Bhagheeratha Engineering Ltd. के अकाउंट के लिये नोट

Mar 31, 2013

1. Company Information

Bhagheeratha Engineering Ltd. is a public Limited Company Incorporated in 1976 and became a Public Limited Company in 1980. The company is engaged in the business of undertaking civil construction contracts. The company has an excellent track record in taking up and completing complex engineering projects such as roads, highways, bridges, dams, canals, tunnels, industrial structures and other turnkey jobs.

During the last few years the company had fallen into financial distress due to cancellation of contracts. The Management is making earnest efforts to revive the company.

2. RELATED PARTY DISCLOSURE

List of Related Parties:

a Key Management Personnel:

i Chairman - Mr. V.C. Antony

a Managing Director - Mr. Tomy C Madathil b Enterprise owned or significantly influenced by key management personnel or their relatives:

1) Associate Companies

i Bhagheeratha developers Ltd.

a Techni soft India Ltd.

Hi Bhagheeratha Energy controls Ltd.

2) Joint Ventures

i PATI-BEL Joint Venture Delhi a PATI-BEL Joint Venture, Kochi iii BEL-TBL Joint Venture

3. IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and a detailed exercise is being done to examine this aspect to fall in line with the provision as required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India, the results of which will be incorporated in the next financial year.

4. The Company has entered into Joint Venture agreements with other entities for execution of projects as detailed below.

Name of JV Project

PATI - BEL Joint Venture-Kochi Road work in Keraia-Thaikood-Chenganoor

Alleppey - Changanassery

PATI - BEL Joint Venture-Delhi Etawah Road Work (NH2) Package IC, U.P.

The Company has not made any investments in the capital of the above Joint Ventures. The JV is executing the projects of the PATI-BEL JV.

5. Contract works at the following four projects were terminated by the Clients.

Etawah Road Project - Client - National Highways Authority of India- work taken through BEL-ACC Joint Venture.

IWT Project at Kottayam - Client - Kerala State Transport Projects

West Bengal Bridge project - Client - National Highways Authority of India

Mizoram Road Project - Client - Mizoram State PWD- Work taken through BEL-ABL Joint Venture.

a) The clients of all the projects had imposed restrictions on transfer of equipment, vehicles, stores and spares in the projects, pending settlement of disputes, as a result of which equipments worth Rs. 318 lakhs (WDV) and stores worth Rs. 248 lakhs are retained at the respective project sites.

b) Company has challenged the above termination and preferred claims for the loss incurred in various Disputes Redressal forums. Though company is confident of getting the decisions in its favour the management as a measure of abundant caution has decided not to recognize the claims as revenue in strict adherence to the Accounting Standard No.7 (Accounting for Construction contract).

6. Claims if any against the company on account of the termination of contracts are not presently ascertainable.

7. Bank guarantees amounting to Rs.2140 lakhs (IWT-Kottayam, Rengali Project - Orissa, Gulab Sagar Project - Madhya Pradesh and ROB Project-Calicuf, Kerala ) are invoked by the clients and company has obtained stay orders from the Court and matter is pending for final decision. Company is confident of getting a decision in its favour and hence no provision for the same is considered necessary.

8. The Audit of Accounts of PATI-BEL JVs in which company is a partner is not complete, the turnover and loss of share on account '' of JV are incorporated based on provisional accounts.

9. Receivables against uncertified work amounting to Rs.623 lakhs, security deposit and with-holding from contract income amounting to Rs. 312 lakhs relating to closed projects are pending realization due to dispute with the clients which are in different stages of arbitration/legal proceedings. Based On the progress made so far in the cases, company is confident of realizing the above dues in the near future.

10. Sales tax assessment in relation to some of the projects of the company is pending. In respect of those projects sales tax paid in advance amounting to Rs. 252 lakhs is debited to sales tax advance account and provision for sales tax is created to the extent of Rs. 189 lakhs. In addition, in respect of one of the projects sales tax department has raised a demand of Rs. 136 lakhs which is disputed and appeal is pending.

11. The stock of spare parts and materials worth Rs. 48.37 lakh is written off during the year as these items have become obsolete and unusable due to ageing and corrosion and expiry of shelf life. Scrap value if any will be assessed and accounted at the time of disposal.

12. Earthmoving equipment having original cost of Rs261.52 lakh and WDV nil and Construction machinery worth original cost of Rs465.63 lakh and WDV nil have been written off as these items are obsolete and very old and are lying in a deteriorated and scrap condition. Scrap value if any will be assessed and accounted at the time of disposal.

