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Notes to Accounts of BEML Ltd.

Mar 31, 2016

Basis of Preparation of Financial Statements

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company''s operating cycle is considered as twelve months for the purpose of current / non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The Company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

A. Useful life adopted by the Company for calculation of Depreciation in respect of the following assets are less than the useful life prescribed under S chedule II of the C ompanies A ct, 2 01 3 . The reduced useful life has been adopted in view of large number of small value assets involved and faster rate of wear and tear for Jigs & Fixtures.

i) Individual assets costing less than Rs.5000 - useful life 1 year.

ii) Jigs & Fixtures valued more than Rs.5.00 Lakhs capitalised - useful life 3 years.

B. Accounting Standard 19 ( Leases )

i) Office premises taken on lease

The Company''s significant leasing arrangements are in respect of operating leases in respect of its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 28.

ii) Cars given on Lease on non cancellable basis

I. a) Gross Carrying amount Rs.716.52 Lakhs (Previous Year -Rs.487.17 Lakhs)

b) Accumulated depreciation Rs.313.12 Lakhs (Previous Year -Rs.251.12 Lakhs)

c) Accumulated impairment losses Rs.Nil

d) (i) Depreciation recognized in the

Statement of Profit & Loss Rs.96.07 Lakhs (Previous Year -Rs.69.07Lakhs)

(ii) Impairment losses recognized in the

Statement of Profit & Loss Rs.Nil (Previous Year -Rs.Nil)

(iii) Impairment losses reversed in the

Statement of Profit & Loss Rs.Nil (Previous Year -Rs.Nil)

II. Future minimum lease payments under non-cancellable operating leases - Leased cars

(i) Not later than one year Rs.47.24 Lakhs (Previous Year -Rs.53.73Lakhs)

(ii) Later than one year but not later than five years Rs.177.76 Lakhs (Previous Year -Rs.162.76Lakhs)

(iii) Later than five years Rs.155.57 Lakhs (Previous Year -Rs.49.52Lakhs)

III. Total rent recognized as income in the

Statement ofProfit & Loss Rs.64.86 Lakhs (Previous Year -Rs.45.88Lakhs)

C. Gross value of vehicles own use includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis Rs.132.05 Lakhs (WDV - Rs.58.62 Lakhs) [Previous Year - Gross Block Rs.763.68 Lakhs (WDV - Rs.110.96 Lakhs)].

D. Fixed Assets

i) Buildings include cost of building at Mumbai and Ranchi pending registration / katha transfer at Rs.33.00 Lakhs (Previous Year - Rs.33.00 Lakhs).

ii) The Company has taken land measuring 1109 acres and two workshops on lease for a period of 10 years vide Lease Agreement dated 5th May 2004, w.e.f. 28.04.2004 from M/s Bharat Gold Mines Limited (BGML) (A Company under orders of winding up by BIFR), and a sum of Rs.100 Lakhs was paid as non- refundable deposit [included under Long Term Loans and Advances (Note 14)]. As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale/transfer of ownership that may be fixed for the property and lessee shall be free to construct new building/alter the existing building/lay roads/fence the land in the interest of furthering its business to suit its use and on expiry of the lease the said building shall vest with the lessor on payment of consideration based on value prevailing on the date of handing over of the property. The Company had incurred on the above land a sum of Rs.1452.95 lakhs (WDV - Rs.1093.18 Lakhs) on Buildings [Previous Year - Rs.1452.95 Lakhs (WDV - Rs.1141.93 lakhs)] included in Fixed Assets (Note 10) as at year end.

Vide order dated 09.07.2013, the Hon''ble Supreme Court of India upheld the decision of the Union Government, to float a global tender of BGML assets with an observation about the existence of sub-lease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Hon''ble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation ofthe lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company / Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

iii) Lease hold Land includes leased land allotted by Kerala Industrial Infrastructure Development Corporation (KIIDC) measuring 374.59 acres for a lease premium of Rs.2547.21 Lakhs (excluding Service Tax) (Previous Year - Rs.2547.21 Lakhs excluding Service Tax) for 99 years lease period with effect from 01.07.2009. The actual land handed over by KIIDC was measuring 374.16 acres and the revised lease premium payable is Rs.2544.29 Lakhs only. Adjustment in financial statement will be made on formal amendment of lease agreement by KIIDC.

iv) Lease Hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bangalore Aerospace, SEZ Park) at a cost of Rs.5126.00 Lakhs (Previous Year - Rs.5126.00 Lakhs).

v) Lease Hold Land includes land at cost Rs.129.41 Lakhs at Hyderabad for which registration will be completed after development of showroom.

vi) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

vii) Free Hold Land includes land measuring 555.37 acres at Mysore costing Rs.321.23 Lakhs (including additional compensation of Rs.183.57 Lakhs demanded by KIADB) for which title deeds have to be obtained from KIADB. As per the demand of KIADB, provision of interest amounting to Rs.486.60 Lakhs (Previous Year - Rs.464.12 Lakhs) up to period 31st March 2016 has been made. However, matter has been taken up with KIADB for waiving of interest which is pending before KIADB. Liability for both interest and additional compensation has been created. Registration will be made once the matter is settled with KIADB.

viii) Free Hold Land measuring 3.647 acres of land, surrendered to BBMP against TDR (at cost) is Rs.4.58 Lakhs. Free Hold Land measuring 1.937 acres of land surrendered to BBMP for which TDR yet to be received (at cost) is Rs.2.43 Lakhs.

Above TDR will be utilised for further construction.

ix) Company has taken action to obtain title documents in respect of the following immovable properties.

(1) Flat at Roshan comp, Madras - Rs.4.04 Lakhs.

(2) Flat at Ashadeep, New Delhi - Rs.2.80 Lakhs.

(3) Office building at Nagpur - Rs.27.18 Lakhs.

(4) Lease Hold Land at Singrauli - Rs.1.75 Lakhs.

E. Amount of borrowing cost capitalised on addition of assets during the year is as under:- Plant &Machinery Rs.510.51 Lakhs

Buildings Rs.104.88 Lakhs

Electrical Installations Rs.17.92 Lakhs

Technical Know how Rs.330.09 Lakhs

F. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT etc.,) - Rs.57046.22 Lakhs (Previous Year - Rs.47797.57 Lakhs).

ii Other claims - legal cases etc. Rs.52629.58 Lakhs (Previous Year - Rs.50409.61 Lakhs). (This include a claim amounting to Rs.38681.39 Lakhs against which the company has lodged a counter claim of Rs.31403.92 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs.1912.50 Lakhs (Previous Year - Rs.1912.50 Lakhs). The matter is subjudice.

c. Other money for which the company is contingently liable - Rs.Nil (Previous Year - Rs.11.29 Lakhs).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.2270.81 Lakhs (Previous Year - Rs.1964.44 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs.Nil (Previous Year - Rs.Nil ).

c. Other commitments (specify nature) - Rs.Nil (Previous Year - Rs.Nil).

G. Accounting Standard 17 (Segment Reporting)

In view ofNotification No. GSR 463(E) dated 05-06-2015 (Serial no. 8) issued by Ministry of Corporate Affairs, exempting companies engaged in Defence Production from the application of Accounting Standard 17 (Segment Reporting), disclosure requirements under AS - 17 has not been made.

H. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

I. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year''s presentation.


Mar 31, 2014

Basis of Preparation of Financial Statements

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company''s operating cycle is considered as twelve months for the purpose of current / non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

A. Accounting Standard 19 ( Leases )

i ) Office premises taken on lease

The Company''s significant leasing arrangements are in respect of operating leases in respect of its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 28.

ii) Cars given on Lease on non cancellable basis

I. a) Gross Carrying amount Rs. 491.67 Lakhs (Previous Year - 535.36 Lakhs)

b) Accumulated depreciation Rs. 183.74 Lakhs (Previous Year - 150.04 Lakhs)

c) Accumulated impairment losses Rs. Nil

(i) Depreciation recognized in the Statement of Profit & Loss Account Rs. 48.83 Lakhs (Previous Year - 50.98 Lakhs)

(ii) Impairment losses recognized in the Statement of Profit & Loss Account (Previous Year - Nil)

(iii)Impairment losses reversed in the Statement of Profit & Loss Account Nil (Prevrious Year - Nil)

II. Future minimum lease payments under non-cancellable operating leases - Leased cars

(i) Not later than one year 59.26 Lakhs (Previous Year - Rs. 68.10 Lakhs)

(ii) Later than one year but not later than five years Rs. 194.02 Lakhs (Previous Year - Rs. 209.93 Lakhs)

(iii) Later than five years Rs. 88.32 Lakhs (Previous Year - Rs. 107.29 Lakhs)

III. Total rent recognized as income in the Statement of Profit & Loss Account Rs. 47.45 Lakhs (Previous Year - Rs. 58.66 Lakhs)

B. Gross value of vehicles own use includes equipment offered to customers for trials on No Cost No Commitment (NCNC) basis Rs. 471.68 Lakhs (WDV - Rs. 316.48 Lakhs) (Previous Year - Rs.Nil).

