Home  »  Company  »  Triveni Eng.&Ind.Ltd  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Triveni Engineering & Industries Ltd.

Mar 31, 2015

Contingent assets are not recognized.

1. Contingent Liabilities (To The extent not provided For)

(a) Claims against the Company not acknowledged as debts (as certified by the management)

(Rs,in Lacs)

31.03.2015 31.03.2014

i) Claims which are being contested by the company and in respect of which 2,208.25 2,175.75 the company has paid amounts aggregating to Rs. 471.80 lacs (previous period Rs. 468.89 lacs) excluding interest under protest pending final adjudication of the cases:

Sl. Particulars Amount of Amount paid no. contingent liability

01. Sales Tax 295.20 91.92

(220.22) (94.36)

02. Excise Duty 1,189.61 340.42

(1,232.91) (331.31)

03. Others 723.44 39.46

(722.62) (43.22)

Figures in brackets relates to previous period.

ii) The Company is contingently liable in respect of short provision against 4,409.28 4,409.28 disputed income tax liabilities of Rs. 4,409.28 lacs (previous period Rs. 4,409.28 lacs) against which Rs. 2,844.88 lacs (previous period Rs. 2,711.88 lacs) stands paid. The disputed income tax liability mainly arises from additions made on a/c of unrealized incentives against which the Company has fled appeals. In the event such liability finally materializes Rs. 3,524.20 lacs (previous period Rs. 3,524.20 lacs) will be adjusted against the capital reserve.

iii) Statutory levies against which remission has been availed under U.P. Sugar 3,591.14 3,570.27 Industry Promotion Policy 2004, issued by the State Government of Uttar Pradesh [refer note 35(a)]

iv) Liability arising from claims / counter claims / Interest in arbitration / court Indeterminate Indeterminate cases, claims of certain employees / ex-employees and in respect of service tax, if any, on certain activities of the Company which are being contested by the Company.

The amount shown above represent the best possible estimates arrived at on the basis of available information. The uncertainties, possible payments and reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants, as the case may be, and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal position against such disputes.

(b) Guarantees / surety given on behalf of companies Rs. 1,688.13 lacs (previous period Rs. 1,818.15 lacs), including a corporate guarantee of Rs. 1,647.13 lacs (previous period Rs. 1,777.15 lacs) equivalent to GBP 17.62 lacs (previous period GBP 17.62 lacs) given on behalf of an associate company as a surety for due performance of its obligations under a contract awarded by an overseas customer and in respect of which, the associate company has fully indemnified the Company against any claims, damages or expenses, including legal costs. The guarantees have been given in the normal course of operations of these companies and are not expected to result in any loss to the Company on the basis of such companies fulfilling their ordinary commercial obligations.

c) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 3,525.70 lacs (previous period Rs. 48.70 lacs), after adjusting advances aggregating to Rs. 409.78 lacs (previous period Rs. 83.59 lacs).

2. In accordance with Schedule II of the Companies Act 2013, the estimated useful lives of tangible fixed assets have been technically assessed and revised by the management with effect from April 1, 2014. Consequent to the above- (a) the depreciation charge for the year is lower by Rs.1,819.91 lacs.

(b) carrying amounts of Rs. 2,093.90 lacs in respect of fixed assets , the revised useful lives of which had expired prior to

April 1, 2014, has been adjusted to the extent of Rs. 1,382.18 lacs against general reserves and the balance Rs. 711.72 lacs against deferred tax liability.

3. The Company had, in earlier years, revalued a property at New Delhi and certain plant and machinery installed at its sugar unit at Deoband. The increase in value consequent to such revaluation was credited to revaluation reserve in the accounts and depreciation proportionate to such increase in value was adjusted each year from the revaluation reserve created initially. During the current year, the Company has reversed the entire revaluation reserve appearing in the books as at the commencement of the year. Accordingly, the net book value of building and plant & machinery has been reduced by Rs. 1,506.14 lacs and Rs. 1.51 lacs respectively to reflect the reversal of revaluation of these assets. Further, the Company has, during the year, reclassified the amounts aggregating to Rs. 235.59 lacs paid on acquisition and subsequent improvement of title pertaining to the property at New Delhi, under leasehold land, earlier capitalized under building. Accordingly, excess depreciation charged on building in earlier years aggregating to Rs. 44.54 lacs has been written back during the year.

4. (a) The Company had, in respect of eligible projects, accounted for capital subsidy as well as remissions and reimbursement of certain statutory levies and other expenses, in accordance with and as prescribed under the U.P. Sugar Industry Promotion Policy 2004 ("Policy") issued by the State Government of U.P. Till the beginning of the current financial year, the Company had accounted for recoverable incentives, aggregating to Rs.14,002.46 lacs (previous period Rs. 14,002.46 lacs) including capital subsidy of Rs. 10,470.00 lacs (previous period Rs. 10,470.00 lacs) credited to capital reserves, and had availed remission of Rs. 3,570.27 lacs (previous period Rs. 3,314.22 lacs).

