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Notes to Accounts of Sunil Hitech Engineers Ltd.

Mar 31, 2015

1 GENERAL INFORMATION

Sunil Hitech Engineers Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (as amended by the Companies Act, 2013). Its shares are listed on two stock exchanges in India. The Company is engaged in the business of Engineering, Procurement, Construction-(EPC), Fabrication, Erection, Overhauling, Maintenance, Trading and other related activities.

1.1 Terms/ Rights attached to equity shares

The Company has only one class of equity shares with voting rights having a par value of H10 per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

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 bythe shareholders.

1.2 The Company is not a Subsidiary Company.

1.3 Reserved Shares and Terms of Warrants

The convertible warrant holders have the option to convert their warrants into 20,50,000 (Pr.Yr. 16,50,000) equity shares of H10/- each at the terms and conditions as referred in Note 5.

2 MONEY RECEIVED AGAINST SHARE WARRANTS

2.1 The members at the Extra Ordinary General Meeting held on 18 April 2014 has authorized the Board/ Committee thereof, to create, offer, issue and allot on preferential basis (i) 55,00,000 warrants convertible into equity shares to the Promoters Group, Persons acting in concert with Promoters or Companies under Promoters Group and (ii) 20,00,000 warrants convertible into equity shares to the Non Promoters Investors.

2.2 Terms attached to equity warrants

The warrant entitles the holder to subscribe for one equity shares of H10/- each at the premium of H45.40 per equity shares which is determined in accordance with the provisions of SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009. On 21st November 2014 warrants aggregating to 20,50,000 has been alloted to person acting in concert with promoters and non promoters after receiving H13.85, being 25% of H55.40, per warrant.

The holders of 20,50,000 warrants have an option to apply for and be allotted one equity share of the Company per warrant before the expiry of 18 months from date of allotment. If the option is not excercised as aforesaid amount paid on such warrants shall stand forfeited.

The warrant holders shall also be entitled to any future bonus/ rights issue(s) of equity shares or other securities convertible into equity shares by the Company in the same proportion and manner as any other shareholders of the Company for the time being. The Equity shares to be allotted on conversion of warrants shall rank pari passu in all respects with the existing equity shares of the Company.

Company is in the process of obtaining in principal approval for the allotment of 53,00,000 warrants to promoters and promoters group.

Proposed allottees of 1,50,000 warrants has not subscribed the warrants.

3.1 Term loan from Banks referred above to the extent of :

a) Rs.537.07 Lacs (Pr.Yr. Rs.419.03 Lacs) are secured by first mortgage/ pari-passu charge on the respective buildings situated at Pune and Nagpur.

b) Rs.794.80 Lacs (Pr.Yr. Rs.196.70 Lacs) secured by first hypothecation/ pari-passu charge on the respective plant and machineries including Hydra's at various sites.

c) Rs.57.99 Lacs (Pr.Yr. Rs.61.21 Lacs) are secured by first hypothecation/ pari-passu charge on the respective Vehicles at various sites.

d) Nil (Pr.Yr. Rs.2,056.54 Lacs) are secured by exclusive charge over the project specific total assets including receivables of the Kolhapur T&D site.

3.2 Term loan from Financial Institutions referred above to the extent of:

a) Rs.1,197.32 Lacs (Pr.Yr. Nil) are secured by first mortgage/ pari-passu charge on the respective buildings situated at Nagpur and Mumbai.

b) Rs.2,065.33 Lacs (Pr.Yr. Rs.1,167.96 Lacs) are secured by first hypothecation/ pari-passu charge on the respective plant and machineries including Hydra's situated at various sites.

c)Rs.2.19 Lacs (Pr.Yr. Rs.4.37 Lacs) are secured by first hypothecation/ pari-passu charge on the respective Vehicles at various sites.

d) Rs.1.61 Lacs (Pr.Yr. Rs.19.56 Lacs) are secured by first and exclusive hypothecation on the respective non consumable materials.

e) Rs.1,400.00 Lacs (Pr.Yr. Nil) are secured against retention money receivable from Parli Project.

4.1 Working Capital Loans are secured by hypothecation of present and future stock of raw materials, stores and spares, book debts and other receivables and have Second Charge on Fixed Assets of the Company and personal guarantee of some of the Directors.

Of the above Nil (Pr.Yr. Rs.3,000.00 Lacs) are secured by first hypothecation/ pari-passu charge on the stock and receivables of the project at Jhabua site.

5 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances Rs.222.16 Lacs (Pr.Yr. 33.98 Lacs)

b) Other Commitments - Non cancellable operating Leases (Refer Note 36)

6 CONTINGENT LIABILITIES

(Rs. In Lacs)

Particulars 31 March 2015 31 March 2014

a) Service Tax demand disputed, contested in appeal 972.69 1,580.12

b) Sales Tax demand disputed, contested in appeal 39.84 39.84

c) Customs Duty disputed 115.49 115.49

d) Income Tax disputed, contested in appeal 291.17 -

e) Guarantee given to Banks and Financial Institutions - 58,132.86 50,097.19

f) Guarantee given to Banks and Financial Institutions on behalf of -

i) A subsidiary company 8,879.00 9,279.00

- Loans/ LC/ BG outstanding at the year end 7,162.51 7,507.41

ii) An Associate Company 2,401.88 2,500.00

- Loans outstanding at the year end - 478.33

iii) Others 220.00 3,210.00

g) Claims against the Company not acknowledged as debts 111.76 101.37

7 EMPLOYEE BENEFITS

As required by Accounting Standard-15 "Employee Benefits" the disclosures are as under:

Defined Contribution Plans:

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees' Pension Scheme (EPS) with the Government and certain state plans such as Employees' State Insurance (ESI). PF and EPS covers substantially all regular employees and the ESI covers eligible workers. Contributions are made to the Government's funds. While both the employees and the Company pay predetermined contributions into the PF and the ESI Scheme, contributions into the EPS is made only by the Company. The contributions are normally based on a certain portion of the employee's salary.

