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Notes to Accounts of Artson Engineering Ltd.

Mar 31, 2015

1. The Cash Flow Statement has been prepared following the indirect method except in case of Purchase and Sale of investments and Taxes paid which have been considered on the basis of actual movement of cash with necessary adjustments in corresponding Assets and Liabilities.

2. Cash and Cash Equivalents represent Cash and Bank Balances only.

3. Corporate Information

Artson Engineering Limited ("the Company") is a company limited by shares incorporated under the Companies Act, 2013. The Company's Registered Office is situated at Mumbai. The Company's shares are listed on the Bombay Stock Exchange (BSE) and the Scrip Code is 522134.

The Company was incorporated in the year 1978 and since inception, the Company has commissioned, on turn-key basis, several fuel storage and handling facility systems. The Company is in the business of Engineering, Procurement & Construction contract in Oil, Gas & Hydrocarbon (OG&H) Sector and ancillary services, including manufacturing activity.

The Company was referred to the BIFR as a sick company under the provisions of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company's reference as a sick company was registered under Case No. 152/ 2004 with the BIFR. At the hearing held on 27th November 2007, the BIFR sanctioned the Rehabilitation Scheme of the Company and the Order sanctioning the scheme of rehabilitation was received by the Company on 18th December 2007 (Sanctioned Scheme). The Company has made an application on 17th October 2013 for extension of the Rehabilitation Scheme as referred above and pending the final hearing, the Sanctioned Scheme is under implementation.

b. Terms/rights attached to equity shares

The Company's issued, subscribed and paid-up capital comprises of equity shares only and no preference share have been issued. The Company's paid-up capital comprises only one class, i.e. equity shares having par value of Rs. 1 per share. Each holder of equity share is entitled to one vote per share.

The liability of the members is limited.

The Company's shares are listed on the Bombay Stock Exchange Limited (BSE).

Restriction on distribution of Dividend

Pursuant to the Provisions of the Sanctioned Scheme, the Company is not permitted to declare any dividend to the equity shareholders without the prior approval of the BIFR/Monitoring Agency (MA) during the period of rehabilitation.

c. No bonus shares have been issued, no shares have been issued for consideration other than cash and no shares have been bought back during the last five years

e. Reduction in paid-up value of equity shares

Pursuant to the provisions of the Sanctioned Scheme, effective 26th December 2007 the paid-up value of the equity shares has been reduced from Rs. 10 per share to Rs. 1 per share fully paid-up. On reduction, the paid-up capital of the Company was reduced to Rs. 92,30,000 comprising of 92,30,000 equity shares of Rs. 1 each. On 4th January 2008, the Company allotted 2,76,90,000 equity shares of Rs. 1 each to Tata Projects Limited. Consequent to the allotment of these shares, the Company has become a subsidiary of Tata Projects Limited (shareholding of 75% in the Company's paid-up capital). The Company's paid-up capital has thus been increased to Rs. 3,69,20,000 comprising of 3,69,20,000 equity shares of Rs. 1 each.

* Term Loan from the Holding Company in terms of the Sanctioned Scheme of BIFR dated 18th December 2007 secured against the immovable property and all title deeds of the property.

Based on an in-principle approval granted by the Holding Company for extension of dates for moratorium as proposed by the Company, the maturity profile of the loans and their classification into Current and Non-current has been done for the current year.

The rate of interest is 10% p.a. For further details refer note 36.

The above Maturity Profile may change subject to approval of modification application made to BIFR as referred in Note 36.

* 1. Working Capital loan from Corporation Bank of Rs. (10.54) Lakh (Previous year Rs. 2021.45 Lakh) is secured by first charge by way of hypothecation of inventories, books debts and other current assets.

