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Notes to Accounts of ISGEC Heavy Engineering Ltd.

Mar 31, 2016

Note 1. Secured by hypothecation of inventories and by a charge on book debts and other assets of the Company, in favour of working capital consortium bankers on pari passu basis.

Note 2. : Repayable on demand. Rates of interest vary from 10.60% to 12.90% p.a.

Note 3. : Average rate of interest on Packing Credit Loans from Banks is 0.97 % p.a in Foreign Currency (all loans are in USD) (previous year 1.13 % p.a) and 9.08 % p.a. in Indian Rupees (previous year not applicable )

Note 4. Details of Employee Benefits Expense

The disclosure of employee benefits as required in Accounting Standard -15 is given below:-

a) Defined Contribution Plan:

The Company has recognised, in the statement of profit and loss, expenses for the following Defined Contribution Plans:

Note 5. : Earning Per Share

In accordance with Accounting Standard (AS-20) on ''Earnings Per Share'' the following table reconciles the numerator and denominator used to calculate Basic and Diluted Earnings Per Share:

Note 6: Segment Reporting

(a) Primary Segment

The Company operates in only one segment of Engineering business which comprises of production and sales of Engineering Equipments, identified in accordance with principles enunciated in Accounting Standard AS- 17 . Hence, separate segment information is not applicable.

(b) Secondary Segment

In respect of secondary segment information, the Company has identified Geographical segments as (i) domestic and (ii) Overseas.

(i) Domestic Revenue includes sales to customers located within India and earnings in India.

(ii) Overseas Revenue includes sales to customers located outside India and earnings outside India.

The required disclosure is as follows:-

Note 7: There is no other information required to be disclosed apart from the information already disclosed, pursuant to the requirements of Schedule III to the Companies Act,2013

Note 8: Previous year figures have been regrouped/ recast wherever considered necessary to conform to current year classification.

Note 9: Company Overview:

Isgec Heavy Engineering Limited (the "Company") is a Heavy Engineering Company and is engaged in the manufacture of Process Plant equipments, Mechanical and Hydraulic Presses, Alloy Steel and Ferrous Castings, Containers, Contract Manufacturing and Execution of Projects for setting up Boilers, Sugar Plants, Power Plants and Air Pollution Control Equipments for customers in India and abroad. The Company is a Public Limited Company and its shares are listed on Bombay Stock Exchange (BSE).


Sep 30, 2013

Note 1. Overview

Isgec Heavy Engineering Limited (the ACI-Company ACI-) is a diversified heavy engineering Company and is engaged in manufacture of Process Plant equipments, Mechanical and Hydraulic Presses and Castings, Contract Manufacturing and execution of projects for setting up Boilers, Sugar Plants and EPC Power Plants for customers in India and abroad.

The Company is a Public Limited Company and its shares are listed on Bombay Stock Exchange (BSE) and Delhi Stock Exchange (DSE).

a) Provisions

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if

i) the Company has a present obligation as a result of a past event,

ii) a probable outflow of resources is expected to settle the obligation and

iii) the amount of the obligation can be reliably estimated.

b) Contingent Liabilities

Contingent Liability is disclosed in the case of

i) a present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation

ii) a possible obligation, unless the probability of outflow of resources is remote.

c) Contingent Assets : Contingent Assets are neither recognised, nor disclosed.

d) Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

a)The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital are as under:

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each share holder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of the share holders in the ensuing Annual General Meeting. In the event of the liquidation of the company, the holders of the equity shares will be entitled to receive the remaining assets of the company, after distribution of all the preferential amounts. The distribution will be in proportion to number of equity shares held by each of the equity share holders.

Note 1.1 Secured by hypothecation of inventories and by a charge on book debts and other assets of the company, on pari passu basis to working capital consortium bankers.

Note 1.2 Repayable on demand

Note 1.3 Average rate of interest on Packing Credit Loans from Banks is 7.78 ACU-.

Note 1.4 : Classified as joint venture in accordance with Accounting Standard (AS) 27-Financial Reporting of Interest in Joint Ventures as per joint venture agreement between Isgec Heavy Engineering Limited and Hitachi Zosen Corporation, Japan. It may be noted that the Company holds 51 ACU- equity shares in the said company.

