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Notes to Accounts of Valecha Engineering Ltd.

Mar 31, 2016

Note 1 (b) Right, Preferences and restrictions attached to shares :

The Company has only one class of Equity Shares having a par value of Rs, 10/- per share. Each share holder is entitle for one vote per share. In the event of liquidation, the equity share holders are entitle to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their share holding.

1Nature of Security and Terms of Repayment for Long Term Secured Borrowings

Nature of Security Terms of Repayment

1) Term Loan with the outstanding balance of Rs, 175.55 lakhs Repayable in 48 monthly installments (March 2015 : Rs, 325.53 lakh) is secured by exclusive commencing from Dec 2012 and the last charge on specific Machineries installment due in October 2016. Rate of

Interest at 8.00% p.a

2) Term Loan with the outstanding balance of Rs, 5.26 Repayable in 36 monthly installments Lakhs (March 2015 : Rs, 16.19 lakhs) is secured by exclusive with the last installment due in June 2016. charge on the vehicles Rate of Interest at 10.25% p.a.

3) Term Loan with the outstanding balance of Rs, 2.00 Repayable in 36 monthly installments Lakhs (March 2015 : Rs, 10.94 lakhs) is secured by exclusive with the last installment due in May 2016. charge on the vehicles Rate of Interest at 10.75% p.a.

4) Term Loan with the outstanding balance of Rs, 2.44 Repayable in 36 monthly installments Lakhs (March 2015 : Rs, 7.12 lakhs) is secured by exclusive with the last installment due in June 2016. charge on the vehicles Rate of Interest at 10.25% p.a.

5) Term Loan with the outstanding balance of Rs, 8.02 Repayable in 36 monthly installments Lakhs (March 2015 : Rs, 14.72 lakhs) is secured by exclusive with the last installment due in Dec. 2016. charge on the specific Machinery. Rate of Interest at 10.60% p.a.

6) Term Loan fully paid during the year Repayable in 36 monthly installments (March 2015 : Rs, 1438.57 lakh) it was secured by exclusive commencing from Nov. 2013 and the last charge on the specific Machineries. installment due in Sept. 2016. Rate of

Interest at 13.00% p.a

7) Term Loan fully paid during the year Repayable in 36 monthly installments (March 2015 : Rs, 2080.08 lakh) it was secured by exclusive commencing from Nov. 2013 and the last charge on the specific Machineries. installment due in Sept. 2016. Rate of

Interest at 13.00% p.a

8) Term Loan fully paid during the year Repayable in 36 monthly installments (March 2015 : Rs, 2151.34 lakh) it was secured by exclusive commencing from Nov. 2013 and the last charge on the specific Machineries. installment due in Sept. 2016. Rate of

Interest at 13.00% p.a

9) Term Loan with the outstanding balance of Rs, 3712.16 lakhs Repayable in 30 months payable in (March 2015 : Rs, 3663.49 lakh) is secured by first & exclusive charge quarterly installment with the moratorium on the project receivables for EPC from Surat Municipal period of 12 months and thereafter the Corporation for the three projects with the exclusive and quarterly repayment on phased manner. first charge over Escrow Account and project specific Current Assets. Rate of interest at 12.50% p.a.

10 Nature of Security and Terms of Repayment for Long Term Secured Borrowings

Nature of Security Terms of Repayment

11) Corporate Loan with the outstanding balance of Rs, 1233.68 lakhs Repayable in 10 Quarterly Installments with the (March 2015 : Rs, 1558.60 lakh) is secured by exclusive charge moratorium period of Six months.

on the specific immovable property along with the subservient Rate of interest at 13.10% p.a charge on movable fixed assets & current assets

12) Term Loan with the outstanding balance of Rs, 6161.27 lakhs Repayable in 36 months payable in (March 2015 : Rs, 6216.37 lakh) is secured by first & exclusive charge quarterly installment with the moratorium on the project receivables for EPC from Rapti Nhar Nirman Mandal-II period of 12 months.

Irrigation Depart, Basti, Uttar Pradesh with the exclusive and Rate of interest at 12.25% p.a. first charge over Escrow Account and project specific Current Assets.