** 2. Term Loan from Tata Capital Financial Services Limited Rs. 20 Crore and Working Capital Demand Loan Rs. 1 Crore guaranteed Unconditionally and irrevocable corporate guarantee from Holding Company.

a. Figure in bracket are of previous year.

b. Deletion to Fixed Assets includes Furniture and Fixture discarded Gross Block Rs. NIL (Previous Year Rs. 23.98 Lakh), Accumulated Depreciation Rs. NIL (Previous Year Rs. 9.18 Lakh) & Net Charged to Statement of Profit and Loss Rs. NIL (Previous Year Rs. 13.14 Lakh).

c. Depreciation for the year 31.03.2015 includes depreciation on assets whose remaining useful life is NIL as on 01.04.2014. Accordingly Rs. 16.33 Lakh has been debited to retained earnings as per Schedule II of the Companies Act, 2013.

* Includes Rs. 24.03 Lakh (Previous Year Rs. 31.38 Lakh) towards Defined Contribution Plan and Rs. 8.65 Lakh (Previous Year Rs. 20.04 Lakh) towards Defined Benefit Plan and Rs. 5.13 Lakh (Previous Year Rs. 11.80 Lakh) for PF administration Charges and Other Fund.

4 Contingent liabilities not provided for:

Sr. Name of Statute Nature of For the No. Dues Year Ended March 2015 (Rs. Lakh)

1 Commercial Tax (Andhra Works 12.21 Pradesh) Contract Tax

2 Commercial Tax (West Works 2.08 Bengal) Contract Tax

3 Commercial Tax (Punjab) Penalty 8.03

4 Sales Tax VAT 101.52

5 Income Tax 136.72

6 Income Tax 535.35

7 Third party claim from 1,143.00 disputes relating to contracts

Nature of Statue For the Year Period Forum Ended March 2014 (Rs. Lakh)

Commercial Tax 12.21 F.Y. 1998-99 Commissioner (Andhra Pradesh) (Appeal)

Commercial Tax F.Y. 1998-99 (West Bengal) 2.08 F.Y. 1999-00 Commissioner F.Y. 2000-01 (Appeal)

Commercial Tax 8.03 F.Y. 2010-11 Joint Director (Punjab) cum Deputy Excise & Taxation Commissioner (Appeal)

Sales Tax - F.Y. 2007-08 Commissioner (Appeal)

Income Tax 136.72 A.Y. 2010-11 CIT (A)

Income Tax A.Y. 2012-13 CIT (A)

Third party claim from 900.00 disputes relating to contracts

5 All the Fixed Deposit receipts are lying with the banks towards margin money against Bank guarantees issued by Banks.

Note: On grounds of prudence, the Company has recognised Deferred Tax Asset only to the extent of the future reversal of Deferred Tax Liability. During the year, there is no reversal of Deferred Tax Liability (Previous Year Rs. 1.20 Lakh).

Provision for tax under the Income Tax Act, 1961 is not made as there are no chargeable profits during the year.

Holding Company : Tata Projects Limited

Key Managerial Personnel : Mr. Rajesh Mandale, Chief Financial Officer from 2nd February 2015, Ms. Anuja Bhate Company Secretary from February 2014 and Mr. Pratik Agrawal, Chief Financial Officer from 21st July 2014 t< 12th December 2014.(See Note 49)

* The Company is following Percentage Completion Method for recognising contract revenue.

* The Company has adopted Completion of Physical Proportion of the Contract Work Method to determine the stage of completion of contracts-in-progress.

6 Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

According to information available with the Management and relied upon by the auditors, on the basis of intimation received from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the Company has amounts due to micro and small enterprises under the MSMED Act as follows:

7 The Company is registered with the Board for Industrial and Financial Reconstruction (BIFR) as a sick company and BIFR has vide its order dated 18th December 2007 sanctioned the rehabilitation scheme ("the Sanctioned Scheme"). While most of the provisions of the Sanctioned Scheme have been implemented, the Company was not able to achieve positive net worth as at 31st March 2013; accordingly, the Company has filed application on 17th October 2013 to BIFR seeking an extension and modification of the Sanctioned Scheme. The modification also includes conversion of Loans of Rs. 4418 Lakh (including interest up to 31st March 2013 and loan of Rs. 300 Lakh taken during the three months period ended 30th June 2013, but excluding interest of Rs. 94.27 Lakh for the three months period ended 30th June 2013) of the Holding Company as at 31st March 2013 into 4% Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 1/-each, which is pending for approval from BIFR. In view of this, and based on written confirmation from the Holding Company, no provision has been made for interest payable to it amounting to Rs. 705.60 Lakh for the period 1st July 2013 to 31st March 2015 (including Rs. 403.04 Lakh for year ended 31st March 2015 ). The Management is considering various alternatives for achieving profitability and positive cash flow. Based on the current order book position, operating results for the current year and considering the continued support of the Holding Company, barring unforeseen circumstances, the Management is confident about the Company's ability to continue as a going concern and the Auditors of the Company have put an "emphasis of matter" paragraph on the aforesaid matter in the Auditor's Report for the year ended 31st March 2015.

