AnnualReport 2011 2012 English

7/28/2019 AnnualReport 2011 2012 English

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DeefJemcejCeere #eCe(GLIMPSES OF SOME IMPORTANT EVENTS)

Shri R Misra, CMD, HEC is seen receiving the BT-Star PSU Excellence Awaed 2012 in Turn Around Category

from Shri Oscar Fernandes, Chairman, Committee on Human Resource Development, Shri TKA Nair, Advisor to

the Hon'ble Prime Minister & Shri Nishi Kant Sinha, Former Chairman, PESB at Hotel Taj Mansingh, New Delhi

on 25.05.2012.

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Sri R. Misra, CMD of Heavy Engineering Corporation, is seen laying the foundation stone of an

Effluent Treatment Plant at the company Foundry Forge Plant in Ranchi on 19th September 2012.

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GLIMPSES OF SOME IMPORTANT EVENTS

Celebration of Shri Vishkarma Puja at HEC Plants on 17.09.2012

Sri R. Misra, CMD, HEC inaugurating the dispatch of first CNC Deep Hole Boring Machine,

Model BDH 140N to Ordinance Factory, Kanpur.


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QUALITY POLICY

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To achieve and maintain a leadingposition as supplier of reliable qualityproducts, systems and services to meet

customer needs and expectations


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ANNUAL REPORT 2011-12

1

CONTENTS

1. Notice of AGM 2

2. Directors' Report 3

- R&D, Technology Absorption, Adaptation, Innovation and Energy Conservation 10

- Report on Corporate Governance 12

- Auditors Report and Management's Replies 14

- Comments on the Accounts by C & AG 19

3. Annual Accounts

- Significant Accounting Policies 20

- Audited Accounts with Notes & Cash Flow Statement 22

4. Additional Information 46

BOARD OF DIRECTORS(As on 30.11.2012)

Chairman-cum-Managing Director : Shri R.Misra

Director (Production) : Shri Kushal Saha

Director (Personnel) : Shri Subhra Banerjee

Director (Marketing) : Shri A.V. Krishna

Director : Shri Vijay Shankar Madan

: Shri Harbhajan Singh

Company Secretary : Shri Abhay Kumar Kanth

Auditors : M/s Anjali Jain & Associates,

Chartered Accountants

Bankers : State Bank of India

Registered Office : Plant Plaza Road, Dhurwa,Ranchi- 834004 (Jharkhand)


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2

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given to the Shareholders of Heavy Engineering Corporation Limited that 53rd Annual General Meeting of the Company will be held onFriday, the 30th November, 2012 at 3.00 PM at its Registered Office located at Plant Plaza Road, Dhurwa, Ranchi to transact the following business:-

ORDINARY BUSINESS1. To receive, consider and adopt the Directors' Report to the Shareholders for the financial year ended 31st March 2012.

2. To receiver, consider and adopt the audited Profit & Loss Account for the financial year ended 31st March, 2012 and Balance Sheet as on that datealong with the Auditors Report thereon and our replies thereto.

3. Appointment of Auditor under Section 619 (2) of the Companies Act, 1956 for the financial year 2012-13 authorize Board of Directors to fixremuneration of the Statutory for the financial year 2012-13

By order of Board of Directors

Date : 5.11.2012

(A. K. Kanth)

Co. Secretary

Note: 1. A Member of the Company entitled to attend and vote at the meeting is entitled to appoint proxy to attend and vote instead of himself andproxy need not be a Member of the Company.


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Shri R. MisraChairman-cum-Managing Director

Shri Vijay Shankar MadanDirector

Shri Harbhajan SinghDirector

Shri Kushal SahaDirector (Production)

Shri Shubhra BanerjeeDirector (Personnel)

Shri Abhay Kumar KanthCompany Secretary

Shri A. V. KrishnaDirector (Marketing)

BOARD OF DIRECTORS(As on 30.11.2012)


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OUR PROJECTS

Wagon Tippler at New OBBP, Rourkela Steel Plant

Twin Boomer Stakcer at New OBBP, Rourkela Steel Plant


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To

The ShareholdersHeavy Engineering Corporation LimitedLadies and Gentlemen,

Heavy Engineering Corporation has completed its 53 years of service to the nation and the Directors of the Company have the pleasure to present the 53rdAnnual Report of the Company together with Audited Accounts for the year ended 31st March, 2012.

