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Notes to Accounts of KEC International Ltd.

Mar 31, 2016

1.1 3,750 fully paid up Equity Shares of Rs. 2 each were allotted to a trustee against 1,688 equity shares of the erstwhile RPG Transmission Limited (RPGT), since merged in the Company in 2007-08, where rights were kept in abeyance by RPGT. On settlement of the relevant court cases/issues, the Equity Shares issued to the trustee will be transferred.

2. The Company has only one class of Equity Shares having a face value of Rs. 2 each. Every member shall be entitled to be present, and to speak and vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. The Company in General Meeting may declare dividends to be paid to members, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

3. 750, 11.65% Privately Placed, Secured, Redeemable Non-Convertible Debentures of Rs. 10 lacs each aggregating Rs. 7,500 lacs (Previous Year - Rs. 7,500 lacs) are secured by an equitable mortgage on land situated at Cable factory, Mysore and hypothecation of all movable fixed assets situated at Cable factory, Mysore. 350 Debentures of Rs. 10 lacs each aggregating Rs. 3,500 lacs are repayable on June 15, 2018 and 400 Debentures of Rs. 10 lacs each aggregating to Rs. 4,000 lacs are repayable on June 14, 2017.

4. Term loans from banks :

(a) Rs. NIL (Previous Year Rs. 2,798.50 lacs) secured by first charge on movable assets of Telecom Division including Telecom Towers.

(b) Rs. NIL (Previous Year Rs. 564.13 lacs) secured by first charge on movable fixed assets i.e. construction equipment pertaining to the Transmission, Distribution and Railway business situated at various project sites in India.

(c) Rs. 5,015.00 lacs (Previous Year Rs. 6,327.50 lacs) secured by first charge on land, building and plant & machinery at Jabalpur and Nagpur factories, both present and future. The term loan is repayable in remaining 10 quarterly structured installments by September 28, 2018 and the present interest rate is 10.60% p.a.

(d) Rs. 4,250.00 lacs (Previous Year Rs. 4,750.00 lacs) secured by first charge on land, building and plant & machinery situated at Jaipur factory, both present and future. The term loan is repayable in remaining 12 quarterly structured installments by March 31, 2019 and the present interest rate is 11.20% p.a.

5. Term loans from other parties includes :

(a) Rs. Nil (Previous Year Rs. 807.69 Lacs) secured by first charge over the fixed assets pertaining to Tower Testing Station situated at Nagpur.

(b) Rs. 4,595.65 lacs (Previous Year Rs. 6,160.87 lacs) secured by exclusive first charge on the project assets including immovable properties at Cable factory, Vadodara both present and future. The term loan is repayable in remaining 8 equal quarterly installments by March 20, 2018 and the present interest rate is 10.50% p.a.

6. Loans repayable on demand from banks :

(a) Rs. 99,782.20 lacs (Previous Year Rs. 52,086.63 lacs) secured by first charge by hypothecation of all the present and future current assets excluding those covered under Note 4.2 (a) above and first charge on flat situated at Juhu, Mumbai and second charge created on fixed assets situated at Jaipur, Jabalpur & Nagpur factories. The present interest rates are in the range of 9.90% to 13.70% p.a.

(b) Rs. 9,987.42 lacs (Previous Year Rs. 12,735.79 lacs) guaranteed by banks, which in turn is secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 2.41% to 3.48% p.a.

(c) Rs. 983.10 lacs (Previous Year Rs. 4,046.69 lacs) secured by assignment of certain overseas book debts. The present interest rates are in the range of is 3.50% to 6.00% p.a.

7. Other short-term borrowings

(a) From Banks-secured

(i) Rs. 16,776.52 lacs (Previous Year Rs. 12,109.29 lacs)secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 1.45% to 2.02% p.a.

(ii) Rs. 3,312.50 lacs (Previous Year Rs. 3,124.75 lacs)secured by security stated against Note 7.1 (b) above. The present interest rate is 3.38% p.a.

