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Notes to Accounts of Emco Ltd.

Mar 31, 2016

1. Company has made Investment and loans aggregating to Rs,9,919.64 Lacs into its wholly owned subsidiary EMCO Power Limited, which is setting up power projects in the state of Chhattisgarh and Odisha through joint venture companies. Said Investment has been utilized towards project development expenditure like feasibility studies, acquisition of land, allocation of water, EIA studies and other pre-operative expenses. The work on these projects has been temporarily suspended by the management due to unfavorable economic scenario and uncertainties, especially in power sector. Looking at the stage of the project, management is of view that impairment of investment and loan aggregating to Rs,9,919.64 Lacs is not necessary.

2. The company has opted to avail the choice provided under paragraph 46A of AS 11: "Accounting for the effects of changes in the foreign exchange rates" as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monetary items relating to depreciable assets, is adjusted in carrying cost of depreciable assets.

3 RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD - 18 A List of Related Parties over which control exists (i) Subsidiaries

EMCO Power Limited EMCO Renewable Energy Limited EMCO Infrastructure Limited EMCO Transmission Networks Limited EMCO Overseas Pte. Limited PT Setenco Investa Niaga

Shekhawati Transmission Service Company Limited EMCO Global DMCC (Incorporated on 21.01.2016)

B Name of the associates and joint ventures with whom transactions were carried out during the year

(i) Joint Ventures

PT Vardhaman Logistics PT Vardhaman Mining Services Rabaan (s) Pte. Limited.

Shyam EMCO Infrastructure Limited Kalinga Energy & Power Limited PT Bina Insan Sukses Mandiri

(ii) Association of Persons

Arki Aviation

4 Company has incurred total expenditure of Rs,184.76 Lakhs (Rs,78.79 Lakhs) on Research and Development activities.

5 The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector.

6 The figure for the corresponding previous year have been restated / regrouped where ever necessary to make them comparable with the current period.

7 Balances of Trade Receivable, Trade Payable, Loans and Advances and other balances are as per books of account and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realizable value as shown in the accounts.

8 The company''s normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

9. As per Section 135 of the Companies Act 2013, out of total expenditure of Rs,14.79 Lakhs which was to be incurred on corporate social responsibility activity, the company has spent Rs,19.83 Lakhs during the year.


Mar 31, 2015

1. Nature of Operation:

The Company is primarily engaged in the power industry, the company manufactures range of transformers. The Company's products include transformers, energy metering system, substation and transmission towers and lines which constitutes of generation, transmission, distribution and manufacture of power equipment viz Generation Equipment and T&D Equipment.

2. Company has made Investment and loans aggregating to Rs. 9,341.04 Lakhs into its wholly owned subsidiary EMCO Power Limited, which is setting up power projects in the state of Chhattisgarh and Odisha through joint venture companies. Said Investment has been utilised towards project development expenditure like feasibility studies, acquisition of land, allocation of water, EIA studies and other pre-operative expenses. The work on these projects has been temporarily suspended by the management due to unfavourable economic scenario and uncertainties, specially in power sector. Looking at the stage of the project, management is of view that impairment of investment and loan aggregating to Rs. 9,341.04 Lakhs is not necessary.

3. The company has opted to avail the choice provided under paragraph 46A of AS 11: "Accounting for the effects of changes in the foreign exchange rates" as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monetary items relating to depreciable assets, is adjusted in carrying cost of depreciable assets.

4 RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD - 18 A

List of Related Parties over which control exists Subsidiaries

EMCO Power Limited

EMCO Renewable Energy Limited

EMCO Infrastructure Limited

EMCO Transmission Networks Limited

EMCO Overseas Pte. Limited

PT Setenco Investa Niaga

Shekhawati Transmission Service Company Limited

B Name of the associates and joint ventures with whom transactions were carried out during the year (i) Joint Ventures

PT Vardhaman Logistics

PT Vardhaman Mining Services

Rabaan (s) Pte. Limited.

Shyam EMCO Infrastructure Limited

Kalinga Energy & Power Limited

PT Bina Insan Sukses Mandiri

(ii) Association of Persons

Arki Aviation

C Name of the associate & joint ventures with whom transactions were carried out during the year (i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain

Mr. Shailesh S. Jain

Ms. Meenakshi Jain

Ms. Ratna S. Jain

(ii) Entities where Key Management Personnel have Significant Influence

EMCO Foundation

EMCO Investments Private Limited

5 Company has incurred total expenditure of Rs. 78.79 Lakhs (Rs. 87.47 Lakhs) on Research and Development activities.

6 The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector.

7 The figure for the corresponding previous year have been restated / regrouped where ever necessary to make them comparable with the current period.