During the year, the Company has recognised the following amounts in the Accounts:

Defined Benefit Plans Leave Encashment:

The Company's employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the Company rules.

The Liability of compensated absences, which is non funded, has been provided based on the report of independent actuary using the "Projected Unit Credit Method" in respect of past services. Accordingly H301.80 Lacs (Pr.Yr. Rs.226.54 Lacs) being the liability as at the year end for compensated absences have been provided in the accounts.

Gratuity:

The Employees' Gratuity Fund scheme is a defined benefits plan. The present value of obligation is determined based on the actuarial valuation, using the "Projected Unit Credit Method", which recognises each period of services as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The Company makes contributions to the Employees' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of the LIC, a funded defined benefit plan for employees. The scheme provides for payment to employees as under:

i) On normal retirement/ early retirement/ withdrawal/ resignation:

As per the provisions of The Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On the death in service:

As per the provisions of The Payment of Gratuity Act, 1972 without any vesting period.

Disclosures for defined benefit plans i.e. Gratuity (Funded Plan) based on actuarial reports as on 31 March 2015:

8 DISCLOSURE FOR OPERATING LEASES UNDER ACCOUNTING STANDARD-19 "LEASES"

The Company has taken various residential/ office premises (including furniture and fittings, therein as applicable), under operating lease or leave and license agreements. These are generally cancellable under leave and license arrangements and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments of H1138.90 Lacs (Pr.Yr. H987.43 Lacs) are recognised in the Statement of Profit and Loss.

9 In terms of the requirements of the Accounting Standard-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

10 RELATED PARTY DISCLOSURE WITH WHOM TRANSACTIONS HAVE TAKEN PLACE DURING THE YEAR AS REQUIRED BY ACCOUNTING STANDARD - 18 ARE GIVEN BELOW:

Category I : Subsidiaries :

SEAM Industries Limited

Sunilhitech India Infra Private Limited (Formerly Known as Ecological Road Construction Private Limited)

Sunilhitech Solar (Dhule) Private Limited Sunil Hitech Energy Private Limited SHEL Investments Consultancy Private Limited Patna Green Energy Private Limited

Category II : Associates : Gangakhed Sugar & Energy Limited

V. K. Realtors (Partnership Firm)

Category III : Joint Venture : PBSPL - SHEL - JV

SHEL ASSIGNIA - JV

Category IV: Directors, Key Management Personnel and their Relatives:

Mr. Ratnakar Manikrao Gutte Mrs. Sudhamati Ratnakar Gutte Mr. Sunil Ratnakar Gutte Mr. Vijay Ratnakar Gutte

Mr. Mohanan Narayanan Mattathil (till 8th Oct 2014) Mr. Venkataramana Condoor

Mr. Anupam Gianchand Dhiman (w.e.f. 14 Oct 2014) Mrs. Swati Rajesh Phad CS Shrikant Rikhe

Category V : Enterprise over which persons covered under Category IV above are able to exercise significant control

Gutte Infra Private Limited

VRG Digital Corporation Private Limited

RSV & Associates

Kolhapur Green Energy Private Limited

11 Disclosure of Trade payables to Micro, Small and Medium Enterprises under Current Liabilities is based on the information available with the Company regarding the Status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. Amount outstanding (not overdue) as on 31 March 2015 to Micro, Small and Medium Enterprises on account of principal amount aggregate to H3.06 Lacs (Pr.Yr. H54.45 Lacs) and interest payable thereon Rs.Nil (Pr.Yr. Rs.Nil) and interest paid during the year Rs.Nil (Pr.Yr. Rs.Nil).

12 Balance of some of the Trade Receivables and Trade Payables are subject to confirmation/ reconciliation and adjustments, if any.

13 Previous year's figures are regrouped and recasted wherever required.


Mar 31, 2014

1 COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances H 33.98 Lacs (Pr.Yr. NIL)

b) Other Commitments - Non cancellable operating Leases (Refer Note 40)

2 CONTINGENT LIABILITIES

Particulars 31-03-14 31-03-13

a) Service Tax demand disputed, contested in appeal 1,580.12 1,598.24

b) Sales Tax demand disputed, contested in appeal 39.84 39.84

c) Customs Duty disputed 115.49 115.49

d) Guarantee given to Banks and Financial Institutions on behalf of -

i) A subsidiary company 9,279.00 5,242.00

- Loans/ LC/ BG outstanding at the year end 7,507.41 3,539.25

ii) An Associate Company 2,500.00 2,500.00

- Loans outstanding at the year end 478.33 1,298.33

iii) Others 3,210.00 250.00

e) Claims against the Company not acknowledged as debts 101.37 101.37

3 EMPLOYEE BENEFITS

As required by Accounting Standard-15 "Employee Benefits" the disclosures are as under:

Defined Contribution Plans:

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees'' Pension Scheme (EPS) with the Government and certain state plans such as Employees'' State Insurance (ESI). PF and EPS covers substantially all regular employees and the ESI covers eligible workers. Contributions are made to the Government''s funds. While both the employees and the Company pay predetermined contributions into the PF and the ESI Scheme, contributions into the EPS is made only by the Company. The contributions are normally based on a certain portion of the employee''s salary.