(b) From Banks-unsecured

Rs. 7,947.16 lacs (Previous Year Rs. Nil) is repayable by December 2016 and carries interest rate of 1.93% p.a.

(c) From other parties

(i) Rs. 14,341.61 lacs (Previous Year Rs. 15,141.18 lacs) secured by security stated against Note 7.1 (a) above. The loans of Rs. 9,378.69 lacs carries interest of 3.91% p.a and loan of Rs. 4,962.92 lacs carries interest of 3.16% p.a.

(ii) Rs. Nil (Previous Year Rs. 26,000.00 lacs) being commercial paper against standby facilities from certain banks which in turn is secured by security stated against Note 7.1 (a) above. Maximum balance outstanding anytime during the year is Rs. 80,000 lacs (Previous Year Rs. 31,000 lacs)

8. Balances with banks includes deposits amounting to Rs. 115.92 lacs (Previous Year Rs. 153.86 lacs) and margin money or security against the borrowings, guarantees and other commitments Rs. 222.01 lacs (Previous Year Rs. 101.01 lacs) which have an original maturity of more than 12 months.

9. Balances with banks includes deposits amounting to Rs. Nil (Previous Year Rs. 5.92 lacs) which have a maturity of more than 12 months from the Balance Sheet date.

10. : Excise duty shown above includes Rs. (371.98) lacs (Previous Year Rs. 79.94 lacs) being excise duty related to the difference between the closing stock and opening stock of finished goods.

11. : Other expenses shown above include fees of Rs. 164.54 lacs (Previous Year Rs. 154.41 lacs) paid to branch auditors and fees of Rs. 7.00 Lacs (Previous Year Rs. 9.00 Lacs) paid to the cost auditors.

12.: Miscellaneous expenses shown above includes Rs. Nil (Previous Year Rs. 133.00 lacs) being contribution made for political party through an Electoral Trust.

2 Defined Benefit Plan (Funded)

a. A general description of the Employee Benefit Plan:

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days / one month salary, as applicable, payable for each completed year of service or part thereof in excess of six months in terms of gratuity scheme of the Company or as per the Payment of the Gratuity Act, whichever is higher. Vesting occurs upon completion of five years of service.

NOTE 13. - The Company is primarily engaged in Engineering, Procurement and Construction business (EPC) relating to products, projects and systems for power transmission, distribution and related activities. Further, the Company''s business is managed across multiple geographies on a worldwide basis and the same is monitored on individual project basis. Accordingly, there is no other separate reportable segment as defined by Accounting Standard (AS) 17 "Segment Reporting". However, in the Consolidated Financial Statements, for the purpose of geographical segments, the consolidated revenue from operations are broadly divided into two segments- India and Outside India and disclosed accordingly.

NOTE 14. - Basic / diluted earnings per share has been calculated by dividing the profit for the year after tax of Rs. 15,800.96 lacs (Previous Year Rs. 11,073.50 lacs), by 25,70,88,370 (Previous Year 25,70,88,370) being the weighted average number of equity shares (having face value of Rs.2/- each) outstanding during the year.

NOTE 15. - Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act).This has been relied upon by the auditors.

NOTE 16. - SCHEME OF AMALGAMATION:

1. A Scheme of Amalgamation (the Scheme) between Jay Railway Projects Private Limited (Jay Railway) (engaged in EPC business relating to railways signaling automation systems and technology) and the Company and their respective shareholders under Section 391 to 394 of the Companies Act, 1956 was sanctioned by the Hon''ble High Court of Judicature at Bombay on December 30, 2015. The Scheme, which has become operative from December 30, 2015 upon fling of the certified copy of the Order of the Hon''ble High Court of Judicature at Bombay with the Registrar of Company in the Maharashtra, is effective from April 01, 2014 (The Appointed date).

2. Pursuant to the Scheme, with effect from the appointed date Jay Railway (Transferor Company) is amalgamated in the Company, as a going concern, with all its assets, liabilities, properties, rights, benefits and interest therein.