On premature termination of the Policy by the State Government with effect from June 4, 2007, the Company has challenged before the Luck now Bench of the Allahabad High Court, the action of the State Government in withdrawing the said Policy and not granting the incentives to the Company. Pending fnal adjudication in the matter, the High Court vide its interim order dated 09.05.2008 has permitted limited protection of remissions which were being enjoyed on the date when the Policy was revoked.

Accordingly, during the current year, the Company has accounted for only remissions of Rs. 20.88 lacs(previous period Rs. 256.04 lacs), net of reversals of Rs. Nil (previous period Rs. 170.26 lacs) in respect of certain incentives earlier excess booked, as permitted by the High Court in the interim order. Eligible reimbursements of Rs. 793.61 lacs (previous period Rs. 2,342.29 lacs) have however not been accounted for during the current year and the aggregate of such reimbursements not accounted for till the end of the current year aggregating to Rs. 8,132.78 lacs (previous period Rs. 7,339.17 lacs) shall be accounted for in accordance with the fnal order of the High Court.

(b) The Company had availed loans aggregating

Rs. 12,626.00 lacs during financial year 2012-14 under the "Scheme for Extending Financial Assistance to Sugar Undertakings, 2014" notified by the Government of India. Under the said scheme interest subvention @ 12% per annum is granted by the Government on such loan. The loan outstanding as at the end of the year is Rs. 12,626.00 lacs (previous period Rs. 12,626.00 lacs).

(c) During the year the Company has accounted subsidy of Rs. 3,624.21 lacs (Previous period Rs. 2,743.39 lacs) towards amount reimbursed / reimbursable by the State Government of Uttar Pradesh in respect of commission on purchase of cane.

(d) The State Government of Uttar Pradesh, vide notification dated 12.11.2014, had inter-alia announced cash subsidy for the Sugar Industry against the notified state advised cane price for the season 2014-15. The quantum of subsidy was linked to the average selling prices of sugar and its by-products during the period 1/10/2014 to 31/05/2015. In view of the selling prices of the relevant products having prevailed (and expected to during the balance period) well below the threshold limits specified in the notification, the Company has during the year accounted for the prescribed subsidies aggregating to Rs. 13,443.68 lacs in respect of cane purchased by it during the season 2014-15 up to the end of the financial year.

(e) During the year, the State Government of Uttar Pradesh has also provided a subsidy of Rs. 6 per quintal of cane purchased during the sugar season 2013-14. Accordingly, the Company has received subsidy amount of Rs. 2,793.45 lacs during the year which has been adjusted against the cost of material consumed.

5. Cost of material consumed is net of Rs. 217.03 lacs being refund received during the year (previous period Rs. 323.50 lacs being reversal of provision) in respect of administration charges on captive consumption of molasses paid by the Company in earlier years.

6. Due to decline in the free sugar prices below the cost of production of sugar, the sugar inventories held by certain unit(s) of the Company as on 31.03.2015 have been valued at their net realizable value. The impact of write down of inventories during the year is Rs. 11,109.47 lacs (previous period Rs. 5,536.24 lacs).

7. The Company has made provisions for the employee benefits in accordance with the Accounting Standard (AS) 15 "Employees Benefits". During the year/period, the Company has recognized the following amounts in its financial statements:

8. Pursuant to compliance of Accounting Standard (AS) 18 "Related Party Disclosures", the relevant information is provided here below :

a) related party where control exists

(i) Mr D.M. Sawhney, Chairman & Managing Director (Key Management person).

(ii) Wholly owned subsidiaries

Triveni Energy Systems Limited

Triveni Engineering Limited

Triveni Entertainment Limited *1

Bhudeva Projects Limited

Svastida Projects Limited

b) The details of related parties with whom transactions have taken place during the Year : i) wholly owned subsidiaries (group A)

Triveni Energy Systems Limited (TESL) Triveni Engineering Limited (TEL) Triveni Entertainment Limited (TENL) *1 Bhudeva Projects Limited (BPL) Svastida Projects Limited (SPL)

ii) Associates (group B)

Triveni Turbine Limited (TTL)

Aqwise-Wise Water Technologies Limited (AWTL)

Triveni Entertainment Limited (TENL) *1

TOFSL Trading & Investments Limited (TOFSL) *2

The Engineering & Technical Services Limited (ETS) *2

iii) Key Management person (group C)

Mr D.M. Sawhney, Chairman & Managing Director (DMS) Mr.Tarun Sawhney, Vice Chairman and Managing Director (TS)

iv) relatives of Key Management person (group d)

Mrs Rati Sawhney (RS – Wife of DMS)

Mr Nikhil Sawhney (NS – Son of DMS)

v) Companies / parties in which key management person or his relatives have substantial interest / significant influence (group e)

