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Notes to Accounts of KNR Constructions Ltd.

Mar 31, 2016

1 Term Loans from Banks

i) HDFC Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery

ii) Axis Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery

iii) ICICI Bank Ltd.,

- Secured by Hypothecation of specific assets purchased out of the loan, comprising Plant & Machinery The details of rate of interest and repayment terms of term loans are as under

2. In accordance with the Payment of Gratuity Act, 1972, the Company provides for gratuity covering employees. The liability on account of gratuity is covered partially through a recognized Gratuity Fund managed by Life Insurance Corporation of India (LIC) and balance is provided on the basis of valuation of the liability by an independent actuary as at the year end. The management understands that LIC''s overall portfolio of assets is well diversified and as such, the long term return on the policy is expected to be higher than the rate of return of Central Government bonds.

3. Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

1 Hypothecation of entire current assets on pari passu basis with other participating banks,

2 First pari passu charge on equitable mortgage of land & buildings, valued at Rs. 30.38 Crores

3 First pari passu charge on equitable mortgage of industrial factory buildings without machinery, valued at Rs. 25.49 Crores on 09-03-2015

4 Hypothecation of certain equipment''s of written down value as on 31.03.2015 is Rs 45.03 Crores

5 Personal guarantee of Directors.

4. The interest rate for working capital demand loan and cash credit facilities varies from 10.80% to 12.40 % per annum

5 The company availed short term un-secured loans from directors, which are repayable on demand and carries interest at 10.00% to 11% per annum.

6.. There is no impairment Loss on fixed assets on the basis of review earned out by the management in accordance with the Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which are found having no market value have been written off in the accounts.

Debit and credit balances of parties a:e subject to confirinalion by the respective parties.

4 -The Company has taken unsecured advances / loans from its directors, the del alls of which are turn i shed below

Willi The current year’s classification / disclosure.

1Sri. S.Vaikuntanathan, V.P (F&A) has joined on 07-01-2016.

2Sri. G. Sravana Kumar, CGM (F&A) has resigned on 30-11-2015.

During the period under review, no employee of the Company is employed throughout the financial year and in receipt of Rs.60 lakhs or more, or employed for part of the year and in receipt of Rs.5 lakhs or more a month, under Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

ii) The median remuneration of employees of the Company during the financial year was Rs. 1.48lakhs;

iii) In the financial year, there was decrease of 18.83% in the median remuneration of employees;

iv) There were 854 employees on the rolls of Company as on March 31, 2016


Mar 31, 2013

1 CORPORATE INFORMATION:

1.1 The shares of the Company are listed on the stock exchanges in India in 2008 pursuant to the Public offer of equity shares. The Company is engaged in the infrastructure sector'' primarily in the construction of roads'' bridges and flyovers'' irrigation projects.

2. The Company has not received any intimation from ''Suppliers'' regarding their status under the Micro'' Small and Medium Enterprises Development Act'' 2006 and hence disclosures'' if any relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

3. Segmental Reporting

The Company''s operations consists of Construction activities. Hence'' there are no reportable segments under Accounting Standard – 17. During the year under report'' the Company is engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform'' no separate geographical disclosures are considered necessary.

4. In the case of Patel-KNR-JV'' the share of loss for the quarter ended 30th June'' 2012 was accounted for an amount of Rs 87.53 lakhs based on the un-audited financial statements furnished by the said J.V. However'' the share of profit/ loss for the remaining period of the financial year is not accounted as the said JV has not furnished audited/un-audited financial statements for the year ended 31-03-2013. The impact of this on the share of profit/ (loss) of the Company cannot be quantified in the absence of full particulars in this regard.

5. As per the Accounting Standard-27 on "Financial Reporting of Interest in Joint Venture'' issued by the Institute of Chartered Accountants of India'' the particulars of Joint Venture and its interest there in are as follows:

6. There is no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company'' those assets which are found having nil market value have been written off in the accounts.

7. Debit and credit balances of parties are subject to confirmation by the respective parties.

8. The Company has taken unsecured advances / loans from its directors'' the details of which are furnished below:

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


Mar 31, 2012

The Company has only one class of shares referred to as equity shares having a par value of Rs 10/- . Each holder of equity shares is entitled to one vote per share.

The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.

The Board of Directors, in their meeting on 28-05-2012 declared dividend of Rs 1/- per equity share. The total dividend appropriation for the year ended March 31 , 2012 amounted to Rs 326.86 Lakhs including corporate dividend tax of Rs 45.62 Lakhs.

1.1 Term Loans availed from banks and others are secured by hypothecation of specific assets comprising plant and equipment and vehicles acquired out of the said loans and personal guarantee of a director.

1.2 All term loans from banks and others are repayable in 35 equal monthly installments

2.1 Working Capital Facilities: Cash Credit facilities from consortium of banks are secured by:

1 Hypothecation of entire current assets on pari passu basis with other participating banks,

2 First pari passu charge on equitable mortgage of land & buildings, the WDV of which is Rs 1.38 crores (Market Value approx. Rs5.25 Crores) as on 31.03.2009 .