3. Upon the Scheme being effective, the shares held by the Company and its nominees in the Transferor Company have been cancelled and extinguished and no share was issued by the Company in consideration for the Scheme of Amalgamation. Further intercompany loans and balances between the Transferor Company and the Company have been cancelled.

The Company recorded all the assets and liabilities of Jay Railway and transferred to and vested in the Company at their respective book values. Further, the debit balance in Statement of profit and Loss of the Transferor Company as on the appointed date i.e. April 01, 2014 of Rs. 90.63 lacs and for the financially year 2014-15 of Rs. 22.98 lacs has been adjusted against the Surplus in Statement of profit and Loss of the Company.

4. The amalgamation being "Amalgamation in the nature of merger" has been accounted for under the pooling of interest method as prescribed in the Accounting Standard (AS-14) - "Accounting for Amalgamations".

NOTE 17. - The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, trade receivables etc.] as at March 31, 2016 of the Company relating to these contracts aggregate Rs. 3,134.86 lacs (Previous Year Rs. 5,125.96 lacs) The Company has been receiving time extension from the client, from time to time, for completion of the contracts. The Company is confident of completing these projects.

NOTE 18. - In terms of the agreement entered into, in an earlier year, by the Company with the joint venture partner, the Company has funded EJP KEC Joint Venture, South Africa (JV) (including for the other venturer''s share) for smooth execution of the transmission line project at South Africa referred to in the said agreement, which was ultimately completed by the JV in April, 2014.

The JV suffered the loss in execution of the aforesaid project, interalia, on account of unexpected weather and terrain conditions, breach of contract by the client (e.g. changes in the specification, withholding payment due to JV).

During the previous year, the JV lodged various claims (viz. compensation and damages claims) on the client to recover additional costs incurred/ damages suffered by the JV during the execution of the project. During the year, the adjudication proceedings have commenced. Based on the claim expert/ legal advice received, the Company is confident that the JV will ultimately succeed in getting these claims from the client and thereby the Company will realise its dues from the JV. Accordingly, amount recoverable (net of provision) from the JV aggregating Rs. 10,998.22 lacs (Previous Year Rs. 13,022.97 lacs) as appearing under ''Short-term loans and advances'' - Note 18, has been considered good and recoverable by the management.

NOTE 19.- The Corporate Social Responsibility (CSR) obligation for the year as computed by the Company and relied upon by the auditors is Rs. Nil (Previous Year Rs. Nil). CSR amount spent during the year is Rs. 93.00 Lacs (Previous Year Rs. 39.50 Lacs).

NOTE 20. – The transaction for sale of telecom tower assets at 381 sites in the states of Chhattisgarh, Meghalaya and Mizoram to ATC Telecom Tower Corporation Private Limited has been completed at a total consideration of Rs. 8,230 Lacs on July 22, 2015. profit on sale of these assets (net of related expenses) of Rs. 536.06 lacs is included under "Other Income" Note 21.

NOTE 21. – During the previous year, pursuant to the notification of Schedule II to the Companies Act, 2013 (the Act) with effect from April 1, 2014, the Company revised the estimated useful life of its assets as mentioned in Note 1(F)(i). Pursuant to the transition provisions prescribed in Schedule II to the Act, the Company had fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, and adjusted an amount of Rs. 199.01 lacs (net of deferred tax of Rs. 102.48 lacs) against the opening Surplus balance in the Statement of profit and Loss as at March 31, 2014 under Reserves and Surplus. The depreciation expense in the Statement of profit and Loss for the previous year was higher by Rs. 395.51 lacs consequent to the change in the useful life of the assets.

NOTE 22.- Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2014

1.1 Balances with banks includes deposits amounting to Rs. 8.92 lacs (Previous year Rs. 9.28 lacs) and margin money or security against the borrowings, guarantees and other commitments Rs. 240.78 lacs (Previous year Rs. 201.18 lacs) which have an original maturity of more than 12 months.

