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RPG Cables LimitedCeat Mahal,463, Dr. Annie Besant Road, WorliMumbai 400 025.Website : www.rpgcables.com

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1

ANNUAL REPORT 2002-03

MANAGEMENT TEAM

Mr. A. S. Jatkar, Managing DirectorMr. Vijay R. Phatarphekar, CE & SBU Head PowerMr. A. K. Sharma, ,Vice President & SBU Head

Telenet SolutionsMr. Nikhil Gupta, Vice President - Finance & IT

Vice President - Human Resources & TQM

REGISTERED OFFICE

Hebbal Industrial Area,Hootagalli, Belavadi Post,Mysore - 570 018.Phone:0821 - 2402401/404Fax: 0821 - 2402499

CORPORATE OFFICE

Ceat Mahal,463, Dr. Annie Besant Road,Worli, Mumbai - 400 030.Tel : 24937244/56670300Fax : 24930206Website : www.rpgcables.com

BANKERS

State Bank of India

Canara Bank

Bank of India

Global Trust Bank

SOLICITORS & ADVOCATES

Khaitan & Co.

AUDITORS

N. M. Raiji & Co.Chartered Accountatns

BOARD OF DIRECTORS

Mr. H. V. Goenka, ChairmanMr. R. A. Naik

Mr. Haigreve Khaitan

Mr. J. M. Mukhi

Mr. B. L. Paranjape (expired on 19.3.03)Mr. V. N. Nadkarni

Mr. D. G. Piramal

Mr. Manoj K. Maheshwari

Mr. P. K. Mohapatra

Mr. A. K. Gupta (IFCI Nominee)Mr. A. S. Jatkar, Managing Director

COMPANY SECRETARY

Mr. Bharat Thakkar

AUDIT COMMITTEE

Mr. R. A. Naik

Mr. Manoj K. Maheshwari

Mr. P. K. Mohapatra

SHAREHOLDERS/INVESTORS GRIEVANCECOMMITTEE

Mr. R. A. Naik

Mr. P. K. Mohapatra

Mr. A. S. Jatkar

REGISTRARS & TRANSFER AGENTS

Alpha Systems Pvt. Limited,30 Ramanna Residency, Ground Floor,4th Cross, Sampige RoadMalleswaram, Bangalore 560 003.Phone: 080 - 3460815-818Fax: 080 - 3460819Email: [email protected]

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RPG CABLES LIMITED

CONTENTS INDEX

Page No.

RPG CABLES LIMITED

Notice .............................................................. 3

Directors’ Report .............................................. 5

Management Discussion & Analysis Report ........ 8

Report on Corporate Governance ...................... 10

Auditors’ Report ............................................... 16

Balance Sheet ................................................... 18

Profit & Loss Account ........................................ 19

Cash Flow Statement ......................................... 20

Schedules ......................................................... 21

Statement Pursuant to Section 212 (3) &212 (5) of the Companies Act, 1956 ................ 39

BLUE NILES HOLDINGS LIMITED

Directors’ Report .............................................. 40

Auditors’ Report ............................................... 41

Balance Sheet ................................................... 42

Profit & Loss Account ........................................ 43

Schedules ......................................................... 44

CONSOLIDATED FINANCIAL STATEMENTS .. 49

Proxy Form ....................................................... 71

3

ANNUAL REPORT 2002-03NOTICE

NOTICE IS HEREBY GIVEN THAT THE TWENTY-FIRSTANNUAL GENERAL MEETING OF THE MEMBERS OFRPG CABLES LIMITED WILL BE HELD ON WEDNESDAY, THE24TH DECEMBER, 2003 AT 11.00 A.M. AT HOTELSOUTHERN STAR, VINOBHA ROAD, MYSORE-570 001 TOTRANSACT THE FOLLOWING BUSINESS:

ORDINARY BUSINESS

1) To receive, consider and adopt the Audited Balance Sheetas at March 31, 2003 and the Profit and Loss Accountfor year ended on that date together with the reports ofthe Directors and Auditors.

2) To appoint a Director in place of Mr. Dilip.G.Piramal,who retires by rotation, and being eligible, offers himselffor re-appointment.

3) To appoint a Director in place of Mr. R A Naik, whoretires by rotation, and being eligible, offers himself forre-appointment.

4) To appoint a Director in place of Mr. Manoj K Maheswari,who retires by rotation, and being eligible, offers himselffor re-appointment.

5) To consider, and if thought fit, to pass with or withoutmodification(s) the following resolution as an OrdinaryResolution:

“RESOLVED THAT pursuant to Section 224, and otherapplicable provisions, if any, of the Companies Act, 1956,M/s N.M.Raiji & Company, Chartered Accountants,Mumbai be and are hereby appointed as Auditors of theCompany to hold office from conclusion of this AnnualGeneral Meeting until the conclusion of the next AnnualGeneral Meeting on a remuneration to be agreed uponbetween the Board of Directors of the Company and thesaid Auditors”.

SPECIAL BUSINESS

6) To consider, and if thought fit, to pass, with or withoutmodification(s) the following resolution as a SpecialResolution:

“RESOLVED THAT in suppression of the earlier specialresolution passed at the annual general meeting held on27th September, 2002 and subject to such approvals asmay be necessary, the approval of the Company be andis accorded for delisting of the equity shares of theCompany, in terms of Securities And Exchange Board OfIndia (Delisting of Securities) Guidelines-2003 from allthe Stock Exchanges, other than at the National StockExchange of India Ltd, Mumbai and the Bangalore StockExchange, Bangalore where the equity shares of theCompany are presently listed.”

“RESOLVED FURTHER THAT the Board of Directors ( theBoard) of the Company be and is hereby authorised todelist the equity shares of the Company from Bombay

Stock Exchange, Calcutta Stock Exchange, Delhi StockExchange, Jaipur Stock Exchange, Ahmedabad StockExchange, Saurashtra Kutch Stock Exchange andVadodara Stock Exchange at such time as the Boardmay in its absolute discretion, consider appropriate andupon such terms and conditions as may be in the interestof the Company, after taking into account various factorssuch as but not limited to the incidence, impact or burdenof the cost of listing fee payable to the Stock Exchangeslocated as aforesaid and the volume of the trading onthe relevant Stock Exchanges.”

“RESOLVED FURTHER THAT the Board be and is herebyfurther authorised and granted powers to removedifficulties and do all such acts, deeds, matters and thingsas may be considered necessary, usual or expedient togive effect to this resolution.”

By Order of the Board

Bharat ThakkarCompany Secretary

Registered Office:Hebbal Industrial Area,HootagalliBelavadi PostMysore - 570 018

Dated : 14th November, 2003

NOTES:

1 A MEMBER ENTITLED TO ATTEND AND VOTE AT THEMEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF AND APROXY NEED NOT BE A MEMBER OF THE COMPANY.THE PROXY IN ORDER TO BE EFFECTIVE MUST BEDEPOSITED AT THE REGISTERED OFFICE OF THECOMPANY NOT LESS THAN 48 HOURS BEFORE THECOMMENCEMENT OF THE MEETING.

2 The Explanatory Statement setting out the material factsconcerning the special business mentioned under itemno. 6 of the Notice as required under Section 173(2) ofthe Companies Act, 1956 is annexed hereto.

3 The Register of Members and the Share Transfer Booksof the Company will remain closed from Friday,19th December, 2003 to Wednesday 24th December,2003 (Both days inclusive).

4 Members are requested to:

a) Notify any change in address with Pin Code numbersimmediately to the Company’s Registrars & ShareTransfer Agents M/s. Alpha Systems Pvt. Limited,30, Ramanna Residency, Ground Floor, 4th Cross,Sampige Road, Malleswaram, Bangalore-560 003.

b) Bring their copy of the Annual Report and AttendanceSlip with them at the Annual General Meeting.

c) Quote ledger folio in all their correspondence.

4

RPG CABLES LIMITED

The above resolution is therefore, recommended for yourapproval. The shareholders have already approved delistingof shares from six stock exchanges at the Twentieth AnnualGeneral Meeting of the Company held on 27th September,2002. The present resolution authorizes delisting from sevenexchanges. In respect of delisting at six exchanges which wasapproved earlier, the present resolution is proposed to beadopted by way of an abundant caution since the SecuritiesExchange Board of India (Delisting of Securities) Guidelines–2003 were issued in February 2003, i.e. after the resolutionwas adopted on 27th September, 2002.

Except to the extent of the individual shareholding, none ofthe Directors of the Company is concerned and/or interestedin this resolution.

By Order of the Board


Registered Office:Hebbal Industrial Area,HootagalliBelavadi PostMysore - 570 018

Dated : 14th November, 2003

ANNEXURE TO THE NOTICE

Explanatory Statement as required under Section 173(2) of the Companies Act, 1956

Item No. 6

The Company’s Equity Shares are listed on nine StockExchanges viz. Bangalore Stock Exchange Ltd., Vadodra StockExchange Ltd., The Delhi Stock Association Ltd., National StockExchange of India Ltd., The Stock Exchange, Ahemedabad,The Saurashtra Kutch Stock Exchange Ltd., The Calcutta StockExchange Association Ltd., Jaipur Stock Exchange Ltd. andThe Stock Exchange, Mumbai.

The trading volumes on the Stock Exchanges other than at theStock Exchange, Mumbai and the National Stock Exchangehave been very thin and no particular benefit is available tothe shareholders of the Company by continuing the listing ofthe shares on these exchanges. Moreover, with online tradingavailable and accessible throughout the country on the NationalStock Exchange, the need for listing on all such StockExchanges is no longer necessary. The Company is thereforedesirous of delisting of its shares from all the Stock Exchangesother than from the National Stock Exchange and theBangalore Stock Exchange in the state of Karnataka wherethe Registered office of the Company is situated.

It is accordingly proposed to give authority to the Board ofDirectors of the Company to delist the Equity shares from anyor all of the said Stock Exchanges, other than at NationalStock Exchange and Bangalore after taking into considerationthe interest of the shareholders in general.

5

ANNUAL REPORT 2002-03DIRECTORS� REPORT

Your Directors have pleasure in presenting their Twenty-FirstAnnual Report and Audited Accounts of the Company for theyear ended March 31, 2003.

FINANCIAL RESULTS

(Rs. In Crores)*2002-03 2001-02

Turnover (Inclusive of other income) 187.68 345.87

Gross Profit(before depreciation,interest & tax) 2.11 21.02

Less: Depreciation 8.59 11.24

Less: Interest (Net) (1.24) 5.78

Profit before Tax (5.24) 4.00

Less: Tax - 0.01

Add: Deferred tax Adjustments (5.52) (0.67)

Less: Provision for tax forearlier years (2.25) 0.25

Profit after Tax 2.53 4.41

Balance brought forward fromPrevious year 44.49 41.78

Profit available for appropriation 47.02 46.19

Appropriations:

Equity Dividend - 1.70

Balance carried to Balance Sheet 47.02 44.49

47.02 46.19

* These include the result of Operations of Concepta CablesLtd for a part of the year.

MERGER OF CONCEPTA CABLES LTD

You will recall that at an Extraordinary General Meeting ofthe Company held on 11th April, 2003 the shareholders hadapproved the Merger of a subsidiary of your Company,Concepta Cables Ltd., with the Company.

We are pleased to confirm that all approvals have beenreceived for this merger and the results for the year 2002-03reflect the merged position.

DIVIDEND

Your Directors regret their inability to recommend payment ofdividend for the year under review in view of insufficientprofits.

OPERATIONS

Telecom Cables

In the Jelly Filled Telecom Cables segment of the business,there has been a further price erosion by approx. 20% as aresult of which your company was unable to accept any orders,resulting in a steep reduction in sales and profits. The Companyhas taken several initiatives to substantially reduce costs &minimize losses. The Rae Bareli Plant of the Company wasclosed down. In the Optical Fibre Cable segment, the Companyincreased the volume from 100834 FKM to 229694 FKM outof the new plant at Mysore. Your company has also tied upwith Corning, USA for providing structured cabling solutionsin India.

Power Cables

It was a mixed year for the Power Cables industry. The demandwas low in the first two quarters but increased significantly inthe last two quarters both in the Low Tension and High Tensionsegments. The operating expenses were monitored closely andthe rationalizing of the manpower base and other operatingcosts continued unabated. Emphasis was laid on achievingpositive cash flows.

Housewiring Cables

The turnover of this business continued to grow significantly.‘RPG Cables’ brand is now present across the country andhas received wide recognition for quality among end users aswell as Architects, Builders & Contractors. To promote thebrand, your Company organized various meets and campaignsin different parts of the Country to get closer to the customers.

Telenet Solutions

This is a new business commenced last year by your companyfor undertaking contracts for installation of Telecom Cables &Towers. This business was able to establish a foothold in thecompetitive market and has already earned a name for itself.

FUTURE PROSPECTS

Telecom Cables

Most of the Basic Service Providers have completed their longdistance Optical Fibre Cable (OFC) networks. The demandfor OFC in the next one year will therefore come fromorganizations having ‘right of way’ and for development ofthe ‘access’ network. The demand for OFC is expected toremain static during 2003-04 with some stability in pricing.

The Jelly Filled Telephone Cable business is likely to remainstagnant on account of increased usage of Optic Fibre basedsystems and wireless systems.

Power Cables

In continuation of the ambitious plan unveiled by theGovernment for the power industry last year, a legislationwas introduced in January 2003 to open up the sector for

6

RPG CABLES LIMITEDprivate participation in both generation and distribution. Thisis expected to provide fillip to the power industry and increase/improve the quality of transmission & distribution networkssubstantially, thereby resulting in improved levels of demandfor cables in 2003-04. Growth is particularly fuelled by thecontinuing improvement in Oil, Petrochemicals, Infrastructure,Steel and Power distribution sectors. The Accelerated PowerDevelopment and Restructuring Programme (APDRP) wouldcreate a huge demand for High Tension cables.

In the ensuing years due to efficiencies of production beingachieved by Indian industry as a result of increase in the sizeof operations, the export sector would also open up resultingin added demand.

Housewiring Cables

Having established its presence across the Country, the companyenvisages a rapid increase in its business due to the largescale infrastructural development being undertaken in the country.At the same time various new products are being introduced inthe market to cater to the needs of discerning customers.

Telenet Solutions

The company has received a large order from a prestigiousorganization and is in an advanced stage of negotiatingseveral other orders. Our entry into this line of business hasbeen timely as it has thrown open a large untapped potentialin the market place.

SUBSIDIARIES

Pursuant to the provisions of Section 212 of the CompaniesAct, 1956, the Audited Accounts as of March 31, 2003together with the Reports of the Directors and Auditors of thesubsidiary Blue Nile Holdings Ltd., is attached.

During the year, one of the subsidiaries, KTL Industrial FinanceCo. Ltd., was sold due to its continued poor performance.

DEPOSITS

The Company has been accepting deposits from the publicand shareholders. Total amount of such fixed deposits as atMarch 31, 2003 was Rs. 3468.67 lacs. Deposits amountingto Rs. 39.86 lacs from depositors remained unclaimed as atthe end of the year. Subsequently, out of the said unclaimeddeposits, deposits for Rs. 31.07 lacs have been repaid/renewed.

COMPANIES (DISCLOSURE OF PARTICULARS IN THEREPORT OF BOARD OF DIRECTORS) RULES, 1988

The particulars as prescribed under the Rules appear in theAnnexure forming part of the Directors’ Report.

TOTAL QUALITY MANAGEMENT

Your Directors are happy to record the continued progress inTotal Quality Management movement at all levels in theCompany. The Mysore Plant and Thane Plant are certified toISO 14001 certification besides already having ISO 9001.The Silvassa plant is certified to ISO 9001 standards. TheThane Plant received the prestigious RPG Quality Award 2002Certificate of Merit in the Manufacturing Category.

VOLUNTARY DELISTING OF THE COMPANY�SSECURITIES

Last year, your Company had taken the approval of theshareholders for voluntary delisting of its shares from variousstock exchanges. Due to changes in certain regulations, theCompany has been called to once again seek your approvalto this voluntary delisting for which a proposal appears in theNotice convening the Annual General Meeting.

HUMAN RESOURCES

Industrial relations continued to be cordial. Information as perSection 217(2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975 forms partof this Report.

DIRECTORS

Your directors regret to report the untimely demise ofMr. B L Paranjape who was a Director of the company sinceNovember 1997. Your Directors wish to place on record theirsincere appreciation for the contribution made by Mr.Paranjape in the progress of the Company.

Mr. Manoj Kumar Maheshwari; Mr R A Naik and Mr Dilip GPiramal retire by rotation at the ensuing Annual GeneralMeeting and being eligible, offer themselves forre-appointment.

Mr. A K Gupta of Industrial Finance Corporation of IndiaLtd joined the Board on 29th July 2003 as the NomineeDirector from the said financial institution.

DIRECTORS� RESPONSIBILITY STATEMENT AS REQUIREDUNDER SECTION 217 (2AA) OF THE COMPANIES ACT,1956.

The Directors confirm that –(i) In the preparation of the annual accounts, the applicable

accounting standards have been followed along withproper explanation relating to material departures.

(ii) Appropriate accounting policies have been selected andapplied consistently and have made judgements andestimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the Companyas at 31st March, 2003 and the profit of the Companyfor the year ended 31st March, 2003.

(iii) Proper and sufficient care has been taken for maintenanceof adequate accounting records in accordance with theprovisions of the Companies Act, 1956 for safeguardingthe assets of the Company and for preventing anddetecting fraud and other irregularities.

(iv) The annual accounts have been prepared on a goingconcern basis.

CORPORATE GOVERNANCE

The Corporate Governance and the Management Discussion& Analysis Reports form an integral part of this report and areset out as separate Annexures to this report. The Certificate ofthe Auditors of the Company certifying compliance of theconditions of the Corporate Governance as stipulated in clause

7

ANNUAL REPORT 2002-0349 of the Listing Agreement with Stock Exchanges is alsoannexed with the report on Corporate Governance.

AUDITORS�

M/s. N. M. Raiji & Co. Chartered Accountants, Auditors ofthe Company, retire at the conclusion of the ensuing AnnualGeneral Meeting and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENT

Your Directors express their gratitude to the Company’scustomers, shareholders, business partners, distributors andsuppliers for their understanding and support.

PARTICULARS OF CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO AS PER SECTION 217 (1) OF THECOMPANIES ACT, 1956 AND THE RULES MADE THEREINAND FORMING PART OF THE DIRECTORS’ REPORT FORTHE YEAR ENDED 31ST MARCH, 2003A. CONSERVATION OF ENERGY

Energy Conservation Measures TakenThe Company has laid greater emphasis on use of alternatefuel for diesel generator. Consequent to efficient loading andsynchronization the Company has been able to effectivelyoptimize the performance of diesel generators. Only criticalequipments have been connected with diesel generators. Inaddition, for efficient consumption of energy, apparatuslike HT breaker (in MSEB incoming line to overcome failure ofmotors due to single phasing), and MDI controller forcontrolling maximum demand etc. have been installed.Secondly, measures for reuse of old/waste oil in Boilers,installation of lighting energy savers, machine specific lightinghave been initiated.B. TECHNOLOGY ABSORPTION, RESEARCH &

DEVELOPMENT (R&D)1. Specific areas in which R & D is carried out by the

company.New product development like special light weight fillerand tough rubber sheath, which is cost effective havingcomparatively longer life, have been developed forcustomers. Trials are underway to develop cables forcellular communication system. Developmental activitiesare carried on a continuous basis for improvements inproduct quality. R&D is focused also on import substitutionand reducing lead time in manufacturing and deliveries.

2. Benefits derived as a result of the above R & D.Above efforts have helped the company to be a leadingmanufacturer of cables which are produced tointernational standards and specifications, enabling theCompany to improve margins establishing presence inemerging technology sectors, stay competitive and achievegreater customer satisfaction.

3. Future plan of action.New product development like crosslinked PVC compoundwith excellent mechanical properties, dry cured Silicone

Your Directors also record their appreciation and gratitude toFinancial Institutions and Banks for their continued and timelyassistance in meeting the Company’s resource requirements.Finally, your Directors acknowledge the dedicated servicesrendered by all employees of the company.

For and on behalf of the Board of Directors

H V GoenkaChairman

MumbaiDated: 14th November, 2003.

based Polyethylene compound, Import substitution of XLPEcompound, Zero Halogen Low Smoke compound andcost effective speciality compound formulation are in linefor commercial application.

4. Expenditure on R & D : (a) Capital : Nil (b) Recurring: Rs.19.19 lacs (c) Total : Rs.19.19 lacs (d) Total R & D expenditure as a percentage of total

turnover is less than 1%.Technology Absorption, Adaptation and Innovation

1. Efforts, in brief, made towards technology absorption,adaptation and innovation.Efforts are on from this year to innovate products in theactive components segment of telecom business. Trialsare also being conducted to develop cables for cellularcommunication systems.