13) Term Loan with the outstanding balance of Rs, 215.30 lakhs Repayable in 60 monthly installments

(March 2015 : Rs, 211.58 lakhs) is secured by exclusive charge with the last installment due in March 2019. Rate of on the property purchased Interest at 10.50% p.a

14) Term Loan with the outstanding balance of Rs, 4201.21 lakhs Repayable in 18 quartely installments

(March 2015 : Rs, 5000.00 lakhs) is secured by first & exclusive charge with the last installment due in Sept 2020. Rate of on the specific immovable property & JSL & VIL Shares Interest at 12.15% p.a

15) Term Loan with the outstanding balance of Rs, 4.27 lakhs Repayable in 36 monthly installments

(March 2015 : Rs, 6.36 lakhs) is secured by first & exclusive charge with the last installment due in July 2017. Rate of on the specific machine Interest at 10.25% p.a

16) Term Loan with the outstanding balance of Rs, 33.81 lakhs Repayable in 36 monthly installments

(March 2015 : Rs, 50.47 lakhs) is secured by first & exclusive charge with the last installment due in July 2017. Rate of on the specific vehicles Interest at 10.25% p.a

17) Term Loan with the outstanding balance of Rs, 24.92 lakhs Repayable in 36 monthly installments

(March 2015 : Rs, 37.20 lakhs) is secured by first & exclusive charge with the last installment due in July 2017. Rate of

on the specific Machineries Interest at 10.25% p.a

18) Term Loan with the outstanding balance of Rs, 10.60 lakhs Repayable in 36 monthly installments

(March 2015 : Rs, 15.83 lakhs) is secured by first & exclusive charge with the last installment due in July 2017. Rate of on the specific Machineries Interest at 10.25% p.a

19) Term Loan with the outstanding balance of Rs, 72.80 lakhs Repayable in 46 monthly installments

(March 2015 : Rs, 85.41 lakhs) is secured by first & exclusive charge with the last installment due in July 2018. Rate of on the specific vehicles Interest at 10.50 % p.a

20) Term Loan with the outstanding balance of Rs, 3677.22 Repayable in 60 monthly installments Lakhs (March 2015 : Rs, Nil lakh) is secured by exclusive commencing from Oct 2015 and the last charge on the specific Machineries. installment due in Sept. 2020. Rate of Interest at 14.00 % p.a

21) Term Loan with the outstanding balance of Rs, 3500.00 Repayable in single payment Lakhs (March 2015 : Rs, Nil lakh) is secured Against Bank on or before 07.08.2016 Guarantees Rate of Interest at 13.75 % p.a

22) Term Loan with the outstanding balance of Rs, 267.75 Repayable in 36 monthly installments Lakhs (March 2015 : Rs, Nil lakh) is secured by exclusive commencing from Oct 2015 and the last charge on the specific Machineries. installment due in Sept 2018. Rate of Interest at 14.00% p.a

i. Working capital loans are secured by hypothecation of book debts, current assets, unencumbered plant & machinery and specific immovable properties as per the sanction terms.

ii. Short Term Facilities from Banks are secured against the securities offered under the working capital loans.

23 Pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from 1st April 2014, the useful life of fixed assets have been revised as prescribed there in. As a result, an amount of Rs, 485.06 lakhs representing assets whose useful life has already exhausted as on 1st April 2014 has been adjusted against retained earnings. During the year Rs, 485.06 is added to accumulated depreciation as at 01.04.2015. In respect of remaining assets additional depreciation amounting to Rs, Nil lakhs (Previous Year Rs, 1703.18 lakhs) has been charged for the Year ended 31.03.2016

The Share of Companies Income / Expenditure and Receivables / Payables in case of contracts executed in Joint Venture / Consortium under the work Sharing arrangements are reflected in the books of account of the Company under the relevant heads of account, Hence not considered again for above Disclosure

24 Disclosure required by schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 186(4) of the Companies Act, 2013 :

25 The accumulated losses for the year ended 31st March, 2016 have resulted in Company''s erosion of more than 50 percent of its peak net worth during the immediately preceding four financial years. However, the management is of the opinion that subject to approval of Master Restructuring Agreement by banks, the Company will be able to return to profitability over the next few years and may be in position to repay Loans and pay statutory dues. Hence, the financial statements have been prepared assuming that the Company and its subsidiaries will continue as a going concern. No adjustments are hence made in the financial statements that might result from the outcome of this uncertainly.

