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Notes to Accounts of Sancia Global Infraprojects Ltd.

Mar 31, 2015

The Company has only one class of share referred to as equity shares having a par value of Rs.10/-. Each holder of equity shares is entitled to one vote per share In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be proportionate to the number of equity shares held by the share holders.

1.1 The company has issued Foreign Currency Convertible Bonds (FCCBs) of the nominal value of USD 50 million, having a maturity period of 5 years. As per the terms of the offering circular issued by the company for FCCBs the bonds carry interest on 1% payable half yearly on 12th February & 12th August respectively each year, and the Bonds are convertible into fully paid equity shares of the Company at any time on or after February 27, 2008 and up to January 29, 2013, unless previously redeemed, converted or re-purchased and cancelled.

In accordance with the offering Circular dated February 01, 2008 issued by the Company, under condition 6 (C ) (XXIX) of the said offering Circular with effect from February 12, 2009 the Conversion Price of the Bond is re-set at Rs. 282.27 from Rs. 376.36. Further, during the year 2013-14, due to the stringent financial position, the Company has not been able to discharge its interest payment obligations of Rs. 306.08 Lacs on the said Bonds, which was due for payment on 12th August 2013 & 12th February 2014.

As per the Offering Circular, in the event of non-conversion of said Bonds into equity shares of the Company, the same shall be redeemed at 137.24 % of principal amount. The management has not made any provision in the books of account towards any liability that may fall on the Company, in the eventuality of redemption of the Bonds.

1.2 Foreseeing the huge developments taking place in MENA market (Middle East, North Africa) the Company undertook huge expansion plans and had taken up multiple projects at the same time, and signed an agreement with CNPC''s subsidiary in China named BOMCO for 40 rigs for a value of more than one billion US dollar, which business was to be taken up by the wholly owned subsidiary company i.e. Petrogrema overseas PTE. Ltd and substantial investment was made in the subsidiary to facilitate the overseas body to setup the business of Oil rigs and Mines. However, due to worldwide recession in the economy and tightening of financial resources in the world market, company could not size up funds that were required for 40 rigs which were committed to CNPC, as a result of which payments made to CNPC as well as various other suppliers got stuck and the monies advanced to them could not be recovered because of financial closure and also the project could not completed on time. The Company had signed mandates with 2 First Class Banks and 1 top M&A firm from U.K who were not able to raise the debt as required due to financial recession worldwide.

All the above has resulted in huge losses to its wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd. resulting in complete erosion of its Net worth. In view of the above, as a conservative approach and in line with the accounting policy on diminution of investment being followed by the Company, the management decided to write off the value of investments in its subsidiary as well as Loans by Rs. 8193.22 Lacs and Rs. 3120.92 Lacs respectively during the financial year 2011-12.

During the financial year 2012-13 the wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd has incurred heavy losses due to written-off of various loans & advances (Rs.103.31 Crores) which could not be recovered as per the view ofthe management and become bad due to various reasons mentioned hereinabove.

During the financial year 2013-14 the management decided to write off the remaining value of investments in its subsidiary as well as Loans by Rs. 8193.22 Lacs and Rs. 3120.92 Lacs respectively with due reason that the wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd has incurred heavy losses due to written-off of various loans & advances (Rs.103.31 Crores) in past years which could not be recovered as per the view of the management and become bad due to various reasons mentioned hereinabove.

1.3 The management of company has observe that part of the block of assets (Equipments/Machineries) become obsolete due to efflux of time, wear and tear and more so due to technological obsolescence and have very little or scrap value. Further, the cost of operations and maintenance of such old machines is high as such could not withstand the competition from the similar modern machines/equipments in the market. The gross block/value of such types of assets is approx. 26 Crores.

1.4 The accumulated loss of the Company as on 31.03.2015 is more than 100% of its net worth during the year and immediately preceding the financial year and as such falls within the definition of "sick industrial Company" under section 46(AA) (i) of the Companies (Second Amendment) Act, 2002 . The Net Worth of the company had also been eroded during the financial year 2011-12 itself resulting, the Company had become a sick industrial company within the meaning of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The company has made a reference during the financial year 2012-13 to the "Board for Industrial & Financial Reconstruction" under section 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 however the same reference has been declined by BIFR.

1.5 There is an inquiry has been initiated by "office of Registrar of companies (West Bengal)" for contravention of provisions of the companies Act, 1956 however the company has filed the application for compounding of offences under the said Act.

1.6 Contingent Liabilities :-

(i) Liability towards Corporate and Bank guarantees:-

(Rs. in Lacs) Particulars 31.03.2015 31.03.2014

a) Contingent Liability not Provided for

b) Bank Guarantee 29.00 29.00

c) Corporate Guarantee (As per the sanctioned 57965.00 57965.00 Limit) given to and on behalf of the following

Group Companies :-

1) Greenearth Resources & Pojects Ltd.

2) New saw Infraprojects Ltd.

3) SanciaInfraglobal Private Limited

(ii) Service Tax Liability:- There was an inquiry operation on 04th day of June, 2014 conducted by DGCEI, Zonal Unit, Mumbai to ascertain facts regarding evasion of the service tax under Central Excise Act, 1944 read with section 83 of the finance act, 1994. However the service tax liability is not materialize.