8 As approved by the Members at their Extra Ordinary General Meeting held on 22.01.2015, the Board of Directors have allotted 24,39,025 fully paid equity shares of the Company of Rs. 2/- each at a price of Rs. 41/- per equity share (including share premium of Rs. 39/- per equity share) under preferential allotment, to one of Promoter Group entity, as per the applicable provisions of the SEBI (ICDR) Regulations.

9 Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of account and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

10 The company's normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

11 As per Section 135 of the companies act 2013, out of total expenditure of Rs. 13.82 Lakhs which was to be incurred on corporate social responsibility activity, the company has spent Rs. 23.50 Lakhs during the year.


Mar 31, 2014

1. CONTINGENT LIABILITIES AND COMMITMENTS

I) Contingent Liabilities (to the extent not provided for)

a) Bank Guarantees outstanding as at the year end (gross) (Secured) 77,302.11 77,641.34

b) Letters of Credit outstanding as at the year end (Secured) 7,012.36 11,409.38

c) Guarantee for Subsidiary Company 7,715.50 7,068.10

d) Disputed amount of Sales Tax. 120.53 272.03

e) Claim made by workmen for re-instatement. Matter Subjudice. Amount not ascertainable

f) Disputed amount of Income Tax. 306.88 272.24

g) Disputed amount of Excise duty 2,591.66 3,322.92

h) Disputed amount of Service tax. 314.00 186.28

i) Claims against Company not acknowledged as debt 126.37 141.33

II) Other Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)Claims for Liquidated Damages against the company are recognised in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly additional provision of Rs. 638.22 lakhs (Rs. 293.44 lakhs) has been made to meet the future probable losses on this account and cumulative provision as at year end Rs 1,231.66 lakhs (Rs. 593.44 lakhs).

b. Trade receivable includes contractual retention amounts billed to customers of Rs. 18,020.57 lakhs (Rs. 18,839.29 lakhs). Management expect to collect retentions in respect of running contracts on completion of contract. In respect of com- pleted contract, management is confident of realising contractual retention amount billed to customers and Liquidated Damages withheld by the customers based on past experience and ongoing correspondence with the customers.

2. Company has made Investment and net loan aggregating to 8,123.20 Lakhs into its wholly owned subsidiary EMCO Power L imited, which is setting up power projects in the state of Chhattisgarh and Orissa through joint venture companies. Said Investment has been utilised towards project development expenditure like feasibility studies, acquisition of land, allocation of water, EIA studies and other pre-operative expenses. There are delays in these projects mainly on account of economic scenario and uncertainty in coal allocation policy. Looking at the stage of the project, management is of view that impairment of investment or loan of Rs. 8,123.20 Lakhs is not necessary.

3. The company has opted to avail the choice provided under paragraph 46A of AS 11: "Accounting for the effects of changes in the foreign exchange rates" as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monetary items relating to depreciable assets, is adjusted in carrying cost of depreciable assets.

4. RELATED PARTY DISCLOSURE

A List of Related Parties over which control exists (i) Subsidiaries

EMCO Power Limited

Shekhawati Transmission Service Company Limited (wef 01.02.2013)

EMCO Renewable Energy Limited

EMCO Infrastructure Limited

EMCO Transmission Networks Limited (Formaly known as East West Power Generation Limited)

EMCO Overseas Pte. Limited

PT Setenco Investa Niaga

B Name of the associates and joint ventures with whom transactions were carried out during the year (i) Joint Ventures

Shyam EMCO Infrastructure Limited

Kalinga Energy & Power Limited

PT Vardhaman Logistics

PT Vardhaman Mining Services

Rabaan (s) Pte. Limited.

PT Bina Insan Sukses Mandiri

(ii) Association of Persons

Arki Aviation

C Name of the key management personnel and their relatives with whom transactions were carried out during the year. (i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain

Mr. Shailesh S. Jain

Ms. Meenakshi Jain

Ms. Ratna S.Jain

(ii) Entities where Key Management Personnel have Significant Influence

EMCO Foundation

EMCO Power Quality Solutions Limited

5. Company has incurred total expenditure of Rs. 87.47 Lakhs (Rs. 120.90 Lakhs) on Research and Development activities.

6. Exceptional Expenditure Exceptional expenditure includes -

a Reversal of Excess Depreciation of Rs. NIL (Rs. 1304.99 Lakhs) charged in earlier years on Windmill assets as per triple shift rates instead of rates applicable to continuous process plants for plant and machinery under schedule XIV of Companies Act, 1956

b Write off of Inventories / other assets of Rs. NIL Lakhs (Rs. 1220.03 Lakhs) on account of obsolence of technology.

7. The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector.

8. The figures for the corresponding previous year have been restated / regrouped where ever necessary to make them comparable with the current period.

9. Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of account and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

10. The companies normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non-current based on the operating cycle of respective businesses.

11. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence entitled for the exemption.


Mar 31, 2013

C) Employee Stock Option Scheme (ESOS)

i. 1,90,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2006. Dur- ing the year Nil Equity Shares have been issued and allotted to the Employees / Director against exercise of Options under ESOS 2006. Details of which are given as under :

# Against above option the eligible employee is entitled to acquire fi ve equity share of Rs. 2 each of the Company.

* The option would vest over a maximum period of three years from the date of grant.

Nature of Security and Repayment Terms

a) 500 (500) - 12.50% Non Convertible Debentures (NCD s) are secured on fi rst charge (pari passu) by way of mortgage on building situated at MIDC-Thane, Umala-Jalgaon and on land and building situated at MIDC-Jalgaon and hypothecation on plant and machinery, furniture, electrical and other installations, offi ce equipments and air conditioners situated at MIDC-Thane, MIDC-Jalgaon, Umala-Jalgaon and Dadra.

b) Vehicle Loans are secured by way of hypothecation on respective vehicles fi nanced.

c) Term loan from banks referred in (c) (i) above loan amounting to 646.80 Lakhs ( 1,509.20 Lakhs) is secured by exclusive fi rst charge by way of mortgage on the specifi c land on which the windmills are installed in Maharashtra and exclusive fi rst charge by way of hypothecation on movable fi xed assets (plant, machinery equipments) pertaining to windmills.

d) Term loan from banks referred in (c) (ii) above loan amounting to 3,562.00 Lakhs ( 3,349.45 Lakhs) is secured on fi rst charge basis by way of equitable mortgage on Solar Project s land and all other immovable properties, present and future and also by way of hypothecation on project s all movable, present and future, all book debts, operating cash fl ows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.

e) Maturity Profi le of Long Term Borrowings

a) Working Capital Term Loan referred in (a) above is secured on fi rst charge basis (pari passu) by way of equitable mortgage on Company s immovable properties situated at MIDC-Thane and MIDC-Jalgaon both present or future. Further the said working capital term loan is secured on second charge (pari passu) by way of hypothecation on the Company s movable assets including current assets except assets exclusively fi nanced by other lenders i.e. Wind Mills and Solar farm.

b) Working Capital Loans from banks referred in (b), (c) and (d) above and bank facilities mentioned in Note 26 (I) (a) and (b) are secured on fi rst charge basis (pari passu) by way of hypothecation on current assets of the Company such as raw Materials, stocks-in-process, fi nished goods, consumable stores and spares, book debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively fi nanced by other lende Further the said working capital facilities are secured on fi rst charge basis (pari passu) by way of registered mortgage on the movable and immovable Properties situated at Vadodara (Gujarat) Silvassa (UT-Dadara and Nagar Haveli) and second charge by way of registered mortgage on the Company s all movable fi xed assets and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon and Umala-Jalgaon.

# These fi gures do not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund.

* Includes buyer s credit of 999.70 lakhs ( 901.42 lakhs)

Defi ned Benefi t Plans

The employees gratuity fund scheme managed by Life Insurance Corporation of India is a defi ned benefi t plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefi t entitlement and measures each unit separately to build up the fi nal obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

The estimates of future salary increase, considered in actuarial valuation, has been made after taking into account infl ation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

General Description of signifi cant defi ned plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on death, resignation after fi ve completed year of service, retirement or permanent disablement.

Broad Category of plan assets relating to Gratuity as a percentage of total plan assets.

II Leave Plan

Leaves standing at the end of the calendar year are carried forward in the next calendar year. Eligible employees will get encashment of their unutilized leaves beyond the threshold limit, in the month of April every year. In case of death, permanent disablement and resignation, the employees will get encashment of their unutilized leaves forthwith.

Claims for Liquidated Damages against the company are recognised in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly additional provision of 293.44 lakhs ( 300.00 lakhs) has been made to meet the future probable losses on this account and cumulative balance of such provision as at year end is 593.44 lakhs ( 300.00 lakhs).

b. Trade receivable includes contractual retention amounts billed to customers of 18,839.29 lakhs ( 22,468.62 lakhs). Management expect to collect retentions in respect of running contracts on completion of contract. In respect of completed contract, management is confi dent of realising dues based on past experience and on going correspondence with the custome

1 The fi gures for the corresponding previous year have been restated / regrouped where ever necessary to make them comparable with the current period.

2 The company has opted to avail the choice provided under paragraph 46A of AS 11: "Accounting for the effects of changes in the foreign exchange rates" as amended by notifi cation no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monetary items relating to depreciable assets, is adjusted in carrying cost of depreciable assets.

