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Notes to Accounts of Pratibha Industries Ltd.

Mar 31, 2015

1. Change of policy of Valuation of Raw Material

Company has changed its policy of valuation of Raw Material Stock from First in First out (FIFO) to Weighted Average method. Due to the nature and quantum of such raw material stock, it is not possible to assess financial impact of such change on profit and loss account.

2. Disclosure pursuant to Accounting Standard – 7 "Construction Contracts"

In terms of the disclosure required to be made under the Accounting Standard 7 for "Construction Contracts" as notified in the Rule 7 of the Companies (Accounts) Rules, 2014, the amounts considered in the financial statements up to the balance sheet date are as follows:

3. leases

The Company has operating lease agreements, primarily for leasing office space and residential premises for it employees. Most of these lease agreements provide for cancellation by either party with a notice period ranging from 30 days to 120 days and contain a clause for renewal of lease agreement at the option of the Company. There are no non-cancellable operating leases. There are no assets taken on finance lease.

4. Financial Reporting of Interest in Joint Ventures

The investments in joint venture are governed by the AS-27 "Financial Reporting of Interest in Joint Venture" issued by the Institute of Chartered Accountants of India. During the period under review, there were following active investments in the joint ventures:

5. During the year, the Company has not remitted dividend in foreign currency (P.Y. NIL)

6. As on 31st March 2015, there is no Mark-to-Market loss on account of derivative forward exchange contract.

7. Segment Information

The Company has identified two reportable segments viz. Infrastructure & Construction and Manufacturing & Coating. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

8. Other Information under Part II of Schedule III of the Companies Act, 2013 are not applicable and hence not disclosed.

9. During the year, the Company has sold of major machineries of Saw Pipe Division. The loss on sale of assets is shown as exceptional items in the statement of Profit & Loss.

10.Prime Infrapark Pvt. Ltd., wholly owned subsidiary has incurred losses and its net worth is fully eroded. However, Investment is considered at cost and there is no requirement for the provision of permanent diminution as the management is of the opinion that its subsidiary shall recover its losses in coming years.

11.Balance under the head 'Trade Receivables', 'Trade Payables', 'Loan and Advances Receivable and Payable' are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

12.The previous year's figures have been regrouped, rearranged and reclassified wherever necessary to conform to the current year presentation.


Mar 31, 2014

Company Overview

Pratibha Industries Limited (''the Company'') is one of a fastest growing Infrastructure Company in India. The Company undertakes infrastructure projects, which includes designing, engineering and execution/ construction of complex & integrated water transmission & distribution projects, water treatment plants, elevated and underground reservoirs, mass housing projects, commercial complexes, pre-cast design & construction, road construction and urban infrastructure.

1. Contingent Liabilities: (Rs in Lakh) As at As at Particulars 31 st March 31 st March 2014 2013 i. Unutilized Letters of Credit with Bankers 24,019.44 27,452.26

ii. Bank Guarantee 186,040.31 135,502.61

iii. Corporate Guarantee 96,334.00 101,434.00

iv. Estimated amounts of contract remaining to be executed on Capital Account and not provided for 7,775.48 13,455.26

v. Cases in the court, which in the opinion of the management, require no provision of liability than what is recorded in accounts. 1,402.13 379.00

vi. Central Excise Liability (excluding penalties) that may arise. The matter is with CESTAT. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has 24.27 24.27 been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

vii. Service Tax liability (excluding penalties) that may arise. The matter is with CESTAT. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made. 136.53 136.53

viii. Sales Tax Liability (excluding penalties). The matters are in appeal and management is of the opinion that the liability may not arise. Accordingly no provision has been made. 135.53 135.53

ix. Assignment of Retention Receivables to IndusInd Bank with recourse to the extent of amount. 757.90 2,987.98

The Management is of the opinion that claims for performance guarantee will not arise related to the projects executed previously.

2. Change of Policy of Operating cycle for current and non-current classification Company has changed its policy of operating cycle for current and non-current classification for the project specific loans. These loans have been reclassified as long term loans instead of short term loans.

Due to reclassification, the short term loans have reduced by Rs.75,227 Lakh (P.Y. Rs.46,034 Lakh), the long term loans have increased by Rs.20,711 (P.Y. Rs.34,134) and current maturities have increased by Rs.54,516 Lakh (P.Y. Rs.11,900 Lakh), There is no financial impact on Profit and Loss account.