It is matter of great pride that your company continuously earned net profit for the 6th consecutive year and has been conferred BT Star PSU ExcellenceAward 2012 in Turn Around Category.

1. PERFORMANCE HIGHLIGHTS

We are happy to inform you that inspite of odds like labour unrest, stoppage of bank operation and delay in implementation of upgradation of someof critical facilities your company has shown growth in terms of Gross sales. The gross sale has gone up by 6.5% over that of the last financial year.The gross sales during the year has been`725.23 crore against`681.21 crore during the previous year.

2. PRODUCTION & SALES

The production & sales figures for the year as compared to the previous year and MOU targets are as follows:- (`in crore)2011-12 2010-2011

MOU Actual MOU Actual

Gross Turnover 1000.00 725.23 700.00 681.21

Production 952.22 687.74 667.70 700.55

The Gross Sales, Production and productivity for the last ten years are given below:

Gross Sales `Crore

0

100

200

300

400

500

600

700

800

2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12

159 178

304

413

454

528

681

725

DIRECTORS' REPORT


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Production `Crore

0

100

200

300

400

500

600

700

800

2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12

136166

281

383 419

538

701 688

Productivity

There is a marked improvement in Gross sales per employee

Gross Sales per Employee `Lakhs

0

5

10

15

20

25

30

35

2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12

4.41 5.15

9.13

13.80

15.8318.42

24.60

30.17

3. FINANCIAL RESULTS

Profitability was affected due to increase in material cost, fuel cost and employment cost. As a result, Gross margin has gone down inspite ofimprovement in productivity in terms of Gross Sales per employee. (`in crore)

Particulars2011-2012 2010-2011

MOU Actual MOU Actual

Gross Margin* 62.00 18.34 54.00 42.60

Interest 4.75 5.15 12.00 0.92

Depreciation 5.15 4.31 5.20 4.06

Profit before Tax 52.10 8.58 36.80 38.14

Net Profit 52.10 8.58 36.80 38.14

Cash Profit 57.25 12.89 42.00 42.20

* Profit before Depreciation, Interest, Tax, Prior Period and extra ordinary items


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Gross Margin `Crore

-80

-60

-40

-20

0

20

40

60

2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12

-61.49 -64.24

13.15

31.19

44.02

34.38

42.60

18.34

Net Profit `Crore

-350

-300

-250

-200

-150

-100

-50

0

50

100

2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12

-285.02

-86.89

2.86 4.1718.37

44.27 38.14

8.58

Paid up Equity Capital of the Company on 31.03.2012 stands to be`606.08 crore.

During the year your Company contributed`74.52 crores to Central and State Exchequers as compared to`66.45 crores in the previous year.


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4. MARKETING ACTIVITIES

ORDERS BOOKED & ORDER BOOK POSITION :

Inspite of delay/deferment of many high value projects/tenders bycustomers, company during the year booked orders worth`545.82crore and order book position of company stood at`1916.36 crore

as on 31.3.2012.During the year, the Company received following important orders:

EOT Crane Package of various capacity from BSP Bhilai.

07 nos. 5 cum Shovel equipment from different units of CIL.

Coal Handling Plant from NCL Krishnashila.

Crusher package from SAIL RMD.

03 nos. CNC Lathe machine from FGK Kanpur.

Mining Spares from various CIL units.

Apart from the above, a number of orders for Castings, Forgings,Spare items had also been received from various Steel Plants, Mining& general engineering industries in Private sector.

Project Activities :

The Project Division is currently executing the Turnkey orders of OreHandling Plant, Part-A (Pkg-060) & Coal Handling Plant (062)of BSP Bhilai and Pkg-090 of RSP Rourkela. The execution of theprojects at these sites is under progress and all efforts are beingmade for early execution.