Kameni Upaskar Limited (KUL)

The Engineering & Technical Services Limited (ETS)

TOFSL Trading & Investments Limited (TOFSL)

Subhadra Trade & Finance Limited (STFL)

Tirath Ram Shah Charitable Trust (TRSCT) *1 Was an associate till 19.3.2014 and thereafter became a subsidiary company *2 Ceased to be Associates during the previous period

9. 2,00,000 stock options had been granted to certain employees of the Company on April 30, 2010, prior to the demerger of its steam turbine business and vesting of the same in M/s Triveni Turbine Ltd. (TTL). This included 40,000 options granted to an employee whose services were transferred to TTL. In respect of the remaining employees to whom stock options had been earlier granted, in accordance with the Scheme of Arrangement, and in line with the best practices, adjustment has been made by the Company for the corporate action of demerger, by adjusting the exercise price of such options, so as to ensure that the fair value of options immediately prior to and immediately subsequent to the corporate action remains unchanged.

10. a) In accordance with the Guidance Note on Accounting for Self-generated Certified Emission Reductions (CERs), issued by the Institute of Chartered Accountants of India, the Company has recognized the CERs held by it as inventories in its financial statements. Disclosures as required under the Guidance Note are as under:

i) 86562 (previous period 86562) CERs (net of fee for UNFCCC adaptation fund) have been held as inventory by the Company as at the end of the year ;

ii) There are no CERs under certification as on the date of the financial statements;

iii) The Company's Deoband and Khatauli Phase-I projects are registered as Clean Development Mechanism (CDM) projects with United Nations Framework Convention on Climate Change (UNFCCC) and it is not feasible to identify specific items of machinery/equipment as an "emission reduction equipment". Accordingly, details of depreciation and operation & maintenance costs, pertaining to emission reducing equipment have not been provided.

b) During the year the National Load Despatch Centre (NLDC) has issued 54275 (previous period 95752) Renewable Energy Certificates (RECs) to the Company under the Central Electricity Regulatory Commission (CERC) Regulation on RECs. At the close of the year 106533 (previous period 84350) RECs remained unsold and are held as inventory. However, since no cost has been incurred by the Company in respect of the RECs lying in inventory, the value of such inventories has been considered as Nil in accounts.

11. The figures of the previous period have been regrouped/rearranged to the extent necessary. Previous accounting year of the Company was for a period of eighteen months ended on 31/3/2014. Accordingly, the previous period figures given in these financial statements in so far as relating to the items of income and expenses and cashfows are for a period of eighteen months ended on that date and are therefore, not comparable with the current year fgures.


Sep 30, 2012

A) Terms/rights attached to equity shares

The Company has only one class of equity shares with a par value of Rs. 1/- 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.

In the event of liquidation of the Company, the holders of equity shares are entitled to receive the remaining assets of the Company, after meeting all liabilities and distribution of all preferential amounts, in proportion to their shareholding.

Note: Upon demerger of the steam turbine undertaking of the Company and its vesting in Triveni Turbine Ltd., under a Scheme of Arrangement, pending execution of necessary documents and modification of charge, the term loans extended to the Company, as above, as well as those transferred to Triveni Turbine Ltd., relating to the steam turbine undertaking and outstanding at the year end amounting to Rs. 1,388.80 lacs (previous year: Rs. 4,442.30 lacs) are secured, as mentioned above, against the assets of the Company.

* Represents deferred tax asset in respect of unabsorbed depreciation of Rs. 2,329.95 lacs and business loss of Rs. 321.62 lacs which has arisen mainly on account of an exceptional charge in respect of arrears of cane price. The Company is hopeful of earning sufficient taxable income in near future to enable it to avail the benefit of such unabsorbed depreciation and business loss.

Cash credit from banks is secured by pledge/hypothecation of the stock-in-trade, raw material, stores and spare parts, work-in-progress and receivables and second charge created/to be created on the properties of all the Engineering units and third charge on the properties of Sugar, Co-generation and Distillery units of the Company on pari-passu basis.

Includes

*1 Land costing Rs. 358.90 lacs (previous year : Rs. 416.95 lacs) pending transfer in the name of the Company.

*2 Transferred to Revaluation Reserve Rs. 32.49 lacs (previous year : Rs. 32.49 lacs).

*3 Depreciation capitalised during the year amounting to Rs. 5.10 lacs (previous year : Rs. Nil).

* In view of the fair value of the shares of the Company, calculated on the basis of average of the weekly closing prices on the National Stock Exchange during the period of six months ended 30.09.2012, being lower than the exercise price of the stock options granted under ESOP 2009 Scheme (Refer Note No. 33), the options granted to the employees are not considered dilutive in nature.

