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Notes to Accounts of Sadbhav Engineering Ltd.

Mar 31, 2014

Corporate Information:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in areas of canals, irrigations projects, roads, bridge, irrigations projects, roads, bridge, mining activities on contract basis, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. Company also establish, maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOOT basis. Company is also engaged in business of energy generation through Wind Power Project.

1. Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt:-

(i) The Dy. Commissioner of Custom has passed the order for Demand of Custom duty towards import of Machineries Rs. 104.95 Lakh (Rs. 104.95 Lakh) & Interest of Rs. 174.05 Lakh (Rs. 174.05 Lakh). The Company has filled the Appeal to Commissioner of Customs against the said order, hence no provision is made in the books of accounts.

(ii) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has filed a suit for recovery of Rs. 46.42 Lakh (Rs. 46.42 Lakh) against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs. 46.42 Lakh (Rs. 46.42 Lakh) balance to be paid and filed Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court. The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts

(b) Guarantees:-

Company has given corporate guarantee to banks for Rs. 29825.00 Lakh (Rs. 28850.00 Lakh) against the finance facility given by the banks to subsidiary companies.

(c) Other Money for which the company is contingently liable:-

(i) Demand under Service Tax Act, 1994 Rs. 67.29 Lakh (Rs. 67.29 Lakh)

(ii) Company has received order of the Commissioner of service tax on 01st April, 2013 wherein Commissioner upheld the demand of Rs. 199.13 Lakh (Rs. 199.13 Lakh) and impose penalty of Rs. 345.92 Lakh (Nil). Company filed appeal before CESTAT and received unconditional stay order on order of Commissioner hence no provision has been made.

(iii) The Company has received Show-Cause Notice on 13th April, 2013 for imposing penalty of Rs. 19.84 Lakh (Nil) under Rule 26 of the Central Excise Rules, 2002. Company filed appeal before appropriate authority hence no provision has been made.

(iv) Income Tax of Rs. 3566.92 Lakhs on the claim made of the deduction u/s 80IA (4) of the Income Tax Act, 1961. The Finance Act (2), 2009 has amended Section 80IA(4) of the Income Tax Act, 1961 by substituting an explanation to Section 80IA with restrospective effect from 01.04.2000. On the basis of legal opinion and decided cases, the Company has continued to claim deduction under section 80-IA(4) of the Act on eligible projects and consequently the Company considers it appropriate not to create a liaility for provision of Income Tax. However an amount of income tax of Rs. 858.40 Lakhs for the current year and of Rs. 2708.51 Lakhs for the earlier years since FY 2007-08 has been disclosed as contingent liability.

(v) The Deputy Commercial Tax Commissioner, Audit Divison-1 Ahmedabad has passed order against "Jililn Sadbhav JV" for VAT demand of Rs. 702.00 Lakh inclusive of interest Rs. 330.18 lakh and Penalty of Rs. 74.36 lakh. In Jilin-Sadbhav JV, Sadbhav Engineering Limited is having 48% share. Against this Order the Joint Venture has filed an appeal in the Gujarat Value Added Tax Tribunal at Ahmedabad, hence no provision has been made.

(vi) The Company has received a show cause notice from the office of Mining Engineer, Mines and Geology Department, Udaipur on 05/02/2014 imposing penalty of Rs. 81.32 Lakh under rule 63, 37A (IX) of Rajasthan Minor Mineral Concession Rules, 1986. The Company has filed a Civil Writ Petition No.2635/2014 in The High Court of Rajasthan against the said notice. The Company has deposited Rs. 30.00 Lakh with the Mining Engineer, Mines and Geology Department, Udaipur as per stay order of the Honourable Court. Further proceeding is pending, hence no provision has been made.