B Name of the associates and joint ventures with whom transactions were carried out during the year (i) Joint Ventures

PT Vardhaman Logistics

PT Vardhaman Mining Services

Rabaan (s) Pte. Limited

Shyam Emco Infrastructure Limited

Kalinga Energy & Power Limited

PT Bina Insan Sukses Mandiri

(ii) Association of Persons

Arki Aviation

C Name of the key management personnel and their relatives with whom transactions were carried out during the year. (i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain

Mr. Shailesh S. Jain

Mr. Ajay K. Dhagat (up to 04.11.2011)

Ms. Meenakshi Jain

Ms. Ratna S. Jain

(ii) Entities where Key Management Personnel have Signifi cant Infl uence

Emco Foundation

Emco Power Quality Solutions Limited

* Loans and advances shown above fall under the category of "Short term loans and advances" in the nature of loans and is repayable on demand. ** Loans and advances shown above fall under the category of "Long term loans and advances" in the nature of loans and is repayable within 5 to 7 yea

Investment by the lonee in the shares of the Company

None of the lonnes and lonees of subsidiary companies have, per se, made investments in shares of the Company.

3 Company has incurred total expenditure of 120.90 Lakhs ( 425.05 Lakhs) on Research and Development activities.

4 Exceptional Expenditure Exceptional expenditure includes -

a Reversal of Excess Depreciation of 1,304.99 Lakhs charged in earlier years on Windmill assets as per triple shift rates instead of rates applicable to continuous process plants for plant and machinery under schedule XIV of companies act 1956

b Write off of Inventories / other assets of 1,220.03 Lakhs on account of obsolence of technology.

5 The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector.

6 Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of account and subject to confi rmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

7 The company''s normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classifi ed into current and non-current based on the operating cycle of respective businesses.

8 The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfi lment of conditions stipulated in the circular. The Company has satisfi ed the conditions stipulated in the circular and hence is entitled to the exemption.


Mar 31, 2012

A) Employee Stock Option Scheme (ESOS)

i. 1,90,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2006. Out of this Nil Equity Shares have been issued and allotted to the Employees / Director against exercise of Options under ESOS 2006. Details of which are given as under

TERMS OF SECURED LOAN

a. 500 (500) - 12.50% Non Convertible Debentures (NCD) of Rs. 6.67 lakhs (Rs. 10.00 lakhs) each are secured on first charge (pari passu) by way of mortgage on building situated at MIDC-Thane, Umala-Jalgaon and on land and building situated at MIDC-Jalgaon and hypothecation on plant and machinery, furniture, electrical and other installations, office equipments & air conditioners situated at MIDC-Thane, MIDC-Jalgaon, Umala-Jalgaon and Dadra.

b. Vehicle Loans are secured by way of charge of respective vehicles financed.

c. Term loan from banks referred in (c) (i) above loan amounting to Rs. 1,509.20 lakhs (Rs. 2,371.60 lakhs) is secured by exclusive first charge by way of mortgage on the specific land on which the windmills are installed in Maharashtra and exclusive first charge by way of hypothecation on movable fixed assets (plant, machinery equipments) pertaining to windmills.

d. Term loan from banks referred in (c) (ii) above loan amounting to Rs. 3,349.45 lakhs (Nil) is secured on first charge by way of mortgage on Solar Project's all immovable properties, present and future and a first charge by way of hypothecation on project's all movable, present and future, all book debts, operating cash flows, receivables, commissions, revenues of what so ever nature and where ever arising out of Solar Project.

a Working Capital Term Loan referred in (a) above is secured on first charge basis (pari passu) by way of equitable mortgage on Company's immovable properties situated at MIDC-Thane and MIDC-Jalgaon both present or future. Further the said working capital term loan is secured on second charge (pari passu) by way of hypothecation on the Company's movable assets including current assets except assets exclusively financed by other lenders i.e. Wind Mills and Solar farm.

b Working Capital Loans from banks referred in (b), (c) and (d) above are secured on first charge basis (pari passu) by way of hypothecation on current assets of the Company such as Raw Materials, Stocks-in-process, Finished Goods, Consumable Stores and Spares, Book Debts, outstanding and claims, receivable both present and future except book debts and receivables pertaining to wind mill and solar farm which are exclusively financed by other lenders. Further the said working capital facilities are secured on first charge basis (pari passu) by way of registered mortgage on the Movable and Immovable Properties situated at Vadodara (Gujarat) Silvassa (UT-Dadara & Nagar Haveli) and Second Charge by way of registered mortgage on the Company's all movable fixed assets and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon and Umala-Jalgaon.