C. Fixed Assets

i) Buildings includes cost of building at Kolkota Rs. 26.82 Lakhs (Previous Year - Rs. 26.82 Lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 Lakhs at the end of 99 years from the date of taking possession viz., FebruaryRs. 83 / AprilRs. 84.

ii) Buildings includes cost of building at Mumbai and Ranchi pending registration / khatha transfer at Rs. 33.00 Lakhs (Previous Year - Rs. 33.00 Lakhs)

iii) The company has taken land measuring 1109 acres and two workshops on lease initially for a period of 10 years vide Lease Agreement dated 5th May 2004 w.e.f 28.04.2004 from M/s Bharat Gold Mines Limited (A Company under orders of winding up by BIFR), and a sum of Rs. 100 Lakhs was paid as non-refundable deposit, (included under Long Term Loans and Advances (Note 14)). As per the terms of the Lease agreement, this deposit shall be adjusted against the outright sale / transfer of ownership that may be fixed for the property and the lessee shall be free to construct new building / alter the existing building / lay roads / fence the land in the interest of furthering its business to suit its use and on expiry of the lease the said building shall vest with lessor on payment of consideration based on value prevailing on the date of handing over of the property. The Company had incurred on the above land, a sum of Rs. 1452.95 Lakhs (WDV Rs. 1191.95 Lakhs) on building (Previous Year - Rs. 1452.95 Lakhs (WDV Rs. 1239.33 Lakhs)) included in Fixed Assets (Note 10) as at year end.

During the year, vide order dated 09.07.2013, the Hon''ble Supreme Court of India upheld the decision of the Union Government to float a global tender of BGML assets with an observation about the existence of sub-lease of a portion of the land to BEML Ltd expiring on 28.04.2014 to be included in the tender documents. The Company filed an Interlocutory application before the Hon''ble Supreme Court of India, praying for exclusion of land leased to BEML from the purview of global tender, which was dismissed. Since the lease agreement provides for the continuation of the lease even after the expiry of lease period on 28.04.2014 till the final decision of the Company / Government in this regard, the operations of the company on the above land is continued. Appropriate accounting action will be considered based on the outcome of the tender process.

iv) Lease hold Land includes leased land allotted by Kerala Industrial Infrastructure Development Corporation (KIIDC) measuring 374.59 acres for a lease premium of Rs. 2547.21 Lakhs (Previous Year - Rs. 2547.21 Lakhs) for 99 years lease period with effect from 01.07.2009. The actual land handed over by KIIDC was measuring 374.16 acres and the revised lease premium payable is Rs. 2544.29 Lakhs only. Adjustment in financial statement will be made on formal amendment of lease agreement by KIIDC.

v) Lease Hold Land includes land measuring 101175.92 Sq. Mtrs taken on perpetual lease from KIADB (Bangalore Aerospace, SEZ Park) at a cost of Rs. 5126.00 Lakhs (Previous Year - Rs. 5126.00 Lakhs).

vi) Free Hold Land include land at cost Rs. 134.27 Lakhs at Hyderabad for which registration is pending.

vii) No Provision considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

viii) As per the demand of KIADB, provision of interest amounting to Rs. 441.64 Lakhs up to period 31st March 2014 has been made. However, matter has been taken up with KIADB for waiving of interest which is pending before KIADB Board. Additional compensation demanded by KIADB authority amounting to Rs. 183.57 Lakhs has been capitalised and liability for both interest and additional compensation has been created. Registration will be made once the matter is settled with KIADB Board.

D. Amount of borrowing cost capitalised on addition of assets during the year is as under:

* Plant & Machinery Rs. 1.00 Lakh

* Any other asset (should be specified) Rs. Nil

a. The Joint Venture Company BEML Midwest Ltd. has not prepared its financial statements as at 31st March, 2014 due to litigation pending before Company Law Board. Hence, disclosure requirements under AS-27 (Financial Reporting of Interests in Joint Ventures) with regard to the Company''s share in assets, liabilities, income & expenditure and its share in the contingent liabilities could not be complied with.

b. The company had issued corporate guarantee to Bank for facilities extended to BEML Midwest Limited, for Rs. 1912.50 Lakhs. Since BEML Midwest failed to pay, the Bank concerned invoked the corporate guarantee and claimed from the company. However the company has refused to pay the claim on the ground that the claim relating to forward contracts were entered into without the approval of board of BEML Midwest Limited and that the majority shareholder has misappropriated and acted beyond the mandate without complying with the terms and conditions specified by the Board of BEML Midwest Limited. The matter is pending before Debt Recovery Tribunal (DRT). The company does not envisage any cash outflow in this regard.

c. The Company has entered into a Consortium Agreement (MAMC Consortium) with M/s. Coal India Limited (CIL) and M/s. Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s. Mining and Allied Machinery Corporation Limited (under liquidation). The agreement, inter-alia, provided for formation of a Joint Venture company with a shareholding pattern of 48:26:26 among BEML, CIL and DVC respectively. The Company has paid the proportionate share of Rs. 4800.00 Lakhs towards the total bid consideration of Rs. 10000.00 Lakhs towards the said acquisition, based on the order passed by the Hon''ble High Court of Calcutta. The said assets are taken possession by the MAMC Consortium. Further, the Company has incurred a sum of Rs. 768.29 Lakhs (Previous Year - Rs. 714.02 Lakhs) towards maintenance, security and other related expenditure. The expenditure incurred by CIL and DVC on account of this proposal is not ascertained. The total sum of Rs. 5568.29 Lakhs (Previous Year

* Rs. 5514.02 Lakhs) is included under the head ‘Other Loans and Advances'', pending allotment of equity shares in the capital of the JV company. Since the company intends to treat this as a long term investment, no independent valuation of the assets taken over has been done and the diminution in value of investments, if any, can be ascertained only after the formulation of business plan and approval of shareholders'' agreement from MOD and consequential share allotment.

Further, a company in the name of ‘MAMC Industries Limited'' (MIL) was formed and incorporated as a wholly-owned subsidiary company for the intended purpose of JV formation. Shareholders'' agreement, as duly approved by the Boards of all the three members of the consortium, has been submitted to Ministry of Defence for necessary approval. After obtaining the said approval, MIL, would be converted into a JV Company. The Company has advanced a sum of Rs. 600.93 Lakhs (Previous Year - Rs. 599.56 Lakhs) on account of MIL, which is included under the head ‘Loans and Advances to related parties''.

a. Negative work orders amounting to Rs. 722.60 Lakhs (Previous Year - Rs. 624.56 Lakhs) were reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on cost of production on this account.

b. Raw materials & Components includes materials lying with sub contractors Rs. 1052.93 Lakhs (Previous Year - Rs. 1910.63 Lakhs).

c. The closing stock of work-in-progress and finished goods are stated at lower of standard cost, which approximates to actuals, and net realisable value. The difference between the actual cost of production and the standard cost is not material.

d. Variances arising on account of difference between standard cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

e. Provision towards obsolescence is made as per provisioning norms consistently followed and is based on ageing of inventory.

f. The inventory does not include the value of materials received free of cost from customers and supplies against LOI which are held in trust.

i. Trade Receivables - Outstanding for period exceeding six months include Rs. 499.60 Lakhs (Previous Year - Rs. 499.60 Lakhs) due from Railway Board, on the amount billed, relating to certain expenses incurred by the company on the supply of wheel sets. The Railway Board has agreed vide its amendment to sale order dated 18.10.12 to reimburse this claim at the lower of actual paid by BEML as per documentary evidence or at the rates being paid by Ministry of Railways, subject to unconditional acceptance by the company. The company is yet to give its acceptance, pending clarification from Railway Board / the paying authority of Railway Board on the rates paid by them. The company does not expect any material impact on the final realization of this receivable.

ii. The company is having factoring arrangement with banks. Trade receivables amounting Rs. Nil (Previous Year - Rs. 17189.83 Lakhs) has been sold to the banks. This amount has been reduced from trade receivables ''Others'' as on 31st March, 2014. [The factoring cost incurred is Rs. 652.58 Lakhs. (Previous Year - Rs. 1093.74 Lakhs), included in Bank charges].