1.7 The company does not possess information as to which of its suppliers are ancillary industrial undertaking/small scale industrial undertaking holding permanent registration certificates issued by the Directorate of Industries of a state or union territory, consequently :-

a) The total outstanding dues of small scale industrial undertaking cannot be ascertained.

b) The names of the small scale industrial undertaking to whom the company owed sums for more than 45 days cannot be ascertained.

1.8 Details of Managerial remuneration under section 198 of the companies Act, 1956

Salaries and Allowances Rs. 8.63 Lacs

Sitting Fees to Non-executive Directors Rs. 0.40 Lacs

1.9 The Company has the following wholly owned Subsidiary, the details are as under:

Petrogrema Overseas Name of the subsidiary PTE Limited

Country of incorporation or residence Singapore

Proportion of ownership interest 100%

The Subsidiary of the Company has incurred h eavy losses, which has also affect the assumption of going concern of Subsidiary company.

1.10 Segment Reporting:

During the financial year 2014-15 the company was primarily engaged in single business segment viz Rental/ Hiring of construction Equipments /machineries and further the Company does not have any material earnings emanating outside India, the Company is Considered to operate only in the domestic segment .

Enterprises under the control of Key Managerial Personnel of the company:-

a. Sancia Infraglobal Private Limited

Subsidiary Company a. Petrogrema Overseas Pte. Ltd.

1.11 Earnings per Share (EPS):

The basic earnings per share ("EPS") is computed by dividing the Net Profit after tax for the year by the weighted average number of equity shares. For the purpose of calculating diluted earnings per share, Adjusted Net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. However we have not reported diluted "EPS" since the potential equity shares are Anti-dilutive in nature.

As per AS-22 "Accounting for Taxes on Income", deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The Net worth was fully eroded and the management was not expecting any taxable income in the near future and accordingly Deferred Tax Assets (DTA) is recognized to the extent of Deferred Tax Liability (DTL).

1.12 During the F.Y 2013-14 M/s Suryoday Allo Metal Powders Limited, a company registered under the companies Act, 1956 and having its Registered office at 302, B- Wing, Narayan Chamber, 555 Narayan Peth Pune- 411030 (Maharashtra) filed a legal suit in the court at Kolkata for winding-up the company due to defaulting of payment of Rs. 1,04,19,948/- by M/s Sancia Global Infraprojects Limited.

1.13 The Company has defaulted in making payments to secured creditors and also not provided for interest on the banking facilities availed from the banks. The secured creditors had declared the account as a Non Performing Asset (NPA) and initiated notice under Section 13(2) as per the SARFAESI Act 2002. Further Bank of India have assigned all the rights, title and interest in financial assistance in favour of "Edelweiss Asset Reconstruction Company Limited (EARC)" vide letter No. EdelARC/3985-2014 dated April 30, 2014 received from "Edelweiss Asset Reconstruction Company Limited."

21.17 During the financial year 2011-12 the company had acquired the assets & liabilities of its associate company i.e. M/s Sancia Infraglobal Private Limited. However the same transaction could not completed due to not getting the requisite approvals from the relevant authorities and being restated.

21.18 Previous year''s figures have been re-grouped, re-classified and rearranged wherever necessary.


Mar 31, 2014

1.1. The company has issued Foreign Currency Convertible Bonds (FCCBs) of the nominal value of USD 50 million, having a maturity period of 5 years. As per the terms of the offering circular issued by the company for FCCBs the bonds carry interest on 1% payable half yearly on 12th February & 12th August respectively each year, and the Bonds are convertible into fully paid equity shares of the Company at any time on or after February 27, 2008 and up to January 29, 2013, unless previously redeemed, converted or re-purchased and cancelled.

In accordance with the offering Circular dated February 01,2008 issued by the Company, under condition 6 (C ) (XXIX) of the said offering Circular with effect from February 12, 2009 the Conversion Price of the Bond is re-set at Rs. 282.27 from Rs. 376.36. Further, during the year 2013-14, due to the stringent financial position, the Company has not been able to discharge its interest payment obligations of Rs. 306.08 Lacs (P.Y. 197.28 Lacs) on the said Bonds, which was due for payment on 12th August 2013 & 12th February 2014.

As per the Offering Circular, in the event of non-conversion of said Bonds into equity shares of the Company, the same shall be redeemed at 137.24 % of principal amount. The management has not made any provision in the books of account towards any liability that may fall on the Company, in the eventuality of redemption of the Bonds.

1.2. There was a search and seizure action u/s 132 of the Income Tax Act 1961 had been conducted by the Income Tax Department as on 23rd June, 2009 and presently the matter is pending with the Income Tax Appellate Tribunal, Kolkata pursuant to Appeal filed by DCIT, Kolkata under section 253 of the Income Tax Act, 1961. However the company has not made any provision towards liability of income tax for the period covered under the aforesaid search and seizure since the management did not foresee any major income tax liability. Further the company has received the notice of demand dated 08th June, 2014 under section 156 of the income tax Act, 1961 for the assessment year 2004-05, 2005-06, 2007-08, 2008-09, and 2009-10 with the demand of Rs.24982/-, 852001/-, 6,73,130/-, 59,49,227/- and 2,18,62,624/- respectively. However the management has decided to file appeal against the said orders.

