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Notes to Accounts of Bhagawati Gas Ltd.

Mar 31, 2014

(Figures in Rs.) 1. Contingent liabilities not provided for:

For the For the Year Year Ended Ended Particulars March 31, March 2014 31,2013

Counter 10,000 10,000

Guarantee given to bankers for guarantees issued by the banker (Net of margins) Security 23,083,887 23,083,887

provided against amount withdrawn from the Hon''ble High Court.(refer note 26)

2. The company had, in an earlier year, won an arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from Hindustan Copper Limited (HCL) along with interest. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Hon''ble High Court have admitted HCL''s appeal and granted interim stay and directed HCL to deposit the award amount of Rs. 23,083,887. The Honorable Supreme Court on an appeal of HCL had modified the award and the company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court. The company has withdrawn the money by furnishing the said Security. The case is pending in the High Court of Rajasthan.

3. An arbitration award in respect of an amount aggregating to Rs. 68,820,333 with interest thereon, claimed from HCL is passed by the arbitral tribunal in favour of the company. Hindustan Copper Limited (HCL) has preferred an appeal under Section 34 of The Arbitration and Conciliation Act, 1996 against the award in the court of the District Judge, Jhunjhunu. The case is being heard by the court as per procedure.

4. Trade Receivable aggregating to Rs. 57,731,233 and other Receivable Rs. 81,920,827 are overdue for recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

5. Advances of Rs. 7,218,468 (7,323,468) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

6. The company has given interest free loan aggregating to Rs. 17,964,928 as at March 31, 2014 to a borrower company. The borrower company had given a proposal to the Company to convert its borrowings into Equity. The company is still in the process of finalization/ acceptance of the proposal.

7. During the year, Long term gas supply agreement with the customer has expired. The company is negotiating to extend the same as the customer was not able to purchase minimum guaranteed quantity as per the agreement and their plant remained closed. The restoration of operation of the company dependent upon the extension of the supply agreement.

8. There are no dues of micro, small and medium enterprises. The information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis to information available with the company.

9. Related Party Disclosure: List of related parties

Relationship Name of the related party

Parties under common control Bhagawati International Limited

Bhagawati Combat Systems Limited Lavino Portfolios Private Limited Kamakshi Bricon Private Limited Flow Tech Hotels Private Limited

Key management personnel r. Rakesh S. Bhardwaj (Managing Director)

and their relatives

Mrs. Shachi Bhardwaj (Relative of Managing

Director)

Mr. Vivek Sharma (Whole Time Director)

10. Balance due to/ from various parties are subject to confirmations/ reconciliations thereof. Management does not consider any adjustment on completion of reconciliation/ confirmation.

11. Employee Benefits

The following table sets out the status of the gratuity plan and leave encashment and the amounts recognized in the Company''s financial statements as at March 31, 2014.

12. Figures of previous years have been regrouped or rearranged wherever found necessary. As per our report of even date attached.


Mar 31, 2010

1. Contingent liabilities not provided for: (Amount in Rs.)



Particulars Year ended Year ended March 31, 2010 March 31, 2009

Counter Guarantee given to bankers for guarantees 500,000 10,000 issued by the banker (Net of margins)

2. Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances Rs. 0.00 (previous year Rs. 0.00)].

3. The company has not received the required information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence the information could not be compiled and disclosed.

4. The company had won an arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from Hindustan Copper Limited (HCL) along with interest. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Honble High Court have admitted HCLs appeal and granted interim stay and directed HCL to deposit the award amount of Rs. 2,3083,887. The Honorable Supreme Court on an appeal of HCL had modified the award and the company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court. The company has withdrawn the money by furnishing the said Security. The case is pending in the High Court of Rajasthan.

5. An arbitration award in respect of an amount aggregating to Rs. 68,820,333 with interest thereon, claimed from HCL is passed by the arbitral tribunal in favour of the company. Hindustan Copper Limited (HCL) has preferred an appeal under Section 34 of The Arbitration and Conciliaton Act, 1996 against the award in the court of the District Judge, Jhunjhunu. The case is being heard by the court as per procedure.