Note 2 : CONTINGENT LIABILITIES ACY- COMMITMENTS

(Rs. in lacs)

Particulars As at As at 30.09.2013 30.09.2012

I Contingent Liabilities:

a) Claims against the Company not acknowledged as debts 1,172.92 650.59 (including sales tax under dispute)

b) Guarantees furnished by the bankers on behalf of the Company and 114,796.21 104,932.34 counter indemnity furnished by the Company to bankers for the same amount. ACo-

ACo- Includes Performance Bank Guarantees given on behalf of subsidiary - 21.50 company Isgec Covema Limited

c) Bonds executed in favour of President of India against Export Promotion 5,711.24 6,632.60 Capital Goods license

d) Bonds executed in favour of President of India against Advance 26,128.20 - Authorizations ACo-

ACo- Includes Bonds given on behalf of joint venture company Isgec Hitachi 8,438.00 - Zosen Limited

e) Bills discounted with Banks / Financial Institutions outstanding at 2,718.90 - the year end

f) Corporate Guarantees furnished by the Company to Customers 1,245.12 1,505.01

II Letters of Credit outstanding 4,808.29 4,080.37

III Estimated amount of contracts remaining to be executed on Capital Account 1,774.84 1,171.83 and not provided for (net of advances)

Note 3 : SEGMENT REPORTING

(a) Primary Segment

The company operates in only one segment of Engineering business which comprises of production and sales of Engineering Equipments, identified in accordance with principle enunciated in Accounting Standard (AS-17) Hence, separate segment information is not applicable.

(b) Secondary Segment

The Segment Revenue in the geographical segments considered for disclosure is as follows:

(i) Revenue within India includes sales to customers located within India and earnings in India.

Note 4 : There is no other information required to be disclosed apart from the information already disclosed, pursuant to the requirements of Schedule VI to the Companies act,1956

Note 5 : Previous year figures have been regrouped/ recast wherever considered necessary to confirm to current year classification.


Sep 30, 2012

Note 1. Overview

Isgec Heavy Engineering Limited (the "Company") is a diversified heavy engineering company and is engaged in manufacture of Process Plant equipments, Mechanical and Hydraulic Presses and Castings, Contract Manufacturing and execution of projects for setting up Boilers, Sugar Plants and EPC Power Plants for customers in India and abroad.

The company is a Public limited company and its shares are listed on Bombay Stock Exchange (BSE) and Delhi Stock Exchange (DSE).

(a) The rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital are as under:

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each share holder is entitled to one vote per share. The dividend proposed by the board of directors is subject to the approval of the share holders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of the liquidation of the company, the holders of the equity shares will be entitled to receive the remaining assets of the company, after distribution of all the preferential amounts. The distribution will be in proportion to number of equity shares held by each of the equity share holders.

Note 2.1 Secured by hypothecation of inventories and by a charge on book debts and other assets of the company, on pari passu basis to working capital consortium bankers

Note 2.2 Repayable on demand

Note 3.1 : Classified as joint venture in accordance with Accounting Standard (AS) 27-Financial Reporting of Interest in Joint Ventures as per joint venture agreement between Isgec Heavy Engineering Limited and Hitachi Zosen Corporation, Japan. It may be noted that the Company holds 51% equity shares in the said company.

Note 4 : CONTINGENT LIABILITIES & COMMITMENTS

(Rs. in lacs)

Particulars As at As at 30.09.2012 30.09.2011

I Contingent Liabilities:

a) Claims against the Company not acknowledged as debts 650.59 928.33 (including sales tax under dispute)

b) Guarantees furnished by the bankers on behalf of the Company and counter 104,932.34 125,598.79 indemnity furnished by the Company to bankers for the same amount.*

*Includes Performance Bank Guarantees given on behalf of subsidiary 21.50 132.25 company Isgec Covema Limited

c) Bonds executed in favour of President of India against Export Promotion 6,632.60 1,968.50 Capital Goods licence

II Letters of Credit outstanding 4,080.37 10,332.95

III Estimated amount of contracts remaining to be executed on Capital Account 1,171.83 2,142.93 and not provided for (net of advances)

Note 5.1 : SEGMENT REPORTING

(a) Primary Segment

The company operates in only one segment of Engineering business which comprises of production and sales of Engineering Equipments, identified in accordance with principle enunciated in Accounting Standard AS-17 . Hence, separate segment information is not applicable.

(b) Secondary Segment

The Segment Revenue in the geographical segments considered for disclosure is as follows:

(i) Revenue within India includes sales to customers located within India and earnings in India.

(ii) Revenue outside India includes sales to customers located outside India and earnings outside India.

Note 5.2 : LEASE RENT INCOME

(a) The Company has given on lease factory, land and plant and machinery under operating lease. In accordance with Accounting Standard (AS-19) on ''Leases'' disclosure of the future minimum lease income under non cancellable operating leases in the aggregate and for each of the following periods:

Note 6 : FOREIGN CURRENCY EXPOSURES

The Company had entered into swaps/forward contracts which are not intended for trading or speculative purposes but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

Note 7 : There is no other information required to be disclosed apart from the information already disclosed, pursuant to the requirements of Schedule VI to the Companies act,1956

Note 8 : Previous year figures have been regrouped/ recast wherever considered necessary to conform to current year classification.


Sep 30, 2009

1. Contingent Liabilities:

a) Claims against the Company not acknowledged as debts (including sales tax under dispute) Rs. 861.46 Lacs (Previous year Rs. 788.41 lacs).

b) Guarantees furnished by the bankers on behalf of the Company for Rs. 49309.47 lacs.* (Previous year Rs. 43,253.70 lacs) and counter indemnity furnished by the Company to bankers for the same amount.