1. Contingent liabilities and commitments (to the extent not provided for)

a) Claims against the Company not acknowledged as debts (Rs. in Lacs)

30.09.2012 30.09.2011

i) Claims which are being contested by the company and in respect of which the 2,566.29 2,682.15 company has paid amounts aggregating to Rs. 613.76 lacs (previous year : Rs. 651.39 lacs) under protest pending final adjudication of the cases:

Sl. Particulars Amount of contingent Amount paid no. liability

01. Sales Tax 430.29 226.43

(507.51) (245.01)

02. Excise Duty 1,451.82 327.90

(1,375.36) (354.20)

03. Others 684.18 59.43

(799.28) (52.18)

Figures in brackets relates to previous year.

ii) The Company is contingently liable in respect of short provision against disputed 4,587.50 4,587.50 income tax liabilities of Rs. 4,587.50 lacs (previous year: Rs. 4,587.50 lacs) against which Rs. 3,881.93 lacs (previous year : Rs. 3,672.90 lacs) stands paid and the balance amount has been stayed till disposal of first appeal. The disputed income tax liability includes Rs. 3,733.21 lacs towards unrealised incentives. In the event such liability finally materializes, Rs. 3,524.20 lacs will be adjusted against the corresponding capital reserve.

iii) Statutory levies against which remission has been availed under U.P. Sugar Industry 3,320.27 2,479.19 Promotion Policy 2004 issued by the State Government of Uttar Pradesh [refer note - 40(a)]

iv) Liability arising from claims / counter claims/ Interest in arbitration/ Court cases, claims Indeterminate Indeterminate of certain employees/ex-employees and in respect of service tax, if any, on certain activities of the Company which are being contested by the Company.

v) Differential cane price for the sugar season 2007-08 pending disposal of the matter by - 7,895.80 the Hon''ble Supreme Court. As against price of Rs. 1,250/MT advised by the State Govt. of Uttar Pradesh, the Company had accounted for and discharged its liability at Rs. 1,100/ MT in accordance with the interim order passed by the Supreme Court.

The amounts shown above represent the best possible estimates arrived at on the basis of available information. The uncertainties, possible payments and reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants, as the case may be, and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal position against such disputes.

b) Guarantees / surety given on behalf of certain associate companies Rs. 1,566.74 lacs (previous year Rs. 41.00 lacs), including a corporate guarantee of Rs. 1,525.74 lacs (GBP 17,61,821) given during the year on behalf of an associate company as a surety for due performance of its obligations under a contract awarded by an overseas customer and in respect of which, the associate company has fully indemnified the Company against any claims, damages or expenses, including legal costs. The guarantees have been given in the normal course of operations of these companies and are not expected to result in any loss to the Company on the basis of such companies fulfilling their ordinary commercial obligations.

c) Outstanding commitments for capital expenditure are Rs. 1,168.11 lacs (previous year Rs. 707.25 lacs) after adjusting advance amounting to Rs. 631.84 lacs ( previous year Rs. 223.73 lacs).

2. Pursuant to the Employees Stock Option Scheme (ESOP 2009) framed by the Company, 2,00,000 stock options had been granted to eligible employees of the Company during the financial year 2009-10. Subsequent thereto, under a Scheme of Arrangement (Scheme) between the Company, M/s Triveni Turbine Ltd. (TTL) and their respective shareholders and creditors, which was duly approved by the Hon''ble High Court of Allahabad vide its order dated 19.04.2011, the employees of the Steam Turbine Undertaking (including those who were granted stock options under ESOP 2009) became the employees of TTL. In the Scheme, two alternatives were stated for dealing with the ESOP 2009 and the preferred alternative was subject to the approval of the Stock Exchanges / SEBI. Since the Company is unable to get any response / approval to the preferred alternative, it is in the process of implementing the second alternative whereby the options if exercised would result in grant of shares in only the respective company in which such employee is employed. This would, inter-alia, necessitate splitting of the exercise price of the options between TTL and the Company on an equitable basis and amending the entitlements of shares to be granted on exercise of the options.

Pending final determination in the matter as aforesaid, the required disclosures of the ESOP 2009 are as under:

* Refers to the exercise price and the market price on date of grant of the options by the Company, prior to the demerger of the Steam Turbine undertaking of the Company.

The options outstanding as at the end of the year have a weighted average contractual life of 13 months and are exercisable at the grant price of Rs. 108.05, Pending final determination in the matter regarding modification of ESOP 2009 as stated above, the exercise price of Rs. 108.05 is without considering any modification/adjustment which may be required to be carried out post demerger of the steam turbine undertaking of the Company.

c) Fair Valuation

The fair value of options used to compute proforma net income and earning per equity share has been done by an independent firm of Chartered Accountants on the date of grant of options using Black Scholes Model.

The weighted average fair value of each option of the Company as on the date of grant, works out to Rs. 56.60 (Rs. 56.60), which had been arrived at without considering the subsequent demerger of the steam turbine undertaking of the Company.