8 a. In the opinion of the Management, all Current Assets, Loans & Advances are approximately of the same value if realized in the ordinary course of business. Provision for all the known liabilities and doubtful receivables is adequately made.

b. Trade receivables include retention of Rs. 270.42 Lakh (Previous Year Rs. 146.18 Lakh) receivable on completion of projects.

c. Balance outstanding against Trade Receivable and Trade Payable (including debit balances), are subject to reconciliation and confirmation with respective parties. Provision of Rs. 276.23 Lakh (Previous Year Rs. 43.37 Lakh) for doubtful debts is made during the year; resulting in total provision of Rs. 497.60 Lakh as at 31st March 2015.(Previous Year Rs. 221.37 Lakh).

d. Long term Loans and Advances includes Rs. 300.90 Lakh reimbursement receivable from client. Provision of Rs. 300.90 Lakh (Previous Year Rs. 162.63 Lakh) has been made during the year.

9 The net Gain on account of exchange rate difference amounting to Rs. 2.84 Lakh (Previous Year Loss of Rs. 14.54 Lakh) has been accounted in the Statement of Profit and Loss in compliance with AS-11.

10 Quantitative Details:

a. Erection / Construction Activities:

In respect of Erection / Construction activities, the materials procured by the Company are directly delivered to the project sites and charged off in the year of purchase. It is not practicable to furnish the quantitative information in respect of these items due to diversified size and nature of business.

* Based on the data available with the Company, Investment Pattern for LIC Managed funds is as Central Government Securities - 22.19%, State Government Securities -29.06% others approved securities -0.99%, Debenture & Bonds - 29.92%, Equity Shares - 5.50%, Fixed Deposits - 12.34%.

11 Effective 1st April 2014, the Company has changed the estimated useful life of group of assets in line with the recommended useful life as per Part C of Schedule II to the Companies Act, 2013. As per para 7 (b) of Notes of Part C of Companies Act, 2013, where the remaining useful life of an asset as on the effective date is nil, the carrying amount of the asset should be recognised in the retained earnings. Such carrying amount as on 1st April 2014 for the Company is Rs. 16.33 Lakh.

12 The Company has not contributed any amount towards Corporate Social Responsibility (CSR) in terms of Section 135 as there are no profits attributable to CSR.

13 The Company has taken factory premises under cancelable and non-cancelable operating lease. The lease agreement is for two years and option of renewal on expiry of lease period is based on mutual agreement. Rental expenses towards cancelable and non cancelable operating lease charged to Statement of Profit and Loss amount to Rs. 6.00 Lakh ( Previous Year Rs. 4.00 Lakh).

14 In line with accepted practice in construction business, certain revisions of costs and billing of previous year which have crystallised during the year have been dealt with during the current year.

15 The Company has filed in October 2013 a Miscellaneous Application (No.536 of 2013)("MA") with the Board for Industrial and Financial Reconstruction ("BIFR") containing various proposals for modifications to the Sanctioned Scheme. The said MA is pending with the BIFR. Vide one of the proposals contained in the said MA, the Company has sought exemption from the appointment of Managing Director (MD)/Manager (M)/Whole-time Director (WD). During the course of the proceedings before the BIFR, a legal opinion has also been submitted on the matter. Accordingly, the Company has not appointed any MD/M/WD, which is one of the categories of the Key Managerial Personnel (KMP) under the Companies Act, 2013. The Company has appointed qualified and experienced KMP in other categories viz. Company Secretary and Chief Financial Officer.