3. Disclosure pursuant to Accounting Standard – 7 "Construction Contracts"

In terms of the disclosure required to be made under the Accounting Standard 7 for "Construction Contracts" as notified in the Companies (Accounting Standard) Rules, 2006, the amounts considered in the financial statements up to the balance sheet date are as follows:

4. Leases:

The Company has operating lease agreements, primarily for leasing office space and residential premises for it employees. Most of these lease agreements provide for cancellation by either party with a notice period ranging from 30 days to 120 days and contain a clause for renewal of lease agreement at the option of the Company. There are no non-cancelable operating leases. There are no assets taken on finance lease.

5. Related Party Disclosure:

As per the accounting standard 18 prescribed by Companies (Accounting Standards) Rules, 2006, details of related parties & transactions with them are given below:

Sr. No. Name of Related Party Relationship

1 Prime Infrapark Pvt. Ltd

2 Muktangan Developers Pvt. Ltd.

3 Pratibha Holding (Singapore) Pte. Ltd Subsidiary Companies

4 Pratibha Infra Lanka (Private) Ltd (Wholly owned subsidiary of Pratibha Holding (Singapore) Pte Limited)

5 Bhopal Sanchi Highways Pvt. Ltd.

6 Saudi Pratibha Industries Limited

7 Pratibha Industries (B) SDN BHD Associates & Enterprises over Which Key Managerial Personnel are able to exercise significant influence 8 Pratibha Shareholding Private Limited

9 Pratibha Heavy Engineering Limited

10 Pratisheel Infra Solutions Private Limited

11 Pratibha Membrane Filtering Systems Private Limited

12 Petron Pratibha JV

13 Pratibha JV

14 Pratibha Ostu Stettin JV

15 Pratibha Rohit JV

16 Patel Pratibha JV

17 Pratibha Unity JV

18 MEIL Saisudhir Pratibha JV

19 Pratibha China State JV

20 Unity Pratibha Multimedia JV

21 Niraj Pratibha JV

22 Unity Pratibha Consortium

23 ITD Pratibha Consortium

24 Pratibha GIN KJI Consortium

25 Pratibha SMS JV Joint Ventures

26 Pratibha Al Ambia JV

27 Pratibha Aparna JV

28 Pratibha Membrane Filters JV

29 Pratibha Mosinzhstroi Consortium

30 Pratibha CRFG JV

31 Pratibha GECPL JV

32 Pratibha Pipes & Structural Consortium

33 Gammon Pratibha JV

34 FEMC Pratibha JV

35 KBL PIL Consortium

36 Pratibha Jain Irrigation Navana JV

37 Pratibha Yogiraj JV

38 Pratibha Industries Limited Yogiraj JV

39 Mrs. Usha B. Kulkarni

40 Mr. Ajit B. Kulkarni

41 Mr. Ravi A. Kulkarni Key Managerial Personnel

42 Mr. Sharad P. Deshpande

43 Mr. Yogen Lal

44 Mr. Shyam Kulkarni Relatives of Key Managerial

45 Mr. Anand Kulkarni Personnel

Note: Previous year''s figures are given in italic

* Guarantee given / (received) represents corporate guarantee given by Pratibha Industries Limited for related party to third party during the year.

Out of the above, transaction with related parties in excess of 10% of the total related party transactions are as under:

6. Financial Reporting of Interest in Joint Ventures:

The investments in joint venture are governed by the AS-27 "Financial Reporting of Interest in Joint Venture" issued by the Institute of Chartered Accountants of India. During the period under review, there were following active investments in the joint ventures:

*Joint Ventures are in the nature of jointly controlled operations.

As per para 1, of AS 27, "This statement should be applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income and expenses in the financial statements of ventures and investors, regardless of the structures or forms under which the joint venture activities take place."

Accordingly, incomes, expenses assets and liabilities are incorporated in the Consolidated Balance sheet of the Pratibha Industries Limited.

7.1. During the year, the Company has not remitted dividend in foreign currency (P.Y. NIL)

8. Additional Information under Revised Schedule VI of the Companies Act, 1956:

(Following details are related to saw pipe manufacturing division only)

A. Raw Material Purchased

9. Segment Information:

The Company has identified two reportable segments viz. Infrastructure & Construction and Manufacturing & Coating. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

10. Other Information under Part II of Schedule VI of the Companies Act, 1956, are not applicable and hence not provided.

