Notes to Accounts of Techno Electric & Engineering Company Ltd.[Old]

Mar 31, 2017

Note

a) Fixed deposit receipts of Rs,1,037.38 lakhs (Previous Year Rs, 974.77 lakhs) are lodged with the Bankers of the Company as Margin against Bank Guarantees issued /to be issued in favour of the company .

b) Fixed deposit receipts of Rs, 1.49 lakhs (Previous Year Rs, 1.40 lakhs) are lodged with a client/ Sales Tax authorities as Security/Registration Deposits.

c) Rs, 60 lakhs has been deposited in Escrow Account for buy back of 15 lakhs shares of the Company as per Buy back regulations prescribed by SEBI.

300 (Previous year 700) Non-Convertible Debentures of Rs, 10.00 lakhs each

(secured by hypothecation of all the investment in the equity shares of subsidiary company)

The Debentures as mentioned above presently carries interest rate of 10.24% p.a.

#The outstanding 300 Non-Convertible Debentures are redeemable on 28/01/2018. Amount disclosed under the head "Other Liabilities excluding provisions" Note 21.

Note

Loans from Banks in foreign currency are secured against hypothecation of Components, Raw-Ma-terials, Work-in-Progress, Plant & Machinery, Book Debts of EPC division, ranking pari-pasu.

The Company also enjoys financing facilities with certain other Banks against hypothecation of Components, Raw-Materials, Work-in-Progress, Plant & Machinery, Book Debts of EPC division, equitable mortgage of Land at Rajpur, West Bengal.

# Dividend include Dividend received from Subsidiary Company amounting to Rs, 1,164.80 lakhs (Previous Year Rs, 2,496.01 lakhs)

* Liability written back includes Rs, 153.87 lakhs being waiver of commission by Managing Director provided in earlier years.

^A Includes Rs, 2,334.38 lakhs on sale of Wind Division Assets (33 MW in the state of Tamil Nadu).

Materials and Stores purchased during the year include Stores Rs, 3,734.27 lakhs (Previous Year Rs, 2,522.67 lakhs). The consumption of such materials included in outlay and contract work-in-progress have been taken by the Auditors as certified.

The weighted no. of equity share outstanding during the period and for all period presented are adjusted for events other than the conversion of potential equity shares, that have changed the no. of equity shares outstanding without a corresponding change in resources.

Fair value hierarchy

This section explains the estimates and judgments made in determining the fair values of Financial Instruments that are measured at fair value and ammortised cost and for which fair values are disclosed in financial statements. To provide an indication about reliability of the inputs used in determining the fair values, the company has classified its financial instruments into the three levels prescribed under accounting standards. An explanation of each level follows underneath the table:

Level 1 :

Includes financial Instrument measured using quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can access at the measurement date.

Level 2 :

Includes financial Instruments which are not traded in active market but for which all significant inputs required to fair value the instrument are observable. The fair value is calculated using the valuation technique which maximises the use of observable market data.

Level 3:

Includes those instruments for which one or more significant input are not based on observable market data.

The following table presents fair value hierarchy of assets and liabilities measured at fair value as of 31st March, 2016:

The carrying amount of cash and cash equivalents, bank balances, trade receivables, loans, other financial assets, trade payables and other financial liabilities are considered to be the same as their fair value due to their short term nature and are in close approximation of fair value.

The Company''s investment in the equity shares of its subsidiaries, associates & joint venture is recognized at cost. The company has elected to apply previous GAAP carrying amount of its equity investment in subsidiaries, associates & joint venture as deemed cost as on the date of transition to Ind AS.

4. FINANCIAL RISK MANAGEMENTS

Financial risk factors

The Company''s activities expose it to a variety of financial risks : market risk, liquidity risk and credit risk.

Market risk

The primary market risk to the Company is foreign exchange risk. The Company is exposed to foreign exchange risk through its purchases from overseas suppliers and short term foreign currency loan. The Company pays off its foreign exchange exposure within a short period of time, thereby mitigates the risk of material changes in exchange rate on foreign currency exposure.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with its financial liabilities.

The Company''s principle source of liquidity are cash and cash equivalent, bank balances, cash flows from operations and investment in mutual funds. The Company has no outstanding bank borrowings as on 31st March, 2017. The Company believes that working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

Credit Risk

Credit risk is the risk that counter party will not meet its obligation under a financial instrument leading to a financial loss. The company is exposed to credit risk from investments, trade receivables, cash and cash equivalents, bank balances, loans and other financial assets.