During the year, the Company has recognised the following amounts in the Accounts:

Defined Benefit Plans

Leave Encashment:

The Company employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the

Company rules.

The Liability of compensated absences, which is non funded, has been provided based on the report of independent actuary using the "Projected Unit Credit Method" in respect of past services. Accordingly H 226.54 Lacs (Pr.Yr. H 246.03 Lacs) being the liability as at the year end for compensated absences have been provided in the accounts.

Gratuity:

The Employees'' Gratuity Fund scheme is a defined benefits plan. The present value of obligation is determined based on the actuarial valuation, using the "Projected Unit Credit Method", which recognises each period of services as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The Company makes contributions to the Employees'' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of the LIC, a funded defined benefit plan for employees. The scheme provides for payment to employees as under:

i) On normal retirement/ early retirement/ withdrawal/ resignation:

As per the provisions of The Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On the death in service:

As per the provisions of The Payment of Gratuity Act, 1972 without any vesting period.

Disclosures for defined benefit plans i.e. Gratuity (Funded Plan) based on actuarial reports as on 31 March 2014:

The estimate of future increase in compensation levels considered in the actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

4 DISCLOSURE FOR OPERATING LEASES UNDER ACCOUNTING STANDARD-19 "LEASES"

The Company has taken various residential/ office premises (including furniture and fittings, therein as applicable), under operating lease or leave and license agreements. These are generally cancellable under leave and license arrangements and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments of H 987.43 Lacs (Pr.Yr. H 755.55 Lacs) are recognised in the Statement of Profit and Loss.

The future lease payments and payment profile of non cancellable operating leases are as under.

5 In terms of the requirements of the Accounting Standard-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

6 SEGMENT REPORTING

I. Business Segments:

Business segments have been identified in line with Accounting Standard 17 - "Segment Reporting".

The Company''s businesses are classified into following three primary business segments:

a) Project

b) Overhauling & Maintenance (O & M)

c) Project Supply

Project Segment: This segment is engaged in the business of Fabrication, Erection and Commissioning of Boilers (Power Plants) ESP, Rotating Machineries, Sugar plants, Transmission and Distribution and EPC Contract and Balance of Plant (BOP).

O & M Segment: This segment is engaged in the business of Repair and Maintenance, Overhauling and Renovations of Boilers and auxiliaries, Ash Handling Systems etc.

Project Supply Segment: Supply of Projects related Steel and other materials at various Sites.

During the year Segment Reporting has been reconstituted in line with the revised reporting norms of the Company. Consequently, segment figures for the previous year have been regrouped.

II. Geographical Segments

Since company operates only in India, there are no geographical segments as defined in AS 17.

7 NOTE ON HEDGE AND UNHEDGED FOREIGN CURRENCY ASSETS AND LIABILITIES

During the year, the Company has entered into forward exchange contract, being derivative instruments for hedgeing purposes and not intended for trading or speculation purpose, to establish the amount of currency in indian rupees required at the settlement date of certain payables. There are no Forward Exchange Contracts outstanding as at the year end (Pr.Yr. NIL). The year end foreign currency exposures that have not been hedged by derivative instrument or otherwise are as below.

8 RELATED PARTY DISCLOSURE WITH WHOM TRANSACTIONS HAVE TAKEN PLACE DURING THE YEAR AS REQUIRED BY ACCOUNTING STANDARD - 18 ARE GIVEN BELOW:

Category I : Subsidiaries :

SEAM Industries Limited

Sunilhitech India Infra Private Limited (Formerly Known as Ecologica

Road Construction Private Limited)

Sunilhitech Solar (Dhule) Private Limited

Sunil Hitech Energy Private Limited

SHEL Investments Consultancy Private Limited

Category II : Associates :

Gangakhed Sugar & Energy Limited

V. K. Realtors (Partnership Firm)

Category III : Joint Venture : PBSPL - SHEL - JV

Category IV : Directors, Key Management Personnel and their Relatives:

Mr. Ratnakar Manikrao Gutte

Mrs. Sudhamati Ratnakar Gutte

Mr. Sunil Ratnakar Gutte

Mr. Vijay Ratnakar Gutte

Mr. Mohanan Narayanan Mattathil

Mr. Venkataramana Condoor (w.e.f. 01 June 2013)

Mrs. Swati Rajesh Phad

Category V : Enterprise over which persons covered under Category IV above are able to exercise significant control :

Gutte Infra Private Limited

VRG Digital Corporation Private Limited

RSV & Associates

Kolhapur Green Energy Private Limited

Notes:

i) Above Loans and Advances are repayable on demand.

ii) Loans and Advances to employees/ customers and investments by such employees/ customers in the shares of the company if any, are excluded from the above disclosure.