*iii.Trade receivables - Outstanding for period exceeding six months include Rs. 925.87 Lakhs (Previous Year - Rs. 925.87 Lakhs) towards interest rate difference on advance amount received from Ministry of Defence (MoD). This amount pertains to interest rate difference between deposit rate and interest recovered at the rate of 9.50% by MoD during FY 2006-07, 2007-08 and 2009-10 from various bills. The matter has been taken up with MoD and it is under their consideration.

iv. Trade receivables - Outstanding for period exceeding six months include Rs. 4139.92 Lakhs (Previous Year Rs. 4139.92 Lakhs) towards exchange rate difference and escalation for import of components in respect of a long term contract for Design, Development and Supply, entered into with Ministry of Defence (MoD) in 2001. This contract provided for import content denominated in US Dollar with a clause for escalation and exchange rate variation.

As the import of materials was from a country in the European Union which adopted Euro as its International transaction currency, the company was forced to import in Euro currency from January, 2007 to meet its obligations under the contract. The Euro as a trading currency was not contemplated at the time of entering the contract placed by the customer.

The request for amendment for US Dollar to Euro and the consequential Escalation and Exchange Rate variation is pending with the customer. The company does not expect any material impact on this account, sequel to the reassessment of the escalation and exchange rate variation, based on an acceptable formula for the customer.

J. Claims receivable includes:

a. Cost of additional material consumed for rail coaches (over and above the design specification based on which the revenue was recognized) amounting to Rs. 3181.51 Lakhs (Previous Year - Rs. 124.15 Lakhs), awaiting final price to be fixed by customer. The provisional price as per contract does not include the cost of additional material required for the change in the design specification. Once the final price is fixed, the claim receivable will be adjusted and corresponding revenue accounted.

b. Cost of additional material consumed against variation order of Metro contract (RS1 & RS6) amounting to Rs. 512.33 Lakhs (Previous Year - Rs. 258.37 Lakhs) awaiting customer NOC.

c. Claim Lodged pending under reconciliation amounting to Rs. 436.80 Lakhs (Previous Year - Rs. 252.18 lakhs).

d. Claim lodged with Railway Board for excise duty and corresponding sale tax claim of Rs. 764.78 Lakhs (Previous Year - Rs. 817.83 Lakhs).

The Company doesn''t expect any material impact on the final realization of the above amounts.

ii. Unbilled revenue include Rs. 7820.63 Lakhs (Previous Year - Rs. 11709.84 Lakhs) on account of additional provisional price accounted based on recommendation (for the years 2010-11 & 2011-12) by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Rail Board.

i. Revenue including Excise Duty include Rs. 3259.13 Lakhs (Previous Year - Rs. 3891.36 Lakhs) recognised as additional provisional price in terms of Accounting Policy No. 7(iii) based on the price recommended for Rail coaches for the year 2011-12 by the Chief Advisor (Cost), Ministry of Finance (which is under consideration by the Rail Board). The difference, if any, is accounted in the year of finalisation of price.

ii. Revenue including Excise Duty includes revenue recognized for Rs. 7244.49 Lakhs (Previous Year - Rs. 12823.28 Lakhs) in respect of FOR destination contracts, in accordance with Accounting Standard 9 - Revenue Recognition, on the basis of custodian certificates accepting billing and title to the goods, having a profit of Rs. 1454.47 Lakhs (Previous Year - Rs. 791.47 Lakhs) for the transactions.

iii. The company has entered into a consortium agreement with three international partners for the supply of Metro coaches to Bangalore Metro Rail Corporation Ltd, (BMRCL). As per the agreement, the company is responsible to raise the bills at the full value of the contract including consortium scope on BMRCL and terminal excise duty and VAT thereon is discharged by the company.

K. Accounting Standard 15 (Employee Benefits)

a. Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Contributory Medical Scheme

The company has a post retirement contributory medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated officers / workers who opt for the scheme. Company pays 2/3 rd insurance premium and the balance is paid by the superannuated officers / workers. The scheme was actuarially valued during the year and liability has been provided for.

c. Interest Rate Guarantee on Provident Fund

Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. Company has got the same actuarially valued and there is no additional liability that need to be provided for the year.

d. Gratuity

The employees'' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

e. The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors The above information is certified by the actuary.

L. In terms of the Notification No.S.O. 301 (E) dt.08.02.2011 of the Ministry of Corporate Affairs, the Board at its meeting held on 18.05.2012 had given consent with regard to non-disclosure of quantitative information relating to purchases, sales, consumption of raw materials, gross income from services rendered, work-in-progress etc, to be shown under Broad heads, as required under paragraphs 5(ii) (d); 5 (iii); and 5 (viii) (a) to (e) except (d) of Part-II of Schedule VI of the Companies Act, 1956, in the Annual accounts for the Financial Year 2011-12 and onwards.

M. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) - Rs. 40217.09 Lakhs (Previous Year - Rs. 5452.75 Lakhs).

ii Other claims - legal cases etc. Rs. 47077.13 Lakhs (Previous Year - Rs. 5116.17 Lakhs).

(This include a claim amounting to Rs. 35527.00 Lakhs against which the company has lodged a counter claim of Rs. 52365.00 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs. 1912.50 Lakhs (Previous Year - Rs. 1912.50 Lakhs).

c. Other money for which the company is contingently liable - Rs. Nil (Previous Year - Rs. Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 1977.52 Lakhs (Previous Year - Rs. 2414.20 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs. Nil (Previous Year - Rs. Nil ).

c. Other commitments (specify nature) - Rs. Nil (Previous Year - Rs. Nil ).

Notes

1. The company does not expect any re-imbursement in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I (a) above pending resolutions of the arbitration / appellate proceedings.

3. The cash flow in respect of matters referred to in I (b) above is generally expected to occur within 3 years.

b. Segmental Capital Employed:

Fixed assets used in Company''s business or liabilities incurred have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

c. Secondary Reporting Since, more than 90% of total sales is within India, geographical reporting is considered not applicable

O. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

P. Figures of previous year have been regrouped / reclassified / recast wherever necessary to conform to current year''s presentation.


Mar 31, 2013

Basis of Preparation of Accounts

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company''s operating cycle is considered as twelve months for the purpose of current / non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recommended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

Micro, Small and Medium Enterprises

The information under MSMED Act, has been disclosed to the extent such vendors have been identified by the company during the year. The details of amounts outstanding to them based on available information with the Company is as under :

A. Accounting Standard 19 (Leases)

i) Office premises taken on lease

The Company''s significant leasing arrangements are in respect of operating leases in respect of its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 28.

ii) Cars given on Lease on non cancellable basis

I. a) Gross Carrying amount Rs. 535.36 Lakhs (Previous Year - Rs. 519.64 Lakhs)

b) Accumulated depreciation Rs. 150.04 Lakhs (Previous Year - Rs. 110.29 Lakhs)

c) Accumulated impairment losses Rs. Nil

(i) Depreciation recognized in the Statement of Profit & Loss Account Rs. 50 98 Lakhs (Previous Year - Rs. 53.67 Lakhs)

(ii) Impairment losses recognized in the Statement of Profit & Loss Account Rs. Ni1 (Previous Year - Rs. Nil)

(iii) Impairment losses reversed in the Statement of Profit & Loss Account Rs. Ni1 (Previous Year - Rs. Nil)

II. Future minimum lease payments under non-cancellable operating leases - Leased cars

(i) Not later than one year Rs. 68.10 Lakhs (Previous Year - Rs. 52.10 Lakhs)

(ii) Later than one year but not later than five years Rs. 209.93 Lakhs (Previous Year - Rs. 191.20 Lakhs)

(iii) Later than five years Rs. 107.29 Lakhs (Previous Year - Rs. 136.64 Lakhs)

III. Total rent recognized as income in the Statement of Profit & Loss Account Rs. 58.66 Lakhs (Previous Year - Rs. 42.49 Lakhs)

B. Fixed Assets

i) Buildings includes Cost of building at Kolkotta Rs.26.82 Lakhs (Previous Year - Rs.26.82 Lakhs) on lease with an option to buy for a nominal sum of Rs.0.15 Lakhs at the end of 99 years from the date of taking possession viz., February''83 / April''84.