Credit risk on cash and cash equivalent and bank balances is limited as the Company generally invest in deposits with recognized banks. Investments primarily include investments in liquid mutual fund units, quoted bonds and investment in subsidiaries, associates & joint venture. Loan is provided to joint venture company which is repayable on demand. Trade receivables are unsecured and are derived from revenue from customers who are primarily Public Sector Undertakings and hence the risk is limited. Other financial assets primarily includes the deposit made for tender participation, rent & electricity deposit and interest accrued but not due.

5. CAPITAL MANANGEMENT

For the purpose of managing capital, Capital includes issued equity share capital and reserves attributable to the equity holders.

The objective of the company''s capital management are to:

- Safeguard their ability to continue as going concern so that they can continue to provide benefits to their shareholders.

- Maximize the wealth of the shareholder.

- Maintain optimum capital structure to reduce the cost of the capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and requirement of financial covenants. In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares . The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, loans and borrowings, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March, 2017 and 31st March, 2016.

* Permitted receipts includes cash withdrawn from bank.

# Permitted payments includes payments from various project sites for normal operation (expenses).

6. DISCLOSURES IN ACCORDANCE WITH Ind AS 19 (2015) ON "EMPLOYEES BENEFITS":

Defined Benefit Obligations

The below tables set forth the changes in the projected benefit obligation and plan assets and amounts recognized in the standalone financial Statements as at 31st March, 2017 and 31st March, 2016, being the respective measurement dates.

b) As the revenues from overseas sites does not exceed the minimum threshold limit for such disclosure, no separate disclosure for Geographical segment ( Secondary Segment ) is applicable.

7. FIRST-TIME ADOPTION OF Ind-AS

These standalone interim financial statements of the Company for the year 31st March, 2017 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - First Time adoption of Indian Accounting Standard, with effect from 1st April, 2015 as the transition date and IGAAP as the previous GAAP.

The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 5 have been applied in preparing the standalone financial statements for the year ended 31st March, 2017 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s Balance Sheet, Statement of Profit and Loss, is set out in note 42.2.1, 42.2.2 and 42.2.3. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in note 42.1.

8 Exemptions availed on first time adoption oflnd-AS 101

Ind-AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions.

(a) Deemed cost for Property, Plant and Equipment (PPE) - The Company has elected to measure items of PPE at the date of transition to Ind AS at their historical cost. Company has used the historical cost of assets, which is considered as deemed cost on transition.

(b) Investment in subsidiaries, joint venture and associates - The Company has elected to adopt the previous GAAP carrying values on date of transition as deemed cost for investments in subsidiaries, joint venture and associates.

(c) Under Ind AS 109, at initial recognition of a financial asset, an entity may make an irrevocable election to present subsequent changes in the fair value of an investment in an equity instrument in other comprehensive income. Ind AS 101 allows such designation of previously recognized financial assets, as '' fair value through other comprehensive income'' on the basis of the facts and circumstances that existed at the date of transition to Ind AS. Accordingly, the Company has designated its investments in certain equity instruments at fair value through other comprehensive income on the facts and circumstances that existed at the date of transition to Ind AS.

9. RELATED PARTY DISCLOSURES

10. Name of related parties and related party relationship

S. No. Name of the party Nature of relationship

J_ Simran Wind Project Limited__Subsidiary Company_

2_ Patran Transmission Company Limited__Associate Company_

3_ Techno Infra Developers Private Limited__Subsidiary Company_

4_ Techno Clean Energy Private Limited__Subsidiary Company_

_5_ Techno Green Energy Private Limited__Subsidiary Company_

_6_ Techno Wind Power Private Limited__Subsidiary Company_

_7_ Jhajhar KTTransco Private Limited__Joint Venture Company

_8_ Shri Padam Prakash Gupta__Key Managerial Personnel

Director & Relative of Key 9 Shri Ankit Saraiya ___Managerial Personnel_

Director & Relative of Key

_ ^{Ms Avantika Gu}p^ta__Managerial Personnel ^Y

11. The previous year figures have been regrouped and/or rearranged wherever considered necessary

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Mar 31, 2016

NOTE 1. RIGHTS, PREFERENCES AND RESTRICTIONS ATTACHED TO THE SHARES

The equity shares of the Company of nominal value of Rs. 2 per share rank pari passu in all respects including voting rights and entitlement to dividend and repayment of share capital.

NOTE 2. The previous year''s figures have been regrouped, rearranged and re-classified to confirm to the current year''s classification.

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Mar 31, 2015

1 Rights, Preferences and Restrictions attached to the Shares

The equity shares of the Company of nominal value of Rs.2 per share rank pari passu in all respects including voting rights and entitlement to dividend and repayment of share capital.

