monitored and assessed while ensuring that the aggregate value of transactions is reasonably spread amongst counterparties. The Company uses expected credit loss model to assess the impairment allowance on trade receivables, if any, on the reporting date and accordingly applied the same for measurement and recognition of impairment losses on trade receivables.
(b) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.
(i) Foreign Exchange Risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports, exports and borrowings primarily with respect to USD and Euro. The Companyâs exports are denominated generally in USD and Euro thereby providing a natural hedge to that extent against foreign currency payments on account of imports of raw materials and/or the re-payment of borrowings and interest thereon. The foreign currency transaction risk is also managed through selective hedging by way of forward contracts for underlying transactions having firm commitments or highly probable forecast of crystalisation.
The Company has entered into certain derivative contracts for hedging the exposure in foreign currency and has recognised a gain/loss in the Statement of Profit & Loss on measurement of said contracts at fair value on the reporting date. The fair value of derivative instrument is measured based on valuation received from the authorised dealer (Bank).
The exposure to equity price risk arises from Investments in quoted equity shares held by the Company and classified in the Balance Sheet at cost and at fair value through OCI. Having regard to the nature of quoted equity investments, intrinsic worth, intent and long term nature of investments, fluctuation in market price(s) are considered acceptable and do not warrant any management estimation.
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw materials and other commodity products for manufacturing of Cables, Capacitors, etc. and certain bought out components for execution of Turnkey Contract(s) and related/incidental Services. It requires a continuous supply of certain raw materials and bought out components such as copper, aluminum, polymers, steel, jointing kits, etc. The prices of certain commodities eg. copper, aluminium, steel and polymers are subject to considerable volatility. Since the market prices in certain contracts are fixed on firm price basis, the fluctuation in prices of these commodities can severely impact the cost of the product or turnkey project, as the case may be. The Company gives priority to customers who allow price variation on major commodity input raw materials to avoid such risks. The Commodity price risk for selected items eg. copper and aluminium is also managed through selective hedging by way of future contracts on London Metal Exchange (LME) and also through forward booking with the suppliers on a case to case basis after due assessment of underlying risk. Occasionally, scarcity of polymers in the global market and price volatility due to geo political and variety of other reasons is a risk in terms of meeting customer''s delivery commitments. To mitigate such risk, the Company procures materials in tranches to even out price fluctuation. Also, the Company has tied up with globally renowned suppliers for timely supply at competitive prices for meeting the requirement of imported polymer products to manage the cost in volatile environment without any compromise on quality.
(c) Liquidity Risk
Liquidity risk is the risk where the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when due and accordingly it manages the risk in a manner so as to meet its normal financial obligations without any significant delay or stress. Further, the management has arranged for diversified funding sources and adopted a policy of managing assets with liquidity in mind. The Company has also developed appropriate internal control system and contingency plans for managing liquidity risk by regular assessment of expected cash flows and availability of alternative sources of additional funding, if required. As such, the Company believes that sufficient working capital is available to meet its currently assessed requirements.
The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates and commodity prices. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The fair values of all derivatives are separately recorded in the Balance Sheet within current and non-current assets and liabilities. Derivatives that are designated as hedges are classified as current or non-current depending on the maturity of the derivative. The use of derivatives can give rise to credit and market risk. The Company as far as possible mitigates the risk by entering into contracts only with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by the management and the Audit Committee and Risk Management Committee of the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.
(i) Cash flow hedges
The Company enters into forward exchange and commodity price contracts for hedging highly probable forecast transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognized in equity through OCI until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to profit or loss when the hedged item affects profit or loss. When the forecasted transaction results in the recognition of a non-financial asset (e.g., inventory), the amount recognized in the cash flow hedging reserve is adjusted against the carrying amount of the non-financial asset. These hedges have been effective for the year ended 31st March 2023. The Company uses foreign exchange contracts from time to time to optimize commodity related exchange rate risk. Fair value changes on such forward contracts are recognized in other comprehensive income. The majority of cash flow hedges taken relates to hedging the foreign exchange rate of highly probable forecast transactions and commodity price contracts for hedging the commodity price risk of highly probable forecast transactions. The cash flows related to above are expected to occur during the year ended 31st March 2024 and consequently may impact profit or loss for that year depending upon the change in the commodity prices and foreign exchange rates movements.
(ii) Fair value hedge
The fair value hedges relate to forward covers taken to hedge currency exposure. The Company uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. Fair value changes on such forward contracts are recognized in the statement of profit and loss.
The fair value of the companyâs derivative positions recorded under derivative financial assets and derivative financial liabilities are as follows.
48. Capital Management:
The Company''s primary objective with respect to capital management is to ensure continuity of business and support the growth of the Company while at the same time provide reasonable returns to its various stakeholders and maximise shareholders value. In order to achieve these objectives, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity/ internal accruals and borrowings, both short term and long term. The capital structure is governed by policies approved by the Board of Directors and the Company monitors capital by applying net debt (total borrowings less investments and cash and cash equivalents) to equity ratio. The Company manages its capital structure and make adjustments in the light of changes in economic conditions and the requirements of financial covenants attached to the interest bearing loans and borrowings that define capital structure requirements. No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2023 or corresponding previous year.
(i) The remuneration to Key Managerial Personnel (excluding Non-Executive Directors) as stated above is exclusive of provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.
(ii) Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered.
(iii) No amount has been provided as doubtful debts or written off/written back (allowance for expected credit loss) during the year in respect of debts/advances due from/to above Related Parties.
(c) Disclosure as required under SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 in respect of transactions with an entity viz. "The Punjab Produce & Trading Company Pvt. Ltd." belonging to the promoters/ promoter group which holds 10% or more shareholding in the Company (excluding entities already covered under Note No.49):
(c) Undisclosed income:
No transactions have been recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 - '' Nil (Previous year'' Nil)
(d) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall:
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(e) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries); or
(ii) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(f) Financial Performance Ratios:
Note(s): Explanation for changes in ratio by more than 25%
(i) Debt Service Coverage Ratio improved on account of increase in profitability.
(ii) Return on Equity Ratio improved on account of better profitability.
(iii) Net Profit Ratio improved on account of increase in profitability.
(iv) Increased earnings resulted in increase of Return on Capital Employed.
(v) Increase in Return on Investment is primarily due to significant rise in the aggregate market value of quoted Equity Instruments.
51. No significant adjusting event occurred between the Balance Sheet date and the date of approval of these financial statements by the Board of Directors of the Company requiring adjustment or disclosure.
52. Previous year figures have been regrouped/ rearranged, wherever considered necessary to conform to current year classification.
Mar 31, 2018
* Includes Rs, 61.57 lakhs (Previous year Rs, 36.77 lakhs) pertaining to gain/loss on exchange fluctuations adjusted to the cost of capital assets as per para 46A [Refer Note No. 2.6 (a)(iii)].
For details of assets pledged as security, refer Note No. 17.
Note: The despatch of share certificate(s) in physical form and credit in the respective demat account(s) in respect of 27,05,553 number of additional equity shares, in aggregate, allotted to certain allottees under category âCâ of the basis of allotment as per Letter of Offer dated 14th September, 2015 under the Rights Issue have not yet been completed in view of the status-quo order passed by the Honâble High Court of Delhi on 18th November, 2015. The additional equity shares to the extent alloted to each of the above listed shareholders but not yet credited in the respective demat account(s) have been included in the number of shares shown in the above table.
1. Rupee Term Loan and Foreign Currency Term Loan from a bank are secured by way of hypothecation of moveable Fixed Assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interse amongst consortium lenders. The said Term Loans are further secured by second charge by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts, claims, etc. These Term Loans are repayable over a period of four to seven years commencing from March, 2017 and ending on January, 2026. Rupee Term Loan and Foreign Currency Term Loan (fully hedged) carry rate of interest varying from 9.15% to 9.80% p.a. on the reporting date.