3 First pari passu charge on equitable mortgage of 5 acres of agricultural land of approximate value of Rs 6.00 Crores

4 First pari passu charge on equitable mortgage of industrial factory buildings without machinery of approximate value of Rs 25.40 Crores

5 Hypothecation of certain equipment's of written down value as on 31.03.2010 is Rs 45.00 Crores

6 Personal guarantee of Directors.

7 First pari passu charge on equitable mortgage of property in the name of Company and Director of approximate value of Rs 25.40 Crores

3. Contingent Liabilities not pr ovided for

Rs in Lakhs

Sl. Particulars 2011-12 2010-11 No.

a. Bank Guarantees

- for Company 42121.82 31434.05

- for Joint Ventures' 2264.81 3197.36

- for Subsidiaries Nil Nil

- for Associates (SPV's ) 200.00 200.00

- for Tax matters 241.63 241.63

Total 44828.26 35073.04

b. Corporate guarantees given to banks and financial institutions for financial assistance extended to Subsidiaries,

Associates and Joint Ventures 11142.25 13642.25

c. Counter Guarantees to Corporate Nil 280.00

d. Letters of Credit 1164.65 Nil

e. Demands against the Company not acknowledged as debts and not provided for in respect of which the Company has filed appeal.

- Income Tax and Interest on TDS 3106.83 2954.75

- Sales Tax / VAT / Entry Tax 1882.88 1481.99

f. Claims against the Company not acknowledged as debts 176.77 Nil

g. Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects - amounts are not ascertainable.

4. Remittance in foreign currencies for dividend

The company has not remitted any amount in foreign currencies on account of dividends during the year and has remitted dividend to the nonresident shareholders in Indian currency during the year ended March 31, 2012 and the details of the same as given below:

5. The Company has not received any intimation from 'Suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the yearend together with interest paid / payable as required under the said Act have not been given.

6. Segmental Reporting

The Company's operations consist of Construction activities. Hence, there are no reportable segments under Accounting Standard - 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

Note: The amounts mentioned above in the case of 1) M/s. Patel-KNR-JV 2) M/s. KNR-Patel-JV 3) M/s. KNR-BPL-JV and M/s. KNR Constructions LLC are based on the un-audited financial statements of the respective entities.

7. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which are found having nil market value have been written off in the accounts.

8. Debit and credit balances of parties are subject to confirmation by the respective parties.

9. The Revised schedule VI to the Companies Act ,1956 has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure & presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification /disclosure.


Mar 31, 2011

1. All amounts in the financial statements are presented in Indian Rupees in lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped / rearranged wherever considered necessary to confirm to the figures presented in the current year.

During the year ,the company has opened a branch at Dubai on 26-04-2010. This branch operations are controlled by Sri K Jalandhar Reddy, Executive Director of the Company.

During the year, the company purchased all the equity shares in KNRCL FZE, a foreign company, which was owned by Sri K. Narasimha Reddy, M.D of KNR Constructions Ltd., on 29-11-2010. Against this transaction , the company has not paid the purchase consideration of Rs 48,88,337/- to Sri K. Narasimha Reddy as on 31-3-2011 . Sri K. Narasimha Reddy has been appointed as the Director of this company. Five Equity shares, face value of AED 100000 each have been purchased from Sri. K. Narasimha Reddy , M.D of KNR Constructions Ltd and purchase value of each share is AED 78174 as on 29-11-2010.

During the year ,the company purchased all the equity shares in KNR Infra Projects Pvt Ltd., Hyderabad on 28.03.2011 which was promoted by Sri K Jalandhar Reddy and Sri J.V Panindra Reddy. The total purchase consideration of Rs. 1,00,000/- has been paid to the said persons during the financial year .

Additional amount of depreciation has been charged to the Profit & Loss A/c to the tune of Rs 9,44,94,285/-during the financial year on account of the change in accounting policy of providing depreciation on plant and machinery for few projects only from Written Down Value Method to Straight Line Method based on the useful lives estimated by the management .

2. Contingent Liabilities not provided for Rs. in Lakhs

Sl No Particulars 2010-11 2009-10

a. Bank Guarantees

- for Company 31434.05 19338.34

- for Joint Ventures' 3197.36 4086.20

-for Subsidiaries Nil Nil

- for Associates (SPVs) 200.00 622.32

Total 34831.41 24,046.86

b. Corporate guarantees given to banks and financial institutions for financial assistance extended to Subsidiaries, Associates and Joint Ventures 13642.25 52642.25

c. Counter Guarantees to Corporates 280.00 Nil

d. Letters of Credit Nil Nil

e. Demands against the Company not acknowledged as debts and not provided for in respect of which the Company has filed appeal.

- Income Tax 2954.75 4.68

- Sales Tax / VAT / Entry Tax 1481.99 156.50

f. Claims against the Company not acknowledged as debts Nil Nil

g. Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects - amounts are not ascertainable.

3. The Company has not received any intimation from ‘Suppliers' regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid /payable as required under the said Act have not been given.