1.3. Foreseeing the huge developments taking place in MENA market (Middle East, North Africa) the Company undertook huge expansion plans and had taken up multiple projects at the same time, and signed an agreement with CNPC''s subsidiary in China named bOmCo for 40 rigs for a value of more than one billion US dollar, which business was to be taken up by the wholly owned subsidiary company i.e. Petrogrema overseas PTE. Ltd and substantial investment was made in the subsidiary to facilitate the overseas body to setup the business of Oil rigs and Mines. However, due to worldwide recession in the economy and tightening of financial resources in the world market, company could not size up funds that were required for 40 rigs which were committed to CNPC, as a result of which payments made to CNPC as well as various other suppliers got stuck and the monies advanced to them could not be recovered because of financial closure and also the project could not completed on time. The Company had signed mandates with 2 First Class Banks and 1 top M&A firm from U.K who were not able to raise the debt as required due to financial recession worldwide.

All the above has resulted in huge losses to its wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd. resulting in complete erosion of its Net worth. In view of the above, as a conservative approach and in line with the accounting policy on diminution of investment being followed by the Company, the management decided to write off the value of investments in its subsidiary as well as Loans by Rs. 8193.22 Lacs and Rs. 3120.92 Lacs respectively during the financial year 2011-12.

During the financial year 2012-13 the wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd has incurred heavy losses due to written-off of various loans & advances (Rs.103.31 Crores) which could not be recovered as per the view of the management and become bad due to various reasons mentioned hereinabove.

During the current financial year 2013-14 the management decided to write off the remaining value of investments in its subsidiary as well as Loans by Rs. 8193.22 Lacs and Rs. 3120.92 Lacs respectively with due reason that the wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd has incurred heavy losses due to written-off of various loans & advances (Rs.103.31 Crores) in past years which could not be recovered as per the view of the management and become bad due to various reasons mentioned hereinabove.

1.4. Loss for the year is inclusive of loss of Rs.1254.80 Lacs (P.Y. 396.83 Lacs) being loss on impairment of old machineries/equipments due to efflux of time, wear and tear and more so due to technological obsolescence, some of the machines have been rendered of no use and have very little or scrap value. Further, the cost of operations and maintenance of such old machines was very high as such could not withstand the competition from the similar modern machines/equipments in the market. The Company could not replace the said machines/equipments due to its financial crisis. Hence to avoid high maintenance cost of such equipment''s, the same were scraped during the year, and impairment loss has been duly recorded as per the decision of the management.

During the financial Year, the Company has sold some Equipment / Scrap having gross block value of Rs.15.52 Crores and Accumulated Depreciation of Rs. 11.20 Crores with a loss of Rs. 3.87 Crores.

1.5. During the year, the Company has written-off Rs.3340.89 Lacs (P.Y. 75.01 Lacs) towards bad & doubtful debts, being disputed balances with Sundry Debtors, which are under various stages of negotiations and settlement however the management of the Company is not confident of recovery of these Debts. Based on analysis of each account by the management it has been decided to written off such debts.

1.6. The accumulated loss of the Company as on 31.03.2014 is more than 100% of its net worth during the year and immediately preceding the financial year and as such falls within the definition of "sick industrial Company" under section 46(AA) (i) of the Companies (Second Amendment) Act, 2002.

The Net Worth of the company had also been eroded during the financial year 2011-12 itself resulting, the Company had become a sick industrial company within the meaning of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The company has made a reference during the financial year 2012-13 to the "Board for Industrial & Financial Reconstruction" under section 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 however the same reference has been declined by BIFR.

1.7 There is an inquiry has been initiated by "office of Registrar of companies (West Bengal)" for contravention of provisions of the companies Act, 1956 however the company has filed the application for compounding of offences under the said Act.

1.8. Contingent Liabilities

(i) Liability towards Corporate and Bank guarantees:-

Particulars 31.03.2014 31.03.2013

a) Contingent Liability not Provided for

b) Bank Guarantee 29.00 29.00

c) Corporate Guarantee (As per the 57965.00 57965.00 sanctioned Limit) given to and on behalf of the following Group Companies :-

1) Greenearth Resources & Projects Ltd.

2) New saw Infraprojects Ltd.

3) SanciaInfraglobal Private Limited

(ii) Service Tax Liability: - The inquiry/case against the service tax liability was initiated by the "Directorate General of Central Excise Intelligence, Ahmedabad Zonal Unit however the service tax liability is not materialize. Further there was an inquiry operation on 4th day of June, 2014 was conducted by the DGCEI, Zonal Unit, Mumbai to ascertain facts regarding evasion of service tax under central excise act, 1944 read with section 83 of the finance act, 1994. However the company has not made any provision towards liability of service tax for the period covered under the aforesaid search and seizure since the management does not foresee any major service tax liability

1.9. The company does not possess information as to which of its suppliers are ancillary industrial undertaking/small scale industrial undertaking holding permanent registration certificates issued by the Directorate of Industries of a state or union territory, consequently :-

a) The total outstanding dues of small scale industrial undertaking cannot be ascertained.

b) The names of the small scale industrial undertaking to whom the company owed sums for more than 45 days cannot be ascertained.

