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Notes to Accounts of Welspun Enterprises Ltd.

Mar 31, 2014

1). CONTINGENT LIABILITIES & COMMITMENTS:

I. Contingent Liabilities Rs. In Lacs

As At AS At 31-03-2014 31-03-2013

a. Claims against the Company / 370.15 499.01 Disputed Liabilities not acknowledged as debts

b. Guarantee issued by the bankers 4612.48 11141.32 on behalf of the Company

c. Guarantee given by the Company to the bankers for the facilities granted :-

1. Wholly owned subsidiaries. 3257.19 995.11

2. Joint Ventures 33153.42 36030.45

d. Income Tax demand disputed 5069.59 1107.31 by the Company

e. Service Tax demand disputed 347.76 - by the Company

2) Security Deposits and Retention money deducted from contract receipt are subject to confirmation and adjustment, if any, on finalization of account.

3). BUILD, OPERATE & TRANSFER PROJECTS :

The Company obtained a contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State Industrial Development Corporation (MPSIDC) for execution of Dewas Water Supply project.

In terms of contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect the water supply charge during the concession period of 32 years including the period of construction or reconstruction.

In earlier year the Company finished the construction and obtained the provisional certificate for commissioning and started operations. However the Company could not achieve the optimal capacity and was advised to complete the project to achieve the desired and specified results by MPSIDC as al so to expand the capacity and to under take reconstruction and completion

Accordingly the Company has undertaken reconstruction and completion of the project so as to achieve the desired capacity as also increase the capacity for supply of water from BOT Project.

Having, regard to the accounting policies followed by the Company, the entire expenditure incurred thereon (net of revenue for supply of water) is shown as Build, Operate and Transfer project expenditure (Toll collection rights) under the head in tangible assets under development and would be amortized / written off based on the projected toll revenue for the balance toll period.

In the prior financial year(s) the Company had written off, operation and maintenance expenses including interest. However due to reconstruction and completion under taken, the Company has discontinued that practice from the year 2011-12.

4). EXCEPTIONAL ITEM :

Pursuant to agreement for sale Dtd.5th March 2013 entered in to between the Company and Leighton Wels pun Contractors Private Limited, the Company has transferred indentified EPC division / works of GMADA Mohali Water Division, Chirai Anjar Road Work and Dewas Water Projects aggregate value of Rs. 556 Crores for the composite consideration of Rs.1,15,03,48,500/- subject to the terms and condition as contained in the said agreement.

As a consideration for the transfer of the above business the Company had received 11503485 equity shares in the Leighton Wel spun Contractors Private Limited, of the face value of Rs. 10/- each fully paid up at a premium of Rs. 90/- per share aggregating consideration of Rs. 1150348500/- Surplus of Rs. 107,92,49,055 arising in respect of the said transfer was shown as income from transfer of business under the head Other Operating Revenue in the statement of profit & loss for the year ended 31st M arch 2013.

As per the Clause 14.4.2 of the said Agreement To Sell (ATS), if the Company is unable to issue Notice to Proceed (NTP) for any of the above projects, it has an obligation to give Replacement Project (s) to LWIN of equivalent contract value.

If NTP i s not issued, and Replacement Project(s) are not arranged, the proportionate shareholding based on the value of projects for which NTP is not issued will be extinguished. Due to various circumstances, it became clear that a NTP could not be issued to LWIN for either of the balance projects. Following these developments, the Company obtained an opinion from an external valuator on the cost of the obligation to arrange for Replacement Projects for LWIN (''replacement obligation'').

Based on valuation carried out, Wel spun Infra Projects Private Limited ("WIPPL") (Group Company) holding 32.38% in LWIN has agreed to purchase the Company s stake in LWIN @ Rs 81 Crores. Loss of Rs. 34,06,82,111/- on sales of the said Company s stake in "LWIN" is shown under the head Exceptional Item in the statement of Profit & Loss.

Further as per agreement Mohali Project was assigned back to the Company, by LWIN along with all rights, asset and liabilities pertaining to the said business.