1.2 Balances with banks includes deposits amounting to Rs. 5.16 lacs (Previous year Rs. 5.16 lacs) which have a maturity of more than 12 months from the Balance Sheet date.

2.1 : Excise duty shown above includes Rs. 354.48 lacs (Previous year Rs. 59.52 lacs) being excise duty related to the difference between the closing stock and opening stock of finished goods.

2.2 : Professional fees shown above include fees of Rs. 133.30 lacs (Previous year Rs. 110.87 lacs) paid to branch auditors and fees of Rs. 9.00 lacs (Previous year Rs. 8.00 lacs) paid to the cost auditors.

NOTE 3 - Contingent Liabilities and Commitments (To the Extent not Provided for)

(i) Contingent Liabilities

(a) Claims against the Company not acknowledged as debts :

Sr. Nature of Claims Relating to various years Current Year Previous Year No. comprise in the period Rs. in lacs Rs. in lacs

1 Sales Tax / Value Added Tax* 1993–2012 6,599.87 (Tax/Penalty/ Interest) 1993–2011 4,920.31

2 Excise Duty * 1994–2014 3,408.22 (Tax/Penalty/ Interest) 1994–2013 2,629.36

3 Service Tax * 1998–2013 16,983.40 (Tax/Penalty/ Interest) 1998–2013 16,882.72

4 Entry Tax * 2001–2014 1,974.94 (Tax/Penalty/ Interest) 1995–2013 1,788.80

5(i) Income Tax matters mainly in respect of A.y. 2006-07 2,416.10 - allowance of depreciation etc. relating to Power Transmission Business acquired by the Company where during the year Department has fled appeal in the Supreme Court

(ii) Income Tax matters at overseas unit/s 2002–2008 3,143.53 2000–2008 3,462.58

6 Customs Duty 1995–1996 60.14 1995–1996 60.14

7 Civil Suits 1993–2004 72.02 1993–2006 72.02

8 Demands of employees/ subcontractors Amount not determinable

*These claims mainly relate to the issues of applicability, issue of disallowance of cenvat / VAT credit and in case of Sales Tax / Value added tax, also relate to the issue of submission of relevant forms and the Company''s claim of exemption for MVAT on export sales and services.

2 Defined Benefit Plan (Funded)

a. A general description of the employee Benefit Plan :

The Company has an obligation towards gratuity, a funded defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of the employment of an amount equivalent to 15 days / one month salary, as applicable, payable for each completed year of service or part thereof in excess of six months in terms to gratuity scheme of the Company or as per the Payment of the Gratuity Act, whichever is higher. Vesting occurs upon completion of five years of service.

XI Contribution expected to be paid to the Plan during the year ending March 31, 2015 – Rs. 337 lacs.

NOTE 4

The Company is primarily engaged in Engineering, Procurement and Construction business (EPC). Further, the Company''s business is managed across multiple geographies on a worldwide basis and the same is monitored on individual project basis. Accordingly, there is no other separate reportable segment as defined by Accounting Standard -17 "Segment Reporting".

NOTE 5 - Related Party Disclosures

(a) Name and nature of relationship of the party where Control exists Subsidiaries- wholly owned :

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ – LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Global Mauritius, Mauritius

(vi) KEC Power India Private Limited

(vii) KEC International Holdings LLC, USA

(viii) KEC Brazil LLC, USA

(ix) KEC Mexico LLC, USA

(x) KEC Transmission LLC, USA

(xi) KEC US LLC, USA

(xii) SAE Towers Holdings, LLC, USA

(xiii) SAE Towers Brazil Subsidiary Company LLC, USA

(xiv) SAE Towers Mexico Subsidiary Holding Company LLC, USA

(xv) SAE Towers Mexico S de RL de CV, Mexico

(xvi) SAE Towers Brazil Torres de Transmission Ltda, Brazil

(xvii) SAE Prestadora de Servicios Mexico, S de RL de CV, Mexico

(xviii) SAE Towers Ltd, USA

(xix) SAE Towers Panama Holdings LLC, USA

(xx) SAE Towers Panama S de RL, Panama

(xxi) SAE Engenharia E Construcao Ltda, Brazil (Incorporated on October 29, 2012)