C. There is no investment by loanee in the shares of Parent Company/ Subsidiary Company.

9 The company has entered into a Joint Venture with Phenix Building Solutions Private Limited named as "PBSPL - SHEL - JV", a jointly controlled entity incorporated in India where in the company holds 49% interest.

Details of Company''s interest in the aforesaid joint venture as per the requirement of AS-27 on Financial Reporting of Interest in Joint Venture is as under :

10 Disclosure of Trade payables to Micro, Small and Medium Enterprises under Current Liabilities is based on the information available with the Company regarding the Status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. Amount outstanding (not overdue) as on 31 March 2014 to Micro, Small and Medium Enterprises on account of principal amount aggregate to H 54.45 Lacs (Pr.Yr. Rs 7.90 Lacs) and interest payable thereon rs Nil (Pr.Yr. Rs Nil) and interest paid during the year rs. Nil (Pr.Yr. rs Nil).

11 Balance of some of the Trade Receivables and Trade Payables are subject to confirmation/ reconciliation and adjustments, if any.

12 Previous year''s figures are regrouped and recasted wherever required.


Mar 31, 2013

1 GENERAL INFORMATION

Sunil Hitech Engineers Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the business of Engineering, Procurement, Construction-(EPC), Fabrication, Erection, Overhauling, Maintenance, Trading and other related activities.

2 EMPLOYEE BENEFITS

As required by Accounting Standard-15 "Employee Benefits" the disclosures are as under:

Defined Contribution Plans:

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees Pension Scheme (EPS) with the government and certain state plans such as Employees'' State Insurance (ESI). PF and EPS cover substantially all regular employees and the ESI covers eligible workers. Contributions are made to the Government''s funds. While both the employees and the Company pay predetermined contributions into the PF and the ESI Scheme, contributions into the EPS is made only by the Company. The contributions are normally based on a certain portion of the employee''s salary.

Defined Benefit Plans Leave Encashment:

The Company''s employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the Company rules

The Liability of compensated absences has been provided based on the report of independent actuary, using the "Projected Accrued Benefit Method", which is same as the "Projected Unit Credit Method" in respect of past services. Accordingly Rs. 246.03 Lacs (Pr.Yr. Rs. 251.17 Lacs) being the liability as at the year end for compensated absences have been provided in the accounts

Gratuity:

The Employees'' Gratuity Fund scheme is a defined benefits plan. The present value of obligation is determined based on the actuarial valuation, using the Projected Unit Credit Method, which recognises each period of services as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation

3 DISCLOSURE FOR OPERATING LEASES UNDER ACCOUNTING STANDARD-19 "LEASES"

The Company has taken various residential/office premises (including furniture and fittings, therein as applicable), under operating lease or leave and license agreements. These are generally cancellable and ranges from 5 months to 15 years under eave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments of Rs. 755.55 Lacs (Pr.Yr. Rs. 656.25 Lacs) are recognised in the Statement of Profit and Loss.

4 In terms of the requirements of the Accounting Standard-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

5 SEGMENT REPORTING

I. Business Segments:

Business segments have been identified in line with Accounting Standards on Segment Reporting "AS 17".

The Company''s businesses are classified into following three primary business segments

a) Project

b) Overhauling & Maintenance (O & M)

c) Supply

Project Segment: This segment is engaged in the business of Fabrication, Erection and Commissioning of Boilers (Power Plants) ESP, Rotating Machineries, Sugar plants, Transmission and Distribution and EPC Contract and Balance of Plant ( BOP).

0 & M Segment: This segment is engaged in the business of Repair and Maintenance, Overhauling and Renovations of Boilers and auxiliaries, Ash Handling Systems etc.

Supply Segment: Supply of Electrodes, Boiler Spare Parts, Coal, Steel and other materials at various Thermal Power Plants.

During the year Segment Reporting has been reconstituted in line with the revised reporting norms of the Company. Consequently, segment figures for the previous year have been regrouped

6 NOTE ON HEDGE AND UNHEDGED FOREIGN CURRENCY ASSETS AND LIABILITIES

During the year, the Company has not entered into any forward exchange contract, being derivative instruments for hedge or trading or speculation purpose. No Forward Exchange Contracts are outstanding as at the year end. The year end foreign currency exposures that have not been hedged by derivative instrument or otherwise are as below.

7 The company has entered into a Joint Venture with Phenix Building Solutions Private Limited named as "PBSPL - SHEL - JV", a jointly controlled entity where in the company holds 49% interest.

The company has not made any capital contribution in the said Joint Venture. The accounts of the JV are under preparation and therefore proportionate share in the profits or losses are not incorporated in the Financial statements

8 Disclosure of Trade payables to Micro, Small and Medium Enterprises under Current Liabilities is based on the information available with the Company regarding the Status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. Amount outstanding (not overdue) as on 31 March 2013 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs. 7.90 Lacs (Pr.Yr. Rs. 28.32 Lacs) and interest payable thereon Rs. Nil (Pr.Yr. Rs. Nil) and interest paid during the year Rs. Nil (Pr.Yr. Rs. Nil).

9 Balance of some of the Trade Receivables and Trade Payables are subject to confirmation/reconciliation and adjustments, if any.