(d) During the year, minority shareholders of Bijapur Hungud Tollway Private Limited (''BHTPL'') (a subsidiary of the Company) has filed company petition under section 347 and 398 of the Companies Act, 1956 with the Company Law Board Mumbai Bench against Sadbhav Engineering Ltd a holding Company and its associates/affiliates wherein the company is also defendant. The Company Law Board (CLB) passed an order in favour of the minority shareholder although company pleaded that matter should be referred for arbitration as per shareholder agreement (SHA). Against the CLB order the company filled Special Civil Application (SCA) with Hon''ble High Court of Gujarat that matter of minority shareholder should be referred as per SHA. Hon''ble High Court accepted SCA of the company and granted interim relief where by further proceeding of CLB have been stayed. Currently the matter is pending before Hon''ble High Court of Gujarat. The management believes that, based on legal advice, the outcome of above contingencies will be favourable and that any loss is not probable. Accordingly, no amounts have been accrued or paid in regard to dispute.

B Capital & other Commitments

The followings are the estimated amount of contractual commitments of the company:-

(Rs. in Lakhs)

Particulars As at March As at March 31, 2014 31, 2013

(i) Loan Commitments 0.00 0.00

(ii) Sub Ordinate Debt/Equity Shares in Subsidiarieses 30774.37 83249.84

C During the year ended March 31, 2014 the amount of per share dividend recognised as distribution to equity share holders is Re 0.70 (0.60) which comes to Rs. 1061.64 Lakh (Rs. 905.67 Lakh)

2. Segment Reporting

As permitted by Paragraph 4 of Accounting Standard -17, "Segment Reporting ", notified persuant to the Companies (Accounting Standard) Rules 2006, if a single financial report contains both consolidated financial statement and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. This financial report contains both standalone & consolidated financial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated financial statements.

3. There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 "Impairment of Assets".

4. Borrowing Cost:

During the year, company has capitalized borrowing cost Rs. 290.22 (303.89) Lakh according to AS-16 Borrowing Cost.

5. Some of the Balances of Advance to Contractors, Debtors & Advance received from clients are subject to confirmatin from parties.

6. No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries.

7. In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilities and doubtful assets have been made.

8. All amounts in the financial statements are presented in Rupees 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.


Mar 31, 2013

Corporate Informaton:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilites in areas of canals, irrigatons projects, roads, bridge, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstructon, renovaton, demolitons and constructon of canals, irrigatons projects, roads, bridge, dams. Company also establish, maintain, operate, lease or transfer the above infrastructure facilites on BOT, BOLT and BOOT basis. Company is also engaged in mining actvites on contract basis and business of energy generaton through Wind Power Project.

1.1 Contngent Liabilites and commitments

A Contngent Liabilites

(a) Claims against the company not acknowledge as debt

(i) The dy. Commissioner of Custom has passed the order for Demand of Custom duty towards import of Machineries Rs.104.95 (Rs.104.95) & Interest of Rs. 174.05 (Nil). The Company has flled the Appeal to Commissioner of Customs against the said order , hence no provision is made in the books of accounts

(ii) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lakhs against the company and its directors and ofcers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the later claimed Rs. 46.42 Lakhs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdicton of the court. The mater is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts

(b) Guarantees

Company has given corporate guarantee to banks for Rs. 28850 Lakhs (Rs. 10500 Lakhs) against the fnance facility given by the banks to subsidiary companies.

(c) Other Money for which the company is contngently liable

(i) Demand under Service Tax Act, 1994 Rs.67.29 Lakhs (Rs. 67.29 Lakhs)

(ii) Company has received order of the Commissioner of service tax on 01st April, 2013 wherein Commissioner upheld the demand of Rs. 199.13 lakhs (Rs. 199.13 Lakhs) and impose penalty of Rs. 345.92 Lakhs (Nil). Company is in the process of fling of appeal before appropriate authority hence no provision has been made.

(iii) Company has received Show-Cause Notce on 13th April, 2013 for imposing penalty of Rs. 19.84 Lakhs (Nil) under Rule 26 of the Central Excise Rules, 2002. Company is in the process of fling of appeal before appropriate authority hence no provision has been made.