5). The Company has given Inter corporate deposits of Rs. 27.50 Crores to ARSS and Rs. 2.50 Crores to Anil Construction P Ltd, during the year 2012-13 and also charged interest of Rs. 4.15 Crores thereon, which is not received. No interest is charged on the said ICD''s during the year 2013-14

The matter is constantly pursued by the company and legal proceeding is also initiated for recovery of the said amount. There is no need to make any provision for the said amount as the Company is hope full for the recovery in near future.

6). The Company is operating in a single segment only during the year i.e. Civil Construction Contract.

7) Transaction with related parties (as certified by the management)

A. Holding Companies!

* Wels pun Corp Limited (up to 24- Jan 2014)

* Welspun Infratech Limited

* Wels pun Enterprise Ltd

B. Subsidiary Companies!

* MSK Projects (Himmatnagar Bypass) Private Limited

* MSK Projects (Kim Mandvi Corridor) Private Limited

* Anjar Road Private Limited

C. Integrated Joint Ventures!

* Dewas Bhopal Corridor Limited

a. Associate Concern!

* We spun Corp Limited (after 24- Jan 2014)

* Wels pun M ax Steel Limited

* Welspun Steel Limited

* Welspun India Limited

* Wels pun Retails Limited

* Wels pun Reality Private Limited

b. Key Management Personnel!

* Mr. B.K. Goenka- Chairman

* Mr. Sandeep Garg - (Managing Director)

* Mr. R.R. Mandawewala - Director

8). Based on the legal opinion taken by the Company, Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the Build, Operate & Transfer Project Expenditure is in the nature of promoter contribution and accordingly treated as Capital Reserve in the books of accounts of the Company.

9). Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of recovering the dues and accordingly they have been classified as debt considered good and therefore no provision is considered necessary, there against.

10). Under the Micro, Small and Medium Enterprise Development Act, 2006 ("MSMED Act") which came into force effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made. The Company is in the process of compiling the relevant information. As the relevant information is not yet readily available and / or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprise in accordance with the provisions of the Act, would not be material and the same, if any, would be disclosed in the year of payment of interest.

In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act'' 2006 , the information required under the said Act could not be compiled and disclosed.


Mar 31, 2013

Note No. 1.1 Income from Transfer of Business

Pursuant to agreement for sale Dtd. 5th March 2013 entered in to between the Company and Leighton Welspun Contractors Private Limited, the Company has transferred the following indentified EPC division / works of aggregate value of Rs. 556 Crores for the composite consideration of Rs.1,15,03,48,500/ subject to the terms and condition as contained in the said agreement.

Water Division:

EPC Works in relation to the transmission of water from Kaluji, head works by laying of approximately 22 Km of 2200 Millimeter diameter pipe line in Mohali, Punjab awarded by Greater Mohali Area Development Authority as a going concern by way of slump sales along with all rights, assets and liabilities pertaining to the said division.

EPC Works in relation to laying a pipe with a larger diameter in order to increase the supply of water to the industrial units in Dewas, Madhya Pradesh from 23 Million liters, per days to 30 million liter per day emanating out of Dewas Water Supply projects of the Company.

EPC Works:

Chairai EPC Works EPC Works relation to the projects for four laning of approximately 28.853 Km of the Chirai Anjar Road including the Anjar bypass in the state of Gujarat, emanating out of the Build, Operate Transfer project awarded by the Gujarat State Road Development Corporation to the Company. As a consideration for the transfer of the above business the Company has received 11503485 equity shares in the Leighton Welspun Contractors Private Limited, of the face value of Rs. 10/ each fully paid up at a premium of Rs. 90/ per share agreegating consideration of Rs. 1,15,03,48,500/ Surplus of Rs.1,07,92,49,055 arising in respect of the said transfer has been shown as ''income from transfer of business'' under the head "Other Operating Revenue" in the statement of profit & loss and value of 1,15,03,485 equity shares received by the Company has been shown as Investment in shares under the head "Non Current Investment".

2). Security Deposits and Retention money deducted from contract receipt are subject to confirmation and adjustment, if any, on finalization of account.

3). Build, Operate & Transfer Projects (BOT Projects)

The Company obtained a contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State Industrial Development Corporation (MPSIDC) for execution of Dewas Water Supply project.