2. Benefits derived as a result of the above efforts, e.g.,product improvement, cost reduction, productdevelopment, import substitution, etc.The above efforts would result in development of newcost effective products.

3. In case of imported technology: (a) Technology imported : Manufacture of

Optical Fibre Cables (b) Year of import : 2001 (c) Has technology been fully absorbed: Yes (d) If not fully absorbed, areas where this has not taken

place, reasons therefor and future plans of action : NIL

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Total foreign exchange earned was Rs.639.86 lacs andoutflow was Rs.2103.65 lacs.


H V GoenkaChairman

MumbaiDated: 14th November, 2003

ANNEXURE TO THE DIRECTORS� REPORT

8

RPG CABLES LIMITEDMANAGEMENT DISCUSSION AND ANALYSIS

Business Review

The Company is engaged in the business of manufacture andsale of Telecom, Power and Housewiring Cables. During theyear, a new SBU, Telenet Solutions, was formed to undertakeall activity relating to laying of cables, erecting towers andproviding turnkey solutions for setting up communicationnetworks involving Optical Fibre, Microwave and Copper.During the year the Company also entered into the businessof Structured Cabling.

Overview of Operations

Telecom Cables

The Company decided not to supply any Polyethylene InsulatedJelly Filled Telephone Cables (PIJF) to BSNL due to difficultmarket conditions caused by increased competition, overcapacity and negative margins. The Company was selectivein choosing only remunerative orders and hence there was asubstantial decline in overall sales.

The future of the industry for PIJF Cables continues to be quiteunpredictable. The demand for the product is declining rapidlydue to increase in mobile telephony which is set to replaceland lines over a period of time.

Optic Fibre Cables (OFC) are rapidly replacing PIJF Cables ofhigher pairage. In future, only the connectivity for the last milefrom the exchange to the user will be through Copper cables.The market for OFC is now stable. The Company is wellpositioned to supply these cables to traditional Public Sectorcompanies viz. BSNL, MTNL, Railways as well as Private SectorCompanies like Reliance, Tatas, Bharti, and Cable TVoperators.

Though the Company was successful in increasing marketshare, it could not however increase its profitability due toreduction in margins, decline in prices of fibre and entry ofnew players.

In view of the above, the Company is examining new areasand opportunities for enhancing business in the Telecom marketthrough tie-ups such as the one with Corning for structuredCables.

Power Cables

It was a tough year for the Power Cables Industry in generalwith falling margins. The Government has already introducedthe Electricity Act, 2003 which will encourage private sectorparticipation in Transmission and Distribution, restructure StateElectricity Boards (SEBs) reduce subsidies, tariff rationalizationand give high priority to the Power Sector.

Growth is also expected in other infrastructure sectors, whichwill eventually lead to an increase in demand for LT Cables.During the year the capacity of the Company’s plant atSilvassa has been increased. The Plant enjoys tax benefitsand is yielding good returns. Further the Company has initiatedseveral cost control /reduction measures which will bear fruitin the following year. The Company is targeting exports andcable solutions which will help in improving its position.

Housewiring

As reported last year, this is a highly competitivesegment with players from the organised and unorganisedsector competing in a large and growing market. TheCompany has been able to increase its market penetrationand build the “RPG” brand which has been well receivedin the market and made a mark among quality consciousconsumers. The Company’s products are now marketedthroughout the country. The Company is geared to improveits market share with strong brand promotion andcontacts with Architects, Builders, Contractors and other directusers.

Financial HighlightsRs. in Crs

A. Income StatementParticulars 31.03.2003 31.03.2002

a) PBDIT 2.11 21.02% of Sales 1.21% 6.31%

b) Financial Expenses (1.24) 5.78

c) Depreciation 8.59 11.24

d) PBT (5.24) 4.00% of Sales (3%) 1.20%

e) Tax (Net) (7.77) (0.41)

f) PAT 2.53 4.41

Segmentwise turnover of the Company was as under:Rs. in Crs

2002-03 2001-02

Telecom Cables 32.71 189.77

Power Cables 122.40 125.71

Others 19.93 17.91

Total 175.04 333.39

Rs. in CrsB. Balance Sheet

Particulars 31.03.2003 31.03.2002

Liabilities

Share Capital 21.24 21.24

Reserves & Surplus 111.17 225.69

Loan Funds 209.49 221.62

Deferred Tax Liability 2.35 20.59

Total 344.25 489.14

Assets

Net Fixed Assets 102.22 97.20

Investments 91.03 152.61

Net Working Capital 148.98 239.33

Miscellaneous Exp. 2.02 -

Total 344.25 489.14

9

ANNUAL REPORT 2002-03Loan Funds

The Company’s Loan funds declined to Rs. 209.49 crs fromRs. 221.62 crs in the previous year on account of repaymentof high cost debts.

Investments

Investments have declined substantially due to the sale of asubsidiary-KTL Industrial Finance Co. Ltd., and the merger ofConcepta Cables Limited with the Company.

Distribution of Income (Rs. in Crs)

Particulars 2002-03 % 2001-02 %Material Cost 107.00 55.46 222.52 65.06Excise Duty 18.35 9.51 40.68 11.89Interest (1.24) (0.64) 5.78 1.67Other Expense 42.97 22.27 41.78 12.22Personnel Expenses 17.26 8.95 20.00 5.85Depreciation 8.59 4.45 11.24 3.29

Total 192.93 100.00 342.00 100.00

Return on Capital Employed (ROCE) (Rs. in Crs)

Particulars 2002-03 2001-02Shareholders Fund (Net) 132.41 246.93Loan Funds 209.49 221.62Capital Employed (Net) 341.90 468.55PBIT (6.48) 9.78ROCE (%) (1.90) 2.09EPS 1.19 2.07Book Value per share 62.34 116.26

The Shareholders funds have decreased substantially due tothe effect of the merger of Concepta Cables Ltd with theCompany, sale of KTL Industrial Finance Co. Ltd, the whollyowned subsidiary and recording of the losses of Blue NilesHoldings Ltd. in terms of the Scheme of Amalgamationapproved by the High Courts of Mumbai & Karnataka.

Internal Control Systems

The Company has an effective system of internal audit toensure that there exists a proper control over all thetransactions. The Internal Audit Department periodicallyconducts audits of the key areas of business and systems andreports to the Managing Director. Significant audit

observations, follow-up actions and audit plans are reportedto the Audit Committee which consists of two independentDirectors and meets once every quarter.

Total Quality Management and Human Resources /Industrial Relations

Quality Management is given utmost importance and todayall the Plants have ISO Certification.

The Company won the RPG Quality Award Certificate ofMerit, for its Thane Unit. Rightsizing and re-organisation iscontinuously taken up to reduce costs to remain competitive.

Industrial Relations continue to be cordial. The Companyregularly conducts training programmes for its employees atall levels to improve and sharpen the skills and knowledge ofits employees. Employees are actively involved in Small GroupActivities (SGA’s) which helps in bringing cohesion,togetherness and sense of belonging to the organization whichin turn results in greater productivity.

Investors Service

The Company values its investors. A grievance redressalmechanism has been set in place to ensure prompt redressal.The Company facilitates payment of interest /dividend throughElectronic Clearing System (ECS) to ensure prompt paymentsand avoid delays or loss of warrants. The Companycommunicates with its investors regularly through newslettersand also has a section on its web-site www.rpgcables.com forthe benefit and use of investors. The Company’s results areregularly updated on the web-site.

Information Technology

The Company believes in the power of Information Technologyand has provided a computer to each and every employee.These computers are fully networked to provide informationand communication technology to all employees.

During the year, our Website has also been upgraded toprovide better content and prompt response.

Cautionary Statement

Statements in the Management Discussion and Analysis Reportdescribing the Company’s objective, projections and estimatesare forward looking statements within the meaning ofapplicable security laws and regulations. Actual result mayvary from those expressed or implied depending uponeconomic conditions, government policies and other incidentalfactors.

10

RPG CABLES LIMITEDREPORT ON CORPORATE GOVERNANCE

Pursuant to Clause 49 of the Listing Agreement, a Report onCorporate Governance is given below.1. Company’s philosophy on Code of Governance

Corporate Governance is aimed at assisting the topmanagement of the Company in the efficient conduct ofits business and in meeting its obligations to shareholders.The Company has adopted a codified CorporateGovernance Charter, interalia, to fulfill its corporateresponsibilities and achieve its financial objectives.

2. Board of DirectorsA. Composition:

The strength of the Board, as on 1st April, 2002was nine Directors. Mr. B L Paranjape expired on19th March, 2003. Prior to his demise, the Boardcomprised of one executive/whole-time Director, andeight non-executive Directors. As at 31st March,2003, none of the Directors of the Company was amember in more than 10 committees or acted asChairman of more than five committees across allCompanies in which he was a Director.The details of Directors on the Board of the Companyare given below:-

Names of Date of No. of No. ofDirectors Appointment Board Meetings Memberships in

attended Boards of otherout of five Companies/

meetings held in (Boardthe Financial year Committees) @

2002-03

Mr. H.V.Goenka 21-11-1997 4 10(1)Mr. A.S.Jatkar~ 16-12-1999 5 9(3)Mr. Haigreve Khaitan# 04-03-1994 - 17(5)Mr. J.M.Mukhi# 28-08-1995 2 3(1)Mr. V.N.Nadkarni# 21-11-1997 3 9(9)Mr. R.A.Naik# 27-06-1984 5 -Mr. B.L.Paranjape#* 21-11-1997 5 N.AMr. Dilip.G.Piramal# 27-10-1999 2 13(8)Mr. Manoj.K.Maheshwari# 24-10-2000 4 12(8)Mr. P.K.Mohapatra 14-08-2001 4 10(8)

Board Meeting were held on 25th April 2002, 29th July, 2002, 27th September, 2002,25th October, 2002, and 30th January, 2003.

# Independent Directors, * Expired on 19th March, 2003, ~ Managing Director.

@ Includes Directorships held in Private Limited Companies but excludes Foreign Companies.

B. None of the non-executive Directors of the Companyhas any pecuniary relationship or transactions withthe Company other than fees paid for professionalservices rendered by them.

3. Audit CommitteeA qualified and an independent Audit Committee ofDirectors has been set up having three non-executiveDirectors, of which two members are independent. Theterms of reference of this committee are wide enough tocover the matters specified in the Companies Act, 1956for the Audit Committees and the Clause 49 of the ListingAgreement with the Stock Exchanges. The terms ofreference include:-

• Overseeing the Company’s financial reportingprocess and the disclosure of its financial informationto ensure that the financial statement is correctsufficient and credible.

• Recommending the appointment and removal ofexternal auditor, fixation of audit fee and alsoapproval for payment for any other services.

• Reviewing with management the annual financialstatements before submission to the Board.

The members of the Audit Committee are Mr. P. K.Mohapatra, Mr. B. L. Paranjape (expired on 19th March,2003), Mr. Manoj K. Maheshwari and Mr. R.A.Naik(appointed w.e.f. 29th July 2003). The Company Secretaryacts as Secretary to the Committee.During the year under review, four meetings of the AuditCommittee were held on 25th April, 2002, 29th July,2002, 25th October, 2002, and 30th January, 2003which were attended by all members except by Mr. P. K.Mohapatra on 25th October, 2002.

4. Remuneration Committee/Remuneration paid to Directors.A. Remuneration Committee

Remuneration Committee of Directors formed on29th July 2002 to review the remuneration payableto executive Directors of the Company comprises ofMr. Manoj.K.Maheshwari, Mr. B.L.Paranjape(expired on 19th March, 2003), Mr. P.K.Mohapatraand Mr. R.A.Naik (appointed w.e.f. 29th July 2003).The meeting of the Remuneration Committee washeld on 29th July 2002 to review the remunerationpayable to Mr. A.S.Jatkar, Managing Director.

B. Remuneration of DirectorsThe details of the payments made to the Directorsduring the year under review is as follows.

i) To the Mr. A. S. Jatkar, Managing Director.

All elements of remuneration package i.e. salary,benefits, bonuses, pension etc.

(Rs. in lacs)

Salary (including allowances) 15.08Contribution to P.F and other Funds 2.16Perquisites 2.74

19.98

ii) To Non-Executive Directors (sitting fees).Name of the Director Sitting Fees (Rs.)Mr. H. V. Goenka 20,000/-Mr. Haigreve Khaitan -Mr. J. M. Mukhi 10,000/-Mr. V. N. Nadkarni 15,000/-Mr. R. A. Naik 25,000/-Mr. B. L. Paranjape 45,000/-Mr. Dilip. G. Piramal 10,000/-Mr. Manoj. K. Maheshwari 40,000/-Mr. P.K. Mohapatra 20,000/-

11

ANNUAL REPORT 2002-035. Disclosure

No material, financial and commercial transactions werereported by the management to the Board in which themanagement had personal interest having potential conflictwith the interest of the Company at large.

The Company has complied with the requirements of theStock Exchanges, SEBI and Statutory Authorities on allmatters related to the capital markets during the lastthree years. Except for one case pertaining to the FinancialYear 1999-2000 there are no penalties or stricturesimposed on the Company by the Stock Exchanges, SEBIand Statutory Authorities relating to the above.

6. Information on Directors Seeking Re-appointment

(a) The relevant information relating to the Directors whoare seeking reappointment at the ensuing AnnualGeneral Meeting to be held on 24th December 2003is given below:

Mr. Manoj Kumar Maheshwari is a second-generation entrepreneur with interests in theInformation Technology, Marketing, Pharmaceuticaland Chemical industries. He is a graduate from theBombay University with a major in Chemistry andhas done his post-graduation in IndustrialManagement. Mr. Maheshwari’s work experienceencompasses the project management, production,marketing, financial and general management areasof medium sized companies. He is on the Board ofthe Company since October 2000. He is also adirector of the following Companies:

MIRC Electronics Limited; Hind Syntex Limited; MadanInvestments Pvt. Limited; Maheshwari Investor’s Pvt.Limited; Maheshwari Intrafin (India) Pvt. Limited;Karjan Investments Pvt. Limited; Bombay GasCablecom Pvt. Ltd.; Gopal Traders Pvt. Limited;MW.Com Pvt. Limited; Hamilton & Co. Limited; DGPHinoday Limited; Tujan Investments Pvt. Limited andTukar Investments Pvt Limited

Mr. R.A.Naik is a retired IAS officer and formerChief Secretary to the Government of Karnataka. Hehas held various important positions while in Office.He was also a Director of various State and CentralGovernment Undertakings while in service. He hasconsiderable experience in general businessadministration. He is on the Board of the Companyfrom June 1984. He is not a director in othercompany.

Mr. Dilip .G. Piramal is the Chairman of V.I.PIndustries Limited, the second largest producer ofmoulded luggage in the world under the brand name“V.I.P”. Mr. Piramal also heads Blow PlastErgonomics Ltd., which is into the business of

Hi-tech Office Furniture Systems. Another marketleader headed by Mr. Piramal is DGP HinodayIndustries Ltd., the largest manufacturer of ferritemagnates in India in technical collaboration withworld leader Hitachi. He is a former President ofThe All India Plastic Manufacturers’ Association, TheOrganisation of Plastics Processors of India and theRotary Club of Bombay Mid-Town. He is on theBoard of the Company since October 1999. He isalso a director of the following Companies:

Blow Plast Limited; V.I.P Industries Limited; DGPHinoday Industries Limited; Alkyl Amines ChemicalsLimited; Kemp & Company Limited; DGP SecuritiesLimited; Kiddy Plast Limited; Universal LuggageManufacturing Co. Ltd.; Quality Plastics Limited;Gazelle Travels Pvt. Limited; DGP Enterprises Pvt.Limited; DGP Capital Management Limited and BlowPlast Ergonomics Limited.

7. Means of Communication

The Quarterly, Half-yearly and Annual Results arepublished in the news papers having wide circulation.During the Year under review, the Results have beenpublished in ‘Financial Express’and ‘Sanjeevani’,Bangalore. The results are also displayed on theCompany’s web-site i.e. www.rpgcables.com. CompleteAnnual Report is sent to every shareholder.

Management Discussion and Analysis forms part ofAnnual Report.

8. Compliance

The auditors certificate on compliance of clause 49 to theListing Agreement is attached to this report.

9. Details of General Body Meetings

During the last three years, the Annual General Meetingshave been held at the Hotel Southern Star, Vinobha Road,Mysore-570 001, on 27th July,2000, 14th August, 2001and 27th September, 2002. During the year under review,an Extra Ordinary General meeting of the shareholderswas held on 11th April, 2003 at the aforesaid venue toconsider the scheme of amalgamation of Concepta CablesLtd. with the Company

There were no Special Resolutions, which were put throughpostal ballot. No resolution is proposed to be passedthrough postal ballot at the ensuing Annual GeneralMeeting.

The last Annual General Meeting was held on27th September, 2002. At this meeting Mr. B. L.Paranjape, Mr. R. A. Naik, Mr. P. K. Mohapatra, theDirectors and Mr. A. S. Jatkar, the Managing Director,were present.

12

RPG CABLES LIMITED10. General shareholders information

(a) As indicated in the Notice to the shareholders, theAnnual General Meeting of the Company will beheld on 24th December 2003. The time and venueof the meeting is as indicated in the Notice.

(b) Date of book closure: 19th December 2003 to24th December 2003 (both days inclusive).

(c) Financial calendar: April 1 to March 31.

(d) Financial calendar ( dates for last two quarters aretentative and subject to change)

Unaudited Financial Results for the quarter Results were declared onended 30th June, 2003 29th July, 2003

Unaudited Financial Results for the quarter Results were declared onended 30th September, 2003 30th October, 2003

Unaudited Financial Results for the third 4th week of January, 2004quarter ending 31st December, 2003

Audited Financial results for the year 4th week of April, 2004ending 31st March, 2004

Annual General Meeting for the financial August/September,2004year ending 31st March, 2004

(e) Listing of shares on stock exchanges:The shares of the Company are quoted on ninestock exchanges in India i.e. Bangalore StockExchange Ltd., Vadodara Stock Exchange Ltd., TheDelhi Stock Exchange Association Ltd., National StockExchange of India Ltd., The Stock ExchangeAhmedabad, The Saurashtra Kutch Stock ExchangeLtd., The Calcutta Stock Exchange Association Ltd.,Jaipur Stock Exchange Ltd. and The Stock Exchange,Mumbai.Pursuant to the shareholders’ resolution dated27th September, 2002, the Company has appliedfor delisting of its shares from the following stockexchanges viz. Vadodara Stock Exchange Ltd., TheDelhi Stock Exchange Association Ltd., The StockExchange Ahmedabad, The Saurashtra Kutch StockExchange Ltd. and Jaipur Stock Exchange Ltd. Theapplications for delisting are pending at respectiveexchanges for disposal.

(f) Stock Code: 17056 with Stock Exchange, Mumbaiand ‘RPGTELECOM’ with National Stock Exchange.ISIN No.:- INE145A01015 with NSDL.

(g) Market Price Data: High / Low during each month in last financial year and performance in comparison to broadbased indices such as BSE Sensex etc.:-

Monthly high and low quotations, the volume of shares traded at the Stock Exchange Mumbai and National StockExchange of India Ltd. for 2002-03 and the performance of the Company’s prices compared with BSE Sensex are as follows:

Bombay Stock Exchange (BSE) National Stock Exchange (NSE) Performance*

Period High Low Close Volume High Low Close Volume Sensex RPG Cables(Rs.) (Rs.) (Rs.) (Rs.) (Rs.) (Rs.) Limited

Apr-2002 17.00 12.00 14.80 236640 18.70 11.50 14.40 470787 (4.16) 12.12

May-2002 17.20 10.25 12.85 113222 15.75 10.35 12.85 267216 (7.01) (14.33)

Jun-2002 17.80 12.05 16.30 171062 17.80 12.00 16.30 491984 2.61 20.30

Jul-2002 19.15 12.40 13.35 181988 21.50 12.30 13.20 404523 (7.97) (20.54)

Aug-2002 13.85 12.20 12.25 39263 13.85 12.15 12.30 109418 6.10 (9.26)

Sep-2002 12.70 10.00 10.00 66449 13.40 9.95 9.95 95703 (6.72) (15.61)

Oct-2002 10.50 9.15 9.80 36227 10.65 9.00 10.00 63781 (0.90) (2.00)

Nov-2002 10.25 9.00 10.05 44437 10.40 9.05 10.15 62297 9.19 4.15

Dec-2002 11.95 9.00 9.45 68115 11.50 8.90 9.60 138767 3.99 (9.57)

Jan-2003 9.90 7.80 8.10 53473 9.60 7.70 8.00 88398 (3.94) (12.90)

Feb-2003 8.50 7.15 7.45 27322 8.00 7.15 7.40 46969 0.72 (3.87)

Mar-2003 7.60 4.85 5.85 104109 7.50 5.30 5.50 102782 (7.66) (23.03)

(Source:BSE Website) (Source:NSE Website)* Difference between the opening and closing prices during the period in %.