(iv) With regards to inserton of explanatons with retrospectve efect from 01-04-2000 in secton 80-IA (4) of the Income Tax Act, 1961 read with sub secton (13), the Company has received Notce under secton 148 of the Income Tax Act, 1961 in Financial Year 2009-10 for re-opening of assessment from Assessment Year 2003-04 to 2007-08, against which Company has fled a Special Civil Applicatons in the High Court of Gujarat. High Court of Gujarat has quashed the Notce issued under secton 148 for the Assessment Year 2003-04 & 2004-05 and for remaining assessment years it has directed the department of Income Tax to complete the assessments without serving the notce of demand on the company. Accordingly Income Tax Department has completed the assessments from A.Y.2005-06 to 2007-08 and intmated to the company without serving notce of demand. Further, the company has fled writ petton with High Court of Gujarat for challenging consttutonal validity for inserton of explanatons with retrospectve efect and writ has been admited. At present the mater is sub judies, hence quantfcaton of liability cannot be ascertained.

(v) During the year Company has received Income Tax Assessment order u/s 143(3) r.w.s. 153A dated 28.03.2013 for the FY 2004-05 to FY 2009-10 and Income Tax Assessment order u/s 143(3) r.w.s. 153B(1)(b) for the FY 2010-11 dt. 28.03.2013. As per the Order additonal Income Tax liability including interest for all the seven fnancial years was Rs. 565.90 Lacs. The company has fled the appeal with higher authority. Hence no provision has been made in the books of accounts.

1.2 Segment Reportng

As permited by Paragraph 4 of Accountng Standard -17, "Segment Reportng ", notfed persuant to the Companies (Accountng Standard) Rules 2006, if a single fnancial report contains both consolidated fnancial statement and the separate fnancial statements of the parent, segment informaton need be presented only on the basis of the consolidated fnancial statements. This fnancial report contains both standalone & consolidated fnancial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated fnancial statements.

1.3 List of Related Partes

Subsidiaries :

Sadbhav Infrastructure Project Limited, Nagpur-Seoni Express Way Limited,

Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Toll Way Limited, Rohtak-Panipat Tollway Ltd., Bijapur Hungund Tollway Pvt. Ltd., Hyderabad Yadgiri Toll Way Pvt. Ltd., Maharashtra Border Check Post Network Ltd., Shreenathji Udaipur Tollway Pvt. Ltd., Bhilwara Rajsamand Tollway Pvt. Ltd. and Solapur Bijapur Tollway Pvt. Ltd.

Associate Companies

Mumbai Nasik Expressway Ltd., Dhule Palesner Tollway Ltd.,

Joint Ventures:

SEL-GKC JV

Key Management Personnel (KMP):

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitn R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel, Shri Vasistha C. Patel, Shri Vikram R. Patel.

Relatves of KMP:

Smt. Shantaben V. Patel, V. M. Patel (HUF), Alpa Dharmin Patel, Bhavna V. Patel, Tosha Patel, Rekhaben V. Patel, Truptben V. Patel, Vipulbhai H. Patel.

1.4 Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. Nil (31.51 Lakh) according to AS-16 Borrowing Cost.

1.5 Exceptonal Item pertains to the Performance Bonus received on early executon of work contracts. Bonus Received/Income Rs. 10973.98 Lakh

Bonus Expenses Rs. 4880.00 Lakh

Net Bonus Income Rs. 6093.98 Lakh

1.6 Some of the Balances of Advance to Contractors, Debtors & Advance received from clients are subject to confrmatn from partes.

1.7 No Provision has been made for losses made by subsidiary companies as it is temporary diminuton in the value of investments in subsidiaries.

1.8 In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known liabilites and doubtul assets have been made.

1.9 All amounts in the fnancial statements are presented in Rupees Lakhs except per share data and as otherwise stated. Figures in brackets represent corresponding previous year fgures in respect of Proft & 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 confrm to the fgures presented in the current year.