In terms of contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect the water supply charge during the concession period of 32 years including the period of construction or reconstruction.

In earlier year the Company finished the construction and obtained the provisional certificate for commissioning and started operations. However the Company could not achieve the optimal capacity and was advised to complete the project to achieve the desired and specified results by MPSIDC as also to expand the capacity and to under take reconstruction and completion

Accordingly the Company has undertaken reconstruction and completion of the project so as to achieve the desired capacity as also increase the capacity for supply of water from BOT Project.

Having, regard to the accounting policies followed by the Company, the entire expenditure incurred thereon (net of revenue for supply of water) is shown as Build, Operate and Transfer project expenditure and would be amortized / written off based on the projected toll revenue for the balance toll period.

In the prior financial year(s) the Company had written off, operation and maintenance expenses including interest. However due to reconstruction and completion under taken, the Company has discontinued that practice from the year 2011-12.

4). CHANGE OF ACCOUNTING POLICIES OF AMORTIZATION :

Hitherto up to 31st March 2012 expenditure incurred on Build, Operate & Transfer projects, of Hoshanagabd – Harda – Khanadwa and Raisen Rahatgarh Road Project, was amortized / written off after reducing the "Cash Subsidy" received from Madhya Pradesh Rajya Setu Nirman Nigam Limited from the total BOT cost on the basis of projected toll revenue over the period of concession. Based on the legal opinion received by the Company the Company has changed the policy and the said BOT Expenditure is amortized / written off without deducting the Cash Subsidy received from Madhya Pradesh Rajya Setu Nirman Nigam Limited retrospectively,

Had there been no change in the method of amortization, the amount of amortization would have been lower by Rs. 42,20,29,603/- (including Rs. 5,96,44,959/-for the current year). Consequently Profit and reserves and surplus would have been higher to that extent.

5). The Company is operating in a single segment only during the year i.e. Civil Construction Contract.

6). Disclosure in accordance with Accounting Standard - 7 (Revised).

7). Disclosures relating to Employee Benefits – As per Revised AS-15:

During the year Company has recognized the following amount in the financial statements.

a). DEFINED CONTRIBUTION PLAN

Contribution to Defined Contribution Plan recognized as Expense for the year as under:

8). Transaction with related parties (as certified by the management)

A. Holding Companies:

- Welspun Corp Limited

- Welspun Infra-tech Limited

B. Subsidiary Companies:

- MSK Projects (Himmatnagar Bypass) Private Limited

- MSK Projects (Kim Mandvi Corridor) Private Limited

- Welspun BOT Projects Private Limited

- Anjar Road Private Limited

C. Integrated Joint Ventures:

- Bul MSK Infrastructure Private Limited

- Dewas Bhopal Corridor Private Limited

a. Associate Concern:

- Welspun Max Steel Limited

- Welspun Steel Limited

- Welspun India Limited

- Welspun Retails Limited

- Welspun Captive Power Generation Limited

- Rami Metal Limited

- Welspun Reality Private Limited

b. Key Management Personnel:

- Mr. B.K. Goenka- Chairman

- Mr. Sunil Shinde - Managing Director & CEO – (Resigned on 19-05-2012)

- Mr. Sandeep Garg - (Managing Director & CEO w.e.f. 16-07-2012)

- Mr. R.R. Mandawewala – Director

9). Based on the experts'' s opinion taken by the Company, Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the Build, Operate & Transfer Project Expenditure is in the nature of promoter contribution and accordingly treated as Capital Reserve in the books of accounts of the Company.

10). Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of recovering the dues and accordingly they have been classified as "debt considered good" and therefore no provision is considered necessary, there against.

11). Under the Micro, Small and Medium Enterprise Development Act, 2006 ("MSMED Act") which came into force effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made. The Company is in the process of compiling the relevant information. As the relevant information is not yet readily available and / or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprise in accordance with the provisions of the Act, would not be material and the same, if any, would be disclosed in the year of payment of interest.

In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act'' 2006, the information required under the said Act could not be compiled and disclosed.