2 Related Party Transactions

A. List of related parties and nature of relationships, where control exists :

S.No. Name of the party Nature of relationship

1 Simran Wind Project Limited Subsidiary Company

2 Patran Transmission Company Limited (w.e.f. 13/11/2013) Subsidiary Company

3 Techno Power Grid Company Limited Subsidiary Company

4 Techno Infra Developers Private Limited Subsidiary Company

5 Mr. Padam Prakash Gupta Key Managerial Personnel

6 Mr. Ankit Saraiya Relative of Key Managerial Personnel

7 Ms Avantika Gupta Relative of Key Managerial Personnel

B. Disclosure of significant transactions with related parties and the status of outstanding balances as on March 31, 2015:

3 The previous year''s figures have been regrouped, rearranged and re-classified to conform to the current year''s classification.

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Mar 31, 2013

NOTE 1

There is no other information apart from the information already disclosed above required to be disclosed pursuant to the relevant clauses of New Schedule VI as inserted to Companies Act by the Notification No.S.0.447(E), Dated.28-2-201 1 (As amended by Notification No.F.N0.2/6/2008-CL-V, Dated 30-3-201 1).

The previous year''s figures have been regrouped, rearranged and re-classified to conform to the current year''s classification.

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Mar 31, 2012

Note: 1a. Rights, Preferences and Restrictions attached to the Shares:

The equity shares of the Company of nominal value of Rs 2 per share rank pari passu in all respects including voting rights and entitlement to dividend.

a) Fixed deposit receipts of Rs 798.45 Lakhs (Previous Year Rs 740.79 Lakhs) are lodged with the Bankers of the Company as margin against Bank Guarantees issued /to be issued in favour of the Company.

b) Fixed deposit receipts of Rs 0.65 Lakhs (Previous Year Rs 29.65 Lakhs) are lodged with Sales tax authorities as Security/ Registration Deposits.

Note: 1. Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs 56.00 Lakhs (Previous year Rs Nil).

Note: 2. CONTINGENT LIABILITIES (Rs.in Lakhs)

Year ended Year ended

March 31, 2012 March 31, 2011

Corporate Guarantee issued for Loans obtained by subsidiary company 2,181.82 5,090.84

Note: 3. There is no other information apart from the information already disclosed above required to be disclosed pursuant to the relevant clauses of new Schedule VI as inserted to Companies Act, 1956 by the Notification No.S.O.447(E), Dated 28-2-201 1 (As amended by Notification No.F.NO.2/6/2008-CL-V, Dated 30-3-2011).

Note: 4. Consequent to the notification of revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 are prepared as per revised Schedule VI. Accordingly, the previous year's figures have also been regrouped, rearranged and re-classified to conform to the current year's classification. The adoption of revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.

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Mar 31, 2011

1. Contingent Liabilities not provided for in respect of :

Corporate Guarantee issued for loans obtained by a subsidiary company Rs. 5,090.91 Lakhs (Previous Year Rs. 8,000.00 Lakhs)

2. Materials and Stores purchased during the year include Stores Rs. 2,055.86 Lakhs (Previous Year Rs.1,317.48 Lakhs). The consumption of such materials included in outlay and contract work-in-progress have been taken by the Auditors as certified.

3. Interest paid includes Rs. 308.59 Lakhs (Previous Year Rs.135.61 Lakhs) on Debentures.

4. Interest paid includes Rs.1,083.22 Lakhs (Previous Year Rs. 836.17 Lakhs) on Term Loans.

i) Term Loan from DBS Bank Ltd. is secured by way of first charge on the fixed assets and current assets of the Energy (Power) Division of the Company ranking pari-pasu with other lenders.

ii) Term loan from IndusInd Bank Limited is secured by way of equitable mortgage of land and hypothecation of fixed assets and current assets of Energy (Power) Division, ranking pari-pasu with other lenders.

iii) FCNR Loan from Citi Bank is secured against hypothecation of Components, Raw-Materials, Work-in-Progress, Plant & Machinery, Book Debts ranking pari-pasu with other borrowings and personal guarantee of the Managing Director of the Company.

b) 500 Nos of 7.5 percent Non Convertible Debentures are secured by way of mortgage and creation of charge in favour of the trustees (IDBI Trusteeship Services Ltd) on the immovable properties and movable properties of Simran Wind Project Private Ltd., a wholly owned subsidiary company and a non-disposal undertaking executed in favour of the trustees on a pari-pasu basis with debenture-holders of Simran Wind Project Private Limited

The Debentures are redeemable at par in 11 equal quarterly instalments commencing from May 20, 2010 and the last date of payment is 20th November 2012

d) The Company also enjoys overdraft facilities with Scheduled Banks against hypothecation of Components, Raw-Materials, Work-in-Progress, Plant & Machinery, Book Debts ranking pari-pasu with other borrowings and personal guarantee of the Managing Director of the Company.