Mar 31, 2012

Corporate information:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in areas of canals, Irrigation projects, roads, bridges, dams which include civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and Construction of canals, Irrigation projects, roads, bridges, dams. Company also establish, maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOOT basis. Company is also engaged in mining actives on contract basis and business of energy generation through Wind Power Project.

1.1 Contingent Liabilities and commitments

A Contingent Liabilities

(a) Claims against the company not acknowledge as debt

(i) Demand of Custom duty towards import of Machineries Rs. 104.95 (Rs. 104.95)

(ii) The Regional Transport officer, Surat (RTO) issued a Notice for payment of road tax and penalty under the Bombay Motor Vehicles Act, 1958 on forty (40) dumpers used by the Company at the excavation of mining sites around Surat. The Company fled a Special Civil application in the Gujarat High Court against the Commissioner of Transport and the RTO. The Gujarat High Court directed Company to deposit the road tax (without penalty). The Company has complied with the order and has deposited Rs. 49.20 Lakhs. The hearing of the mater has not yet commenced before authority. The Company has not made provision for penalty in its Books of Accounts.

(iii) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lakhs against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the later claimed Rs. 46.42 Lakhs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jusdiction of the court. The mater is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

(b) Guarantees

Company has given corporate guarantee to banks for Rs. 10500 Lakhs (Rs. 21200 Lakhs) against the finance facility given by the banks to subsidiary companies.

(c) Other Money for which the company is contingently liable

(i) Demand under Service Tax Act,1994 Rs. 67.29 Lakhs (Rs. 67.29 Lakhs)

(ii) During the year Company has Received Show cause cum Demand Notice of Rs. 199.13 Lakhs under the Service Tax Act, 1994.

(iii) With regards to insertion of explanations with retrospective effect from 01-04-2000 in section 80-IA (4) of the Income Tax Act, 1961 read with sub section (13), the Company has received Notice under section 148 of the Income Tax Act, 1961 in Financial Year 2009-10 for re-opening of assessment from Assessment Year 2003-04 to 2007-08, against which Company has fled a Special Civil Applications in the High Court of Gujarat. High Court of Gujarat has quashed the Notice issued under section 148 for the Assessment Year 2003-04 & 2004-05 and for remaining assessment years it has directed the department of Income Tax to complete the assessments without serving the Notice of demand on the company. Accordingly Income Tax Department has completed the assessments from A.Y. 2005-06 to 2007-08 and intimated to the company without serving Notice of demand. Further, the company has fled writ petting with High Court of Gujarat for challenging constitutional validity for insertion of explanations with retrospective effect and writ has been admitted. At present the mater is sub judies, hence quantification of liability cannot be ascertained.

1.2 Employee benefits

As per Accounting Standard-15 "Employee benefits", the disclosures of Employee benefits as defined in the Accounting Standard as given as below:

(b) defined benefit Plan:

The company made annual contributions to the employee's Group Gratuity cash accumulation Scheme of the Life Insurance Corporation of India, a funded benefit plan for qualifying employees.

The present value of the defined benefit obligation and the related current service cost were measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.

The following tables sets out the funded status of the gratuity plan and the amount recognised by the company's financial statements as at March 31, 2012.

1.3 Segment Reporting

As permited by Paragraph 4 of Accounting Standard -17, "Segment Reporting ", notified pursuant to the Companies (Accounting Standard ) Rules 2006, if a single financial report contains both consolidated financial statement and the separate financial statements of the parent, segment information need be presented only on the basis of the consolidated financial statements. This financial report contains both standalone & consolidated financial statements of the parent, hence segment wise Revenue Results and Capital employed are given in consolidated financial statements.

1.4 List of Related Parties

Subsidiaries & Fellow Subsidiaries:

Sadbhav Infrastructure Project Limited, Nagpur-Seoni Express Way Limited,

Ahmedabad Ring Road Infrastructure Limited, Aurnagabad-Jalna Toll Way Limited, Rohtak-Panipat Tollway Pvt. Ltd., Bijapur Hungund Tollway Pvt. Ltd, Hyderabad Yadgiri Tollway Pvt. Ltd., Maharashtra Border Check Post Network Ltd. and Shreenathji Udaipur Tollway Pvt. Ltd.