ii) Buildings includes cost of building at Mumbai and Ranchi pending registration / khatha transfer at Rs.33.00 Lakhs (Previous Year - Rs.33.00 Lakhs)

iii) The total amount towards Lease/Sale of facilities comprising mostly land, belonging to Bharat Gold Mines Limited ( a Company under orders of winding up by BIFR) is yet to be ascertained. The Company has started utilising the facilities from May 2005 and a sum of Rs.100 Lakhs has been paid, which is included under Long Term Loans & Advances (Note No.14). As the nature of transaction is undecided, no amount has been charged to the profit and loss account till date. The company has incurred an expenditure towards creation of fixed Assets for a gross value of Rs.1452.95 Lakhs (Previous Year - Rs.1395.95 Lakhs) included under Note No.10 & Rs. Nil (Previous Year - Rs.15.31 Lakhs) as capital work in progress included under Note No.11 totaling to Rs.1452.95 Lakhs (Previous Year - Rs.1411.26 Lakhs).

iv) Lease Hold Land includes Leased land allotted by Kerala Industrial Infrastructure Development Corporation measuring 374.59 acres on Lease premium of Rs.2547.21 Lakhs for 99 years lease period with effect from 01.07.2009. Whereas actual land handed over by Kerala Industrial Infrastructure Development Corporation was measuring 374.16 acres after exclusions and revised the Lease Premium payable as Rs.2544.29 Lakhs. Adjustment in financial statement will be made on formal amendment of Lease Agreement by Kerala Industrial Infrastructure Development Corporation.

v) Free Hold Land include land at cost Rs.134.27 Lakhs at Hyderabad for which registration is pending.

vi) No Provision was considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

C. Accounting Standard 15 (Employee Benefits)

a. Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Contributory Medical Scheme

The company has a post retirement contributory medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated officers / workers who opt for the scheme. Company pays 2/3 rd insurance premium and the balance is paid by the superannuated officers / workers. The scheme was actuarially valued during the year and liability has been provided for.

c. Interest Rate Guarantee on Provident Fund

Provident Fund Trust of the Company has to declare interest on Provident Fund at a rate not less than that declared by the Employees'' Provident Fund Organisation. In case the Trust is not able to meet the interest liability, Company has to make good the shortfall. Company has got the same actuarially valued and there is no additional liability that need to be provided for the year.

d. Gratuity

The employees'' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

e. The estimates of rate of escalation in salary considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors The above information is certified by the actuary.

D. In terms of the Notification No.S.O. 301 (E) dt.08.02.2011 of the Ministry of Corporate Affairs, the Board at its meeting held on 18.05.2012 had given consent with regard to non-disclosure of quantitative information relating to purchases, sales, consumption of raw materials, gross income from services rendered, work-in-progress etc, to be shown under Broad heads, as required under paragraphs 5(ii) (d); 5 (iii); and 5 (viii) (a) to (e) except (d) of Part-II of Schedule VI of the Companies Act, 1956, in the Annual accounts for the Financial Year 2011-12 and onwards.

E. I. Change in Accounting Policy

During the year Company changed its Accounting Policy on the following:

1. i. To comply with the statutory requirement for treating the jigs & fixtures as fixed assets and as opined by the Expert Advisory Committee of ICAI, the Company changed its Accounting Policy adopted in the previous years of classifying all the jigs & fixtures as "Other non-current assets" and amortizing the same based on technical assessment.

As per the revised accounting policy, the Jigs & fixtures of unit value of Rs.5.00 Lakhs and above are capitalized as ''Fixed Assets'' and depreciated over a period of three years and of Unit value of below Rs.5.00 lakhs are charged in the statement of profit and loss.

ii. Due to the above change in the accounting policy :

The Gross block of the fixed asset is increased by Rs.1449.58 Lakhs, Accumulated depreciation increased by Rs.1025.21 Lakhs and the net block of fixed assets increased by Rs.424.37 Lakhs, Depreciation for the year increased by Rs.285.65 Lakhs, Other Non-current assets decreased by Rs.306.59 Lakhs and the loss for the year increased by Rs.133.76 Lakhs. Had the company continued the earlier accounting policy, the ''Amortization of jigs & fixtures under Other expenses'' would have been higher by Rs.382.73 Lakhs and the Loss would have been higher by Rs.248.97 Lakhs.

2. i. Similarly to comply with the statutory requirement for treating the Special Tools as Non-current assets and as opined by the Expert Advisory Committee of ICAI, the Company changed its Accounting Policy adopted in the previous years of amortising the Cost of Special Tools on the basis of technical assessment.

As per the revised accounting policy, Special Tools up to the unit value of Rs.5000 are charged off in the year of incurrence and those above unit value of Rs.5000 are amortised over a period of 3 years.

ii. In view of the adoption of new Accounting Policy the following amounts are charged to Statement of Profit & Loss

a. Value of Special Tools with unit value less than Rs. 5000 charged off during the year. Rs. 314.85 Lakhs

b. Amortisation during the year increased / (decreased) by Rs. 254.77 Lakhs Total Rs. 569.62 Lakhs

Since, no technical assessment for amortisation of Special Tools under the old policy was carried out for the year, the impact of the change in the financial statement is not ascertainable.

F. Contingent liabilities & Commitments

I. Contingent liabilities

a. Claims against the Company not acknowledged as debts

i . Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) Rs.5452.75 Lakhs (Previous Year - Rs.2459.40 Lakhs).

ii. Other claims - legal cases etc. Rs.5116.17 Lakhs (Previous Year - Rs.3196.17 Lakhs).

b. Guarantees

Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs.1912.50 Lakhs (Previous Year - Rs.1912.50 Lakhs).

c. Other money for which the company is contingently liable - Rs.Nil (Previous Year - Rs.Nil).

II. Commitments

a. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.2414.20 Lakhs (Previous Year - Rs.12934.25 Lakhs)

b. Uncalled liability on shares and other investments partly paid - Rs.Nil (Previous Year - Rs.Nil ).

c. Other commitments (specify nature) - Rs.Nil (Previous Year - Rs.Nil).

NOTES

1. The company does not expect any re-imbursement in respect of above contingent Liabilities.

2. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in I (a) above pending resolutions of the arbitration / appellate proceedings.

3. The cash flow in respect of matters referred to in I (b) above is generally expected to occur within 3 years.

G. Advances, Balances with government departments, Trade Payables and receivables, Other loans and advances and deposits classified under non current and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

H. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year''s presentation.


Mar 31, 2012

Basis of Preparation of Accounts

Assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company's operating cycle as twelve months for the purpose of current/ non current classification of assets and liabilities.

Rights and restrictions attached to equity shares

The company has only one class of share, i.e., equity shares having the face value of Rs.10 per share. Each holder of equity share is entitled to one vote per share. Dividend is paid in Indian Rupees. The dividend recomended by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting. During the year ended 31st March 2012, per share dividend paid as distribution to equity shareholders was Rs.10/- (Previous year Rs.10/-). In the event of liquidation of the Company, equity shareholders will be entitled to receive remaining assets of the Company after distribution of all external liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.

No shares of the Company is held by its subsidiaries. The Company does not have any holding company. No shares of the Company is reserved for issue under options and contracts/commitments for the sale of shares/disinvestment.

Micro, Small and Medium Enterprises

The information under MSMED Act, has been disclosed to the extent such vendors have been identified by the company based on the certificates produced by them. The details of amounts outstanding to them based on available information with the Company is as under :

B. Accounting Standard 19 (Leases)

i) Office premises taken on lease

The Company's significant leasing arrangements are in respect of operating leases relating to its leased office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No. 27.

C. Fixed Assets

i) Includes Cost of building at Kolkata valued at Rs. 26.82 lakhs (Previous Year Rs. 26.82 lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 lakhs at the end of 99 years from the date of taking possession viz., February'83 / April'84.

ii) Includes cost of building at Mumbai and Ranchi pending registration / khatha transfer valued at Rs. 33.00 lakhs (Previous Year Rs. 33.00 lakhs)

iii) The total amount towards Lease/Sale of facilities comprising mostly land, belonging to Bharat Gold Mines Limited (a Company under orders of winding up by BIFR) is yet to be ascertained. The Company has started utilising the facilities from May 2005 and a sum of Rs. 100 lakhs has been paid, which is included under Loans & Advances (Note No.14). As the nature of transaction is undecided, no amount has been charged to the profit and loss account till date. The company has incurred an expenditure towards creation of fixed assets for a gross value of Rs. 1395.95 lakhs (Previous Year Rs. 1209.01 lakhs) included under Note No.10 & Rs.15.31 lakhs (Previous Year Rs.31.90 lakhs) as capital work in progress included under Note No.11 totaling to Rs. 1411.26 lakhs (Previous Year Rs.1240.91 lakhs).

iv) No provision was considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

The Joint Venture Company BEML Midwest Ltd. has not prepared its financial statements due to litigation pending before Company Law Board as at 31st March, 2012. Hence, disclosure requirements under AS-27 with regard to the Company's share in assets, liabilities, income & expenditure and its share in the contingent liabilities could not be complied with.

a. The company has entered into a Consortium Agreement with Coal India Limited (CIL) and Damodar Valley Corporation (DVC) on 08-06-2010 for acquiring specified assets of M/s. Mining and Allied

Machinery Corporation Limited (under liquidation) through Hon'ble High Court auction. Accordingly, a company in the name of 'MAMC Industries Limited' was formed and incorporated on 25.08.2010. Terms of shareholders' agreement is under negotiation. Upon finalisation, the said new company will be converted into a Joint Venture Company by allotting shares in the proportion 48:26:26 to BEML, CIL and DVC respectively. In this connection the company has incurred a sum of Rs. 5980.86 lakhs (Previous year Rs. 5208.12 lakhs) (net of amount received from M/s. CIL & DVC as on 31st March, 2012). The other venturers have also incurred expenditure on behalf of the Joint Venture, the details of which is not known. The control in this company is intended to be temporary till the finalisation of Joint Venture agreement. Pending negotiation as above, this sum is included in advances recoverable in cash or kind or for value to be received, under Note no. 14.