5. a) Unsecured Loan from a Bank amounting to Rs. 5,000.00 Lakhs is guaranteed by personal Guarantee of the Managing Director of the Company.

b) Other unsecured Loans of Rs. 7,500.00 Lakhs are obtained by issue of Commercial Papers.

6 a. Fixed Deposit Receipts of Rs. 740.79 Lakhs (previous Year Rs. 644.16 Lakhs) are lodged with the Bankers of the Company as Margin against Bank Guarantees Issued / to be issued in favour of the Company.

b. Fixed deposit receipts amounting to Rs. 29.65 Lakhs (previous Year Rs. 28.29 Lakhs)are lodged with a client / Sales Tax authorities as Security / Registration Deposits.

7. In the opinion of the management, diminutions in the value of certain Investments Rs.14.96 (Previous Year Rs.16.53 Lakhs) are temporary in nature and hence no provision has been made for the same.

8. a) Advances include Share Application Money of Rs. 4,900.00 Lakhs (Previous Year Nil) paid to subsidiary Company.

b) Loans and Advances include Loan of Rs. 3.50 Lakhs (Previous Year Nil) due from a subsidiary Company. Maximum amount due at any time during the year was Rs. 750.00 Lakhs (Previous Year Nil)

c) Advances include Rs. 0.21 Lakhs (previous year Nil) receivable from subsidiary Company. Maximum amount due at any time during the year was Rs. 600.00 Lakhs (Previous Year Nil)

9. To the extent identified from available information, there is no amount due to micro, small and medium size enterprises as on 31st March, 2011

During the previous year Commission was payable by virtue of his terms of appointment as Managing Director of erstwhile transferor company and calculated on the basis of profit of that year of the transferor company only and the said erstwhile Managing Director was not a Director of the Company as on March 31, 2010. The said expenses were included under the respective head of account.

19. Related Party disclosures under Accounting Standard 18 :

a) Name of the related party and nature of relationship:

2010-2011 2009-2010

Name Relationship Name Relationsship

Mr Padam Key Management Mr. Rajiv Key Management Prakash Gupta Personnel Agarwal Personnel Simran Wind Wholly owned Simran Wind Wholly owned Subsid Project Subsidiary Project iary Private Private Limited Limited Mr Ankit Relative Gupta of Key Management Personnel

20. Previous Year's figures have been re-grouped and re- arranged wherever considered necessary to confirm to current years classifications

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Mar 31, 2010

A. Background:

Techno Electric & Engineering Company Limited (Formerly known as Super Wind Project Limited) ("the Company") was incorporated on October 26, 2005 to carry on in India and anywhere else in the World the business of and as an independent power project company and for the purpose to establish, develop, install, commission, acquire, operate and maintain non-conventional and renewable power projects.

The Company was converted into a public limited company on December 11, 2009 and consequently the word Private has been deleted from its name.

Pursuant to and as envisaged in the Scheme of Amalgamation, the name of the Company stands changed to "Techno Electric & Engineering Company Limited" and a fresh Certificate of Incorporation has been obtained on July 14, 2010.

Pursuant to Scheme of Amalgamation, the business of erstwhile Techno Electric & Engg. Co. Ltd. which was engaged in the business of engineering, procurement and construction (EPC) with its focus primarily on the Indian power Sector have been transferred to the Company and formed an integral part of the business of the Company.

1. Contingent Liabilities not provided for in respect of :

i) Letters of Credit outstanding Rs. 35,05,74,403.

ii) Corporate Guarantee issued for loans obtained by a subsidiary company Rs. 80,00,00,000.

2. Materials and Stores purchased during the year include Stores Rs. 13,17,48,067. The consumption of such materials included in outlay and contract work-in-progress have been taken by the Auditors as certified.

3. a) Interest paid includes Rs. 1,35,61,645 on Debentures and Rs. 8,36,16,983 on Term Loans.

b) Sundry Creditors include Rs. 39,04,109 & Rs. 22,32,328 being interest accrued but not due on debenture and term loan respectively.