16 Previous year's figures have been regrouped and restated wherever necessary to make their classification comparable with that of the current year.


Mar 31, 2014

1. Corporate Information

Artson Engineering Limited ("the Company") is a company limited by shares incorporated under the Companies Act, 1956 The Company''s Registered Office is situated at Mumbai. The Company''s shares are listed on the Bombay Stock Exchange (BSE) and the Scrip Code is 522134.

The Company was incorporated in the year 1978 and since inception, the Company has commissioned, on turn-key basis several fuel storage and handling facility systems. The Company operates in only one business segment i.e Engineering and Construction for EPC Projects

The Company was referred to the BIFR as a sick company under the provisions of Section 3 (1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company''s reference as a sick company was registered under Case No 152/2004 with the BIFR. At the hearing held on 27th November 2007, the BIFR sanctioned the Rehabilitation Scheme of the Company and the Order sanctioning the scheme of rehabilitation was received by the Company on 18th December 2007 (Sanctioned Scheme). The Company has made an application on 17th October 2013 for extension of the Rehabilitation Scheme as referred above and pending the final hearing, the Sanctioned Scheme is under implementation

2 Contingent liabilities not provided for :

a. Demand from Sales Tax Department (Work Contract Tax) Rs. 22.32 Lakh (Previous Year Rs. 22.32 Lakh) for which appeals are pending

b. Claims against the Company not acknowledged as debts Rs. 900 Lakh (Previous Year Rs. 1534.99 Lakh)

c. Income Tax Department has issued a demand notice for Rs. 136.72 Lakh (Previous Year Rs. 227.26 Lakh) as penalty

3 a. All the Fixed Deposit receipts are lying with the banks towards margin money against Bank guarantees issued by Banks

4 a. Related Parties and Relationships

Holding Company : Tata Projects Limited

Key Managerial Personnel : Mr. P. S. Chopde, Executive Director (Manufacturing) upto 10th April 2013

5 Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:

According to information available with the Management and relied upon by the auditors, on the basis of intimation received from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the Company has amounts due to micro and small enterprises under the MSMED Act as follows

6 The Company is registered with the Board for Industrial and Financial Reconstruction (BIFR) as a sick company and BIFR has vide its order dated 18th December 2007 sanctioned the rehabilitation scheme ("the Sanctioned Scheme"). While most of the provisions of the Sanctioned Scheme have been implemented, the Company was not able to achieve positive net worth as at 31st March 2013, accordingly, the Company has filed application on 17th October 2013 to BIFR seeking an extension and modification of the Sanctioned Scheme. The modification also includes conversion of Loans of Rs. 4418 Lakh (including interest up to 31st March 2013 and loan of Rs. 300 Lakh taken during the three months period ended 30th June 2013, but excluding nterest of Rs. 94.27 Lakh for the three months period ended 30th June 2013) of the Holding Company as on 31st March 2013 into 4% Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 1/- each, which is pending for approval from BIFR. In view of this, and based on written confirmation from the Holding Company, no provision has been made for interest payable to it for the nine months ended 31st March 2014 amounting to Rs. 302.56 Lakh (includingRs. 99.38 Lakh for the quarter ended 31st March 2014 ). The Management is considering various alternatives for achieving profitability and positive cash flow. Based on the current order book position, operating results for the current year and considering the continued support of the Holding Company, barring unforeseen circumstances, the Management is confident about the Company''s ability to continue as a going concern and the Auditors of the Company have put an "emphasis of matter"paragraph on the aforesaid matter in the Auditors Report for the year ended 31st March 2014