1.10. Details of Managerial remuneration under section 198 of the companies Act, 1956

Salaries and Allowances Rs. Nil (P.Y. Rs. 4.80Lacs)

Sitting Fees to Non-executive Directors Rs. Nil (P.Y. Rs. 0.40 Lacs)

The Subsidiary of the Company has incurred heavy losses, which has also affect the assumption of going concern of Subsidiary company.

1.11. Segment Reporting

During the financial year 2013-14 the company was primarily engaged in single business segment viz Rental/ Hiring of construction Equipments /machineries and further the Company does not have any material earnings emanating outside India, the Company is Considered to operate only in the domestic segment .

1.12. Related Party Disclosures :-

Key Managerial Personnel of the company:

Sr. Name of Managerial Nature of Relationship No. Personnel

1. Mr. Arun Kumar Ray Director

2. Mr. Johnny Fernandes Managing Director

3. Mr. Kishor Kumar Damani Director

4. Mr. Pradeep Sutodia Director

Enterprises under the control of Key Managerial Personnel of the company:-

a. SanciaInfraglobal Private Limited

b. Greenearth Resources & Projects Limited

Subsidiary Company

a. Petrogrema Overseas Pte. Ltd. (Wholly owned subsidiary : Singapore)

1.13. Earnings per Share (EPS):

The basic earnings per share ("EPS") is computed by dividing the Net Profit after tax for the year by the weighted average number of equity shares. For the purpose of calculating diluted earnings per share, Adjusted Net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. However we have not reported diluted "EPS" since the potential equity shares are Anti-dilutive in nature.

As per AS-22 "Accounting for Taxes on Income", deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The Net worth was fully eroded and the management was not expecting any taxable income in the near future and accordingly Deferred Tax Assets (DTA) is recognized to the extent of Deferred Tax Liability (DTL).

1.14. Previous year''s figures have been re-grouped, re-classified and rearranged wherever necessary.


Mar 31, 2013

1. The company has issued Foreign Currency Convertible Bonds (FCCBs) of the nominal value of USD 50 million, having a maturity period of 5 years. As per the terms of the offering circular issued by the company for FCCBs the bonds carry interest on 1% payable half yearly on 12th February & 12th August respectively each year, and the Bonds are convertible into fully paid equity shares of the Company at any time on or after February 27, 2008 and up to January 29, 2013, unless previously redeemed, converted or re-purchased and cancelled.

In accordance with the offering Circular dated February 01, 2008 issued by the Company, under condition 6 (C ) (XXIX) of the said offering Circular with effect from February 12, 2009 the Conversion Price of the Bond is re-set at Rs. 282.27 from Rs. 376.36. Further, during the year 2012-13, due to the stringent financial position, the Company has not been able to discharge its interest payment obligations of Rs. 197.28 Lacs on the said Bonds, which was due for payment on 12th August 2012 & 12th February 2013.

As per the Offering Circular, in the event of non-conversion of said Bonds into equity shares of the Company, the same shall be redeemed at 137.24 % of principal amount. The Company has defaulted in making payment to FCCB holders which was due on February 13, 2013. Further the management has not made any provision in the books of account towards any liability that may fall on the Company, in the eventuality of redemption of the Bonds.

2. There was a search and seizure action u/s 132 of the Income Tax Act 1961 had been conducted by the Income Tax Department as on 23rd June, 2009 and presently the matter is pending with the Income Tax Appellate Tribunal, Kolkata pursuant to Appeal filed by DCIT, Kolkata under section 253 of the Income Tax Act, 1961. However the company has not made any provision towards liability of income tax for the period covered under the aforesaid search and seizure since the management did not foresee any major income tax liability.

3. Foreseeing the huge developments taking place in MENA market (Middle East, North Africa) the Company undertook huge expansion plans and had taken up multiple projects at the same time, and signed an agreement with CNPC''s subsidiary in China named BOMcO for 40 rigs for a value of more than one billion US dollar, which business was to be taken up by the wholly owned subsidiary company i.e. Petrogrema overseas PTE. Ltd and substantial investment was made in the subsidiary to facilitate the overseas body to setup the business of Oil rigs and Mines. However, due to worldwide recession in the economy and tightening of financial resources in the world market, company could not size up funds that were required for 40 rigs which were committed to CNPC, as a result of which payments made to CNPC as well as various other suppliers got stuck and the monies advanced to them could not be recovered because of financial closure and also the project could not completed on time. The Company had signed mandates with 2 First Class Banks and 1 top M&A firm from U.K who were not able to raise the debt as required due to financial recession worldwide.

All the above has resulted in huge losses to its wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd. resulting in complete erosion of its Net worth. In view of the above, as a conservative approach and in line with the accounting policy on diminution of investment being followed by the Company, the management decided to write off the value of investments in its subsidiary as well as Loans by Rs. 8193.22 Lacs and Rs. 3120.92 Lacs respectively during the financial year 2011-12.