Had the compensation cost for the stock options granted under ESOP 2009 been determined based on fair value approach, the Company''s net profit/loss and earning per share would have been as per the proforma amounts indicated below:

* The compensation expenses for the year on fair value basis has been computed without considering the effect of any modification/ adjustment which may be required to be made to ESOP 2009 to give effect to the demerger of the steam turbine division.

3. Based on the intimation received by the Company from its suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, the relevant information is provided here below:-

4. a) The Company has taken various residential, office and godown premises under operating lease. These are generally not non-cancelable and the unexpired period ranges upto 4 years and renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits under certain agreements. There is no contingent rent or restriction imposed in the lease agreement. Lease payments under operating lease are recognised in the statement of profit and loss as "Rent" under "Other Expenses" (Refer Note No. 25).

b) The Company has also given certain portion of its office/factory premises under operating leases. These leases are not non-cancellable and are extendable by mutual consent and at mutually agreeable terms. The gross carrying amount, accumulated depreciation and depreciation recognised in the statement of profit and loss in respect of such portion of the leased premises are not separately identifiable. There is no impairment loss in respect of such premises. No contingent rent has been recognised in the statement of profit and loss.

5. Pursuant to compliance of Accounting Standard (AS) 18 "Related Party Disclosures", the relevant information is provided here below :

a) Related party where control exists

(i) Mr. D.M. Sawhney, Chairman & Managing Director (Key Management Personnel).

(ii) Wholly owned subsidiaries

Upper Bari Power Generation Limited (UBPGL) *1 Triveni Energy Systems Limited (TESL)

Triveni Engineering Limited (TEL)

*1 Ceased to be subsidiary during the year.

b) The details of related parties with whom transactions have taken place during the year :

i) Wholly owned Subsidiaries (Group A)

Upper Bari Power Generation Limited (UBPGL) *1 Triveni Energy Systems Limited (TESL)

Triveni Engineering Limited (TEL)

*1 Ceased to be subsidiary during the year.

ii) Associates (Group B)

Triveni Turbine Limited (TTL)

TOFSL Trading & Investments Limited (TOFSL)

The Engineering & Technical Services Limited (ETS)

Triveni Entertainment Limited (TENL)

Aqwise-Wise Water Technologies Limited (AWTL)

iii) Key Management Person (Group C)

Mr. D M Sawhney, Chairman & Managing Director (DMS)

Mr. Tarun Sawhney, Joint Managing Director (TS)

iv) Key Management person relatives (Group D)

Mrs. Rati Sawhney (RS - wife of DMS)

Mr. Nikhil Sawhney (NS - son of DMS).

v) Companies/Parties in which key management person or his relatives have substantial interest/significant influence (Group E)

Kameni Upaskar Limited (KUL)

Tirath Ram Shah Charitable Trust (TRSCT)

6. The Company has made a provision for employee benefits in accordance with the Accounting Standard (AS) 15 "Employees Benefits". During the year, the Company has recognised the following amounts in its financial statements:

7. (a) The Company had, in respect of eligible projects, accounted for capital subsidy, remissions and reimbursement of certain statutory levies and expenses, in accordance with and as prescribed under the U.P. Sugar Industry Promotion Policy 2004 ("Policy") issued by the State Government of Uttar Pradesh. Till September 30, 2011, the Company had accounted for recoverable incentives (including capital subsidy of Rs. 10,470.00 lacs credited to capital reserves) aggregating to Rs. 14,002.46 lacs (previous year Rs. 14,002.46 lacs) and had availed remission of Rs. 2,479.20 lacs (previous year Rs. 1,735.54 lacs).

On premature termination of the Policy by the State Government with effect from June 4, 2007, the Company had challenged the action of the State Government in withdrawing the said Policy and not granting the incentives to the Company, before the Lucknow Bench of the Allahabad High Court. Pending final adjudication in the matter, the Hon''ble High Court vide its interim order dated 09.05.2008 had permitted limited protection of remissions which were being enjoyed on the date when the Policy was revoked.

Accordingly, during the current year, the Company has accounted for only remissions of Rs. 841.07 lacs (previous year Rs. 743.65 lacs) as permitted by the High Court in its interim order. Eligible reimbursements of Rs. 2,171.53 lacs (previous year Rs. 1,487.29 lacs) have however not been accounted for during the year and the aggregate of such reimbursements not accounted for till the end of the year aggregates to Rs. 4,996.88 lacs (previous year Rs. 2,825.35 lacs) and shall be accounted for in accordance with the final order of the High Court.

(b) The Company had availed loans aggregating to Rs. 9,432.00 lacs (previous year Rs. 9,432.00 lacs) under the "Scheme for Extending Financial Assistance to Sugar Undertakings, 2007" notified by the Government of India. Under the said scheme Interest subvention @ 12% per annum is granted by the Government on such loan. The outstanding loans as at the end of the year were Rs. Nil (previous year Rs. 2,076.12 lacs).

b) Nature of provisions:

Warranties : The Company gives warranties on certain products and services, undertaking to repair or replace the items that fail to perform satisfactorily during the warranty period. Provisions made as at September 30, 2012 represent the amount of expected cost of meeting such obligations of rectification / replacement. The timing of the outflows is expected to be within the period of two years.