4. Segmental Reporting

The Company's operations consist of Construction activities. Hence, there are no reportable segments under Accounting Standard – 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

5. Related Party Transactions

A. Following is the list of related parties and relationships:

Sl. No Particulars

A) Subsidiaries

KNR Agrotech Beverages Pvt Ltd.,

KNR Constructions LLC, Oman

KNR – FZE *

KNR Infrastructure Projects Pvt Ltd., **

B) Joint Ventures

KNR – Patel JV

Patel – KNR JV

NCC-KNR JV

KNR – SLEC JV

KNR-BPL JV

KNR-GVR-JV

KNR-JKM-KAMAL-JV

C) Associates

Patel-KNR Infrastructure Ltd.,

Patel-KNR Heavy Infrastructure Ltd.,

D) Key Management Personnel

Sri K Narasimha Reddy , M.D

Sri K Jalandhar Reddy, E.D

Sri JV Panindra Reddy, E.D

Sri M. Rajesh Reddy, E.D

Sri M. V Venaka Rao, CS

Sri G. Sravana Kumar, G.M

E) Relatives of Key Management Personnel

NIL

F) Enterprises owned or significantly influenced by key management personnel or their relatives

Yuvashakthi Enterprises (Firm)

KNR Infrastructure Projects Pvt Ltd.,

Vishnu Publicity Solutions Pvt. Ltd.,

Trapezoid Software Solutions Pvt. Ltd.,

Mesmeric Software Solutions Pvt. Ltd.,

Nag Talent Ventures & Infotech Pvt. Ltd.,

* Has become a subsidiary with effect from 29-11-2010.

** Has become a subsidiary with effect from 28-03-2011.

6. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which are found having nil market value have been written off in the accounts.

7. Debit and credit balances of parties are subject to confirmation by the respective parties.

8. Additional information pursuant to provisions of Para 3, 4C and 4D of Part – II of Schedule VI of Companies Act, 1956 – not applicable.

9. Figures of previous year have been regrouped / rearranged wherever necessary to conform to the current year presentation.


Mar 31, 2010

1. All amounts in the financial statements are presented in Rupees in lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year figures in respect of Profit & Loss items and in respect of Balance Sheet items as on the Balance Sheet date of the previous year. Figures for the previous year have been regrouped /rearranged wherever considered necessary to confirm to the figures presented in the current year.

2. Contingent Liabilities not provided for Rupees in Lakhs

Sl No Particulars 2009-10 2008-09

a. Bank Guarantees

- for Company 19338.34 9537.22

- for Joint Ventures 4086.20 2699.62

- for SPVs 622.32 1105.92

TOTAL 24,046.86 13,342.76

b. Corporate guarantee 52642.25 52642.25

c. Letter of Credit Nil Nil

d. Demands against the Company not acknowledged as debts and not provided for in respect of which the Company has fled appeal.

- Income Tax 4.68 4.68

- Sales Tax 156.50 165.61

e. Claims against the Company not acknowledged as debts Nil Nil

f. Joint and several liabilities in respect of joint venture projects and liquidated damages in respect of delays in completion of projects - amounts are not ascertainable.

3. Details of utilization of IPO proceeds

The Company raised funds through IPO in the F.Y 2007-08, by issuing its equity shares comprising of 78,74,570 equity shares. In this regard, equity shares of Rs. 10/- each were issued at Rs. 170/- each aggregating to Rs. 13,386.77/- lakhs

4. The Company has not received any intimation from ‘Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

5. Segmental Reporting

The Companys operations consist of Construction activities. Hence there are no reportable segments under Accounting Standard – 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions prevailing in India being uniform, no separate geographical disclosures are considered necessary.

6. Related Party Transactions

A) Following is the list of related parties and relationships:

Sl. No Particulars

A) Subsidiaries

KNR Agrotech Beverages Pvt Ltd., KNR Constructions LLC, Oman

B) Joint Ventures

KNR – Patel JV Patel – KNR JV NCC-KNR JV KNR – SLEC JV KNR-BPL JV KNR-GVR-JV KNR-JKM-KAMAL-JV

C) Associates

Patel-KNR Infrastructure Ltd., Patel-KNR Heavy Infrastructure Pvt Ltd.,

D) Key Management Personnel

Sri K.Narasimha Reddy Sri K.Jalandhar Reddy Sri J.V.Panindra Reddy Sri M.Rajesh Reddy Sri. M.V.Venkata Rao Sri. G.Sravana Kumar

E) Relatives of Key Management Personnel

Nil

F) Enterprises owned or significantly influenced by key management personnel or their relatives

Yuvashakthi Enterprises (Firm)

KNR Infrastructure Projects Pvt Ltd.,

Vishnu Publicity Solutions Pvt. Ltd.,

Trapezoid Software Solutions Pvt. Ltd.,

Mesmeric Software Solutions Pvt. Ltd.,

Nag Talent Ventures & Infotech Pvt. Ltd.,

7. There was no impairment Loss on fxed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 issued by the Institute of Chartered Accountants of India. Further during the review of assets of the company, those assets which were found to be having nil market value have been written off in the accounts.

8. Debit and credit balances of parties are subject to confrmation by the respective parties.

9. Additional information pursuant to provisions of Para 3, 4C and 4D of Part – II of Schedule VI of Companies Act, 1956 – not applicable.

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

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