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Notes to Accounts of Batliboi Ltd.

Mar 31, 2018

Note No. 1 Company Overview

Batliboi Ltd, was incorporated in 1941. The Registered Office of the Company is located at Bharat House, 5th Floor, 104, Bombay Samachar Marg, Fort, Mumbai - 400 001. Its shares are listed in Bombay Stock Exchange (BSE). The Company is engaged in manufacture and trading of machine tool and textile engineering machines.

Note No. 2 Basis for preparation:

i. Compliance with Ind AS:

The Financial Statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (Act) read with Rule 4A of Companies (Accounts) Second Amendment Rules, 2015, Companies (Indian Accounting Standards) Rules, 2015 and the other relevant provisions of the Act and Rules thereunder. For all the periods upto 31st March 2017, the financial statements were prepared under historical cost convention in accordance with the accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements for the year ended 31st March 2018 are the first financial statements of the Company under Ind AS. Refer to Note- 35 for explanation of how the transition from previously applicable Indian GAAP (herewith referred to as ‘IGAAP’) to Ind AS has affected the financial position, financial performance and cash flows of the Company.

ii. Basis of accounting :

The Company maintains its accounts on accrual basis following the historical cost convention basis, except for certain financial assets and financial liabilities which have been measured at fair value in accordance with Ind AS.

iii. Presentation of Financial Statements :

The Balance Sheet, Statement of Profit and Loss and Statement of Changes in equity are prepared and presented in the format prescribed in the Schedule III to the Companies Act, 2013 (“the Act”). The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements)Regulations, 2015.

iv. Functional and presentation Currency :

The Company’s presentation and functional currency is Indian Rupees (?) and all values are rounded off to the nearest lakhs (INR 00,000), except when otherwise indicated.

Note No. 3 Use of Judgement, Assumptions and Estimates

The preparation of the Company’s financial statements requires management to make informed judgements, reasonable assumptions and estimates that affect the amounts reported in the financial statements and notes thereto. Uncertainty about these could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in the future periods. These assumptions and estimates are reviewed periodically based on the most recently available information. Revisions to accounting estimates are recognized prospectively in the Statement of Profit & Loss in the period in which the estimates are revised and in any future periods affected.

In the assessment of the Company, the most significant effects of use of judgments and/or estimates on the amounts recognized in the financial statements relate to the following areas:

- Financial instruments;

- Useful lives of property, plant & equipment;

- Valuation of inventories;

- Measurement of recoverable amounts of assets / cash-generating units;

- Assets and obligations relating to employee benefits;

- Evaluation of recoverability of deferred tax assets; and

- Provisions and Contingencies.

Rights, preferences and restrictions

The Company has only one class of equity shares having a face value of Rs. 5/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation the equity shareholders are eligible to receive remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings.

Preference Shares

6,92,480, 5% Non Cumulative Preference Shares of Rs. 100 each ( 4,78,000 Reedemable on 27th March, 2021 and 2,14,480 redeemable on 19th June 2021.

The reconciliation of the number of shares outstanding at the begnning and at the end of year is as under :

Deferred tax Asset on unabsorbed depreciaition, unabsorbed business lossess and other temporary differnces available as per the Income Tax Act, 1961 had been recognised, since it is probable that taxable profit will be available to adjust them in future years. Unabsorbed depreciation can be carried forward and set off against the profits for infinite number of years under the Income Tax Act, 1961 and profitability projections based on current margins show sufficient profits for set off in future.

Note No 4:

Working capital borrowings from consortium banks on cash credit overdraft/ short term loan and non-fund based facilities are secured by first pari passu charge on stock of raw materials, stock in process, semi-finished and finished goods, consumable stores and spares, bills receivable, books debts and other moveable current assets (both present and future) of the company and second pari passu charge on the fixed assets of the company (both present and future) at Udhana, Surat. Credit facilities including sub limits extended by consortium banks to Batliboi Environmental Engineering Limited (BEEL) are secured by 2nd pari passu charge on the fixed assets of the company (both present and future) at Udhana Surat.

i) The company does not expect any reimbursement in respect of the above contingent liabilities.

ii) It is not practicable to estimate the timing of cash outflows, if any, in respect of matters as specified above in note 22.a, above pending resolution of the appellate proceedings.

iii) In respect of guarantees as specified in note 22.c given by the Company to the bankers of BEEL, one of the related party, BEEL has given counter guarantees to the bank on behalf of the Company.

b) Commitments:

i) Estimated amount of Contracts remaining to be executed on Capital Account and not provided for is ‘7.84 lakhs (31st March 2017: Rs. 19.07 lakhs, 01st April 2016: Nil).

NOTE 5- RELATED PARTY DISCLOSURES AS PER IND AS 24: a. List of Related Parties *:

List of related parties where control exists and related parties with whom transactions have taken place and relationship:

i) Subsidiary Companies:

a) Queen Projects (Mauritius) Ltd - Mauritius.

b) Vanderma Holdings Ltd - Cyprus 1

c) Pilatus View Holdings AG- Switzerland 1

d) Quickmill Inc.- Canada 1

e) Aesa Air Engineering SA- France 1

f) Aesa Air Engineering PTE Ltd - Singapore 1

g) Aesa Air Engineering Ltd - China 1

h) Aesa Air Engineering Pvt Ltd India 1

i) 760 Rye Street Inc., Canada 1.

1 These are step down subsidiaries.

ii) Key Management Personnel and their relatives :

a) Mr. Nirmal Bhogilal, Chairman

b) Mr. Vivek Sharma, Managing Director

c) Mrs. Sheela Bhogilal, Director

d) Mrs Prema Chandrasekhar, Chief Financial Officer (up to 16/05/2017)

e) Mr Ketan Vyas, Chief Financial Officer ( w.e.f. 16/05/2017)

f) Ms Namita Thakur, Company Secretary (up to 31/08/2016)

g) Ms Sarika Singh, Company Secretary ( w.e.f 25/10/2016)

h) Mr Kabir Bhogilal, Chief X Officer

i) Mrs Maya Bhogilal

iii) Independent / Non Executive Directors

a) Mr. Ameet Hariani

b) Mr. E. A. Kshirsagar

c) Mr. George Verghese

d) Mr. Subodh Bhargava

e) Mr. Vijay Kirolskar

iv) Enterprises over which Key Management Personnel are able to exercise significant influence :

a) Batliboi Environmental Engineering Ltd

b) Batliboi International Limited

c) Batliboi Impex Ltd

d) Batliboi Enxco Pvt Ltd

e) Sustime Pharma Ltd

f) Spartan Electricals

g) Bhagmal Investments Pvt Ltd

h) Delish Gourment Pvt Ltd

i) Hitco Investments Pvt Ltd

j) Nirbhag Investment Pvt Ltd

k) Pramaya Shares and securities Pvt Ltd

l) Bhogilal Trustship Pvt Ltd

v) Entities in which management personnel are trustees :

a) Bhogilal Leherchand Foundation

b) Leherchand Uttamchand Trust Fund

c) Shekhama Family Trust

d) Bhogilal Family Trust

‘Related party relationships on the basis of the requirements of Indian Accounting Standard (Ind AS) - 24 disclosed above is as identified by the company and relied upon by the auditors.

NOTE 6 - FINANCIAL DERIVATIVE INSTRUMENTS:

a. Derivative contracts entered into by the Company and outstanding as on 31st March, 2018 for Hedging currency and interest related risks.

Nominal amount of derivative contracts entered by the company and outstanding is given below:

b. Foreign Currency payables and receivables that are not hedged by derivative instruments as on 31st March, 2018 and 31st March 2017:

c. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

NOTE 7- DISCLOSURE PURSUANT TO INDIAN ACCOUNTING STANDARD-19 “EMPLOYEE BENEFITS”:

The Company has classified the various benefits provided to employees as under:

a. Defined Contribution Plans:

The Company has recognized the following amounts in the Statement of Profit and Loss which are included under contribution to Provident Fund and Other Funds:

Provident Fund:

The Fair value of the assets of the provident fund trust as of the balance sheet date is greater than the obligation, including interest and also the returns on these plan assets including the amount already provided are sufficient to take care of provident fund interest obligations, over and above the fixed contributions.

NOTE 8 - FAIR VALUE MEASUREMENTS:

The following disclosures are made as required by Ind AS -113 pertaining to Fair value measurement:

a. Accounting classification and fair values

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

b. Measurement of fair values:

The following tables shows the valuation techniques used in measuring Level 2 fair values.

c. Financial risk management

The Company has exposure to the Credit risk, Liquidity risk and Market risk arising from financial instruments.

Risk Management Framework: The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board of Directors has established the Risk Management Committee (RMC), which is responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits to control / monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities.

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s financial risk management policy is approved by the Board of Directors.

d. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables.

Trade receivables: The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period.

The following table provides information about the exposure to credit risk and measurement of loss allowance using Life time expected credit loss for trade receivables:

Cash and cash equivalents:

The Company held cash and cash equivalents of Rs. 18.79 lakhs as at 31st March 2018 (31st March 2017: Rs. 63.93 lakhs). The cash and cash equivalents are held with reputed banks.

e. Liquidity Risk:

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

f. Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and commodity prices, will affect the Company’s income or the value of its financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables, long term debt and commodity prices. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and commodity price risk.

g. Interest rate risk:

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value through the Statement of profit and loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates.

h. Currency risk:

The Company is exposed to currency risk on account of its operating and financing activities. The functional currency of the Company is Indian Rupee.

To the extent the exposures on purchases and borrowings are not economically hedged by the foreign currency denominated receivables, the Company uses derivative instruments, like, foreign exchange forward contracts to mitigate the risk of changes in foreign currency exchange and principal only swap rates. Company does not use derivative financial instruments for trading or speculative purposes.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies including the use of derivatives like foreign exchange forward contracts to hedge exposure.