The identification of the value of Jigs (presently shown under Other Non-Current Assets) to be disclosed under Fixed Assets as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India is pending. These special tools and jigs are amortised based on technical assessement in terms of Accounting Policy No: 17(i), and such amortisation charge is not less than depreciation otherwise chargeable under plant and machinery. Hence the present treatment by the company results in more appropriate recognition and presentation in the financial statement. The value of special tools and jigs is not material.

a. Negative work orders amounting to Rs. 817.13 lakhs (Previous Year Rs. 2025.88 Lakhs) were reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on cost of production on this account for the financial year 2011-12.

b. Raw materials & Components includes materials lying with sub contractors Rs. 3463.00 lakhs (Previous Year Rs. 2033.40 lakhs) and with customers for trials etc Rs. Nil Lakhs (Previous Year Rs. 33.62 lakhs). Of these, confirmation from the parties is awaited for Rs. 1798.61 lakhs (Previous Year Rs.1137.32 lakhs).

c. The closing stock of work-in-progress and finished goods are stated at lower of standard cost, which approximates to actuals, and net realisable value. The difference between the actual cost of production and the standard cost is not material.

d. Variances arising on account of difference between standard cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the cost of production in order not to carry forward the period variances to subsequent financial period.

e. Provision towards obsolescence is made as per provisioning norms consistently followed and is based on ageing of inventory.

f. The inventory does not include the value of materials received free of cost from customers and held in trust for utilisation in manufacture of their products.

i. Trade Receivables include Rs. 7618.19 lakhs (Previous Year Rs. 6631.38 lakhs) on account of additional provisional price accounted based on recommendation by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Railway Board.

ii. Trade Receivables includes an amount of Rs. 1480.60 lakhs (Previous Year Rs. 1480.60 lakhs) being the differential amount claimed as reimbursement and the amount allowed by Railway Board on the wheel sets procured as per their terms of contract, in respect of contracts executed during the period from 2007-08 to 2009-10. Normally the Wheel Sets were supplied by the Railway Board as a free supply item till then and the Railway Board changed supply policy due to severe capacity constraints. The disallowed amount relates to freight, sales tax and part of cost incurred. The Company has taken up this matter with the Railway Board to appoint an arbitrator as per contract. Railway Board sought information from ICF to resolve the issue.

iii. Trade Receivables include Rs. 14855.74 lakhs (Previous Year Rs. 13563.53 lakhs) in respect of escalation claims as per the contracts, is under consideration by Ministry of Defence (MoD).

iv. The Company is having factoring arrangement with banks. Trade receivables amounting Rs. 20412.91 lakhs (Previous year Rs. 13370.43 lakhs) has been sold to the banks. This amount has been reduced from trade receivables 'others' as on 31st March, 2012. [The factoring cost incurred is Rs. 1506.07 lakhs. (Previous year Rs. 180.75 lakhs)].

v. Trade Receivables (including a sum of Rs. 37219.00 lakhs) (Previous Year Rs. 35570.24 lakhs) outstanding for more than one year which in the opinion of management is realisable.

vi. Trade Receivables is net of unbilled receivables of Rs. 21432.71 lakhs (Previous year Rs. 12036.46 lakhs) disclosed under Note No. 20 - Other Current Assets.

vii. Trade receivables include Rs. 925.87 lakhs towards interest rate difference on advance amount received from MoD. This amount pertains to interest rate difference between deposit rate and interest recovered at the rate of 9.50% by MoD during FY 2006-07, 2007-08 and 2009-10 from various bills. The matter has been taken up with MoD and the amount in the opinion of the management is realisable.

a. On account of the trading business carried out during the year, out of the amount paid towards procurement and other recoverables, a sum of Rs. 3358.40 lakhs is outstanding as the intended export was held up on account of various reasons including change in policy by Government of Goa and the need to obtain fresh licenses. This amount is included in "Other Loans and Advances" above and will be recovered / adjusted during the Financial Year 2012-13.

i. Revenue from operations include Rs. 7258.70 lakhs (Previous Year Rs. 2814.60 lakhs) recognised as additional provisional price in terms of accounting policy No. 7(iv) based on the price recommended for Rail coaches by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Rail Board. The difference, if any, is accounted in the year of finalisation of price.

ii. Company has recognised sale from joint venture operation in respect of sale of metro cars only to the extent of its share in the revenue as required under Accounting Standard 27 ' Financial reporting of interest in joint ventures', though as per accounting policy 7(ix) requires recognising / presenting such revenue at full value and deducting there from cost of items supplied by other members of the consortium.

NOTE 21A :

The company has entered into a consortium agreement with three international partners for the supply of metro coaches to Bangalore Metro Rail Corporation Ltd,(BMRCL). As per the agreement, the company is responsible to raise the bills at the full value of the contract including consortium scope on BMRCL and terminal excise duty and VAT thereon is discharged by the company. Accordingly the total amount invoiced including the value of consortium scope of supply is as under:

A. Accounting Standard 15 (Employee Benefits)

a. Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

b. Post Retirement Contributory Medical Scheme

The company has a post retirement contributory medical scheme where an insurance policy is taken by the company for providing mediclaim benefits to the superannuated officers / workers who opt for the scheme. Company pays 2/3rd insurance premium and the balance is paid by the superannuated officers / workers. The scheme was actuarially valued during the year and liability has been provided for.

c. Gratuity

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

a. Accounting Standard 11 (Foreign Exchange Fluctuations)

Effect of Foreign Currency Fluctuation included in the Miscellaneous Expenses for the year is Rs.1345.61 lakhs. (Previous Year Rs. 295.22 lakhs included in Miscellaneous income).

B. In terms of the Notification No.S.O. 301 (E) dt.08.02.2011 of the Ministry of Corporate Affairs, the Board at its meeting held on 18.05.2012 had given consent with regard to non-disclosure of quantitative information relating to purchases, sales, consumption of raw materials, gross income from services rendered, work-in-progress etc, to be shown under Broad heads, as required under paragraphs 5(ii) (d); 5 (iii); and 5 (viii) (a) to (e) except (d) of Part-II of Schedule VI of the Companies Act, 1956, in the Annual accounts for the Financial Year 2011-12 and onwards.

D. Commitments & Contingent Liabilities

a. Commitments, Guarantees etc. (Amount Rs. Lakhs)

Current Previous Particulars Year Year

Estimated amount of contracts remaining to be executed on capital account and not provided for 12,934.25 5,233.10

b. Counter guarantees given to banks for guarantees issued on behalf of the company is Rs.108249.25 lakhs. (Previous Year Rs. 65465.44 lakhs)

c. Claims against the Company not acknowledged as debts (net of provisions, to the extent ascertainable):

i Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) Rs. 2459.40 lakhs (Previous Year Rs. 6592.06 lakhs).

ii Other claims- legal cases etc. Rs. 3196.17 lakhs (Previous Year Rs. 3433.01 lakhs).

d. Corporate Guarantee issued to bankers on behalf of M/s. BEML Midwest Ltd (Joint Venture company) Rs. 1912.50 lakhs (Previous Year Rs. 1912.50 lakhs).

e. Corporate Guarantees issued to bankers on behalf of M/s. Vignyan Industries Limited (subsidiary company) Rs. 750.00 lakhs ( Previous Year Rs. 750.00 lakhs).

NOTES

1. The Company does not expect any re-imbursement in respect of above Contingent Liabilities.

2. The cash flow in respect of matters referred to in (b), (d) and (e) above is generally expected to occur within 3 years.