13. CONTINGENT LIABILITY

1) Bankers of the company have issued general guarantees on behalf of the company amounting to Rs.2140 (Rs.2140) lakhs which are secured by hypothecation of machinery, pledge of fixed deposit receipts and personal guarantees of Directors in addition to the counter guarantees issued by the company for an equal amount.

14. PREVIOUS YEAR FIGURES ,

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 previous year figures to confirm to this year''s classification.

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Mar 31, 2012

1. Company Information

Bhagheeratha Engineering Ltd. was incorporated as a Private Limited Company in 1976 and became a public Limited Company in 1980. The company is engaged in the business of undertaking civil construction Contracts. The company has an excellent track record in taking up and completing complex engineering projects such as roads, highways, bridges, dams, canals, tunnels, Industrial structures and other turnkey jobs.

During the last few years the company had fallen into financial distress duo to cancellation of contracts. The Management is making earnest efforts to review the company.

2. LONG TERM BORROWINGS

Repayment of all those Loans are defaulted since 2000. On the basis of The terms agreed upon in the Corporate Debt Restructuring Scheme, the company has provided interest at a concessional rate of 0.25% p.a. on loans of Rs.3810 Iakh8 availed from the consortium of bankers Interest is charged at the* rate of 17.50% on Rs.423 lakhs and also no interest is charged on loans of Rs.5889/- lakhs for which Interest moratorium was originally allowed. The company is no longer covered by the CDR scheme and therefore the above concessional rate of interest on the loans are no more applicable. The bankers have filed suits for recovery of the above loans. The company has now submitted a scheme for One Time Settlement of those loans, which is under the consideration of the banks. The consortium of bankers have gone to DRT for recovery action and therefore, the company have not been appraised of the balances with the banks since 01.04.2009. Short provisions if any on this account is not presently ascertainable

The Hire purchase financiers have claimed interest on delayed payments. The Hire Purchase financiers have taken possession of tho Hypothecated assets and have not given details of accounts. Hence, the company has not provided Overdue interest.

Loans from Bankers are Secured by:

loans from banks are secured by hypothecation/mortgage of materials, spare parts, work in progress, receivables and immovable pinpoints and floating charge on machinery, vehicles & equipment ,and the personal spouse of two Directors. Those loans are also collaterally socurod by mortgage of 20.43 are of land with residential building and 10.17 ares of land with residential building ( spouse of two diroctors ) and 58.28 are of land belonging to one of the Asocial Companies.

3. RELATED PARTY DisCLOSURE

List of flouted parties ;

a Key Management Personnel:

I Chairman • Mr.V.C. Antony

li Managing Director - Mr. Tomy C Madathil

b Enterprise owned or significantly influenced by key management personnel or their relatives;

1) Associate Companies

i Bhagheeratha Developers Ltd.

ii Techni Soft India Ltd.

iii Bhagheeratha Energy Controls Ltd.

2) Joint Ventures

I PATI-BEL Joint Venture Delhi ii PATI-BBL Joint Venture, Kochi Hi iwi I I Ml Joint Ventures

4. IMPAIRMENT OF ASSETS

No material Impalrmonl of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute Of Chartered Accountants of India.

5. The Company lias entered into Joint Ventures agreements with other entities for execution of projects as detailed below.

Name of JV Project

PATI - BEL Joint Venture-Kochi Road work in Korala-Thaikood-Chonganoor

Alloppoy - Changanassery

PATI - BEL Joint Venture-Dolh Etawah Road Work (NH2) Pockage ic.u.p..

I ho Company has not made any Investments in the capital of the above Joint Ventures. The JV is executing the projects of the PA I l-BEL JV,

6. Contract works at the following four projects wore terminated by the Clients.

Etawah Road Project - Client - National Highways Authority of India. IWI Projoct at Koltayam - Client - Kerala Btate Transport Projects Wost Bengal Bridge project - Client - National Highways Authority of India Mizoram Road Project - Client Mizoram State PWD

a) Tho clionls in first Throop projects had imposed restrictions on transfer of equipment, vehicles, sloros and spares in the projects, pending settlement of disputed.

b) At Mi/ovum project the equipments, vehicles, stores and spares are compulsorily retained at the project site by a court order on a dispute with the clients. The WI) V of such equipment:; and vehicles as on 31.03.2012 is Rs. 170 lakhs and the value of such stores and spares is Rs.42.54 lakhs.

c) Value of equipments and stock of spares compulsorily retained by the clients at West Bengal project as at 31.03.2012 aro Rs.45 lakhs and Rs.140 lakhs respectively.

d) Value of stock of materials and spares retained as explained above at Etawah and IWT projects are Rs.79 lakhs and Rs.26 lakhs respectively.

e) Company has challenged the above termination and preferred claims for the loss incurred in various Disputes Redressat forums. Though company is confident of (jotting the decisions in its favour the management as a measure of abundant caution has decided not to recognizo tho claims as revenue In strict adherence to the Accounting Standard No.7 ( Accounting for Construction contract).