(xxii) SAE Engineering & Construction Services, S de RL de CV (Incorporated on November 8, 2013)

(xxiii) KEC International (Malaysia) SDN BHD (Incorporated on April 19, 2013)

Associate :

(i) RP Goenka Group of Companies Employees Welfare Association (incorporated on May 21, 2012)

key Management Personnel: Mr. R.D. Chandak – Managing Director

(b) Parties with whom transactions have taken place :

Subsidiaries :

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ – LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Power India Private Limited

(vi) SAE Towers Mexico S de RL de CV, Mexico

Joint Ventures :

(i) Al-Sharif Group and KEC Ltd. Company, Saudi Arabia (formerly known as Faiz Abdul Hakim Al-Sharif Group and KEC Company Ltd., Saudi Arabia)

(ii) EJP KEC Joint Venture, South Africa

(iii) KEC - ASSB JV, Malaysia

(iv) KEC - ASIAKOM – UB JV

(v) KEC - ASIAKOM JV

(vi) KEC - JEI JV

(vii) KEC - DELCO - VARAHA JV

(viii) KEC - VARAHA - KHAZANA JV

(ix) KEC - VALECHA - DELCO JV

(x) KEC - SIDHARTH JV

(xi) KEC - TRIVENI - KPIPL JV

(xii) KEC - UNIVERSAL JV

(xiii) KEC - DELCO - DUSTAN JV

(xiv) KEC - ANPR - KPIPL JV

(xv) KEC - PLR - KPIPL JV

(xvi) KEC - BJCL JV

(xvii) KEC - KIEL JV

(xviii) KEC - ABEPL JV

(xix) KEC - TNR INFRA JV

(xx) KEC - SMC JV

(xxi) KEC - WATERLEAU JV

Associate :

(i) RP Goenka Group of Companies Employees Welfare Association

key Management Personnel: Mr. R. D. Chandak – Managing Director

c) In respect of contracts as referred to in Note 1(C) (iii), the Company has recognised revenue from operations Rs. 2,326.25 lacs (Previous year Rs. 6,914.82 lacs), total expenditure Rs. 2,258.61 lacs (Previous year Rs. 7,323.26 lacs), total assets aggregating Rs. 9,333.78 lacs (Previous year Rs. 14,652.75 lacs) and total liabilities aggregating Rs. 9,262.76 lacs (Previous year Rs. 15,076.69 lacs).

NOTE 6

Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). This has been relied upon by the auditors.

NOTE 7

The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, trade receivable, etc] as at March 31, 2014 of the Company relating to these contracts aggregate Rs. 6,378.26 lacs (Previous year Rs. 5,589.30 lacs). The situation in Libya is returning to normal and the Company is confident of completing these projects.

NOTE 8

The production of Cables at Thane factory has been discontinued from February 11, 2013 and during the year, the Company has given voluntary retirements to all the workers at a cost of Rs. 1,816.42 lacs. The complete range of products manufactured at Thane factory is now being manufactured at new cable factory at Vadodara.

Further the Company signed an ''Agreement for Sale" dated March 29, 2014 for sale of land (book value Rs. 6,313 lacs) to M/s Ardent Properties Pvt. Ltd. (a 100% subsidiary of Tata Housing Development Company Limited) for a consideration of approx. Rs. 21,234 lacs. The Company expects to complete all formalities shortly.

NOTE 9

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

1.1 3,750 fully paid up Equity Shares of Rs. 2 each were allotted to a trustee against 1,688 equity shares of RPGT, since merged in the Company in 2007-08, where rights were kept in abeyance under section 206A(b) of the Companies Act, 1956 by RPGT. On settlement of the relevant court cases/issues, the Equity Shares issued to the trustee will be transferred.

1.2 The Company has only one class of Equity Shares having a face value of Rs. 2 each. Every member shall be entitled to be present, and to speak and vote and upon a poll the voting right of every member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. The Company in General Meeting may declare dividends to be paid to members according to their respective rights, but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.