Disclosure as required by Accounting Standard 19 'Leases'

Operating Lease

a. Building includes Commercial / Residential premises given on operating lease having original cost of Rs. 89.84 lakhs (Rs. 23.44 lakhs) and accumulated depreciation of Rs. 24.68 lakhs (Rs. 7.36 lakhs) as at 31st March 2012. Depreciation on the above assets for the current year is Rs. 1.46 lakhs ( Rs. 0.38 lakhs). In respect of the above arrangements, lease rent receivable are recognized in the Statement of Profit and Loss for the year and included under Other Income.

b. The Company's significant leasing arrangements are in respect of premises taken on lease. The arrangements are generally from 1 month to 60 months. Under these agreements, generally refundable interest-free deposits have been given. In respect of above arrangements, lease rentals payable are recognized in the Statement of Profit and Loss for the year and included under Rent and Compensation (Refer Note 24).

Defined Benefit Plans

The employees' gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

General Description of significant defined plans

I Gratuity Plan

Gratuity is payable to all eligible employees of the Company on death, resignation after five completed year of service, retirement or permanent disablement.

II Leave Plan

Leaves standing at the end of the calendar year are carried forward in the next calendar year. Eligible employees will get encashment of their unutilized leaves beyond the threshold limit, in the month of April every year. In case of death, permanent disablement and resignation, the employees will get encashment of their unutilized leaves forthwith.

1. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

1. a) Bank Guarantees outstanding as at the yearend (gross) -(Secured) 67,058.78 70,062.51

b Letters of Credit outs tanding (net) as at the year end (Secured) 8,818.85 9,284.84

c) Guarantee for Subsidiary Company Nil 5,307.60

d) Disputed amount of Sales Tax. 230.54 93.54

e) Claim made by workmen for re-instatement, Matter Subjudice. Amount Not Ascertainable

f) Disputed amount of Income Tax. 27.79 590.13

g) Disputed amount of Excise duty and Service tax. 2,869.86 2,336.80

h) Claims against Company not acknowledged as debt 151.18 153.01

2 Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to Rs. 98.87 lakhs (Rs. 8,055.69 lakhs)

Claims for Liquidated Damages against the company are recognized in the accounts based on Management assessment of probable outcome with reference to available information supplemented by experience of similar transactions. Accordingly provision of Rs. 300.00 lakhs has been made to meet the future probable losses on this account.

b. Trade receivable includes contractual retention amounts billed to customers of Rs. 22,468.62 lakhs (Rs. 23,174.30 lakhs) Management expect to collect retentions in respect of running contracts on completion of contract. In respect of completed contract, management is confident of realizing dues based on past experience and ongoing correspondence with the customers.

3. CHANGE IN PRESENTATION AND DISCLOSURES OF FINANCIAL STATEMENTS

During the year ended 31st March 2012, the revised schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statement. However, it has significant impact on presentation and disclosure made in financial statements. The company has also reclassified the previous year figures in accordance with the requirement applicable in current year.

4. The company has opted to avail the choice provided under paragraph 46A of AS 11: "Accounting for the effects of changes in the foreign exchange rates" as amended by notification no.: G.S.R. 914(E) dated 29th December 2011. Accordingly, the foreign exchange difference on long term foreign currency monitory items relating to depreciable assets, is adjusted in carrying cost of depreciable assets, which would be depreciated over the balance life of assets.

5. RELATED PARTY DISCLOSURE

A. List of Related Parties with whom the Company had transactions

(i) Key Management Personnel and their Relatives

Mr. Rajesh S. Jain Mr. Shailesh S. Jain

Mr. Ajay K. Dhagat (up to 4th November 2011)

Mr. R. S. Shah (up to 19th April 2010)

Ms. Meenakshi Jain Ms. Ratna S. Jain

Ms. Urmila R. Shah (up to 19th April 2010)

(ii) Entities where Key Management Personnel have Significant Influence

EMCO Foundation

EMCO Power Quality Solutions Limited

(iii) Subsidiaries

EMCO Power Limited

EMCO Renewable Energy Limited

EMCO Infrastructure Limited

East West Power Generation Limited

EMCO Overseas Pte. Limited

EMCO Edison Transformer Pty. Limted

PT Setenco Investa Niaga

(iv) Joint Ventures

PT Vardhaman Logistics PT Vardhaman Mining Services Rabaan (s) Pte. Limited Shyam EMCO Infrastructure Limited Kalinga Energy and Power Limited PT Bina Insan Sukses Mandiri

(v) Association of Persons

Arki Aviation

D. Disclosure with respect to Related Party Transaction

1) Key Management Personnel and their relatives

a) Remuneration Paid to Key Management Personnel and their relative : Rs. 118.98 lakhs (Rs. 79.99 lakhs) includes Remuneration paid to Mr. Rajesh Jain Rs. 47.41 lakhs (Rs. 24.00 lakhs), Mr. Shailesh Jain Rs. 47.40 lakhs (Rs. 24.00 lakhs) , Mr. Ajay Kumar Dhagat Rs. 18.17 lakhs (Rs. 22.80 lakhs), Mr. R S Shah Nil (Rs. 2.94 lakhs).

b) Salary paid to Key Management Personnel and their relative : Rs. 33.65 lakhs (Rs. 33.65 lakhs) paid to Ms. Meenakshi Jain.

c) Rent Expenses paid to Key Management Personnel and their relative : Rs. 25.63 lakhs (Rs. 24.80 lakhs) paid to Ms. Ratna S Jain.