Cost to completion: The provision represents costs of materials and services required for integeration of water treatment package at the site, prior to commissioning.

Administrative charges on Molasses : The provision represents disputed liability towards administrative charges on molasses captively consumed by the Company. The dispute is currently pending adjudication before the Supreme Court, which has in the interim stayed the recovery of such charges.

Arbitration / Court-case Claims: Provision has been made against certain claims awarded against the company in legal proceedings which have been challenged by the Company before appropriate authorities.

Loss on foreign exchange derivatives: Provision is made for mark-to-market losses on derivative contracts outstanding at the year-end which were entered into for hedging certain firm commitments or highly probable forecast transactions.

Others: Represents provision made for deficiency in company managed provident fund trusts for the benefit of its employees.

c) Disclosure in respect of contingent liabilities is given as part of Note No. 32.

Note 1. There are no repayment schedule for the loans and advances to subsidiary companies mentioned above, which are repayable on demand. In respect of loan to Triveni Turbine Ltd., each tranche of loan is repayable in twelve quarterly instalments, subject to its option to accelerate the repayment.

8. Pursuant to the undertaking given by the Company to Securities Exchange Board of India in connection with granting relaxation of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules,1957 for listing of equity shares of Triveni Turbine Limited (TTL), the Company''s investment in the equity shares of TTL will remain under a lock-in period till November 29, 2014.

9. Plant and machinery at Deoband unit existing as on 1st November,1986 was revalued during the financial year 1986-87 by an approved valuer, to reflect the assets at their fair value. A property at Delhi, earlier held as stock-in-trade, was revalued during the financial year 1999-00, at estimated market value and converted to fixed assets. The increase in the value of such assets over their book values, consequent to the revaluation, had been credited to revaluation reserve in the respective year of revaluation. The revalued assets are stated net of accumulated depreciation thereon.

10. Pending completion of procedural formalities, the titles to certain assets, transferred to Triveni Turbine Ltd.(TTL) pursuant to a duly approved Scheme of Arrangement framed under sections 391 to 394 of the Companies Act, 1956, could not, where necessary, be transferred in the name of TTL and are being held in trust by the Company.

11. In accordance with the Guidance Note on Accounting for Self-generated Certified Emission Reductions (CERs), issued by the Institute of Chartered Accountants of India, the Company has recognised the CERs held by it as inventories in its financial statements. Disclosures as required under the Guidance Note are as under:

a) 58,816 CERs (net of UNFCCC adaptation fund) have been held as inventory by the Company;

b) 28,312 CERS are under certification as on the date of the financial statements;

c) The Company''s Deoband and Khatauli Phase-I projects are registered as Clean Development Mechanism (CDM) projects with United Nations Framework Convention on Climate Change (UNFCCC) and it is not feasible to identify specific items of machinery/equipment as an "emission reduction equipment" . Accordingly, details of depreciation and operation & maintenance costs, pertaining to emission reducing equipment have not been provided.

12. The Company has during the year has made a long-term strategic investment by acquiring 13,008 equity shares (representing 25.04% equity stake) in Aqwise-Wise Water Technologies Ltd., a company registered in Israel, engaged in providing water treatment solutions, using proprietary technology. The investment is synergistic to the water/waste water business being carried out by the Company.

13. Due to decline in the free sugar prices and the levy sugar price being much lower than the cost of production of sugar, the sugar inventories held by certain unit(s) of the Company as on 30.09.2012 have been valued at the net realisable value. Accordingly sugar inventories have been written down by Rs. 571.27 lacs (previous year Rs. 102.03 lacs).

e. Remittance in foreign currencies for dividend:

The Company has not remitted any amount in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividend have been made by/on behalf of non-resident shareholders. The particulars of dividend payable to non-resident shareholders (including non-resident Indian shareholders) which were declared during the year are as under:


Sep 30, 2010

1. Contingent liabilities (to the extent not provided for)

a) Claims against the Company not acknowledged as debts (Rs. in Million)

As on As on 30.09.10 30.09.09

i) Claims which are being contested by the Company and in respect of which the 249.50 242.17

Company has paid amounts aggregating toRs. 85.57 Million (Rs. 84.35 Million) under protest pending final adjudication of the cases:

Sl. Particulars Amount of Contingent Amount Paid No. Liability

1 Sales TaRs. 48.00 22.98 (32.74) (22.10)

02 ERs.cise Duty 151.12 58.88

(167.01) (58.59)