10 Due to natural calamity occurred at SECHI Site, the Company had incurred loss of Rs. 147.50 Lacs in FY 2009-10 and same had been provided as extraordinary loss in the books of accounts for the year ended 31 March 2010. The site and the assets thereon were sufficiently insured and claim of Rs. 50 Lacs received in the FY 2010-11 and Rs. 93.52 Lacs received in the FY 2011-12 had been accounted as an extraordinary income in the respective year.

11 Previous year''s figures are regrouped and recasted wherever required


Mar 31, 2012

1 GENERAL INFORMATION:

Sunil Hitech Engineers Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the business of Engineering, Procurement, Construction-(EPC), Fabrication, Erection, Overhauling, Maintenance, Trading and other related activities.

2.1 Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March, 2012, the amount of per share dividend recognised as distributions to equity shareholders is Rs 1.20 (Pr. Yr. Rs 1.20).

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.

2.2 The Company does not have any holding company.

3.1 Term loan from bank referred above to the extent of:

a) Rs 341.51 Lacs (Pr.Yr. Rs 379.15 Lacs) are secured by first mortgage/pari-passu charge on the respective immovable properties situated at Pune and Nagpur.

b) Rs 2,199.85 Lacs (Pr. Yr. Rs 3,728.08 Lacs) are secured by first mortgage/pari-passu charge on the respective Plant and Machineries including Hydra's at various sites.

c) Rs 163.80 Lacs (Pr. Yr. Rs 177.48 Lacs) are secured by first mortgage/pari-passu charge on the respective Vehicles at various sites.

3.2 Term loan from financial institutions referred above to the extent of:

a) Rs 1,717.43 Lacs (Pr. Yr. Rs 8.54 Lacs) are secured by first mortgage/pari-passu charge on the respective Plant and Machinery including Hydra's situated at various sites.

c) Rs 9.51 Lacs (Pr. Yr. Rs 21.96 Lacs) are secured by first mortgage/pari-passu charge on the respective Vehicles at various sites.

4.1 Working Capital Loans are secured by hypothecation of present and future stock of raw materials, stores and spares, book debts and other receivables and have Second Charge on Fixed Assets of the Company and personal guarantee of some of the Directors.

5.1 Short Term Loans from Banks are secured by Second Charge on Fixed Assets of the Company and personal guarantee of some of the Directors.

1. CONTINGENT LIABILITIES: (Rs in Lacs)

Particulars March 31, 2012 March 31, 2011

a) Counter Guarantees given to Bank against Guarantees given by them 39,273.84 37,484.01

b) Bank Letter of Credit outstanding at the year end 1,063.64 3,746.66

c) Service Tax demand disputed, contested in appeal 864.85 181.18

d) Corporate Guarantee given on behalf of

i) SEAM Industries Limited, a subsidiary company 5,242.00 3,842.00 Loans/LC/BG outstanding at the year end 4,467.52 2,596.54

ii) Others - 5,000.00 Loans outstanding at the year end - 4,999.75

e) Estimated Amount of Contracts remaining to be executed on capital commitments and other commitments net of advances. - 619.17

f) Claims against the Company not acknowledged as debts 11.53 11.53

The Company has paid dividend in respect of share held by Non-Resident Shareholders, on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External A/c. The exact amount of dividend remitted in foreign currency cannot be ascertained.

2. EMPLOYEE BENEFITS:

As required by Accounting Standard - 1 5 "Employee Benefits" the disclosures are as under:

Defined Contribution Plans:

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees' Pension Scheme (EPS) with the government and certain state plans such as Employees' State Insurance (ESI). PF and EPS cover substantially all regular employees and the ESI covers eligible workers. Contributions are made to the Government's funds. While both the employees and the Company pay predetermined contributions into the PF and the ESI Scheme, contributions into the EPS is made only by the Company. The contributions are normally based on a certain portion of the employee's salary.

Defined Benefit Plans:

Leave Encashment:

The Company's employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the Company

The liability of compensated absences has been provided based on report of independent actuary, using the "Projected Accrued Benefit Method", which is same as the "Projected Unit Credit Method" in respect of past services. Accordingly Rs 251.17 Lacs (Pr.Yr. Rs 170.54 Lacs) being the liability as at the year end for compensated absences have been provided in the accounts.

Gratuity:

The Employees' Gratuity Fund Scheme is a defined benefits plan. The present value of obligation is determined based on actuarial valuation, using the Projected Unit Credit Method, which recognises each period of services as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The Company makes annual contributions to the Employees' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of the LIC, a funded defined benefit plan for employees. The scheme provides for payment to employees as under:

i) On normal retirement / early retirement / withdrawal / resignation:

As per the provisions of Payments of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On the death in service:

As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

3. DISCLOSURE FOR OPERATING LEASES UNDER ACCOUNTING STANDARD-19 "LEASES":

The Company has taken various residential /office premises (including furniture and fittings, therein as applicable), under operating lease or leave and license agreements. These are generally cancellable and ranges from 5 months to 1 5 years under leave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments of Rs 656.25 Lacs (Pr. Yr. Rs 271.50 Lacs) are recognised in the Statement of Profit and Loss.