During the financial year 2012-13 the wholly owned subsidiary company i.e. Petrogrema Overseas Pte. Ltd has incurred heavy losses due to written-off of various loans & advances (Rs.103.31 Crores) which could not be recovered as per the view of the management and become bad due to various reasons mentioned hereinabove.

4. Loss for the year is inclusive of loss of Rs.396.83 Lacs being loss on impairment of old machineries/equipments due to efflux of time, wear and tear and more so due to technological obsolescence, some of the machines have been rendered of no use and have very little or scrap value. Further, the cost of operations and maintenance of such old machines was very high as such could not withstand the competition from the similar modern machines/equipments in the market. The Company could not replace the said machines/equipments due to its financial crisis. Hence to avoid high maintenance cost of such equipment''s, the same were scraped during the year, and impairment loss has been duly recorded as per the decision of the management.

5. During the year, the Company has written-off Rs.75.01 Lacs towards bad & doubtful debts, being disputed balances with Sundry Debtors which are outstanding for more than 1 year, which are under various stages of negotiations and settlement however the management of the Company is not confident of recovery of these Debts. Based on analysis of each account by the management is has been decided to written off such debts.

6. The accumulated loss of the Company as on 31.03.2013 is more than 100% of its net worth during the year and immediately preceding the financial year and as such falls within the definition of "sick industrial Company" under section 46(AA) (i) of the Companies (Second Amendment) Act, 2002 . The Net Worth of the company had also been eroded during the financial year 2011-12 itself resulting, the Company had become a sick industrial company within the meaning of section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985.

The company has made a reference during the financial year 2012-13 to the "Board for Industrial & Financial Reconstruction" under section 15(1) of Sick Industrial Companies (Special Provisions) Act 1985 however the same reference has been declined by BIFR.

7. There is an inquiry has been initiated by "office of Registrar of companies (West Bengal)" for contravention of provisions of the companies Act, 1956 however the company has filed the application for compounding of offences under the said Act.

8. Contingent Liabilities :-

8(i) Liability towards Corporate and Bank guarantees:-

(Rs. in Lacs)

Particulars 31.03.2013 31.03.2012

a) Contingent Liability not Provided for

b) Bank Guarantee 29.00 29.00

c) Corporate Guarantee (As per the Sanctioned 57965.00 57965.00 Limit) given to and on behalf of the following

Group Com panies :-

1) Greenearth Resources & Projects Ltd.

2) New saw Infra projects Ltd.

3) Sancia Infraglobal Private Limited

8(ii) Service Tax Liability: - The inquiry/case against the service tax liability was initiated by the "Directorate General of Central Excise Intelligence, Ahmedabad Zonal Unit however the service tax liability is not materialize.

9. The company does not possess information as to which of its suppliers are ancillary industrial undertaking/small scale industrial undertaking holding permanent registration certificates issued by the Directorate of Industries of a state or union territory, consequently :-

a) The total outstanding dues of small scale industrial undertaking cannot be ascertained.

b) The names of the small scale industrial undertaking to whom the company owed sums for more than 45 days cannot be ascertained.

10. Details of Managerial remuneration under section 198 of the companies Act, 1956 Salaries and Allowances Rs.4.80 Lakhs (P.Y. Rs. 4.80 Lacs)

Sitting Fees to Non-executive Directors Rs.0.40 Lakhs (P.Y. Rs. 0.50 Lacs)

11. Segment Reporting:

During the financial year 2012-13 the company was primarily engaged in single business segment viz Rental/ Hiring of construction Equipments /machineries and further the Company does not have any material earnings emanating outside India, the Company is Considered to operate only in the domestic segment .

Enterprises under the control of Key Managerial Personnel of the company:-

a. Sancia Infraglobal Private Limited

b. Greenearth Resources & Projects Limited

Subsidiary Company

a. Petrogrema Overseas Pte. Ltd. (Wholly owned subsidiary : Singapore)

12. Earnings per Share (EPS):

The basic earnings per share ("EPS") is computed by dividing the Net Profit after tax for the year by the weighted average number of equity shares. For the purpose of calculating diluted earnings per share, Adjusted Net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. However we have not reported diluted "EPS" since the potential equity shares are Anti-dilutive in nature.

As per AS-22 "Accounting for Taxes on Income", deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

During the financial year 2011-12, the Net worth was fully eroded and the management was not expecting any taxable income in the near future and accordingly Deferred Tax Assets (DTA) is recognized to the extent of Deferred Tax Liability (DTL).

As the Income tax matter is pending with the Income Tax Appellate Tribunal, Kolkata pursuant to Appeal filed by DCIT, Kolkata under section 253 of the Income Tax Act, 1961 only the timing difference of depreciation has been considered during the financial year 2012-13 and deferred tax liability of Rs. 100.61 Lacs is recognized and carried forward.