Note No. 9:

Capital Management

For the purpose of the Company’s capital management, capital includes issued equity capital , share premium and all other equity reserves. The primary objective of the Company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents, excluding discontinued operations.

Note No 10:

Disclosure for provisions in terms of IND AS 37

The aforesaid provision are made for warranty cover related to goods sold and jobs executed (Refer Note 13) :

Note No 11: ESOP related Disclosure

Pursuant to the resolution passed in the extra ordinary general meetig in the year 2011-12, the Company has reversed 28,65,255 options to the eligible employees of the Company and its subsidiaries under the Employees Stock Option Scheme. The exercise price of all the options is Rs. 15.75 per option. Summary of stock options as on 31.03.2018 is as follows:

Note No 12: Segment Reporting

The Company has considered business segments as the primary segments for disclosure.

Segments have been identified in line with the Accounting Standards on Segment Reporting (Ind As 108), taking into account the nature of business, products and services, the Company’s organization structure as well as the differential risks and returns of these segments. Segments Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments. Those not identifiable to the individual segments are included under unallocated.

The Company has classified its business into the following segments:

a) Machine Tool Business Group, which handles manufacturing and marketing (including trading and agency business) of machine tool and components e.g. CNC and GPM machines, machine castings, machine carcasses, cranes etc.

b) Textile Engineering Group, which deals in manufacturing and marketing of textile air-engineering systems range i.e. Humidification, waste recovery, and auto control systems, besides marketing (including trading and agency business) of textile machinery e.g. circular knitting, spinning, and flat-knitting machines etc.

c) Others, which covers remaining business i.e., air conditioning equipments, agro-industrial products (e.g. pumps/motors) etc

Note No13 :

Balances of receivables and payables are subject to confirmation.

Note No. 14

Disclosures as required by Indian Accounting Standard (Ind AS) 101 First Time Adoption of Indian Accounting Standards First Time Adoption of Ind AS

The financial statements for the year ended 31st March 2018, are the Company’s first financial statement prepared in accordance with Indian Accounting Standrad (Ind AS) as notified under Companies (Indian Accounting Standards) Rules, 2015. For periods up to and including the year ended 31st March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for year ended on 31st March 2018, together with the comparative period data as at end for the year ended 31st March 2017. In preparing these financial statements, the Company’s opening balance sheet was prepared as at 1st April 2016, the Company’s date of transition to Ind AS. This note explains the mandatory exceptions and optional exemptions availed by the Company in restating its Indian GAAP financial statements, including the Balance Sheet as at 1st April 2016 and the financial statements as at end for the year ended 31st March 2017.

(i) Mandatory exceptions:

a) Estimates:

The estimates as at 1st April 2016 and 31st March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items:

- Fair Value through Profit and Loss - quoted and unquoted equity (other than investments in Subsidiaries).

- Impairment of financial assets based on expected credit loss model.

- Provision for inventory obsolescence.

- Provision for warranty.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at 1st April 2016, the date of transition to Ind AS and as at 31st March 2017.

b) Derecognition of financial assets & financial liabilities

The Company has applied the de-recognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c) Classification and measurement of financial assets and financial liabilities :

The Company has classified the financial assets and financial liabilities in accordance with Ind AS 109 on the basis of facts and circumstances that exist at the date of transition to Ind AS.

d) Impairment of financial assets :

The Company has applied the impairment requirements of Ind AS 109 retrospectively, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognised in order to compare it with the credit risk at the transition date. Further, as permitted by Ind AS 101, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS, whether there have been significant increases in credit risk since initial recognition.

(ii) Optional exemptions (allowed as per Ind AS 101):

a) Business Combination :

The company has applied the exemption as provided in Ind AS 101 on non-application of Ind AS 103, “Business Combinations” to business combinations consummated prior to April 1, 2016 (the Transition Date).

b) Share based payment transactions :

Ind AS 101 encourages but does not require first time adopters to apply Ind AS 102 “Share Based Payment” to equity instruments that were vested before the date of transition to Ind AS. Accordingly the company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2016.

c) Cumulative Translation differences :

The company has elected to apply Ind AS 21 “The Effects of Changes in Foreign Currency” prospectively in respect of cumulative translation differences that existed at the date of transition to Ind AS relating to long term foreign currency monetary item being net investment in foreign subsidiary.

d) Use of Fair value as Deemed cost :

The Company has elected to measure items of Property, Plant and Equipment at its carrying value at the transition date except for Land, Building and Plant and Machinery and for investments held in subsidiaries which are measured at fair value as deemed cost as at the date of transition to Ind AS.

e) Designation of previously recognised financial asset :

The company has elected to designate financial asset i.e investment in equity shares other than investments in subsidiaries at Fair Value through Profit and Loss as per Ind AS 109 based on the facts and circumstances as on transition date.

A. Defined Employee Benefit Liabilities :

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to Statement of Profit and Loss. Under Ind AS, remeasurement [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized in Other Comprehensive Income (OCI). Due to this, for the year ended 31st March 2017, the employee benefit cost is reduced and remeasurement gains/ losses on defined benefit plans has been recognized in the OCI.

B. Deferred Tax :

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its Tax Base.

Under Indian GAAP, deferred tax assets are recognized in case of unabsorbed depreciation or carry forward losses only to the extent that there is timing difference the reversal of which is virtual certain. Under Ind AS 12, deferred tax assets on such items are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences.

Minimum Alternate tax has been merged with deferred tax assets as required under Ind AS 12 deferred tax assets are amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry forward of unused tax losses and the carry forward of unused tax credits.

C. Financial Assets/ Liabilities measured at amortised cost :

Under Ind AS financial assets and liabilities are measured at fair value at the inception and subsequently at amortised cost or at fair value based on their classification. Under I-GAAP the financial assets and liabilities were measured at cost. Loans from Director and Preference Share Capital are recognized at amortized cost using effective interest rate method. On initial recognition the fair value of loans and Redeemable Preference shares to Related Parties has been estimated by discounting the future loan repayments using the rate the borrower may pay to an unrelated lender for a loan. Accordingly corresponding effect of interest income/expense from financials instruments measured at amortised cost has been recognized in Statement of Profit and Loss.

D. Fair Valuation of Property, Plant and Equipment :

The Company has elected the option of fair value as deemed cost for Property, Plant and Equipment and Capital Work in Progress as on the date of transition date to Ind-AS. This has resulted in increase of Rs. 17,999.65 Lakhs in the value of Property, Plant and Equipment and reduction in the value of Capital Work in Progress with corresponding net increase in retained earnings of Rs. 17,718.32 Lakhs. Fair value as Deemed cost as on transition date for respective category of Plant, Property and Equipment and Capital Work in Progress is as under:

Since fair value of Property Plant and Equipment as on 1st April 2016 has been adopted as deemed cost, the profit on sale of SPM property which was recognized on the profit and loss account during the financial year 2016-17 under Indian GAAP has been reversed.

E. Changes in rates of Foreign currency monetary items :

Ind AS 21 requires that exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operations shall be recognized in the profit and loss in the separate financial statements of the reporting entity. Accordingly the exchange difference on such item which was recognized in the Foreign Currency translation reserve under Indian GAAP is recognized in the profit and loss account.

F. Provision for Warranty:

The Company has on adoption of Ind AS changed the basis of estimation of provision for warranty considering the past trend.

G. Fair value as deemed cost for investments in subsidiaries and Fair value of investments in quoted and unquoted equity (other than investments in Subsidiaries):

On transition, Ind AS 101 allows an entity to treat fair value as deemed cost for investments held in subsidiaries. Accordingly, the Company has elected to treat fair value as deemed cost for its investments held in a subsidiary.

Under Indian GAAP, the Company has recorded long term investment in quoted and unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Company has designated such investments as FVTPL investments.

The amount which was recognized in Foreign Currency Translation Reserve during 2016-17 under Indian GAAP has been reversed consequent to adoption of fair value as deemed cost for investments in subsidiaries as on 1st April 2016.

H. Provision for obsolescence of Inventory:

The Company has on adoption of Ind AS elected to measure the provision for obsolescence of inventory based on the age of the inventory instead of making provision on the basis of identification which was followed in Indian GAAP.

I. Trade receivables:

As per Ind AS 109, the Company is required to apply expected credit loss model for recognizing the allowance for doubtful debts.

J. Preference shares Capital:

The company has treated 5%preference shares as borrowings on transition date as the same are redeemable and non-cumulative with a predefined period for redemption. This had resulted in decrease in Equity as on transition date with a corresponding increase in long term borrowings.

K. Foreign Currency Translation Reserve :

The Company has elected to reset the balance appearing in the foreign currency translation reserve to zero as at 1st April 2016. Accordingly, the translation reserve balance under previous GAAP has been transferred to retained earnings. There is no impact on the total equity as a result of this adjustment.

L. Revaluation surplus under Indian GAAP :

The Company has elected fair value as deemed cost for its Property, Plant and Equipments and thus, the revaluation surplus existing as on the transition date under Indian GAAP has been derecognized in the retained earnings on the date of transition.

M. Excise Duty

Excise duty on account of sale of goods have been included in revenue as it is on own account because it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not.

Note No. 15 :

The audit report of financial year 2016-17 and 2015-16 contained qualified opinion on account of remuneration to Managing Director in excess of the ceiling under Schedule V of the Companies Act, 2013 from 1st February 2016 to 12th September 2016. The Company has received approval from Central Government on 21st June 2017 for remuneration paid to Managing Director.

Note No. 16 :

Previous years figures have been reclassified and re grouped to confirm to current years classification and grouping. Figures in bracket represent previous years figure.


Mar 31, 2017

1. Borrowings and Securities:

Working Capital Borrowings from Consortium banks on cash credit Overdraft /Short Term Loan and non-fund based facilities are secured by first pari-passu charge on stock of Raw Materials, Stock in Process, Semi-finished and finished goods, consumable stores and spares, bills receivable, book debts and other moveable current assets (both present and future) of the Company; and Second pari passu charge on the fixed assets of the Company (both present and future) at Udhana, Surat. Credit facilities including sub-limits extended by consortium banks to Batliboi Environmental Engineering Limited (BEEL), are secured by 2nd pari-passu charge on the fixed assets of the Company (both present and future) at Udhana, Surat.