7. Claims If any against the company on account of the termination of contracts are not presently ascertainable

8. Bank guarantees amounting to Rs.2140 lakhs (IWT-Kollayam, Rongall Project - Orissa, Gulab Sagar Projocl - Madhya Pradesh and ROB Projoct-Callcut, Kerala) are Invoked by the clients and company has obtained stay orders from the Court and matter is pending for final decision. Company is confidant of getting a decision in its favour and hence no provision for the same is considered necessary.

9. The Audit of Accounts of PAf l-BEL JVs in which company is a Partner is not complete. the turnover and loss of sham on account of JV are incorporated based on provisional accounts,

10. Receivables against uncertified work amounting to Rs.623 lakhs, Security deposit and with-holding from contract income amounting to Rs.330 lakhs rotating to closed projects are pending realization duo to dispute with the clients which are In different stages of arbitration/legal proceedings. Based on the progress made so far in the cases, company is confidant of realizing the above duos in the near Future.

11. CONTINGENT LIABILITY

1) The banks have initiated action under SARFAE8IA for taking over and Disposal of dwelling houses owned by guarantors (spouse of two Directors) against which the High Cowl has granted stay on condition that Ms.400 lakhs will be kept in a no-lion deposit account, pending Disposal of the case. Accordingly the amount is deposited In the bank. The above guarantors shall be compensated for loss they may Buffer on account of the action by bankers on this account and consequently the liability may devolve on the company.

2) Bankers of the company have issued general guarantees on behalf of the company amounting to Rs.2140 (Rs.2685) lakhs which are secured by hypothecation of machinery, pledge of fixed deposit receipts and Personal guarantees of Directors in addition to the counter guarantees issued by the company for .in oriel amount.

12. PREVIOUS YEAR FIGURES

During the year ended 31st March 2012 the Movisod Schedule VI notified Under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to confirm to this Year’s classification.

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Mar 31, 2010

1. Secured Loan

Cash Credit and Working Capital Demand Loans from banks are secured by hypothecation/mortgage of materials, spare parts, work in progress, receivables and immovable properties in addition to the personal guarantee of three Directors and floating charge on machinery, vehicles & equipment.

Term Loan from Syndicate Bank is secured by mortgage of land measuring 8 Acre 40 cents at Kottayam, Land measuring 5 Acre 21 cents at Kayamkulam and personal guarantee of three directors.

Term Loan from Federal Bank Limited is secured by hypothecation of equipment / vehicles purchased by availing the above facility and personal guarantee of two Directors.

Hire purchase credits and term loans from financing companies amounting to Rs.591 lakhs (Rs.591) lakhs is secured by hypothecation of machinery and vehicles purchased against such credits.

2. On the basis of the terms agreed upon in the Corporate Debt Restructuring scheme, the company has provided interest at a concessional rate of 8.25 % p.a. on the term loans and overdraft amounts of Rs.4122 lakhs availed from the consortium of bankers and also no interest is charged on term loans of Rs. 4037 lakhs for which interest moratorium was allowed. The Company is no longer covered by the CDR scheme and therefore the above concessional rate of interest on the loans and overdraft are no more applicable. The Company has now submitted a scheme for One Time Settlement of these loans and overdrafts, which is under the consideration of the banks. Short provisions if any on this account is not presently ascertainable.

The Hire purchase financiers have claimed interest on delayed payments. The Hire Purchase financiers have taken possession of the hypothecated assets and have not given details of accounts. Hence, the Company has not provided overdue interest.

3. Fixed assets, receivables and inventories are hypothecated to consortium of Bankers & Financiers for availing loans from them.

4. The deposit accounts with banks are frozen pending settlement of the dues to banks.

5. Contract works at the following four projects were terminated by the Clients.

Etawah Road Project-Client: - National Highways Authority of India.

IWT Project at Kottayam - Client: - Kerala State Transport Projects.