(h) The name and designation of the Company Secretary and Compliance Officer: Mr. Bharat Thakkar, CompanySecretary.

13

ANNUAL REPORT 2002-03(i) (a) Alpha Systems Pvt. Limited are the Registrars and Share Transfer Agents of the Company. Their contact details are:

Mr. G. SubramaniAlpha Systems Pvt. Limited,30, Ramanna Residency, Ground Floor, 4th Cross,Sampige RoadMalleswaram, Bangalore: 560 003.Phone:080 - 3460815-818Fax: 080 - 3460819Email: [email protected]

(b) In respect of transfer of shares, etc. shareholders are advised to contact Alpha Systems Pvt. Limited directly.

(c) During the year under review, the Company received certain complaints from the shareholders as follows. To thebest of knowledge of the Company, these complaints have been solved to the satisfaction of the shareholders.

Nature of 2002-2003 2001-2002complaints Received Attended to Received Attended to

Non-receipt of sharecertificates 11 11 72 72

Letters from StockExchanges, SEBI, etc. 3 3 17 17Non-receipt of dividendwarrants 38 38 42 42TOTAL 52 52 131 131

(d) In most cases, the applications received for transfer of shares in physical form are registered and returned withina period of 15 days from the date of receipt, if the documents are clear in all respects.The response time for attending the applications for transfer of shares is as follows:-

Transfer period 2003 2002in days No of % No of %

transfers transfers

1 – 10 34 9.63 380 32.2011 – 15 59 16.71 190 16.1016 – 20 126 35.69 192 16.2721 and above* 134 37.96 418 35.43TOTAL 353 100.00 1180 100.00

* Delay mostly due to notice to seller for confirmation in case of mismatch of signatures or dematerialisationrequest.

(j) As of 31 March the distribution of the equity shareholding of the Company was as follows:

2003 2002

No. of No. of % of No. of % of No. of % of No. of % ofshares share share shares share shares share shares shareheld holders holders held holding held holders held holding

1- 100 38459 77.85 1327920 6.25 39787 78.49 1395373 6.57101-200 4358 8.82 776202 3.65 4502 8.88 800759 3.77201-500 4333 8.77 1574209 7.41 4302 8.49 1552405 7.31501-1000 1366 2.77 1052572 4.96 1302 2.57 998522 4.701001-5000 768 1.55 1477432 6.96 696 1.37 1297564 6.115001-10000 54 0.11 406384 1.91 36 0.07 270826 1.28Above 10001 62 0.13 14623667 68.85 64 0.13 14922937 70.26Total 49400 100.00 21238386 100.00 50689 100.00 21238386 100.00

14

RPG CABLES LIMITED(k) Categories of Shareholders as on 31st March are as follows:-

2003 2002

Catetory No. of % of No. of % of No. of % of No. of % ofshare share shares share shares share shares share

holders holding held holding holders holding held holding

Individuals 47938 97.04 6092261 28.69 48815 96.30 5669830 26.70Corporates 674 1.36 10901709 51.33 680 1.35 10661443 50.20FIIS 5 0.01 170041 0.80 4 0.01 170061 0.80NRIs/OCBs 711 1.44 428559 2.02 719 1.42 442349 2.08Mutual Funds 47 0.10 3586838 16.89 46 0.09 4125302 19.42NSDL transit 18 0.04 54708 0.26 60 0.12 25483 0.12CDSL transit 7 0.01 4270 0.02 359 0.71 143918 0.68Total 49400 100.00 21238386 100.00 50689 100.00 21238386 100.00

(l) Dematerialisation of shares and Liquidity:-

Over 45.21% of outstanding Equity Shares have been dematerialized up to 31st March, 2003.

Trading in Equity Shares of the Company is permitted only in dematerialized from w.e.f. 26th June, 2000, as pernotification issued by the Securities & Exchange Board of India (SEBI).

(m) As of date, the Company has no outstanding convertible instruments.

(n) Manufacturing Units of the Company are located at Mysore, Thane & Silvassa

(o) Members can contact the Company at the :

i) Registered Office ii) Corporate OfficeRPG Cables Ltd., RPG Cables Ltd.,Hebbal Industrial Area, Ceat MahalHootagalli, Belavadi Post, 463, Dr. Annie Besant Road, Worli,Mysore-570 018. Mumbai:400 030.Phone:0821 - 2402401/404/373/409 Phone:022 - 24937244 / 56670300Fax: 0821 - 2402499 Fax: 022 - 24930206 / 56606411E-mail: [email protected]: www.rpgcables.com

(p) For Members who desire to dispose off their odd lot shares, the Company has set up a “RPG Shareholders BeneficiaryTrust”, which helps to consolidate odd lot shares and disposes them in the market. The proceeds are then distributedamong the odd lot shareholders after deduction of expenses. The application form is available on request from theRegistrar or can be downloaded from the website of the Company viz., www.rpgcables.com

(q) Members can avail of nomination facility by filing Form 2B with the Company. Blank forms will be supplied on requestand these are also available with the Registrar and Share Transfer Agents or can be downloaded from the websiteof the Company viz. www.rpgcables.com

(r) Members, who are holding shares under more than one folio and the name(s) are in the same order, are requestedto send their relative Share Certificate to the Registrars and Share Transfer Agents, for consolidation of the entireholding in one folio. The Share Certificates after consolidation will be returned by Registered Post/Courier.

(s) Pursuant to Section 205 A (5) of the Companies Act, 1956 all unclaimed/unpaid dividends of RPG Cables Ltd. uptothe financial year ended September 30, 1995, for erstwhile Asian Cables & Industries Ltd. upto the financial yearended March 31, 1995 and for erstwhile Upcom Cables Ltd. upto the financial year ended March 31, 1995 havebeen transferred to the General Revenue Account of the Central Government. Shareholders who have not encashedthe dividend warrants for the said periods may claim the same from the Registrar of Companies, Karnataka, Bangalore.The unclaimed dividend in respect of the Financial year 1995-96 has been deposited with the Investors Education andProtection Fund which cannot be claimed from the Company or the Central Government. Dividend for the subsequentperiod can be claimed from the Company if the same is unclaimed so far.

15


CERTIFICATE

To the Members ofRPG Cables Ltd.

We have examined the compliance conditions of Corporate Governance by RPG Cables Limited, for the year ended onMarch 31, 2003, as stipulated in clause 49 of the Listing Agreement of the said Company with Stock Exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited toprocedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of CorporateGovernance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company hascomplied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

As required by the guidance note issued by the Institute of Chartered Accountants of India, we state that based on the recordsmaintained by the Company and the confirmation received from the Registrars of the Company, no investor grievances arepending for a period exceeding one month against the Company as at March 31, 2003.

We further state that such compliance is neither an assurance as to the future viability of the company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For and on behalf ofN. M. RAIJI & CO.

Chartered Accountants

J. M. GandhiPartner

Membership No. 37924Place: MumbaiDate: 14th November, 2003

16

RPG CABLES LIMITEDAUDITORS� REPORT

To,

The Members of RPG Cables Limited.

We have audited the attached Balance Sheet of RPG CablesLimited for the year ended 31 March, 2003 and also theannexed Profit and Loss Account and Cash Flow Statement ofthe Company for the year ended on that date. These financialstatements are the responsibility of the Company’smanagement. Our responsibility is to express opinion on thesefinancial statements based on our audit.

We conducted our audit in accordance with the auditingstandards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a testcheck basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessingthe accounting principles used and significant estimates madeby the management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides areasonable basis for our opinion.

As required by the Manufacturing and Other Companies(Auditor’s Report) Order, 1988, issued by the Company LawBoard in terms of Section 227(4A) of the Companies Act,1956, and on the basis of such checks as we consideredappropriate, we enclose in the Annexure a statement on thematters specified in the paragraphs 4 and 5 of the said order.

Further to our comments in the Annexure referred to the above,we report that :

1. We have obtained all the information and explanationswhich to the best of our knowledge and belief werenecessary for the purpose of our audit.

2. In our opinion, proper books of account as required bylaw have been kept by the Company, so far as appearsfrom our examination of the books.

3. The Balance Sheet and Profit and Loss Account are inagreement with the books of account.

4. In our opinion, the Balance Sheet and Profit & LossAccount comply with the Accounting Standards referredto in sub-section (3C) of section 211 of the CompaniesAct, 1956.

5. On the basis of the written representations received fromthe Directors and taken on records by the Company, wereport that none of the Director is disqualified, as on thebalance sheet date, from being appointed as a Directorin terms of Section 274 (1) (g) of the Companies Act,1956.

6. Attention is invited to Note II (1) of Schedule O in respectof Accounting of Amalgamation and adjustment ofdiminution of Rs 8944.16 lakhs in the value of assets ofthe Company against Share Premium Account, as perthe court approved Scheme of Amalgamation.

7. In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts together with the notes thereon give theinformation required by the Companies Act, 1956, in themanner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India:a) in the case of the Balance Sheet, of the state of

affairs of the Company as at 31 March, 2003,b) in the case of the Profit and Loss Account, of the

Profit for the year ended on that date, andc) in the case of the Cash Flow Statement of the cash

flows for the year ended on that date.

For N. M. Raiji & Co.


J.M. GandhiPartner

Membership No 37924Place: MumbaiDate: 14th November, 2003

ANNEXURE TO AUDITORS� REPORTi. The Company has maintained proper records showing

full particulars including quantitative details and situationof fixed assets. The Managent has physically verifiedcertain fixed assets on the basis of a phased programmeof verification of assets.. For certain assets given on lease,confirmation from lessees have been obtained. Nomaterial discrepancies were noticed on verification of theassets made during the year.

ii. The Fixed Assets have not been revalued during the year.iii. As explained to us, physical verification of packing

materials, raw - materials, finished goods and stores andspares has been conducted by the management at

reasonable intervals. Confirmations have been obtainedin respect of stocks lying with third parties.

iv. The procedures for physical verification of stocks areadequate in relation to the size of the Company and thenature of the business.

v. Discrepancies noticed on physical verification of stocksas compared to book records were not material andhave been properly dealt with in the books of account.

vi. In our opinion, the valuation of stocks is fair and properin accordance with the normally accepted accountingprinciples and is on the same basis as in the previousyear.

17

ANNUAL REPORT 2002-03vii. The Company has taken loan from a company listed in

the Register maintained under section 301 of theCompanies Act, 1956. The terms of interest and otherterms and conditions of which are not, prima facie,prejudicial to the interests of the Company. We areinformed that there are no Companies under the samemanagement within the meaning of Section 370 (1-B) ofthe Companies Act, 1956.

viii. The Company has granted deposits to Companies listedin the Register maintained under section 301 of theCompanies Act, 1956 which also includes loans/depositsto subsidiary companies. The rate of interest and otherterms and conditions for such loans/deposits are not,prima facie, prejudicial to the interest of the company.We are informed that there are no Companies under thesame management within the meaning of Section 370(1-B) of the Companies Act, 1956.

ix. In respect of loans & advances in the nature of loansgiven, parties are repaying the principal amount andinterest as stipulated, except that in case of inter corporatedeposits and a loan to a firm there were delays inrepayment of the principal and interest thereon. TheCompany has taken steps to recover the amount, whereverpossible.

x. In our opinion, and according to the information andexplanations given to us, the internal control proceduresrelating to the purchase of raw materials, machinery,equipment and other assets and for sale of goods areadequate and commensurate with the size of the Companyand nature of its business.

xi. As informed to us, there are no transactions for thepurchases of goods and materials and sale of goods,materials and services made in pursuance of contracts orarrangements entered in the Register maintained underSection 301 of the Companies Act, 1956, aggregatingduring the year to Rs. 50,000 or more in respect of eachparty.

xii. As explained to us, unserviceable and damaged storesand raw materials have been determined by the Companyand necessary adjustments for loss thereon have beenmade in the accounts.

xiii. In our opinion and according to the information andexplanations given to us, the company has complied withthe provisions of section 58A of the Companies Act,1956 and the Companies (Acceptance of Deposits) Rules,1975, with regard to the deposits accepted from thepublic.

xiv. The Company has maintained reasonable records for thesale and disposal of scrap. According to the informationand explanations given to us, the Company has no by-products.

xv. In our opinion, the scope and coverage of Internal AuditSystem is adequate and commensurate with the size andthe nature of its business.

xvi. We have broadly reviewed the books of accountmaintained by the Company pursuant to the Order madeby the Central Government for the maintenance of CostRecords under Section 209(1)(d) of the Companies Act,1956, and are of the opinion that, prima facie, theprescribed accounts and records have been maintained.We have not however, made a detailed examination ofthe records with a view to determine whether they areaccurate or complete.

xvii. The Company has generally been regular in depositingProvident Fund and Employees State Insurance dues withthe appropriate authorities.

xviii.There are no undisputed amounts payable in respect ofIncome Tax, Wealth Tax, Sales Tax, Customs Duty andExcise Duty as at the Balance Sheet date, which areoutstanding for a period of more than six months fromthe date they became payable.

xix. Based on our examination of the Books of account andaccording to the information and explanations given tous, there are no personal expenses charged to revenueaccount other than expenses incurred under servicecontract obligations with employees and / or acceptedbusiness practice.

xx. The Company is not a Sick Industrial Company within themeaning of Section 3(1)(o) of the Sick IndustrialCompanies (Special Provisions) Act, 1985.

xxi. In respect of Service Activities, the Company has areasonable system, commensurate with its size and natureof business for:

a) recording receipts, issues and consumption ofmaterials and allocating materials consumed to therelative jobs/projects.

b) allocating man-hours utilised to the respective jobs/projects.

c) authorisation at appropriate levels and an adequatesystem of internal control on issue of storesand allocation of stores and manpower tojobs/projects.

xxii. We are informed that the Company does not have anydamaged goods in respect of traded items.

For N. M. Raiji & Co.


J. M.Gandhi

PartnerMembership No 37924

Place: MumbaiDate: 14th November, 2003

18

RPG CABLES LIMITEDBALANCE SHEET AS AT 31ST MARCH 2003

As at As at31.03.2003 31.03.2002

SCHEDULES (Rs. �000) (Rs. �000) (Rs. ‘000)SOURCES OF FUNDSShareholders� FundsShare Capital A 212,399 212,399Reserves & Surplus B 1,111,714 2,256,938

1,324,113 2,469,337Loan FundsSecured Loans C 1,285,264 1,240,602Unsecured Loans D 809,587 975,634

2,094,851 2,216,236Deferred Tax Liability (Net) 23,550 205,914

3,442,514 4,891,487

APPLICATION OF FUNDSFixed Assets EGross Block 2,850,552 2,674,275Less : Depreciation 1,833,819 1,719,620

Net Block 1,016,733 954,655Add:Lease equalisation adjustment 1,599 4,217Add:Capital Work in Progress and Advances 3,842 13,101

1,022,174 971,973Investments F 910,346 1,526,152Current Assets, Loans & Advances GInterest accrued on Investments 1,142 1,828Inventories 194,146 300,312Sundry Debtors 735,755 819,331Cash and Bank Balances 58,306 139,104Loans and Advances & Deposits 1,433,187 2,066,618

2,422,536 3,327,193Less : Current Liabilities & Provisions HLiabilities 911,750 1,065,903Provisions 20,962 (132,072)

932,712 933,831Net Current Assets 1,489,824 2,393,362Miscellaneous Expenditure (to the extent notwritten off or adjusted)Deferred Revenue Expenditure 20,170 -(Refer note no. II. 2 of Schedule ‘O’)

3,442,514 4,891,487

Notes on Accounts O

In terms of our report of even date

for N.M.RAIJI & Co.Chartered Accountants

J. M. Gandhi Bharat ThakkarPartner Company Secretary

Mumbai, 14th November, 2003

Haigreve Khaitan DirectorA. S. Jatkar Managing Director

19

ANNUAL REPORT 2002-03PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2003

Year Ended Year Ended31.03.2003 31.03.2002

SCHEDULES (Rs. �000) (Rs. �000) (Rs. ‘000)INCOME

Sales & Services I 1,750,389 3,333,809Less: Excise Duty 183,476 406,838

1,566,913 2,926,971Other Income J 126,395 124,899

1,693,308 3,051,870

EXPENDITURE

Material Expenses K 1,069,967 2,225,240Personnel Expenses L 172,552 200,040Other Expenses M 429,721 416,147Interest (Net) N (12,397) 57,799Depreciation 105,534 141,639Less : Transferred from Revaluation Reserve 19,648 29,216

85,886 112,423Prior period items - 200

1,745,729 3,011,849

PROFIT

Profit before taxation (52,421) 40,021Provision for taxation - 135Deferred tax adjustment (55,184) (6,670)Provision for taxation of earlier years (22,587) 2,490Profit after taxation 25,350 44,066Balance brought forward from last year 444,860 417,785

470,210 461,851

APPROPRIATION/(DRAWAL):Final Equity Dividend - Proposed - 16,991Balance carried to Balance Sheet 470,210 444,860

470,210 461,851

Basic and diluted earning per Equity Share (Rupees) 1.19 2.07

Notes on Accounts O






20

RPG CABLES LIMITEDCASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2003

Year ended Year ended31.03.03 31.03.02(Rs. 000) (Rs. 000)

A. CASH FLOW FROM OPERATING ACTIVITIES:Net profit before tax and extraordinary items (52,421) 40,021Adjustments for:— Depreciation 85,886 112,423— Lease Equalisation 2,618 2,810— Amortisation of VRS expenses 5,043 -— (Profit)/Loss on sale of Investments (75,613) (74,314)— Interest/Dividend earned (305,940) (272,203)— Interest Expense 300,964 315,694— (Profit)/Loss on Sale of Fixed Assets (24,450) 1,605Operating profit before working capital changes (63,912) 126,036Adjustments for:— Trade and other receivables 157,384 364,935— Inventories 106,166 12,042— Trade payables (159,432) 135,768Cash generated from operations 40,206 638,781Direct taxes paid 202,890 (61,864)Cash Flow before extraordinary items 243,096 576,917Extraordinary ItemsPayment under Employee’s Voluntary Retirement Scheme (25,213) -Net Cash from Operating Activities 217,884 576,917

B. CASH FLOW FROM INVESTING ACTIVITIES:Purchase of Fixed Assets (including Capital WIP) (165,625) (54,265)Realisation on Sale of Fixed Assets 31,721 45,224Purchase of Investments (42,195) (89,901)Sale Proceeds of Investments 136,672 94,283Interest received 226,389 165,263Dividend received 2,994 28,576Loans to / Receivable from Subsidiary / Other companies (91,483) (494,534)Net Cash from Investing Activities 98,474 (305,354)

C. CASH FLOW FROM FINANCING ACTIVITIES:Net proceeds from borrowing - Long Term 64,683 (193,837)Net proceeds from borrowing - Short Term (186,067) 120,234Interest paid (248,363) (252,908)Lease rental paid (10,416) (10,647)Dividends Paid (including Tax on Dividend) (16,991) (42,551)Net cash used in Financing Activities (397,155) (379,709)

D. NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (80,798) (108,146)Cash and Cash equivalents as at opening 139,104 247,250Cash and Cash equivalents as at closing 58,306 139,104In terms of our report of even date






21

ANNUAL REPORT 2002-03SCHEDULES TO BALANCE SHEET

As at As at31.03.2003 31.03.2002

(Rs. �000) (Rs. �000) (Rs. ‘000)SCHEDULE A

SHARE CAPITAL

Authorised :

2,50,00,000 Equity Shares of Rs.10 each 250,000 250,00025,00,000 Redeemable Cumulative Preference Shares of Rs. 100 each 250,000 250,000

500,000 500,000

Issued, Subscribed and paid up:

2,12,38,386 Equity Shares of Rs. 10 each 212,384 212,384Add: Forfeited shares 17 17Less: Unpaid Allotment money 2 2

212,399 212,399

SCHEDULE B

RESERVES & SURPLUS

Capital Reserve 56,888 56,888Capital Redemption Reserve 100,000 100,000Share Premium 1,155,445 1,155,445Less: Deficit on amalgamation adjusted 79,479 -(Refer note II.1 of Schedule O)Less: Restatement/ revision in value of assets 894,416 -(Refer note II.1 on Schedule O)

181,550 1,155,445

Revaluation Reserve

As per last balance sheet 135,308 164,524Less : For assets disposed off during the year 1,144 -Less: Transferred to Profit and Loss Account 19,648 29,216

114,516 135,308

General Reserve

As per last balance sheet 188,550 401,135Less: Deferred Tax Liability upto 31st March 2001 - 212,585

188,550 188,550Amalgamation Surplus 175,887 175,887

Less: Deficit on amalgamation adjusted 175,887 -

(Refer note II.1 of Schedule O) - 175,887

Profit and Loss Account 470,210 444,860

1,111,714 2,256,938

22

RPG CABLES LIMITEDSCHEDULES TO BALANCE SHEET

As at As at31.03.2003 31.03.2002

(Rs. �000) (Rs. �000) (Rs. ‘000)SCHEDULE CSECURED LOANSBanks:- Working Capital Borrowings 626,559 364,306- Term Loans 402,000 612,722

1,028,559 977,028Financial Institutions :- Term Loans 167,365 124,688

167,365 124,688Others 89,340 138,886

1,285,264 1,240,602

NOTES:

1. FROM BANKS

a. Working Capital Borrowings are secured by way of first charge on hypothecation of inventories & book debts and byway of a second charge on all immovable properties of respective units.

b. Term Loans of Rs. 470 lacs (Previous year Rs. 519 lacs) from State Bank of India are secured by first pari-passu chargeon the company’s fixed assets and pari-passu second charge on inventories, book debts and other liquid assets.

c. Term loan from ICICI Bank of Rs. 3550 lacs (Previous year: Rs. 4358 lacs) is secured by mortgage and charge onimmovable properties both present and future and charge on movables both present and future subject to priorcharges in favour of banks for Working Capital requirement and in favour of Financial institutions for specificmachinery.