Associate Companies

Mumbai Nasik Expressway Ltd., Dhule Palesner Tollway Ltd.,

Joint Ventures:

SEL-GKC JV

Key Management Personnel:

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitn R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel

relatives of Key Management Personnel

Smt. Shantaben V. Patel, V. M. Patel (HUF), Shri Vikram R. Patel, Shri Vasistha C. Patel

1.5 There was no impairment Loss on fixed assets on the basis of review carried out by the management in accordance with Accounting Standard-28 "Impairment of Assets".

1.6 Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. 31.51 Lakhs (19.17 Lakhs) according to AS-16 Borrowing Cost.

1.7 No Provision has been made for losses made by subsidiary companies as it is temporary diminution in the value of investments in subsidiaries.

1.8 In the opinion of the Management, trade receivables and loans and Advances have a realizable value in the ordinary course of business not less than the amount at which they are stated in the balance sheet and provision for all known Liabilities and doubtful assets have been made.

1.9 All amounts in the financial statements are presented in Rupees 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.

1.10 Revised Schedule VI and Previous year figures

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to confirm to this year's classification. The adoption of the revised schedule VI does not impact recognition and measurement principles followed for preparation of the financial statements. However, it significantly impacts presentation and disclosure made in the financial statements, particularly presentation of Balance sheet.


Mar 31, 2010

Company Overview:

The Company, Sadbhav Engineering Limited is engaged in the business of development of infrastructure facilities in the line of canals, irrigations projects, roads, bridge, dams which includes civil, electrical and mechanical contractor, designer and engineers, structural contractor, earthwork contractor for repairing, reconstruction, renovation, demolitions and construction of canals, irrigations projects, roads, bridge, dams. Company also establishes maintain, operate, lease or transfer the above infrastructure facilities on BOT, BOLT and BOTT basis. Company is also engaged in mining activities on contract basis.

1) All amounts in the financial statements are presented in Rupees Lacs 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) As the Company is engaged in Construction business, the provision of Para 3 and Para 4C of Part II of Schedule VI to The Companies Act, 1956 regarding quantitative details, licence capacity and installation capacity are not applicable.

3) In the opinion of the Board, the current assets, loans and advances are approximately of the value stated if realized in ordinary course of business. Provision for known liabilities are adequate and not in excess of the amount reasonably necessary.

4) Details of Securities given in respect of Secured Loans

1. Redeemable Non Convertible Debentures

The debentures are secured by the first legal Registered Mortgage and charge on the specific movable fixed assets of the Company and specific immovable properties i.e. Bunglow (Manorama Retreat) and Flat (Abhimanyu) belonging to the Company. The security has been created on the said assets on 29th May, 2009 and same has been registered with Registrar of Company on 2nd June, 2009.

2. Term Loans From Banks & Financial Institutions

Secured by way of hypothecation of specific machineries and equipments purchased.

3. Working Capital From Banks

a. Secured by hypothecation of stock of construction materials lying at sites, books debts and other receivables

b. First charge by way of mortgage of immovable property(Sadbhav House) and immovable property situated at Village Ognaj alongwith furnitures, fixtures etc. owned by company and second charge on machineries owned by the company.

c. Freehold land admeasuring 1,15,556 Sq. mts. of Group company Sadbhav Quarry Works Pvt. Ltd. situated at Tulsigam, Tal. Savli, Dist. Baroda.

d. Corporate Guarantee of Group Company Sadbhav Quarry Works Pvt. Ltd.

e. All the limits are also secured by Personal Guarantee and certain properties of Promoter Directors.