2. Other Unsecured Loans from Related Parties and a Body Corporate are repayable from February, 2019 onwards and these Loans carry rate of interest varying from 9.00% to 11.00% p.a. on the reporting date.
* The Company has recognized Deferred Tax Assets during the financial year ended 31st March, 2018 considering reasonable certainty of the likely timings and level of future taxable profits that will be available against which carry forward business loss/unabsorbed depreciation under the Income Tax Act, 1961 can be utilized. Since Deferred Tax Assets were not recognized in the periods prior to the current financial year, the effective tax reconciliation for the previous periods have not been given.
(a) Working Capital Loans from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
(b) Working Capital Loans/borrowings (both fund and non-fund based ) from Banks are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable Fixed Assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari passu inter se amongst the consortium lenders.
(c) Buyerâs Credit from a bank are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable Fixed Assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari passu interse amongst the consortium lenders. Buyerâs Credit (In Foreign Currency) are due for repayment between April, 2018 and December, 2018 and carry rate of interest of 0.5% to 2.65% p.a.
3. Capital and other commitments:
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for '' 573.08 lakhs (2016-17 '' 69.94 lakhs and 1st April, 2016 '' 647.73 lakhs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto. The governing terms and conditions whereof, interalia, provide for levy of liquidated damages, penalty, etc. on account of non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made on this account wherever considered necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 41 "Leasesâ.
4. In accordance with Ind AS 18 on "Revenueâ and Schedule III to the Companies Act, 2013, Revenue from Operations upto period ended 30th June, 2017 were reported gross of excise duty and net of value added tax (VAT)/central Sales tax (CST) and service tax. Excise duty was reported as separate expense. Consequent to the introduction of Goods & Services Tax (GST) with effect from 1st July, 2017 excise duty, VAT, sales tax, service tax, etc. have been subsumed into GST and the same is not recognized as a part of sales as per the requirement of Ind AS 18. Accordingly, Revenue from Operations in the current year is not comparable with that of the previous year.
5. The financial statements of the Company for the year ended March 31, 2018 has been approved by the Board of Directors in its meeting held on 23rd May, 2018. For the year ended 31st March, 2018, a dividend of '' 1.50 per Equity Share is proposed by Board of Directors at its meeting held on 23rd May, 2018. The same is subject to the approval of shareholders in the ensuing Annual General Meeting of the Company and therefore proposed dividend (including dividend distribution tax) has not been recognized as liability as at the Balance Sheet date in line with Ind AS-10 on "Events after the Reporting Periodâ.
Notes:
(i) The Company is contesting the demand for Terminal Tax Liability raised by the Municipal Corporation of Satna (M.P.) pertaining to financial years from 2002-03 to 2012-13, by challenging, interalia, the constitutional validity of alleged provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Honâble High Court of Madhya Pradesh, Jabalpur.
(ii) The Company received Show Cause Notice from the Commissioner, Central GST, Excise & Customs for cross utilization of CENVAT Credit on input and input services during the period April, 2012 to March, 2017 for payment of service tax on output services. Based on appraisal of the merits of the case, the management considers that the said Show Cause Notice is not tenable and there is no likelihood of any liability arising against the Company.
(iii) The future cash outflow in respect of Note No. 39 (a) & (b) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and adjudicating authorities concerned.
6. Operating Leases:
(a) As Lessee
The Company has taken certain offices and residential premises/facilities under operating lease/sub-lease agreements. The lease agreements generally have an escalation clause and are not non-cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by lease/sub-lease agreements. The aggregate lease rental has been charged to the Statement of Profit and Loss.
(b) As Lessor
The Company has entered into operating lease/sub-lease arrangements for certain pieces and parcel of Leasehold Land and Buildings thereon. The arrangements is non-cancellable in nature and is executed for twelve years since latest renewal. Lease rental income earned by the Company during the financial year 2017-18 is '' 288.48 lakhs. The future minimum lease/sub-lease rentals receivables (including rental increases) under non-cancellable operating leases are as under:
7. Segment Information:
The Company has only one reportable primary business segment i.e. Electrical and other Cables, Capacitors, Wires and Conductors, etc. and Turnkey Projects predominantly relating thereto, based on guiding principles given in Ind AS 108 âOperating Segmentsâ notified pursuant to Companies (Indian Accounting Standards) Rules, 2015. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.
(i) Information by Geographies -
(ii) The Company has business operations only in India and does not hold any assets outside India.
(iii) Revenue from one customer was '' 17558.85 lakhs for the financial year 2017-18 (previous year '' Nil), which accounts for more than 10% of the total revenue of the Company.
The management assessed that the fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, borrowings, trade payables, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments.
For Financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.
The following methods and assumptions were used to estimate the fair values:
a. The Equity Investments which are Quoted, the fair value has been taken at the market prices/NAV of the same as on the reporting dates. They are classified as Level 1 fair values in fair value hierarchy.
b. The derivative financial instruments which are unquoted, the fair value has been taken at based on value certificate given by respective Banks. They are classified as Level 2 fair values in fair value hierarchy.
c. The Equity Investments which are Unquoted, the fair value has been taken as per the valuation report certified by Chartered Accountant as on the reporting dates. They are classified as Level 3 fair values in fair value hierarchy.
Fair Value Hierarchy
The following are the judgments and estimates made in determining the fair values of the financial instruments that are (a) recognized and measured at fair value and (b) measured at amortized cost and for which fair value are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into the three levels of fair value measurement as prescribed under the Ind AS 113 "Fair Value Measurementâ.
During the year ended March 31, 2018 and March 31, 2017, there were no transfers between Level 1 and Level 2 fair value measurements and no transfer into and out of Level 3 fair value measurements.
8. Financial Risk Management
The Company has a Risk Management Policy which covers risk associated with the financial assets and liabilities. The Risk Management Policy is approved by the Directors. The different types of risk impacting the fair value of financial instruments are as below:
(a) Credit Risk:
Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily Trade Receivables).
Customer credit risk is managed in accordance with the Companyâs established policy, procedures and controls relating to customer credit risk management. The Company assesses the credit quality of the counterparties taking into account their financial position, past experience and other factors. Credit risk is reduced to a significant extent if the projects(s) are funded by the Central and state Government and also by receiving pre-payments (including mobilization advances) and achieving project completion milestone within the contracted delivery schedule. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss allowance for trade receivables. Impairment, if any, is provided as per the respective credit risk of individual customer as on the reporting date.
(b) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three type of risks: Foreign exchange risk, Interest rate risk and other price risk.
(i) Foreign Exchange Risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports and borrowing primarily with respect to USD and Euro. The Companyâs exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts, currency swaps and interest rate swaps including for underlying transactions having firm commitments or highly probable forecast of crystallization.
The Company has entered into certain derivative contracts hedging the borrowings in foreign currency and has recognized a gain/loss in the Statement of Profit & Loss on measurement of said contracts at fair value on the reporting date. The fair value of derivative instrument is measured based upon valuation received from the authorized dealer (Bank).
(iii) Equity Price Risk
The Companyâs exposure to equity securities price risk arises from quoted Investments held by the Company and classified in the balance sheet at deemed cost and at fair value through OCI. Having regard to the nature of securities, intrinsic worth, intent and long term nature of securities, fluctuation in their prices are considered acceptable and do not warrant any management estimation.