The mortgage and specific machinery charges will rank pari-passu with the existing holders of all the units.

This loan carries a right to convert the whole or part of the outstanding loan balance, into equity shares under specificconditions.

d. Term Loan from ICICI Bank of Rs. Nil (Previous year :Rs. 1250 lacs) is secured by mortgage on lease hold propertysituated at World Trade Centre, Mumbai and free hold property comprising of three residential flats at Malad,Mumbai.

2. FINANCIAL INSTITUTIONS

a. Term loan from IFCI of Rs. 800 lacs (Previous year : Rs. 750 lacs) is secured by first mortgage charge on immovableproperties both present and future and charge on movables both present and future subject to prior charges in favourof banks for Working Capital requirement and in favour of Financial institutions for specific machinery. The mortgageand specific machinery charges will rank pari-passu with the existing holders of all the units.

b. Term Loan from IFCI of Rs. 264.27 lacs (Previous year: Rs. 264.27 lacs ) for Raebareli unit is secured by first mortgagecreated on all the immovable properties of that unit both present and future and charge by way of hypothecation of allmovable assets of that unit both present and future, save and except book debts, and subject to prior charge in favourof banks on movables for Working Capital requirement.

c. Term Loan of Rs.609.37 lacs (Previous year Rs. 600 lacs )from KSIIDC is secured by equitable mortgage and chargeson specific immovable properties of the Company both present and future and charge by way of hypothecation of

23


specific movable assets of the company including movable plant and machinery spares, tools and accessories andother movable assets both present and future, save and except book debts and subject to prior charge in favour ofbanks on movables for working capital requirement.

d. Term Loans of Rs. Nil (Previous year : Rs.52.10 lacs) for Mysore unit are secured by first mortgage created on all theimmovable properties of that unit both present and future and a charge by way of hypothecation of all movable assetsof that unit both present and future, save and except book debts, and subject to prior charge in favour of banks onmovables for Working Capital requirement.

e. Term Loans of Rs. Nil (Previous year: Rs. 4.21 lacs) taken by Thane unit from Financial Institutions under Asset Creditor other Schemes are secured by hypothecation of specific machinery purchased there against. This loan carries theright to convert the outstanding loan balance or 20% of the original loan, whichever is lower, into equity shares underspecific conditions.

3. OTHERS

a. Loans from PICUP in lieu of deferment of Trade / Sales tax to the extent of Rs.854.13 lacs (Previous year :Rs. 1357.86lacs) is secured by way of second charge ranking pari passu created on all tangible movable properties and assets ofRaebareli unit, both present and future including inventories and bookdebts.

b. Hire Purchase credit of Rs. 39.27 lacs (Previous year: Rs. 27.17 lacs) is secured by hypothecation of assets under hirepurchase scheme.

c. State Development loan from Govt. of Karnataka agreegating Rs. Nil (Previous year : Rs. 3.82 lacs) is secured byway of second charge through mortgage of all immovable properties of Mysore Unit, present and future.

SCHEDULES TO BALANCE SHEET

SCHEDULE C (Contd.)

24


As at As at31.03.2003 31.03.2002

(Rs. �000) (Rs. ‘000)SCHEDULE D

UNSECURED LOANS

Fixed Deposit 349,852 309,758

7.75% Redeemable Non-Convertible Debentures 25,000 -

Commercial Paper - 200,000

Short-term loans and advances

- From Banks 8,430 -

- From other than Banks 84,000 115,000

Other loans and advances

- From Banks 2,546 -

- From other than Banks 339,759 350,876

809,587 975,634

Notes

1. Redeemable Convertible Debentures are issued to Bank of Baroda and are due for repayment. These have since beenrepaid.

2. Short Term Loans and Advances of Rs. 84.30 lacs ( Previous year : Nil )from Bank represent temporary overdraft.

3. Short Term Loans and Advances from other than Banks comprises of Rs. 700 lacs (previous year Rs. 750 lacs) fromIndustrial Development Bank of India and Rs. 140 lacs (previous year Rs. 400 lacs) from companies repayable on demand.

4. Other loans and advances include :

a. Sales Tax deferment loan of Rs. 2959.94 lacs (Previous year : Rs. 3233.76 lacs) repayable after completion of 7years from the date of sanction of permitted benefits and repayable thereafter over a period of 5 years.

b. Unsecured Loan of Rs. 350 lacs (Previous year :Rs. 225 lacs) from IL & FS is repayable on 30.03.2007.

c. Sales tax deferrment amount of Rs. 76.29 lacs pending conversion into loan.

d. Sales tax deferrment loan of Rs. 11.35 lacs payable on 31-5-2005 and 31-05-2006

e. Other Loans and Advances of Rs. 25.46 (Previous year: Rs. Nil) taken from Sarswat Co-Operative Bank Ltd. The loanis repayable within two years.

25

AN

NU

AL R

EPO

RT 2

002-0

3

SCHEDULE EFIXED ASSETS

Gross Block Depreciation Net Block

As at Additions Acquired on Disposal/ As at As at On assets For the Disposal/ As at As at As at01.04.2002 amalgamation Adjustments 31.03.2003 01.04.2002 acquired on year Adjustments 31.03.2002 31.03.2003 31.03.2002

amalgamation

Land - Free hold 27,269 - - 1,327 25,942 - - - - - 25,942 27,269

Land - Lease hold 1,520 - 9,475 - 10,995 236 - 17 - 253 10,742 1,284

Buildings 192,461 1,115 20,491 - 214,067 63,541 838 5,895 - 70,274 143,793 128,920

Plant & Machinery 2,223,967 21,100 126,565 6,685 2,364,947 1,481,362 11,877 86,100 3,057 1,576,282 788,665 742,604

Plant & Machinerygiven on lease 152,554 - - - 152,554 136,400 - 6,686 - 143,086 9,468 16,154

Furnitures & Fittings 15,562 2,297 412 866 17,405 9,511 163 1,075 475 10,274 7,131 6,051

Office Equipments 51,859 3,756 1,369 1,260 55,724 26,666 461 4,922 493 31,556 24,168 25,193

Vehicles 9,083 1,643 - 1,808 8,918 1,904 - 839 649 2,094 6,824 7,179

TOTAL 2,674,275 29,911 158,312 11,946 2,850,552 1,719,620 13,339 105,534 4,674 1,833,819 1,016,733 954,655

Lease TerminalAdjustment account 1,599 4,217Capital Work inProgress & CapitalAdvances 3,842 13,101

GRAND TOTAL 2,674,275 29,911 158,312 11,946 2,850,552 105,534 4,674 1,833,819 1,022,174 971,973

TOTAL - Previous Year 2,832,743 45,639 - 204,107 2,674,275 1,735,258 - 141,639 157,278 1,719,620 971,973

NOTES:

a. Leasehold land in case of Raebareli Unit is allotted by UP State Development Corporation Limited for ninety years w.e.f. 19th May, 1986 and is pending registration in the name of the Company,postamalgamation with earstwhile Upcom Cables Ltd.

b. Buildings include residential flat Rs. 9.99 lakhs and leasehold premises Rs. 20.33 lakhs.

c. Land,Building and Plant & Machinery of each unit were revalued on different dates by external valuers at net replacement cost.Accordingly the following amounts were added to the historical cost of these assetson the dates mentioned there against:

— Mysore Unit Rs. 2527.39 lakhs on 1.10.93

— Rarebareli Unit Rs. 1452.24 lakhs on 31.03.91

— Thane Unit Rs. 971.00 lakhs on 31.12.85

d. Leasehold land amounting to Rs. 94.75 lacs is alloted by KIADB for 8 years w.e.f.12.09.1994. This is in the process of being converted to freehold land.

SCHEDULES TO BALANCE SHEET

26


As at As at31.03.2003 31.03.2002

SCHEDULE F (Rs. �000) (Rs. �000) (Rs. ‘000)Investments - (Long Term, at Cost)Subsidiary Companies - Unquoted:Fully paid Equity Shares of Rs,10 eachNIL (34500069) of KTL Industrial Finance Co.Ltd. - 345,001(Sold during the year after adjustment referred toin note no. II.1 iv. Of Schedule ‘O’)NIL (18050009)of Concepta Cables Ltd. - 180,500(See note no. II.1 of Schedule O)Fully paid Equity Shares of Rs.100 each2150000 (2150000) of Blue Niles Holdings Ltd. 215,000Less: Adjustment for dimunition in value 215,000(Refer note no. II.1 Schedule O) - 215,0001500000 (1500000) Zero coupon Fully Convertible 150,000 150,000

Debentures of Rs.100 each of Blue Niles Holdings Ltd. 150,000 890,501NOTE:Debentures of Blue Niles Holdings Ltd., are redeemable at the end of tenth year from the date of its issue i.e. 28th June, 1995,with an option to convert each debenture into fully paid Equity share of Rs.100 each, any time after the expiry of six months butprior to the date of redemption.Trade-Quoted:

2260205 - Ceat Ltd (1810382) 149,625 128,765(324150 Shares acquired on amalgamation)

1293769 - Zensar Technolgies Ltd. (757769) 164,664 120,981160360 - Saregama Limited.(137550) 38,320 36,957952420 - Harrisons Malayalam Ltd.(672270) 24,151 21,188

(100 Shares acquired on amalgamation)3309548 - KEC International Ltd. (983548) 81,537 52,345464830 - RPG Life Science Ltd (430360) 32,365 30,816

(12800 Shares acquired on amalgamation)3068658 - CESC (Nil) 45,030 -(174250 Shares acquired on amalgamation)

345400 - Phillips Carbon Black Ltd (Nil) 5,457 -295631 - Eveready Industries (India) Ltd (Nil) 8,909 -

(17499 Shares acquired on amalgamation)365510 - RPG Transmission Ltd (Nil) 31,444 -

(217900 Shares acquired on amalgamation) 581,502 391,052

Others - Unquoted:16827807 - RPG Communication Holdings Ltd (22827807) 168,278 228,278

168,278 228,278

Other Than Trade:6 years National Savings Certificate (Rs.0.16 lakhs 16 16pledged as security deposits)Indira Vikas Patra 200 units of Rs. 5000 each - 1,000Investment in Trust 15,305 15,305

15,321 16,321

915,101 1,526,152

Less: Provision for dimnunition in value of Quoted Investments 4,755 -

910,346 1,526,152Aggregate cost of Quoted Investments 581,502 391,052Aggregate Market Value of Quoted Investments 254,582 207,079Aggregate cost of Unquoted Investments 318,278 1,118,779

27


As at As at31.03.2003 31.03.2002

(Rs. �000) (Rs. �000) (Rs. ‘000)

SCHEDULE G

CURRENT ASSETS, LOANS AND ADVANCES

Current Assets

Interest accrued on Investments 1,142 1,828

Inventories(as valued and certified by the Management)

Stores and Spares - at cost 14,049 18,246

Stock in Trade - (at Lower of cost or Net realisable value)

- Raw & Packing Materials (including in-transit) 62,383 78,074

- Finished Goods 51,201 79,116

113,584 157,190

Work in process - (at lower of cost or Net realisable value) 66,513 124,876

194,146 300,312

Sundry Debtors - Unsecured

Outstanding for more than six months

Considered good 293,928 215,997

Considered doubtful 102,287 114,662

Others : Considered good 441,827 603,334

838,042 933,993

Less : Provision for doubtful debts 102,287 114,662

735,755 819,331

Cash and Bank Balances:

Cash and Cheques on hand and remittance in transit 12,015 1,591

Balance with scheduled Banks :

- in Current Accounts* 8,430 7,927

- in Fixed Deposits** 33,522 125,635

- in Unclaimed Dividend Accounts 4,276 3,942

46,228 137,504

Balance with a Non-schedule Bank

- On Current Account 63 9

58,306 139,104

* includes Rs. Nil (Previous year: Rs. 4 lacs) in an account jointly held with IFCI in terms of Suppliers Credit Facility availed.

** includes Rs. 186.60 lacs (Previous year 98.63 lacs) pledged with banks for issue of Bank Guarantees.

28


As at As at31.03.2003 31.03.2002

(Rs. �000) (Rs. �000) (Rs. ‘000)SCHEDULE G (Contd.)

SCHEDULE H

CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

Acceptances 357,886 430,782Sundry Creditors 241,675 387,209Other Liabilities 277,020 218,145Unclaimed Dividend 4,219 3,886Advance Lease Rental - 210Interest accrued but not due on loans/deposits 30,950 25,671

911,750 1,065,903

Provisions

Provision for Taxation (net) 20,962 (149,063)Proposed Final Equity Dividend - 16,991

20,962 (132,072)

932,712 933,831

CURRENT ASSETS, LOANS AND ADVANCESLoans and Advances(Unsecured, considiered good unless otherwise stated)Loans to Subsidiary Companies 208,384 398,594Less: Provision for doubtful advances 36,590 -

(Refer note no. II. 1 Schedule O)

171,794 398,594Receivables from Companies– Subsidiaries - - 242,557– Others 14,671 14,671 29,957

186,465 671,108Advances recoverable in cash or in kindor for value to be receivedConsidered good 341,928 376,678Considered doubtful 2,047 1,802

343,975 378,480Less : Provision for doubtful advances 2,047 1,802

341,928 376,678Receivable on Sale of Investment 132,000 90,559Deposits/Loans to Companies & Firms 1,049,505 919,224Less : Adjusted as per Scheme 297,825 -

(Refer note no. II. 1 Schedule O) 751,680 919,224Advance against Equity - 4,500Balance with Excise/Custom Authorities 21,114 4,549

1,433,187 2,066,618

2,422,536 3,327,193

29

ANNUAL REPORT 2002-03SCHEDULES TO PROFIT & LOSS ACCOUNT


(Rs. �000) (Rs. �000) (Rs. ‘000)SCHEDULE ISALES AND SERVICESA) Sales (including Excise Duty) 1,591,462 3,219,307B) Services:-

1. Lease Rental- a) Operating Lease 25,200 36,480- b) Other Lease Rentals - 4,645

Less: Lease Equalisation 2,618 2,810

(2,618) 1,835

2. Management Fees - 32,453

3. Contract Job Income 136,345 43,734

1,750,389 3,333,809

SCHEDULE JOTHER INCOMEDividend from Companies 2,994 24,956Profit on sale of Investments 75,613 74,314Profit / (Loss) on Sale of Assets (net) 24,450 (1,605)Provision no longer required written back 9,797 13,182Miscellaneous Receipts 13,541 14,052

126,395 124,899

SCHEDULE KMATERIAL EXPENSESRaw & Packing Materials ConsumedOpening Stock* 96,245 123,621Add : Purchases 839,267 2,051,397

935,512 2,175,018Less : Closing Stock 62,383 78,074

873,129 2,096,944(Accretion)/Decretion to StockOpening StockWork in Process* 141,509 94,032Finished Goods* 89,111 75,288

230,620 169,320Less:Closing StockWork in Process 66,513 124,876Finished Goods 51,201 79,116

117,714 203,992112,906 (34,672)

Purchase of Traded goods 83,932 162,968

1,069,967 2,225,240

* Opening Stock includes :Raw material & packing material Rs.181.71 lacs, work-in-process Rs.166.33 lacs, Finished goodsRs. 99.95 lacs taken over on amalgamation of Concepta Cables Ltd with the Company.

30

RPG CABLES LIMITED

Year Ended Year Ended31.03.2003 31.03.2002 (Rs. �000) (Rs. ‘000)

SCHEDULE LPERSONNEL EXPENSESSalaries, Wages & Bonus 193,144 194,218Contribution to Provident & Other Funds 27,537 27,480Staff Welfare Expenses 9,105 13,507

229,786 235,205Less:Manpower Cost reimbursed 57,234 35,165

172,552 200,040

SCHEDULE MStores and Spares Consumed 12,072 23,566Manufacturing Expenses 1,358 2,980Power,Fuel and Water Charges 51,391 67,965Repairs and Maintenance:- Machinery 3,820 8,567- Buildings 2,195 5,600- Others 1,479 3,225Contract Job Expenses 83,610 33,384Freight Outwards 26,861 42,122Brokerage & Commission 26,518 9,727Insurance 7,067 8,088Rent- against Assets taken on lease 10,416 10,647- Others 5,365 5,181Rates and Taxes 2,321 10,592Directors’ Fees and Commission 185 195Travelling & Motor Car Expenses 26,508 29,089Communication Expenses 10,105 14,617Bad & Doubtful debts/Advances writen off 46,766 4,977Foreign Exchange Fluctuation (2,928) 6,126Licence Fees 8,468 36,950Finance Charge 61,330 48,347Miscellaneous Expenses 44,814 44,202

429,721 416,147

SCHEDULE NINTEREST(Net)Interest ExpensesInterest on Debenture 1,208 1,170Interest on Fixed Loan 184,545 210,088Interest on Others 104,795 93,789

290,548 305,047Less:Interest Income (Gross)On Deposits with Companies 266,040 192,387On Deposits with Banks 2,580 285On Deferred Sales Receivables 20,743 6,381On Income Tax Refund 12,889 43,624Other Interest 693 4,571

302,945 247,248

(12,397) 57,799

SCHEDULES TO PROFIT & LOSS ACCOUNT

31

ANNUAL REPORT 2002-03SCHEDULE �O�

I. SIGNIFICANT ACCOUNTING POLICIES:

1. Historical cost convention:

The accounts are prepared on accrual basis under historical cost convention except for Fixed Assets, which have beenrevalued.

2. Fixed Assets:

Land, Building and Plant & Machinery were revalued by each unit other than Silvassa unit on different dates. Such assetsare stated at revalued amount less depreciation. Other assets including Plant & Machinery on lease are carried at cost lessdepreciation.

Cost of Fixed Assets includes interest/financing cost on borrowings used for acquisition of assets and incidental expenditureincurred upto the date of commissioning. Further, exchange difference/rollover cost relating to foreign currency loans takentowards fixed assets acquisition is also capitalised. Renewal and replacements are capitalised, if appropriate, dependingupon the nature and long term utility thereof.

3. Depreciation:

Depreciation on Assets (other than those given on lease) is provided at rates specified in Schedule XIV of the CompaniesAct, 1956 under the Straight Line Method. Leaseholds are amortised over the period of lease. Exchange differencescapitalised are depreciated prospectively over the residual useful life of the related assets.

Depreciation on leased assets is provided by the Straight Line Method at rates specified in Schedule XIV of the CompaniesAct, 1956 or at a rate resulting in amortisation of the depreciable value of the asset over the primary lease period,whichever is higher.

Additions, consequent to the revaluation are depreciated with reference to the remaining useful life of each asset, asdetermined by the valuer. Such depreciation is adjusted against transfer of equivalent amount from Revaluation Reserve toProfit & Loss Account.

4. Foreign Currency Transactions:

Foreign Currency Transactions are accounted at exchange rates on the transaction date. Outstanding year-end balancesare translated at the forward contract rates or year-end exchange rates as applicable. Resultant differences together withgains/losses on settlement of transactions are taken to Profit and Loss Account except that exchange differences on longterm liabilities utilised for acquisition of fixed assets are adjusted to cost of related fixed assets.