2) Entities where Key Management Personnel have Significant Influence

a) Rent recovered from EMCO Power Quality Solutions Private Limited : Rs. 0.38 lakhs (Rs. 0.37 lakhs).

b) Expenses incurred and recovered from EMCO Foundation : Rs. 9.79 lakhs (Nil)

c) Donation given to EMCO Foundation Rs. 20.00 lakhs (Rs. 63.20 lakhs)

3) Transaction with Subsidiaries

a) Business Advance Given to Subsidiaries Rs. 6,425.78 lakhs (Rs. 2,045.02 lakhs) includes EMCO Overseas Pte Limited (Singapore) Rs. 3,690.06 lakhs (Rs. 948.62 lakhs), EMCO Power Ltd Rs. 2,735.72 lakhs (Rs. 1,094.35 lakhs), East West Power Generation Co Limited Nil (Rs. 1.81 lakhs), EMCO Power Infrastructure Limited Nil (Rs. 0.14 lakhs) and EMCO Infrastructures Limited Nil (Rs. 0.10 lakhs).

b) Business Advance Received Back from EMCO Overseas Pte Limited (Singapore) Rs. 2,849.36 lakhs (Rs. 2.05 lakhs)

c) Recovery of Overheads from EMCO Power Limited Rs. 600.86 lakhs (Rs. 151.99 lakhs).

d) Expenses incurred on behalf of Subsidiaries Rs. 0.84 lakhs (Nil) includes EMCO Infrastructure Limited Rs. 0.06 lakhs (Nil), EMCO Renewable Energy Limited Rs. 0.06 lakhs (Nil), East West Power Generation Co Limited Rs. 0.72 lakhs (Nil)

e) Interest Accrued on Loan of Subsidiaries Rs. 994.55 lakhs (Nil) includes EMCO Overseas Pte Limited (Singapore) Rs. 517.33 lakhs (Nil), EMCO Power Limited Rs. 477.22 lakhs (Nil).

4) Association of Person

a) Advance given to Arki Aviation Nil (Rs. 85.03 lakhs).

b) Share of Flying and Maintenance Expenses to Arki Aviation Rs. 60.47 lakhs (Rs. 62.29 lakhs).

6. Company has incurred total expenditure of Rs. 425.05 lakhs (Rs. 42.07 lakhs) on Research and Development activities.

7. The Company has only one reportable segment, i.e. Transmission and Distribution Segment within Power Sector

8. Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of account and subject to confirmation and reconciliation, if any. In the opinion of the management balances shown under Sundry Debtors, Accrued value of work done and Loans and Advances have approximately the same realisable value as shown in the accounts.

9. The company's normal operating cycle in respect of operations relating to the Sub-station and Transmission Line may vary from project to project depending upon the size of the project, type of project, project complexities and related approvals. Operating cycle for all other business is based on twelve months period. Assets and liabilities have been classified into current and non- current based on the operating cycle of respective businesses.

10. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption.


Mar 31, 2011

1. Contingent Liabilities Not Provided For in Respect of:

Rs in lakhs

Sr. Particulars 31-Mar-11 31-Mar-10 No.

a) Bank Guarantees outstanding as at the yearend (Gross) -(Secured) 70,062.51 70,420.10

b) Bank Guarantees outstanding as at the yearend (Gross) -(Secured) Given for erstwhile NIL 60.63 Subsidiary, EMCO Energy Limited (Subsidiary upto 24th July 2009)

c) Letters of Credit outstanding (net) as at the yearend (Secured) 9,284.84 8,583.42

d) Guarantee given for Subsidiary Company 5,307.60 5,415.60

e) Disputed amount of Sales Tax in respect of which appeals have been filed. 93.54 31.02

f) Claims made by workmen for re-instatement. Matters Subjudice. Amount not ascertainable

g) Disputed amount of Income Tax in respect of which rectifcation has been filed 590.13 357.78

h) Disputed amount of Excise duty and Service tax in respect of which the Company is in 2,336.80 1,847.69 appeal.



i) Claim of about Rs 28.36 lakhs (Rs 26.42 lakhs) by suppliers against the Company. The matter is Subjudice.

j) Suit of Rs 107 lakhs (Rs 107 lakhs) filed by a Sub-Contractor against the company, proceeding is pending before Sole Arbitrator.

k) Summary suit of Rs 10.13 lakhs (Rs 10.13 lakhs) filed by one supplier against the Company. The matter is Subjudice.

l) Claim filed against the company for compensation not acknowledged as debt Rs 7.52 lakhs (Rs 27.36 lakhs).

