| Rs. In lacs
As at As at
A Contingent Liabilities not Provided for Mar 31 2013 Sep 30 2012
I Guarantee issued by the Banks on
Behalf of the company 13,919.08 25,110.05
II Claims against the company by DOT
not acknowledge as debt. 41,036.41 41,036.41
III Disputed Income Tax Demand under Appeal 39,656.21 39,656.21
IV Disputed Sales Tax/VAT Demandunder Appeal 193.49 193.49
V Disputed Customduty demand under Appeal 23.36 23.36
VI The Company on 3rd April, 2010 has given a Corporate Guarantee to
M/s. Axis Trustee Services Limited acting as the Debenture Trustee of
M/s. Beeta Infocom Pvt. Ltd. in terms of its issue of Non Convertible
Debentures (NCDs) aggregating to Rs. 84 crores outstanding as on 31st
March, 2013.
VII Also, the Company had issued a Corporate Guarantee on 18th May,
2009 in favour of M/s. Cisco Systems Capital India Pvt. Ltd ("the
Lender") for guaranteeing the monetary obligations w.r.t. loan availed
by its wholly owned subsidiary i.e M/s. Tulip SWAN IT Services Limited
from the Lender.
VIII The company has given corporate guarantee to ICICI Bank Ltd.
amounting to Rs. 250 cores against the term loan facility taken by its
wholly owned subsidiary, Tulip Data Centre Services Pvt Ltd. The terms
and conditions of such guarantee are not prejudicial to the interest of
the company.
IX The company has given corporate guarantees to Karur Vysya Bank, J&K
Bank, IDFC ltd & Standard Chartered Bank for the long term loans
amounting to Rs. 35 Crores, Rs. 35 Crores, Rs. 95 Crores & Rs. 36.93
Crores respectively on behalf of TULIP DATA CENTRE SERVICES PVT LTD,
whollyowned subsidiary of the company.
B Foreign Currency Convertible Bonds (FCCB)
USD $150 Million Zero Coupon Foreign Currency Convertible Bonds
During the year 2007-08, the Company issued at par 5 year, Zero Coupon
Foreign Currency Convertible Bond (FCCB) at an Exercise Price of Rs.
227.444 per share (Rs. 1137.22 per share before split of share into
1:5) aggregating to US$ 150 Million (Rs. 6040.5 miilion as on the date
of issue) for financing Capital Expenditures, Overseas Acquisitions and
other expenditure as per RBI Regulation. As per terms and conditions of
the Offering Circular issued by the Company for FCCB, the bonds are
convert- ible by holders of the Bond (the Bondholders) into fully paid
equity shares of the Company with full voting rights with par value of
Rs. 21- per share (Rs. 10/- per share before split of share into 1:5)
of the Company (the shares) at any time on or after 5th Septem- ber,
2007 (or such earlier date as is notified to the Bondholders by the
Company) and prior to the Close of the business on 19th August, 2012
unless previously redeemed, converted or repurchased and cancelled.
The Bond may redeemed in cash in whole, but not in part, at their Early
Redemption Amount, at the option of the company at anytime on or after
26th August, 2010 and on and prior to 19th August, 2012, subject to
satisfaction of certain conditions. These bonds are redeemable at
144.506% of the principal amount on 26th August, 2012 unless previously
converted, redeemed or purchased and cancelled.
The company has incurred an expenditure of Rs. 1467.70 lacs towards
issue expenses of these bonds. These expenses have been charged to the
securities premium account as provided under section 78 of the
Companies Act, 1956.
During the F.Y. 2008-09 & 2009-10, the company has bought back Zero
Coupon Foreign Currency Convertible Bonds (FCCBs) aggregating to USD
52.99 Millions, resulting in outstanding FCCB liability to USD 97
Million.
The company has defaulted in repayment of aforesaid unsecured Foreign
Currency Convertible bonds (FCCB) amounting to approx. USD 145 million
(Rs. 78533.73 Lacs approx.) (including Premium approx. Rs. 25808.83
Lacs) in respect of FCCB were due for redemption on 26th August, 2012.
In order to redeem aforesaid FCCB, the management is actively pursuing
various options which includes raising of additional finance in the
form of debt and other various options. Discussion on each of these
options is in process and the management is confident that the company
will be able to arrange the required funds for its redemp- tion
shortly.