Besides this, Coal Washery at Madhuband (BCCL) and Coal Handling Plant

of NCL Krishnashila & Crusher package of SAIL RMD is in initial stage.The production achieved for 2011-12 was`285 crore against thetarget of`414 crore. Shortfall has been due to land slide owing toheavy rainfall at BSP site and non-start of work of Coal washery atMadhuband, BCCL due to exorbitant delay in receipt of environmentalclearance by BCCL from Govt. of India

NEW BUSINESS INITIATIVES:

a) Important MOU/Agreements Signed during 2011-12:

With M/s Vitkovice a.s., Czech Republic on 10.10.2011 - for

equipments/components for Steel, Thermal power plant, NavalShip, Nuclear Sectors

With M/s INCO Engineering, Czech Republic on 10.10.2011 -for Underground Mining Equipments

With M/s Kralovopolska, Czech Republic on 06.10.2011 - forPetrochemical sector & EOT Cranes

With M/s V R Steel, South Africa on 18.11.2011 - for manufactureof (a) Bucket for Dragline & Shovel, (b) Body for Mining Dumper,(c) Components used for Bulk Material Handling, (d) Armoring ofCar/vehicle for personal & Military use

b) Efforts for Export orders

An order for` 10 crore had been received for modernization ofSaidpur Railway Workshop project, Bangladesh.

5. BIFR AND REVIVAL PACKAGE

Consequent upon winding up order of BIFR and subsequent appeal to

AAIFR and Honble High Court of Jharkhand, issue of revival of HECwas referred to BRPSE which recommended revival package for HECon 7.10.2005. Govt. of India approved the package in Dec-2005.Continued efforts were made to settle the various issues pertaining toland, buildings, waiver of dues and fund to be provided by Govt. ofJharkhand. Govt. of Jharkhand (GOJ) in April 2009 agreed to waiveoutstanding electricity dues plus DPS on it and water dues; providegrant of`275.51 crore out of which HEC would pay`25.51 croreto Commercial Tax Dept. to settle the outstanding Commercial TaxLiabilities. HEC will transfer non-residential/residential buildings,which were given on rent to GOJ, and 2342 acres of land (including

85 acres of appurtenant land with buildings) to State Govt. Inaddition, GOJ agreed for transfer of 158 acres of land by HEC to CISFto settle their dues. Accordingly affidavits were filed by HEC, DHI andGovt. of Jharkhand based on which Honble Jharkhand High Courtapproved the revival package on 13.11.2009.

Company has transferred 158 acres of Land to CISF. Govt. Jharkhandhad taken possession of 1148 residential quarters, 17 non-residentialbuildings with 85.11 acres appurtenant land and 1902.64 acresof vacant land which in turn had released` 164.21 crore out of`275.51 crore agreed earlier. In addition it had waived electricity dues

upto 31.3.2006 and Delayed Payment Surcharge (DPS) upto 31.8.08.

The reliefs like waiver of DPS for the period 1.9.2008 to 31.3.2010and water dues and receipt of balance amount of grant of`111.30crore, settlement of commercial tax dues upto 31.03.2007 under therevival package approved by Honble Jharkhand High Court is yet tobe implemented. Efforts are being made to settle all these issues.However, partial implementation of the Revival Scheme of Govt. ofJharkhand has not been accounted for in the Accounts.

6. SAFETY, ENVIRONMENT AND POLLUTION CONTROL

As always, your company gives utmost importance to the occupationalsafety and health of workers in the company. Various training andawareness programme were conducted regularly in order to inculcatesafety consciousness among the employees. Complete medicalcheck-ups were regularly carried on as per the statutory norms.Safety appliances like hand gloves, goggles, protective clothing,safety helmets, safety belts, safety shoes etc. were provided tothe employees. National safety day and HEC Safety Week werecelebrated by all the units.


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The company does not compromise on environmental pollution andso takes all precautions towards pollution control as detailed below :-

Compliance with all statutory requirements laid down underAir (Prevention and Control of Pollution) Act, Water (Preventionand Control of Pollution) Act and Environment (Protection) Act.

Obtaining running consent from the State Pollution ControlBoard and compliance with the stipulated conditions.

Testing of water effluent samples regularly for pollutants,based on which consent for discharge of water to inland bodyis granted.

Ambient air test is carried out regularly to ascertain limit ofpollution gases before giving consent for air emission.

Regular tree plantation activities are being carried out with thehelp of forest department to keep the HEC areas green andreduce the pollution.

7. MANPOWER POSITION

The manpower of the Company as on 31.03.2012 stood at 2404 asagainst 2769 on 31.03.2011.

8. INDUSTRIAL RELATIONS

During the period under review, the industrial relation climate, ingeneral remained normal. However, gate meetings and generalmeetings organized by different trade unions to press their demandsmainly related to wage revision, promotion, pending LTL issues,unauthorized occupation of Quarters and lands, increase in water

charges, minimum wages to contract workers, regularization ofcontract workers etc. The year 2011-12 saw finalization of revisionof scales of pay for workers, supervisors and executives.