26 CSR Expenditure :

Corporate Social Responsibility (CSR) - In View of losses incurred, expenditure on CSR is not applicable for the year ended as at 31st March, 2016. In the Previous year the Company had not spent required amount of Rs, 41.22 Lakhs

27 The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2015

1. CONTINGENT LIABILITIES

Contingent Liabilities are not provided for and are disclosed by way of notes :

i. Bank Guarantees and Letter of Credits outstanding amounting to Rs. 33,755.99 lacs (Previous Year Rs. 40,268.55 lacs).

ii. Corporate Guarantee issued in favour of the lenders on behalf of Company's subsidiaries towards the Project Finance of BOT/Annuity Road Projects. As against the aggregate Project Finance amounts outstanding of Rs. 57,724 lacs (Previous Year Rs. 53,750 lacs), Counter Guarantee issued in favour of the lenders is to the extent of Rs. 54,537.00 lacs (Previous Year Rs. 50,397.50 lacs). Company also holds the Corporate Guarantee of the Minority Shareholder amounting to Rs. 828.62 lacs (Previous Year Rs. 871.65 lacs), in its favour.

iii. Necessary provisions are made for the present obligations that arise out of past events prior to the Balance Sheet date entailing future outflow of economic resources. Such provisions reflect best estimates based on available information.

2. Since the principal business of the Company is construction activity quantitative data in respect of trading and manufacturing activities carried out by the company, as required by the Companies Act is not applicable.

3. CSR Expenditure :

(a) Gross amount required to be spent by the company during the year is. Rs. 41,22,478/-

(b) Amount spent during the year on :

4. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2014

1. Employees Retirement and other Benefits:

Defined contribution Plan: The Company''s contribution to provident fund is charged to Statement of Profit and Loss.

Defined benefit plan: The Company''s liability towards Gratuity is determined by Independent actuaries using the projected credit method. Actual gain and losses are recognised immediately in the Statement of Profit & Loss. Obligation is measured at the Present value of the estimated future cash flow using a discounted rate i. e. determined by the market yield at the Balance Sheet date.

2. CONTINGENT LIABILITIES

Contingent Liabilities are not provided for and are disclosed by way of notes:

i. Bank Guarantees and Letter of Credits outstanding amounting to Rs. 40, 268. 55 lacs. (Previous Year Rs. 37, 163. 78 lacs).

ii. Corporate Guarantee issued in favour of the lenders on behalf of Company''s subsidiaries towards the Project Finance of BOT/Annuity Road Projects. As against the aggregate Project Finance amounts outstanding of Rs. 53, 750 lacs (Previous year Rs. 41, 310 lacs), Counter Guarantee issued in favour of the lenders is to the extent of Rs. 50, 397. 50 lacs (Previous Year Rs. 41, 310 lacs). Company also holds the Corporate Guarantee of the Minority Share Holder amounting to Rs. 871. 65 lacs (Previous Year Rs. 1, 937. 00 lacs), in its favour.

iii. Claims against the Company and disputed liabilities not acknowledged as debts are insignificant.

3. Since the principal business of the Company is construction activity quantitative data in respect of trading and manufacturing activities carried out by the company, as required by Part II of schedule VI to the Companies Act, 1956 is not applicable.

4. The Company has not received any information from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006. (The Act) and hence disclosures required under the said act have not been given. The Company is making efforts to get the confirmation from the suppliers as regards their status under the Act. However, none of the supplier has confirmed the same.

5. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2013

1. CONTINGENT LIABILITIES

Contingent Liabilities are not provided for and are disclosed by way of notes :

(i) Bank Guarantees and Letter of Credits outstanding amounting to Rs. 37,163.78 lacs. (Previous Year Rs. 34,769.53 lacs). (ii) Corporate Guarantee issued in favour of the lenders on behalf of Company''s subsidiaries towards the Project Finance of the BOT/ Annuity Road Projects. Loan amount outstanding Rs. 41,310 lacs ( Previous year Rs. 28,740 lacs).

2. Since the principal business of the company is construction activity quantitative data in respect of trading and manufacturing activities carried out by the company, as required by Part II of schedule VI to the Companies Act 1956 is not applicable.

3. The Company has not received any information from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006. (The Act) and hence disclosures required under the said act have not been given. The Company is making efforts to get the confirmation from the suppliers as regards their status under the Act. However, none of the supplier has confirmed the same.

4. The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2012

* The additional charge of depreciation on account of revaluation is withdrawn from the Revaluation Reserve and credited to the Profit and Loss Account.

# The Company has forfeited Rs. 9,45,00,000/- being the 25% advance on 35,00,000 Preferential warrants at Rs. 108/- per Preferential warrant for which the remaining amount was not received prior to the stipulated time period. The said amount is transferred to the General Reserve Account.

i. # Working Capital Loans are secured by Hypothecation of Books Debts, Current Assets, Unencumbered Plant & Machinery and Portion of the Immovable Properties as per the sanction terms.

ii. # Other Short Term Facilities from Banks are either unsecured and/or against the securities offered under working capital limits.