3. It is not practicable to estimate the timing of cash flows, if any, in respect of matters referred in (c) above pending resolutions of the arbitration / appellate proceedings.

E. Pending completion of legal formalities as per foreign laws, in respect of foreign offices / companies, the expenditure incurred thereof has been recorded in the company's books of accounts.

Revenue under Railway customer does not include Rs.72779 lakhs (Previous year Rs.82091 lakhs) biiled on behalf of the consortium by the company.

b. Segmental Capital Employed:

Fixed assets used in Company's business or liabilities incurred have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous

c. Secondary Reporting

Since, more than 90% of total sales is within India, geographical reporting is considered not applicable.

G. Advances, balances with government departments, trade payables and receivables, other loans and advances and deposits classified under non curent and current are subject to confirmation. There are certain old balances pending review / adjustment. The management does not expect any significant impact upon such reconciliation.

H. The Accounts for the year approved by the Board of Directors and certified by the Statutory Auditors on 31.05.2012 were revised in the light of the C&AG's observations under section 619(4) of the Companies Act, 1956 by adding Note No. 19.a. There is no impact on the financial figures.

I. Figures of previous year have been regrouped / reclassified / recast wherever necessary to conform to current year's presentation.


Mar 31, 2011

A.l. BASIS OF ACCOUNTING

The Financial statements are prepared and presented under the historical cost convention, in accordance with Generally Accepted Accounting Principles in India (GAAP), on accrual basis of accounting except as stated herein. GAAP comprises of mandatory Accounting Standards (AS) covered by the Companies (Accounting Standards) Rules 2006 issued by the Central Government, to the extent applicable, the provisions of Companies Act, 1956 and these have been consistently applied.

A.2. USE OF ESTIMATES

The preparation of the Financial Statements in conformity with GAAP, requires that the Management to make estimates and assumptions that affect the reported amount of Assets and Liabilities, disclosure of contingent liability as at the date of financial statements and the reported amount of revenue and expenses during the reporting period. Although such estimates are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates and such differences are recognised in the period in which the results are ascertained.

B. DISCLOSURE UNDER MANDATORY ACCOUNTING STANDARDS

1. Accounting Standard 5 (Net Profit or Loss for the period. Prior period items and Changes in Accounting Policies)

(a) Company has commenced recognizing Expenditure on Software which is not an integral part of hardware, as Intangible Asset as against the previous practice of charging such expenditure to revenue. Due to the change in the Accounting Policy, the profit for the year is increased by Rs. 481.32 lakhs.

3. Accounting Standard 11 (Foreign Exchange Fluctuations)

Effect of Foreign Currency Fluctuation included in the Profit & Loss account for the year is Rs. 295.22 lakhs (Cr) [Previous Year Rs. 1529.77 lakhs (Cr)]

4. Accounting Standard 15 (Employee Benefits)

(a) Leave Salary

This is an unfunded defined benefit plan categorized under other long term employee benefits in terms of Revised Accounting Standard 15. The defined benefit obligation for compensated absence has been actuarially valued and liability provided accordingly.

(b) Gratuity

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method.

5. Accounting Standard 16 (Borrowing Cost)

The amount of interest capitalized during the year is Rs.95.66 Lakhs ( Previous Year Rs. NIL). Out of this a sum of Rs. 6.56 Lakhs relates to previous years.

(b) Segmental Capital Employed:

Fixed assets used in Company's business or liabilities have not been identified to any of the reportable segments, as the fixed assets are used interchangeably between segments. The Company believes that it is currently not practicable to provide segment disclosures relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

(c) Secondary Reporting:

Since, more than 90% of total sales is within India, geographical reporting is considered not applicable.

8. Accounting Standard 19 (Leases)

i) Office premises taken on lease

The Company's significant leasing arrangements are in respect of operating leases in respect of some of its office premises. These lease arrangements, which are cancellable, are generally renewable by mutual consent. The aggregate lease rentals paid are disclosed under rent in Schedule 20.

B. Intangible Assets:

Intangible Assets included in Schedule 4 (b) like Expenditure on Software & Technical Knowhow Fee are amortised over a period not exceeding ten years based on technical assessment.

12. Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures)

The Joint Venture Company, BEML Midwest Ltd., has not prepared its Financial Statements as on 31st March, 2011. Hence, disclosure requirements under AS-27 could not be complied with.

13. Accounting Standard 28 (Impairment of assets)

No provision was considered necessary for impairment of assets as the realizable value of assets technically assessed is more than the carrying cost of these assets.

(b) Counter guarantees given to banks for guarantees issued on behalf of the Company is Rs. 65465.44 lakhs. (Previous Year Rs. 53780.70 lakhs)

(c) Claims against the Company not acknowledged as debts (net of provisions, to the extent ascertainable):

i. Disputed statutory demands (Customs Duty, Central Excise, Service Tax, Sales Tax/VAT) Rs. 6592.06 lakhs (Previous Year Rs. 7252.05 lakhs)

ii. Other claims- legal cases etc. Rs. 3433.01 lakhs (Previous Year Rs. 2237.06 lakhs)

(d) Corporate Guarantee issued to bankers on behalf of BEML Midwest Ltd (Joint Venture Company) Rs. 1912.50 lakhs (Previous Year Rs. 1912.50 lakhs)

(e) Corporate Guarantee issued to bankers on behalf of Vignyan Industries Limited (Subsidiary Company) Rs. 750.00 lakhs (Previous Year Rs .750.00 lakhs).

(f) Contingent liability on availment of factoring receivables facility - Rs. 13370.43 lakhs (Previous Year Rs. NIL)

C. DISCLOSURE UNDER STATUTE

2. The information under MSMED Act, has been disclosed only to the extent such vendors have been identified by the Company based on the certificates produced by them.

3. Depreciation rate adopted by the Company in respect of following assets is significantly higher than the statutory minimum rates prescribed under the Companies Act, 1956.

4. The Company has been exempted by the Ministry of Corporate Affairs vide letter dt.28.01.2011 from disclosure requirements in compliance of paras 3(i)(a), 3(h) (a) to (d), 4-C and 4-D of Part II, Schedule VI to the Companies Act, 1956 relating to sales in respect of each class of goods, quantitative details licensed capacity, installed capacity, actual production, value of imports on CIF basis etc.

D. GENERAL

1. SALES

(i) Sales include revenue recognized in terms of Accounting Policy No.5(i) representing Sales covered by Goods Carrier Notes amounting to Rs. NIL lakhs (Previous Year. Rs. 12260.92 lakhs) and Custodian Certificate cases, as per customers' request, amounting to Rs. 6790.78 lakhs (Previous Year Rs. 17560.76 lakhs) for which necessary excise duty has been provided, where the equipments were lying in the Company premises as at 31 "'March, 2011.

(ii) Sales include revenue recognized in terms of Accounting Policy No.5(i) amounting to Rs. NIL lakhs (Previous Year Rs. 8660.16 lakhs) representing sales on FOR Destination basis in respect of which the goods have been handed over to transporter on or before 31st March, 2011 and are in transit as on 31stMarch 2011.

(iii) Sales include Rs. 82090.41 lakhs (Previous Year Rs. 58302.41 lakhs) representing revenue recognized under Accounting Policy No 5(ix) in respect of Metro coaches supplied to Metro customers in terms of Supplementary Consortium Agreement entered into between the Members of the Consortium authorizing the Company to make sale of whole of the scope under the main contract awarded to the Consortium and on which the terminal taxes and duties are being discharged by the Company under the applicable laws.

(iv) Sales include Rs. 2814.60 lakhs (Previous Year Rs. 3534.66 lakhs) recognised as additional provisional price in terms of Accounting Policy No. 5(iv) based on the price recommended for Rail coaches by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Railway Board. The adjustment, if any, on flnalisation of price will be accounted in the year of finalisation.