11. Balance under the head ''Trade Receivables'', ''Trade Payables'', ''Loan and Advances Receivable and Payable'' are shown as per books of accounts subject to confirmation by concerned parties and adjustment, if any, on reconciliation thereof.

12. The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary to confirm to the current year presentation.


Mar 31, 2013

Company Overview

Pratibha Industries Limited (‘the Company''), is one of the fastest growing Infrastructure Company in India. The Company undertakes infrastructure projects, which includes designing, engineering and execution/construction of complex & integrated water transmission & distribution projects, water treatment plants, elevated and underground reservoirs, mass housing projects, commercial complexes, pre-cast design & construction, road construction and urban infrastructure.

1 Contingent Liabilities:

(Rs. in Lakhs) Particulars As at 31st As at 31st March 2013 March 2012

i. Unutilized Letters of Credit with Bankers 27,452.26 20,696.71

ii. Bank Guarantee 1,35,502.61 1,01,359.86

iii. Corporate Guarantee 1,01,434.00 63,884.00

iv. Estimated amounts of contract remaining to be executed on Capital Account and not provided for 13,455.26 1,053.24

The Management is of the opinion that claims for performance guarantee will not arise related to the projects executed previously.

2 Change of Policy of Operating cycle for current and non-current classification:

Company has changed its policy of operating cycle for current and non-current classification for the business activities of the Company from 12 months "to the duration of the specific project/contract/project line/service including the defect liability period, wherever applicable and extends up to the realization of receivables (including retention monies) within the agreed credit period normally applicable to the respective lines of business”. There is no financial impact on profit and loss account. However, balance sheet figures have been regrouped, rearranged and reclassified wherever necessary.

3 Disclosure pursuant to Accounting Standard – 7 "Construction Contracts”:

In terms of the disclosure required to be made under the Accounting Standard 7 for "Construction Contracts” as notified in the Companies (Accounting Standard) Rules, 2006, the amounts considered in the financial statements up to the balance sheet date are as follows:

4 Leases:

The Company has operating lease agreements, primarily for leasing office space and residential premises for it employees. Most of these lease agreements provide for cancellation by either party with a notice period ranging from 30 days to 120 days and contain a clause for renewal of lease agreement at the option of the Company. There are no non-cancelable operating leases. There are no assets taken on finance lease.

5 Other Information under Part II of Schedule VI of the Companies Act, 1956 are not applicable and hence not disclosed.

6 Balance under the head ‘Trade Receivables'', ‘Trade Payables'', ‘Loan and Advances Receivable and Payable'' are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

7 The previous year''s figures have been regrouped, rearranged and reclassified wherever necessary to conform to the current year presentation.


Mar 31, 2012

The Board of Directors in their meeting held on 25th May 2012, proposed final dividend of Rs 0.60 per share. The proposal is subject to approval of shareholders at Annual General Meeting to be held on 12th July 2012. The total appropriation for the year ended March 31, 2012 amounted to Rs 704.87 lakhs including corporate dividend tax of Rs 98.39 Lakhs.

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.

The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms / Rights attached to Compulsorily Convertible Participatory Preference Shares (CCPPS)

CCPPS are having a par value of Rs 2 per share.

The CCPPS may be converted, exercised or exchanged at the sole discretion of the Investor on any day within 18 (Eighteen) months from the date of allotment of such shares, or in any event, compulsorily convert at the end of 18 (Eighteen) months from such date of allotment i.e. on 25.05.2012 in the ratio of 1:1.

Preference subscription shares outstanding from time to time shall collectively be entitled to the following dividends:

(A) 0 .01% per annum of the face value of each Preference Subscription Share and

(B) on participating basis, for all dividends declared on Equity Shares of the Company, and for this purpose, each existing Preference Subscription Share shall be deemed to have been converted, excercised or exchanged into Equity Shares on the Execution Date at the same time as the dividend on Equity Shares is paid.

As per the records of the company, including its register of shareholders/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and benificial ownership of shares.

The company has neither issued any bonus shares nor any shares pursuant to contract without payment being received in cash during preceding five years. It has also not bought back any shares during these years.

1. Foreign Currency Loans are repayable in 4 years to 6 years from the date of loan. Above loans are secured by first charges on specific assets financed by the lender. Further, loans are guaranteed by the personal guarantees of promoters / directors of the company.

