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Notes to Accounts of Deep Industries Ltd.

Mar 31, 2015

A Contingent Liabilities:

i. Bank Guarantees

The company has given counter guarantees aggregating to Rs. 1964.44 Lacs (31st March 2014 Rs. 1962.65 Lacs) to banks as at 31st March, 2015.

B. Segment Reporting

The Company is engaged in the one segment i.e. Oil and Gas service activity having mainly the domestic hire charges income and there are no separate reportable segments as per Accounting Standard 17 - "Segment Reporting" issued by the Council of the Institute of Chartered Accountants of India.

C. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the assets' net selling price and value in use. In assessing the value in use the estimated future cash flows are discounted to the present value at the weighted average cost of capital. During the year there are no impairment losses on assets of the Company.

D. The Company during the Financial Year 2013-14 had issued 29,50,000 Convertible Warrants of Rs. 34/- each under Section 81(1A) of the Companies Act, 1956. Out of these, the Company has received amount of Rs. 9,02,70,000 during the year 2013-14 towards this Convertible Warrants i.e.against 29,50,000 Convertible Warrants at Rs. 30.60 each. During the Year 2014-15, the balance of Rs. 3.40/- each was received. On receipt of full value, 29,50,000 warrants were converted into equity shares and were issued at Rs. 10/- each with premium of Rs. 24/- each.

E. In compliance of Accounting Standard 22 on "Accounting for taxes on Income" issued by Institute of Chartered Accountants of India, the Company has provided Accumulated net deferred tax liability in respect of timing difference as on 31st March, 2015. The item - wise details of deferred tax liability as on 31.03.2015 are as under:

F. Current Liability related to Micro, Small and Medium Enterprises

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid to as at year end together with interest paid /payable under this Act have not been given. The Company is making efforts to get the confirmation from the vendors as regards their status under the Act.

G. Foreign Currency exposures that are not hedged by derivative instruments as on 31st March 2015 amount to Rs.58.21 Cr. The unhedged exposures are naturally hedged by future foreign currency earnings and earnings linked to foreign currency.

H. The previous year figures have been accordingly regrouped/ re-classified to conform to the current year's classification.


Mar 31, 2014

NOTE 1: CORPORATE INFORMATION

Deep Industries Limited (DIL) is a well diversified oil & gas company serving the industry since 1991 with business interests in Air and Gas compression, Work over, Drilling and Oil & Gas Exploration and Production. DIL is the first company in India to provide high pressure Air and Gas compressors on charter hire basis. DIL is the largest Natural Gas Compression services provider in India and has also diversified into providing of work-over services to exploration and production (E&P) players through its fleet of rigs. From its Drilling to Dispensing plan, DIL has also expanded its arms to Exploration and Production Business of Oil, Gas and Coal Bed Methane.

1-(i). The Company has only one class of equity shares having a par value of Rs. 10 per share, each shareholder is elligible for one vote per share. The Company delcares and pays dividend in Indian Rupees. Dividend Proposed by Board of Directors is subject to approval of Shareholders in the ensuing Annual General Meeting. 6-(ii) In the event of liquidation, the Equity Sharesholders are eligible to receive the remaining Assets of the company after Distribution of all Preferential amount, in proportion to Shareholding.

2. Company has not alloted any bonus shares, Shares without consideration in cash and/or bought back any equity shares during the priod of five years immediately preceeding the Balance sheet date.

Nature of Security and Term of Repayment for Long Term Secured borrowings

i) Rupee Term Loan and Foreign Currency Term Loan from State Bank of India, IDBI Bank, EXIM Bank and Indusind Bank as mentioned above is secured by hypothecation of Air Compressor, Gas Compressor, Work over Rigs and other Misc. Assets and further secured by personal guarantee of Directors and equitable mortgage of immovable properties situated at Ahmedabad held in the name of director and relative of director. Though Rollover Period of Foreign Currency Term Loan is less than 12 Month from the Balance Sheet date, the tenure of Term Loan for which arrangement is made is more than 12 Months. Hence, Foreign Currency Term Loan arrangement is classified as Non-Current Liabilities.

ii) Buyer''s Credits are obtained from overseas branches of State Bank of India and Bank of Baroda which are backed by Letter of Undertaking from State Bank of India, IDBI Bank and Indusind Bank who has sanctioned the Term Loans. Though Rollover Period of one of the Buyers credit is less than 12 Month from the Balance Sheet date, the tenure of Term Loan for which arrangement is made is more than 12 Months. Hence, Buyers Credit arrangement is classified as Non-Current Liabilities.

iii) Repayment of Term Loan of State Bank of India and Indusind Bank are repayable in Five years. Term Loan of EXIM Bank and IDBI Bank are repayable in Seven years with moratorium period as stated here in above.

v Vehicle Loan from Bank and Other Financial Institution 2

(Secured by Hypothecation of Vehicles and Personal Gurantee of Directors) * - (Working Capital cash credit facilities of State Bank of India is secured by Hypothecation of Inventory and Book Debt and Further secured by Personal Gurantee of Director and Equitable Mortgage of Immovable property situated at Ahmedabad held in the name of Directors and Relative of Directors. - (Working Capital Facility of IDBI is secured by Second Charge on Secutiries as mentioned in hereinabove).