13. Previous year''s figures have been re-grouped, re-classified and rearranged wherever necessary.


Mar 31, 2012

1. The company has issued Foreign Currency Convertible Bonds (FCCBs) of the nominal value of USD 50 million, having a maturity period of 5 years. As per the terms of the offering circular issued by the company for FCCBs the bonds carry interest on 1 % payable half yearly on 12th February & 12th August respectively each year, and the Bonds are convertible into fully paid equity shares of the Company at any time on or after February 27, 2008 and up to January 29, 2013, unless previously redeemed, converted or re-purchased and cancelled.

In accordance with the offering Circular dated February 01, 2008 issued by the Company, under condition 6 (C ) (XXIX) of the said offering Circular with effect from February 12, 2009 the Conversion Price of the Bond is re-set at Rs. 282.27 from Rs. 376.36. Further, during the year 2011- 12, due to the stringent financial position, the Company has not been able to discharge its interest payment obligations of Rs. 89.27 Lac on the said Bonds, which was due for payment on February 12,2012.

As per the Offering Circular, in the event of non-conversion of said Bonds into equity shares of the Company, the same shall be redeemed at 137.24 % of principal amount. The management has not made any provision in the books of account towards any liability that may fall on the Company, in the eventuality of redemption of the Bonds.

2. In respect of Block Assessment of the Company for the Assessment Years 2004-05 to 2010-11, under section 153A& 153Cofthe Income Tax Act, 1961 the Income Tax Department has issued a show cause letter dated November 30, 2011 for conducting Special Audit u/s 142A (2A) of the Income Tax Act, 1961. As no assessment has been made till date and due to the reason further liability will be quantified on the completion of Block assessment, hence no provision has been made for the same during the year.

3. Loss for the year is inclusive of a loss of Rs. 31.21 Crores and of Rs. 81.93 Crores arising out of Loan made to and due to diminution in the value of investments made by the Company in its wholly owned foreign subsidiary Petrogrema Overseas PTE Ltd respectively. Foreseeing the huge developments taking place in MENA market (Middle East, North Africa) the Company undertook huge expansion plans and had taken up multiple projects at the same time, and signed an agreement with CNPC's subsidiary in China named BOMCO for 40 rigs for a value of more than one billion US dollar, which business was to be taken up by the wholly owned subsidiary company and substantial investment was made in the subsidiary to facilitate the overseas body to setup the business of Oil rigs and Mines. However, due to worldwide recession in the economy and tightening of financial resources in tne world market, company could not size up funuo ",£.t were required for 40 rigs which were committed to CNPC, as a result of which most payments done to CNPC as well as various other suppliers got stuck and the monies advanced to them could not be recovered because of financial closure and also the project could not completed on time. The Company '-.-vi signed mandates with 2 First Class Banks and 1 top M & A firm from U.K who were not able to raise the what as required due of financial recession worldwide.

Further, huge investments were made by the Company for acquiring of mining license, and also substantial monies were paid for consultancy services and other expenses for acquiring of license. However, due to a change in the Government Policy with respect of allotment/sale of mining licenses the company could not acquire the mininglicense and also the Indian company also went into huge financial crises.

All the above has resulted in huge losses to the subsidiary company resulting in complete erosion of its Net worth. In view of the above, as a conservative approach and in line with the accounting policy on diminution of investment being followed by the Company, the management decided to write off the value of investments as well as loans by 50%.

4. During the year, the Company has made provision) a sum of Rs.55.76 Crores towards sums advanced to various parties as Loans and Advances. The Company had finalized a proposal to setup a Mega Steel project at SEZ in Kolhapur for which it was also in the process of signing of an MOU with Maharashtra State Government and had obtained all the necessary statutory permission and approval for setting up the same. The Company simultaneously ventured into investment in its proposed SAW Pipe plant, Steel plant etc. and also started expansion in its equipment division.

In pursuance of the above projects, the company had given advances to various parties to purchase equipments and machines and after having proceeded considerably towards the setting up of the projects, amongst several other reasons, the Company found itself short of resources required for the completions and operation of the project, as the financiers to the project, refused to fulfill their commitments as per the agreement with them. As the Company could not make the full payment to the suppliers, hence the sums advanced have been forfeited by the parties, and they also did not supply the machineries, equipments and other capital items. After a stringent follow up with the respective parties for refund of advances and having failed to recover the same, the Company has filed recovery suit against some of these parties which are presently pending with the Hon'ble High Court of Kolkata. However, the management is uncertain of a favorable outcome hence the advances given to the parties have been written off.

5. Loss for the year is inclusive of loss of Rs.69.26 Crores being loss on sale of old machinery/equipments. The Company had purchased the machines during the years from 1999- 2000 to 2003-2004 and also purchased some second hand machines in 2007-08. However, due to efflux of time, wear and tear and more so due to technological obsolescence some of the machines have been rendered of no use and have very little or scrap value. Further, the cost of operations and maintenance of such old machines was very high as such could not withstand the competition from the similar modern machines/equipments in the market. The Company could not replace the said machines/equipments due to its financial crisis. Hence to avoid any further depletion in value of such machines and equipments and to plug the high maintenance cost of such equipments, the same were sold during the year, resulting in the above stated loss.