03 Others 50.38 3.71 (42.42) (3.66)

The outflow arising from these claims is uncertain and is after adjusting likely reimbursement of Rs. 12.02 Million (Rs. 12.02 Million) from customers in respect of Central ERs.cise demands on account of denial of benefit under Notification No.6/2000.

ii) The Company is contingently liable in respect of short provision against disputed income 464.78 21.85 taRs. liabilities ofRs. 464.78 Million (Rs. 21.85 Million) against whichRs. 365.84 Million stands paid, mostly through adjustment and the balance amount has been stayed till disposal of first appeal. The disputed income taRs. liability includesRs. 374.51 Million towards unrealized incentives. In the event such liability finally materialises,Rs. 353.61 Million will be adjusted against the corresponding capital reserve. In case the said incentives are ultimately not realized, a deduction from taRs.able income to that extent would be available to the Company in subsequent years.

iii) Differential cane price for the sugar season 2007-08 pending disposal of the matter by 789.56 789.56 the Honble Supreme Court. As against price ofRs. 1250/MT advised by the State Government, the Company had accounted for and discharged its liability atRs.1100/MT in accordance with the interim order passed by the Supreme Court.

iv) Indeterminate liability arising from claims/counter claims/Interest in arbitration/court cases, claims alleging infringement of technical know-how/copyrights, claims of some employees/eRs.-employees and in respect of service taRs., if any, on certain activities of the Company which are being contested by the Company.

b) Guarantees/surety given on behalf of

(i) Subsidiary Company

(IncludingRs. Nil (Rs. 5.00 Million) for availing of credit facilities, against which dues 0.10 5.10 outstandingRs. Nil)

(ii) Other companies 4/00 4.00

c) The amounts shown in item 2(a) represent the best possible estimates arrived at on the basis of available information. The uncertainties, possible payments and reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants, as the case may be, and therefore can not be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal position against such disputes.

The amounts shown in item 2(b) above represent guarantees given in the normal course of operations of these companies and are not eRs.pected to result in any loss to the Company on the basis of such companies fulfilling their ordinary commercial obligations.

2. Advances recoverable in cash or in kind in schedule 11 "Loans &Advances" include

a) Due from the Company Secretary-Rs. Nil (Rs. Nil). MaRs.imum amount due at any time during the yearRs. 0.04 Million (Rs. 0.01 Million).

b)Rs. 0.02 Million (Rs. 0.02 Million) on account of Security Deposit paid to the Managing Director.

3. Estimated amount of Contracts remaining to be eRs.ecuted on capital account and not provided for:

Rs.209.80 Million (Rs. 225.49 Million) after adjusting advances paid amounting toRs. 85.72 Million (Rs. 58.67 Million).

4. a) The Company had, in respect of eligible projects, accounted for capital subsidy and remissions and reimbursement of certain statutory levies and eRs.penses, in accordance with and as prescribed under U.P. Sugar Industry Promotion Policy 2004 ("Policy") issued by the State Government of Uttar Pradesh. Till September 30, 2009, the Company had accounted for recoverable incentives ofRs. 1400.25 Million (including capital subsidy) and had availed of remissions ofRs. 125.46 Million under the Policy.

On premature termination of the Policy by the State Government with effect from June 4,2007, the Company has challenged the action of the State Government in withdrawing the said Policy and not granting the incentives to the Company, in the Lucknow Bench of the Allahabad High Court. Pending final adjudication in the matter, the High Court vide its interim order dated 09.05.2008 has permitted limited protection of remissions which were being enjoyed on the date when the Policy was revoked.

The Company has been legally advised that it continues to be entitled to all the benefits under the Policy. However, during the current year, the Company has accounted for only remissions ofRs. 48.10 Million as permitted by the High Court in the interim order and further eligible reimbursements ofRs. 133.81 Million will be accounted for in accordance with the final order of the High Court.

b) The Company had availed of a loan amounting toRs. 943.20 Million (Rs. 943.20 Million) under the "Scheme for ERs.tending Financial Assistance to Sugar Undertakings 2007" notified by the Government of India. Under the said scheme interest subvention @ 12% per annum is granted by the Government on such loan. The outstanding loan as at the end of the year amounts toRs. 681.76 Million (Rs. 943.20 Million)

5. Plant and machinery at Deoband unit eRs.isting as on 1st November, 1986 was revalued during the financial year 1986-87. The revaluation had been conducted by an approved valuer, to reflect the assets at their present value. A property at Delhi, earlier held as stock in trade was revalued during the financial year 1999-00, at estimated market value and converted to fiRs.ed assets. The increase in the value of such assets over their book values, consequent to the revaluation, had been credited to revaluation reserve in the respective year of revaluation. The revalued assets are stated net of accumulated depreciation thereon.