2. The Company has filed a suit against one customer claiming damages of Rs 110.91 lakhs (Rs 110.91 lakhs) and also fled a suit for an order restraining invocation of bank guarantee amounting to Rs 8.50 lakhs (Rs 8.50 lakhs) from the customer.

3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to Rs 8,055.69 lakhs (Rs 672.73 lakhs)

4. Terms of Secured Loans (Refer Schedule 3)

a. 500 - 12.5% Non Convertible Debentures of Rs 10 lakhs each referred in (1) of Schedule 3 are secured by way of Mortgage on Building situated at MIDC-Thane, Umala-Jalgaon and on Land and Building situated at MIDC-Jalgaon and hypothecation on Plant & Machinery, Furniture, Electrical & other installations, Offce Equipments & Air conditioners situated at MIDC- Thane, MIDC-Jalgaon, Umala-Jalgaon and Dadra. This will be redeemed in three equal annual instalment commencing from 24 December 2011.

b. Vehicle Loans referred in (2) of Schedule 3 are secured by way of charge of respective vehicles fnanced.

c. Term loans referred in 3(a) of Schedule 3 is secured by frst pari-passu charge on all the Company's immovable properties situated at MIDC-Thane and MIDC-Jalgaon purchased or to be purchased and the frst charge by way of hypothecation of all the Company's movables Fixed Assets and also subject to exclusive charges and/or to be created on specifc items of plant and machinery/equipments.

d. Term loan referred in 3(b) of Schedule 3 is secured by exclusive frst charge by way of mortgage on the specifc land on which the windmills are installed in Maharashtra and exclusive frst charge by way of hypothecation on movable fxed assets (plant, machinery, equipments) pertaining to windmills.

e. Working Capital Loans from Banks referred in 4(a), 4(b) & 4(c) of Schedule 3 and Bank facilities mentioned in Note No. 2 (a), (b) & (c) above are secured against hypothecation by way of frst charge on Raw Materials, Stocks-in-process, Finished Goods, Consumable Stores and Spares, Book Debts except book debts and receivables pertaining to wind mill, Outstanding and Claims both present and future. This is further secured by Second Charge on the Company's all movable Fixed Assets except pertaining to wind mill and on immovable properties situated at MIDC-Thane, MIDC-Jalgaon and Umala-Jalgaon.

5. Extraordinary Item:

During the previous year ended 31st March 2010, Company has sold one of its subsidiaries “EMCO Energy Limited” which was setting up power plant at Warora, Maharashtra and has net gain of Rs 9,849.32 lakhs (net of tax of Rs 2,885.38 lakhs)). Being non-recurring in nature same has been treated as an extraordinary item.

6. Related Party Disclosure:

A. List of Related Parties with whom the Company had transactions

(i) Key Management Personnel and their Relatives

- Mr. Rajesh S. Jain

- Mr. Shailesh S. Jain

- Mr. Ajay K. Dhagat

- Mr. R. S. Shah (upto 19th April 2010)

- Ms. Meenakshi Jain

- Ms. Ratna S. Jain

- Ms. Urmila R. Shah (upto 19th April 2010)

(ii) Entities where Key Management Personnel have Signifcant Infuence:

- Purna Properties and Investments Private Limited

- EMCO Foundation

- EMCO Power Quality Solutions Limited

(iii) Subsidiaries

- EMCO Energy Limited (Upto 24th July 2009)

- EMCO Power Limited

- EMCO Renewable Energy Limited (Previously known as EMCO Power Infrastructure Limited)

- EMCO Overseas Pte Limited

- EMCO Infrastructure Limited (Previously known as Warora Power Company

- East West Power Generation Company Limited

- EMCO Edison Transformer Pty. Limited

- PT Setenco Investa Niaga (from 26th November 2010)

(iv) Joint Ventures

- PT Vardhaman Logistics

- PT Vardhaman Mining Services

- Rabaan (s) Pte. Limited.

- Shyam EMCO Infrastructure Limited

- Kalinga Energy & Power Limited

- PT Bina Insan Sukses Mandiri (from 26th November 2010)

(v) Association of Persons

- Arki Aviation

7. Segment Reporting:

The Company has only one reportable segment, i. e. Transmission and Distribution Segment within the Power Sector.