4. In terms of the requirements of the Accounting Standard-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

5. SEGMENT REPORTING:

I. Business Segments:

Business segments have been identified in line with Accounting Standard-17 "Segment Reporting"

The Company's businesses are classified into following three primary business segments:

a) Project

b) Overhauling and Maintenance (O&M)

c) Supply

Project Segment: This segment is engaged in the business of Fabrication, Erection and Commissioning of Boilers (Power Plants) ESP, Rotating Machineries, Sugar plants, Transmission and Distribution and EPC Contract and Balance of Plant (BOP).

O&M Segment: This segment is engaged in the business of Repair and Maintenance, Overhauling, and Renovations of Boilers and auxiliaries, Ash Handling Systems etc.

Supply Segment: Supply of Electrodes, Boiler Spare Parts, Coal, Steel and other material at various Thermal Power Plants.

6. NOTE ON HEDGE AND UNHEDGED FOREIGN CURRENCY ASSETS AND LIABILITIES:

The Company has entered into forward exchange contract, being derivative instruments for hedge purpose and not intended for trading or speculation purposes, to establish the amount of currency in Indian Rupees required or available at the settlement date of certain payables and receivables. Forward Exchange Contracts to buy foreign currency Nil (Pr. Yr. USD 28.95 Lacs) are outstanding as at the year end. The year end foreign currency exposures that have not been hedged by derivative instrument or otherwise are as below.

7. DISCLOSURE REQUIRED BY CLAUSE 32 OF THE LISTING AGREEMENT (AS CERTIFIED BY THE MANAGEMENT):

A. Interest-free loans and advances in the nature of loans : Nil

Notes:

i) Above Loans and Advances are repayable on demand.

ii) Loans and Advances to employees / customers and investments by such employees / customers in the shares of the Company if any are excluded from the above disclosure.

8. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. Amount outstanding (not overdue) as on 31 March 2012 to Micro, Small and Medium Enterprises on account of principle amount aggregate to Rs 28.32 Lacs (Pr. Yr. Rs 78.12 Lacs) and interest payable thereon Rs Nil (Pr. Yr. Rs Nil) and interest paid during the year Rs Nil (Pr. Yr. Rs Nil).

9. Unamortised issue expenses amounting to Rs 66.91 Lacs had been charged to the revenue in the previous year ended on 31 March 2011.

10. Balances of some of the Trade Receivables and Trade Payables are subject to confirmation / reconciliation and adjustments, if any.

11. Due to natural calamity occurred at SECHI Site, the Company had incurred loss of Rs 147.50 Lacs in FY 2009-10 and same had been provided as extraordinary loss in the books of accounts for the year ended 31 March 2010. The site and the assets thereon were sufficiently insured and claim of Rs 93.52 Lacs received in current year (Pr. Yr. Rs 50.00 Lacs) has been accounted as extraordinary income.


Mar 31, 2011

1. Contingent Liabilities: (Rs. in Lacs)

Particulars 31.03.2011 31.03.2010

a) Counter Guarantees given to bank against guarantees given by them 37,484.01 27,567.62

b) Bank Letter of Credit outstanding at the year end 3,746.66 1,016.75

c) Sales Tax demand disputed, contested in appeal Nil 374.31 Amount paid there against and shown as Advances recoverable

d) Service Tax demand disputed, contested in appeal 181.18 181.18 Amount paid there against and shown as Advances Recoverable

e) Corporate Guarantee given on behalf of :-

i) SEAM Industries Limited, a subsidiary company 3,842.00 2,492.00

Loans/ LC/ BG outstanding at the year end 2,596.54 1,071.69

ii) Others 5,000.00 5,000.00

Loans outstanding at the year end 4,999.75 5,124.01

f) Claims against the Company not acknowledge as debts 11.53 Nil

2. Estimated amount of contracts remaining to be executed on capital account Rs. 619.17 Lacs (Rs. 249.45 Lacs), net of advances of Rs. Nil (Rs. 2.77 Lacs).

3. Provision for current tax includes provision for wealth tax Rs. 5.57 Lacs (Rs. 5.20 Lacs)

4. Unamortised issue expenses at the beginning of the year amounting to Rs. 66.91 Lacs has been charged to the revenue.

5. Balances of some of the Sundry Debtors and Sundry Creditors are subject to confirmation / reconciliation and adjustments, if any.

6. Employee Benefits:

As required by Accounting Standards-15 'Employee Benefits' the disclosures are as under:

Defined Contribution Plans:

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees' Pension Scheme (EPS) with the government and certain state plans such as Employees' State Insurance (ESI). PF and EPS cover substantially all regular employees and the ESI covers eligible workers. Contributions are made to the Government's funds. While both the employees and the Company pay predetermined contributions into the PF and the ESI Scheme, contributions into the EPS is made only by the Company. The contributions are normally based on a certain portion of the employee's salary.

Defined Benefit Plans: Leave Encashment:

The Company's employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the Company rules.

Upto previous year ended on 31st March 2010, liability of compensated absences was provided as per management's estimate. From this year the same is being provided based on report of independent actuary using the Projected Accrued Benefit Method which is same as the Projected Unit Credit Method in respect of past services. Accordingly, incremental liability for compensated absences upto last year as per actuarial valuation amounting to Rs. 105.14 Lacs and also liability for the year amounting to Rs. 49.61 Lacs have been charged to the revenue.

Gratuity:

The employees' gratuity fund scheme is a defined benefits plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of services as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The Company makes annual contributions to the Employees' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of the LIC, a funded defined benefit plan for employees. The scheme provides for payment to employees as under:

i) On normal retirement / early retirement / withdrawal / resignation: As per the provisions of Payments of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On the death in service:

As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.