West Bengal bridges project- Client: - National Highways Authority of India. .

Mizoram Road Project - Client: -Mizoram State PWD.

The clients in first three projects had imposed restrictions on transfer of equipment, vehicles, stores & spares in the projects, pending settlement of disputes. In respect of Etawah project equipment, WDV of which is Rs131 lakhs was taken over by one of the financiers on a court order and the balance equipment, vehicles sold by the client through an auction for Rs102 lakhs (WDV Rs47 lakhs) and proceeds credited to company account. The WDV of remaining equipment /vehicles as on 31.03 2010 is Rs. 61 Lakhs and the value of stores and spares as on 31.03.2010 is Rs.245 lakhs.

At Mizoram project the equipment, vehicles, stores and spares are compulsorily retained at the project site by a court order on a dispute with the clients. The WDV of such equipments and vehicles as on 31.3.2010 is Rs. 313 lakhs and the value of such stores and spares is Rs.66 lakhs.

Company has challenged the above termination and preferred claims for the loss incurred in various Disputes Redressal forums. Though company is confident of getting the decisions in its favor the management as a measure of abundant caution has decided not to recognise the claims as revenue in strict adherence to the Accounting Standard No.7 (Accounting for Construction contract) Claims if any against the company on account of the termination of contracts are not presently ascertainable.

6. (a) Bank guarantees amounting to Rs.2157 Lakhs (IWT

Project - Kottayam, Rengali Project- Orissa, Gulab Sagar Project- Madhya Pradesh and ROB Project- Calicut, Kerala) are invoked by the Clients and Company has obtained stay order from the Court and matter is pending for final decision. Company is confident of getting a decision in its favor and hence no provision for the same is considered necessary.

(b) Bank Guarantees amounting to Rs1852 lakhs (Rs. 843 lakhs against work advances and Rs1009 lakhs as performance guarantees) issued to NHAI in respect of WB-lll project at West Bengal are encashed after the balance sheet date. Amount paid towards performance guarantee being loss is provided for in the accounts.

7. The Audit of Accounts of Pati-BEL JVs in which Company is a partner is not complete, the turn over and loss of share on account of JV are incorporated based on provisional accounts.

8. Miscellaneous Income includes-

(a) Interest on Bank deposits Rs. 27 lakhs (Rs. 43 lakhs).

(b) Interest Received on Income Tax refund Rs. 4.25 lakhs (Rs. 1.1 lakhs).

(c) Profit on sale of Fixed Assets Rs. 93 lakhs (Rs. 489 lakhs)

(d) Margin on Contracts Rs. 94 lakhs (Rs. 66 lakhs)

9. Based on the information available with the Company regarding the status of suppliers, following are the amounts outstanding for a period exceeding thirty days to SSIs as on the close of the year.

M/s. Aadhar Equipments Pvt. Ltd. Rs. 0.40 lakhs (Rs. 0.40 lakhs)

M/s. Akshar Engineering Equipments Ltd. Rs. 2.97 lakhs. (Rs. 2.97 lakhs)

10. Related Party Disclosure.

List of related parties -

1. Associated Companies

(a) Bhagheeratha Developers Ltd.

(b) Techni soft India Ltd.

(c) Bhagheeratha Energy Controls Ltd

2. Key Management Personnel

Chairman - Mr.V.C.Antony

Managing Director - Mr. Tomy C Madathil

3. Joint Venture

PATI - BEL Joint Venture - Delhi

PATI - BEL Joint Venture - Kochi

OTHER NOTES

11. Contingent Liabilities: -

Bankers of the Company have issued general guarantees on behalf of the company amounting to Rs.4537 (Rs.6548) lakhs which are secured by hypothecation of machinery, pledge of fixed deposit receipts and personal guarantees of Directors in addition to the counter guarantees issued by the company for an equal amount. Out of the above, Bank Guarantees amounting to Rs 1852 lakhs were encashed by one of the client after the balance sheet date.

12. The maximum amount due by Directors or other officers of the Company at any time during the year is Rs. Nil (Rs.-) lakhs.

13. The Company has not earned any Foreign Exchange during the year (Nil)

14. The Company has not spent any Foreign Exchange during the year.

15. There are no employees who are in receipt of remuneration as prescribed under section 217 (2A) of the Companies Act 1956.

16. Previous years figures have been regrouped wherever necessary to conform to the current years classifications. In the Notes figures given in brackets pertain to previous year.

17. All amounts are rounded off to the nearest thousand.