"Includes Performance Bank Guarantees given on behalf of subsidiary company Isgec Covema Limited Rs 122.17 lacs (Previous year Rs. 183.04 lacs).

c) C Forms due against Sales Tax for the assessment years 2004-05 to 2008-2009 of Rs.739.02 lacs (Previous year Rs. 600.92 lacs.)

d) Bills discounted with Banks / Financial Institutions outstanding at the year end Rs.341.57 lacs (Previous year Rs. 267.99 lacs)

e) Bonds executed in favour of President of India against EPCG licence Rs. 1917.45 lacs (Previous year Rs. 996.08 lacs)

2. Letters of credit outstanding at year end Rs. 3668.47 lacs (Previous Year Rs. 9,143.58 lacs).

3. a) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. 340.10 lacs (Previous year Rs. 1831.84 lacs).

b) Liability on account of partly paid units of Kotak India Growth Fund - II Rs. 169.75 (Previous year 169.75).

4. Micro, Small & Medium Enterprises Development Act, 2006

The Company is in the process of compiling information from its suppliers regarding their status under the above Act and hence disclosure, if any, of the amounts unpaid as at the year end together with the interest paid/ payable as required has been given to the extent of information available.

5. Segment Reporting

The Company has only one segment of Engineering Business identified in accordance with guiding principles enunciated in Accounting Standard AS-17 Segment Reporting issued by the Institute of Chartered Accountants of India, hence the segment information is not applicable.

6. Related Party transactions

In accordance with the Accounting Standard on "Related Party Disclosures" (AS-18), the disclosures in respect of Related Parties and transactions with them, as identified and certified by the management, are as follows:

(a) Nature of Related Parties and description of relationship

Holding Company None

Subsidiaries Saraswati Sugar Mills Limited

ISGEC Covema Limited

ISGEC Exports Limited

ISGEC Engineering & Projects Ltd.

Joint Venture ISGEC Haco Metal Forming Machinery Pvt. Ltd.

Entities over which Directors Yamuna Syndicate Limited and their relatives can Kamla Puri Charitable Trust exercise significant influence Kamla Puri Charitable Foundation

Blue Water Enterprises Key Management Personnel Mr. Aditya Puri (Managing Director)

Mrs. Nina Puri (Wholetime Director) Relatives of Key Management Mr. Ranjit Puri (Chairman), (Husband of Mrs. Nina Puri Wholetime Director & Father of Mr. Aditya Puri Managing Director)

Mrs. Tanupriya Puri (wife of Mr. Aditya Puri Managing Director)

7. In accordance with Accounting Standard (AS-19) on Leases, the Company has taken various residential/ commercial premises and plant and machinery under cancellable operating leases. Lease rent charged to Profit & Loss account for the year Rs 168.52 Lacs (Previous year Rs 105.79 lacs)

8. As per Accounting Standard, AS - 26, Software Licences and Technical Know How amounting to Rs. 103.72 lacs (Previous Year 98.13 lacs) and Rs. NIL lacs (Previous Year Rs. 111.98 Lacs) respectively acquired during the year have been capitalised and amortised over estimated useful life of five years.

9. Disclosure in terms of Accounting Standard AS - 29 on Provisions, Contingent Liabilities and Contingent Assets:-

a) Movement for provision for Liabilities: (Rs. in Lacs)

2008-09 2007-08

Opening Balance 5,502.17 4,386.80

Provided for during the year 2,587.80 2,435.22

Used during the year 571.34 1,192.43

Reversed during the year 641.22 127.42

Closing Balance 6,877.41 5,502.17

Timing of outflow/uncertainties Outflow on expenses incurred/ crystallisation of dues depends upon claims to be made by Customers & others.

b) Provisions made during the year have been accounted for under the head cost of goods purchased for resale for Rs.2307.71 lacs (Previous year Rs. 2259.52 Lacs) and manufacturing expenses for Rs.280.09 lacs (Previous year Rs. 175.70 Lacs).

10. The Company has not made any provision for Corporate Dividend Tax as the dividend receivable by the Company from its subsidiary during the financial year ending 31.03.2010 when the right to receive payment is established, is likely to be more than the dividend to be distributed.

11. Dividend paid during the year includes Nil (Previous Year Nil) dividend in foreign currency on 508900 (Previous Year 512050) Equity Shares held by six (previous year six) Non - Resident shareholders. The dividend to these shareholders has been paid in Indian Currency.

12. Foreign Currency Exposures:

The Company had entered into swaps/forward contracts which are not intended for trading or speculative purposes but for hedge purposes, to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.

13. Previous year figures have been regrouped/ recast wherever considered necessary to conform to current year classification.

 
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