2. Rupee Loans from banks are repayable in 3 years to 10 years from the date of loan. Above loans are secured by first charges on specific assets financed by the lender.

Further, loans are guaranteed by the personal guarantees of promoters / directors of the company.

3. Rupee Loans from Financial Institutions are repayable in 3 years to 4 years from the date of loan. Above loans are secured by first charges on specific assets financed by the lender. Further, loans are guaranteed by the personal guarantees of promoters / directors of the company.

1. Foreign Currency loan (Buyers credit) is repayable in 90 days from the date of availment.

2. Rupee loan taken from various banks are secured against i) first charge by hypothecation of current assets (other than those specifically charged to other banks), namely stock of raw materials, work-in-progress and receivables, ii) First charge on the gross block (other than those specifically charged to other banks) iii) Project specific current assets and iv) Personal guarantees of Promoter-Directors of the company.

Cash and cash equivalents as on March 31, 2012 and March 31, 2011 include restricted cash and bank balances of Rs 6443.25 Lakhs and Rs5743.76 Lakhs, respectively. The restrictions are primarily on account of cash and bank balances held as margin money deposits against guarantees and unclaimed dividends.

The deposits maintained by the Company with banks and financial institutions comprise of time deposits, which can be withdrawn by the Company at any point without prior notice or penalty on the principal.

1. Contingent Liabilities:

(Rs in Lakhs)

No. Particulars As at 31st March 2012 As at 31st March 2011

1 Unutilized Letters of Credit with Bankers

- Domestic 20,696.39 7,256.21

- Foreign 0.32 1,019.91

2 Bank Guarantee 1,01,359.86 88,255.24

3 Corporate Guarantee 63,884.00 32,309.00

4 Estimated amounts of contract remaining to be executed on 1,053.24 655.11 Capital Account and not provided for

5 Cases in the court, which in the opinion of the management, 597.29 522.29 require no provision of liability than what is recorded in accounts.

6 Income Tax liability (excluding Penalties) that may arise. The 8,272.49 3,575.83 Commissioner of Income Tax (Appeal) has allowed the claim of Section 80IA and has passed all the appeal orders in favour of the Company. The Department has filled appeal with ITAT against the orders.

7 Central Excise Liability (excluding Penalties) that may arise. 138.74 135.25 The matter is with CESTAT. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

8 Service Tax liability (excluding Penalties) that may arise. The 99.66 99.66 matter is with CESTAT. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

9 Assignment of Retention Receivables to IndusInd Bank- 4,500.00 - during the year company has assigned its retention receivables to IndusInd bank with recourse to the extent of amount.

The Management is of the opinion that claims for performance guarantee will not arise related to the projects executed previously.

During the F.Y. 2010-11, income tax authorities conducted search & seizure u/s. 132 of the Income Tax Act. The matter is pending for final assessment.

2. Balance under the head 'Trade Receivables', 'Trade Payables', 'Loan and Advances Receivable and Payable' are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

3. The management is of the opinion that some of its projects are eligible for tax benefits u/s 80IA of the Income Tax Act 1961.

4. During the year, the Board of Directors in their meeting held on 3rd February, 2012 has considered and approved the Composite Scheme of Arrangement for merger of Pratibha Pipes and Structural Limited into Pratibha Industries Limited and subsequent sale of its Manufacturing Undertaking, after giving effect to the merger of PPSL with PIL, to Pratibha Heavy Engineering Ltd (wholly owned subsidiary of PIL), pursuant to the relevant provisions of the Companies Act, 1956. The scheme is subject to approval of Honorable High Court of Bombay and their respective Shareholders and creditors.

5. During the year, the company has not remitted dividend in foreign currency (P.Y. NIL).

6. Unclaimed Dividend:

The amount of unclaimed dividend lying in Unclaimed Dividend Account as on 31/03/2012 is Rs6.99 Lakhs (Previous Year Rs5.85 Lakhs).

7. Leases:

The company has operating lease agreements, primarily for leasing office space and residential premises for it employees. Most of these lease agreements provide for cancellation by either party with a notice period ranging from 30 days to 120 days and contain a clause for renewal of lease agreement at the option of the company. There are no non-cancelable operating leases. There are no assets taken on finance lease.

As per Para 1, of AS 27, "This statement should be applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income, and expenses in the financial statements of ventures and investors, regardless of the structures or forms under which the joint venture activities take place."