5. Investments:

Investments are considered as long term investments and are accordingly stated at cost. Provision against diminution invalue is made, only if, considered other than of temporary nature as per criteria laid down by the Board of Directors.Profit/Loss on sale of securities is determined based on the average carrying amount of the total holding of theconcerned security.

6. Inventories:

Stores & Spares are valued at cost. Raw / Packing materials, work-in-process and finished goods are valued at lower ofcost or net realisable value. Stock of scrap is valued at net realisable value. The cost of material is arrived on First inFirst out basis.

7. Revenue Recognition:

a) Sales and Related Income

Sales are recognised at the point of despatch of goods, at the agreed rates. Adjustments arising out of pricevariation claims are accounted on acceptance of claims by customers. Export benefits are accounted in the year ofexport.

b) Revenue from contracts

Revenue from Contracts is recognized on the percentage of completion method as soon as services are rendered.

8. Interest and Other Income:

Interest and other Income are accounted on accrual basis except those sums, which are not reasonably certain ofrealisation, are recognised on cash basis.

32

RPG CABLES LIMITED9. Lease Rental Income:

Lease Income has been accounted on accrual basis, based on the Guidance Note on Accounting for Leases, issued by theInstitute of Chartered Accountants of India. The Company has adjusted the Lease Rental accruing under Lease Agreementsby creating Lease Terminal Adjustment Account, resulting in the recognition of net income at constant periodic rate onnet investment outstanding on leased assets. The amount that is considered towards lease equalisation is net of depreciationprovided and annual charge.Lease Income on operating lease is accounted on accrual basis.

10. Retirement Benefits:

Gratuity and Superannuation liability are respectively covered by Group Gratuity and Group Superannuation Policieswith Life Insurance Corporation of India. Premia payable on Policies are actuarially determined each year. Contributionsto Provident Fund are charged on monthly basis. Incremental liability towards leave encashment is provided based onactuarially valued estimates at the year-end.

11. Taxation :

Income tax is provided after considering deferred tax as per the Accounting Standard 22 on Accounting on Taxes onIncome issued by the Institute of Chartered Accountants of India.

12. Miscellaneous Expenditure:

Compensation to employees who have opted for retirement under the “Employee Retirement Scheme” of the Company isamortised over 5 years.

II. NOTES ON ACCOUNTS:

1. Amalgamation of Concepta Cables Limited, a wholly owned subsidiary (Transferor Company) with RPG Cables Limited(Transferee Company).

a) Pursuant to the Scheme of Amalgamation u/s 391 and 394 of the Companies Act, 1956, duly approved by theshareholders and the concerned High Courts, the assets and liabilities of the Transferor Company were transferred toand vested with the transferee Company with effect from 28th March 2003 i.e. Appointed Date. The TransferorCompany was engaged in the business of manufacture and Sale of Polyethylene Insulated Jelly Filled Telecom Cable(PIJF) and Optical Fiber Cable (OFC).

b) The accounting of Amalgamation is carried out as per the ‘purchase method’. Accordingly all assets and liabilities ofthe Transferor Company, as on the Appointed Date, have been incorporated in the books of accounts of the TransfereeCompany at the fair value, as determined by the Board of Directors. The deficit arising on amalgamation has beenadjusted against Amalgamation Reserve/ Share Premium Account, as per the provisions of the approved Scheme.

The details of Accounting for Amalgamation are as follows

Description Amount(Rs ‘000)

Assets taken over (Fair Value) 516,803Liabilities taken over (Fair Value) 718,849Net Assets taken over (202,046)Net Deferred Tax Asset created 127,180Cost of Investment in Concepta Cables Ltd. (180,500)Deficit (255,366)Adjustment against Amalgamation Surplus 175,887Adjustment against Share Premium 79,479

c) The accounting treatment of the deficit on Amalgamation is not in line with Accounting Standard 14 on “Accountingfor Amalgamations’ issued by the Institute of Chartered Accountants of India, according to which, it should have beentreated as ‘goodwill on Amalgamation’. However, the adjustment of deficit is in accordance with the Court approvedScheme of Amalgamation.

d) The approved Scheme of Amalgamation also provides for restatement/revision of assets and liabilities of the Companyat the fair value as determined by the Board of Directors of the Company and the net deficit arising to be adjustedagainst balance in Share Premium Account/ General Reserve.

33

ANNUAL REPORT 2002-03In terms of the said clause the Board Of Directors have provided for the diminution in the value of its investments ofand loans to its subsidiaries to the extent of Rs 8944.16 lacs and amount has been charged to Share PremiumAccount.

The utilisation of Share Premium Account is not in accordance with Section 78 of the Companies Act, 1956. However,the same has been carried out as per the Court approved Scheme.

2. Deferred Revenue Expenditure comprises of expenses incurred on Voluntary Retirement Expenditure of Rs. 252.13 lacsincurred during the year at Mysore Factory. During the year Rs. 50.43 lacs were charged to Profit and Loss Account.

3. a) Estimated amount of contracts remaining to be executed on capital account and not provided for was Rs. 106.20 Lacs(Rs.180.69 lacs) net of advances.

b) Aggregate liability towards future lease rental Rs. 837.78 Lacs (Rs.687.97 lacs).

4. Contingent Liability not provided for:

a) Counter Guarantees issued in favour of Banks : Rs. 2627.30 lacs (Rs.1432.18 lacs)

b) Corporate Guarantees given for loans taken by:

RPG Satellite Communication Ltd. : Rs. 3201 lacs (Rs.3201 lacs)

KEC International Limited : Rs. 3500 lacs (Rs. 3500 lacs)

c) Corporate Guarantees given for performanceof business contracts : Rs. 30 lacs (Rs. Nil)

d) Claims against the Company not acknowledged as debts

Excise duty : Rs. 123.98 lacs (Rs.150.87 lacs)

Income Tax : Rs. NIL (Rs. 1.15 lacs)

Cases pending adjudication with courts : Rs. 43.59 lacs (Rs.27.76 lacs)

Entry Tax : Rs. 44.03 lacs (Rs. 27.44 Lacs)

Interest : Rs. 9.71 lacs (Rs. 9.71 lacs)

Sales Tax : Rs. 2.11 lacs (Rs. 2.11 lacs )

5. As per scheme of Amalgamation approved by the High court, assets of erstwhile Asian Cables & Industries Ltd. weretransferred to the company with effect from April 1, 1996. Pending ascertainment of value of such transfer for the purposeof stamp duty, provision has not been made in the accounts for stamp duty payable. As per the estimate of the management,stamp duty is approx. Rs.112 lacs and the same will be adjusted from General Reserve.

6. Maximum balance with Municipal Co-operative Bank Limited, Mulund, a non- scheduled bank was Rs.5.27 lacs (Rs.8.67lacs).

7. Advances recoverable in cash or in kind include Rs. 1.02 lacs (Rs. 1.36 lacs) due from the Managing Director of thecompany. Maximum balance during the year is Rs. 1.36 lacs (Rs.2.22 lacs).

8. Sundry Creditors include outstanding payable to SSI Units of Rs.423.76 lacs .Name of such parties, where outstanding is inexcess of Rs 1 lakh, which is outstanding for more than 30 days are mentioned below:

Sankhla Industries, Shubha Packaging, Woodcraft, Wood Designers, Hinddustan Wood, Sagar Timbers, ChamundeswariIndustries, Systematic Steels, MS Cabrol India Ltd, OK Glass Fibres Ltd, Sanjay Wood Converter, Wood Drums , BhushanSteel, Sneham International , Systematic Steel Ltd, Ranaie Udyog, Siddharth Plastic Industries, Trishul Wire Products,Mumbai Wire & Metals, Umesh Enterprises, S.C.Plastics, Yash Packaging, Iqbal Wood Drum, Ishani Industries, JamalWood Work, Kirti Udyog, Sidharth Plastic Industries.

34

RPG CABLES LIMITED9. Additional information pursuant to provisions of Part II of Schedule VI of the Companies Act, 1956.

Managerial remuneration including estimated value of perquisites paid/payable to the ‘Managing Director’ of the Companyis as under:

(Rs.�000) (Rs.’000)For the year ended For the year ended

31.03.2003# 31.03.2002

a) Salary (including allowance) 1508 2195*

b) Contribution to PF and other Funds 216 288

c) Value of Perquisites 274 496

1998 2979

# Represents Salary for a part of the financial year only.* Salary includes Rs. 2.92 lacs being arrears of salary for the year 2000-01

10. I The relevant information of goods manufactured and traded are given hereunder in quantities and value

GOODS MANUFACTURED/ UOM INSTALLED PRODN./ OPENING CLOSING SALES SALESTRADED CAPACITY PURCHASE STOCK STOCK UNITS (Rs.’000)

A. TELECOMa) Jelly Filled Telephone Cables CKM 7137000 226214 39086 5745 259555 117843

(4500000) (2565502) (47521) (37385) (2575638) (1435793)b) Optical Fibre Cables FKM 365000 52207 14002 10853 55356 144803

(130000) (104021) (2421) (8833) (97609) (426640)

B POWER CABLES K.M. 6936 8680 925 124 9481 1176633(5736) (5008) (847) (925) (4926) (1152236)

C TRADED ITEMS Nos. 0 0 0 0 0 1478640 0 0 0 0 (200583)

D WIND ENERGY KWH 3000000 1439649 0 0 1439649 4319(3000000) (1655486) 0 0 (1275000) (4055)

# Installed capacity is as certified by the Managing Director of the Company. It includes that of Concepta Cables Ltd. due toamalgamation effective from 28/03/2003

* Opening stock includes Jelly Filled Telecom Cables of 1701 CKM and Optical Fibre of 5169 FKM taken over on amalgamation ofConcepta Cables Ltd. with the Company.

Licenced Capacity - Not Applicable.

Previous Year’s figures are in brackets.

II Material Cost(Rs. ‘000)

For the year ended For the year ended31st March 2003 31st March 2002

(UOM) Qty. Value Qty. Valuea) Consumption

Copper MT 1,364 154,715 5,006 566,906Aluminium MT 2,922 254,132 3,183 177,975Compound MT 3,327 177,232 4,726 350,568Others 287,050 1,001,495

873,129 2,096,944

35

ANNUAL REPORT 2002-03Value Value

% (Rs. �000) % (Rs. ‘000)

b) Percentage Consumptioni) Raw Materials

Imported 9 82,864 15 326,893Indigenous 91 790,265 85 1,770,051

Total 100 873,129 100 2,096,944

ii) Stores and Spares:Imported 18 2,171 19 5,203Indigenous 82 9,901 81 18,363

Total 100 12,072 100 23,566

For the year ended For the year ended31st March 2003 31st March 2002

(Rs. �000) (Rs. ‘000)III CIF Value of Imports:

Raw Materials 207,647 239,132Stores & Spares 455 3,035Capital Goods 206 45,861

IV Earnings in Foreign ExchangeExports of Cables (F.O.B) 63,986 40,151

V Expenditure in Foreign Currency(On Payment basis)Travelling Expenses 1,623 -Interest / Bank Charges 434 1,743Others - 260

VI Dividend Remittance in Foreign Currency:Remittance (net of tax) (Rs. ‘000) 115 329No.of Non-Resident Shareholders 26 28No.of Shares on which remittance was made 181288 282728Year for which the dividend was remitted 2001-02 2000-01

VII Payments to Auditors:As Auditors 432 420For Tax Audit 172 84Other Services 427 -

11. Company has created Deferred Tax Assets on loss taken over from Concepta Cables Ltd. This has been adjusted againstDeferred Tax Liability as there is a virtual certainty to that extent.

Deferred Tax asset/(liability) consists of : As at As at31.03.2003 31.03.2002

Book/ tax depreciation (197616) (198383)Provision for statutory dues 9527 7436Deferred revenue expenditure (3075) (14968)Business loss 167614 -

( 23550) (205915)

36

RP

G C

AB

LES LIM

ITED 12 Segment information for the year ended March 31, 2003

(I) Information about Primary Business Segments

Telecom Cables Power Cables Other Business Unallocated TotalRevenue

2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02

External 327,174 1,897,653 1,223,957 1,257,066 199,258 179,089 - - 1,750,389 3,333,808Inter Segment - - - - - - - - - -Total Revenue 327,174 1,897,653 1,223,957 1,257,066 199,258 179,089 - - 1,750,389 3,333,808ResultSegment Result (69,761) 20,746 29,945 38,112 4,168 42,281 - - (35,648) 101,140Unallocated expenditure, net of unallocated income - - - - - - 29,170 3,322 29,170 3,323Operating Profit (69,761) 20,746 29,945 38,112 4,168 42,281 (29,170) (3,322) (64,818) 97,818Interest expense (net) - - - - - - (12,397) 57,799 (12,397) 57,799Provision for taxation (including deferred tax) - - - - - - (77,771) (4,046) (77,771) (4,046)Net Profit (69,761) 20,746 29,945 38,112 4,168 42,281 60,998 (57,074) 25,350 44,065Other InformationSegment Assets 657,870 964,271 924,415 971,475 209,845 324,442 2,583,097 3,714,194 4,375,228 5,974,381Segment Liabilities 481,925 561,239 474,098 375,047 55,475 39,049 2,039,616 2,529,709 3,051,115 3,505,044Capital Expenditure 4,359 20,630 22,316 24,906 3,235 103 - - 29,910 45,639Depreciation 45,001 47,395 28,196 32,217 12,689 32,810 - - 85,886 112,423

(ii) Information about Secondary Business Segments

Revenue by Geographical market India Outside India Total

2002-03 2001-02 2002-03 2001-02 2002-03 2001-02

External 1,686,403 3,293,658 63,986 40,151 1,750,389 3,333,809Inter segment - - - - - -Total 1,686,403 3,293,658 63,986 40,151 1,750,389 3,333,809Carrying amount of Segment Assets 4,375,228 5,974,381 - - 4,375,228 5,974,381Additions to fixed assets 29,704 45,639 - - 29,910 45,639

(iii) Notes :

(i) The Company is organised into three main business segments, namely :

- Telecom Cables

- Power Cables

- Others include the housewiring business, contract Job, and sale of wind energy.

Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structure and the internal financial reportingsystems.

(ii) The Segment Revenue in the geographical segments considered for disclosure are as follows :

- Revenue within India includes sales to customers located within India and earnings in India.

- Revenue outside India includes sales to customers located outside India and earnings outside India.

(iii) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

37

ANNUAL REPORT 2002-0313. Related Party Disclosures

a) Related Party RelationshipsSr. Name of the Related Party Relationship1. Concepta Cables Ltd. 100% subsidiary till 27-3-20032. Blue Niles Holdings Ltd. 100% subsidiary3. KTL Industrial Finance Company Ltd. 100% subsidiary till 28-3-20034. Key Management Personnel:

Mr. A. S. Jatkar Managing Director5. Relatives of Key Management Personnel

Not Applicableb) Transactions during the period with Related Parties Key Management Personnel are as under:

(Rs. ‘000)

Sr. Name of the Related Party Description of Transaction Outstanding Outstanding

& Nature of relation 2002-03 balance as on 2001-02 balance as on31.3.2003 31.3.2002

1 Concepta Cables Ltd. Purchase of Raw packing materials 12401 3,045100% subsidiary till 27-3-2003 Sale of finished goods – 1,120CCL mergered with RPGCL Material Conversion charges-expense 31688 14,663w.e.f 28-3-2003 Loans/Advances refunded by Concepts 43890 110,479

Sale (Purchase) of fixed assets (197) 83,616Sale of raw materials 240806 32,768Other services 5576 3,126Purchase of finished goods – 2,195Management fees - income – 32,453Lease rent - income 25200 36,480Interest - income 50310 22,027Reimbursement of manpower cost 57234 35,164Reimbursement of expenses from Concepts 17203Inter Corporate Deposit taken (given) – 95,845Outstanding receivables net of payables# 135,259Counter Guarantees outstanding - 210,000

2 Blue Niles Holdings Ltd. Inter Corporate Deposit given (refunded) (279790) 250,314100% Subsidiary Company Shares purchase 7993 –

Interest income on ICD given 76913 53,826Shares of Share 132000 –Outstanding receivables, net of payables # 376333 455,203Dividend income – 21,500

3 KTL Industrial Finance Company Inter Corporate Deposit given/(refunded) (163655) 311,955Inter Corporate Deposit received back – –

100% Subsidiary Company Share Purchase 22558 –until March 28, 2003 Interest income on ICD given 109332 58,206

Outstanding receivables, net of – 599,918payables #

4 Key Management Personnel - Managerial remuneration 1998 2,979Mr. A. S. Jatkar

# transactions with the above parties are accounted in the respective current accounts.

14. Previous year’s figures have been regrouped or rearranged wherever necessary. However, previous year’s figures are notcomparable with Current year’s figures due to amalgamation referred to in Note 1 above.

38

RPG CABLES LIMITED15. Balance sheet abstract and Company’s general business profileI Registration Details

Registration No. 4679 State Code 08

Balance Sheet Date 31 03 2003

Date Month Year

II Capital raised during the year (Amount in Rs. Thousand)

Public Issue Rights Issue

NIL NIL

Bonus Issue Private Placement

NIL NIL

III Position of Mobilisation & Deployment of Funds (Rs. �Thousands)

Total Liabilities Total Assets

3442514 3442514

Sources of Funds

Paid-up Capital Reserves & Surplus

212399 1111714

Secured Loans Unsecured Loans

1285264 809587

Application of Funds

Net Fixed Assets Investments

1022174 910346

Net Current Assets Misc.Expenditure

1513374 20170

Accumulated Losses

—

IV Performance of Companies (Amount in Rs. �Thousands)

Gross Income Total Expenditure

1693308 1745729

Profit before Tax Profit after Tax

-52421 25350

Earning per Share in Rs. Dividend rate %

1.19 —

V Generic names of Principal Products of Company

Item Code No. (ITC Code) 854420.19 Product Description Jelly Filled Telephone Cables

Item Code No. (ITC Code) 854470.09 Product Description Optic Fibre Cables

Item Code No. (ITC Code) 8544.00 Product Description Insulated Wires & Cables

Schedules ‘A’ to ‘N’ form an integral part of the Accounts & have been signed by the following


for N.M.RAIJI & Co.Chartered AccountantsJ. M. Gandhi Bharat ThakkarPartner Company SecretaryMumbai, 14th November, 2003


39

ANNUAL REPORT 2002-03STATEMENT PURSUANT TO SECTION 212 (3) AND 212(5) OF THE COMPANIESACT, 1956

1. Name of the Subsidiary Blue Niles Holdings Limited

2. Financial year of the Subsidiary Company 31st March, 2003

3. a. No. of shares held by RPG Cables Limited and its nominees 21,50,000 Equity Shares ofRs. 100/- each fully paid up

b. Extent of Holding 100%

4. Net Aggregate of Subsidiary’s Profit/Loss so far as it concerns the membersthe members of RPG Cables Limited (Rs.‘000)

a) Not dealt with in the Accounts of RPG Cables Limited for the year ended31st March 2003 —

i) For the subsidiary’s financial year ended as in 2 above (2,65,870)

ii) For the previous financial years of the subsidiary since it becamesubsidiary of RPG Cables Limited (2,198)

b) Dealt with in the Accounts of RPG Cables Limited for the year ended31st March 2003

i) For the subsidiary’s financial year ended as in 2 above Nil

ii) For the previous financial years of the subsidiary since it becamesubsidiary of RPG Cables Limited

5. Material changes in the interest of RPG Cables Limited between the endof financial year of the Subsidiary Company and 31st March 2003 None

6. Material changes between the end of Financial Year of the SubsidiaryCompany and 31st March 2003

a) Fixed Assets None

b) Investments None

c) Monies Lent None

d) Monies Borrowed None




40

Blue Niles Holdings Limited

Your Directors have pleasure in presenting their Annual Report& Audited Accounts for the year ended 31st March, 2003.

FINANCIAL RESULTS:

Rs. In lacs2002-03 2001-02

Total Income 614.85 527.20Total Expenditure 3277.90 549.18Loss 2663.05 21.98Balance Brought Forward 111.94 133.92Balance Carried Forward (2546.75) 111.94

The working of your Company for the year under reviewresulted in loss of Rs. 2663.05 lacs as against a loss ofRs. 21.98 lacs in the previous year.

DIVIDEND :

In view of the loss, your directors regret their inability torecommend any dividend.

DIRECTORS:

Mr. A S Jatkar retires by rotation and being eligible, offershimself for re-appointment.

DIRECTORS� RESPONSIBILITY STATEMENT AS REQUIREDUNDER SECTION 217 (2AA) OF THE COMPANIES ACT,1956

The Directors confirm that –

(i) in the preparation of the annual accounts, the applicableaccounting standards have been followed along withproper explanation relating to material departures;

(ii) appropriate accounting policies have been selected andapplied consistently and have made judgements andestimates that are reasonable and prudent so as to givea true and fair view of the state of affairs of the companyas at 31st March, 2003 and of the loss of the Companyfor the year ended 31st March, 2003;

(iii) proper and sufficient care has been taken for themaintenance of adequate accounting records in

accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities;

(iv) the annual accounts have been prepared on a goingconcern basis.