2.1 Term loans from banks :

(a) Rs. 8,395.50 lacs (Previous Year Rs. 8,395.50 lacs) secured by first charge on movable assets of Telecom Division including Telecom Towers, both present and future. The term loan is repayable in 12 equal quarterly installments commencing from April 24, 2013 and carries interest rate of 7.25% p.a.

(b) Rs. 5,831.56 lacs (Previous Year Rs. 9,167.00 lacs) secured by way of first charge on fixed assets situated at Thane and Mysore. The term loan is repayable in remaining 7 equal quarterly installments by December 9, 2014 and the present interest rate is 11.75 % p.a.

(c) Rs. 1,260.00 lacs (Previous Year Rs. 2,940.00 lacs) secured by way of first charge on land, building and plant and machinery situated at Jaipur. The term loan is repayable in remaining 3 equal quarterly installments by December 31, 2013 and carries interest rate of 10.25% p.a.

(d) Rs. 2,854.92 lacs (Previous Year Rs. 4,000.00 lacs) secured by first charge on movable fixed assets i.e. construction equipment pertaining to the Transmission, Distribution and Railway business situated at various project sites in India, both present and future. The term loan is repayable in remaining 10 equal quarterly installments by September 27, 2015 and the present interest rate is 10.75% p.a.

(e) Rs. 3,700.00 lacs (Previous Year Rs. NIL) collaterally secured by first charge to be created on land, building and plant & machinery situated at Thane and Mysore. The term loan is repayable in 13 quarterly structured installments commencing from March 31, 2015 and the present interest rate is 10.50% p.a.

(f) Rs. 4,700.00 lacs (Previous Year Rs. NIL) secured by first charge to be created on land, building and plant & machinery situated at Nagpur and Jabalpur factories. The term loan is repayable in 20 quarterly structured installments commencing from December 28, 2013 and the present interest rate is 10.85% p.a.

(g) Rs. NIL (Previous Year Rs. 0.32 lacs) secured by hypothecation of vehicles.

2.2 term loans from other parties includes :

(a) Rs. 2,961.54 lacs (Previous Year Rs. 3,500.00 lacs) secured by first charge over the fixed assets pertaining to Tower Testing Station situated at Nagpur both present and future. The term loan is repayable in remaining 11 equal quarterly installments by December 09, 2015. The term loan of Rs. 1,692.32 lacs and Rs. 1269.22 lacs carry interest of 10% p.a. and 12.25% p.a. resepectively.

(b) Rs. 3.44 lacs (Previous Year Rs. 7.14 lacs) secured by hypothecation of vehicles. Out of these, the term loan of Rs. 0.77 lacs is repayable in remaining 5 equal monthly installments by August 03, 2013, Rs. 0.42 lacs is repayable in remaining 5 equal monthly installments by August 09, 2013 and Rs. 2.25 lacs is repayable in remaining 21 equal monthly installments by December 11, 2014 and carry interest rate of 13.20 % p.a.

(c) Rs. 10,334.78 lacs (Previous Year Rs. 7,400 lacs) secured by exclusive first charge on the project assets including immovable properties at Cable factory, Vadodara both present and future. The term loan is repayable in remaining 20 equal quarterly installments by March 20, 2018 and the present interest rate is 11.33% p.a.

3.1 Loans repayable on demand from banks :

(a) Rs. 37,739.19 lacs (Previous Year Rs. 5,640.56 lacs) secured by first charge by hypothecation of all the present and future current assets of the Company excluding those covered under Note 4.1 (a) above and second charge on the Company''s fixed assets situated at Jaipur, Jabalpur & Nagpur factories. The present interest rates are in the range of 10% to 16% p.a.

(b) Rs. 3,488.43 lacs (Previous Year Rs. 2,034.80 lacs) guaranteed by banks, which in turn is secured by security, stated against Note 7.1 (a) above. The present interest rate is 3.00% to 3.50% p.a.