The loss is inclusive of loss arising due to scrapping of pollution control equipments and ash hancHing systems acquired by the Company, during the process of setting up its Lam coke manufacturing plant. However, due to financial constraints and failure of the banks and others to timely fund the project, the same was stalled and ultimately scrapped.

6. During the year, the Company had Provision of Rs. 14.63 Crores towards doubtful debts, being disputed balances in Sundry Debtors which are outstanding for more than 1 year, which are under various stages of negotiations and follow up with the customers. The management of the Company is not confident of recovery of these amounts. However, based on analysis of each account, the Company has made provision for Bad & Doubtful debts of such debts.

7. As on October 5,2011 the Company has acquired all the assets at book value of Rs. 175.09 Cr. and liabilities at book value of Rs. 117.60 Cr. Of its Associate Company viz. Sancia Infra Global (P) Ltd and purchase consideration of Rs. 57.49 Cr. and the differential net off investment has been treated as goodwill. The remaining shareholders of the associate company shall be paid a consideration at the face value of the equity shares held by them. The Entire Assets of M/s Sancia Infraglobal (P) Ltd. are charged/hypothecated to the Banks/Institutions against credit facilities availed by the Associate Company, and post acquisition, the same shall continue to remain charged with the respective Banker/Financial institution.

8. The accumulated loss of the Company as on 31.03.2012 is more than 100% of its net worth during the year and immediately preceding the financial year and the Company has aiso suffered cash loss of Rs. 68.01 Cr. during the year and immediately preceding financial year and as such falls within the definition of "sick industrial Company" under section 46(AA) (i) of the Companies (Second Amendment) Act, 2002 (which is not yet notified). The Company has also eroded its Net Worth as at the end of the financial year and as a result, the Company has become a sick industrial company within the meaning of section 3(1 )(o) of the Sick Industrial Companies (Special Provisions)Act, 1985.

9. Contingent Liabilities:-

Particulars As at As at March 31,2012 March 31,2011 (Rs. in Lacs) (Rs. in Lacs)

(a) Contingent Liability not provided for:

Bank Guarantees 29.00 29.00

Corporate Guarantee given to on behalf of Group companies 57965.00 57965.00

(1) Greenearth resources & projects limited

(2) Anarcon Resources Pvt. Ltd.

(3) Tirupati Niket Pvt.Ltd.

The Subsidiaries of the Company has incurred heavy losses due to cash losses, it has also affect the assumption of going concern of Subsidiary company.

Since the Company does not have any material earnings emanating outside India, the Company is considered to operate only in the domestic segment.

10. Earnings per Share (EPS):

The basic earning per share ("EPS") is computed by dividing the Net Profit after tax for the year by the weighted average number of Equity shares. For the purpose of pulsating diluted eanings per share, Adjusted Net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of ail dilutive potential equity shares. However we have not reported diluted "EPS" since the potential equity shares are Anti dilutive in nature.

Since Company's Net worth is fully eroded and as per AS-22 "Accounting for Taxes on Income", deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Since, the management is not in the hope in near future that there will be taxable income. So, Deferred Tax Assets (DTA) is recongnised to the extent of Defened Tax Liablity(DTL).

11. Previous year's figures have been re-grouped, re-classified and rearranged wherever necessary.


Mar 31, 2010

1. FCCB Bond issued:-

The Company had issued Foreign Currency Convertible Bonds (FCCB) of the nominal value of US$ 50.00 million having maturity period of 5 years.

As per the terms and conditions of the Offering Circular issued by the Company for FCCB, the Bonds are convertible by the Bondholders into fully paid equity shares of the Company at any time on or after 27th February 2008 and up to 29th January 2013, unless previously redeemed, converted or repurchased and cancelled.

In accordance with the Offering Circular dated February 01, 2008 issued by the Company, under Condition 6(C) (xxix) of the said Offering Circular with effect from February 12, 2009 the Conversion Price of the Bonds is reset at Rs 282.27 from Rs. 376.36

Total bonds outstanding as on 31st March, 2010 is US$ 36,295,000 to be converted at a predetermined exchange rate of US$ 1 = Rs 39.36.

During the year 19,11,038 Fully Paid up Equity shares @ 10/- each Issued and Allotted to the investors to convert FCCB of US$ 1,37,05,000.

2. Balances of Sundry Debtors, sundry creditors, Advances and Deposits are subject to confirmation, reconciliation and adjustment if any.

3. Contingent Liabilities:-

Particulars As at March As at March 31, 2010 31, 2009 (Rs. in (Rs. in Lacs) Lacs) (a) Contingent Liability not provided for:

Bank Guarantees 67.60 29.00

Estimated amount of contracts remaining to be executed 14471.58 14284.20

on capital account and not provided for*

(Out of which Letter of Credit o/s : 3785.37Lacs)*

Corporate Guarantee 57965.00 57965.00

Disputed Dues under Income Tax Act pending in Appeal 87.57 87.57

During the year search and seizure action u/s132of the - - income tax act 1961 have been c6nducted by income tax department as on 23rd June,2009; However directors of the company do not anticipate any major income tax demand.