AUDIT COMMITTEE:

In terms of Section 292A of the Companies Act, 1956, theCompany has set up an Audit Committee at its Board Meetingheld on 27th March, 2001. The Audit Committee consists ofMr. A.S. Jatkar as Chairman, Mr. Nikhil Gupta andMr. Vijay Phaterphekar.

EMPLOYEES:

As the Company has no employees, the provisions of Section217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) Rules, 1975 are not applicable.

AUDITORS:

Mr. H.M. Merchant, Chartered Accountant, retires as Auditorof the Company at the conclusion of the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment.

COMPANIES (DISCLOSURE OF PARTICULARS IN THEREPORT OF THE BOARD OF DIRECTORS) RULES, 1988:

Since the Company is an investment Company and has nomanufacturing or other operations, the Companies (Disclosureof Particulars in the Report of Board of Directors) Rules, 1988are not applicable. There are no Foreign Exchange earningsor outgo during the Financial Year ended on31st March, 2003.


(A S Jatkar) (Nikhil Gupta)Director Director

MumbaiDated: 25th August 2003

DIRECTORS� REPORT

DIRECTORS : Mr. A.S. Jatkar AUDITORS : H.M. MerchantMr. Nikhil Gupta Chartered AccountantMr. Vijay R. Phatarphekar

BANKERS : American Express Bank.REGISTERED OFFICE : Ceat Mahal

463, Dr. Annie Besant RoadWorli, Mumbai 400 030.

41


REPORT OF AUDITOR TO THESHAREHOLDERS

I have audited the attached Balance Sheet of Blue Nile HoldingsLtd. as at March 31, 2003 and the Profit & Loss Account ofthe Company for the year ended on that date annexed thereto.These financial statements are the responsibility of thecompany’s management. My responsibility is to express anopinion on these financial statements based on my audit.I have conducted the audit in accordance with auditingstandards generally accepted in India. Those Standardsrequired that I plan and perform the audit to obtain reasonableassurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing theaccounting principles used and significant estimates made bythe management, as well as evaluating the overall financialstatement presentation. I believe that my audit provides areasonable basis for my opinion.1. I have obtained all the information and explanations which

to the best of my knowledge and belief were necessaryfor the purpose of the audit.

2. In my opinion, proper books of account as required bylaw have been kept by the Company so far as it appearsfrom my examination of the books.

3. The Balance Sheet and Profit and Loss Account dealt withby this report are in agreement with the books of account.

4. In my opinion, the Balance Sheet and Profit and LossAccount referred herein comply with the accountingstandards referred to in Section 211 (3)(C)of theCompanies Act, 1956 to the extent applicable.

5. On the basis of the written confirmations received fromthe Directors and taken on record by the Board ofDirectors, I report that none of the Directors is disqualified,as on 31st March, 2003, from being appointed as aDirector in terms of section 274 (1) (g) of the CompaniesAct, 1956.

6. In my opinion and to the best of my information andaccording to the explanations given to me, the saidaccounts read together with the notes thereon give theinformation required by the Companies Act, 1956 in themanner so required and give a true and fair view inconformity with the accounting principles generallyaccepted in India.a) In the case of the Balance Sheet, of the state of

affairs of the Company as at March 31, 2003, and.b) In the case of the Profit and Loss Account, of the Loss

for the year ended on that date.7. As required by the Manufacturing and other Companies

(Auditors Report) order, 1988 issued by the CompanyLaw Board, in terms of Section 227 (4A) of the CompaniesAct, 1956, and on the basis of such checks of the booksand records of the company as I consider appropriateand according to the information and explanations givento me during the course of the audit, on the mattersspecified in the paragraphs 4 and 5 of the said order tothe extent applicable. I further report that :

a) The Company is an investment Company. TheCompany does not own any fixed assets and it didnot have any employees at any time during the year,hence in my opinion no comments are required underparagraph 4 of the order in the case of items (I), (ii),(iii), (iv), (v), (vi), (x), (xii), (xiv), (xvi) & (xvii) ofclause (A) and item (iii) of clause (D).

b) Except for loan from the Holding Company, theCompany has not taken any loan from Companies,firms, or parties listed in the Register maintained u/s301 and 370(1-B) of the Companies Act, 1956. Theterms and conditions of the above mentioned loanare not prima facie prejudicial to the interest of theCompany.

c) The Company has not given loan to a Companyunder the same management as defined under section301 and 370 (1-B) of the Companies Act, 1956.

d) In respect of loans or advances in nature of loansgiven by the Company, the parties are repaying theprincipal amount as stipulated and are also regularin the payment of interest wherever applicable.

e) During the year, there are no transactions of purchaseof goods and material and sale of goods, materialsand services.

f) The Company has not accepted deposits from thepublic, and hence the directions issued by the ReserveBank of India (RBI) for the Non Banking FinancialCompanies are not applicable to the Company.

g) The Company does not have an internal audit system.In the opinion of the management, an internal auditsystem is not considered necessary having regard tothe nature of business and the volume of transactions.

h) There are no undisputed amounts payable in respectof income tax, wealth tax, sales tax, customs dutyand excise duty which were outstanding , as at theBalance Sheet date, for a period of more than sixmonths from the date they became payable.

i) Based on my examination of the Books of accountand according to the information and explanationsgiven to me, there are no personal expenses chargedto revenue account.

j) The Company is an investment company and hencethe provisions of the Sick Industrial Companies(Special Provisions) Act, 1985 are not applicable.

k) I have no comments to offer under paragraph 4D(ii)of the Order as the Company has not granted loansand advances on the basis of security by way ofpledge of shares, debentures or other securities.

l) The Company has maintained proper records of thetransactions and contracts in respect of investmentsand has also made timely entries therein. The sharesare held by the Company in its own name exceptcertain shares purchased during the year which weresent for transfer.

Place : Mumbai H. M. MERCHANTDate : 25th August, 2003 Chartered Accountant

42

Blue Niles Holdings LimitedBALANCE SHEET AS AT 31ST MARCH, 2003

As at As at31.03.2003 31.03.2002

Schedules Rs.�000 Rs.’000

SOURCES OF FUNDS

Share Holders� Funds

Share Capital A 215,000 215,000

Reserves & Surplus B 3,086 14,280

Loan Funds

Unsecured Loans C 502,884 547,297

720,970 776,577

APPLICATION OF FUNDS

Investments D 376,185 511,272

Current Assets,Loans and Advances E 126,720 379,299

Less : Current Liabilities & Provisions F 36,611 113,994

Net Current Assets 90,109 265,305

Profit & Loss Account 254,676 —

720,970 776,577

Notes on Accounts I

As per my report of even date

H. M. MerchantChartered Accountant

Mumbai, 25th August, 2003

A. S. JatkarNikhil Gupta

Directors

43

ANNUAL REPORT 2002-03PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2003


Schedules Rs.�000 Rs.’000

INCOME

Dividend 585 2,145Interest G 58,985 50,568Provisions no longer required, written back 1,875 -Other Income 41 7

61,486 52,720

EXPENDITURE

Interest 77,600 53,826Interest to financial institutions - 14,620Loss on Sale of Investments 233,688 (15,915)Other Expenses H 103 87Provision for doubtful Advances 1,000 2,300Provision for doubtful advance against allotment of equity 15,400 -

327,791 54,918

PROFIT

Profit /(Loss)before Taxation (266,305) (2,198)Provision for taxation - -Income Tax Provision written back (Net) 435 -Profit after Taxation (265,870) (2,198)Balance brought forward from last year 11,194 13,392

(254,676) 11,194

APPROPRIATION

Balance carried to Balance sheet (254,676) 11,194

(254,676) 11,194

Notes on Accounts I





Directors

44

Blue Niles Holdings LimitedSCHEDULES TO BALANCE SHEET

As at As at31.3.2003 31.3.2002

Rs.�000 Rs.’000

SCHEDULE - A

SHARE CAPITAL

Authorised :

21,50,000 Equity Shares of Rs. 100/- each 215,000 215,000

215,000 215,000

Issued,Subscribed and Paidup :

21,50,000 Equity Shares of Rs. 100/- each(Held by Holding Company and its Nominees) 215,000 215,000

215,000 215,000

SCHEDULE - B

RESERVES AND SURPLUS

Capital Reserve 286 286General Reserve 2,800 2,800Profit & Loss Account - 11,194

3,086 14,280

SCHEDULE - C

UNSECURED LOANS

DEBENTURES

15,00,000 Zero % interest fullyConvertible Debentures of Rs.100/- each fully paid 150,000 150,000

LOANS

From Holding Company 340,384 397,297From others 12,500 -

502,884 547,297

Note:

Above debentures issued to Holding company are redeemable at the end of tenth year ( Previous Year Seventh Year) from thedate of issue ie. 28th June, 1995 with an option to convert each debenture into fully paid Equity Shares of Rs.100/- each anytime after the expiry of six months but prior to the date of redemption. The Company, however, has the option to purchase thedebentures before conversion/redemption.

45


As at As at31.3.2003 31.3.2002

Rs.�000 Rs.’000

SCHEDULE - D

INVESTMENTS - AT COST

Quoted:

Fully paid Equity Shares Of Rs.10/- each

- CFL Capital Services Ltd.(190,00,000) - 169,631- Ceat Ltd. (68,343) - 8,264

174,810 CESC Ltd.(174,810) 26,955 26,955- Eveready Industries (India) Ltd. (151,799) - 45,112

335,204 Zensar Technologies Ltd (335,204) 91,148 91,148- Harrisons Malayalam Ltd.(280,050) - 16,953- Philips Carbon Black Ltd.(300) - 8- RPG Transmission Ltd (147,610) - 22,931

677,552 Saregama India Ltd. (677,552) 117,599 117,599(5,00,000 shares pledged with financial institution) - -

- RPG Life Sciences Ltd. (5,670) - 276

235,702 498,877Unquoted:

Fully paid Preference Shares of Rs. 100 each

- Duncan Investments & Industires Ltd (50) - 5Fully paid Equity Shares of Rs.100/- each

- Duncan Services Ltd. (360) - 18- Brabourne Investments Ltd (1,300) - 135

Fully paid Equity Shares of Rs.10/- each

- Organised Investments Ltd. (373,000) - 3,7336,844,088 RPG Communication Holdings Ltd (844,088) 140,483 8,483

- Duncan Investments & Industires Ltd (2,000) - 21

140,483 12,395

376,185 511,272

— Aggregate cost of quoted investments 235,702 498,877— Aggregate Market value of quoted investments 53,137 226,704— Aggregate Cost of unquoted investments 140,483 12,395

46

Blue Niles Holdings Limited

SCHEDULES TO PROFIT & LOSS ACCOUNTYear Ended Year Ended31.3.2002 31.3.2002

Rs.�000 Rs.’000SCHEDULE G

INTEREST

Interest on Loans and Advances 58,645 50,568(Tax deducted at source Rs.Nil Previous Year Rs.4,766,030)Interest from Income Tax Department (Net) 340 -

58,985 50,568

SCHEDULE H

OTHER EXPENSES

Remuneration to auditor 27 27General expenses 57 -Fees to Authorities 8 5Registration & Subscription 5 5Bank Charges 2 45Conveyance 4 5

103 87

SCHEDULES TO BALANCE SHEETAs at As at

31.3.2003 31.3.2002Rs.�000 Rs.�000 Rs.�000

SCHEDULE E


CURRENT ASSETSSundry Debtors - Unsecuredconsidered good - outstanding for more than six months - 6,495Cash and Bank BalancesCash on hand 2 - 3With Scheduled Banks on Current Accounts 36 38 27

38 6,525LOANS & ADVANCES(Unsecured - considered good unless otherwise stated)Advance payment of Taxes (net of provision) 9,172 13,371Interest Receivables - 16,028Loans to companies 99,510 - 330,750Less:Provision for doubtful advances 2,000 - 2,875

97,510 327,875Advance against allotment of equity 15,400 - 15,500Less: Provision 15,400 - -

Advance against purchase of debentures 20,000 -

126,682 372,774126,720 379,299

SCHEDULE F

CURRENT LIABILITIES & PROVISIONS

CURRENT LIABILITIES

Interest accrued 36,455 30,426Dividend refundable - 80Sundry Creditors 156 83,488

36,611 113,994

47

ANNUAL REPORT 2002-03NOTES ON ACCOUNTS

SCHEDULE I

A. SIGNIFICANT ACCOUNTING POLICIES :

1. Investments :

(a) Investments held by the company are of long term nature and are stated at cost inclusive of incidental expenses.(b) Provision against diminution in the value of Investment is made where in the opinion of the management dimunition is

of a permanent nature.

2. Recognition of Income & Expenditure :(a) Income is recognised on accural basis except in respect of Assets classified as Non-Performing Assets (NPA). Since the

company is a Non Banking Finance Comapany (NBFC), the income on NPA is recognised only when it is actualllyrealised. Classification of Loans & Advances as NPA & provision for doubtful advances are in accrodance with relevantRBI guidelines, except that amount realised after the Balance Sheet date are recognised in arriving at the year endclassification.

(b) Expenses are accounted on accrual basis.

3. Treatment of Contingent Liability :Full disclosure in made in the accounts in connection with contingent liability if any, but the provision for the same is madewhen such liability crystalises.

4. Prior Period Adjustments:Prior period adjustments if any, having impact on the financial affairs of the Company are disclosed.

B . NOTES ON ACCOUNTS

1. Contingent liability:Claims againt the company not acknowledged as debts: Nil

2. In the opinion of the Directors, the current assets, loans and advances are realisable in the normal course of the business atthe value at which these are stated in the Balance Sheet.

3. During the year the company has sold certain quoted equity shares to holding company at market rate and certainunquoted equity and preference shares to KTL Industrieal Finance Co. Ltd at the break up value arrived at as per the latestavailable Balance Sheet of that company. The Profit/Loss on sale has been recognised in the profit and loss account.

4. Interest has been provided @13% p.a. on loan from Holding Company.

5. Payment to Auditors: 2002-03 2001-02Audit Fees : Rs. 21,000 21,000Tax audit fees : Rs. 3,000 3,000Other Services : Rs. Nil 1050Out of pocket expenses : Rs. 2,890 2,510Total : Rs. 26,890 27,560

6. Accounting Standard 18 on related Party Disclosures is not applicable to the Company since the turnover of the Companydoes not exceed Rs.50 crores for the year.

7. Segmental Reporting-The Company is in the business of investing in shares and inter corporate deposit and the entireincome represents interest on investments and loss on sale of investment. Accordingly segment reporting is not applicable.

8. Deferred tax asset has not been recognised by the Company in view of uncertainty of future taxable income.9. Additional information pursuant to Part II of Schedule VI to the Companies Act,1956 - Not Applicable10. Previous year figures are regrouped wherever necessary.





Directors

48

Blue Niles Holdings LimitedBALANCE SHEET ABSTRACT AND COMPANY�S GENERAL BUSINESS PROFILE

I Registration Details

Registration No. 14492 State Code 11

Balance Sheet Date 31 03 2003

Date Month Year

II Capital raised during the year (Amount in Rs. Thousand)

Public Issue Rights Issue

NIL NIL

Bonus Issue Private Placement

NIL NIL

III Position of Mobilisation & Deployment of Funds (Amount in Rs. Thousand)

Total Liabilities Total Assets

720970 720970

Sources of Funds

Paid-up Capital Reserves & Surplus

215000 3086

Secured Loans Unsecured Loans

NIL 502884

Application of Funds

Net Fixed Assets Investments

NIL 376185

Net Current Assets Misc.Expenditure

90109 NIL

Accumulated Losses

254676

IV Performance of Companies (Amount in Rs. Thousands)

Turnover Total Expenditure

61486 327791

Profit before Tax Profit after Tax

(266305) (265870)

(Please Tick appropriate box for Profit - for losses)

Earning per Shares in Rs. Dividend rate %

NIL NIL

V Generic names of Three Principal Products/services of Company (as per monetary terms)

NOT APPLICABLE

Item Code No. (ITC Code) NIL

Product Description INVESTMENT COMPANY





Directors

49


We have examined the attached Consolidated Balance Sheetof RPG Cables Limited (the Company) and its subsidiaries(RPG Cables Group) as at March 31, 2003 and also theConsolidated Profit and Loss Account and the ConsolidatedCash Flow Statement of the Group for the year ended on thatdate.

These financial statements are the responsibility of themanagement of RPG Cables Limited. Our responsibility is toexpress an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with generallyaccepted auditing standards in India. These standards requirethat we plan and perform the audit to obtain reasonableassurance whether the financial statements are prepared, inall material respects, in accordance with accounting principlesgenerally accepted in India and are free of materials mis-statements. An audit includes, examining on a test basis,evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accountingprinciples used and significant estimates made bymanagement, as well as evaluating the overall financialstatements. We believe that our audit provides a reasonablebasis for our opinion.

We did not audit the following financial statements:

1. Blue Nile Holdings Limited, a subsidiary, whose financialstatement reflect total assets of Rs 7209.70 lakhs andtotal revenue of Rs 614.86 lakhs for the year then endedand

2. KTL Industrial Finance Company Limited, subsidiary ofthe Company upto 28th March,2003, whose revenue forthe period ended 28th March,2003 is Rs 1013.72 lakhs.

The financial statements of the above two companies,including Profit and Loss Account of KTL Industrial FinanceCompany Limited upto 28th March, 2003 have beenaudited by other auditors whose reports have beenfurnished to us, and in so far as it relates to the amountsincluded in respect of subsidiaries, is based solely on thereport of the other auditors. We have placed reliance onthe said reports for our audit opinion.

AUDITORS� REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

We report that, the consolidated financial statements havebeen prepared by the Company in accordance with therequirements of Accounting Standard (AS 21), onConsolidated Financial Statements, issued by The Instituteof Chartered Accountants of India and on the basis of theseparate audited financial statements of RPG Cables Ltd.and its subsidiaries included in the Consolidated FinancialStatements.

1. We have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary for the purpose of our audit.

2. In our opinion and to the best of our information andaccording to the explanations given to us and on theconsideration of the separate audit report on individualaudited financial statements of RPG Cables Limited andits subsidiaries, we are of the opinion that, the saidaccounts, read together with the notes thereon give a trueand fair view:

a. in the case of the consolidated balance sheet, of thestate of affairs of RPG Cables Group as atMarch 31, 2003 ;

b. in the case of the consolidated Profit and Loss Account,of the loss of the RPG Cables Group for the yearended on that date; and

c. In the case of the consolidated Cash Flow Statement,of the Cash Flows of the RPG Cables Group.