7 a. In the opinion of the Management, all Current Assets, Loans & Advances are approximately of the same value if realized

in the ordinary course of business. Provision for all the known liabilities and doubtful receivables is adequately made

b. Trade receivables include retention ofRs. 146.18 Lakh (Previous YearRs. 371.05 Lakh) receivable on completion of projects

c. Balance outstanding against Trade Receivable and Trade Payable (including debit balances), are subject to reconciliation and confirmation with respective parties. Provision of Rs. 43.37 Lakh (Previous Year Rs. 78 Lakh) for doubtful debts is made during the year; resulting in total provision of Rs. 221.37 Lakh as on 31st March 2014

d. Long term Loans and Advances includes Rs. 300.90 Lakh reimbursement receivable from client. Provision of Rs. 162.63 Lakh (Previous Year Rs. Nil) has been made during the year

8 Amount due within one year towards Sales Tax Deferment Loan is Rs. 8.04 Lakh (Previous Year Rs. 24.01 Lakh)

9 The net loss on account of exchange rate difference amounting to Rs. 14.54 Lakh (Previous Year Gain of Rs. 9.59 Lakh) has been accounted in the Statement of Profit and Loss in compliance with AS-11 on "Changes in Foreign Exchange Rates"

10 Quantitative Details:

a. Erection / Construction Activities:

In respect of Erection / Construction activities, the materials procured by the Company are directly delivered to the project sites and charged off in the year of purchase. It is not practicable to furnish the quantitative information in respect of these items due to diversified size and nature of business


Mar 31, 2013

1. Corporate Information

Artson Engineering Limited (the Company) is a company limited by shares incorporated under the Companies Act, 1956. The Company''s Registered Offce is situated at Mumbai. The Company''s shares are listed on the Bombay Stock Exchange (BSE) and the Script Code is 522134.

The Company was incorporated in the year 1978. Since inception, the Company has commissioned on turn-key basis several fuel storage and handling facility systems. The Company operates in the business segment of Oil, Gas and Hydrocarbon (OG&H) Industry.

The Company was referred to the BIFR as a sick company under the provisions of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company''s reference as a sick company was registered under Case No. 152/2004 with the BIFR. At the hearing held on 27th November 2007, the BIFR sanctioned the Rehabilitation Scheme of the Company and the Order sanctioning the scheme of rehabilitation was received by the Company on 18th December 2007 (Sanctioned Scheme). The Sanctioned Scheme is presently under implementation.

2. Contingent liabilities not provided for:

a. Sales Tax (Works Contract Tax) Rs. 22.31 Lakh (Previous Year Rs. 22.31 Lakh) for which appeals are pending.

b. Claims lodged but not acknowledged by the company Rs.. 1,534.99 Lakh (Previous Year Rs. NIL)

c. Income Tax Department has issued a demand notice for Rs. 227.26 Lakh as penalty for A.Y. 2006-07 and A.Y. 2007-08 and the same is pending before the Appellate Authorities.

d. Capital Commitment of Rs. NIL (Previous Year Rs. 0.41 Lakh) on account of orders foated in market for purchase of Capital Goods.

3. a. All the Fixed Deposit receipts are lying with the banks towards margin money against Bank guarantees issued by Banks.

4. (a) Related Parties and Relationships

Holding Company: Tata Projects Limited

Key Managerial Personnel: Mr. P. S. Chopde, Executive Director (Manufacturing)

Mr. P. V. Varghese, Executive Director (Upto 31st December 2012)

b. The amount of interest paid by the company in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006, along with the amount of the payment made to the supplier beyond the appointed day during each accounting year is Rs. NIL (Previous Year Rs. NIL)

c. The amount of interest due and payable for the period of delay in making payment (where principal has been paid but Interest under MSMED Act 2006 not paid is Rs. NIL (Previous Year Rs. NIL)

d. The amount of interest accrued and remaining unpaid at the end of each accounting year is Rs. NIL (Previous Year Rs. NIL)

e. The amount of further interest remaining due and payable even in the succeeding year, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23 of Micro, Small and Medium Enterprises Development Act, 2006 is – Rs. NIL (Previous Year Rs. NIL).

The above information is given to the extent available with the Company.