12). In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.

13). CIF Value of Import Rs. –Nil-

Rs. –Nil- 44). Expenditure in Foreign currency Rs. –Nil- Rs. –Nil- 45). Earning in Foreign Exchange Rs. –Nil- Rs. –Nil- 46) Remittance in Foreign Currency Rs. –Nil- Rs. –Nil- 47) The previous year figures are regrouped / rearranged / recast wherever considered necessary.


Mar 31, 2012

1. CONTINGENT LIABILITIES & COMMITMENTS:

I. Contingent Liabilities Rs in Lacs

As At As At 31-03-2012 31-03-2011

a. Claims against the Company / Disputed Liabilities not acknowledged as debts 380.88 38.58

b. Guarantee issued by the bankers on behalf of the Company 13580.34 17543.18

c. Guarantee given by the Company to the bankers for the facilities granted

1. Wholly owned subsidiaries 1131.78 1267.44

2. Joint Ventures 37231.88 38597.66

d. Letter of credit issued by the Company's Bank on behalf of the Company. 322.82 502.05

e. Income Tax demand disputed by the Company - 1045.79

2. In completed contract work under contract work in progress at the various sites is estimated by the management having regards unbilled work, out standing running bill and expected recovery there of.

3. Security Deposits deducted from contract receipt and mobilization advances received against contracts are subject to confirmation and adjustment, if any, on finalization of account.

4. BUILD, OPERATE & TRANSFER (BOT) PROJECTS:

i) The Company obtained a contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State Industrial Development Corporation (MPSI DC) for execution of Dewas Water Supply project.

In terms of contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect the water supply charge during the concession period of 32 years including the period of construction or reconstruction.

In earlier year the Company finished the construction and obtained the provisional certificate for commissioning and started operations. However the Company could not achieve the optimal capacity and was advised to complete the project to achieve the desired and specified results by MPSIDC as also to expand the capacity and to undertake reconstruction and completion.

Accordingly the Company has undertaken reconstruction and completion of the project so as to achieve the desired capacity as also increase the capacity for supply of water from BOT Project.

Having, regard to the accounting policies followed by the Company, the entire expenditure incurred thereon on (net of revenue for supply of water) is shown as Build, Operate and Transfer project expenditure and would be amortized / written off based on the projected toll revenue.

In the prior financial year(s) the Company had written off, operation and maintenance expenses including interest. However due to reconstruction and completion under taken, the Company has discontinued that practice.

ii) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board for execution of Jalandhar Bus Terminal project.

In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 8 years 5 months and 2 days for Jalandhar Bus Terminal Project (including the period of construction).

The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionate amount of Rs.241.38 Lacs (P.Y. Rs. 235.15 Lacs) has been written off during the year.

iii) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board for execution of Ludhiana Bus Terminal Project.

In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 10 years 3 months for Ludhiana Bus Terminal Project (including the period of construction).

The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionate amount of Rs.179.22 Lacs (P.Y. Rs. 172.11 Lacs) has been written off during the year.

iv) The MSK Infrastructure & Toll Bridge Private Limited ('Transferor Company1) had obtained the contract on Build, Operate and Transfer (BOT) basis from Madhya Pradesh Road Development Authority for construction of Hoshangabad-Harda-Khandwa Road Project. In Terms of the Contract the Transferor Company was entitled to collect the toll during the concession period of 5440 days (Including the period of the construction). The Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation as approved by the Honorable High Court of Gujarat on 2nd November, 2006 with effect from 01.01.2005.

The Transferor Company had completed the construction of the above project and was put open to traffic during the earlier year.

The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as per the scheme of amalgamation.

Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs. 240.15 Lacs (P.Y. 241.09 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road Development Authority.

v) The MSK Highways Limited ("Transferor Company) had obtained the contract on Build, Operate and Transfer (BOT Basis) from Madhya Pradesh Road Development Authority for construction of Raisen-Rahatgarh. In Terms of the Contract the Transferor Company entitled to collect the toll during the concession period of 5440 days (Including the period of the construction). The Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation as approved by the Honorable High Court of Gujarat on 2nd November, 2006 with effectfrom 01.01.2005.