For N.M.Raiji & Co.,Chartered Accountants

J.M.GandhiPartner

Membership No 37924Place: MumbaiDate : 14th November, 2003

RPG CABLES LIMITED Consolidated

50

RPG CABLES LIMITED ConsolidatedCONSOLIDATED BALANCE SHEET AS AT 31ST MARCH 2003

As at As at31.03.2003 31.03.2002

SCHEDULES (Rs. �000) (Rs. ‘000)SOURCES OF FUNDS:

Shareholders� Funds

Share Capital A 212,399 212,399Reserves & Surplus B 1,125,265 1,851,256

1,337,664 2,063,655Loan Funds

Secured Loans C 1,285,264 1,350,528Unsecured Loans D 822,087 1,071,769

2,107,351 2,422,297Deferred Tax Liability (Net) 23,550 168,625

3,468,565 4,654,577

APPLICATION OF FUNDS

Fixed Assets E

Gross Block 2,850,552 2,820,051Less : Depreciation 1,833,819 1,722,804

Net Block 1,016,733 1,097,247Add:Lease equalisation adjustment 1,599 4,217Add:Capital Work in Progress and Advances 3,842 25,394

1,022,174 1,126,858Investments F 1,150,082 1,509,904Current Assets, Loans & Advances G

Interest accrued on Investments 1,142 1,828Inventories 194,146 395,280Sundry Debtors 735,755 916,260Cash and Bank Balances 58,344 167,254Loans and Advances & Deposits 1,210,954 1,555,547

2,200,341 3,036,169Less : Current Liabilities & Provisions HLiabilities 912,413 1,194,048Provisions 11,790 (175,649)

924,203 1,018,399Net Current Assets 1,276,138 2,017,770Miscellaneous Expenditure (to the extent notwritten off or adjusted)

Preliminary Expenses - 45Deferred Revenue Expenditure 20,171 -(Refer note no. II. 2 of Schedule ‘O’)

3,468,565 4,654,577

Notes on Accounts O



J. M. Gandhi Bharat ThakkarPartner Company SecretaryMumbai, 14th November, 2003


51

ANNUAL REPORT 2002-2003CONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 31ST MARCH, 2003


SCHEDULES (Rs. �000) (Rs. ‘000)INCOMESales & Services I 2,244,169 3,820,646Less: Excise Duty 253,739 493,517

1,990,430 3,327,129Other Income J 59,718 164,768Closing Stock of Shares - 26,194

2,050,148 3,518,091

EXPENDITUREMaterial Expenses K 1,497,301 2,580,478Opening Stock of Shares 11,512 33,934Personnel Expenses L 248,108 236,389Other Expenses M 960,088 529,310Interest (Net) N 112,703 142,306Depreciation 115,877 144,594Less : Transferred from Revaluation Reserve 19,648 29,216

96,229 115,378Prior period items 119 174

2,926,060 3,637,969

PROFITProfit before taxation (875,912) (119,878)Provision for taxation - 135Deferred tax adjustment (17,895) (43,959)Provision for taxation of earlier years (21,764) 2,490Profit after taxation (836,253) (78,544)Balance brought forward from last year 36,092 131,627

(800,161) 53,083

APPROPRIATION/(DRAWAL):Final Equity Dividend - Proposed - 16,991Reserves Adjustment(Refer note no. b I. Of Schedule ‘O’) (1,283,925)

Balance carried to Balance Sheet 483,764 36,092

(800,161) 53,083

Basic and diluted earning per Equity Share (Rupees) (39.37) (3.70)Notes on Accounts O





52

RPG CABLES LIMITED ConsolidatedCONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2003

31.03.03 31.03.02(Rs. �000) (Rs. ’000)

A. CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and extraordinary items (875,912) (119,878)Adjustments for:– Depreciation 96,228 115,378– Lease Equalisation 2,618 2,810– Amortisation of VRS expenses 5,043– Preliminary Exp. 45– Provisions for advances and debts 14,525 -– Provisions for diminution in value of shares 2,378– (Profit)/Loss on sale of Investments 158,075 (69,146)– Interest/Dividend earned (364,925) (201,759)– Interest Expense 378,565 347,632– Loss of Subsidiary cease to be subsidiary on Balance Sheet date 558,462 -– (Profit)/Loss on Sale of Fixed Assets (24,450) 1,605Operating profit before working capital changes (51,771) 79,065Adjustments for:– Trade and other receivables 294,597 180,344– Inventories 106,166 17,830– Trade payables (242,844) 140,230Cash generated from operations 106,148 417,469Direct taxes paid 207,523 (62,315)Cash Flow before extraordinary items 313,671 355,154Extraordinary ItemsPayment under Employee’s Voluntary Retirement Scheme (25,214) -Net Cash from Operating Activities 288,457 355,154

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (including Capital WIP) (165,625) (207,641)Realisation on Sale of Fixed Assets 31,721 45,224Purchase of Investments (42,195) (144,813)Sale Proceeds of Investments 38,070 156,281Interest received 285,374 117,816Dividend received 2,995 7,526Loans to Other companies (91,483) (12,075)Net Cash from Investing Activities 58,857 (37,682)

C. CASH FLOW FROM FINANCING ACTIVITIESRedemption of Preference SharesNet proceeds from borrowing - Long Term 77,183 (143,837)Net proceeds from borrowing - Short Term (186,067) 78,811Interest paid (319,933) (284,512)Lease rental paid (10,416) (10,647)Dividends Paid (including Tax on Dividend) (16,991) (42,551)Net cash used in Financing Activities (456,224) (402,736)

D. NET INCREASE / (DECREASE) IN CASH & CASH EQUIVALENTS (108,910) (85,264)Cash and Cash equivalents as at opening 167,254 252,518Cash and Cash equivalents as at closing 58,344 167,254





53

ANNUAL REPORT 2002-2003SCHEDULES TO CONSOLIDATED BALANCE SHEET

As at As at31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE A

SHARE CAPITAL

Authorised :

2,50,00,000 Equity Shares of Rs.10 each 250,000 250,00025,00,000 Redeemable Cumulative Preference 250,000 250,000

Shares of Rs. 100 each500,000 500,000

Issued, Subscribed and paid up:

2,12,38,386 Equity Shares of Rs. 10 each 212,384 212,384Add: Forfeited shares 17 17Less: Unpaid Allotment money 2 2

212,399 212,399

SCHEDULE B

RESERVES & SURPLUS

Capital Reserve 56,888 57,174

Capital Redemption Reserve 100,000 100,000

Share Premium 1,155,445 1,155,445


(Refer note II.1 of Schedule O)

Less: Restatement/ revision in value of assets 894,416 -

(Refer note II.1 on Schedule O)181,550 1,155,445

Revaluation Reserve

As per last balance sheet 135,308 164,524

Less : For assets disposed off during the year 1,147 -

Less: Transferred to Profit and Loss Account 19,648 29,216

114,513 135,308

General Reserve

As per last balance sheet 188,550 403,935

Less: Deferred Tax Liability upto 31st March 2001 - 212,585

188,550 191,350

Amalgamation Surplus 175,887 175,887


(Refer note II.1 of Schedule O) - 175,887

Profit and Loss Account 483,764 36,092

1,125,265 1,851,256

54

RPG CABLES LIMITED ConsolidatedSCHEDULES TO CONSOLIDATED BALANCE SHEET

As at As at31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE C

SECURED LOANS

Banks:— Working Capital Borrowings 626,560 424,232— Term Loans 402,000 51,922

1,028,560 476,154Financial Institutions :— Term Loans 167,364 735,488

167,364 735,488Others 89,340 138,886

1,285,264 1,350,528

NOTES:

1. FROM BANKS

a. Working Capital Borrowings are secured by way of first charge on hypothecation of inventories & book debts and bya way of a second charge on all immovable properties of respective units.

b. Term Loans of Rs. 470 lacs (Previous year Rs. 519 lacs) from State Bank India are secured by first pari-passu chargeon the company’s fixed assets and pari-passu second charge on inventories, book debts and other liquid assets.

c. Term loan from ICICI Bank of Rs. 3550 lacs (Previous year: Rs. 4358 lacs) is secured by mortgage and charge onimmovable properties both present and future and charge on movables both present and future subject to prior chargesin favour of banks for Working Capital requirement and in favour of Financial institutions for specific machinery.

The mortgage and specific machinery charges will rank pari-passu with the existing holders of all the units.

This loan carries a right to convert the whole or part of the outstanding loan balance, into equity shares under specificconditions.

d. Term Loan from ICICI Bank of Rs. Nil (Previous year :Rs. 1250 lacs) is secured by mortgage on lease hold propertysituated at World Trade Centre, Mumbai and free hold property comprising of three residential flats at Malad, Mumbai.

2. FINANCIAL INSTITUTIONS

a. Term loan from IFCI of Rs. 800 lacs (Previous year : Rs. 750 lacs) is secured by first mortgage charge on immovableproperties both present and future and charge on movables both present and future subject to prior charges in favour ofbanks for Working Capital requirement and in favour of Financial institutions for specific machinery. The mortgage andspecific machinery charges will rank pari-passu with the existing holders of all the units.

b. Term Loan from IFCI of Rs. 264.27 lacs (Previous year: Rs. 264.27 lacs ) for Raebareli unit is secured by first mortgagecreated on all the immovable properties of that unit both present and future and charge by way of hypothecation of allmovable assets of that unit both present and future, save and except book debts, and subject to prior charge in favourof banks on movables for Working Capital requirement.

c. Term Loan of Rs.609.37 lacs (Previous year Rs. 600 lacs )from KSIIDC is secured by equitable mortgage and chargeson specific immovable properties of the Company both present and future and charge by way of hypothecation ofspecific movable assets of the company including movable plant and machinery spares, tools and accessories and othermovable assets both present and future, save and except book debts and subject to prior charge in favour of banks onmovables for working capital requirement.

d. Term Loans of Rs. Nil (Previous year : Rs.52.10 lacs) for Mysore unit are secured by first mortgage created on all theimmovable properties of that unit both present and future and a charge by way of hypothecation of all movable assetsof that unit both present and future, save and except book debts, and subject to prior charge in favour of banks onmovables for Working Capital requirement.

55


e. Term Loans of Rs. Nil (Previous year: Rs. 4.21 lacs) taken by Thane unit from Financial Institutions under Asset Credit orother Schemes are secured by hypothecation of specific machinery purchased there against. This loan carries the rightto convert the outstanding loan balance or 20% of the original loan, whichever is lower, into equity shares under specificconditions.

3. OTHERS

a. Loans from PICUP in lieu of deferment of Trade / Sales tax to the extent of Rs.854.13 lacs (Previous year :Rs. 1357.86lacs) is secured by way of second charge ranking pari passu created on all tangible movable properties and assets ofRaebareli unit, both present and future including inventories and bookdebts.

b. Hire Purchase credit of Rs. 39.27 lacs (Previous year: Rs. 27.17 lacs) is secured by hypothecation of assets under hirepurchase scheme.

c. State Development loan from Govt. of Karnataka agreegating Rs. Nil (Previous year : Rs. 3.82 lacs) is secured by wayof second charge through mortgage of all immovable properties of Mysore Unit, present and future.

SCHEDULES TO CONSOLIDATED BALANCE SHEETSCHEDULE C (Contd.)

As at As at31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE DUNSECURED LOANSFixed Deposit 349,852 309,7587.75% Redeemable Non-Convertible Debentures 25,000 -Commercial Paper - 200,000Short-term loans and advances— From Banks 8,430 -— From other than Banks 84,000 115,000Other loans and advances— From Banks 2,546 -— From other than Banks 352,259 447,011

822,087 1,071,769

Notes

1. Redeemable Convertible Debentures are issued to Bank of Baroda and are due for repayment. These have since beenrepaid.

2. Short Term Loans and Advances of Rs. 84.29 lacs ( Previous year : Nil ) from Bank represent temporary overdraft.

3. Short Term Loans and Advances from other than Banks comprises of Rs. 700 lacs (previous year Rs. 750 lacs) from IndustrialDevelopment Bank of India and Rs. 140 lacs (previous year Rs. 400 lacs) from companies repayable on demand.

4. Other loans and advances include :

a. Sales Tax deferment loan of Rs. 2959.94 lacs (Previous year : Rs. 3233.76 lacs) repayable after completion of 7 yearsfrom the date of sanction of permitted benefits and repayable thereafter over a period of 5 years.

b. Unsecured Loan of Rs. 350 lacs (Previous year :Rs. 225 lacs) from IL & FS is repayable on 30.03.2007.

c. Sales tax deferrment amount of Rs. 76.29 lacs pending conversion into loan.

d. Sales tax deferrment loan of Rs. 11.35 lacs payable on 31-5-2005 and 31-05-2006

e. Other Loans and Advances of Rs. 25.46 (Previous year: Rs. Nil) taken from Saraswat Co-Operative Bank Ltd. The loanis repayable within two years.

56

RP

G C

AB

LES LIM

ITED C

on

solid

ate

dSCHEDULES TO CONSOLIDATED BALANCE SHEET

SCHEDULE E

FIXED ASSETS

Gross Block Depreciation Net Block

As at Additions Disposal/ As at As at For the Disposal/ As at As at As at01.04.2002 Adjustments 31.03.2003 01.04.2002 year Adjustments 31.03.2003 31.03.200331.03.2002

Land - Free hold 27,269 - 1,328 25,941 - - - - 25,941 27,269

Land - Lease hold 10,995 - - 10,995 236 17 - 253 10,742 10,759

Buildings 212,273 1,793 - 214,066 63,706 6,825 - 70,531 143,535 148,567

Plant & Machinery 2,338,339 31,350 4,743 2,364,946 1,483,800 95,280 3,065 1,576,015 788,931 854,540

Plant & Machinery given on lease 152,646 - 92 152,554 136,492 6,686 91 143,087 9,467 16,154

Furnitures & Fittings 15,970 2,301 867 17,404 9,671 1,097 446 10,322 7,082 6,324

Office Equipments 53,476 3,805 1,260 56,021 26,995 5,133 608 31,520 24,501 26,455

Vehicles 9,083 1,644 2,102 8,625 1,904 839 652 2,091 6,534 7,179

TOTAL 2,820,051 40,893 10,392 2,850,552 1,722,804 115,877 4,862 1,833,819 1,016,733 1,097,247

Lease Terminal Adjustment account 1,599 4,217 Capital Work in Progress & Capital Advances 3,842 25,394

GRAND TOTAL 2,820,051 40,893 10,391 2,850,552 1,722,804 115,877 4,862 1,833,819 1,022,174 1,126,858

TOTAL - Previous Year 2,834,514 189,644 204,107 2,820,051 1,735,488 144,594 157,278 1,722,804 1,126,858

NOTES:

a. Leasehold land in case of Raebareli Unit is allotted by UP State Development Corporation Limited for ninety years w.e.f. 19th May, 1986 and is pending registration in the name ofthe Company,post amalgamation with earstwhile Upcom Cables Ltd.

b. Buildings include residential flat Rs. 9.99 lakhs and leasehold premises Rs. 20.33 lakhs.

c. Land,Building and Plant & Machinery of each unit were revalued on different dates by external valuers at net replacement cost.Accordingly the following amounts were added tothe historical cost of these assets on the dates mentioned there against:

— Mysore Unit Rs. 2527.39 lakhs on 1.10.93

— Rarebareli Unit Rs. 1452.24 lakhs on 31.03.91

— Thane Unit Rs. 971.00 lakhs on 31.12.85

d. Leasehold land amounting to Rs. 94.75 lacs is alloted by KIADB for 8 years w.e.f.12.09.1994. This is in the process of being converted to freehold land.

57


As at As at31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE F

Investments - (Long Term, at Cost)Trade-Quoted:Fully paid Equity Shares of Rs.10 each

2260205 - Ceat Ltd (2202875) 155,876 154,188Nil - CFL Capital Services Ltd ( 26402000) - 269,631

1628973 - Zensar Technolgies Ltd. (1092973) 255,812 212,129837912 - Saregama Limited.(836052) 155,919 160,496

(500000 Shares pledged with Bank)952420 - Harrisons Malayalam Ltd.(952420) 38,163 38,164

3309548 - KEC International Ltd. (983548) 81,537 52,345464830 - RPG Life Science Ltd (448830) 32,485 32,044

3242908 - CESC (352850) 71,986 31,181345400 - Phillips Carbon Black Ltd (300) 5,461 8295631 - Eveready Industries (India) Ltd (Nil) 51,880 50,099365510 - RPG Transmission Ltd (365510) 53,637 53,637

Nil - Spencer & Co. Ltd. (399000) - 48,120

902,756 1,102,042Others - Unquoted:

23671895 of RPG Communication Holdings Ltd (23671895) 236,761 236,761Nil - Organised Investments Ltd.(373000) - 3,733Nil - Duncan Investments & Industries Ltd.(2000) - 21Nil - Adapt Investments Ltd.(12988) - 334Nil - Adorn Investments Ltd.(12988) - 333Nil - Brentwood Investments Ltd.(40000) - 4,020Nil - Canal Investments Ltd.(475000) - 4,845Nil - Eastern Aviations & Inds. Ltd.(163000) - 1,659Nil - Jubilee Investments & Industries Ltd.(2970268) - 67,091Nil - Offshore India Ltd.(2402500) - 24,406Nil - RPG Industries Ltd.(12000) - 121Nil - Trade Apartments Ltd.(250000) - 2,513

Fully paid Equity Shares of Rs. 100/- eachNil - Duncan Services Ltd.(360) - 18Nil - Brabourne Investments Ltd.(61200) - 6,233Nil - Chattrapati Investments Ltd.(238100) - 26,751

Fully Paid Preference Shares of Rs. 100 eachNil - Duncan Investments & Industries Ltd.(50) - 5Nil - Jubilee Investment & Industries Ltd.(150000) - 15,075

236,761 393,919Other Than Trade:

6 years National Savings Certificate (Rs.0.16 lakhs 16 16pledged as security deposits)Indira Vikas Patra 200 units of Rs. 5000 each - 1,000Investment in Trust 15,305 15,305

15,321 16,321

1.154,838 1,512,282

Less: Provision for Quoted Investment 4,756 2,378

1,150,082 1,509,904

Aggregate cost of Quoted Investments 902,756 1,099,664Aggregate Market Value of Quoted Investments 307,728 503,265Aggregate cost of Unquoted Investments 236,761 393,919

58

RPG CABLES LIMITED ConsolidatedSCHEDULES TO CONSOLIDATED BALANCE SHEET

As at As at31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE G


Current Assets

Interest accrued on Investments 1,142 1,828

Inventories(as valued and certified by the Management)Stores and Spares - at Cost 14,049 19,813Stock in Trade - (at lower of cost or Net realisable value)- Raw & Packing Materials (including in-transit) 62,383 106,551- Finished Goods 51,201 80,137Stock of Shares as verified, valued and - 26,194

certified by the MangementWork in process - (at lower of cost or Net realisable value) 66,513 162,585

194,146 395,280

Sundry Debtors - UnsecuredOutstanding for more than Six monthsConsidered good 293,928 230,752Considered doubtful 102,287 117,202Others : Considered good 441,827 685,508

838,042 1,033,462Less : Provision for doubtful debts 102,287 117,202

735,755 916,260Cash and Bank Balances:Cash and Cheques on hand and remittance in transit 12,017 12,121Balance with scheduled Banks :- in Current Accounts* 8,466 9,257- in Fixed Deposits** 33,522 141,925- in Unclaimed Dividend Accounts 4,276 3,942

46,264 155,124Balance with a Non-schedule Bank- On Current Account 63 9

58,344 167,254

* includes Rs. Nil (Previous year: Rs. 4 lacs) in an account jointly held with IFCI in terms of Suppliers Credit Facility availed.

** includes Rs. 186.60 lacs (Previous year :98.63 lacs) pledged with banks for issue of Bank Guarantees.

59


As at As at31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE G (Contd.)