2. Contingent Liabilities not provided for in respect of:

3. Claims against the Company not acknowledged as debts: Rs 187.40 Lakhs (Previous Year: Rs. 230.12 Lakhs).

4. Disputed Sales Tax/Excise demands under appeal Rs. 76.30 Lakhs (Previous Year: Rs 76.30 Lakhs).

5. Corporate Guarantees given to banks & financial institutions for credit facilities/performance guarantees extended by them to Batliboi Environmental Engineering Limited (BEEL), a related party: Rs 2,070.00 Lakhs (Previous year: Rs 2,290.00 Lakhs). Balance outstanding as on 31.03.2017: Rs 1,753.14 Lakhs (Previous Year: Rs. 1,543.95 Lakhs).

6. Guarantees given on behalf of the Company by its bankers and outstanding Rs 796.09 Lakhs (Previous year: Rs. 884.40 Lakhs). Out of the above, Guarantees of Rs 73.78 Lakhs (Previous year Rs. 91.78 Lakhs) given by Company''s bankers and outstanding in respect of contracts of Batliboi Environmental Engineering Limited (BEEL), a related party.

7. Guarantee given by the company''s bankers on behalf of BEEL out of the specific guarantee facility of Rs. 288.00 Lakhs Rs. 171.33 Lakhs is outstanding as on 31.03.2017.

8. In respect of guarantees given by the Company to the bankers of Batliboi Environmental Engineering Limited (BEEL), a related party, BEEL has given counter guarantees on behalf of the Company.

9. Standby letter of Credit of CAD 1.52 million equivalent to Rs. 728.53 Lakhs issued by the Company''s banker out of the working capital limit to the banker of Quickmill Inc., a step-down subsidiary of the Company.

10. Commitments:

11. Estimated amount of contracts remaining to be executed on capital account not provided for: Rs 19.07 Lakhs (Previous Year: Rs. Nil Lakhs).

12. The Company does not have any other commitment.

13. Details of Manufacturing, Trading and Services: (A) MANUFACTURING

14. Consumption of Raw Materials:

15. The effects of Changes in Foreign Exchange Rates:

Exchange Gains/Loss credited/charged to Profit and Loss Account: Exchange Loss in Rs 21.43 Lakhs (P.Y Exchange Gain of Rs.31.03 Lakhs).

Exchange Loss of Rs. 96.13 Lakhs (P.Y. exchange gain of Rs. 239.57 Lakhs) on long term investment in wholly owned foreign subsidiary shown under “Foreign Currency Translation Reserve” in Reserves and Surplus.

16. As per Accounting Standard 15 Employee Benefits - the disclosures as defined in the Accounting Standard are given below:

17. Defined Contribution Plans:

The Company has recognized the following amounts in the Profit and Loss Account for the Year:

18. Defined Benefit Plans/Compensated Absence:

General description of Defined Benefit Plan Gratuity:

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the length of service. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.

* The estimate of future salary increases considered in actuarial valuation are on the basis of rough approximation of the salary an employee will be receiving at the time of actual payment of gratuity/leave encashment. A suitable growth rate is assumed for this purpose. This is implied in the Projected Unit Credit Method.

19. Provident fund:

The fair value of the assets of Provident Fund Trust as of Balance Sheet date is greater than the obligation, including interest, and also the returns on these plan assets including the amount already provided are sufficient to take care of PF interest obligations, over and above the fixed contribution recognized.

20. Segment Reporting:

The Company has considered business segments as the primary segments for disclosure.

Segments have been identified in line with the Accounting Standards on Segment Reporting (AS-17), taking into account the nature of business, products and services, the Company''s organization structure as well as the differential risks and returns of these segments. Segments Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments. Those not identifiable to the individual segments are included under unallocated.

The Company has classified its business into the following segments:

21. Machine Tool Business Group, which handles manufacturing and marketing (including trading and agency business) of machine tool and components e.g. CNC and GPM machines, machine castings, machine carcasses, cranes etc.

22. Textile Engineering Group, which deals in manufacturing and marketing of textile air-engineering systems range i.e. Humidification, waste recovery, and auto control systems, besides marketing (including trading and agency business) of textile machinery e.g. circular knitting, spinning, and flat-knitting machines etc.

23. Others, which covers remaining business i.e., air conditioning equipments, agro-industrial products (e.g. pumps/motors) etc.

24. Secondary Segment Reporting

The Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of the total turnover. As such there are no reportable geographical segments.

25.. Related Party Disclosures:

Related party disclosures as required under Accounting Standard 18 (AS-18) on “Related Party Disclosures” are given below:

26. Relationships:

27. Subsidiary Companies:

28. Queen Projects (Mauritius) Ltd.-Mauritius

29. Vanderma Holdings Ltd.-Cyprus

30. Pilatus View Holdings AG-Switzerland

31. Quickmill Inc.-Canada

32. Aesa Air Engineering SA-France

33. Aesa Air Engineering PTE Ltd.-Singapore

34. Aesa Air Engineering Ltd.-China

35. Aesa Air Engineering Pvt. Ltd.-India

36. 760 Rye Street Inc, Canada

37. Key Management Personnel:

38. Mr. Nirmal Bhogilal, Chairman

39. Mr. Vivek Sharma, Managing Director

40. Mrs. Sheela Bhogilal, Director

41. Mrs. Prema Chandrasekhar, Chief Financial Officer

41. Ms. Namita Thakur, Company Secretary (Up to 31/08/2016)

42. Ms. Sarika Singh (from 25/10/2016)

43. Relatives of Key Management Personnel:

44. Mr.Kabir Bhogilal, Vice President-Corporate Strategy

45. Mrs.Maya Bhogilal

46. Entities over which key management personnel are able to exercise significant influence:

47. Batliboi Environmental Engineering Ltd.

48. Batliboi International Limited

49. Batliboi Impex Ltd.

50. Batliboi Enxco Pvt. Ltd.

51. Sustime Pharma Ltd. 2

52. Spartan Electricals

53. Bhagmal Investments Pvt. Ltd .*

54. Delish Gourment Pvt. Ltd.*

55. Hitco Investments Pvt. Ltd.

56. Nirbhag Investments Pvt. Ltd. *

57. Pramaya Shares & Securities Pvt. Ltd. *

58. Bhogilal Trustship Pvt. Ltd.*

59. Entities in which management personnel are trustees

60. Bhogilal Leherchand Foundation*

61. Leherchand Uttamchand Trust Fund*

62. Shekhama Family Trust

63. Bhogilal Family Trust

64.. Provisions, Contingent Liabilities and Contingent Assets:

Disclosure for Provisions in terms of AS-29:

The aforesaid Provisions are made towards claims made by sales tax and excise authorities pending under appeal and provisions for warranty cover related to goods sold and jobs executed.

65. Balances of receivables and payables are as per books of account. Letters have been sent to selected parties seeking confirmation of balances, and replies are awaited. Adjustments, if necessary, will be made on receipt of such confirmations/reconciliation.

66. In the opinion of the management, current assets, long term loans and advances and other non-current assets have a realizable value in ordinary course of the business at least equal to the amounts at which they are stated in the Balance Sheet.

67. Assets and Liabilities are classified as current or non-current based on the terms of contract where available and based on the judgment of the management in other cases.

68. The Company did not have any long term contracts including derivative contract for which there were any material foreseeable losses.

69. Advances and Deposits from customers reflected under “Other Long Term Liabilities” and “Other Current Liabilities” represent advance/security deposit received by the Company for supply of capital goods.

70. A. The Company has incurred operating losses during the year owing to overall slowdown in the economy affecting the investment by private parties and government sectors in the capital intensive sector. The Company has taken steps to improve the working capital situation by sale of non-core assets during the year and also has a satisfactory order book position as on date.

71. The Company has investment in its subsidiary Aesa Air Engineering SA- France whose accumulated losses are greater than the net worth. In the opinion of the Management, having regard to the long term interest of the Company in the said subsidiary and considering the sizeable order books and cash flow projections of the subsidiary, there is no diminution other than temporary, in the value of the Investments.

The Company has investments in Batliboi Environmental Engineering Ltd, (BEEL) of Rs.191.21 Lakhs. BEEL has accumulated losses which have significantly eroded their net worth. In the opinion of the Management, having regard to the long term interest of the Company in BEEL, there is no diminution other than temporary, in the value of the Investments.

72. Pursuant to the resolution passed in the extra ordinary general meeting in the year 2011-12, the Company has reserved 28,68,255 options to the eligible employees of the Company and its subsidiaries under the Employee Stock Option Scheme. The exercise price for all the options is Rs.15.75.

73.. Exceptional item of Rs. 593.95 Lakhs represents profit on sale of Bangalore property being the difference between sale value and the revalued amount. The amount standing to the credit of Revaluation reserve of Rs. 440.34 Lakhs has been transferred to General reserve on disposal.

74. Previous year''s figures have been reclassified and regrouped to conform to current year''s classification and grouping. Figures in bracket represent previous year''s figures.


Mar 31, 2016

1. Borrowings and Securities:

Working Capital Borrowings from Consortium banks on Cash Credit, Overdraft /Short Term Loan and Non-Fund based facilities are secured by first pari-passu charge on stock of Raw Materials, Stock in Process, Semi-finished and Finished Goods, Consumable Stores and Spares, Bills Receivable, Book Debts and Other Moveable Current Assets (both present and future) of the Company; and Second pari passu charge on the fixed assets of the Company (both present and future) at Udhana, Surat and Hosur Road Bangalore. Credit facilities including sub-limits extended by consortium banks to Batliboi Environmental Engineering Limited (BEEL), are secured by second pari-passu charge on the fixed assets of the Company (both present and future) at Udhana, Surat and Hosur Road Bangalore.