Indefinite Dharna is organized by dependent of deceased employeesw.e.f. 13.04.2012 near HEC Headquarters gate seeking employmentwith HEC.

9. EMPLOYEE WELFARE

The company has its own Township, Plant Hospital and dispensariesfor the regular employees. Contract workers are extended medicalbenefit under ESI Scheme for which subscription amount is paid

by the Company to the respective contractors. Superannuatedemployees are extended free indoor & outdoor medical facility inHEC Plant Hospital.

Efforts are being made to facilitate the employees/ contractworkers to continue their study in order to clear the matriculationexamination. Corporation will help them in getting registration etc.as private candidate.

Attempts are being made to get ITI equivalent qualifications forexperienced but unqualified contract workmen.

10. HUMAN RESOURCE DEVELOPMENT

Your company gives immense importance to human resourcedevelopment. Thrust were on competency development throughorganizing a series of programmes on soft skills viz. attitudinaldevelopment, emotional quotient, transactional analysis, enthusingteam building, leadership quality development, developing

supervisory skill, subordinate development. This helped company inachieving substantial improvement in performance and company ismaking net profit since last 6 years.

Your company is running two schools for the wards of employees &others in the neighboring areas.

11. STATUS OF SCHEDULED CASTES AND SCHEDULEDTRIBES

i). No. of SC & ST employees as on 31.03.2012 stood at 319 and442 respectively

ii). Percentage of SC & ST employees w.r.t total employees stoodas 13.27% and 18.30% respectively.

iii). Out of 25 recruitments made during the year 2011-12, 04nos. of SC candidates & 03 nos. of ST candidates have joined.

12. PROGRESSIVE USE OF HINDI

Rajbhasha Vibhag promotes the usage of Rajbhasha Hindi throughout your company as an essential effort for wider implementationunder the directives of Govt. of India.

The following steps were taken by the company during the year

towards progressive use of Hindi as official language :i) The typists and stenos of English have been given training for

typing and stenography in Hindi.

ii) Employees are being motivated and trained to becomeconversant with Hindi as a workable language.

iii) The Official Language Implementation Committee organizedits quarterly meetings regularly during the year.

iv) Various checkpoints have been made to ensure successfulimplementation of Raj Bhasa Policy and attention of the Headsof Departments/Plants were attracted towards deficiencies found,

if any. Directives were also issued to follow the rules rigidly.

v) Raj Bhasha Fortnight was organized and various competitionssuch as Essay writings, Speech, Poetries, Noting, Drafting,Typing as well as for Raj Bhasha Shield and excellent work inHindi were held. The winners were given attractive prizes. TwoHindi workshops were organized for the benefits of employeesup to date their working knowledge in Hindi.


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13. DEVELOPMENT OF ANCILLARIES AND SSI UNITS

As a part of its social responsibility, your company developed anancillary area near Tupudana with the help of Ranchi IndustrialDevelopment Authority to create opportunity of employment as wellas individual entrepreneurship.

Regular interactions were organized with the SSI units to find outvarious scopes for mutual cooperation and entry in new areascommensurate with HECs growth.

14. CORPORATE SOCIAL RESPONSIBILITY

Initially HEC had a dedicated section known as CommunityDevelopment Cell for carrying out CSR activities which includedconstruction of culverts, helping nearby villagers for poultry farmingand its training, provisions for drinking water etc. Later on withthe deterioration in performance company abandoned this cell.Subsequently, company started skill development programme where

preference are being given to local youths and youths from displacedfamily. For this company started Industrial Training Institute knownas HEC Training Institute (HTI) which provides certificate equivalentto ITI. Company also runs Nursing School for local youths. Companyalso runs schools with a nominal fee. Company is having 350bedded Hospital where ex-employees & their spouse are providedfree treatment. In addition, free health camps are being organized innearby villages and HEC hospital.