8. Research and Development

Company has incurred total expenditure of Rs 42.07 lakhs (Rs 183.93 lakhs) on Research and Development activities.

9. Balances of Sundry Debtors, Sundry Creditors, Loans and Advances and other balances are as per books of accounts and subject to confrmation and reconciliation, if any.

10. Figures of previous year have been regrouped/rearranged, wherever necessary, to conform to those of the current year.


Mar 31, 2010

1. Contingent Liabilities not provided for in respect of:

31-Mar-10 31-Mar-09

Sl, No. Particulars (Rupees In Lakhs) (Rupees in Lakhs)

a) Bank Guarantees outstanding as at the year end (Gross)- 70,420.10 60,012.79 (Secured)

b) Bank Guarantees outstanding as at the year end (Gross) - 60.63 60.63 (Secured) Given for erstwhile Subsidiary, EMCO Energy

Limited (Subsidiary upto 24th july 2009)

c) Letters of Credit outstanding (Net) as at the year end 8,583.42 6,286.01 (Secured)

d) Guarantee given for Subsidiary Company 5,415.60 NIL

e) Disputed amount of Sales Tax in respect of which appeals 31.02 88.11 have been filed.

f) Claims made by workmen for re-instatement Matters Subjudice Amount not ascertainable

g) Disputed amount of Income Tax in respect of which 357.78 425.88 rectification has been filed.

h) Disputed amount of Excise duty and Service tax in respect of 1,847.69 1,341.13

which the Company is in appeal.

i) Claim of about Rs. 26.42 lakh (Rs. 26.42 lakh) by suppliers against the Company. The matter is Subjudice.

j) Suit of Rs. 107 lakh (Rs. 107 lakh) filed by a Sub-Contractor against the Company, proceeding is pending

before Sole Arbitrator.

k) Summary suit of Rs. 10.13 lakh (Rs. 10.13 lakh) filed by one supplier against the Company. The matter is Subjudice.

l) Claim filed against the Company for compensation not acknowledged as debt Rs. 27,36 lakh (Rs. 29.93 lakh).

2. The Company has filed a suit against one customer claiming damages of Rs. 110.91 lakh (Rs. 11 0.91 lakh) and also filed a suit for an order restraining invocation of bank guarantee amounting to Rs. 8.50 lakh (Rs. 8.50 lakh) from the customer.

3, Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) amounting to Rs. 672.73 lakh (Rs. 828.29 lakh)

4. Employee Stock Option Scheme (ESOS):

In accordance with the ESOS of the Company in earlier years, the employees were offered options for 21 3,350 equity shares (Option I), 20,000 equity shares (Option II), 4,000 equity shares (Option III), 1 6,500 equity shares (Option IV), 2,000 equity shares (Option V), 5,000 equity shares (Option VI), 39,500 equity shares (Option VII), and 5,500 equity shares (Option VIII) as per eligible criteria fixed under the scheme. Against each of the above option the eligible employee is entitled to acquire five equity share of Rs. 2 each of the Company at a price of Rs. 90, Rs. 126, Rs.174, Rs. 256, Rs, 302, Rs. 185, Rs. 1 50,and Rs. 1 09 for Option I, II, III, IV,V,VI,VII and VIII respectively,

5. Preferential Issue of Share Warrants:

Pursuant to the approval of members by way of Special Resolution passed at an Extra Ordinary General Meeting of the Company held on 22nd June 2009, the Company has allotted 6,300,000 warrants to one of the promoters who is also Chairman and Managing Director of the Company on 04th July 2009, Each warrant carries option/entitlement to subscribe to one equity share of Rs. 2 each at a premium of Rs, 60, Out of these warrants 3,090,000 warrants have been exercised and accordingly 3,090,000 equity share of Rs, 2 each at a premium of Rs, 60 were allotted on 26th March 2010,

6. Extraordinary Item:

During the year Company has sold one of its subsidiaries "EMCO Energy Limited" which was setting up power plant at Warora, Maharashtra and has net gain of Rs. 9,849.33 lakh (net of tax of Rs. 2,885.38 lakh). Being non-recurring in nature same has been treated as an Extraordinary item.

General Description of significant defined plans

I. Gratuity Plan

Gratuity is payable to ail eligible employees of the Company on death, resignation after five completed year of service, retirement or permanent disablement.

7. Disclosure as required by Accounting Standard 19 Leases: Operating Lease

- The Companys significant leasing arrangements are in respect of residential flats, office premises taken on lease. The arrangements are generally from 1 month to 60 months. Under these agreements, generally refundable interest-free deposits have been given. In respect of above arrangements, lease rentals payable are recognised in the Profit and Loss Account for the year and included under Rent and Compensation (Disclosed under Schedule 1 2). Total of Minimum lease payment for a period: -

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