2. Contingent Liabilities not provided for in respect of:

3. Claims against the Company not acknowledged as debts: Rs.230.12 Lacs (Previous Year: Rs.227.85 Lacs).

4. Disputed Sales Tax/Excise demands under appeal Rs.76.30 Lacs (Previous Year: Rs.76.30 Lacs).

5. Corporate Guarantees given to banks & financial institutions for credit facilities/performance guarantees extended by them to Batliboi Environmental Engineering Limited (BEEL), a related party: Rs.2,290.00 Lacs (Previous year: Rs.2,290.00 Lacs). Balance outstanding as on 31.03.2016: Rs.1,543.95 Lacs (Previous Year: Rs.1,957.11 Lacs).

6. Guarantees given on behalf of the Company by its bankers and outstanding Rs.884.40 Lacs (Previous year: Rs.1,127.48 Lacs). Out of the above, Guarantees of Rs.91.78 Lacs (Previous year Rs.109.56 Lacs) given by Company''s bankers and outstanding in respect of contracts of Batliboi Environmental Engineering Limited (BEEL), a related party.

7. Guarantee given by the Company''s bankers on behalf of BEEL out of the specific guarantee facility of Rs.288.00 Lacs Rs.171.33 Lacs is outstanding as on 31.03.2016.

f) In respect of guarantees given by the Company to the bankers of Batliboi Environmental Engineering Limited (BEEL), a related party, BEEL has given counter guarantees on behalf of the Company.

8. Commitments:

9. Estimated amount of contracts remaining to be executed on capital account not provided for: Rs. Nil Lacs (Previous Year: Rs. Nil Lacs).

10. The Company does not have any other commitment.

11. The effects of Changes in Foreign Exchange Rates:

Exchange Gains/Loss credited/charged to Profit and Loss Account: Exchange Gain Rs.31.03 Lacs (P.Y Exchange Loss of Rs.4.37 Lacs).

Exchange Gain of Rs.239.57 Lacs (P.Y. Exchange Loss of Rs.431.41 Lacs) on long term investment in wholly owned foreign subsidiary shown under “Foreign Currency Translation Reserve” in Reserves and Surplus.

12. Defined Benefit Plans/Compensated Absence:

General description of Defined Benefit Plan

Gratuity:

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the length of service. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service. Gratuity and Compensated Absence as per actuarial valuation on 31st March, 2016 (31stMarch, 2015):

13. Secondary Segment Reporting

The Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of the total turnover. As such there are no reportable geographical segments.

14. Related Party Disclosures:

Related party disclosures as required under Accounting Standard 18 (AS-18) on “Related Party Disclosures” are given below:

15. Relationships:

16. Subsidiary Companies:

17. Queen Projects (Mauritius) Ltd.- Mauritius

18. Vanderma Holdings Ltd.- Cyprus

19. Pilatus View Holdings AG - Switzerland

20. Quickmill Inc. - Canada

21. Aesa Air Engineering SA - France

22. Aesa Air Engineering PTE Ltd - Singapore

23. Aesa Air Engineering Ltd - China

24. Aesa Air Engineering Pvt Ltd – India

25. 760 Rye Street Inc, Canada

26. Key Management Personnel:

27. Mr. Nirmal Bhogilal, Chairman

28. Mr. Vivek Sharma, Managing Director

29. Mrs. Sheela Bhogilal, Director

30. Mrs. Prema Chandrasekhar, Chief Financial Officer

31. Ms. Namita Thakur, Company Secretary

32. Mrs. Puneet Kapur, Chief Corporate Counsel and Company Secretary6

33. Mr. Anand Sharma, Company Secretary*

*Resigned during Financial Year 2015-16

34. Relatives of Key Management Personnel:

35. Mr.Kabir Bhogilal, Vice President-Corporate Strategy

36. Mrs.Maya Bhogilal

37. Entities over which key management personnel are able to exercise significant influence:

38. Batliboi Environmental Engineering Ltd.

39. Batliboi International Limited

40. Batliboi Impex Ltd.

40. Batliboi Enxco Pvt. Ltd.

41. Sustime Pharma Ltd. *

42. Spartan Electricals

43. Bhagmal Investments Pvt. Ltd. *

44. Delish Gourment Pvt. Ltd. *

45. Hitco Investments Pvt. Ltd.

46. Nirbhag Investments Pvt. Ltd. *

47. Pramaya Shares & Securities Pvt. Ltd. *

48. Bhogilal Trustship Pvt. Ltd.*

49. Entities in which management personnel are trustees

50. Bhogilal Leherchand Foundation*

51. Leherchand Uttamchand Trust Fund*

52. Shekhama Family Trust

53 . Balances of receivables and payables are as per Books of Account. Letters have been sent to selected parties seeking confirmation of balances, and replies are awaited. Adjustments, if necessary, will be made on receipt of such confirmations/reconciliation.

54. In the opinion of the Management, current assets, long term loans and advances and other non-current assets have a realizable value in ordinary course of the business at least equal to the amounts at which they are stated in the Balance Sheet.

55. Assets and Liabilities are classified as current or non-current based on the terms of contract where available and based on the judgment of the management in other cases.

56. The Company did not have any long term contracts including derivative contract for which there were any material foreseeable losses.

57. Advances and Deposits from Customers reflected under “Other Long Term Liabilities” and “Other Current Liabilities” represent advance/security deposit received by the Company for supply of capital goods.

58. The Company has incurred operating losses during the year mainly due to under performance of one of its division as it has not been able to execute the orders on time due to stretched working capital owing to overall slowdown in the economy affecting the investment by private parties in the capital intensive sector to which the said division caters to. The Company has taken steps to improve the working capital situation by sale of non-core assets during the year and also subsequent to the year end.

59. The Company has investment in its subsidiary Aesa Air Engineering SA- France whose accumulated losses are greater than the net worth. In the opinion of the Management, having regard to the long term interest of the Company in the said subsidiary and considering the sizeable order books and cash flow projections of the subsidiary, there is no diminution other than temporary, in the value of the Investments.

The Company has investments in Batliboi Environmental Engineering Ltd, (BEEL) of Rs.191.21 Lacs. BEEL has accumulated losses which have significantly eroded their net worth. In the opinion of the Management, having regard to the long term interest of the Company in BEEL, there is no diminution other than temporary, in the value of the Investments.

60. Pursuant to the resolution passed in the extra ordinary general meeting in the year 2011-12, the Company has reserved 28,68,255 options to the eligible employees of the Company and its subsidiaries under the Employee Stock Option Scheme. The exercise price for all the options is ''15.75.

61. Previous year''s figures have been reclassified and regrouped to conform to current year''s classification and grouping. Figures in bracket represent previous year''s figures.


Mar 31, 2015

NOTE 1:

I. Borrowings and Securities:

a) Rupee Term Loans of Rs. 111.93 lacs from a Bank is secured by first charge on the Fixed Assets purchased out of the loans and second charge on the Company's Immovable property at Udhana, Surat. Working capital lender banks have the second pari-passu charge on the aforesaid Fixed Assets.

b) Working Capital Borrowings from Consortium banks on cash credit Overdraft/Short Term Loan and non-fund based facilities are secured by first pari-passu charge on stock of Raw Materials, Stock in Process, Semi-finished and finished goods, consumable stores and spares, bills receivable, book debts and other moveable current assets (both present and future) of the Company; and Second pari-passu charge on the fixed assets of the Company (both present and future) at Udhana, Surat and Hosur Road Bangalore. Credit facilities including sub-limits extended by consortium banks to Batliboi Environmental Engineering Limited (BEEL), are secured by 2nd pari-passu charge on the fixed assets of the Company (both present and future) at Udhana, Surat and Hosur Road, Bangalore.

c) A specific guarantee facility of Rs. 288.00 Lacs (PY Rs. 288.00 Lacs) of BEEL from a Bank is secured by first pari-passu charge by way of an equitable mortgage on the immovable property of the Company situated on the leasehold land at Deonar, Mumbai. Balance outstanding as on 31.03.2015: Rs. 171.33 Lacs (PY. Rs. 171.33 Lacs).

II. Contingent Liabilities not provided for in respect of:

a) Claims against the Company not acknowledged as debts: Rs. 227.85 Lacs (Previous Year: Rs. 350.69 Lacs).

b) Disputed Sales Tax/Excise demands under appeal Rs. 76.30 Lacs (Previous Year: Rs. 76.30 Lacs).

c) Corporate Guarantees given to banks & financial institutions for credit facilities/performance guarantees extended by them to Batliboi Environmental Engineering Limited (BEEL), a related party: Rs. 2,290.00 Lacs (Previous year: Rs. 2,540.00 Lacs). Balance outstanding as on 31.03.2015: Rs. 1,968.52 Lacs (Previous Year: Rs. 2,030.50 Lacs).

d) Guarantees given on behalf of the Company by its bankers and outstanding Rs. 1,127.48 Lacs (Previous year: Rs. 1,475.40 Lacs). Out of the above, Guarantees of Rs. 109.56 Lacs (Previous year Rs. 109.56 Lacs) given by Company's bankers and outstanding in respect of contracts of Batliboi Environmental Engineering Limited (BEEL), a related party.

e) I n respect of guarantees given by the Company to the bankers of Batliboi Environmental Engineering Limited (BEEL), a related party, BEEL has given counter guarantees on behalf of the Company.

f) Company has given Corporate Guarantee to others on behalf of its step down subsidiary Quickmill Inc in current year CAD Nil equivalent to Rs. Nil (PY CAD 0.739 Million equivalent to Rs. 407.26 Lacs).

III. Commitments:

a) Estimated amount of contracts remaining to be executed on capital account not provided for: Rs. Nil Lacs (Previous Year: Rs. Nil Lacs).

b) The Company does not have any other commitment.