4. The Deferred Tax Liabilities of Rs. 2,33,656 for the year has been recognised in the Profit and Loss Account.

5. Secured Loans

b) i) Term Loan from DBS Bank Ltd. is secured by way of first charge on the entire fixed assets of the EPC (Construction) Division, movable & immovable, present and future, ranking pari-pasu with existing charge holders and personal guarantee of the erstwhile Director of the transferor company.

ii) Term loan from IndusInd Bank Ltd. is secured by way of equitable mortgage of land and hypothecation of fixed assets and current assets of Energy (Power) Division, ranking pari-pasu with other lenders and corporate guarantee of the transferor company.

iii) Term loan from Rabo India Finance Ltd. is secured by first charge by way of hypothecation over all the movable properties and mortgage of all the immovable properties of Energy (Power) Division, ranking pari-pasu with the IndusInd Bank Ltd. and corporate guarantee of the transferor company.

b) 500 Debenture (7.5% Non-convertible of Rs. 10,00,000 each) 50,00,00,000

Debentures are secured by way of mortgage and creation of charge in favour of the trustees (IDBI Trusteeship Services Ltd.) on the immovable properties and movable properties of Simran Wind Project Private Ltd., a wholly owned subsidiary company and a non-disposal undertaking executed in favour of the trustees on a pari-pasu basis with debenture-holders of Simran Wind Project Private Ltd. The Debentures are redeemable at par in 11 equal quarterly installments commencing from May 20, 2010.

c) Vehicle Loan from Banks

Secured against hypothecation of specified vehicles 1,16,411

d) The Company also enjoys an overdraft facility with Scheduled Banks against hypothecation of Components, Raw-Materials, Work-in-Progress, Plant & Machinery, Book Debts ranking pari-pasu with other borrowings and personal guarantee of an erstwhile Director of the transferor company.

6. Disclosures in accordance with AS-14,"Accounting for Amalgamation":

(a) Particulars of the Scheme:

Pursuant to the Scheme of Amalgamation between the Company and Techno Electric & Engineering Co. Ltd. (the Transferor Company), as approved by the Honble High Court at Calcutta vide its Order dated May 6, 2010, the Transferor Company stands amalgamated with the Company with effect from April 1, 2009 (the appointed date). Consequently, all the properties, assets, rights and powers of the Transferor Company and all the debts, liabilities, duties and obligations of the Transferor Company including all rights, powers, interests, authorities, privileges, liberties and all properties and assets, movable or immovable, freehold or leasehold, real or personal, corporeal or incorporeal, in possession or reversion, present or contingent or whatsoever nature and wherever situate including all land, buildings, plant and machinery, office equipments, inventories, investments in shares, debentures, bonds and other securities, sundry debtors, cash and bank balances, loans and advances, leases and all other interests and rights in or arising out of such property together with all liberties, easements, advantages, exemptions, approvals, licenses, trade marks, patents, copyrights, import entitlements and other quotas, if any, held, applied for or as may be obtained hereafter by the Transferor Company or which the Transferor Company is entitled together with the benefit of all respective contracts and engagements and all respective books, papers, documents and records of the Transferor Company stand transferred to the Company.

(b) The effective date of the amalgamation was May 26, 2010 and the appointed date was April 1, 2009.

(c) The amalgamation has been accounted for under "Pooling of interest method" as prescribed by the Accounting Standard -14; Accounting for Amalgamation issued by the institute of Chartered Accountants of India, in accordance to which:

i) The assets and liabilities of the transferor company have been incorporated in Financial Statements of the Company at their carrying amounts.

ii) In terms of the said Scheme of Amalgamation, the shareholders holding 5,70,91,200 Equity Shares of Rs. 2 each fully paid up in the transferor company are to be allotted one new Equity Share of Rs. 2 each fully paid up of the transferee company for every Equity Share of Rs. 2 each fully paid up held by them in the transferor company. Accordingly 5,70,91,200 new Equity Shares were allotted to the shareholders at a Board of Directors meeting held on July 10, 2010

iii) An amount of Rs. 15,72,59,773 being the difference between the carrying amount of investments in Redeemable Preference Shares of the transferee company held as investments by the transferor company and that in the books of the transferee company under Preference Share Capital has been shown under Capital Reserve of the transferee company.

7. Fixed Deposit Receipts of Rs. 6,44,16,971 are lodged with the Bankers of the Company as Margin against Bank Guarantees Issued/ to be issued in favour of the Company.

8. In the opinion of the management, diminutions in the value of certain Investments Rs. 16,53,439 are temporary in nature and hence no provision has been made for the same.

9. Fixed deposit receipts amounting to Rs. 28,29,063 are lodged with a client / Sales Tax authorities as Security / Registration Deposits.

10. To the extent identified from available information, there is no amount due to micro, small and medium size enterprises as on March 31, 2010

11. Previous Years figures have been re-grouped and re-arranged wherever considered necessary.

Current years figures include the figures of the erstwhile Techno Electric & Engg Co. Ltd., (the transferor company) as per Scheme of Amalgamation and hence are not strictly comparable with those of previous year.