6. Information regarding Related Party Transactions:

a) Related party where control exists

i) Mr DM Sawhney, Chairman & Managing Director (Key Management person).

ii) Wholly owned subsidiaries Triveni Turbine Limited Upper Bari Power Generation Limited Triveni Energy Systems Limited Triveni Engineering Limited GETriveni Limited

b) The details of related parties with whom transactions have taken place during the year:

i) Wholly owned Subsidiaries (Group A) Triveni Turbine Limited (TTL) Upper Bari Power Generation Limited (UBPGL) Triveni Energy Systems Limited (TESL) Triveni Engineering Limited (TEL) GE Triveni Limited (GETL)

ii) Associates (Group B)

TOFSLTrading & Investments Limited (TO FSL) The Engineering &Technical Services Limited (ETS) Triveni Entertainment Limited (TENL) Carvanserai Limited (CL)* * ceased to be an associate company during the year

iii) Key Management Persons (Group C)

Mr D M Sawhney, Chairman & Managing Director (DMS) Mr. Tarun Sawhney, ERs.ecutive Director - Whole Time (TS) Mr. Nikhil Sawhney, ERs.ecutive Director- Whole Time (NS)

iv) Key Management Person relative (Group D) Mrs Rati Sawhney (Wife of DMS) (RS)

v) Companies/Parties in which key management Person or his relatives have substantial interest/significant influence (Group E)

Kameni Upaskar Limited (KUL) Tirath Ram Shah Charitable Trust (TRSCT)

7. The Company has taken various residential, office and godown premises under operating leases. These are generally not non- cancelable and the uneRs.pired period ranges between 6 months to 6 years and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable interest free security deposits under certain agreements. There is no contingent rent or restriction imposed in the lease agreement.

a) Lease payments under operating lease are recognized in the Profit & Loss Account under "Rent" in Schedule 21.

b) There are no minimum future lease payments under non-cancelable operating lease.

8. Depreciation charged to the profit & loss account is net of Rs. 5.94 Million (Rs. 23.66 Million) being write back of eRs.cess depreciation charged in earlier years.

9. The Board of Directors of the Company have approved a Scheme of Arrangement ("Scheme") framed under the provisions of section 391-394 of the Companies Act, 1956, whereby it is proposed to demerge the Steam Turbine business ("Demerged Undertaking") of the Company to its wholly owned subsidiary company, Triveni Turbine Ltd.("Resulting Company"). With effect from the appointed date on 01.10.2010, the Demerged Undertaking shall stand vested with the Resulting Company and all the assets and liabilities pertaining to the Demerged Undertaking shall stand transferred to the Resulting Company. The legal process regarding the sanction of the Scheme by the Honble High Court of Allahabad, is under progress. As per the Scheme, In consideration for the transfer of the Demerged Undertaking, the shareholders of the Company shall be issued one fully paid-up equity share in the Resulting Company for every one equity share held by them in the Company, on the record date to be fiRs.ed for this purpose.

10. ERs.ceptional/ Non-Recurring Income (net) ofRs. 450.86 Million (Previous Year : Net charge ofRs. 121.58 Million) comprises the following:

i) Profit ofRs. 439.56 Million (Rs.170.94 Million) on the sale of long term trade investment.

ii) Provision ofRs. 88.70 Million (Rs. 114.21 Million) against amounts recoverable in disputed matters, mostly relating to project/sugar machinery business earlier carried out by the Company.

iii) Provision no longer required and written back ofRs. 100 Million in respect of Loans and Advances to Triveni Turbine Limited (earlier known as Triveni Retail Ventures Ltd.), a wholly owned subsidiary company, in view of the proposed demerger of the steam turbine business of the Company and its consequent merger with Triveni Turbine Ltd. (Previous year: Provision made ofRs.100 Million).

iv)Rs. Nil (Rs. 78.31 Million) paid for consultancy charges to assess feasibility of new businesses synergistic to the eRs.isting engineering business.

10. The Company has incurred an expenditure ofRs. 42.97 Million (Rs. 48.01 Million), including capital expenditure ofRs. 10.37 Million [Rs. 22.58 Million) in respect of Research and Development activities in respect of its turbine manufacturing operations. Additionally, the Company has also incurred cane development expenditure ofRs. 89.07 Million (Rs. 99.27 Million) in respect of its sugar units, including capital expenditure ofRs. 32.21 Million (Rs. Nil). The capital expenditure has been capitalized under fiRs.ed assets and the other expenditure has been charged to the Profit & Loss A/c under various heads.

11. On account of the net realizable value of sugar stocks being lower than their cost of production, the sugar inventories held by the Company on 30.09.2010 have been valued at their net realizable value. The consequent write-down of inventories has adversely impacted the profitability of the year byRs. 558.15 Million.

12. Previous year figures have been rearranged wherever necessary to make them comparable with the current years figures. Figures given in brackets relate to the previous year.

13. Schedule 1 to 26 form an integral part of the Balance Sheet and Profit & Loss Account

 
Subscribe now to get personal finance updates in your inbox!