Exposure to other market price risk
(iv) Commodity Price Risk
The Company is affected by the price volatility of certain commodities. Its operating activities require the purchase of raw materials and bought out components for manufacturing of Cables, Capacitors, etc. and Turnkey Contract & Services respectively. It requires a continuous supply of certain raw materials & brought out components such as copper, aluminum, polymers, steel, jointing kits etc. The prices of international commodities e.g. copper, aluminum and polymers are subject to considerable volatility. Since the market prices of cables are generally on firm price basis, the seesawing prices of these commodities can severely impact the cost of the product. The Company gives priority to customers who allow price variation on input raw materials to avoid such risks. Occasionally scarcity of polymers in a global market is a risk in terms of meeting customerâs delivery commitments. Over and above these polymers prices are sensitive to the crude oil prices where the volatility in the recent time has been unprecedented. To mitigate such risks, the Company procures materials in crunches to even out price fluctuation. Also the Company has an approved supplier base to get the best competitive prices for the commodities and also to manage the cost without any compromise on quality.
(c) Liquidity Risk
Liquidity risk is the risk where the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach is to ensure as far as possible that it will have sufficient liquidity to meet its liabilities when due.
The table below summarizes the maturity profile of Companyâs financial liabilities based on contractual undiscounted payments:
9. Capital Management
The Companyâs objective with respect to capital management is to ensure continuity of business while at the same time provide reasonable returns to its various stakeholders. In order to achieve this, requirement of capital is reviewed periodically with reference to operating and business plans that take into account capital expenditure and strategic investments. Sourcing of capital is done through judicious combination of equity/internal accruals and borrowings, both short term and long term. Net debt (total borrowings less investments and cash and cash equivalents) to equity ratio is used to monitor capital.
10. Disclosures in respect of Related Parties as defined in Indian Accounting Standard (Ind AS)-24, with whom transactions were entered into at an armâs length and in the normal/ordinary course of business during the year are given below:
(i) Joint Ventures (Joint Arrangements) Birla Furukawa Fibre Optic Pvt. Limited (BFFOPL)
Birla Cable Limited (BCL) (Formerly Birla Ericsson Optical Limited) (ceased to be Joint Venture with effect from 23rd August, 2016)
(ii) Associate Company Vindhya Telelinks Limited (VTL)
(iii) Joint Venture of an Associate Company Birla Visabeira Private Limited (BVPL)
(iv) Wholly owned Subsidiaries of an Associate Company August Agents Ltd.(AAL)
Insilco Agents Ltd.(IAL)
Laneseda Agents Ltd.(LAL)
(v) Key Management Personnel (KMP) Shri Harsh V.Lodha Chairman
Shri S.S.Kothari Shri S.C.Jain Shri Dinesh Chanda
Non Executive Directors
Shri B.R. Nahar Dr. Kavita A.Sharma Shri Dilip Ganesh Karnik
Shri Y.S.Lodha Chief Executive Officer
Shri Prasanta pandit Chief Financial Officer
(w.e.f. 15.11.2017)
Shri O.P.Pandey Company Secretary
Shri Pankaj Gupta Chief Financial Officer __(Upto 25.08.2017)_
(vi) Post Employment Benefit Plan Entities Universal Cables Limited Employees Gratuity Fund (UEGF)
Universal Cables Limited Employees Provident Fund (UEPF)
Universal Cables Superannuation Fund (USF)
Notes:
(i) The remuneration to Key Managerial Personnel(s) does not include provision/payment towards incremental liability on account of gratuity and compensated absences since actuarial valuation is done for the Company as a whole.
(ii) No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/ to above Related Parties.
(iii) Transactions and balances relating to reimbursement of expenses to/from the above Related Parties have not been considered.
(iv) Inter corporate loans/advances have been given for business purposes.
11. Previous year figures have been regrouped/rearranged, wherever considered necessary to conform to current year classification.
Mar 31, 2017
1. Terms/Rights attached to Equity Shares :
The Company has issued only one class of Shares referred to as Equity Shares having a par value of Rs. 10/- per share ranking pari-passu. The holders of Equity Shares are entitled to one vote per share.
The dispatch of share certificate(s) in physical form and credit in the respective demat account(s) in respect of 27,05,553 number of additional equity shares, in aggregate, allotted to certain allottees under category "Câ of the basis of allotment as per Letter of Offer dated 14th September, 2015 under the Rights Issue have not yet been completed in view of the status-quo order passed by the Honâble High Court of Delhi on 18th November, 2015.
2. Rupee Term Loan and Foreign Currency Term Loan from a bank are secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interest amongst consortium lenders. The said Term Loans are further secured by second charge by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts, claims etc. These Term Loans are repayable in 16 quarterly installments commencing from March, 2017 and ending on December, 2020. Rupee Term Loan and Foreign Currency Term Loan (fully hedged) carry rate of interest 10.10% and 9.80% per annum respectively on the reporting date.
3. Buyerâs Credit from a bank are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc. and are further secured by way of hypothecation of moveable fixed assets, both present and future and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari passu interest amongst consortium lenders. Buyerâs Credit are repayable after 31st March, 2018 with an option of further rollover of one year from respective maturity and carry rate of interest ranging from 0.50% to 1.83% per annum.
4. Loans from Bodies Corporate are repayable from February, 2019 and onwards and these Loans carry rate of interest varying from 9.00% to 11.00% per annum on the reporting date.
5. Working Capital Loans from Banks are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender banks have a right to cancel the credit limits (either fully or partially) and, inter-alia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the sanctioned loan accounts in any manner.
6. Working Capital Loans (both fund and non-fund based) from Banks are secured by way of hypothecation of entire Current Assets, both present and future, of the Company viz. inventories, bills receivables, book debts (trade receivables), claims, etc., and are further secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of certain immovable properties of the Company, ranking pari-passu interest amongst consortium lenders.
7. EMPLOYEE BENEFIT PLANS
8. Defined Benefit Plans -
The Companyâs defined benefit plans, interalia, include the approved funded Gratuity scheme which is administered through Group Gratuity Scheme with Life Insurance Corporation of India and non-funded scheme viz. Pension (applicable only to certain ex-employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. The following tables summaries the components of net benefits expense recognized in the Statement of Profit and Loss, the funded status and the amounts recognized in the Balance Sheet for the respective plans.
9. Defined Contribution Plans -
10. Companyâs contribution to defined contribution plans such as approved and recognized Provident/Family Pension Fund and approved Superannuation Fund are charged to the Statement of Profit and Loss as incurred. The Company has no further obligations beyond its contribution except to the extent as stated in Note (ii) herein. The Company has recognized the following contributions as an expense and included in Employee Benefits Expense in the Statement of Profit and Loss :
11. The Provident Fund except pertaining to employees of Companyâs Goa Unit, being administered by a Trust, whereby the Company deposits an amount determined as a fixed percentage of basic pay of eligible employees to the Fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that Provident Funds set up by employers, which require interest shortfall to be met by the employer, needs to be treated as Defined Benefit Plan. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The Actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31st March, 2017. Details of Fund and Plan Assets Position as of 31st March, 2017, are as follows :
12. Segment Reporting (As per Accounting Standard (AS)-17) :
In the opinion of the management, there is only one reportable segment ("Manufacturing and Sale of Electrical and other Cables, Capacitors, Wires and Conductors etc. and turnkey projects predominantly relating theretoâ) as envisaged by Accounting Standard 17 "Segment Reportingâ. Further, from a geographical segment perspective, export sales constitute less than 10% of enterprise revenues. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.
13. Leases :
Assets Given on Operating Lease -
The Company has leased/sub-leased out certain parcel of Land and Buildings situated thereon to Birla Furukawa Fibre Optics Private Limited on Operating Lease. The lease term is for 55 months and thereafter renewable on mutually agreed terms. There is an escalation clause of 3% in the Lease Agreement for every subsequent period of 11 months. There is no restriction imposed by Lease Agreement. The leases are cancellable.
During the year, the Company has received lease rent of Rs. 282.18 lakhs (Previous year Rs. 273.28 lakhs) which is disclosed as Rent received under Note No. 21 âOther Incomeâ.