Accordingly, incomes, expenses assets, and liabilities are incorporated in the Consolidated Balance sheet of the Pratibha Industries Ltd.

8. Impairment of Assets:

During the year under consideration, none of the assets has been impaired.

9. Segment Information:

The company has identified two reportable segments viz. Infrastructure & Construction and Manufacturing & Coating. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

10. In the opinion of the Directors, the Current Assets, Loan and Advances have a value on realization in the ordinary course of the business, which is at least equal to the amount at which they are stated in the balance sheet.

11. The previous year's figures have been regrouped, rearranged and reclassified wherever necessary to conform to the current year presentation.


Mar 31, 2011

1. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

2. In the opinion of the Directors, the Current Assets, Loan and Advances have a value on realization in the ordinary course of the business, which is at least equal to the amount at which they are stated in the balance sheet.

3. Contingent Liabilities:

(Rs. in Lakhs) Particulars As at 31.03.2011 As at 31.03.2010

a) Unutilized Letters of Credit with Bankers

- Domestic 7,256.21 5099.03

- Foreign 1,019.91 1211.89

b) Bank Guarantee 88,255.24 69565.20

c) Corporate Guarantee 32,309.00 6721.00

d) Estimated amounts of contract remaining to be executed on 655.11 2458.27 Capital Account and not provided for

e) Cases in the court, which in the opinion of the management, 522.29 439.89 require no provision of liability than what is recorded in accounts.

f) Income Tax liability (excluding Penalties) that may arise. The 3,575.83 2742.25 Commissioner of Income Tax (Appeal) has allowed the claim of Section 80IA and has passed all the appeal orders in favour of the Company. The Department has filled appeal with ITAT against the orders.

g) Central Excise Liability (excluding Penalties) that may arise. 135.25 - The matter is with CESTAT. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

h) Service Tax liability (excluding Penalties) that may arise. The 99.66 - matter is with CESTAT. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the Company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

The Company is of the opinion that claims for performance guarantee will not arise related to the projects executed previously.

4. Investments are carried in the books at cost. The Directors are of the opinion that the investment would realize the invested amount on sale and accordingly no provision for diminution in value is required.

5. During the year, income tax authorities conducted search & seizure u/s. 132 of the Income Tax Act. The matter is under investigation.

6. Donation made by the Company is within the limits prescribed u/s. 293(l)(e) of the Companies Act, 1956. Donation given to political parties Rs. NIL (Previous Year Rs. 85 Lakhs).

7. Balance under the head Sundry Debtors, Sundry Creditors, "Loan and Advances Receivable and Payable are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof.

8. During the year the company has received overseas project in Dubai. The company has treated pre-operational expenses for foreign operations amounting to Rs. 831.31 Lakhs as Deferred revenue expenses. The same will be written off in 5 years.

9. The management is of the opinion that some of its projects are eligible for tax benefits u/s 80IA of the Income Tax Act 1961.

10. Unclaimed Dividend

The amount of unclaimed dividend lying in Unclaimed Dividend Account as on 31/03/2011 is Rs. 585,447/- (Previous Year Rs. 445,392).

11. Leases:

The company has operating lease agreements, primarily for leasing office space and residential premises for it employees. Most of these lease agreements provide for cancellation by either party with a notice period ranging from 30 days to 120 days and contain a clause for renewal of lease agreement at the option of the company. There are no non-cancelable operating leases. There are no assets taken on finance lease.

12. Financial Reporting of Interest in Joint Ventures:

The investments in joint venture are governed by the AS-27 "Financial Reporting of Interest in Joint Venture" issued by ttre Institute of Chartered Accountants of India. During the period under review, there were following active investments in the joint ventures:

13. Segment Information:

The company has identified two reportable segments viz. Infrastructure & Construction and Manufacturing & Coating. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting systems.

14. During year, the company has raised Rs. 150 Crores by issue of additional equity and preference share under the prevalent and applicable SEBI Guidelines. The funds have been raised as (i) Rs. 100 Crores by way of Qualified Institutional Placement (QIP Route) by allotment of 12,195,609 equity shares at premium of Rs. 80/- & (ii) Rs. 50 Crores by way of Preferential Allotment of 3,804,348 equity shares & 1,630,435 Compulsorily Convertible Participatory Preference Shares at (face value and premium thereof). Following is the end use of the money so raised:

15. Other Information under Part II of Schedule VI of the Companies Act, 1956: are not applicable and hence not disclosed.

 
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