(v) As per the terms of the sale order from Ministry of Defence for specialized vehicles, date of offer for inspection of the vehicles to Inspecting Authority is to be treated as date of delivery subject to successful acceptance. The inspection is carried out by Inspecting Authority, essentially road and endurance tests. Invariably, there is a considerable time lag between the offer for and the actual inspection due to various reasons. Company is supplying vehicles for more than two decades and there is no rejection of any vehicle till now. More over this being an ex-works contract, on successful inspection, the date of delivery relates back to the date of offer for inspection. Since the company has manufactured the vehicles as per the specification of the customer and the delay in formal inspection is beyond the control of the company, the Company is recognizing sales when accepted for inspection by the Inspecting Authority. The value of sales recognized during the year in respect of these vehicles, based on the offer and acceptance for inspection, pending formal acceptance, is Rs. 24489.00 lakhs (Previous Year Rs. 18492.00 lakhs)

(vi) Company supplies certain intermediary products to a Defence Research Establishment for the manufacture of sensitive / critical defence systems. These products are sent to a third party for the next stage of production on behalf of this establishment after the provisional clearance from the Inspecting Authority. The final inspection note from the Inspecting Authority will be issued only for the final system assembly, after various sub-assemblies from various establishments, engaged by this Defence Research Establishment are integrated, over which company has no control. Company is recognizing sale of these intermediary products based on the provisional clearance, as the delay in issuing the final certificate is beyond the control of the Company in view of the special complexities involved in the manufacture of the sensitive systems. The value of such sales recognized, pending final inspection certificate, during the year is Rs. 4928.00 lakhs (Previous Year Rs. Nil).

2. INVENTORIES

(a) Negative work orders amounting to Rs. 2025.88 lakhs (Previous Year Rs. 3488.37 lakhs) were reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on Cost of Production for the Financial Year 2010-11.

(b) Includes materials lying with sub contractors Rs. 2033.40 lakhs (Previous Year Rs. 2469.95 lakhs) and with customers for trials etc Rs. 33.62 Lakhs (Previous Year Rs. Nil). Of these, confirmation from the parties is awaited for Rs. 1137.32 lakhs (Previous Year Rs. 1638.90 lakhs).

(c) The identification of the value of Jigs (presently shown under Other Current Assets) to be disclosed under Fixed Assets as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India is pending/not feasible/not possible/not practicable. However there will be no impact on the Profit and Loss Account as the company is amortizing the expenditure incurred (which would be equivalent to the depreciation to be charged) in terms ofAccounting Policy No: 14(1).

(d) The Company had accounted a receipt of Rs. 327.77 lakhs towards manufacture of Radio Control Dozer and Disaster management Equipment under Project funded by Technology Information and Forecasting and Assessment Control (TIFAC) which was kept under liabilities and the equipment was lying under FGI (after deration) at Rs. 78.66 lakhs till last year. Since the stipulated events as per agreement have taken place, the net amount of Rs. 249.11 lakhs has been treated as income during the year.

(e) The closing stock of work-in-progress and finished goods are stated at standard cost which is nearly to actuals and the difference, if any, is not material.

(f) Variances arising on account of difference between Standard Cost and the actual cost, on account of change in the nature of inputs from bought-out to internally manufactured or vice versa, timing difference between standard cost and actual occurrence during the financial period and fluctuations in the material prices, is adjusted in the Cost of Production in order not to carry forward the period variances to subsequent financial period.

(g) Provision towards Obsolescence is made as per provisioning norms consistently followed and is based on ageing of inventory.

(h) The Company has received materials free of cost with no value indicated and is held in trust for utilisation in manufacture of their products only.

3. SUNDRY DEBTORS

(i) Debtors include Rs. 6631.38 lakhs (Previous Year Rs. 3676.05 lakhs) including VAT on account of additional provisional price accounted based on recommendation by the Chief Advisor (Cost), Ministry of Finance. The recommended price is under consideration by the Railway Board.

(ii) Debtors includes an amount of Rs. 1480.60 lakhs (Previous Year Rs. 1376.41 lakhs) being the differential amount claimed as reimbursement and the amount allowed by Railway Board on the wheel sets procured as per their terms of contract, in respect of contracts executed during the period from 2007-08 to 2009-10. Normally the Wheel Sets were supplied by the Railway Board as a free supply item till then and the change in policy by Railway Board was due to severe capacity constraint. The disallowed amount relates to freight, sales tax and part of cost incurred. The Company has taken up this matter with the Appropriate Authority. The Company is of the view that, these claims are legally enforceable as they were made as per the terms of contract and hence confident of realizing the amount through appropriate representation before higher Authorities.

(iii) Debtors include reimbursement claim of Rs. 82.84 lakhs (Previous Year Rs. NIL) from Railway Board towards the Excise Duty and VAT thereof Rs. 4.14 lakhs on the Rail coaches manufactured, consequent to the amendmentin the Finance Act, 2011, imposing Excise Duty on rail coach for the first time w.e.f. 1st March, 2011. The claim is under consideration by the Railway Board.

(iv) Debtors include Rs. 13563.53 lakhs (Previous Year Rs. 9555.27 lakhs) in respect of certain escalation claim as per the contract which is under consideration by Ministry of Defence.

(v) During the year the Company entered into a factoring arrangement with banks and sundry debtors amounting to Rs. 13370.43 lakhs (Previous year Rs. Nil) has been sold to the banks. This amount has been reduced from Sundry Debtors as on 31st March, 2011. The factoring cost incurred for the same is Rs. 180.75 lakhs. (Previous year Rs. Nil).

4 FIXED ASSETS:

i) Includes expenditure on development of land at KGF (1849 acres and 5 guntas) received free of cost from Government of Karnataka.

ii) Includes Cost of building at Kolkata valued at Rs. 26.82 lakhs (Previous Year Rs. 26.82 lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 lakhs at the end of 99 years from the date of taking possession viz., February'83 / April'84.

iii) Includes cost of building at Mumbai and Ranchi pending registration / khatha transfer valued at Rs. 33.00 lakhs (Previous Year Rs. 33.00 lakhs).

iv) Includes leased land measuring 374.59 acres taken from Kerala Industrial Infrastructure Development Corporation on a lease premium of Rs. 2547 lakhs for 99 years lease period with effect from 1.07.2009.

v) Reconditioning cost included in Fixed Assets Rs. 99.55 lakhs (Previous Year Rs. Nil)

5. The total amount towards Lease/Sale of facilities comprising mostly land, belonging to Bharat Gold Mines Limited (a Company under orders of winding up by BIFR)isyettobe ascertained. The Company has started utilising the facilities from May 2005 and a sum ofRs. 100 lakhs has been paid, which is included under Loans & Advances (Schedule 11). As the nature of transaction is undecided, no amount has been charged to the profit and loss account till date. The Company has incurred an expenditure towards creation of fixed Assets for a gross value of Rs. 1209.01 lakhs (Previous Year Rs. 1133.65 lakhs) included under Schedule 4 &Rs. 31.90 lakhs (Previous Year Rs. NIL) as capital work in progress included under Schedule 5 totalling to Rs. 1240.91 lakhs (Previous Year Rs. 1133.65 lakhs).

7. i) Sundry Debtors (including a sum of Rs. 35570.24 lakhs) (Previous Year Rs. 31539.00 lakhs) outstanding for more than one year which in the opinion of management is realisable, advances, balances with government departments, sundry creditors and deposits are subject to confirmation. There are certain old balances pending review/adjustment. The Management does not expect any significant impact upon such reconciliation.

ii) Balance available in Provision for Contractual Obligations amounting to Rs. 10662.47 lakhs outstanding as on 01.04.2010 pertaining to certain Defence Order has been withdrawn as no longer required as the first set of the equipment has been successfully accepted by the customer, and no further liability is anticipated on this account.

8. INTER CORPORATE LOANS:

As on 31s' March 2011, the Company has received Rs. 14166.00 lakhs from M/s. Coal India Ltd, against Company's Corporate guarantee, as a partial funding for a back to back financing of the term loan of Rs. 7500.00 lakhs given by the Company to M/s. JK Industries Ltd, and Rs. 7500.00 Lakhs to M/s. Apollo Tyres Ltd, (which is to be secured against first charge on the assets to be created by way of hypothecation in favour of the Company). These back to back loans are for setting up of additional manufacturing facility for OTR tyres in order to ensure uninterrupted supply of such tyres for equipment to be supplied by the Company to M/s. Coal India Ltd. The balance loans and interest outstanding as on 31st March, 2011 Rs. 14090.44 lakhs (Previous Year Rs. 15549.86 lakhs) are disclosed under Unsecured Loans - Schedule 3A and balance of loans given and interest amounting to Rs. 14779.56 lakhs (Previous Year Rs. 16250.41 lakhs) are included under Loans and Advances Schedule 11.

10. Pending completion of legal formalities as per foreign laws, in respect of foreign offices/ companies, the expenditure incurred thereof has been recorded in the Company's books of accounts.

11. Loans and Advances includes Rs. 1067 lakhs (Previous Year Rs. 1067 lakhs) incurred by the Company during 2005-06 on behalf of the R&D Centre of Excellence Society, a Society formed under the Karnataka Societies Registration Act, 1960, on reimbursement basis, for acquiring certain Hardware & Software. This amount will be returned by the Centre as and when the Grant is received from the Government of India, which is pending finalisation of the constitution of various members of the Society.