Assets Taken on Operating Lease :
The Company has taken various residential, office and warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no sub-leases. These leases are generally cancellable and are renewable on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/ payable are charged as "Rentâ under Note No. 27 "Other Expensesâ.
14. The Company is contesting the demand for Terminal Tax Liability raised by the Municipal Corporation of Satna (M.P.) pertaining to financial years from 2002-03 to 2012-13, by challenging, interalia, the constitutional validity of alleged provisions of the Madhya Pradesh Municipal Corporation Act, 1956 and the matter is pending the decision of the Honâble High Court of Madhya Pradesh, Jabalpur.
15. The future cash outflow in respect of Note No. 36 (a) & (b) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and adjudicating authorities concerned.
16. Disclosure of particulars of Guarantee given or security provided as per Section 186(4) of the Companies Act, 2013 is covered under Note No.36(c).
17. The Company has exercised option provided in Para 46A of Accounting Standard - 11 on Effects of changes in Foreign Exchange rates with regard to the treatment of gain/loss on foreign currency transactions and translation. Accordingly, gain on exchange fluctuation on long-term foreign currency monetary items amounting to Rs. 36.77 lakhs (Previous year loss of Rs. 13.60 lakhs) have been adjusted to the cost of capital asset and depreciated over the balance life of the relevant asset. This has resulted in decrease in profit of the year by Rs. 34.22 lakhs (net of depreciation of Rs. 2.55 lakhs) [Previous year increase in profit by Rs. 13.09 lakhs (net of depreciation of Rs. 0.51 lakh)].
18. Derivative Instruments and Unhedged Foreign Currency Exposure:
The Company is exposed to foreign exchange risk arising from foreign currency transactions of imports and exports primarily with respect to USD and Euro. The Companyâs exports are denominated generally in USD, providing a natural hedge to some extent against foreign currency payments on account of imports of raw materials and/or the payment of borrowings. The foreign currency transaction risk are managed through selective hedging programmes by way of forward contracts primarily for underlying transactions having firm commitments or highly probable forecast of crystallization.
During the year, the Company has taken certain derivative instruments for hedging the borrowings in foreign currency and has recognized a loss of Rs. 73.21 lacs in the statement of Profit & Loss on measurement of derivative instruments at fair value. On the reporting date, the fair value of derivative instrument is measured based upon valuation received from the authorized dealer (Bank).
19. The amount of tax credit available to the Company in pursuance to Section 115JAA of the Income Tax Act, 1961, against provision for Current Tax (MAT) during the year shall be accounted for as and when permissible under the governing Guidance Note issued by The Institute of Chartered Accountants of India.
20. There is no impairment of Assets during the year.
21. Previous Year Figures :
The Company has reclassified/regrouped previous year figures wherever necessary, to confirm to this yearâs classification. Figures shown in brackets, represent those of the previous year.
Mar 31, 2016
1. Employee Benefit Plans :
(a) Defined Benefit Plans -
The Companyâs defined benefit plans, interalia, include the approved funded Gratuity scheme which is administered through Group Gratuity Scheme with Life Insurance Corporation of India and non-funded schemes viz. Pension (applicable only to certain ex-employees). Such defined benefits are provided for in the Statement of Profit and Loss based on valuations, as at the Balance Sheet date, made by independent actuaries. The following tables summaries the components of net benefit expense recognized in the Statement of Profit and Loss, the funded status and the amounts recognized in the Balance Sheet for the respective plans.
2. Segment Reporting (As per Accounting Standard (AS)-17) :
In the opinion of the management, there is only one reportable segment (âManufacturing, and Sales of Electrical and other Cables, Capacitors, Conductors and turnkey projects relating theretoâ) as envisaged by Accounting Standard 17 âSegment Reportingâ. Further, from a geographical segment perspective, export sales constitute less than 10% of enterprise revenues. Accordingly, no separate disclosure for segment reporting is required to be made in the financial statements of the Company.
3. Leases :
Assets Given on Operating Lease -
The Company has leased/sub-leased out certain Land and Buildings to Birla Furukawa Fibre Optics Private Limited on Operating Lease. The lease term is for 55 months and thereafter renewable by mutual consent on mutually agreed terms. There is an escalation clause of 3% in the Lease Agreement for every subsequent period of 11 months. There is no restriction imposed by Lease Agreements. The leases are cancellable.
During the year, the Company has received lease rent of Rs. 273.28 lacs (Previous year Rs. 268.53 lacs) which is disclosed as Rent received under Note No. 21 âOther Incomeâ.
Assets Taken on Operating Lease -
The Company has taken various residential, office facilities and warehouse premises under operating Lease Agreement(s). The Lease Agreement(s) generally do not have an escalation clause and there are no sub-leases. These leases are generally cancellable and are renewable by mutual consent on mutually agreed terms. There are no restrictions imposed by Lease Agreement(s). The aggregate lease rentals paid/payable are charged as âRentâ under Note No. 27 âOther Expensesâ.
4. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for Rs. 647.73 lacs (Previous year Rs. 200.45 lacs).
(b) The Company has certain pending contracts for sale of its products and providing turnkey services incidental thereto, the governing terms and conditions whereof, interalia, provide for levy of liquidated damages, penalty, etc. on account of non-fulfillment of contractual obligations within the period as specified in the relevant contracts. Provision has been made on this account wherever considered necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 32 âLeasesâ.
5. Contingent Liabilities (not provided for) :
Notes :
(i) Terminal Tax liability is in respect of demand raised by the Municipal Corporation of Satna (M.P.) under provisions of the Madhya Pradesh Municipal Corporation Act, 1956. The Company has contested the demand interalia by challenging its constitutional validity. The Company has been legally advised that the said demand against the Company is unsustainable and therefore there is no likelihood of the Company being subjected to any Terminal Tax Liability.
(ii) The future cash outflow in respect of No. (b) and (c) above is determinable only on receipt of the decisions/judgments in the cases pending at various forums and authorities concerned.
6. The Company has exercised option provided in Para 46A of Accounting Standard - 11 on Effects of changes in Foreign Exchange rates with regard to the treatment of gain/loss on foreign currency transactions and translation. Accordingly, loss on exchange fluctuation on long-term foreign currency monetary items amounting to Rs. 13.60 lacs (Previous year Rs. 23.37 lacs) have been adjusted to the cost of capital asset and depreciated over the balance life of the asset. This has resulted in decrease in loss of the year by Rs. 13.09 lacs (net of depreciation of Rs. 0.51 lac) [Previous year Rs. 23.08 lacs (net of depreciation of Rs. 0.29 lac)].
7. Previous Year Figures :
The Company has reclassified/regrouped previous year figures wherever necessary, to confirm to this yearâs classification. Figures shown in brackets, represent those of the previous year.
Mar 31, 2014
Nature of Operations
UNIVERSAL CABLES LIMITED is engaged in the manufacturing, laying,
selling of Power Cables and Capacitors.
Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the notified Accounting Standards issued by
Companies Accounting Standard Rules, 2006 (as amended) and the relevant
provisions of the Companies Act, 1956 read with the General Circular
8/2014 dated 4th April, 2014 of the Ministry of Corporate Affairs. The
financial statements have been prepared under the historical cost
convention modified by revaluation of fixed assets, on an accrual
basis. The accounting policies have been consistently applied by the
Company and are consistent with those used in the previous year.
1.(a) Terms/Rights attached to Equity Shares :
The Company has only one class of Shares referred to as Equity Shares
having a par value of Rs. 10/- per share. Each holder of Equity Share
is entitled to one vote per share.
(b) Foreign Currency Loan - Buyer''s Credit from Bank(s) are secured by
hypothecation of entire present and future current assets of the
Company. As collateral security, these facilities are additionally
secured by way of first charge on certain immovable properties of the
Company as continuing security by deposit of title deeds of such
immovable properties. It is repayable within 2 years from the Balance
sheet date and carries rate of Interest ranging from 1.50% - 3.00%.