The Transferor Company had completed the construction of the above project and was put open to traffic during the earlier year.

The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as per the scheme of amalgamation.

Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs.173.53 Lacs (P.Y. 158.81 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road Development Authority.

5) The Company is operating in a single segment only during the year i.e. Civil Construction Contract.

In respect of the construction contracts, the Company follows the percentage of completion method for recognizing profit / loss but no provision is made for contingencies in respect of contract in progress, consistent with the practice of the Company. Accounting Standard (AS) 7 on "Accounting for Construction Contracts" issued by the institute of Chartered Accountant of India requires that an appropriate allowance be made for future unforeseen factors. In the opinion of the Company, such a provision is not required and has no financial effect.

6) Disclosures relating to Employee Benefits - As per Revised AS-15:

During the year Company has recognized the following amount in the financial statements

7) Transaction with related parties (as certified by the management)

A. Holding Companies:

Welspun Corp Limited Welspun Infratech Limited

B. Subsidiary Companies:

MSK Projects (Himmatnagar Bypass) Private Limited MSK Projects (Kim Mandvi Corridor) Private Limited Welspun BOT Projects Private Limited Anjar Road Private Limited

C. Integrated Joint Ventures:

BUL MSK Infrastructure Private Limited Dewas Bhopal Corridor Limited

a) Associate Concern:

Welspun Max Steel Limited

Welspun Steel Limited

Welspun India Limited

Remi Metal Limited

Welspun Retails Limited

Welspun Captive Power Generation Limited

Welspun Infra Projects Private Limited

b) Key Management Personnel:

B.K. Goenka - Chairman Sunil Shinde (Director)

8) Cash Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the Build, Operate & Transfer Project Expenditure Cost, is not reduced from the relevant project cost but the same is shown as "Capital Reserve" in the Balance Sheet.

9) Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of recovering the dues and accordingly they have been classified as "debt considered good" and therefore no provision is considered necessary, there against.

10) Under the Micro, Small and Medium Enterprise Development Act, 2006 ("MSMED Act") which came into force effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made. The Company is in the process of compiling the relevant information. As the relevant information is not yet readily available and / or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprise in accordance with the provisions of the Act, would not be material and the same, if any, would be disclosed in the year of payment of interest.

In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act1 2006, the information required under the said Act could not be compiled and disclosed.

11) In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.


Mar 31, 2010

1) CONTINGENT LIABILITIES MOT PROVIDED FOR IN RESPECT OF:

a) Guarantees issued by the Companys banker on behalf of the Company amounting to Rs.9733.75Lacs (P. Y. Rs. 10650.64 Lacs)

b) Guarantee given by the Company to the bankers for the facilities granted to its wholly owned subsidiary companies MSK PROJECTS (HIMMATNAGAR BYPASS) PRIVATE LIMITED & MSK PROJECTS (KIM MANDVI CORRIDOR) PRIVATE LIMITED, amounting to Rs. 1667 Lacs (P.Y. Rs. 1567 Lacs) Outstanding amount as on 31st March, 2010 Rs 1345.75 Lacs (Previous Year 1086.70 Lacs) and to integrated joint venture Dewas Bhopal Corridor Limited, amounting to Rs. 34500 Lacs (Previous year Rs. 34500 Lacs) Out standing amount as on 31st March 2010 Rs.34831.35 Lacs (P.Y Rs. 25514.75 Lacs)

c) Letter of credit issued by the Companys bank on behalf of the Company Rs.1353.72 Lacs (P.Y.Rs. 837.05 Lacs)

d) Income Tax Demand of Rs.282.40 Lacs (Previous Year Rs. 155.41 Lacs) disputed by the company.

e) Civil suit filed against the Company Rs. 23.46 Lacs

2) Incomplete Contract work under Contract Work In Progress at the various sites is estimated by the management having regards to unbilled work, outstanding running bill and expected recovery thereof.

4) Security Deposits deducted from contract receipt and mobilization advances received against contracts are subject to confirmation and adjustment, if any, on finalization of account.

3) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State Industrial Development Corporation for execution of Dewas Water Supply project.