(c) Rs. 2,395.45 lacs (Previous Year Rs. NIL ) secured by assignment of certain overseas book debts. The present interest rate is 3.64% p.a.

3.2 Other short-term borrowings

(a) From Banks

(i) Rs. 7,055.75 lacs (Previous Year Rs. 4,018.52 lacs) secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 3% to 4% p.a.

(ii) Rs. 2,500.00 lacs (Previous Year Rs. NIL) being commercial paper issued against stand by facility from a bank which in turn is secured by security stated against Note 7.1 (a) above and it carries rate of interest of 9.70% p.a. Maximum balance outstanding any time during the year is Rs. 5,000 lacs (Previous Year Rs. 1,25,000 lacs)

(iii) Rs. 11,394.23 lacs (Previous Year Rs. 15,769.70 lacs) secured by security stated against Note 7.1 (b) above. The present interest rates are in the range of 3% to 4% p.a.

(b) From other parties

Rs. 4,971.00 lacs (Previous Year Rs. 5,000.00 lacs) secured by security stated against Note 7.1 (a) above. The present interest rates are in the range of 4.00% to 10.50% p.a.

4.1 Balances with banks includes deposits amounting to Rs. 9.28 lacs (Previous Year Rs. 8.62 lacs) and margin money or security against the borrowings, guarantees and other commitments Rs. 201.18 lacs (Previous Year Rs. 249.25 lacs) which have an original maturity of more than 12 months.

4.2 Balances with banks includes deposits amounting to Rs. 5.16 lacs (Previous Year Rs. 3.61 lacs) which have a maturity of more than 12 months from the Balance Sheet date.

5.1 : Excise duty shown above includes Rs. 59.52 lacs (Previous Year Rs. 107.62 lacs) being excise duty related to the difference between the closing stock and opening stock of finished goods.

5.2 : Miscellaneous expenses include fees of Rs. 110.87 lacs (Previous Year Rs. 85.75 lacs) paid to branch auditors.

NOTE 6

The Company is primarily engaged in the business of Engineering, Procurement and Construction business (EPC). As such there is no other separate reportable segment as defined by Accounting Standard -17 "Segment Reporting".

RELATED PARTY DISCLOSURES

(a) Name and nature of relationship of the party where Control exists:

Subsidiaries- wholly owned

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ - LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Global Mauritius, Mauritius

(vi) KEC International Holdings LLC, USA

(vii) KEC Brazil LLC, USA

(viii) KEC Mexico LLC, USA

(ix) KEC Transmission LLC, USA

(x) KEC US LLC, USA

(xi) SAE Towers Holdings, LLC, USA

(xii) SAE Towers Brazil Subsidiary Company LLC, USA

(xiii) SAE Towers Mexico Subsidiary Holding Company LLC, USA

(xiv) SAE Towers Mexico S de RL de CV, Mexico

(xv) SAE Towers Brazil Torres de Transmission Ltda, Brazil

(xvi) SAE Prestadora de Servicios Mexico, S de RL de CV, Mexico

(xvii) SAE Towers Ltd, USA

(xviii) SAE Towers Panama Holdings LLC, USA

(xix) SAE Towers Panama S de RL, Panama

(xx) SAE Engenharia E Construcao Ltda, Brazil (Incorporated on October 29, 2012)

(xxi) KEC Power India Private Limited (Status changed from Joint Venture to Subsidiary w.e.f. March 31, 2012)

(b) Parties with whom transactions have taken place :

Subsidiaries:

(i) RPG Transmission Nigeria Limited, Nigeria

(ii) KEC Global FZ - LLC, Ras UL Khaimah

(iii) Jay Railway Projects Private Limited

(iv) KEC Investment Holdings, Mauritius

(v) KEC Global Mauritius, Mauritius

(vi) SAE Towers Holdings, LLC, USA

(vii) KEC Power India Private Limited (Status changed from Joint Venture to Subsidiary w.e.f. March 31, 2012)