Loans and Advances

Receivables from Companies- Others 14,671 29,957

14,671 29,957Advances recoverable in cash or in kindor for value to be receivedConsidered good 325,978 335,819Considered doubtful 2,047 6,768

328,025 342,587Less : Provision for doubtful advances 2,047 6,768

325,978 335,819Receivable on Sale of Investment - 90,559Deposits/Loans to Companies & Firms 1,149,015 1,042,716Less: Adjusted as per Scheme 297,825 -

(Refer note no.II.1 Schedule O) 851,190 1,042,716Less: Provision for doubtful advances 2,000 -

849,190Advance against Equity 15,400 32,800Less: Provision for doubtful avances 15,400 -

- 32,800Balance with Excise/Custom Authorities 21,115 23,696

1,210,954 1,555,547

2,200,341 3,036,169

SCHEDULE H

CURRENT LIABILITIES AND PROVISIONS

Current Liabilities

Acceptances 357,886 486,576Sundry Creditors 241,831 419,905Other Liabilities 277,020 256,414Unclaimed Dividend 4,219 3,886Advance Lease Rental - 210Interest accrued but not due on loans/deposits 31,457 27,057

912,413 1,194,048PROVISIONSProvision for Taxation (net) 11,790 (192,640)Proposed Final Equity Dividend - 16,991

11,790 (175,649)

924,203 1,018,399

60

RPG CABLES LIMITED ConsolidatedCONSOLIDATED SCHEDULES TO PROFIT & LOSS ACCOUNT

Year Ended Year Ended31.03.2003 31.03.2002(Rs. �000) (Rs. ‘000)

SCHEDULE I

SALES AND SERVICES

A) Sales (including Excise Duty) 2,102,895 3,774,509

B) Services:-

1. Lease Rental

- Other Lease Rentals - 4,645

Less: Lease Equalisation 2,618 2,810

(2,618) 1,835

2. Contract Job Income 143,892 44,302

2,244,169 3,820,646

SCHEDULE J

OTHER INCOME

Dividend from Companies 4,574 7,082

Profit on sale of Investments 3,613 90,229

Profit / (Loss) on Sale of Assets (net) 24,450 (1,605)

Provision no longer required written back 13,423 54,601

Miscellaneous Receipts 13,658 14,461

59,718 164,768

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ANNUAL REPORT 2002-2003CONSOLIDATED SCHEDULES TO PROFIT & LOSS ACCOUNT


SCHEDULE K

MATERIAL EXPENSES

Raw & Packing Materials Consumed

Opening Stock 106,551 152,034Add : Purchases 1,244,173 2,410,074

1,350,724 2,562,108Less : Closing Stock 62,383 106,551

1,288,341 2,455,557(Accretion)/Decretion to StockOpening StockWork in Process 162,585 128,014Finished Goods 80,137 76,381

242,722 204,395Less:Closing StockWork in Process 66,513 162,585Finished Goods 51,201 80,137

117,714 242,722125,008 (38,327)

Purchase of Traded goods 83,952 163,248

1,497,301 2,580,478

SCHEDULE L

PERSONNEL EXPENSES

Salaries, Wages & Bonus 209,590 195,402Contribution to Provident & Other Funds 29,107 27,480Staff Welfare Expenses 9,411 13,507

248,108 236,389

62

RPG CABLES LIMITED ConsolidatedCONSOLIDATED SCHEDULES TO PROFIT & LOSS ACCOUNT


SCHEDULE M

Stores and Spares Consumed 15,059 36,419Manufacturing Expenses 4,711 4,129Power,Fuel and Water Charges 60,875 90,977Repairs and Maintenance:

- Machinery 6,095 11,840- Buildings 2,234 5,942- Others 1,962 3,774

Contract Job Expenses 83,610 18,721Freight Outwards 31,325 50,950Brokerage & Commission 30,835 17,458Insurance 7,804 9,064Rent

- against Assets taken on lease 13,656 10,647- Others 5,439 5,304

Rates and Taxes 2,432 10,696Directors’ Fees and Commission 185 195Travelling & Motor Car Expenses 34,016 32,197Communication Expenses 12,766 16,047Bad & Doubtful debts/Advances writen off 48,080 7,517Foreign Exchange Fluctuation (3,314) 6,213Licence Fees 20,568 48,850Finance Charge 68,245 53,185Miscellaneous Expenses 68,577 46,524Management fees - 1,660Provision for diminution in value of investmnet 159,521 2,378Provision on advances 37,557 17,240Provision for doubtful debts 60,366 200Loss on sale of investments 170,184 21,083Provision for advance against equity 17,300 -

960,088 529,310

SCHEDULE N

INTEREST(Net)Interest ExpensesInterest on Debenture 1,208 1,170Interest on Fixed Loan 192,998 227,816Interest on Others 114,625 107,999

308,831 336,985

Less:Interest Income (Gross)On Deposits with Companies 150,976 139,279On Deposits with Banks 4,711 334On Deferred Sales Receivables 20,743 6,381On Income Tax Refund 18,116 43,624Other Interest 1,582 5,061

196,128 194,679

112,703 142,306

63

ANNUAL REPORT 2002-2003SCHEDULE �O�

I. Principles of Consolidation

a) Consolidated Financial Statements have been prepared in accordance with the generally accepted accounting principlesand Accounting Standards issued by “ The Institute Of Chartered Accountants Of India”. The Consolidated FinancialStatements relate to RPG Cables Limited (RPGCL), the parent company and its subsidiary company i.e. Blue NilesHoldings Ltd. During the year, Concepta Cables Ltd, wholly owned subsidiary company was merged with RPGCL andanother subsidiary Company viz. KTL Industrial Finance Ltd was sold. Consolidated Profit and Loss Account includesresults of Concepta Cables Limited upto 27th March 2003 and KTL Industrial Finance Company Limited up to 28th March2003 respectively. In the Consolidated Financial Statements the term ‘Company ’ refers to RPG Cables Limited andcollectively along with its subsidiaries is referred to as the ‘Group’.

b) In the Stand alone Balance Sheet of RPG Cables Ltd Rs. 12839.25 lacs has been adjusted directly from the Reserves asper the approved Scheme of Amalgamation. As this was already considered in the consolidated Profit & Loss Accountof current/ earlier years, the same has been adjusted in the Consolidated Profit & Loss by way of appropriationadjustment.

II. SIGNIFICANT ACCOUNTING POLICIES:

1. Historical cost convention:

The accounts are prepared on accrual basis under historical cost convention except for Fixed Assets, which have beenrevalued.

2. Fixed Assets:

Land, Building and Plant & Machinery were revalued by each unit other than Silvassa unit on different dates. Such assetsare stated at revalued amount less depreciation. Other assets including Plant & Machinery on lease are carried at costless depreciation.

Cost of Fixed Assets includes interest/financing cost on borrowings used for acquisition of assets and incidental expenditureincurred upto the date of commissioning. Further, exchange difference/rollover cost relating to foreign currency loanstaken towards fixed assets acquisition is also capitalised. Renewal and replacements are capitalised, if appropriate,depending upon the nature and long term utility thereof.

3. Depreciation:

Depreciation on Assets (other than those given on lease) is provided at rates specified in Schedule XIV of the CompaniesAct, 1956 under the Straight Line Method. Leaseholds are amortised over the period of lease. Exchange differencescapitalised are depreciated prospectively over the residual useful life of the related assets.

Depreciation on leased assets is provided by the Straight Line Method at rates specified in Schedule XIV of theCompanies Act, 1956 or at a rate resulting in amortisation of the depreciable value of the asset over the primary leaseperiod, whichever is higher.

Additions, consequent to the revaluation are depreciated with reference to the remaining useful life of each asset, asdetermined by the valuer. Such depreciation is adjusted against transfer of equivalent amount from Revaluation Reserveto Profit & Loss Account.

4. Foreign Currency Transactions:

Foreign Currency Transactions are accounted at exchange rates on the transaction date. Outstanding year-end balancesare translated at the forward contract rates or year-end exchange rates as applicable. Resultant differences togetherwith gains/losses on settlement of transactions are taken to Profit and Loss Account except that exchange differences onlong term liabilities utilised for acquisition of fixed assets are adjusted to cost of related fixed assets.

5. Investments:

Investments are considered as long term investments and are accordingly stated at cost including incremental expenses.Provision against diminution in value is made, only if, considered other than of temporary nature as per criteria laiddown by the Board of Directors. Profit/Loss on sale of securities is determined based on the average carrying amount ofthe total holding of the concerned security.

6. Inventories:

Stores & Spares are valued at cost. Raw / Packing materials, work-in-process and finished goods are valued at lowerof cost or net realisable value. Stock of scrap is valued at net realisable value. The cost of material is arrived on First inFirst out basis.

64

RPG CABLES LIMITED Consolidated7. Revenue Recognition:

a) Sales and Related Income

Sales are recognised at the point of despatch of goods, at the agreed rates. Adjustments arising out of pricevariation claims are accounted on acceptance of claims by customers. Export benefits are accounted in the year ofexport.

b) Interest and other Income are accounted on accrual basis except those sums which are not reasonably certain ofrealisation, are recognised on cash basis. In case of two subsidiaries, which are Non Banking Finance Companies(NBFC), income is recognised on accrual basis except in respect of Assets classified as Non- Performing Assets(NPA). Income on NPA is recognised only when it is actually realised. Classification of Loans & Advances as NPA& provision for doubtful advances are in accordance with relevant RBI guidelines, except that amount realised afterthe Balance Sheet date are recognised in arriving at the year end classification. Expenses are accounted on accrualbasis.

c) Revenue from contracts

Revenue from Contracts is recognized on the percentage of completion method as soon as services arerendered.

d) Lease Rental Income:

Lease Income has been accounted on accrual basis, based on the Guidance Note on Accounting for Leases, issuedby the Institute of Chartered Accountants of India. The Company has adjusted the Lease Rental accruing underLease Agreements by creating Lease Terminal Adjustment Account, resulting in the recognition of net income atconstant periodic rate on net investment outstanding on leased assets. The amount that is considered towards leaseequalisation is net of depreciation provided and annual charge.

Lease Income on operating lease is accounted on accrual basis.

8. Retirement Benefits:

Gratuity and Superannuation liability are respectively covered by Group Gratuity and Group Superannuation Policieswith Life Insurance Corporation of India. Premia payable on Policies are actuarially determined each year. Contributionsto Provident Fund are charged on monthly basis. Incremental liability towards leave encashment is provided based onactuarially valued estimates at the year-end.

9. Taxation :

Income tax is provided after considering deferred tax as per the Accounting Standard 22 on Accounting on Taxes onIncome issued by the Institute of Chartered Accountants of India.

10. Miscellaneous Expenditure:

Compensation to employees who have opted for retirement under the “Employee Retirement Scheme” of the Companyis amortised over 5 years.

III. NOTES ON ACCOUNTS:

1. Deferred Revenue expenditure comprises of expenses incurred on Voluntary retirement expenditure of Rs. 252.13 lacsincurred during the year at Mysore factory. The expenses will be written off over a period of 5 years. During the yearRs. 50.43 lacs was charged to Profit and Loss Account.

2. a) Estimated amount of contracts remaining to be executed on capital account and not provided for was Rs. 106.20Lacs (Rs.220.28 lacs) net of advances.

b) Aggregate liability towards future lease rental Rs. 837.78 Lacs (Rs.687.97 lacs).

3. Contingent Liability not provided for:

a) Counter Guarantees issued in favour of Banks : Rs. 2627.30 lacs (Rs.2093.86 lacs)

b) Corporate Guarantees given for loans taken by:

RPG Satellite Communication Ltd. : Rs. 3201 lacs (Rs.3201 lacs)

KEC International Limited : Rs. 3500 lacs (Rs. 3500 lacs)

65

ANNUAL REPORT 2002-2003c) Corporate Guarantees given for performance of Contracts business : Rs. 30 lacs (Rs. Nil)

d) Claims against the Company not acknowledged as debts

Excise duty : Rs. 123.98 lacs (Rs.150.87 lacs)

Income Tax : Rs. NIL l(Rs. 1.15 lacs)

Cases pending adjudication with courts : Rs. 43.59 lacs (Rs.27.76 lacs)

Entry Tax : Rs. 44.03 lacs (Rs. 27.44 Lacs)

Interest : Rs. 9.71 lacs (Rs. 9.71 lacs)

Sales Tax : Rs. 2.11 lacs (Rs. 2.11 lacs )

4. As per scheme of Amalgamation approved by the High court, assets of erstwhile Asian Cables & Industries Ltd. weretransferred to the company with effect from April 1, 1996. Pending ascertainment of value of such transfer for thepurpose of stamp duty, provision has not been made in the accounts for stamp duty payable. As per the estimate of themanagement, stamp duty is approx. Rs.112 lacs and the same will be adjusted from General Reserve.

5. Maximum balance with Municipal Co-operative Bank Limited, Mulund, a non- scheduled bank was Rs.5.27 lacs(Rs.8.67 lacs).

6. Advances recoverable in cash or in kind include Rs. 1.02 lacs (Rs. 1.36 lacs) due from the Managing Director of thecompany. Maximum balance during the year is Rs. 1.36 lacs (Rs.2.22 lacs).

7. Sundry Creditors include outstanding payable to SSI Units of Rs.423.76 lacs .Name of such parties, where outstandingis in excess of Rs 1 lakh, which is outstanding for more than 30 days are mentioned below:

Sankhla Industries, Shubha Packaging, Woodcraft, Wood Designers, Hinddustan Wood, Sagar Timbers, ChamundeswariIndustries, Systematic Steels, MS Cabrol India Ltd, OK Glass Fibres Ltd, Sanjay Wood Converter, Wood Drums ,Bhushan Steel, Sneham International , Systematic Steel Ltd, Ranaie Udyog, Siddharth Plastic Industries, Trishul WireProducts, Mumbai Wire & Metals, Umesh Enterprises, S.C.Plastics, Yash Packaging, Iqbal Wood Drum, Ishani Industries,Jamal Wood Work, Kirti Udyog, Sidharth Plastic Industries.

8. During the year Blue Niles Holding Ltd has sold certain quoted equity shares to Company at market rate and certainunquoted equity and preference shares to KTL Industrial Finance Co. Ltd. at the break up value arrived at as per thelatest available Balance Sheet of that Company. The Profit/ Loss on sale has been recognised in the Profit and LossAccount.

9. During the year provision for dimunition in value of quoted investments is made in the books of KTL Industrial Finance Co.Ltd., as per cost or market value whichever is lower and for the unquoted investments the cost or the NAV value derivedas per the latest Balance Sheet available, whichever is lower.

10. Additional information pursuant to provisions of Part II of Schedule VI of the Companies Act, 1956. Managerial remunera-tion including estimated value of perquisites paid/payable to the Managing Director of the Company is as under :

(Rs.�000) (Rs.’000)For the year ended For the year ended

31.03.2003 31.03.2002

a. Salary (including allowances) 2114 2195*

b. Contribution to PF and other funds 303 288

c. Value of Perquisites 319 496

2736 2979

* Salary includes Rs. 2.92 lacs being arrears of salary for the year 2000-01.

66

RPG CABLES LIMITED Consolidated11. I The relevant information of goods manufactured and traded are given hereunder in quantities and value.

Goods Manufactured/Traded UOM Installed Prodn./ Opening ClosingCapacity# Purchase Stock* Stock Sales unit Sales

(Rs.’000)

A. TELECOM

a) Jelly Filled Telephone Cables CKM 7137000 397546 39744 7446 429844 185564(7137000) (3610772) (49645) (38043) (3623271) (2027121)

b) Optic Fibre Cables FKM 365000 231661 14055 16022 229694 577492(175000) (107299) (2421) (8886) (100834) (435932)

B. POWER CABLES KM 6936 8680 925 124 9481 1176633(5736) (5008) (847) (925) (4926) (1152236)

C. TRADED ITEMS/OTHERS KM 0 0 0 0 0 1588870 0 0 0 0 (155165)

D. WIND ENERGY KWH 3000000 1439649 0 0 1439649 4319(3000000) (1655486) 0 0 (1275000) (4055)

E. EQUITY SHARES * NO.S N.A. NIL 2616740 0 2616740 32751(2616740) (-) (-)

# Installed capacity is as certified by the Managing Director of the Company.- Previous Year’s figures are in brackets.- Licenced Capacity - Not Applicable.

* Pertains to Investment company.

For the year ended 31st March,2003 For the year ended 31st March,2002(Rs. ‘000) (Rs. ‘000)

(UOM) Qty. Value Qty. Value

II Material Costa) Consumption MT

Copper 1,507 171,087 6,746 762,658Aluminium 2,922 254,132 3,183 177,975Compound MT 3,904 202,398 6,624 323,044Fibre KM 185,834 220,460Others 440,264 1,191,880

1,288,341 2,455,557

% Value Rs. �000 % Value Rs. ‘000b) Percentage Consumption

i) Raw MaterialsImported 9 112,329 15 362,263Indigenous 91 1,176,012 85 2,093,294

Total 100 1,288,341 100 2,455,557

ii) Stores and spares:Imported 16 2,348 22 8,169Indigenous 84 12,711 78 28,250

Total 100 15,059 100 36,419

III CIF Value of importsRaw Materials 231,852 248,835Stores & Spares 992 5,177Capital Goods 206 45,861

IV Earnings in foreign ExchangeExports of Cables (F.O.B.) 63,986 40,151

67


V Expenditure in Foreign Currency(On Payment basis)Travelling Expenses 1,623 -Interest/Bank Charges 434 1,825Others - 687

VI Dividend Remittance in Foreign Currency:Remittance (net of tax) (Rs.’000) 115 329No.of Non-Resident Shareholders 26 28No of Shares on which remittance was made 181288 182728Year for which the dividend was remitted 2001-02 2000-01

VII Payments to Auditors:As Auditors 568 557For Tax Audit 208 120Other Services 495 65

12. The Company has created Deferred Tax Assets on loss taken over from Concepta Cables Ltd, which has been adjustedagainst Deferred Tax Liability as there is a virtual certainty to that extent.

Deferred Tax asset/(liability) consists of : As at As at31.03.2003 31.03.2002

Book/ tax depreciation (197616) (203509)Provision for statutory dues 9527 7435Deferred revenue expenditure (3075) (14968)Business loss 167614 42417

(23550) (168626)

For the year ended 31st March,2003 For the year ended 31st March,2002(Rs. ‘000) (Rs. ‘000)

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d 13. Segment information for the year ended March 31, 2003

(I) Information about Primary Business Segments

Telecom Cables Power Cables Other Business Unallocated Total

Revenue 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02

External 837,437 2,453,423 1,223,957 1,257,066 182,775 110,156 - - 2,244,169 3,820,645Inter Segment - - - - - - - - - -Total Revenue 837,437 2,453,423 1,223,957 1,257,066 182,775 110,156 - - 2,244,169 3,820,645ResultSegment Result (257,470) 21,728 29,945 38,112 (506,514) (26,650) - - (734,039) 33,191Unallocated expenditure, net of unallocated income - - - - - - 29,170 10,763 29,170 10,764Operating Profit (257,470) 21,728 29,945 38,112 (506,514) (26,650) (29,170) (10,763) (763,209) 22,428Interest expense (net) - - - - - 112,703 142,306 112,703 142,306Provision for taxation (including deferred tax) - - - - - (39,659) (41,334) (39,659) (41,334)Net Profit (257,470) 21,728 29,945 38,112 (506,514) (26,650) (102,214) (111,734) (836,253) (78,544)Other InformationSegment Assets 657,870 1,286,978 924,415 971,475 209,845 324,442 2,600,637 3,282,722 4,392,768 5,865,616Segment Liabilities 481,925 683,649 474,098 375,047 55,475 39,049 2,043,606 2,704,215 3,055,105 3,801,960Net Assets 175,944 450,317 24,906 154,370 557,031 1,337,663 24,906Capital Expenditure 15,331 178,870 19,597 24,906 3,244 103 - - 38,172 203,879Depreciation 55,343 50,342 28,196 32,217 12,689 32,810 - - 96,228 115,370

(ii) Information about Secondary Business Segments

Revenue by Geographical market India Outside India Total

2002-03 2001-02 2002-03 2001-02 2002-03 2001-02

External 2,180,183 3,780,495 63,986 40,151 2,244,169 3,820,646Inter segment - - - - - -Total 2,180,183 3,780,495 63,986 40,151 2,244,169 3,820,646Carrying amount of Segment Assets 4,392,768 5,865,616 - - 4,392,768 5,865,616Additions to fixed assets 37,966 203,879 - - 38,172 203,879

(iii) Notes :(i) The Company is organised into three main business segments, namely :

- Telecom Cables- Power Cables- Others include the housewiring business, contract Job, and sale of wind energy.

Segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns, the organisation structureand the internal financial reporting systems.(ii) The Segment Revenue in the geographical segments considered for disclosure are as follows :

- Revenue within India includes sales to customers located within India and earnings in India.- Revenue outside India includes sales to customers located outside India and earnings outside India.

(iii) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on areasonable basis.

69

ANNUAL REPORT 2002-200314. Related Party Disclosures

a) Related Party Relationships

Sr. Name of the Related Party Relationship

1. Key Management Personnel:Mr. A S Jatkar Managing Director

2. Relatives of Key Management PersonnelNot Applicable

b) Transactions during the period with Related Parties Key Management Personnel are as under:(Rs. ‘000)

Sr. Name of the Related PartyDescription of Transaction & Nature of relation 2002-03 2001-02

1 Mr. A S Jatkar - Managerial remuneration 2736 2979

15 Previous year’s figures have been regrouped or rearranged wherever necessary. However, previous year’s figures are notcomparable with Current year’s figures due to amalgamation referred to in Note 1 above.

Regd. Office : Hebbal Industrial Area, Hootagalli, Belavadi Post, MYSORE - 570 018

I hereby record my presence at the 21st ANNUAL GENERAL MEETING of the Company at Hotel Southern Star, Vinobha Road,Mysore - 570 001 at 11.00 a.m. on Wednesday, December 24, 2003.

SIGNATURE OF THE ATTENDING MEMBER/PROXY

NOTE : Members/Proxies are requested to bring the attendance slip with them.

ATTEN

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Regd. Office : Hebbal Industrial Area, Hootagalli, Belavadi Post, MYSORE - 570 018

I/We __________________________________________________________ of ___________________________________________

being a member/members of the above named Company hereby appoint _____________________________________________

_______________________________________________________________ of ___________________________________________

or failing him ____________________________________________________ of ___________________________________________

as my/our proxy to attend and vote for me/us on my/our behalf at the 21st ANNUAL GENERAL MEETING of the Company to beheld on Wednesday, December 24, 2003 at Hotel Southern Star, Vinobha Road, Mysore - 570 001.

Signed this _________________ day of ________________ 2003.

Registered Folio No. ___________________________

DP-ID No. ___________________________

Client ID No. ___________________________

No. of shares held ___________________________

NOTE : The Proxy must be returned so as to reach the Registered Office of the Company, RPG Cables Limited, Hebbal IndustrialArea, Hootagalli, Belavadi Post, Mysore - 570 018, not less than FORTY-EIGHT HOURS before the time for holding theaforesaid meeting.

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Signatureover

RevenueStamp ofRs. 1/-

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BOOK - POST

If undelivered, please return to:

RPG Cables LimitedCeat Mahal,463, Dr. Annie Besant Road, WorliMumbai 400 025.Website : www.rpgcables.com

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if undelivered, please return to: rpg cables limited

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