Employees' Retirement and other Benefits :

Defined contribution Plan : The Company's c&ntribution to provident fund is charged to Profit and Loss Account.

Defined benefit plan: The Company's Liability towards Gratuity are determined by Independent actuaries using the projected credit method. Actual gain and losses are recognised immediately in the Income and Expenses. Obligation is measured at the Present value of the estimated future cash flow using a discounted rate i.e. determined by the market yield at the Balance Sheet date.

1. CONTINGENT LIABILITIES

Contingent Liabilities are not provided for and are disclosed by way of notes:

(i) Bank Guarantees and Letter of Credits outstanding amounting to Rs. 34,769.53 lacs (Previous Year Rs. 29,148.85 lacs).

(ii) Corporate Guarantee issued in favour of the Lenders on behalf of their subsidiaries towards the Project Finance of the BOT/Annuity Road Projects. Loan amount outstanding as at 31.03.2012 was Rs. 28,740 lacs (Previous Year Rs. 4,471 lacs).

2. Since the principal business of the Company is construction activity quantitative data in respect of trading and manufacturing activities carried out by the Company as required by Part II of schedule VI to the Company's Act 1956 is not applicable.

3. The Company has not received any information from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006. (The Act) and hence disclosures required under the said act have not been given. The Company is making efforts to get the confirmation from the suppliers as regards their status under the Act. However, none of the supplier has confirmed the same.

4. The Financials Statements for the year ended 31.03.2011 had been prepared as per the then applicable, pre-revised Schedule-VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the Financial Statements for the year ended 31st March, 2012 are prepared under revised Schedule-VI. Accordingly, the previous year's figures have also been reclassified to conform to this year's classification.


Mar 31, 2011

(1) Issue of Preferential Warrants and Equity Shares during the year :

i. Out of the allotted 16,00,000 Preferential Warrants with an option to subscribe to equity shares on a future date, in respect of 6,50,000 warrants, the Company had received the entire issue price for which equity shares were allotted with the nominal value of Rs. 10/- each with a premium of Rs. 29/- per share during the year 2009-10. Further in respect of 9,50,000 warrants, the Company has received the entire issue price for which equity shares were allotted with the nominal value of Rs. 10/- each with a premium of Rs. 29/- per share, during the year.

Consequent to the above, Share Capital is increased by Rs. 95,00,000/- and the Share Premium account by Rs. 2,75,50,000/- during the year.

ii. During the year the Company has allotted additional 35,00,000 preferential warrants at Rs. 107.54 per warrant as approved in the Extra Ordinary General Meeting held on 24th April 2010. In respect of these 35,00,000 warrants, the company has received Rs. 9,45,00,000/- being the 25% of the issue price as advance.

(2) Contingent Liability :

Contingent Liabilities are not provided for and are disclosed by way of notes :

i. Bank Guarantees and Letter of Credits outstanding amounting to Rs. 29,148.85 lacs (Previous Year Rs. 24,392.51 lacs).

ii. Corporate Guarantee issued in favour of the Lenders on behalf of their ultimate subsidiary towards the Project Finance of the Toll Project. Loan amount outstanding as at 31.03.2011 was Rs. 4,471.00 lacs (Previous year Nil).

(3) Provision for Taxes :

i. Current Tax :

The Provision for Income Tax is determined in accordance with provisions of Income Tax Act 1961.

ii. Deferred Tax Provision :

Deferred Tax charge or credit is recognized on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the Balance Sheet date.

(4) Foreign Currency Transaction :

i. Transactions denominated in Foreign Currency are normally recorded at Exchange Rate prevailing at the time of transactions.

ii. Current asset/Investments denominated in Foreign Currency are translated at the rate prevailing at the end of the year and the net gain/ loss is recognized in Profit and Loss Account by reducing/increasing it from the Financial Costs.

(5) Segment reporting :

The Company considers its operations as one single segment i.e. "Construction Activity" and as such, AS-17 is not applicable.