Long Term Foreign Currency Loan - Buyer''s Credit are repayable in 3
equal Installments.
(c)As per the renewed/revised terms and conditions loans from Bodies
Corporate amounting to Rs. 8000 lacs are repayable in full in the year
2015, Rs. 1500 lacs are repayable in the year 2016 and Rs. 1500 lacs
are repayable in 2017. These loans carry interest @ 10.50% - 11.00%
(rate as on reporting date).
* The Company has recognized deferred tax assets on carry forward
business losses and unabsorbed depreciation, as the Company is having
timing differences, the reversal of which will result in sufficient
income to realise the deferred tax asset.
Working Capital Loans from Bank(s) are secured by hypothecation of
entire present and future current assets of the Company. As collateral
security, these facilities are additionally secured by way of first
charge on certain immovable properties of the Company as continuing
security by deposit of title deeds of such immovable properties.
* Includes Rs. 46.56 lacs (Previous year Nil) on account of Borrowing
Costs capitalised during the quarter.
# Includes Rs. 103.05 lacs (Previous year Nil) pertaining to exchange
loss capitalised as per para 46A of AS 11.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The Company expects to contribute Rs. 70 lacs (Previous year Rs. 80
lacs) to the Gratuity Fund during the year 2014-15.
The Provident Fund being administered by a Trust is a Defined Benefit
Scheme whereby the Company deposits an amount determined as a fixed
percentage of basic pay to the Fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of
the employees is adjusted on an annual basis to confirm to the interest
rate declared by the government for the Employees Provident Fund. The
Guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standard Board (ASB) states that Provident
Funds set up by employers, which require interest shortfall to be met
by the employer, needs to be treated as Defined Benefit Plan. The
Actuarial Society of India has issued the final guidance for
measurement of provident fund liabilities. The Actuary has accordingly
provided a valuation and based on the below provided assumptions, there
is no shortfall as at 31st March, 2014.
2. Segment Reporting AS-17 :
In the opinion of the management, there is only one reportable segment
("Manufacturing, Laying, Selling of Power Cables and Capacitors") as
envisaged by Accounting Standard 17 "Segment Reporting". Further, from
a geographical segment perspective, export sale constitute less than
10% of enterprise revenues. Accordingly, no separate disclosure for
segment reporting is required to be made in the financial statements of
the Company.
*As the liability of Gratuity and Leave encashment is provided on an
actuarial basis for the Company as a whole, amount pertaining to Shri
D.R. Bansal (Key Management Personnel), is therefore not included
above.
Note : (1) No amount has been provided as doubtful debts or
advances/written off or written back in respect of debts due from/to
above parties.
(2) Transactions with related parties are done on arm''s length basis in
the ordinary course of business.
3. Leases :
Assets Given on Operating Lease :
The Company has leased out Land and Buildings to Birla Furukawa Fibre
Optics Limited on Operating Lease. The lease term is for 55 months and
thereafter renewable by mutual consent on mutually agreed terms. There
is an escalation clause of 3% in the Lease Agreement for every
subsequent period of 11 months. There is no restriction imposed by
Lease Agreements. The leases are cancelable.
During the year, the Company has received lease rent of Rs. 203.92 lacs
(Previous year Rs. 195.04 lacs) which is disclosed as rent received
under Note No. 22 "Other Income".
Assets Taken on Operating Lease :
The Company has taken various Residential, Office and Warehouse
premises under operating Lease Agreement(s). The Lease Agreement(s)
generally do not have an escalation clause and there are no subleases.
These leases are generally cancelable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
Lease Agreement(s). The aggregate lease rentals paid/payable are
charged as "Rent" under Note No. 26 "Other Expenses".
4. In view of excise duty tariff rates on the Company''s finished
products being lower than cenvatable Customs Duty on imported inputs,
the Company has accumulated CENVAT credits aggregating to Rs. 729.63
lacs (Previous year Rs. 550.96 lacs). Since there is no time limit for
utilization of these balances and based on the alternative mechanism
devised for reduction of cenvat credit balances on a year on year
basis, in the opinion of the managment this does not call for any
provision there against.
5. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 320.82 lacs (Previous year Rs. 1215.00
lacs).
(b) The Company has entered into EPC contracts and contracts for sale
of cables. Non-fulfillment of contract within specified period will
lead to payment of Liquidated Damages ranging from 5% to 10%. Provision
has been made on this account wherever necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 33
"Leases".
6. Contingent Liabilities (not provided for) :
(Rs. in lacs)
Sl. As at As at
No. Particulars 31st March, 2014 31st March, 2013
1 Income Tax 274.93 415.58
2 Terminal Tax Liability 227.37 227.37
3 Excise and Service Tax Cases 241.32 91.84
4 Bills of exchange
discounted with Banks 1854.51 1269.91
5 Corporate Guarantee issued
in favour of SBI on behalf
of the Joint 3520.00 3520.00
Venture Company viz.
"Birla Furukawa Fibre
Optics Ltd."
Notes :
(a) Income Tax demand comprise demand from the Indian Tax Authorities
for payment of additional tax of Rs. 274.93 lacs (Previous year Rs.
386.69 lacs), upon completion of tax assessments for the financial
years 2007-08, 2008- 09, 2009-10 and 2010-11. The Tax demands are
mainly on account of disallowance of benefits which is linked to
Capital Investments (determined @ 75% of total Commercial Tax (VAT
CST) paid and exemption from Entry Tax), Additional Depreciation, and
other expenses under the Income Tax Act, 1961.
The Company is contesting the demands and the Management, believes that
its position is likely to be upheld in the appellate process. The
Company has accrued Rs. 1165.93 lacs (Previous year Rs. 1264.98 lacs)
in the financial statements for the tax demand raised and balance of
Rs. 274.93 lacs (Previous year Rs. 415.58 lacs) has been disclosed as
contingent liability. The management also believes that the ultimate
outcome of these proceedings will not have a material adverse effect on
the company''s financial position and results of operations.
(b) Terminal Tax liability is in respect of demand raised by the
Municipal Corporation of Satna (M.P.) under provisions of the Madhya
Pradesh Municipal Corporation Act, 1956. The Company has contested the
demand interalia by challenging its constitutional validity. The
Company has been legally advised that the said demand against the
Company is unsustainable and therefore there is no likelihood of the
Company being subjected to any Terminal Tax Liability.
(c) The future cash outflow in respect of items 1 to 3 above is
determinable only on receipt of the decisions/ judgements in the cases
pending at various forums and authorities concerned.
7. The Company has exercised option provided in Para 46A of Accounting
Standard - 11 on Effects of changes in Foreign Exchange rates with
regard to the treatment of foreign exchange fluctuation gain/loss.
Accordingly, loss on exchange fluctuation on long-term foreign currency
monetary items amounting to related Rs. 103.05 lacs have been adjusted
to the cost of capital asset and depreciated over the balance life of
the asset. This has resulted in increase in profit of the year by Rs.
93.81 lacs (net of depreciation of Rs. 9.24 lacs).
(a) A sum of Rs. 2.26 lacs (Previous year Rs. 7.55 lacs) on account of
unamortized foreign exchange premium on outstanding forward exchange
contracts is being carried forward to be charged to Statement of Profit
and Loss of the subsequent period.
8. There is no impairment of Fixed Assets during the year.
9. Previous Year Figures
The Company has reclassified/regrouped previous year figures wherever
necessary, to conform to this year''s classification. Figures shown in
brackets, represent those of the previous year.
Mar 31, 2013
1. Nature of Operations
UNIVERSAL CABLES LIMITED, an M. P. Birla Group Company is engaged in
the manufacturing, laying, selling of Power Cables and Capacitors.
2. Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the notified Accounting Standards issued by
Companies (Accounting Standard) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared under the historical cost convention
modified by revaluation of fixed assets, on an accrual basis. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
3. Employee Benefit Plans :
The Company''s defined benefit plans include the approved funded
Gratuity scheme which is administered through Group Gratuity Scheme
with Life Insurance Corporation of India and non-funded schemes viz.
Pension (applicable only to certain employees). Such defined benefits
are provided for in the Statement of Profit and Loss based on
valuations, as at the Balance Sheet date, made by independent
actuaries.
The following tables summarise the components of net benefit expense
recognized in the Statement of Profit and Loss, the funded status and
the amounts recognized in the Balance Sheet for the respective plans.
4. Segment Information :
Business Segments :
Power Cables & Capacitors account for the majority of business of the
Company. Power Cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organisations/engineering industries like railways,
shipping, refineries etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
5. Leases :
Assets Given on Operating Lease :
The Company has leased out Land and Buildings on Operating Lease. The
lease term is for 55 months and thereafter renewable by mutual consent
on mutually agreed terms. There is an escalation clause of 3% in the
Lease Agreement for every subsequent period of 11 months. There is no
restriction imposed by Lease Agreements. The leases are cancelable.
During the year, the Company has received lease rent of Rs. 195.04 lacs
(Previous year Rs. 104.92 lacs) which is disclosed as rent received under
Note No. 22 `"Other Income`".
Assets Taken on Operating Lease :
The Company has taken various Residential, Office and Warehouse
premises under operating Lease Agreement(s). The Lease Agreement(s)
generally do not have an escalation clause and there are no subleases.
These leases are generally cancelable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
Lease Agreement(s). The aggregate lease rentals paid/payable are
charged as `"Rent`" under Note No. 26 "Other Expenses".
6. In view of excise duty tariff rates on the Company''s finished
products being lower than cenvatable Customs Duty on imported inputs,
the Company has accumulated CENVAT credits aggregating to Rs. 550.96 lacs
(Previous year Rs. 965.81 lacs). Since there is no time limit for
utilization of these balances and based on the alternative mechanism
devised for reduction of cenvat credit balances on a year on year
basis, in the opinion of the managment this does not call for any
provision thereagainst.
7. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 1215.00 lacs (Previous year Rs. 1528.63
lacs).
(b) The Company has entered into EPC contracts and contracts for sale
of cables. Non-fulfillment of contract within specified period will
lead to payment of Liquidated Damages ranging from 5% to 10%. Provision
has been made on this account wherever necessary.
(c) For commitment relating to Lease arrangement, Refer to Note No. 33
"Leases".
8. Contingent Liabilities (not provided for) :
(Rs. in lacs)
Sl. As at As at
Particulars
No 31st March,
2013 31st March,
2012
1 Income Tax* 415.58 259.27
2 Terminal Tax Liability** 227.37 195.30
3 Excise and Service Tax Cases 91.84 170.60
4 Bills of exchange
discounted with Banks 1269.91 3308.91
5 Corporate Guarantee issued
in favour of SBI on behalf of the 3520.00 3520.00
Joint Venture Company viz.`"Birla Furukawa Fibre Optics Ltd.`"
* Income Tax demand comprise demand from the Indian Tax Authorities for
payment of additional tax of Rs. 386.69 lacs (Previous year Rs. 233.54
lacs), upon completion of tax assessments for the financial years
2007-08, 2008-09 and 2009-10. Further for the years 2010-11, 2011-12
and 2012-13, the Management has considered Rs. 28.89 lacs (Previous year
Rs. 25.73 lacs) as contingent liability based on the issues raised in the
tax assessments of earlier years. The Tax demands are mainly on account
of disallowance of benefits which is linked to Capital Investments
(determined @ 75% of total Commercial Tax (VAT CST) paid and
exemption from Entry Tax), Additional Depreciation, and other
miscellaneous expenses under the Income Tax Act, 1961.
The Company is contesting the demands and the Management, believes that
its position is likely to be upheld in the appellate process. The
Company has accrued Rs. 1264.98 lacs (Previous year Rs. 1050.09 lacs) in
the financial statements for the tax demand raised and balance of Rs.
415.58 lacs (Previous year Rs. 259.27 lacs) has been disclosed as
contingent liability. The management also believes that the ultimate
outcome of these proceedings will not have a material adverse effect on
the company''s financial position and results of operations.
**Terminal Tax liability is in respect of demand raised by the
Municipal Corporation of Satna (M.P.) under provisions of the Madhya
Pradesh Municipal Corporation Act, 1956. The Company has contested the
demand interalia by challenging its constitutional validity. The
Company has been legally advised that the said demand against the
Company is unsustainable and therefore there is no likelihood of the
Company being subjected to any Terminal Tax Liability.
The future cash outflow in respect of items 1 to 3 above is
determinable only on receipt of the decisions/judgements in the cases
pending at various forums and authorities concerned.
10. The market value of a long term strategic quoted Non-current
investment (trade) in a Joint Venture Company namely, Birla Ericsson
Optical Limited is Rs. 368 lacs as at 31st March, 2013, thus having a
temporary decline of Rs. 482 lacs as compared to the carrying amount of
the said investment. Having regard to the future growth potential
anchored on core competencies, intrinsic assets base/net worth and
state-of-the-art manufacturing facilities of the investee company, in
the opinion of the management the decline in the market value of
Company''s investment is not considered to be of other than temporary
nature and hence does not call for any provision thereagainst.
11. There is no impairment of Fixed Assets during the year.
12. Previous Year Figures
The Company has reclassified/regrouped previous year figures wherever
necessary, to conform to this year''s classification. Figures shown in
brackets, represent those of the previous year.
Mar 31, 2012
(A) Terms/Rights attached to Equity Shares :
The Company has only one class of Shares referred to as Equity Shares
having a par value of Rs.10/- per share. Each holder of Equity Share is
entitled to one vote per share. The Company declares and pays dividend
in Indian Rupees. The dividend proposed by the Board of Directors is
subject to approval of shareholders in the Annual General Meeting. For
the year ended 31st March, 2012, the amount of per share dividend
recognized as distributions to equity shareholders is Rs. Nil (Previous
year Rs. 2/-).
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company in
proportion to the amount paid up or credited as paid up on such equity
shares respectively, after distribution of all preferential amounts.
As per records of the Company, including its register of
shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares.
(B) Aggregate number of shares issued for consideration other than cash
during the period of five years immediately preceding the reporting
date :
30,92,310 (Previous year 30,92,310) Equity Shares of Rs. 10/- each
amounting to Rs. 3,09,23,100/- were allotted on September 7, 2006 to the
Shareholders of erstwhile Optic Fibre Goa Limited pursuant to the
Scheme of Amalgamation without payment being received in cash.
1. Employee Benefit Plans :
The Company has a defined benefit Gratuity Plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an Insurance Company in the form of a
qualifying Insurance Policy.
The Company has a Pension Scheme in place for some of its employees who
had opted for this Scheme in the past. Presently, there are 23
employees covered under the Scheme, out of which one employee is
continuing his employment as on 31.03.2012 and the remaining 22 are
retired ones.
The pension entitlement is based on the final salary and period of
service put in by the pensioners as per the Pension Scheme of the
Company. No escalation in the terminal salary is considered after
retirement. The Pension is paid to the employee till his/her survival
and thereafter it is paid to the surviving spouse as per the rate
prescribed under the Scheme. No post-employment medical plans are
covered under the Pension Scheme of the Company.
The following tables summarise the components of net benefit expense
recognized in the Statement of Profit and Loss, the funded status and
the amounts recognized in the Balance Sheet for the respective plans.