5. The Company is registered with the Board for Industrial & Financial Reconstruction (BIFR) as a sick company and BIFR has, vide its Order dated 18th December 2007, sanctioned the rehabilitation scheme and the same is under implementation. The Company is also in process of making an application to the BIFR seeking an extension of the Sanctioned Scheme of rehabilitation. The Management is considering various alternatives for achieving proftability and positive cash fow. Based on the current order book position and considering continued support of the holding Company, barring unforeseen circumstances, the Management is confdent about the Company''s ability to continue as a going concern. The accounts have accordingly been prepared on a going concern basis.

6. Extra-ordinary Item includes Rs. NIL (Previous Year Rs. 16.68 Lakh) being the fre insurance claim lodged in Financial Year 2010-11.

7. a. Majority of the Company''s Fixed Assets have been independently valued by an independent valuer in the year 2010-11 and considering the same, there is no impairment in the value of assets as on the Balance Sheet date.

b. In the opinion of the Management, all Current Assets, Loans & Advances are approximately of the same value if realized in the ordinary course of business. Provision for all the known liabilities is adequately made.

c. Sundry Debtors include retention of Rs. 371.05 Lakh (Previous Year Rs. 621.36 Lakh) receivable on completion of projects.

d. Balance outstanding against Trade Receivable and Trade Payable (including debit balances), are subject to reconciliation and confrmation with respective parties. Provision of Rs. 78 Lakh (Previous Year Rs. NIL) for doubtful debts is made during the year, resulting in total provision of Rs. 178 Lakh as on 31st March 2013.

8. Amount due within one year towards Sales Tax Deferment Loan is Rs. 24.01 Lakh (Previous Year Rs. 3.36 Lakh).

9. In line with accepted practice in construction business, certain revisions of costs and billing of previous years which have crystallized during the year have been dealt with during the current year.

10. Previous year''s fgures have been regrouped and restated wherever necessary to make their classifcation comparable with that of the current period.


Mar 31, 2012

1. Corporate Information:

Artson Engineering Limited (the Company) is a company limited by shares incorporated under the Companies Act, 1956. The Company's Registered Office is situated at Mumbai. The Company's shares are listed on the Bombay Stock Exchange (BSE) and the Script Code is 522134.

The Company was incorporated in the year 1978 and since inception, the Company has commissioned, on turn-key basis, several fuel storage and handling facility systems and emerged as one of the foremost companies in the Country specializing in such systems. The Company's expertise has gradually expanded beyond the Country and has been executing prestigious overseas contracts as well. The Company operates in the business segment of Oil, Gas and Hydrocarbon (OG&H) Industry. The Company was referred to the BIFR as a sick company under the provisions of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company's reference as a sick company was registered under Case No. 152/ 2004 with the BIFR. At the hearing held on 27th November 2007, the BIFR sanctioned the Rehabilitation Scheme of the Company and the Order sanctioning the scheme of rehabilitation was received by the Company on 18th December, 2007 (Sanctioned Scheme). The Sanctioned Scheme is presently under implementation.

2. Contingent liabilities not provided for:

a. (i) Bank Guarantees issued by the Company to its clients Rs 1,367.03 Lakh (Previous Year Rs 1,694.60 Lakh).

(ii) Bank Guarantees issued by Bankers of Tata Projects Limited on behalf of the Company to the Company's clients. Rs 1,916.99 Lakh (Previous Year Rs 2,279.79 Lakh).

b. Sales Tax (Works Contract Tax) Rs 22.31 Lakh (Previous Year Rs 22.31 Lakh) for which appeals are pending.

c. Capital Commitment of Rs 0.41 Lakh (Previous Year Rs Nil) on account of orders floated in market for purchase of Capital Goods.

d. Income Tax of Rs 333.79 Lakh for which Appeals are pending.

c. Provision for Income-tax under normal provision of Income Tax Act, 1961 is not made as there are carry forward losses; MAT u/s 115 JB of Income-Tax Act, 1961 is not applicable as the Company is a Sick Company within the meaning of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985.