(6) Related Party Disclosure :

Name of the Related Party Nature of Realtionship

(B) Particulars of Joint Ventures & Consortium

1. Ashoka - Valecha (Joint Venture) Joint Venture Member

2. Valecha - ECCI (Joint Venture) Joint Venture Member

3. Valecha - TBL (Joint Venture) Joint Venture Member

4. Valecha - Singla (Consortium) Consortium Member

5. Valecha - SGG (Joint Venture) Joint Venture Member

6. Valecha - Transtonnelstroy (Joint Venture) Joint Venture Member

7. Valecha - Multitech (JV) Joint Venture Member

8. KSSIIPL - VEL (JV) Joint Venture Member

(C) Key Management Personnel

1. Anil Harish Chairman

2. Jagdish K. Valecha Managing Director

3. Umesh H. Valecha Whole Time Director

4. Dinesh H. Valecha Whole Time Director

5. Arvind Thakkar Director

6. G. Ramachandran Director

(7) Since the principal business of the Company is construction activity quantitative data in respect of trading and manufacturing activities carried out by the Company as required by Part II of schedule VI to the Companys Act 1956 is not furnished.

(8) The Company has not received any information from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006. (The Act) and hence disclosures required under the said act have not been given.

The Company is making efforts to get the confirmation from the suppliers as regards their status under the Act. However, none of the supplier has confirmed the same.

(9) The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2010

(1) Issue of Preferential Warrants and Equity Shares during the year:

During the year the Company has allotted 16,00,000 Preferential Warrants at the price of Rs. 39.00 per warrant. Out of the allotted 16,00,000 Preferential Warrants with an option to subscribe to equity shares on a future date, in respect of 6,50,000 warrants, the company had received the entire issue price for which equity shares were allotted with the nominal value of Rs. 10/- each with a premium of Rs. 29/- per share.

Consequent to the above, Share Capital is increased by Rs. 65,00,000/- and the Share Premium account by Rs. 1,88,50,000/- during the year.

(2) Contingent Liability:

Contingent Liabilities are not provided for and are disclosed by way of notes:

Bank Guarantee and Letter of Credits outstanding amounting to Rs. 24,392.51 lacs (Previous Year Rs. 18,110.39 lacs)

(3) Provision for Taxes:

i. Current Tax:

The Provision for Income Tax is determined in accordance with provisions of Income Tax Act 1961.

ii. Deferred Tax Provision:

Deferred Tax charge or credit is recognized on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the Balance Sheet date.

(4) Foreign Currency Transaction:

i. Transactions denominated in Foreign Currency are normally recorded at Exchange Rate prevailing at the time of transactions.

ii. Current asset/Investments denominated in Foreign Currency are translated at the rate prevailing at the end of the year and the net gain/ loss is recognized in Profit and Loss Account by reducing/increasing it from the Financial Costs.

(5) Segment reporting:

The Company considers its operations as one single segment i.e. "Construction Activity" and as such, AS-17 is not applicable.

(6) Related Party Disclosure:

Disclosure as required by the Accounting Standard 18 "Related Party Disclosures" are given below:

Name of the Related Party Nature of Relationship % of Profit

(A) Particulars of Subsidiary & Associate Companies/Firm

1. Valecha Infrastructure Ltd. Wholly Owned Subsidiary Company 100%

2. Valecha International (FZE) Wholly Owned Subsidiary Company 100%

3. Gopaldas Vasudev Construction Pvt. Ltd. Associate Company Nil

4. Valecha Investment Pvt. Ltd Associate Company Nil

(B) Particulars of Joint Ventures & Consortium

1. Ashoka Buildcon - Valecha Engineering Limited (Joint Venture) Joint Venture Member

2. Valecha - ECCI (Joint Venture) Joint Venture Member

3. Valecha - TBL (Joint Venture) Joint Venture Member

4. Valecha - Singla (Consortium) Consortium Member

(C) Key Management Personnel

1. Anil Harish Chairman

2. Jagdish K. Valecha Managing Director

3. Ramchand H. Valecha * Whole Time Director

4. Umesh H. Valecha Whole Time Director

5. Arvind B. Gogate ** Whole Time Director

6. Dinesh H. Valecha Whole Time Director * Retired on 01/07/2009

** Retired on 01/08/2009

(7) Since the principal business of the Company is construction activity quantitative data in respect of trading and manufacturing activities carried out by the company as required by Part II of schedule VI to the Companys Act 1956 is not furnished.

(8) The Company has not received any information from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006. (The Act) and hence disclosures regarding

(a) Amounts due and outstanding to suppliers as at the end of the accounting year

(b) Interest paid during the year

(c) Interest payable at the end of the accounting year, and

(d) Interest accrued and unpaid at the end of the accounting year, has not been provided.

The Company is making efforts to get the confirmation from the suppliers as regards their status under the Act. However, non of the supplier has confirmed the same.

(9) The previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

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