E Contingent Liabilities:

i. Bank Guarantees

The company has given counter guarantees aggregating to Rs. 1962.65 Lacs(31st March 2013 Rs. 1849.82 Lacs) to banks as at 31st March 2014.

ii. Other Contingent Liabilities not provided for

Name of Statute Amount (Rs Lacs) Amount (Rs Lacs) 31.03.2014 31.03.2013

Service tax 146.27 96.36

G. Segment Reporting

The Company is engaged in the one segment i.e. Oil and Gas service activity having mainly the domestic hire charges income and there are no separate reportable segments as per Accounting Standard 17 - "Segment Reporting" issued by the Council of the Institute of Chartered Accountants of India.

H. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the assets'' net selling price and value in use. In assessing the value in use the estimated future cash flows are discounted to the present value at the weighted average cost of capital. During the year there are no impairment losses on assets of the Company.

I. The Company during the Financial Year has issued 29,50,000 Convertible Warrants of Rs. 34/- each under Section 81(1A) of the Companies Act, 1956. Out of these, the Company has received amount of Rs. 9,02,70,000 during the year towards this Convertible Warrants i.e. against 29,50,000 Convertible Warrants at Rs. 30.60 each. These Convertible Warrants carry a right/entitlement to subscribe up to a future date, not exceeding 18 months from the date of such issue to equivalent number of equity shares of the Company at a price of Rs.34/- per share having the face value of Rs. 10/- each and at a premium of Rs. 24/- per equity share.

J. As per Accounting Standard - 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties where control exists and related parties, with whom transactions have taken place and relationships

Subsidiary Company :

Deep Energy LLC, USA Deep Natural Resources Limited Deep Global PTE. LTD. Prabha Energy Pvt. Ltd.

Enterprises significantly influenced by KMP or RKMP :

Deep Methane Private Limited Adinath Exim Resources Limited

Key Management Personnel :

Mr. Paras Savla Mr. Rupesh Savla Mr. Dharen Savla Mr. Premsingh Sawhney Mr. Ajaykumar Singhania Mr. Vijay Shah Mr. Harish Bhinde

Relative of Key Management Personnel (RKMP) :

Mr. Kirit Joshi Mr. Manoj Savla Mrs. Avani Savla Mrs. Mita Manoj Savla Mrs. Priti Paras Savla

K. In compliance of Accounting Standard 22 on "Accounting for taxes on Income" issued by Institute of Chartered Accountants of India, the Company has provided Accumulated net deferred tax liability in respect of timing difference as on 31st March, 2014. The item - wise details of deferred tax liability as on 31.03.2014 are as under:

L. Earnings per Share

The earnings considered in ascertaining the Company''s EPS represent profit for the year after tax. Basic EPS is computed and disclosed using the weighted average number of equity shares outstanding during the year.

M. Current Liability related to Micro, Small and Medium Enterprises

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid to as at year end together with interest paid /payable under this Act have not been given. The Company is making efforts to get the confirmation from the vendors as regards their status under the Act.

N. Foreign Currency exposures that are not hedged by derivative instruments as on 31st March 2014 amount to Rs. 58.97 Cr. The unhedged exposures are naturally hedged by future foreign currency earnings and or earnings linked to foreign currency.

O. The previous year figures have been accordingly regrouped/ re-classified to conform to the current year''s classification.


Mar 31, 2013

NOTE 1: CORPORATE INFORMATION

Deep Industries Limited (DIL) is a well diversified oil & gas company serving the industry since 1991 with business interests in Air and Gas compression, Work over, Drilling and Oil & Gas Exploration and Production. DIL is the first company in India to provide high pressure Air and Gas compressors on charter hire basis. DIL is the largest Natural Gas Compression services provider in India and has also diversified into providing of work-over services to exploration and production (E&P) players through its fleet of rigs. From its Drilling to Dispensing plan, DIL has also expanded its arms to Exploration and Production Business of Oil, Gas and Coal Bed Methane.

