Balkrishna Industries

1 Contingent Liabilities in respect of:
 
 a) Guarantees given by the Companys bankers on behalf of the
 Company                             13,35,42,964            7,67,96,937
 b) Premium payable on redemption of Foreign Currency Convertible
 Bonds Series B                     5,72,07,934            3,12,20,887
 c) Disputed claims for excise and 
 sales tax                           19,41,92,368            8,81,55,997
 d) Disputed income tax demands      15,23,86,857           17,16,36,385
 
 (The outflow in respect of contingent liabilities is totally uncertain
 as the same depends on the final outcome of the disputes, wherever
 applicable)
 
 2 Nature of security in respect of Secured Loans
 
 I Working Capital Loans from Banks:
 
 Cash Credits, Packing Credit, Bills Discounting, Working Capital Demand
 Loan and Buyers Credit:
 
 Secured by first charge by way of hypothecation of stock of raw
 materials, stores and spares, stock in process, finished goods,
 material in transit, book debts and other movables on pari-passu basis
 and further secured by second charge on fixed assets of the Company,
 both present and future, except certain fixed assets on which exclusive
 charge has been created in favour of G.E. Capital Services India.
 
 II Term Loans from Bank: (in previous year)
 
 Secured by pari-passu first charge on the entire fixed assets of the
 Company situated at Bhiwadi unit, Chopanki unit and Wind farm at
 Jaisalmer, all in the state of Rajasthan, and further secured by second
 charge on entire current assets of the Company, both present and
 future.
 
 III Term Loans from Others
 
 (i) DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH
 
 Secured by pari-passu first charge on entire fixed assets of the
 Company, situated at Bhiwadi unit, Chopanki unit and Wind farm at
 Jaisalmer all in the state of Rajasthan.
 
 (ii) G.E. Capital Services India
 
 Secured by exclusive first charge by way of hypothecation of specific
 machineries purchased out of the proceeds of the said loan.
 
 3 Exceptional Item :
 
 In the Previous year, an amount of Rs.2,80,48,575 was received from
 insurance company against loss of profit(LOP) policy due to reduction
 in production caused by fire at Companys Aurangabad Tyre Plant during
 March 2007.
 
 4 Extra Ordinary Item represents the difference between the actual
 payment and provision of Rs. 98,00,000 made in previous year, included
 along with other expenses incurred, on account of stamp duty payable on
 transfer of assets of erstwhile Paper and Textiles Processing Divisions
 to two separate wholly owned Subsidiary Companies.
 
 5 (a) As at 31st March,2009, there are no Micro, Small and Medium
 Enterprises, as defined in the Micro, Small, Medium Enterprises
 Development Act, 2006, to whom the Company owes dues on account of
 principal amount together with interest and accordingly no additional
 disclosures have been made.
 
 (b) The above information regarding Micro, Small and Medium Enterprises
 has been determined to the extent such parties have been identified on
 the basis of information available with the Company. This has been
 relied upon by the auditors.
 
 26 Foreign Currency Convertible Bonds (FCCB)
 
 (a) The Company raised FCCB during the year 2005-06 aggregating to USD
 40 million which included:
 
 i) Zero coupon Series A bonds aggregating to USD 18 million,
 convertible at a price of Rs. 1,080 per share by applying a
 pre-determined exchange rate of Rs. 45.66 per USD and,
 
 ii) 4.5% FCCB Series B aggregating to USD 22 million with redemption
 premium of 1.5% p.a. payable on cumulative basis at the time of
 redemption i.e. on 31st December 2010, convertible at the option of
 bondholders at a price of Rs. 1,375 per share by applying a
 pre-determined exchange rate of Rs. 45.66 per USD. If all these bonds
 are converted into shares, then the Share Capital of the Company will
 increase by 7,30,560 Equity Shares of Rs 10 each.
 
 (b) The Series A bonds, during the year 2005-06 were subsequently
 converted into equity shares upon exercising the conversion right by
 the Bondholders.
 
 The Company allotted them 7,60,999 shares of Rs.10 each at a
 pre-determined premium of Rs. 1,070 each.