12. The Company has entered into a Consortium Agreement with Coal India Limited (CIL) and Damodar Valley Corporation (DVC) on 08.06.2010 for acquiring specified assets of M/s Mining and Allied Machinery Corporation Limited (under liquidation) through Hon'ble High Court auction. Accordingly, a Company in the name of 'MAMC Industries Limited' was formed and incorporated on 25.08.2010. Terms of Shareholders' Agreement is negotiated and finalised and the same would be executed shortly. Upon such execution, the said new Company will be converted into a Joint Venture Company by allotting shares in the proportion 48:26:26 to BEML, CIL and DVC respectively. In this connection the Company has incurred a sum of Rs. 5208.12 lakhs (net of amount received from M/s CIL & M/s DVC as on 31st March, 2011). Pending allotment of shares as above, this sum is included in advances recoverable in cash or kind or for value to be received, under Schedule 11.

13. The Company has invested in 54,22,500 equity shares at Rs. 10/- each in M/s BEML Midwest Limited which was incorporated on 18.04.2007 at Hyderabad. The investment value comes to Rs. 542 Lakhs and this represents 45% share of the JV.

However, due to certain unauthorised transactions by the Directors appointed by the other JV Partner, Midwest Granite Private Limited (MGPL), and the oppression and mis-management by the nominees of MGPL, the Company has filed a petition under section 397 & 398 of the Companies Act, 1956 seeking suitable relief in the matter, which is pending before Honourable Company Law Board.

Further, the said Directors, against whom the above oppression and mis-management charges have been levelled, have substantial net worth. The Company is confident that the un-authorised transfer of funds made can be recovered and other issues resolved leading to further operations and hence no diminution in the value of this investment other than temporary, is anticipated and accordingly no provision has been made in the accounts for decline in the value other than temporary.

14. During the year, Company settled wage revision for workmen. This has impacted the expenses under the head of Employee Remuneration and Benefits by Rs. 12063 lakhs (net of provision), which include Rs. 5580 lakhs for the current year and Rs. 6483 lakhs (net of provision) for the earlier years. Employee Remuneration and Benefits also include Rs. 414 lakhs towards provision for officers' pension contribution.

15. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current year's presentation.


Mar 31, 2010

1. Sales

(i) Sales include revenue recognised in terms of Accounting Policy No.4(i) representing Sales covered by Goods Carrier Notes amounting to Rs 12260.92 lakhs (Pr. Yr. Rs. 11985.80 lakhs) and Custodian Certificate cases amounting to Rs 17560.76 lakhs (Pr. Yr. Rs 5427.46 lakhs) for which necessary excise duty has been provided, where the equipments were lying in the Company premises as at 31/03/2010.

(ii) Sales include revenue recognized in terms of Accounting Policy No.4(i) amounting to Rs. 8660.16 lakhs representing sales on FOR Destination basis in respect of which the goods have been handed over to transporter on or before 31/03/2010 and are in transit as on 31/03/2010.

(iii) Sales include Rs. NIL lakhs (Pr. Yr. Rs. 3408.50 lakhs) revenue recognised in terms of Significant Accounting Policy 4(i) representing Sale of ACEMU Coaches stabled pending fitment of Wheel sets to be supplied free of cost by the customer.

(iv) Sales include Rs. 58302.41 lakhs (Pr. Yr. 8256.90 lakhs) representing revenue recognized under Accounting Policy No 4(ix) in respect of Metro coaches supplied to customer in terms of Supplementary Consortium Agreement dated 6.6.2008 entered in to between the Members of the Consortium authorizing the Company to make sale of whole of the scope under the main contract awarded to the Consortium and on which the terminal taxes and duties are being discharged by the Company under the applicable laws.

2. Inventories

(a) Negative work orders amounting to Rs. 3488.37 lakhs (Pr. Yr. Rs. 2015.36 Lakhs) are reduced to arrive at the closing value of Work in progress and the company does not expect to have any material impact on Cost of production for the F. Y.2009-10.

(b) Includes materials lying with sub contractors Rs. 2469.95 lakhs (Pr. Yr. Rs. 2701.54 lakhs) and with customers for trials etc., Rs. NIL lakhs (Pr. Yr. Rs. Nil). Of these, confirmation from the parties is awaited for Rs 1638.90 lakhs. (Pr.Yr. Rs.768.66 Lakhs).

(c) The identification of the value of Jigs (presently shown under Other Current Assets) to be disclosed under Fixed Assets as per the opinion of the Expert Advisory Committee of Institute of Chartered Accountants of India is pending/not feasible/not possible/ not practicable. However there will be no impact on the Profit and Loss Account as the company is amortizing the expenditure incurred (which would be equivalent to the depreciation to be charged) in terms of Accounting Policy No. 13(i).

(d) Finished goods includes equipment worth Rs. 78.66 lakhs (Pr. Yr. Rs.78.66 lakhs) developed for the development of Radio Control Dozer and Disaster Management Equipment under Project funded by Technology Information Forecasting and Assessment Council (TIFAC) (a Government body), and presently held for demonstration. The funds received from TIFAC

shown under liabilities are to be refunded in five equal installments in the event of commercial production and in case of sale of technology, 50% of the sale value has to be refunded to TIFAC. None of the events have taken place as on the Balance Sheet date.

(e) The company has received materials free of cost with no value indicated and is held in trust for utilisation in manufacture of their products only

3. Fixed Assets:

i) Includes expenditure on development of land at KGF (1849 acres and 5 guntas) received free of cost from Government of Karnataka

ii) Includes Cost of building valued at Rs. 26.82 lakhs (Pr. Yr. Rs. 26.82 lakhs) on lease with an option to buy for a nominal sum of Rs. 0.15 lakhs at the end of 99 years from the date of taking possession viz., February83 /April84.

iii) Includes cost of building pending registration / khatha transfer valued at Rs. 33.00 lakhs (Pr.Yr.Rs. 33.00 lakhs)

4. The total amount towards Lease / Sale of facilities, comprising mostly land, belonging to Bharat Gold Mines Limited (a company under orders of winding up by BIFR) is yet to be ascertained. The company has started utilizing the facilities from May 2005 and a sum of Rs.100 lakhs has been paid, which is included under capital work-in-progress (sch.6). As the nature of transaction is undecided no amount has been charged to the Profit and Loss Account till date. This amount is not likely to be material. The Company has incurred an expenditure of Rs. 1133.65 lakhs (Pr.Yr. 786.87 lakhs) (Gross block) for civil works on the said land which is included in Schedule 6.

The unspent amount of Rs. 9642.09 Lakhs (PY Rs. 16298.56 Lakhs)is deposited in short term fixed deposits with Scheduled Banks and is included in Schedule No: 10 Cash and Bank Balances.

(*) Reappropriated out of Funds earmarked for VRS in FPO,as approved by 45,h Annual General Meeting held on 25.09.2009.

5. (i) Sundry Debtors (including a sum of Rs.31539 lakhs outstanding for more than one year which in the opinion of management is realisable), advances, sundry creditors and deposits are subject to confirmation. There are certain old balances pending review/ adjustment. The Management does not expect any significant impact upon such reconciliation.

(ii) Consequent upon receipt of Bulk Production clearance from the customer, no further provision has been made during the current year. Provision amounting to Rs.2026.41 lakhs has been withdrawn as no longer required out of the amount of contractual obligations provided in the Accounts amounting to Rs. 12688.88 lakhs on the basis of supplies made under the project since no further liability is anticipated on those supplies.

6. Inter Corporate Loans:

As on 31sMarch 2010, the company has received Rs.14166.00 lakhs from M/S. Coal India Ltd, against Companys Corporate guarantee, as a partial funding for a back to back financing of the term loan of Rs 7500.00 lakhs given by the company to M/S. JK Industries Ltd, and Rs. 7500.00 Lakhs to M/S Apollo Tyres Ltd, (which is secured against first charge on the assets to be created by way of hypothecation in favour of the company). These back to back loans are for setting up of additional manufacturing facility for OTR tyres in order to ensure uninterrupted supply of such tyres for equipment to be supplied by the company to Coal India Ltd,. The loans received are disclosed under Unsecured Loans - Schedule 3 A and loans are included under Loans and Advances Schedule 12.

7. Pending completion of legal formalities as per foreign laws, in respect of foreign offices/ companies, the expenditure incurred thereof has been recorded in the companys books of accounts.

8. Figures of previous year have been regrouped/ reclassified/ recast wherever necessary to conform to current years presentation.

 
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