IV. B. The effects of Changes in Foreign Exchange Rates:

Exchange Gains/Loss credited/charged to Profit and Loss Account: Exchange Loss Rs. 4.37 Lacs (P.Y Exchange gain Rs. 346.20 Lacs).

Exchange loss of Rs. 431.41 Lacs (PY Rs. NIL) on long term investment in wholly owned foreign subsidiary shown under "Foreign Currency Translation Reserve" in Reserves and Surplus.

Gratuity:

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the length of service. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.

(iii) Provident fund:

The fair value of the assets of Provident Fund Trust as of Balance Sheet date is greater than the obligation, including interest, and also the returns on these plan assets including the amount already provided are sufficient to take care of PF interest obligations, over and above the fixed contribution recognized.

V. E. Segment Reporting:

The Company has considered business segments as the primary segments for disclosure.

Segments have been identified in line with the Accounting Standards on Segment Reporting (AS-17), taking into account the nature of business, products and services, the Company's organization structure as well as the differential risks and returns of these segments. Segments Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments. Those not identifiable to the individual segments are included under unallocated.

The Company has classified its business into the following segments:

a) Machine Tool Business Group, which handles manufacturing and marketing (including trading and agency business) of machine tool and components e.g. CNC and GPM machines, machine castings, machine carcasses, cranes etc.

b) Textile Engineering Group, which deals in manufacturing and marketing of textile air-engineering systems range i.e. Humidification, waste recovery, and auto control systems, besides marketing (including trading and agency business) of textile machinery e.g. circular knitting, spinning, and flat-knitting machines etc.

c) Others, which covers remaining business i.e., air conditioning equipments, agro-industrial products (e.g. pumps/motors) etc.

VI. F. Related Party Disclosures:

Related party disclosures as required under Accounting Standard 18 (AS-18) on "Related Party Disclosures" are given below:

(A) Relationships:

(i) Subsidiary Companies:

(a) Queen Projects (Mauritius) Ltd. - Mauritius

(b) Vanderma Holdings Ltd. - Cyprus

(c) Pilatus View Holdings AG - Switzerland

(d) Quickmill Inc. - Canada

(e) Aesa Air Engineering SA - France

(f) Aesa Air Engineering PTE Ltd. - Singapore

(g) Aesa Air Engineering Ltd. - China

(h) Aesa Air Engineering Pvt. Ltd. - India

(i) Aesa Air Engineering Ltd. - Hong Kong (ceased to exist w.e.f. 05th Dec 2014)

(j) Aesa Air Engineering SPA - Italy (ceased to exist w.e.f. 20th Feb 2015)

(k) 760 Rye Street Inc., Canada

(ii) Key Management Personnel:

(a) Mr. Nirmal Bhogilal, Chairman & Managing Director

(b) Mrs. Sheela Bhogilal, Director

(c) Mrs. Prema Chandrasekhar, Chief Financial Officer

(d) Mrs. Puneet Kapur, Chief Corporate Counsel and Company Secretary

(iii) Relatives of Key Management Personnel:

(a) Mr. Kabir Bhogilal, Vice-President - Corporate Strategy

(b) Mrs. Maya Bhogilal

(c) Mr. Akshay Chandrasekhar

(iv) Entities over which key management personnel are able to exercise significant influence:

(a) Batliboi Environmental Engineering Ltd.

(b) Batliboi International Limited

(c) Batliboi Impex Ltd.

(d) Batliboi Enxco Pvt. Ltd.

(e) Sustime Pharma Ltd.*

(f) Spartan Electricals

(g) Bhagmal Investments Pvt. Ltd.*

(h) Delish Gourment Pvt. Ltd.*

(i) Hitco Investments Pvt. Ltd.*

(j) Nirbhag Investments Pvt. Ltd.*

(k) Pramaya Shares & Securities Pvt. Ltd.*

(l) Bhogilal Trustship Pvt. Ltd.*

(v) Entities in which management personnel are trustees:

(a) Bhogilal Leherchand Foundation*

(b) Leherchand Uttamchand Trust Fund*

(c) Shekhama Family Trust

* No transaction with the entities during the year.

The aforesaid Provisions are made towards claims made by sales tax and excise authorities pending under appeal and provisions for warranty cover related to goods sold and jobs executed.

VII. A. Balances of receivables and payables are as per books of account. Letters have been sent to selected parties seeking confirmation of balances, and replies are awaited. Adjustments, if necessary, will be made on receipt of such confirmations/reconciliation.

B. In the opinion of the management, current assets, long term loans and advances and other non-current assets have a realizable value in ordinary course of the business at least equal to the amounts at which they are stated in the Balance Sheet.

C. Assets and Liabilities are classified as current or non-current based on the terms of contract where available and based on the judgment of the management in other cases.

D. The Company did not have any long term contracts including derivative contract for which there were any material foreseeable losses.

E. Advances from customers reflected under "Other Long Term Liabilities" and "Other Current Liabilities" represent advance/security deposit received by the Company for supply of capital goods.

VIII. A. The Company has incurred operating losses during the year mainly due to under performance of one of its division as it has not been able to execute the orders on time due to stretched working capital owing to overall slowdown in the economy affecting the investment by private parties in the capital intensive sector to which the said division caters to. The Company has taken steps to improve the working capital situation and timely execution of the orders by the said division.

The Company is also intending to dispose of non-core assets in order to mitigate the losses incurred during the current year and to improve the liquidity position. The promoters have brought in money in the form of unsecured loan and intend to bring further money to improve the liquidity position.

B. The Company has investment in its subsidiary Aesa Air Engineering SA-France whose accumulated losses are greater than the net worth. In the opinion of the Management, having regard to the long term interest of the Company in the said subsidiary and considering the sizeable order books and cash flow projections of the subsidiary, there is no diminution other than temporary, in the value of the Investments.

The Company has investments in Batliboi Environmental Engineering Ltd., (BEEL) of Rs. 191.21 Lacs. BEEL has accumulated losses which have significantly eroded their net worth. In the opinion of the Management, having regard to the long term interest of the Company in BEEL, there is no diminution other than temporary, in the value of the Investments.

In respect of the option granted during the year, the intrinsic value of Rs. 17.20 per share is treated as discount and accounted as employee compensation cost over the vesting period. The employee compensation cost accrued as on 31.03.2015 is Rs. 9.17 lacs.

IX. With effect from 01.04.2014, the Company has revised depreciation rate on certain fixed assets in accordance with the useful life specified in the Schedule II to the Companies Act, 2013 and re-assessed the useful life of certain other fixed assets based on Chartered Engineer and valuer's report and charged depreciation based on said report. Accordingly an amount of Rs. 59.98 lacs has been charged to Profit & Loss account over & above the normal depreciation in respect of assets which have remaining useful life as at 01.04.2014 and amount of Rs. 61.47 lacs has been charged to Retained Earnings (General Reserves) in respect of assets where remaining useful life is NIL.

X. Pursuant to the change in terms of redemption of Non-Cumulative Preference Shares invested in Queen Project Mauritius Ltd., a subsidiary with effect from 01.01.2015, the said investment is treated as long term foreign currency monetary asset forming part of the Company's net investment in the said subsidiary. The exchange loss of Rs. 431.41 lacs has been debited to Foreign Currency Translation Reserve A/c in accordance with Para 15 of Accounting Standard (AS) 11 on "The Effects of Changes in Foreign Exchange Rates".

XI. Previous year's figures have been reclassified and regrouped to confirm to current year's classification and grouping. Figures in bracket represent previous year's figures.


Mar 31, 2012

I. Borrowings and Securities

a. Rupee Term Loans of Rs 383.54 Lacs from a Bank is secured by first charge on the Fixed Assets purchased out of the loans and second charge on the Companyths Immovable property at Udhna, Surat. Working capital lender banks have the second pari passu charge on the aforesaid Fixed Assets.

b. Rupee Term Loan of Rs 428.88 Lacs from a Bank and Foreign Currency Term Loans of Rs 594.65 Lacs are secured by first pari passu charge on the entire Fixed Assets of the Company situated at Udhna, Surat and Hosur Road, Bangalore. Foreign Currency Term Loans are further secured by first and exclusive charge on Land & Building situated at Coimbatore.

c. Working Capital Borrowings from Consortium banks on Cash Credit/Overdraft/Short Term Loan and Non Fund based facilities are secured by first pari-passu charge on stock of Raw Materials, Stock in Process, Semi-finished and finished goods, consumable stores and spares, bills receivable, book debts and other moveable current assets (both present and future) of the company and Second pari passu charge on the fixed assets of the company (both present and future) at Udhna, Surat and Hosur Road, Bangalore.

d. A specific guarantee facility of Rs 288.00 Lacs (Previous Year Rs 288.00 Lacs) of Batliboi Environmental Engineering Limited (BEEL) from a Bank is secured by first pari passu charge by way of an equitable mortgage on the immoveable property of the company situated on the leasehold land at Deonar, Mumbai. Balance outstanding as on 31st March, 2012 Rs 171.33 Lacs (Previous Year Rs 288.00 Lacs).

II. Contingent Liabilities not provided for in respect of:

a. Claims against the company not acknowledged as debts Rs 311.24 Lacs (Previous Year Rs 149.72 Lacs).

b. Disputed Sales Tax/Excise demands under appeal Rs 76.30 Lacs (Previous Year Rs 76.30 Lacs).

c. Corporate Guarantees given to banks and financial institutions for credit facilities/performance guarantees extended by them to Batliboi Environmental Engineering Limited (BEEL), a related party Rs 2,960.00 Lacs (Previous Year Rs 2,690.00 Lacs). Balance outstanding as on 31st March, 2012 Rs 2,207.97 Lacs (Previous Year Rs 2,360.26 Lacs).

d. Guarantees given on behalf of the Company by its bankers and outstanding Rs 1,379.41 Lacs (Previous Year Rs 1,318.05 Lacs). Out of the above, Guarantees of Rs 182.42 Lacs (Previous year Rs 224.64 Lacs) given by Companyths bankers and outstanding in respect of contracts of Batliboi Environmental Engineering Limited (BEEL), a related party.

e. In respect of guarantees given by the company to the bankers of Batliboi Environmental Engineering Limited (BEEL), a related party, BEEL has given counter guarantees on behalf of the Company.

f. Company has given Corporate Guarantee to others on behalf of its step down subsidiary Quickmill Inc. amounting to Canadian Dollar (CAD) 0.94 Million equivalent to Rs 479.82 Lacs (Previous Year CAD 0.74 Million equivalent to Rs 339,87 Lacs).