In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Water supply charge during the concession period of 32 years (including the period of construction).

The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionate amount of Rs.388.36 Lacs (P.Y. Rs. 177.20 Lacs) has been written off during the year.

4) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board for execution of Jalandhar Bus Terminal project.

In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 8 years 5 months and 2 daysforJalandhar Bus Terminal Project (including the period of construction).

The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionate amount of Rs.320.35 Lacs (P.Y. Rs. 320.35 Lacs) has been written off during the year.

5) The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board for execution of Ludhiana BusTerminal Project.

In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 10 years 3 monthsforLudhiana BusTerminal Project(includingthe period ofconstruction).

The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionate amount of Rs.256.05 Lacs (P.Y. Rs. 256.05 Lacs) has been written off during the year.

6) MSK Infrastructure & Toll Bridge Private Limited (Transferor Company) had obtained the contract on Build, Operate and Transfer (BOT) basis from Madhya Pradesh Road Development Authority for construction of Hoshangabad-Harda-Khandwa Road Project. In Terms of the Contract the Transferor Company was entitled to collectthetoll during the concession period of5440days (Including the periodofthe construction). The Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation as approved bythe Honorable High Court of Gujaraton 2nd November, 2006 with effectfrom 01.01.2005.

The Transferor Company had completed the construction of the above project and was put open to traffic during the earlieryear.

The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as per the scheme of amalgamation.

Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs. 356.84 Lacs (P.Y. 355.84 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road Development Authority.

7)MSK Highways Limited ("Transferor Company) had obtained the contract on Build, Operate and Transfer (BOT Basis) from Madhya Pradesh Road Development Authority for construction of Raisen-Rahatgarh. In Terms of the Contract the Transferor Company entitled to collect the toll during the concession period of 5440 days (Including the period of the construction). The Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation as approved by the Honorable High Court of Gujarat on 2nd November, 2006 with effectfrom 01.01.2005.

The Transferor Company had completed the construction of the above project and was put open to traffic during theearlieryear.

The Cost ofthe said project and right to collect the toll charges is transferred to and vested in the Company as per the scheme of amalgamation.

Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs.289.08 Lacs (P.Y. 281.01 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road Development Authority.

8) The Company is operating in a single segment only during the year i.e. Civil Construction Contract.

9) Disclosures relating to Employee Benefits - As per Revised AS-15:

During the year Company has recognized the following amountinthe financial statements

10) Transaction with related parties (as certified by the management)

A. Subsidiary Companies:

- Super Infrastructure & Toll Bridge Private Limited

- MSK Projects (Himmatnagar Bypass) Private Limited

- MSK Projects (Kirn Mandvi Corridor) Private Limited

B. Integrated Joint Ventures:

- Bui MSK Infrastructure Private Limited

- Dewas Bhopal Corridor Limited

C. Associate Concern:

- ManshaTextiles Private Limited

D. Key Management Personnel:

- Ashok M Khurana-Chairman

- AmitA Khurana-Managing Director

- ManjuA Khurana-Director

- C. Mohanan-Director

E. Relativeto Key Management

- Rashika AKhurana

- BindiyaAKhurana

- NeelakshiAKhurana

11) Cash Subsidy of Rs.82.87 Crores (P.Y. 83.80 Crores) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the B.O.T. Project cost, is not reduced from the relevant project cost but the same is shown as "Capital Reserve" in the Balance Sheet.

12) Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of recovering the dues and accordingly they have been classified as "debt considered good" and therefore no provision is consider necessary, there against.

13) Under the Micro, Small and Medium Enterprise Development Act, 2006 ("MSMEDAct") which came into force effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made. The Company is in the process of compiling the relevant information. As the relevant information is not yet readily available and / or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprise in accordance with the provisions of the Act, would not be material and the same, ifany, would be disclosed intheyearof paymentofinterest.

In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act 2006, the information required under the said Act could not be compiled and disclosed.

14) In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilities is adequate and not in excess of the amount reasonably necessary.

15) Previous years figures have been regrouped, rearranged and reclassified wherever necessary.

 
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