3. The Company had received an order from BIFR dated 18th December, 2007 and same is under implementation. Accumulated losses have exceeded share capital and reserves. In the current year, there are cash losses. Tata Projects Ltd. being the holding Company has provided substantial financial assistance which is more than the negative net worth of the Company. Present order book position of the Company is good and expected to be executed soon. Therefore with present orders in hand to be executed in F.Y. 2012-13 and further orders expected to materialize, the Management expect to have a better Cash Flow during the F.Y. 2012-13 and years ahead. Therefore, barring unforeseen circumstances, the Management is of the opinion that the concept of going concern is sustainable, and that the plans are afoot to wipe out the negative net worth of the Company.

4. In the event of Arbitration award in favour of the Company, any amount so received is treated as income in the year of receipt of award. During the year Company is not in receipt of any arbitration award.

5. Majority of the Company's Fixed Assets have been independently valued by an independent valuer in the preceding year and considering the same, there is no impairment in the value of assets as on the Balance Sheet date.

6. a. In the opinion of the management all Current Assets, Loans & Advances are approximated of the same value if realized in the ordinary course of business. Provision for all the known liabilities is adequately made.

b. Sundry Debtors include retention of Rs 621.36 Lakh (Previous Year Rs 479.83 Lakh) receivable on completion of projects.

c. Balance outstanding against sundry debtors and sundry creditors (including debit balances), are subject to reconciliation and confirmation with respective parties. The provision of Rs Nil (Previous Year Rs 100 Lakh) is made for doubtful debts. In the opinion of the management the balance amounts are good and recoverable/payable.

7. Amount due within one year towards Sales Tax Deferment Loan is Rs 3.36 Lakh (Previous Year Rs 6.79 Lakh).

8. The Company has lodged an insurance claim in the last Financial Year. The claim was accepted by Insurance Company for Rs 66.03 Lakh and the balance amount of Rs 16.68 Lakh is claimed as an Extraordinary item being Loss by Fire during the year.

9. The net gain on account of exchange rate difference amounting to Rs 43.31 Lakh (Previous Year Loss Rs 7.93 Lakh) has been debited to the Profit and Loss Account in compliance with AS-11 on "The Effect of changes in foreign Exchange Rates".

10. Quantitative Details:

i. Erection/Construction Activities

In respect of Erection/Construction activities, the materials procured by the Company are directly delivered to the project sites and charged off in the year of purchase and included under "Construction/Operating expenses". It is not practicable to furnish the quantitative information in respect of these items due to diversified size and nature of business.

ii. Manufacturing Activities

The commercial operations at Nasik Factory commenced with effect from 10th November 2010. The relevant quantitative details are as follows:

11. In line with accepted practice in construction business, certain revisions of costs and billing of previous years which have crystallized during the year have been dealt with during the current year.

12. Previous year's figures have been regrouped and restated wherever necessary to make their classification comparable with that of the current period.


Mar 31, 2010

1. Contingent liabilities not provided for:

a. (i) Bank Guarantees issued by the Company to its clients Rs. 56,916,185/- (Previous Year - Rs. 307,500/-).

(ii) Bank Guarantees issued by Bankers of Tata Projects Limited on behalf of the Company to the Companys clients Rs. 227,978,706/- (Previous Year - Rs. 230,778,706/-).

(iii) Letters of credit issued by the Companys Bankers to one of the supplier Rs. 2,048,438/- (Previous Year Rs. NIL).

b. Sales Tax (Works Contract Tax) Rs. 4,708,375/- (Previous Year - Rs. 4,708,375/-) for which appeals are pending.

2. The Company has received the BIFR order dated 18th December, 2007 which is under implementation. The Company had preferred an appeal to the AAIFR with reference to the above order in respect of issues relating to Tax matters i.e. Income Tax & Service Tax, application of SEBI guidelines, exemptions from Clause 49 of the Listing Agreement with the BSE and property/house rent tax by Nashik Municipal Corporation during operation of the Scheme. Company has received an Order from AAIFR dated 1st January, 2009 specifying waivers of the above mentioned taxes and penalties and accordingly the Company has given the effects. The Company has also received an Order dated 3rd December 2009 from the BIFR whereby the Company has been granted exemption upto 31st March 2011 from complying with Clause 49 of the Listing Agreement with the BSE.

3. Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Act, 2006:

The Company has initiated the process of obtaining confirmation from suppliers who have registered themselves under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006). Based on the information available with the Company, the balance due to Micro and Small Enterprises as defined under the MSMED Act, 2006 is Rs. 42.95 Lakh, but interest for the delay in payment is not provided as the management is of the opinion that due to contractual terms liability of interest will not arise.

4. The Company has received an order from BIFR dated 18th December 2007 and same is under implementation. In spite of accumulated losses being exceeding share capital and reserves, in lieu of the large new orders being received and commenced barring unforeseen circumstances, the Management expects to continue as going concern.

5. In respect of Sundry Debtors in arbitration, Company had written off Debtors amounting to Rs. 13.84 Crore in earlier years. In the event of Arbitration award in favour of the Company, any amount so received is treated as income in the year of receipt of award. During the year the Company has received an arbitration award amounting of Rs. 62.13 Lakh which is included in sales.

6. a. Majority of the Companys Fixed Assets have been independently valued by an independent valuer in the preceding year and the valuation is much higher than the book value resulting in no impairment in the value of assets.

b. Verification was carried out by an independent firm of Chartered Accountants during the year at all major domestic locations including Nashik unit, and based on its report, the Company has made the deletion in Gross Block for Rs. 4,925,712/- and in Depreciation for Rs. 3,813,446/- with regards to discarded assets as shown in Schedule - 4 in the Accounts.

7. a. In the opinion of the management, all Current Assets, Loans & Advances are approximated of the same value, if realized in the ordinary course of business. Provision for all the known liabilities is adequately made.

b. Sundry Debtors include retention of Rs. 20,672,997/- (Previous Year - Rs. 30,712,653/-) receivable on completion of projects.

c. Balance outstanding against sundry debtors and sundry creditors (including debit balances), are subject to reconciliation and confirmation with respective parties. In the opinion of the management, the amounts are recoverable and considered good.

d. Cash and Bank balances includes an amount of Rs. NIL (Previous Year - Rs. 3,637/-) which are in the personal bank account of staff at sites and cash lying with them.

8. The net exchange rate difference amounting to Rs. 16,989,937/- (Previous Year - Rs. 9,410,919/-) has been debited to the Profit and Loss account in compliance with AS-11 on "The Effect of changes in Foreign Exchange Rates".

9. (i) Erection/Construction Activities

In respect of Erection/Construction activities, the materials procured by the Company are directly delivered to the project sites and charged off in the year of purchase and included under "Construction/Operating expenses". It is not practicable to furnish the quantitative information in respect of these items due to diversified size and nature of business.

(ii) Manufacturing Activities

During the year and Previous year, no such activity is carried out in Manufacturing Division.

Note: Total Sales from Erection/Constructions activities including Supply is Rs. 1,319,352,888/- (Previous Year - Rs. 321,305,663/-). Aggregate Purchase is Rs. 420,914,140/- (Previous Year - Rs. 239,298,937/-).

10. (a) Necessary approvals of the Members and the Central Government pursuant to the provisions of the Companies Act, 1956 read with Schedule XIII thereto are being obtained for payment of reimbursement of medical expenses of Rs. 175,709/- incurred by Mr. P. S. Chopde, Executive Director-Manufacturing.

(b) The Company has filed an application pursuant to the provisions of the Companies Act, 1956 read with Schedule XIII thereto, with the Central Government seeking its approval for payment of excess remuneration to the extent of Rs. 492,000/- in respect of payment of remuneration referred to in 19(H) above.

11. The Company has paid the Gratuity amount of Rs. 3.50 Lakh to one of the employees, the claim settlement is Pending with Life Insurance Corporation of India.

Leave Encashment has been provided as per actuarial valuation at Rs. 382,330/-, and excess balance from the earlier year is charged to employee cost.

12. In line with accepted practice in construction business, certain revisions of costs & billing of previous years which have crystallized during the year have been dealt with during the current year.

13. Previous years figures have been regrouped and restated wherever necessary to make their classification comparable with that of the current period.

 
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