C Employees Stock Option Scheme
a. During the year 2010-11, Consequent to shareholders approval on the
Company's Employees Stock Option Scheme "TULIP ESOS" 2011, the
Compensation Committee of the Board of Directors at their meeting held
on February 14,2011, have granted 27,00,000 stock options convertible
into equal number of equity shares of Rs.2 each to the eligible
employees to be vested over a period offouryears at an exercise price
of Rs. 164.55, determined as per the SEBI guidelines.
b. During the period 2011-12, consequent to shareholders approval on
the Company's Employees Stock Option Scheme "TULIP ESOS" 2011, the
Compensation Committee of the Board of Directors at their meeting held
on July 28, 2011, have granted 3,87,500 stock options convertible into
equal number of equity shares of Rs.2 each to the eligible employees to
be vested over a period offouryears at an exercise price of Rs. 153.00,
determined as per the SEBI guidelines.
D "The Company has approached the CDR CELL through lenders to
restructure its debt under the CDR mechanism in view of economic
slowdown, unfavourable market conditions, increased competition,
liquidity constraints, capital blocked in government projects coupled
with rising interest cost. Further, the Company had incurred large
capital investment in long gestation projects with short-term debt. In
addition, FCCB default resulted in downgrade of the Company's credit
rating. Ail these factors together resulted in insufficient cash flows
to meet the Company debt obligations.
SBI Capital Markets Ltd has been appointed to advise the Company in its
Debt Recast exercise. The Company undertook a detailed and critical
analysis of its inventories, receivables and creditors along with its
business model in consultation with its Advisor. After careful
consideration and observation by stock auditors and valuers appointed
for this purpose, a onetime charge has been taken in the Statement of
Profit & Loss to provide for impairment in the value of current assets
in view of present business conditions and reworked business model.
This is reflected in the Statement of Profit & Loss and consist of Rs.
1462 Lacs for non moving inventories and its written down value and Rs.
46786.71 Lacs as written off for Receivables/Advances doubtful of
recovery, (these figures are being included in the Statement of Profit
& Loss as Exceptional items).
The CDR proposal of the company has been approved by the CDR Empowered
Group in their meeting held on March 25,2013. The CDR package of the
company covers 12 years door to door repayment plan, reduction in
interest rates by approximately two and half percent, one and half year
moratorium period for the payment of interest and two and half year
moratorium period for the repayment of principal loan amount."
E In the opinion of the management and to the best of their knowledge
and belief the realisable value of current assets, loans and advances
if realised in ordinary course of business would not be less than the
amount at which they are stated in the balance sheet. The company has
filed suits for recovery of debt against certain clients but relying on
the opinion of the advocates these have been considered as fully
realisable.
F The company does not have any dues payable to any Micro and Small
Enterprises as at the period end. The identification of Micro and Small
Enterprises is based on management's knowledge of their status. The
company has not received any intimation from suppliers regarding their
status under the MSMED Act, 2006. Hence, disclosures, if any relating
to amounts unpaid as at the period end, together with interest
paid/payable as required underthe said Act have not been given.
G The Company operates in single segment i.e., 'Corporate Data
Connectivity Business' and therefore segment reporting is not
applicable. The Company's own generated products and services are sold
primarily within India and as such there are no reportable geographical
segment.
H The company has continued the business of Telecommunication (Referred
to in the above Balance Sheet and Statement of Profit & loss as Tulip
Connect) and the company is maintaining separate accounts under section
80(IA) of Income Tax Act, for the same and acordingly a separate set of
Balance Sheet and Statement of Profit & loss has been prepared for
Income Tax purposes, but all the figures have been merged with the
above Balance Sheet and Statement of Profit & loss
I Balances of Debtors and Creditors are subject to confirmation.
J The figures for current period are for 6 months as against 18 months
in the previous period. Hence, the figures are not compa- rable with
those of previous period
K The figures of the previous year have been regrouped, rearranged and
reclassified wherever necessary to conform to current year's
classification.
L Figures in brackets relate to the previous year unless otherwise
stated.
M The company is a multi-locational company. This Balance sheet is the
consolidated Balance sheet of all the Branches of the company.
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