7. Disclosure of Sundry Creditors under Current Liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. Amount outstanding (not overdue) as on 31st March, 2011 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs. 78.12 Lacs (Rs. 91.24 Lacs) and interest payable thereon Rs. Nil (Rs. Nil) and interest paid during the year Rs. Nil (Rs. Nil).

8. Due to natural calamity occurred at SECHI Site, the Company has incurred loss of Rs. 147.50 Lacs in FY 09-10 and same has been provided as extraordinary loss in the books of accounts for the period ended 31st March, 2010, The site and the assets thereon were sufficiently insured and claim of Rs. 50 Lacs received in current year has been accounted as extraordinary income.

9. Disclosure for operating leases under Accounting Standard 19-"Accounting for Leases":

The Company has taken various residential /office premises (including furniture and fittings, therein as applicable), under operating lease or leave and license agreements. These are generally cancellable and ranges from 5 months to 15 years under leave and license, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments of Rs. 271.50 Lacs (Rs. 182.73 Lacs) are recognised in the Profit and Loss Account under "Rent" under Schedule-19

10. Disclosure required by clause 32 of the listing agreement ( as certified by the management) :

A. Interest-free loans and advances in the nature of loans to: Nil

11. Related Party Disclosure for the year as required by Accounting Standard 18 are given below: Category I : Subsidiary Company

SEAM Industries Ltd

Sunil Hitech Energy Pvt. Ltd

SHEL Investments Consultancy Pvt. Ltd

Category II: Associate Company:

Gangakhed Sugar & Energy Ltd

Category III: Directors, Key Management Personnel and their Relatives:

Mr. R.M. Gutte

Mrs. S. R. Gutte

Mr. Sunil R. Gutte

Mr. Vijay R. Gutte

Mr. M. N. Mohanan

Mr. S. K. K. Ramaiah

Relatives of Key Management Personnel

Relative of Director: Mrs. Swati Phad

Category IV: Enterprise over which persons covered under Category III

above are able to exercise significant control:

Trimurti Towers Pvt. Ltd

Sadoday Laxmi Infrastructure Pvt. Ltd

Shanti Laxmi Contractors Pvt. Ltd

Purple Haze Motion Pictures Pvt. Ltd

12. In terms of the requirements of the Accounting standard-28 on "Impairment of Assets" issued by the Institute of Chartered Accountants of India, the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

13. Segment Reporting:

a. Business Segments:

Business segments have been identified in line with Accounting Standards on Segment Reporting "AS 17". The Company's businesses are classified into following three primary business segments.

a) Project

b) Overhauling & Maintenance (O & M)

c) Supply

Project Segment: This segment is engaged in the business of fabrication, Erection & commissioning of Boilers (Power Plant) ESP, Rotating Machineries, Sugar Plant, Transmission & Distribution and EPC contract and Balance of Plant (BOP).

O & M Segment: This segment is engaged in the business of Repair & Maintenance, Overhauling, and Renovations of Boilers and auxiliaries, Ash Handling Systems etc.

Supply Segment: Supply of Electrodes, Boiler Spare Parts, Coal, Steel and other material at various Thermal Power Plants.

14. Figures in brackets indicate previous year's figures.

15. Previous year's figures have been re-grouped / reclassified / rearranged wherever necessary to make them comparable to those for the current year.


Mar 31, 2010

1. Contingent liabilities not provided for:

i) In respect of Excise & service tax matters for which the company has preferred appeals with appropriate authorities- Rs. Nil (P.Y. Rs. 110.03 Lakhs).

ii) In respect of service tax, sales tax matters for which the company has not acknowledged as debts - 394.97 Lakhs (P.Y. Rs. 337.96 Lakhs).

iii) In respect of Letter of Credits with banks- Rs. 1016.75 Lakhs (P.Y Rs. 5674.00 Lakhs)

iv) In respect of counter guarantees given to bank against guarantees given by bank Rs. 27567.82 Lakhs (P.Y. 15571.00 Lakhs)

v) Corporate Guarantee given on behalf of

a) Subsidiary Company (Seam Industries Private Limited) - Rs. 2492.00 Lakhs (P.Y. Nil)

b) Others - Rs. 5000.00 Lakhs (P.Y. Nil)

vi) Security against loans taken by others

a)Seam Industries Private Limited a subsidiary Company has obtained a term loan from Oriental Bank of Commerce amounting to Rs. 742.00 Lakhs which is secured by first charge of equitable mortgage of factory land and building and hypothecation of plant and machinery of the said company.

Our Company has given a collateral security of an equitable mortgage of non agricultural land situated at survey no. 135 & 136 of Mouza -Kandri, & survey no. 166, 168 & 174 of Mouza - Hiwara (BEDE), Dist. Nagpur of the State of Maharashtra whose value is determined by the bank for this purpose is Rs. 111.00 Lakhs

The Company has obtained Counter Corporate Guarantee from Seam Industries Private Limited for the said collateral security given to the extent of Rs.111.00 Lakhs to Oriental Bank of Commerce

b)Debentures issued to Tata Capital Ltd by Gangakhed Sugar & Energy Ltd. are secured by certain immovable properties of the company situated at CBD Belapur, New Mumbai in the State of Maharashtra & movable fixed assets like Crawler, Other Cranes etc. of the Company.

c) Shares of Gangakhed Sugar & Energy Ltd. amounting to Rs.1950 lakhs is pledged with Uco Bank against Term Loan of Rs. 304.31 Crores sanctioned to Gangakhed Sugar & Energy Ltd.