6) Contingent Liability:

a) The Company has given counter guarantee to the Bank for Rs. 85,427.56 Lacs (Rs. 45,012.06 Lacs) against the guarantee given by the Bank.

b) Demand under Orissa Sales Tax Act Rs. 4.55 Lacs (Rs. 4.55 Lacs).

c) Demand under Orissa Sales Tax Act for Entry Tax Rs. 0.75 Lacs (Rs. 0.75 Lacs).

d) Demand of Custom duty towards import of Machineries Rs.104.95 Lacs (Rs.104.95 Lacs).

e) Demand under Income Tax Act, 1961 Rs. 157.02 Lacs (Rs. 56.03 Lacs).

f) Demand under Service Tax Act, 1994 Rs. 67.29 Lacs (Rs. 67.29 Lacs).

g) Company has given corporate guarantee to HDFC bank against loan of Rs. 400 Lacs given by the bank to Seven Hills Construction and to ABN Amro bank against loan of Rs. 106.56 Lacs given to same party.

h) Company has given corporate guarantee to banks for Rs. 17,100 Lacs (Rs. 4,000 Lacs) against the finance facility given by the banks to our subsidiary companies.

i) The Regional Transport Officer, Surat (RTO) issued a notice for payment of road tax and penalty under the Bombay Motor Vehicles Act, 1958 on forty (40) dumpers used by the Company at the excavation of mining sites around Surat. The Company fled a Special Civil application in the Gujarat High Court against the Commissioner of Transport and the RTO. The Gujarat High Court directed Company to deposit the road tax (without penalty). The Company has complied with the order and has deposited Rs. 49.20 Lacs. The hearing of the matter has not yet commenced before authority. The Company has not made provision for penalty in its Books of Accounts.

j) Sarda Energy and Minerals Ltd. (Formerly known as Raipur Alloys Limited) has fled a suit for recovery of Rs. 46.42 Lacs against the company and its directors and officers holding them jointly and severally liable. The Company purchased steel and TMT bar from Sarda Energy and Minerals Limited, for which the latter claimed Rs. 46.42 Lacs balance to be paid and fled Civil Suit at Civil Court, Nagpur. The company has challenged the jurisdiction of the court. The matter is pending before the Civil Court, Nagpur. Company has not made any provision for the said liability in its Books of Accounts.

k) The Finance Act, 2009 has amended an explanation of section 80(1A) of the Income Tax Act, 1961 by giving retrospectively effect from 01-04-2000. Due to aforesaid retrospective amendment estimated Tax liability would be Rs. 7.30 cr. For the A.Y. 2003-04 to A.Y. 2007-08. However, no demand notice has been raised by the department. (Refer Note No. 8).

7) Company is purchasing its bulk construction material like steel, cement, diesel and bitumen etc. from big government undertaking companies and private sector companies and hence there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the company owes any dues on account of principal amount together with interest and accordingly no additional disclosures have been made.

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

8) The Finance Act, 2009 has amended an explanation of section 80(1A) of the Income Tax Act, 1961 by giving retrospectively effect from 01-04-2000. Assessment u/s 143(3) of the Income Tax Act for the A.Y. 2008-09 has been completed during the year and liability as per assessment order has been paid and provided in books of accounts by debiting Income Tax of earlier years. The Company has also provided liability of Income Tax for A.Y. 2009-10 by debiting Income Tax of earlier years. Tax liability for the current year has been provided as per the current tax provisions. The Company has received Notice u/s 148 of the Income Tax Act for re-opening of assessment for the A.Y. 2003-04 to A.Y. 2007-08, against which Company has fled a Special Civil Applications in the High Court of Gujarat and hence estimated tax liability of Rs. 7.30 Crores has not been provided in books of accounts.

9) As per Accounting Standard 18, "Related Party Disclosure" issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the Related Parties as defined in the Accounting Standard are given below:

I. List of Related Parties

Associate Companies/Entities:

Sadbhav Finstock Pvt. Ltd., Sadbhav Quarry Works Pvt. Ltd., Sadbhav Public Charitable Trust, Santokba Trust, Dhule Palasner Tollway Limited.