4. The company does not possess information as to which of its suppliers are ancillary industrial undertakings/ small scale industrial undertaking holding permanent registration certificates Issued by the Directorate of Industries of a state or Union Territory. Consequently:-

The Total outstanding dues of small scale Industrial undertaking can not be ascertained.

The Names of the small scale Industrial Undertaking to whom the company owed sums for more than 45 days can not be ascertained.

5. Details of Managerial remuneration under section 198 of the companies Act, 1956

Salaries and Allowances Rs 9.00 Lacs (P.Y. Rs. 18.00 Lacs)

Sitting Fees to Non executive Directors Rs 0.20 Lacs (RY. Rs 6.00 Lacs)

6. Related Party Disclosures:

A. Key Managerial Personnel

Mr. Ratan Lai Tamakhuwala Non Executive Chairman

Mr. Rishi Raj Agarwal Promoter/ Managing Director

Mr. Sunil Kumar Mandloi Managing Director

Mr. Johnny Femandes Whole-Time Director

B. Enterprises under the control of Key Managerial Personnel

Greenearth Resoures & Projects Limited

Newsaw Infraprojects Limited

Anarcon Resources Private Limited

Shri Hanuman Investment Private Limited

Sancia Infraglobal Private Limited

Wallford Indialnfrastructure Reality Private Limited

C. Subsidiary

Petrogrema Overseas Pte Limited Wholly Owned Subsidiary (Singapore)

7. Earnings per Share (EPS):

The basic earning per share ("EPS") is computed by dividing the Net Profit after tax for the year by the Weighted average number of equity shares.

Diluted earrings per share is computed by dividing the Adjusted Net profit after tax for the year and the weighted average number of equity shares outstanding during the year are adjusting the effects of all dilutive potential equity shares, however we have not reported diluted "EPS" since the potential equity shares are Anti-dilutive in nature.

8. Previous years figures have been re-grouped, re-classified and rearranged wherever necessary.


Mar 31, 2009

1. FCCB Bond issued:- The Company had issued Foreign Currency Convertible Bonds (FCCB) of the nominal value of US$ 50.00 million having maturity period of 5 years.

As per the terms and conditions of the Offering Circular issued by the Company for FCCB, the Bonds are convertible by the Bondholders into fully paid equity shares of the Company at any time on or after 27th February 2008 and up to 29th January 2013, unless previously redeemed, converted or repurchased and cancelled.

In accordance with the Offering Circular dated February 01, 2008 issued by the Company, under Condition 6(C) (xxix) of the said Offering Circular with effect from February 12, 2009 the Conversion Price of the Bonds is reset at Rs. 282.27 from Rs. 376.36

Total bonds outstanding as on 31st March, 2009 is US$ 50,000,000 to be converted at a predetermined exchange rate of US$ 1 = Rs 39.36.

During the year none of the FCCB bonds has been converted by the bond holders into Equity shares.

2. Some of the Balances of Sundry Debtors, sundry creditors, Advances and Deposits are subject to confirmation, reconciliation and adjustment if any.

3. Contingent Liabilities:-

Particulars As at March As at March 31,2009 31,2008 (Rs. in Lacs) (Rs. in Lacs)

(a) Contingent Liability not provided for:

Bank Guarantees 29.00 25.00

Estimated amount of contracts remaining to be executed 14284.20 14284.20

on capital account and not provided for* (Out of which Letter of Credit o/s : 2122.63Lacs)* Corporate Guarantee 57965.00 18750.00

Disputed Dues under Income Tax Act pending in Appeal 87.57 Nil

4. The company does not possess information as to which of its suppliers are ancillary industrial undertakings/small scale industrial undertaking holding permanent registration certificates Issued by the Directorate of Industries of a state or Union Territory. Consequently:- The Total outstanding dues of small scale Industrial undertaking can not be ascertained.

The Names of the small scale Industrial Undertaking to whom the company owed sums for more than 45 days can not be ascertained.

5. Details of Managerial remuneration under Section 198 of the Companies Act, 1956

Salaries and Allowances Rs. 18.00 Lacs (P.Y. Rs. 36.00 Lacs)

Sitting Fees to Non executive Directors Rs. 6.00 Lacs (P.Y. Rs. 3.77 Lacs)

6. Related Party Disclosures:

A. Key Managerial Personnel Shri Ratan Lal Tamakhuwala Non Executive Chairman Mr. Rishi Raj Agarwal Promoter/ Managing Director

B. Enterprises under the control of Key Managerial Personnel Austral Coke & Projects Limited

Armstrong Infrastructures & projects Limited Anarcon Resources Private Limited Shri Hanuman Investment Private Limited Austral Infrastructure Private Limited Gremach Infrastructure Private Limited Gremach Projects Private Limited Austral Projects Private Limited Wallford IndiaInfrastructure Reality Private Limited

C. Subsidiary Petrogrema Overseas Pte Limited Wholly Owned Subsidiary (Singapore)

7. Earnings per Share (EPS):

The basic earning per share ("EPS") is computed by dividing the Net Profit after tax for the year by the number of equity shares outstanding during the year. For the purpose of calculating diluted earrings per share, Adjusted Net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

8. Previous years figures have been re-grouped, re-classified and rearranged wherever necessary.

 
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