6. Advances of Rs. 23,911,431 (Rs. 22,003,031), Security Deposit of Rs. 300,000 (? 300,000) and Sundry Debtors of Rs. 9,978,855 are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

7. The company has entered in to an agreement with Sunflag Iron & Steel Company Limited (Sunflag) to sell its Air Separation Plant (120 TPD) to be installed at Sunflags Plant location at Bhandara Road (Warhi), Maharashtra. During the year, major part of the said plant has been delivered by the company. However, the title of the plant will pass to the Sunflag on completion of delivery. Pending completion of delivery and transfer of title, the cost of plant having the aggregate net written down value of Rs. 93,482,377 (Gross value Rs. 393,213,932 and accumulated depreciation of Rs. 299,731,555) related to such plant.

8. Sitting fee paid to the Directors is disclosed under Schedule 14 - Administrative & Other Expenses.

9. In accordance with Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the ICAI, the company has accounted for deferred taxes during the year.

10. Balance due to /from various parties are subject to confirmations/ reconciliations thereof. Management does not consider any adjustment on completion of reconciliation /confirmation.

11. Employee Benefits

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity and leave encashment were carried out at March 31, 2010 by an actuary. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

12. Figures of previous year have been regrouped or rearranged wherever found necessary.

13. Schedules 1 to 17 forms an integral part of the accounts and have duly been authenticated.


Mar 31, 2009

1. Contingent liabilities not provided for:

Particulars Year ended Year ended

March 31, 2009 March 31, 2008 Rupees Rupees

Counter Guarantee given to bankers for guarantees issued by the banker (Net of margins) 10,000 26,66,000

2. Estimated amount of contracts remaining to be executed on capital account and not provided for [net of advances of Rs. Nil (previous year Rs. Nil)].

3. The company has not received the required information from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence the information could not be complied and disclosed.

4. The Company had made claims aggregating to Rs. 96,930,680 on Hindustan Copper Limited (HCL) in earlier years towards non-compliance of agreement including Minimum Off-take Guarantee. HCL had also preferred claim for Rs. 61,800,689 on the Company for non-supply. Both the parties have disputed the claims of each other and referred the matter to arbitrator for settlement. Subsequent to the year end, the case has been decided in favor of the Company and its claim of Rs. 68,820,333 and interest thereon aggregating to Rs. 39,159,711 and the claim of HCL was not allowed. The Award is under appealable period.

5. The company had won an Arbitration award in respect of an amount aggregating to Rs. 23,083,887 recoverable from HCL. The Additional District Judge, Khetri, Rajasthan has dismissed the appeal filed by HCL against the arbitration award and passed an order for decree. The HCL has preferred an appeal against the said order in the High Court of Judicature for Rajasthan at Jaipur bench, Jaipur. The Honble High Court have admitted HCLs appeal and granted interim stay and directed HCL to deposit the award amount of Rs. 23,083,887 and the Company was permitted to withdraw the said amount by furnishing security to the satisfaction of the Court and filling undertaking for restitution with interest. The Company has withdrawn the money by furnishing the said documents.

6. Advances of Rs. 22,003,031 (22,002,981) and Security Deposit of Rupees 300,000 (300,000) are considered doubtful of recovery. The management is hopeful of recovering the amount in due course of time and therefore provision there against is not considered necessary.

7. The Company had entered into an agreement with Sunflag Iron & Steel Company Limited (Sunfiag) to provide its Air Separation Plant (120 TPD) on lease for a period of ten years at Sunflags Plant location at Bhandara, Maharashtra. Subsequent to year ended, Sunflag has agreed to buy the said plant and an agreement has been entered into for this purpose.

8. Sitting fee paid to the Directors is disclosed under Schedule 15 - Administrative & Other Expenses.

9. Balance due to /from various parties are subject to confirmations / reconciliations thereof. Management does not consider any adjustment on completion of reconciliation /confirmation.

10. Employee Benefits

The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity and leave encashment were carried out at March 31, 2009 by an actuary. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

11. Figures of previous year have been regrouped or rearranged wherever found necessary.

12. Schedulesl to 17 forms an integral part of the accounts and have duly been authenticated.

 
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