A Contingent Liabilities:

i. Bank Guarantees

The company has given counter guarantees aggregating to Rs. 1849.82 Lacs(31st March 2012 Rs. 1730.22 Lacs) to banks as at 31st March 2013.

ii. Other Contingent Liabilities not provided for;

Name of Statute Amount (Rs. Lacs) Amount (Rs. Lacs) 31.03.2013 31.03.2012

Service tax 96.36 69.22



B. Segment Reporting

The Company is engaged in the one segment i.e. Oil and Gas service activity having mainly the domestic hire charges income and there are no separate reportable segments as per Accounting Standard 17 - "Segment Reporting" issued by the Council of the Institute of Chartered Accountants of India.

C. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the assets'' net selling price and value in use. In assessing the value in use the estimated future cash flows are discounted to the present value at the weighted average cost of capital. During the year there are no impairment losses on assets of the Company.

D. The Company during the Financial Year has received Rs. 7,83,75,000/- towards the balance value on 13,75,000 Convertible Warrants which were issued during the financial year 2011-12. The said allottees have made full payment for 13,75,000 warrants i.e. Rs. 76 each. On full payment of 13,75,000 warrant, the said allottees have exercised their option of conversion of Warrants to equity shares on 30.03.2013. On conversion on 30.03.2013, Rs. 1,37,50,000 is transferred to Issued Capital being issue of 13,75,000 equity shares of Rs. 10/- each and Rs. 9,07,50,000/- is transferred to Securities Premium account being Share premium of Rs. 66/- each.

E. As per Accounting Standard - 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties where control exists and related parties, with whom transactions have taken place and relationships

Subsidiary Company Deep Energy LLC, USA

Deep Natural Resources Limited Prabha Energy Pvt. Ltd.

Enterprises significantly influenced by KMP or RKMP Deep Methane Private Limited

Adinath Exim Resources Limited Shree Kuchhi Jain Sewa Samaj

Key Management Personnel Mr. Paras Savla

Mr. Rupesh Savla Mr. Dharen Savla Mr. Premsingh Sawhney Mr. Ajaykumar Singhania Mr. Vijay Shah Mr. Harish Bhinde Mr. Kirit Joshi

Relative of Key Management Personnel (RKMP) Mr. Manoj Savla

Mrs. Avani Savla Mrs. Mita Manoj Savla Mrs. Priti Paras Savla Mrs. Shital Rupesh Savla

F. Current Liability related to Micro, Small and Medium Enterprises

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid to as at year end together with interest paid /payable under this Act have not been given.

The Company is making efforts to get the confirmation from the vendors as regards their status under the Act. N. The previous year figures have been accordingly regrouped/ re-classified to conform to the current year''s classification.


Mar 31, 2012

NOTE 1: CORPORATE INFORMATION

Deep Industries Limited (DIL) is a well diversified oil & gas company serving the industry since 1991 with business interests in Air and Gas compression, Work over, Drilling and Oil & Gas Exploration and Production. DIL is the first company in India to provide high pressure Air and Gas compressors on charter hire basis. DIL is the largest Natural Gas Compression services provider in India and has also diversified into providing of work-over services to exploration and production (E&P) players through its fleet of rigs. From its Drilling to Dispensing plan, DIL has also expanded its arms to Exploration and Production Business of Oil, Gas and Coal Bed Methane.

TERMS AND RIGHTS ATTACHED TO WARRANTS:

(During the year 27,50,000 Shares Warrants issued at price of 76 each of which 13,75,000 warrant fully paid up ( 76 each) converted in to Equity Shares. Balance 13,75,000 Warrant of 76 each paid up 19 Each is pending for Allotment.

The offer is made selectively to the Promoters and Relatives of Prmoters Group of the Company.

The Warrants carry a right / entitlement to subscribe up to a future date, not exceeding 18 months from the date of such issue to equivalent number of equity shares of the Company at a price of 76/- per share having the face value of 10/ - each and at a premium of 66/- per equity share.

The Equity Shares arising out of such conversion shall be allotted on the Conversion Date and thereupon the Warrants shall be treated as automatically extinguished. The Equity Shares so allotted shall rank pari passu in all respects with the existing shares of the Company and eligible for dividend, if any declared by the Company from time to time. The name of the Warrant holder shall be entered into the Register of Members of the Company as the holder of the Equity Shares upon such allotment.

Warrant holders will not be entitled to any of the rights and privileges available to the shareholders including the right to receive notices of or to attend and vote at the General Meetings.

The Warrants are issued only in physical mode and will not be dematerialized.

The Warrants shall not be tradable nor be listed on any of the stock exchanges.