The Provident Fund being administered by Trusts is a Defined Benefit
Scheme whereby the Company deposits an amount determined as a fixed
percentage of basic pay to the Fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of
the employees is adjusted on an annual basis to confirm to the interest
rate declared by the government for the Employees Provident Fund. The
Guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standards Board (ASB) states that Provident
Funds set up by employers, which require interest shortfall to be met
by the employer, needs to be treated as Defined Benefit Plan. The
Actuarial Society of India has issued the final guidance for
measurement of provident fund liabilities. The Actuary has accordingly
provided a valuation and based on the below provided assumptions, there
is no shortfall as at 31st March, 2012.
2. Segment Information :
Business Segments :
Power Cables & Capacitors account for the majority of business of the
Company. Power cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organisations/engineering industries like railways,
shipping, refineries, etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
Optical Fibre consists of single mode and multimode Telecommunication
Grade Optical Fibres.
(a) Primary Segment Information (by Business Segments) :
The following table presents revenue and profit/(loss) information
regarding industry segments for the years ended 31st March, 2012 and
31st March, 2011 and certain assets and liabilities information
regarding industry segments at 31st March, 2012 and 31st March, 2011 :
*As the liability of Gratuity and Leave encashment is provided on an
actuarial basis for the Company as a whole, amount pertaining to Shri
D.R. Bansal (Key Management Personnel), is therefore not included
above.
Note : No amount has been provided as doubtful debts or advances
written off or written back in respect of debts due from/to above
parties.
3. Leases :
Assets Given on Operating Lease :
The Company has leased out Land and Buildings on Operating Lease. The
lease term is for 55 months and thereafter renewable by mutual consent
on mutually agreed terms. There is an escalation clause in the Lease
Agreement that rent shall be increased for every subsequent period of
11 months by an amount equal to 6% of the lease rent. There is no
restriction imposed by Lease Agreements. The rent is not based on any
contingency. The leases are cancelable.
During the year, the Company has received lease rent of Rs. 104.92 lacs
(Previous year Rs. 219.03 lacs) which is disclosed as rent received under
Note No. 22 "Other Income".
Assets Taken on Operating Lease :
The Company has taken various Residential, Office and Warehouse
premises under operating Lease Agreement(s). The Lease Agreement(s)
generally do not have an escalation clause and there are no subleases.
These leases are generally cancelable and are renewable by mutual
consent on mutually agreed terms. There are no restrictions imposed by
Lease Agreement(s). The aggregate lease rentals paid/payable are
charged as "Rent" under Note No. 26 "Other Expenses".
The future minimum lease payments under non-cancelable operating lease
is Rs. Nil (Previous year Rs. Nil).
4. In view of excise duty tariff rates on the Company's finished
products being lower than cenvatable Customs Duty on imported inputs,
the Company has accumulated CENVAT credits aggregating to Rs. 965.81 lacs
(Previous year Rs. 459.24 lacs). Since there is no time limit for
utilization of these balances and based on the alternative mechanism
devised for reduction of cenvat credit balances on a year on year
basis, in the opinion of the management this does not call for any
provision there against.
5. Capital and other commitments :
(a) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 1528.63 lacs (Previous year Rs. 123.87
lacs).
(b) The Company has entered into EPC contracts and contracts for sale
of cables. Non-fulfillment of contract within specified period will
lead to payment of Liquidated Damages ranging from 5% to 10%.
(c) For commitment relating to Lease arrangement, Refer to Note No. 33
"Leases".
6. Contingent Liabilities (not provided for) :
(Rs. in lacs)
Sl. Particulars As at As at
No. 31st March,
2012 31st March, 2011
1 Income Tax* 259.27 428.04
2 Terminal Tax Liability** 214.37 -
3 Excise and Service Tax Cases*** 170.60 -
4 Bills of exchange discounted
with Banks 3308.91 1183.77
5 Corporate Guarantee issued in
favour of SBI on behalf of the 3520.00 3520.00
Joint Venture Company viz.
"Birla Furukawa Fibre Optics
Ltd."
* Income Tax demand comprise demand from the Indian Tax Authorities for
payment of additional tax of Rs. 233.54 lacs (Previous year Rs. 428.04
lacs) upon completion of tax assessments for the financial years
2007-08 and 2008-09. Further for the years 2009-10, 2010-11 and
2011-12, the Management has considered Rs. 25.73 lacs as contingent
liability based on the issues raised in the tax assessments of earlier
years. The Tax demands are mainly on account of disallowance of
benefits which is linked to Capital Investments (determined @ 75% of
total Commercial Tax (VAT CST) paid and exemption from Entry Tax),
Additional Depreciation, and other miscellaneous expenses under the
Income Tax Act, 1961.
The Company is contesting the demands and the Management, believes that
its position is likely to be upheld in the appellate process. The
Company has accrued Rs. 1050.09 lacs (Previous year Rs. 869.33) in the
financial statements for the tax demand raised and balance of Rs. 259.27
lacs has been disclosed as contingent liability. The management also
believes that the ultimate outcome of these proceedings will not have a
material adverse effect on the company's financial position and results
of operations.
** Terminal Tax liability is in respect of demand raised by the
Municipal Corporation of Satna (M.P.) under provisions of the Madhya
Pradesh Municipal Corporation Act, 1956. The Company has contested the
demand interalia by challenging its constitutional validity. The
Company has been legally advised that the said demand against the
Company is unsustainable and therefore there is hardly any likelihood
of the Company being subjected to any Terminal Tax Liability.
*** On the basis of current status of individual cases and as per legal
advice obtained by the Company, wherever applicable, the Company is
confident that no provision is required in respect of these cases at
this point in time.
7. The market value of a long term strategic quoted Non-current
investment (trade) in a Joint Venture Company namely, Birla Ericsson
Optical Limited is approximately Rs. 389 lacs as at 31st March, 2012,
thus having a temporary decline of Rs. 461 lacs as compared to the
carrying amount of the said investment. Having regard to the future
growth potential of the investee company, in the opinion of the
management the decline in the market value of Company's investment is
not considered to be of permanent nature and hence does not call for
any provision there against.
8. In view of unexpected losses incurred by the company during the
year, mainly on account of sharp weakening of Indian Rupee vis-a-vis US
Dollar and other foreign currencies, elevated input prices amid high
volatility and soaring interest rates, the Managerial Remuneration paid
to Shri D.R. Bansal, Chief Executive Officer of the Company, has
exceeded the limits prescribed under paragraph A Section II Part II of
Schedule XIII to the Companies Act, 1956 which needs to be ratified,
confirmed and approved by the Company in General Meeting in terms of
paragraph B Section II Part II of Schedule XIII to the Companies Act,
1956.
The Company therefore is in the process of getting a Special Resolution
passed in the ensuing Annual General Meeting to ratify, confirm and
approve the Managerial Remuneration paid in excess to Shri D.R. Bansal,
Chief Executive Officer of the Company, as aforesaid.
9. Previous Year Figures
Till the year ended 31st March, 2011, the Company was using pre-revised
Schedule VI to the Companies Act, 1956 for preparation and presentation
of its financial statements. During the year ended 31st March, 2012,
the Revised Schedule VI notified under the Companies Act, 1956 has
become applicable to the Company. The Company has
reclassified/regrouped previous year figures to confirm to this year's
classification. The adoption of Revised Schedule VI does not impact
recognition and measurement principles followed for presentation of
financial statements. However, it impacts presentation and disclosure
made in financial statements, particularly presentation of Balance
Sheet. Figures shown in brackets, represent those of the previous year.
Mar 31, 2011
1. Nature of Operations
UNIVERSAL CABLES LIMITED, a M. P. Birla Group Company is engaged in the
manufacturing, laying, selling of Power Cables, Capacitors and Optical
Fibre.
2. Segment Information :
Business Segments :
Power Cables & Capacitors account for the majority of business of the
Company. Power cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organizations/engineering industries like railways,
shipping, refineries etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
Optic Fibre consists of single mode and multimode Telecommunication
Grade Optical Fibres.