III. Commitments:

(a) Estimated amount of contracts remaining to be executed on capital account not provided for Rs 333.75 Lacs (Previous Year Rs 135 Lacs).

(b) The Company does not have any other commitment.

IV. B. The effects of Changes in Foreign Exchange Rates:

(a) Foreign currency long term loan includes:

(i) Canadian dollar (CAD) 801000 i.e. Rs 408.11 Lacs against which the company has not taken any forward cover as at balance sheet date.

(ii) EURO 149075 i.e. Rs 101.21 Lacs against which the company has not taken any forward cover as at balance sheet date. The company has natural hedge against commission receivable.

(iii) USD 167724 i.e. Rs 85.34 Lacs against which the company has no forward cover or natural hedge.

(iv) The company has no exposure by way of derivative contracts.

(b) Exchange Gains/Loss credited/charged to Profit and Loss Account: Exchange Gain Rs 254.97 Lacs (Previous year Exchange Gain Rs 95.68 Lacs).

V. Defined Benefit Plans/Compensated Absence:

General description of Defined Benefit Plan Gratuity:

The company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the length of service. The same is payable on termination of service or retirement, whichever is earlier. The benefit vests after five years of continuous service.

(iii) Provident fund:

The fair value of the assets of Provident Fund Trust as of balance sheet date is greater than the obligation, including interest, and also the returns on these plan assets including the amount already provided are sufficient to take care of interest obligations, over and above the fixed contribution recognized.

VI. A. Segment Reporting

The Company has considered business segments as the primary segments for disclosure.

Segments have been identified in line with the Accounting Standards on Segment Reporting (AS-17), taking into account the nature of business, products and services, the Companyths organization structure as well as the differential risks and returns of these segments. Segments Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments. Those not identifiable to the individual segments are included under unallocated.

The company has classified its business into four major segments:

(a) Machine Tool Business Group, which handles manufacturing and marketing (including trading and agency business) of machine tool and components e.g. CNC and GPM machines, machine castings, machine carcasses, cranes etc.

(b) Textile Engineering Group, which deals in manufacturing and marketing of textile air-engineering systems range i.e. Humidification, waste recovery, and auto control systems, besides marketing (including trading and agency business) of textile machinery e.g. circular knitting, spinning and flat-knitting machines etc.

(c) Air-conditioning and Refrigeration division, which covers manufacturing, marketing, commissioning and servicing of packaged air-conditioners and chillers etc.

(d) Others, which covers remaining business i.e. agro-industrial products (e.g. pumps/motors), air and water treatment jobs etc.

(ii) Secondary Segment Reporting

The Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of the total turnover. As such there are no reportable geographical segments.

VI B. Related Party Disclosures:

Related party disclosures as required under Accounting Standard 18 (AS-18) on "Related Party Disclosures" are given below:

(A) Relationships:

(i) Subsidiary companies:

(a) Queen Projects (Mauritius) Ltd. — Mauritius

(b) Vanderama Holdings Ltd. — Cyprus

(c) Pilatus View Holdings AG — Switzerland

(d) Quickmill Inc.— Canada

(e) Aesa Air Engineering SA — France

(f) Aesa Air Engineering SPA — Italy

(g) Aesa Air Engineering Pte Ltd. — Singapore

(h) Aesa Air Engineering Ltd. — Hong Kong

(i) Aesa Air Engineering Ltd. — China

(j) Aesa Air Engineering Pvt. Ltd. — India

(k) 760 Rye Street Inc. — Canada

(ii) Key Management Personnel:

Mr. Nirmal Bhogilal, Chairman & Managing Director

(iii) Relatives of Key Management Personnel:

(a) Mr. Pratap Bhogilal, Chairman Emeritus

(b) Mr. Kabir Bhogilal, Vice President - Corporate Affairs

(c) Mrs. Sheela Bhogilal

(d) Ms. Maya Bhogilal

(iv) Entities over which key management personnel are able to exercise significant influence:

(a) Batliboi Environmental Engineering Ltd.

(b) Batliboi International Limited

(c) Batliboi Impex Ltd.

(d) Batliboi Enexco Pvt. Ltd.

(e) Sustime Pharma Ltd. *

(f) Spartan Electricals

(g) Bhagmal Investments Pvt. Ltd.*

(h) Delish Gourment Pvt. Ltd.*

(i) Hitco Investments Pvt. Ltd.*

(j) Nirbhag Investments Pvt. Ltd.*

(k) Pramaya Shares & Securities Pvt. Ltd.*

(v) Entities in which management personnel are trustees:

(a) Bhogilal Leherchand Foundation*

(b) Leherchand Uttamchand Trust Fund*

(c) Shekhama Family Trust

* No transaction with the entities during the year.

VI. C. Provisions, Contingent Liabilities and Contingent Assets

Disclosure for Provisions in terms of AS-29:

Rs Lacs

Provisions Opening Additional Amount Amount Closing Amount Provision used Reversed Amount

2011-12 235.99 74.07 23.18 56.30 230.58

2010-11 205.17 109.44 50.64 27.98 235.99

The aforesaid Provisions are made towards claims made by Sales Tax and Excise authorities pending under appeal and provisions for warranty cover related to goods sold and jobs executed.

VII. A. Balances of receivables and payables are as per books of account. Letters have been sent to selected parties seeking confirmation of balances and replies are awaited. Adjustments, if necessary, will be made on receipt of such confirmations/reconciliation.

B. In the opinion of the management, current assets, long term loans and advances and other non-current assets have a realizable value in ordinary course of the business at least equal to the amounts at which they are stated in the Balance Sheet.

C. Assets and Liabilities are classified as current or non current based on the terms of contract where available and based on the judgment of the management in other cases.

VIII. The Company has investments in Batliboi Environmental Engineering Ltd., (BEEL) of Rs 191.21 Lacs. BEEL has accumulated losses which have significantly eroded their net worth. The company has also investment in its subsidiary Aesa Air Engineering SA - France whose accumulated losses are greater than the net worth.

In the opinion of the Management, having regard to the long term interest of the company in the aforesaid companies, there is no diminution other than temporary, in the value of the Investments.

IX. Pursuant to the resolution passed in the Extra Ordinary General meeting, the company has reserved 28,68,255 options during the year to the eligible employees of the company and its subsidiaries under the Employee Stock Option Scheme. The exercise price for option is Rs 15.75 (same as the market price on the grant date). Each option entitles the option holder to subscribe to one equity share of the Company.

Out of the above reserved options, 10,00,000 options have been granted. The date of grant of option is 23rd January, 2012. The granted options would vest in the eligible employees as follows:

- 1 /3rd of the total number of options granted after 36 month from the said date;

- 1 /3rd of the total number of options granted after 48 month from the said date; and

- Balance 1 /3rd of the total number of option granted after 60 month from the said date.

All the options granted as above have not been vested as at the Balance Sheet date.

Since the market price of share of the company on the grant date was the same as the exercise price, the intrinsic value of the option was nil and no employee compensation cost accrued.

X. By virtue of acquisition proceeding, Surat Municipal Corporation (SMC), acquired land admeasuring 2541.84 Sq. meters at Udhna in 1995-96, without paying any compensation. SMC had also acquired land admeasuring 3360 Sq. meter at Udhna in the FY 2007-08 against which SMC paid compensation of Rs 3.16 Lacs after adjusting betterment charges ofRs 15.99 Lacs and TDS of Rs 2.79 Lacs. The Company has preferred an application against the said compensations before the Principal Judge Sr. Division Court Surat, claiming compensation at the prevailing market price. At present the matter is pending in the court. Pending the final compensation, the amount received as above has been disclosed under the head "Current Liabilities".

XI. Till the year ended 31st March, 2011, the company was using the pre-revised schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified and regrouped the previous year figures to conform to current year. Figures in bracket represent previous year's figures.


Mar 31, 2011

1. Contingent Liabilities not provided for in respect of-.

a) Claims against the company not acknowledged as debts:Rs. 149.72 Lacs (Previous Year:Rs. 369.57 Lacs).

b) Disputed sales tax/Excise demands under appeal Rs. 76.30 Lacs (Previous Year: Rs. 86.78 Lacs).

c) Corporate Guarantees given to banks and financial institutions for credit facilities/ performance guarantees extended by them to Batliboi Environmental Engineering Limited (BEEL), a related party: Rs.2690.00 Lacs (Previous year: Rs. 2690.00 Lacs). Balance outstanding as on 31.03.2011:Rs. 2360.26 Lacs (Previous Year: Rs. 2082.05 Lacs).

d) Guarantees given on behalf of the Company by its bankers and outstanding Rs. 1318.05 Lacs (Previous year: Rs. 1182.26 Lacs). Out of the above, Guarantees of Rs. 224.64 Lacs (Previous year Rs. 100.51 Lacs) given by Company's bankers and outstanding in respect of contracts of Batliboi Environmental Engineering Limited (BEEL), a related party.

e) In respect of guarantees given by the company to the bankers of Batliboi Environmental Engineering Limited (BEEL), a related party, BEEL has given counter guarantees on behalf of the Company and extended charge on its current assets to secure the financial assistance availed by the Company from banks/financial institutions [Refer note II- 4-(a)(ii)].

f) Company has given Corporate Guarantee to others on behalf of its step down subsidiary Quickmill Inc amounting to CAD 0.74 Million equivalent to Rs. 339.87 Lacs (Previous year CAD 0.74 Million equivalent to Rs. 326.23 Lacs).