Subsidiaries:

Ahmedabad Ring Road Infrastructure Limited, Sadbhav Infrastructure Project Limited, Aurnagabad-Jalna Tollway Limited, Nagpur-Seoni Express Way Limited, Maharashtra Border Check Post Network Ltd., Sadbhav Mining Limitada, Mozambique, Rohtak-Panipat Tollway Pvt. Ltd, Bijapur-Hungund Tollway Pvt. Ltd, and Hydrabad-Yadgiri Tollway Pvt. Ltd.

Joint Ventures:

Sadbhav-Prakash JV, HCC-SEL JV, Jilin-Sadbhav JV, JMC-Sadbhav JV & SEL-GKC JV

Key Management Personnel:

Shri Vishnubhai M. Patel, Shri Girish N. Patel, Shri Nitin R. Patel, Shri Shashinbhai V. Patel, Smt. Rajeshriben Patel

NOTE:-

1. Sub - Contract Expenditure of relatives of Key Managerial Personnel includes Rs. 1737.77 Lacs (Rs. 135.23) payable to Sarjan Infracon. and Rs. 215.03 (NIL) to Veer Trans, at the year end Rs. 8.59 Lacs (Rs. 20.00 Lacs) and Rs. 51.83 (NIL) are outstanding respectively of the above parties.

10) Disclosures as per Clause 32 of the Listing Agreements with the stock exchanges

(Note :- Loans to Subsidiaries includes interest free loan to Aurangabad-Jalna Tollway Ltd. to the tune of Rs. 1419.70 Lacs).

b) Company has not given any loans and advances to any associates and frms/companies in which directors are interested.

c) None of the loanees have made investments in shares of the Company.

11) 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.

12) Investment:

i) During the year Company invested unutilized Q.I.P. issue proceeds in high quality interest/dividend bearing liquid Quoted Money Market Mutual Funds till the date of full utilization of QIP Proceeds.

ii) Income earned from above investment is Rs. 46.88 Lacs (Rs. 116.99 Lacs.).

iii) 25,10,400 Shares has been pledged out of 83,67,940 shares held in Ahmedabad Ring Road Infrastucture Ltd. with their lenders.

iv) 5,14,496 Shares has been pledged out of 10,05,207 shares held in Aurangabda Jalna Tollway Ltd. with their lenders.

v) 96,00,000 Shares has been pledged out of 2,44,79,940 shares held in Nagpur Seoni Expressway Ltd. with their lenders.

vi) Entire 1,04,00,000 shares held in Mumbai Nasik Expressway Ltd., are pledged with lenders of Mumbai Nasik Expressway Ltd

vii) Movement in investments made by the Company during the year :

Note:- All above figures are provisional as the audited accounts of the above companies are not available at time of signing the annual accounts of the company.

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

13) Borrowing Cost:

During reported year, company has capitalized borrowing cost Rs. NIL (NIL) according to AS-16 Borrowing Cost.

14) As per Accounting Standard-17, "Segment Reporting" issued by The Institute of Chartered Accountants of India, Company who is dealing in multiple products/service and operates in different geographical areas are required to report under this Accounting Standard, hence no disclosure is required as the company operates in a single primary business segment namely "Engineering, Construction & Infrastructure development" activities and at single geographical area namely India.

15) Remuneration to Managing Director is paid on monthly basis and therefore statement showing computation of net profit U/s 349 of the Companies Act, 1956 is not given.

Notes :

1. Hyderabad-Yadgiri TollWay Pvt.Ltd., Rohtak-Panipat Tollway Pvt.Ltd. and Bijapur-Hungund Tollway Pvt. Ltd. was incorporated on 20th Janauary, 2010, 25th January, 2010 and 22nd February, 2010. Their first financial year would end on 31st March 2011.

2. All the Companies have face value of Rs. 10 each, save and except for Sadbhav Mining Limitada where the value is represented in amount only and no specific face value has been defined as per local laws, applicable to the Company.

3. Amount of investment made in Sadbhav Mining Limitada is Rs. 80,396 (50000 MTn @ Rs. 1.608 per MTn).

 
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