If the allottee of warrant does not opt for conversion and does not make balance payment within 18 months, the amount paid on application and allotment will be forfeited.

The amount payable on application shall be 19/- per convertible warrant and the balance amount of 57/- shall be payable within 18 months from the date of allotment.

Money Received towards convertible warrants have been been utilized for the projects of the company.

2-(i). The Company has only one class of equity shares having a par value of 10 per share, each shareholder is elligible for one vote per share. The Company delcares and pays dividend in Indian Rupees. Dividend Proposed by Board of Directors is subject to approval of Shareholders in the ensuing Annual General Meeting.

2-(ii) In the event of liquidation, the Equity Sharesholders are eligible to receive the remaining Assets of the company after Distribution of all Preferential amount, in proportion to Shareholding.

3. Company has not alloted any bonus shares, Shares without consideration in cash and/or bought back any equity shares during the priod of five years immediately preceeding the Balance sheet date.

Nature of Security and Term of Repayment for Long Term Secured borrowings

i) Rupee Term Loan and Foreign Currency Term Loan from State Bank of India as mentioned above is secured by hypothecation of Air Compressor, Gas Compressor, Work over Rigs and other Misc. Assets and further secured by personal guarantee of Directors and equitable mortgage of immovable properties situated at Ahmedabad and Modasa held in the name of director and relative of director. Though Rollover Period of Foreign Currency Term Loan is less than 12 Month from the Balance Sheet date, the tenure of Term Loan for which arrangement is made is more than 12 Months. Hence, Foreign Currency Term Loan arrangement is classified as Non-Current Liabilities.

ii) Buyer s Credits are obtained from overseas branches of State Bank of India which are backed by Letter of Undertaking from State Bank of India, Commercial Branch, Ahmedabad which has sanctioned the Term Loan. Though Rollover Period of Buyers credit is lessthan 12 Month from the Balance Sheet date, the tenure of Term Loan for which arrangement is made is more than 12 Months. Hence, Buyers Credit arrangement is classified as Non-Current Liabilities.

iii) During the year, Company has availed Foreign Currency Term Loan credit facility from Export Import Bank of India (EXIM Bank), Moratorium Period provided by the Bank for a period of 18 Months from 08/09/2011 .The Term Loan is secured by Pari Passu charge on the securities as mentioned in para i above. As Installment is Due after 31/03/2013 (after 12 Month from Balance sheet) it is classified as Non-Current Liabilities.

iv) During the year, Company has availed Term Loan credit facility from Industrial Development Bank of India Ltd. (IDBI Bank) with Moratorium Period provided by the Bank for a period of 18 Months from 1st Disbursement i.e.17/02/2012. IDBI Term Loan is secured by Pari Passu charge on the securities as mentioned in para i & iii above. As Installment is Due after 31/03/2013 (after 12 Month from Balance sheet) it is classified as Non-Current Liabilities.

v) Repayment of Term Loan of State Bank of India are repayable in Five years. Term Loan of EXIM Bank and IDBI Bank are repayable in Seven years with moratorium period as stated here in above.

A Contingent Liabilities:

i. Bank Guarantees

The company has given counter guarantees aggregating to 1730.22 Lacs (31st March 2011 1767.31 Lacs) to banks as at 31st March 2012.

ii. Other Contingent Liabilities not provided for;

Name of Statute Amount (Lacs) Amount (Lacs) 31.03.2012 31.03.2011

Service tax 69.22 4.35

B. Segment Reporting

The Company is engaged in the one segment i.e. Oil and Gas service activity having mainly the domestic hire charges income and there are no separate reportable segments as per Accounting Standard 17 - "Segment Reporting" issued by the Council of the Institute of Chartered Accountants of India.

C. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing the value in use the estimated future cash flows are discounted to the present value at the weighted average cost of capital. During the year there are no impairment losses on assets of the Company.

D. The Company during the Financial Year has received 13,06,25,000/- towards value of 27,50,000 Convertible Warrants issued during previous year at 76 each. The said allottees have made full payment for 13,75,000 warrants i.e. 76 each. For balance 13,75,000 warrants the said allottees have made payment of 19 each (application money). On full payment of 13,75,000 warrant, the said allottees have exercised the option of conversion to equity shares on 28.03.2012. On conversion 1,37,50,000 is transferred to Issued Capital being issue of 13,75,000 equity shares of 10/- each and 9,07,50,000/- is transferred to Share Premium account being Share premium of 66/- each.

E. Earnings per Share

The earnings considered in ascertaining the Company s EPS represent profit for the year after tax. Basic EPS is computed and disclosed using the weighted average number of equity shares outstanding during the year.