2. Estimated amount of contracts remaining to be executed on capital account not provided for: Rs. 135.00 Lacs (Previous Year: Rs. 27.24 Lacs).

3. Borrowings and Security:

a. Security for Bank Borrowings:

i. Working Capital Borrowings from Bank of Baroda led consortium banks on cash credit/overdraft/short term loan and non-fund based facilities are secured by way of first pari passu charge by hypothecation of stock of raw materials, goods in process, finished goods, stores and spares, books debts, outstanding monies, receivables, claims etc. pertaining to the manufacturing division at Udhana and the marketing branches situated all over India, both present and future; besides Second pari passu charge by way of registered mortgage on the immovable property of the company together with plant and machinery attached to the earth or permanently fastened to anything attached to the earth situated at free-hold land at Udhana, Gujarat. Working capital limits of amalgamated SPM division (erstwhile "Batliboi SPM Pvt Ltd") sanctioned by Canara Bank are secured by hypothecation of Book Debts and Inventories of SPM Division. Canara Bank also has first charge on land and building of SPM Division situated at Bangalore.

ii. A specific guarantee facility of Rs. 288 Lacs (Previous year Rs. 288 Lacs) of BEEL from a bank, is secured by first pari passu charge by way of an equitable mortgage of the immoveable properties of the company situated at leasehold land at Deonar, Mumbai.

b. Rupee Term Loans from a Co-operative Scheduled Bank is secured by first charge on the fixed assets financed by these term loans and Second Charge on the Company's immovable and movable property at Udhana, Gujarat. Working capital lender banks have the second pari passu charge on the said fixed assets.

c. Rupee Term Loan from a bank is secured by first pari passu charge on the entire fixed assets of the Company situated at Udhna, Gujarat along with other term lenders.

d. Foreign Currency Term Loans and other Rupee Term Loan are secured by first pari passu charge on the entire fixed assets of the Company situated at Udhna, Gujarat along with other term lenders.

4. a. Balances of Debtors & Creditors are as per books of account. Letters have been sent to selected Debtors & Creditors seeking confirmation of balances and replies are awaited. Adjustments, if necessary, will be made on receipt of such confirmations/reconciliation.

b. In the opinion of the Board of Directors, Current Assets, Loans and Advances have a realizable value in ordinary course of the business at least equal to the amounts at which they are stated in the Balance Sheet.

5. Pursuant to Section 40A (11) of the Income Tax Act, 1961, the company has during the year claimed back the unutilized amounts that were lying with the Welfare Trusts and the company has received Rs. 427.43 lacs.

6. By virtue of acquisition proceeding, Surat Municipal Corporation (SMC), acquired land admeasuring 2541.84 Sq. meter at Udhna in 1995-96, without paying any compensation. SMC had also acquired land admeasuring 3360 Sq. meter at Udhna in the FY 2007-08 against which SMC paid compensation of Rs. 3.16 Lacs after adjusting betterment charges of Rs. 15.99 Lacs and TDS of Rs. 2.79 Lacs. The Company has preferred an application against the said compensation before the Principal Judge Sr. Division Court Surat, claiming compensation at the prevailing market price. Pending the final compensation, the amount received as above has been disclosed under the head "Current Liabilities".

B. Defined Benefit Plans/Compensated Absence: General description of Defined Benefit Plan

Gratuity:

The company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the length of service. The same is payable on termination of service or retirement, whichever is earlier. The benefit vests after five years of continuous service.

(ii) Provident fund:

The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15 Employee Benefits (Revised 2005). states that provident funds set-up by employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

Pending the issuance of the guidance note from the Actuarial Society of India, the company's actuary has expressed his inability to reliably measure provident fund liability. Accordingly, the company is unable to exhibit the related disclosures.

The Provident Fund Trust has surplus to meet out the shortfall on account of increase in the rate of interest on Provident Fund Balances for

thauaar9nm.11

b) In view of losses (after adjusting the losses of earlier years against the profits of the current year) no commission is payable to directors. Hence computation of net profit under Section 349 of the Companies Act. 1956. has not been given.

7. (a) Foreign currency long term loan includes:

(i) Canadian Dollar (CAD) 1701000 i.e. Rs. 782.29 Lacs against which the company has not taken any forward cover as at balance sheet date.

(ii) EURO 316575 i.e. Rs. 200.65 Lacs against which the company has not taken any forward cover as at balance sheet date. The company has natural hedge against commission receivable.

(iii) USD 288384 i.e. Rs. 128.60 Lacs against which the company has no forward cover or natural hedge.

(iv) The company has no exposure by way of derivative contracts.

(b) Exchange Gains/Loss credited/charged to Profit and Loss Account: Exchange Gain Rs. 95.68 Lacs (P.Y. Exchange Loss Rs. 166.59 Lacs).

8. It is the view of the company that the provisions of Items 3(ii) (d) of Part II of Schedule VI of the Companies Act, 1956 do not require disclosure of the quantities and value wise information of Opening and Closing stock and purchases in respect of goods traded in by the Company.

9. Segment Reporting:

The company has considered business segments as the primary segments for disclosure.

Segments have been identified in line with the Accounting Standards on Segment Reporting (AS-17), taking into account the nature of business, products and services, the Company's organization structure as well as the differential risks and returns of these segments. Segments Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments. Those not - identifiable to the individual segments are included under unallocated.

The company has classified its business into four major segments:

a) Machine Tool Business Group, which handles manufacturing and marketing (including trading and agency business) of machine tool and components e.g. CNC and GPM machines, machine castings, machine carcasses and cranes etc.

b) Textile Engineering Group, which deals in manufacturing and marketing of textile air-engineering systems range i.e. Humidification,. Waste Recovery and Auto Control Systems, besides marketing (including trading and agency business) of textile machinery e.g. circular knitting, spinning, and flat-knitting machines etc.

c) Air-conditioning and Refrigeration division, which covers manufacturing, marketing, commissioning and servicing of packaged air-conditioners and chillers etc.

d) Others, which covers remaining business i.e., agro-industrial products (e.g. pumps/motors), air and water treatment jobs etc.

ii) Secondary Segment Reporting

The Company caters mainly to the needs of the domestic market. The export turnover is not significant in the context of the total turnover. As such there are no reportable geographical segments.

10. Related Party Disclosures:

Related party disclosures as required under Accounting Standard 18 (AS-18) on "Related Party Disclosures" are given below: A) Relationships:

i) Subsidiary companies: .

a) Queen Projects (Mauritius) Ltd.-Mauritius

b) Vanderama Holdings Ltd.-Cyprus

c) Pilatus View Holdings AG-Switzerland

d) Quickmill Inc.-Canada

e) Aesa Air Engineering SA-France

f) Aesa Air Engineering SPA-ltaly

g) Aesa Air Engineering PTE Ltd-Singapore h) Aesa Air Engineering Ltd-Hong Kong

i) Aesa Air Engineering Ltd-China -

j) Aesa Air Engineering Pvt Ltd-lndia

k) 760 Rye Street - Canada ii) Key Management Personnel:

Mr. Nirmal Bhogilal, Chairman & Managing Director iii) Relatives of Key Management Personnel:

a) Mr. Pratap Bhogilal, Chairman Emeritus

b) Mr. Kabir Bhogilal, General Manager-Business Development

c) Mrs. Sheela Bhogilal

iv) Entities over which key management personnel are able to exercise significant influence:

a) Batliboi Environmental Engineering Ltd. .

b) Batliboi International Limited

c) Batliboi Impex Ltd. .

d) Batliboi Enexco Pvt. Ltd.

e) Sustime Pharma Ltd.

f) Spartan Electricals

v) Entities in which management personnel are trustees:

a) Bhogilal Leherchand Foundation

b) Leherchand Uttamchand Trust Fund

11. The Company has investments in Batliboi Environmental Engineering Ltd, (BEEL) of Rs. 191.21 Lacs. BEEL has accumulated losses which have significantly eroded their net worth. The company has also investment in its subsidiary Aesa Air Engineering SA- France whose accumulated losses are greater than the net worth.

In the opinion of the Management, having regard to the long term interest of the company in the aforesaid companies, there is no diminution other than temporary, in the value of the Investments.

12. The figures in respect of the previous financial year have been reclassified and regrouped wherever necessary.


Mar 31, 2010

1. Contingent Liabilities not provided for in respect of:

a) Claims against the company not acknowledged as debts: Rs 369.57 Lacs (Previous Year: Rs. 370.60 Lacs).

b) Disputed sales tax/Excise demands under appeal Rs 86.78 Lacs (Previous Year: Rs.91.87 Lacs).

c) Corporate Guarantees given to banks & financial institutions for credit facilities/ performance guarantees extended by them to Batliboi Environmental Engineering Limited (BEEL), a related party: Rs.2690.00 Lacs (Previous year: Rs. 2690.00 Lacs). Balance outstanding as on 31.03.2010: Rs.2082.05 Lacs (Previous Year: Rs .2297.73 Lacs).

d) Guarantees given on behalf of the Company by its bankers and outstanding Rs 1182.26 Lacs (Previous year: Rs. 866.25 Lacs). Out of the above, Guarantees of Rs 100.51 Lacs (Previous year Rs. 43.53 Lacs) given by Companys bankers and outstanding in respect of contracts of Batliboi Environmental Engineering Limited (BEEL), a related party.

e) In respect of guarantees given by the company to the bankers of Batliboi Environmental Engineering Limited (BEEL), a related party, BEEL has given counter guarantees on behalf of the Company and extended charge on its current assets to secure the financial assistance availed by the Company from banks/financial institutions [Refer note II- 4-(e)].

f) Company has given Corporate Guarantee to others on behalf of its step down subsidiary Quickmill Inc amounting to CAD 0.74 Million equivalent to Rs.326.23 Lacs (P.Y CAD 0.74 Million equivalent to Rs.297.89 Lacs).