(a) Primary Segment Information (by Business Segments)
The following table presents revenue and profit/(loss) information
regarding industry segments for the years ended March 31, 2011 and
March 31, 2010 and certain assets and liabilities information regarding
industry segments at March 31, 2011 and March 31, 2010 :
3. Related Party Disclosure :
Mr. D.R. Bansal
Key Management Personnel (Chief Executive Officer)
Joint Ventures Birla Ericsson Optical Limited (BEOL)
Birla Furukawa Fibre Optics Limited (BFL)
Other Parties which
significantly Influence/
are influenced by Vindhya Telelinks Limited (VTL)
the Company (either
individually or with
others) Shakun Polymers Limited (SPL)
4. Leases :
In case of the Assets given on lease
Operating Lease :
The Company has leased out Land and Buildings on Operating Lease. The
lease term is for 55 months and thereafter renewable as per the mutual
terms. There is an escalation clause in the lease agreement. There is
no restriction imposed by lease agreements. The rent is not based on
any contingency. The leases are cancellable.
The Company has received lease rent of Rs. 219.03 lacs (previous year
Rs. 189.11 lacs) disclosed as rent received under Schedule 15 "Other
Income".
Assets Taken on Operating Lease :
The Company has taken various residential, office, warehouse premises
under operating lease agreements. The lease agreements generally not
have an escalation clause and there are no subleases. These leases are
generally not non-cancellable and are renewable by mutual consent on
mutually agreed terms. There are no restrictions imposed by lease
agreements. The aggregate lease rentals payables are charged as "Rent"
in Schedule 18.
The future minimum lease payments under non-cancellable operating lease
Rs. Nil (Previous Year Rs. Nil).
5. Capital Commitments :
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs. 123.87 lacs (Rs. 2131.49 lacs).
6. Contingent Liabilities (not provided for) :
Sl. Particulars As at As at
No. March 31, 2011 March 31, 2010
1. Unredeemed Bank Guarantees 11803.37 9492.76
2. Corporate Guarantee issued
to SBI for loan taken by the 3520.00 Ã
Joint Venture Company "Birla
Furukawa Fibre Optics Ltd."
3. Income Tax 428.04 Ã
7. Derivative Instruments and Unhedged Foreign Currency Exposure
(c) A sum of Rs. 38.00 lacs (Previous year Rs. 99.14 lacs) on account
of unamortised foreign exchange premium on outstanding forward exchange
contracts is being carried forward to be charged to Profit and Loss
Account of the subsequent period.
8. In the opinion of the management, the decline in market value of
the quoted investments by Rs. 160.47 lacs (Rs. 239.64 lacs) in a joint
venture company at the year end is temporary and hence, does not
require any provision thereagainst.
9. In accordance with Explanation below Para 10 of Notified
Accounting Standard 9 : Revenue Recognition, Excise Duty on sales
amounting to Rs. 4570.04 lacs (Rs. 3187.88 lacs) has been reduced from
sales in the Profit and Loss Account and excise duty on decrease in
stocks amounting to Rs. 116.78 lacs considered as income (Rs. 252.46
lacs on increase in stock has been considered as expense) in Schedule
18 of the financial statements.
10. Employee Benefit Plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The Company has also agreed to provide pension to certain employees.
These benefits are unfunded.
The following tables summarize the components of net benefit expense
recognized in the profit and loss account and the funded status and
amounts recognised in the balance sheet for the respective plans.
The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in the employment market.
The Company expects to contribute Rs. 125 lacs (Rs. 100 lacs) to
gratuity fund during the year 2011-12.
11. The Board of Directors in their meeting held on July 27, 2010,
decided to sell the manufacturing operations of Optic Fibre Goa Unit of
the Company to Birla Furukawa Fibre Optics Ltd., a Joint Venture
Company. Accordingly, on October 23, 2010, the Company has sold the
specified assets having cost of Rs. 3418.70 lacs (WDV of Rs. 1345.08
lacs) at Rs. 1413.51 lacs.
12. Previous Year Comparatives
Previous years figures, are shown in brackets in the Schedules and
have been regrouped wherever necessary to confirm to this years
classification.
Mar 31, 2010
1. Nature of Operations
UNIVERSAL CABLES LIMITED, a M. P. Birla Group Company is engaged in the
manufacturing and selling of Power Cables, Capacitors and Optical
Fibre.
2. Segment Information
Business Segments:
Power Cables & Capacitors account for the majority of business of the
Company. Power cables are of different types viz. Extra High Voltage,
Medium Voltage, Low Voltage, Elastomeric and PVC winding wires. These
are used for the transmission and distribution of electricity in power
plants and other organizations/engineering industries like railways,
shipping, refineries etc. PVC winding wires are used for submersible
pumps. Capacitor consists of high/low voltage capacitors.
Optic Fibre consists of single mode and multimode Telecommunication
Grade Optical Fibres.
(a) Primary Segment Information (by Business Segments)
The following table presents revenue and profit/(loss) information
regarding industry segments for the years ended March 31, 2010 and
March 31, 2009 and certain assets and liabilities information regarding
industry segments at March 31,2010 and March 31,2009.
3. Related Party Disclosure
Key Management Personnel
Mr. D.R Bansal (Chief Executive Officer)
Joint Venture Birla Ericsson Optical Limited (BEOL)
Birla Furukawa Fibre Optics Limited (BFFOL)
Other Parties which significantly
Influence/are influenced by Vindhya Telelinks Limited (VTL)
the Company (either individually
or with others) Shakun Polymers Limited (SPL)
4. Optic Fibre Unit of the Company at Goa has accumulated CENVAT credit
aggregating to Rs. 229.42 lacs as at March 31,2010 (as appearing in
Schedule 11 of Loans and Advances) for which the management has devised
an alternate mechanism for utilization of the accumulated Cenvat credit
as going concern over a reasonable period of time and hence this does
not call for any provision there against.
5. Capital Commitments:
Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs.2131.49 lacs (Rs. 426.16 lacs).
6. In the opinion of the management, the decline in market value of
the quoted investments by Rs.239.64 lacs (Rs.563.35 lacs) in a joint
venture company at the year end is temporary and hence, does not call
for any provision there against.
7. In accordance with Explanation below Para 10 of Notified
Accounting Standard 9: Revenue Recognition, Excise duty on sales
amounting to Rs. 3187.88 lacs (Rs. 6348.10 lacs) has been reduced from
sales in the Profit and Loss Account and excise duty on increase in
stocks amounting to Rs. 252.46 lacs considered as expense (Rs. 681.47
lacs on decrease in stocks has been considered as income) in Schedule
18 of the financial statements.
8. Employee Benefit plans (Notified AS 15)
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets a gratuity on departure at
15 days salary (last drawn salary) for each completed year of service.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The Company has also agreed to provide pension to certain employees.
These benefits are unfunded.
The following tables summarize the components of net benefit expense
recognized in the profit and loss account and the funded status and
amounts recognized in the balance sheet for the respective plans.
9. Subsequent Events
On 11 th May, 2010, the Board of Directors, with a view to concentrate
on the core business segment of the Company i.e. Power Cables &
Capacitors, proposed to sell, Lease and/or transfer Optic Fibre Goa
Unit of the Company to Birla Furukawa Fibre Optics Limited, a Joint
Venture Company, subject to necessary approval from the Shareholders
and other compliances as may be needed. The Unit will, however,
continue its operations till the transfer actually takes place. No
impairment provision is required to be made as the Management expects
to realize a price higher than the Written Down Value of the Fixed
Assets to be transferred.
10. Previous Year Comparatives
Previous years figures, are shown in brackets in the Schedules and
have been regrouped wherever necessary to confirm to this years
classification.
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