(viii) SAE Towers Mexico S de RL de CV, Mexico Joint ventures:

(i) Al-Sharif Group and KEC Ltd. Company, Saudi Arabia (formerly known as Faiz Abdul Hakim Al-Sharif Group and KEC Company Ltd., Saudi Arabia)

(ii) KEC Power India Private Limited (Status changed from Joint Venture to Subsidiary w.e.f. March 31, 2012)

(iii) EJP KEC Joint Venture, South Africa

(iv) KEC - ASSB JV Malaysia

(v) KEC - ASIAKOM - UB JV

(vi) KEC - ASIAKOM JV

(vii) KEC - JEI JV

(viii) KEC - DELCO - VARAHA JV

(ix) KEC - VARAHA - KHAZANA JV

(x) KEC - VALECHA - DELCO JV

(xi) KEC - SIDHARTH JV

(xii) KEC - TRIVENI - KPIPL JV

(xiii) KEC - UNIVERSAL JV

(xiv) KEC - DELCO - DUSTAN JV

(xv) KEC - ANPR - KPIPL JV

(xvi) KEC - PLR - KPIPL JV

(xvii) KEC - BJCL JV

(xviii) KEC - KIEL JV

Key Management Personnel: Mr. R.D. Chandak - Managing Director

NOTE 7

Basic / diluted earnings per share has been calculated by dividing the profit for the year after taxation of Rs. 455.84 lacs (Previous Year Rs. 18,183.87 lacs), by 25,70,88,370 (Previous Year 25,70,88,370) being the weighted average number of equity shares outstanding during the year.

NOTE 8

Based on the details regarding the status of the supplier obtained by the Company, there is no supplier covered under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act). This has been relied upon by the auditors.

The execution of the construction works under contracts of the Company with General Electric Company Libya (a Government of Libya undertaking) is disrupted since February, 2011 due to civil/political unrest in that country. The net assets [including fixed assets, debtors etc] as at March 31, 2013 of the Company relating to these contracts aggregate Rs. 5,589.30 lacs (Previous Year Rs. 7,688.72 lacs). The situation in Libya is returning to normal and the Company is confident of completing these projects. Further, during the year the Company has realised Rs. 2,155.91 lacs from the customer.

(i) Members of the Company in the Annual General Meeting held on July 05, 2011 accorded consent subject to approval of the Central Government for payment of commission to non- executive directors up to 5% of the net profits of the Company computed as per the provisions of the Companies Act, 1956, at the end of each financial year, for a period of five years commencing from financial year 2010-11 in such manner and upto such extent as the remuneration committee of the Board of Directors of the Company recommends and the Board of Directors determine from time to time.

The Board of Directors in its meetings held on May 08, 2013 and May 03, 2012 determined commission of Rs. 97.55 lacs and Rs. 880 lacs for the financial years ended March 31, 2013 and March 31, 2012 respectively and accordingly provided for the same in the books. The said provisions include commission of Rs. 78.04 lacs and Rs. 695.18 lacs in excess of 1% of the net profit computed under Section 349 of the Companies Act, 1956 which are subject to the approval of the Central Government under the relevant provisions of the Companies Act, 1956. No payments have been made pending receipt of the said approval.

(ii) Remuneration of Rs. 277.74 lacs paid to the Managing Director and debited to the Statement of Profit and Loss for the financial year 2012-13 includes Rs. 180.19 lacs in excess of the limits specified in Section 309 of the Companies Act, 1956. The excess payment is as a result of lower profit for the year due to additional costs incurred in respect of certain contracts which was not envisaged during the year. An application has been made by the Company to the Central Government under Section 309 (5B) of the Companies Act, 1956 to waive the recovery of the said excess remuneration. Pending such approval the Managing Director holds the excess remuneration paid in trust for the Company.

NOTE 9

The production of Cables at Thane plant has been discontinued from February 11, 2013. The complete range of products manufactured at Thane plant is now being manufactured at new cable plant at Vadodara.

Previous Year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

 
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