The aforesaid Provisions are made towards claims made by sales tax and excise authorities pending under Appeal and provisions for warranty cover related to part sold and jobs executed.

2. Estimated amount of contracts remaining to be executed on capital account not provided for: Rs 27.24.Lacs (Previous Year: Rs. 40.25 Lacs).

3. Borrowings and Security:

a. Security for Bank Borrowings:

i. Working Capital Borrowings from BOB led consortium banks on cash credit/overdraft/short term loan and non-fund based facilities are secured by way of first pari passu charge by hypothecation of stock of raw materials, goods in process, finished goods, stores and spares, books debts, outstanding monies, receivables, claims etc. pertaining to the manufacturing division at Udhana and the marketing branches situated all over India, both present and future; besides Second pari passu charge by way of registered mortgage on the immovable property of the company together with plant and machinery attached to the earth or permanently fastened to anything attached to the earth situated at free-hold land at Udhana, Gujarat. Working capital limits of amalgamated SPM division (erstwhile "Batliboi SPM Pvt Ltd") sanctioned by Canara Bank are secured by hypothecation Of Book Debts and Inventories of SPM Division. Canara Bank also has first charge on land and building of SPM Division situated at Banglore.

ii. A specific guarantee facility of Rs.288 Lacs (P.Y Rs.288 Lacs) of BEEL from a bank, is secured by first pari passu charge by way of an equitable mortgage of the immoveable properties of the company situated at leasehold land at Deonar, Murnbai.

b. Rupee Term Loans from a Co-operative Scheduled Bank is secured by first charge on the fixed assets financed by these term loans (hereafter "the said fixed assets"); and Second Charge on the Companys immovable and movable property at Udhana, Gujarat. Working capital lender banks have the second pari passu charge on the said fixed assets.

c. Rupee Term Loan from a bank is secured by first pari passu charge on the entire fixed assets of the Company situated at Udhna, Gujarat along with other term lenders and personal guarantee of a director.

d. Foreign Currency Term Loans and other Rupee Term Loan are secured by first pari passu charge on the entire fixed assets of the Company situated at Udhna, Gujarat along with other term lenders.

4. Balances of Debtors & Creditors are as per books of account. Letters have been sent to selected Debtors & Creditors seeking confirmation of balances, and replies in some cases are awaited. Adjustments, if necessary, will be made on receipt of such confirmations/reconciliation.

5. In the opinion of the Board of Directors, Current Assets, Loans and Advances have a realizable value in ordinary course of the business at least equal to the amounts at which they are stated in the Balance Sheet.

6. By virtue of acquisition proceeding, Surat Municipal Corporation (SMC), acquired land admeasuring 2541.84 Sq meters at Udhna in 1995-96, without paying any compensation. SMC had also acquired land admeasuring 3360 Sqmeter at Udhna in the FY 2007-08 against which SMC paid compensation of Rs.3.16 Lacs after adjusting betterment charges of Rs.15.99 Lacs and TDS of Rs.2.79 Lacs. The Company has preferred an application against the said compensations before the Principal Judge Sr. Division Court Surat, claiming compensation at the prevailing market price. Pending the final compensation, the amount received as above has been disclosed under the head "Current Liabilities".

7. Taxes on Income:

Keeping in mind the improved performance on a quarter on quarter basis and the higher order inflow in the last quarter and future projections which in the opinion of the management represents convincing evidence of virtual certainty that sufficient future taxable income will be available to realize the deferred tax assets, the company has recognized Deferred Tax Asset to the extent of Rs. 278.44 Lacs in respect of unabsorbed depreciation/losses under the Income Tax Act.

B. Defined Benefit Plans/Compensated Absence: General description of Defined Benefit Plan

Gratuity:

The company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days/one month salary last drawn for each completed year of service depending on the length of service. The same is payable on termination of service, or retirement, whichever is earlier. The benefit vests after five years of continuous service.

Notes:

*The estimate of future salary increases considered in actuarial valuation are on the basis of rough approximation of the salary an employee will be receiving at the time of actual payment of gratuity/leave encashment. A suitable growth rate is assumed for this purpose. This is implied in the Projected Unit Credit Method.

(ii). Provident fund:

The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15 Employee Benefits (Revised 2005) states that provident funds set-up by employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

Pending the issuance of the guidance note from the Actuarial Society of India, the companys actuary has expressed his inability to reliably measure provident fund liability. Accordingly, the company is unable to exhibit the related disclosures.

b) In view of losses no commission is payable to directois. Hence cowfUftllnn of net profit under Section 349 of the Companies Act, 1956, has not been given.

8. (a) Foreign currency long term toan indudies:

(i) CAD 2556000 i.e Rs.1128.35 Lacs against which lire rarassas^ Iras a fomraid cover for USD/CAD 200000. The USD/INR leg booked for CAD 100000 and CAD 100000 remains open as at Ubnce sheet date.

(ii) EURO 475700 i.e Rs.288.09 Lacs against which the agaparcy Unas toward cover of EURO/USD 50000. The USD/INR leg as at balance sheet date is open.

(iii) USD 390945 i.e Rs.175.53 Lacs against which the uumipai^ Unas mm toward cover or natural hedge.

(iv) The company has no exposure by way of derivative confeatik-

(b) Exchange (Gains)/Loss created/(charged) to Profit and tassAanumtRs.166.59 Lacs (P.Y Rs 19.94 Lacs)

* Capacity Figures are on annual basis

** Includes production of parts of equipments. 4909 Nos. (Previous year 4165 Nos.); and Production of equipments 621 Nos (Previous year: 721 Nos.)

@@ Includes SPM production

*** Spare capacity available at Udhana for production of C.I.Castings was utilized for the production of items under i & j above.

**** Since plant was sold, disclosure is no more required.

9. It is the view of the company that the provisionsarff Items3(P) P| of Pmt Hi of Sdiedule VI of the Companies Act 1956 do not require disclosure of the quantities and value wse Mnwm&ism otf Opsraiog and Closing stock and purchases in respect of goods traded in by the Company.

10. Segment Reporting:

The company has considered business segmnEmtfe as ttte pmraarf segments for disclosure.

Segments have been identified in line with the-taranmifius! SfaBsdarais on Segment Reporting (AS-17), taking into account the nature of business, products and servkses. le Cionsgnn)^ snganizafiion structure as well as the differential risks and returns of these segments. Segments Revenue, ResaSS&, $ssffi& araiS UafoiBies include the respective amounts identifiable to each of the segments. Those not identifiable to toe iwaSwirttari seapraerrjiis are included under unallocated.

The company has classified its business into fcur sroagnr sespraejfe::

a) Machine Tool Business Group, which hamates saaaraisfeEftiflarag arad marketing (including trading and agency business) of machine tool and components e.g. CMC amsE QPM raaarfMraes, machire castings, machine carcasses, cranes etc.

b) Textile Engineering Group, which deals inn araraJaKttiaimg arad marketing of textile air-engineering systems range i.e Humidification, waste recovery, and auto anrttaoil ^sterns, besides irairiketing (including trading and agency business) of textile machinery e.g. circular knitting,, spisnmgL, ani feHoniifflirag machines etc,

c) Air-conditioning and Refrigeration diviskm,, witeirila awos rararaalactaring, marketing, commissioning and servicing of packaged air-conditioners and chillers est.

d) Others, which covers remaining business ile„ ap»-iiraifasiraai products (e.g. pumps/motors), air and water treatment jobs etc

ii) Secondary Segment Reporting

The Company caters mainly to the needs of tfieatoiwe^lfemnai^Tl^e:^^ turnover. As such there are no reportable geugjsqpfcicall sffiepnemfe..

11. Related Party Disclosures:

Related party disclosures as required under Accounting Standard 18 (AS-18) on "Related Party Di A) Relationships:

i) Subsidiary companies:

a) Queen Projects (Mauritius) Ltd.-Mauritius

b) Vanderama Holdings Ltd.-Cyprus

c) Pilatus View Holdings AG-Switzerland

d) Quickmill Inc.-Canada

e) Aesa Air Engineering SA-France

f) Aesa Air Engineering SPA-ltaly

g) Aesa Air Engineering PTE Ltd-Singapore h) Aesa Air Engineering Ltd-Hong Kong

i) Aesa Air Engineering Ltd-China j) Aesa Air Engineering Pvt Ltd-lndia

k) 760 RyeiStreet Inc - Canada

ii) Key Management Personnel:

a) Mr. Nirmal Bhogilal, Chairman & Managing Director

b) *Mr. George Verghese, Executive Director *Ceased to be executive director w.e.f 31.12.2009

iii) Relatives of Key Management Personnel:

a) Mr. Pratap Bhogilal, Chairman Emeritus

b) Mr.Kabir Bhogilal, Asst.General Manager-Business Development

iv) Entities over which key management personnel are able to exercise significant influence:

a) Batliboi Environmental Engineering Ltd.

b) Batliboi International Limited

c) Batliboi Impex Pvt. Ltd.

d) Batliboi Enxco Pvt. Ltd.

e) Sustime Pharma Ltd.

f) Spartan Electricals

v) Entities to which management personnel are trustees

a) Bhogilal Leherchand Foundation

b) Leherchand Uttamchand Trust Fund

12. The Company has investments in Batliboi Environmental Engineering Ltd, (BEEL) of Rs.191.21 Lacs. BEEL has accumu- lated losses which have significantly eroded their net worth. The company has also investment in its subsidiary Aesa Air Engineering SA- France whose accumulated losses are greater than the net worth.

In the opinion of the Management, having regard to the long term interest of the company in the aforesaid companies, there is no diminution other than temporary, in the value of the Investments."

13. Micro, Small and Medium Enterprises

The Statement showing the amount payable above Rs.llacs and outstanding for more than 30 days to Micro. Small and Medium Enterprises as at 3T March, 2010 and interest provision made thereon is given below:

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