Calculation of EPS

F. Current Liability related to Micro, Small and Medium Enterprises

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid to as at year end together with interest paid /payable under this Act have not been given.

The Company is making efforts to get the confirmation from the vendors as regards their status under the Act.

G. The Company prepares and represents its financial statements as per Schedule VI to the Companies Act,1956 as applicable to it from time to time. In view of revision to the Schedule VI as per notification issue during the year by the Central Government, the financial statements for the financial year ended 31st March ,2012 have been prepared as per the requirements of the Revised Schedule VI to the Companies Act, 1956. The previous year figures have been accordingly regrouped/ re-classified to conform to the current year s classification.


Mar 31, 2010

A. In the opinion of the board, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary.

B. Other Information pursuant to paragraphs 3, 4, 4A, 4B and 4D of Para-ll of the Schedule VI is given as under so far as applicable to the Company.

(a) The Company has not employed any person drawing remuneration of Rs.2,00,000/- per month or more or Rs. 24,00,000/- per annum.

(b) As the Company is engaged in providing services there is no manufacturing activity carried out and information in respect of installed capacity, production capacity, raw. material consumption, opening and closing stock of goods produced and consumption of indigenous and imported raw materials and spares thereof and turnover of goods produced is not given.

C. Considering nature of activity it is not possible to ascertain the elements of Capital Commitment Expenditure to be executed on capital account.

D. Contingent Liabilities: . i. Bank Guarantees

The company has given counter guarantees aggregating to Rs. 1767.31 Lacs(31st March 2009 Rs. 1182.17 Lacs) to banks as at 31st March 2010.

ii. Other Contingent Liabilities not provided for;

Name of Statute Amount (Rs. Lacs) Amount (Rs. Lacs) 31.03.2010 31.03.2009 Income Tax Act 58.95 38.20 Service tax 4.35 0.0

E. Figures are rounded off to the nearest rupee and the previous year figures are regrouped wherever necessary.

F. Segment Reporting

The Company is engaged in the service activity having mainly the domestic hire charges income and there are no separate reportable segments as per Accounting Standard 17 - "Segment Reporting" issued by the Council of the Institute of Chartered Accountants of India.

G. Impairment of Assets

The carrying amounts of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the assets net selling price and value in use. In assessing the value in use the estimated future cash flows are discounted to the present value at the weighted average cost of capital. During the year there are no impairment losses on assets of the Company.

H. The Company had issued 20,00,000 Convertible Warrants of Rs. 200/- aggregating Rs. 40,00,00,000/- and had received Rs. 4,00,00,000/- at the time of allotment on 31st January 2008 being Rs. 20/- per Convertible Warrants. On option exercise by the allottee for forfeiture and /or on due date on non receipt of balance amount, the amount of Rs. 4,00,00,000/- has been forfeited and are transferred to Capital Reserve- Preferential Warrant Forfeiture account.

I. The Company during the Financial Year has issued 35,00,000 Convertible Warrants of Rs. 58/- each aggregating to Rs. 20,30,00,000/- and has received Rs. 5,07,5Q,000/-being 25% value of said Convertible Warrants. The said Convertible Warrants were allotted on 11* August 2009. Further on 12,50,000 convertible warrants, the company has received balance consideration of Rs. 5,43,75,000 aggregating to total value of Rs.7,25,00,000/-. The said allottee on full payment of warrant have exercised the option of conversion to equity shares. On conversion Rs. 1,25,00,000 is transferred to Issued Capital being issue of 12,50,000 equity shares of Rs. 10/- each and Rs. 6,00,00,000 is transferred to Share Premium account being Share premium of Rs. 48/- each.

The company has utilized Rs. 9,30,93,799/- towards the capital projects for which the preferential warrants were issued.

J In compliance of Accounting Standard 22 on "Accounting for taxes on Income" issued by Institute of Chartered Accountants of India, the Company has provided Accumulated net deferred tax liability in respect of timing difference as on 31 st March, 2010. The item - wise details of deferred tax liability as on 31.03.2010 are as under:

K. Earnings per Share

The earnings considered in ascertaining the Companys EPS represent profit for the year after tax. Basic EPS is computed and disclosed using the weighted average number of equity shares outstanding during the year.

L. Current Liability related to Micro, Small and Medium Enterprises

The Company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, ,2006 and hence disclosure relating to amount unpaid to as at year end together with interest paid /payable under this Act have not been given.

The Company is making efforts to get the confirmation from the vendors as regards their status under the Act.

M. Information pursuant to the provision of part IV of SCHEDULE VI to the Companies Act, 1956. Balance sheet abstract and Companys general business profile.

 
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