2. Certain disputed cases relating to Service tax amounting to Rs. 160.52 Lakhs have neither been considered as contingent liabilities nor acknowledged as claims, based on legal opinions obtained from Tax Advisor/internal assessment. The Company is of the view that the possibility of the demands materializing is remote.

3. Capital Commitments:

Estimated amount of Contracts remaining to be executed on Capital Account (Net of Advances) Rs. 249.45 Lakhs (P.Y. 1500.00 Lakhs)

4. Additional Information

i) Company has paid capital advances of Rs. 94 Lakhs to Global Realities in FY 2007-08. Till the date, title deeds are not executed in the name of company.

ii) Capital advances includes an amount of Rs 725.79 Lacs paid to Gokul Construction for which Agreement for Sale was executed on 04th Jan, 2008 and on receipt of possession letter dated 30th May 2009, the possession has been taken by the company. However Title Deed is expected to be registered in the name of company in forthcoming Financial Year.

iii) Transfer of Rights in Coal Mine Transactions to Subsidiary

a. The company has been selected as a highest bidder for mine in a JV with Maharashtra State Mining Corporation. The mine is located at Jamni Adkoli, Wani (near Wardha), Maharashtra.

Having been selected as a highest bidder, company was asked to deposit a sum of Rs 18.25 crores and same has been deposited on 28tth April, 2008 and 17th August, 2009. During the year Company has obtained LOI from Maharashtra Govt. to initiate process for forming a JV company. During the period under review company has transferred its rights in JV Company at Book Value Rs.18.65 Crores to its Subsidiary company Sunil Hitech Energy Ltd against equity shares in that company as per provisions in the tender. On 2nd March Company has diluted 37.95% of its shareholding in Sunil Hitech Energy Pvt. Ltd to its another subsidiary SHEL Investments Consultancy Pvt. Ltd. at a premium of Rs. 6.85 per share over the acquisition cost.

iv) Other Income includes an amount recovered as Handling Charges of Rs. 430.83 Lakhs against materials and machinery provided to contractors at site.

v) Extra-ordinary Loss

Due to natural calamity occurred at SECHI Site, the Company has incurred loss of Rs.147.50 Lakhs and same has been provided as extraordinary loss in the books of accounts. The site and the assets thereon were sufficiently insured and the management is confident to recover the amount in respect of the said loss in near future and the amount received would be accounted as extraordinary income in the year of receipt.

vi) Balance confirmation letters

The Balance confirmation letters have been sent to the debtors, creditors but replies from debtors are awaited, as response is inadequate therefore accounts of certain debtors are subject to confirmation/ reconciliation, if any. The company does not expect any material differences affecting the financial statements due to this.

vii) As per management estimate, the company has provided for Rs.25 Lakhs against Leave Encashment payable to the employees.

viii)The deductions made against the certified work orders are not available in writing; henceforth accounted for on the basis of certified measurement books available with the customers and the same are subject to the final reconciliation of accounts with customers.

ix) Expenses include Prior period expenses of Rs. 113.09 Lakhs.

x) During the period under review company has paid Income Tax of Rs. 1214.97 Lakhs against action taken U/s 132 of the Income tax Act, 1961 and same has been provided in the books of company as Income Tax for prior period. The exact determination of the quantum is subject to completion of assessment.

xi) VAT liability has been adjusted against set-off receivable/ vat credit available in books of accounts. As there is deviation between amounts shown in VAT returns for other than Maharashtra state and as per books of accounts; the exact determination of the Vat Receivable amount as shown in the books of accounts is subject to completion of assessments /VAT Audit in various states.

xii) In the opinion of Board of Directors all the Current Assets, Loans and Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and that all the known liabilities relating to the year have been provided for.

xiii)In the current year the Subsidiary Company has changed its name from Sunil Hitech Engineers & Manufacturers Pvt. Ltd to SEAM Industries Pvt. Ltd. The change in name has been intimated to all concerned departments & authorities. The change has been effected from 4th of June, 2009 & the board resolution has been passed to that effect.

5.Opening Stock & Closing Stock:

Note: Opening Stock & Closing Stock of Trading based items are nil.

6.Provision for current taxes:

a) Includes provision for Wealth Tax Rs. 5.20 Lacs (Previous Year: - Rs 4.50 Lacs)

7.Segment Information

Primary Segment Reporting: Business Segments

The Companys business segments were classified into Project, and O & M, Supply.

Segment Composition:

Project Segment: This segment is engaged in the business of Fabrication, Erection & Commissioning of Boilers (Power Plants), Erection, Testing, Commissioning of ESP, Transmission & Distribution and EPC Contract.

O & M Segment: This segment is engaged in the business of Repair & Maintenance, Overhauling, and Renovations of Boilers and auxiliaries, Ash Handling Systems etc.

Supply Segment: Supply of Electrodes, Boiler Spare Parts, Coal, Steel and other material at various Thermal Power Plants.

 
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