15. VIGILANCE ACTIVITIES

Vigilance organization of the company operated under the overall

administrative and functional control of Chief Vigilance Officer. Preventive vigilance continued to be the thrust area through periodic

and surprise inspections by the Vigilance Department. Awarenessamongst employees is generated by organizing training programson various guidelines/procedures of CVC, disciplinary enquiryproceedings, their role in combating corruption etc. and need fortransparent and fair working. Twelve such programs were organizedduring the year. In addition, regular interactions by CVO/VigilanceOfficers with senior executives/ employees of HEC were organizedto develop a positive approach among them towards corruption free

efficient and transparent working. Efforts had been on timely disposalof complaints and enquiries. A Compendium of Circulars containingCVC/CTEs guidelines/circulars besides, internal circulars was preparedand distributed amongst the senior officers of the Corporation.

Vigilance Portal in Companys website has been introduced containingvigilance related details for guidance of officers of the Corporation.Policy regarding Public Interest Disclosure and Protection of Informer(PIDPI) resolution and press release of CVC was up-loaded inCompanys website and displayed at Notice Boards for informationof employees/.officers.

Vigilance awareness week was observed as per CVCs guidelines.Essay/quiz competitions were organized to enhance vigilanceawareness among the employees.

16. DISPOSAL OF REQUEST/APPEAL UNDER RTI ACT :

Company emphasizes on transparency and timely submission ofinformation sought was given priority.

17. QUALITY CONTROL

Your company never compromises on quality of the productsmanufactured. The company takes all measures to maintain thequality of its products and services to the utmost satisfaction of itscustomers, keeping this in view Quality assurance department hasbeen centralized for three plants. The standards of Quality of productsand services are being maintained as per relevant Indian standardsand ISO 9001:2000.

18. ENERGY AUDIT

Energy Audit was carried out by Petroleum Conservation ResearchAssociation (PCRA) in 2004-05 in a limited way with the objective tostudy the use of alternate fuel other than the currently used ProducerGas for Heat treatment/Reheating furnaces.

As Foundry Forge unit is the main energy consuming unit, energyaudit of this unit with the help of an external agency M/s. EnergoEngineering Projects Ltd (EEPL) was got done. Suggestions havebeen prioritized and action initiated in following areas:

1. Revamping of the Producer Gas plant, gas cooler units,ventilators and producer gas operated furnaces

2. Overhauling of HT Transformers.

3. Modification in operating system of compressors for intermittentswitching off.

4. Replacement of MG Set of EOT Crane by Variable Frequency Device.

5. Switching off the standby transformers.

19. R&D, TECHNOLOGY ABSORPTION, ADAPTATION, ANDINNOVATION; ENERGY CONSERVATION

The particulars required under section 217(1) of the Companies

Act, 1956 read with the Companies (Disclosure of particulars inthe report of Board of Directors) Rules 1988, regarding R&D,Technology Absorption, Adaptation and Innovation as well as EnergyConservation are furnished in Annexure- A.

20. DIRECTORS RESPONSIBILITY STATEMENT

ii) that in the preparation of the Annual Accounts for the financialyear ended March 31, 2012, the applicable accountingstandards have been followed along with the properexplanation relating to material departures;


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iii) that the Directors have selected such accounting policies andapplied them consistently and made judgments and estimates thatwere reasonable and prudent so as to give a true and fair view ofthe state of affairs of the Company for the year under review.

iv) that the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with

the provisions of the Companies Act,1956 for safeguarding theassets of the Company and for preventing and detecting fraudand other irregularities.

v) that the Directors have prepared the Annual Accounts for thefinancial year ended March 31, 2012 on a going concern basis.

21. FOREIGN EXCHANGE

The foreign exchange outgo during the year was`56.39 Crores.

22. INFORMATION UNDER SECTION 217 (2A) OF THECOMPANIES ACT, 1956

None of the employees of the Company was in receipt of remunerationin excess of limits prescribed under section 217 (2A) of the CompaniesAct, 1956, read with Companies (Particulars of Employees) Rules,1975 during the financial year ending 31st March, 2012.

23. CORPORATE GOVERNANCE

Report on Corporate Governance is placed at Annexure-B.

24. STATUTORY AUDITOR

The Comptroller & Auditor General of India (CAG) has appointedM/s Anjali Jain & Associates, Chartered Accountants, Ranchi as the

Statutory Auditor of the company for the financial year 2011-12.25. COMMENTS OF C&AG AND STATUTORY AUDITORS AND

MANAGEMENTS REPLIES THEREON

The comments of C&AG under Section 619 (4) of the CompaniesACT, 1956 on the Accounts of the Company for the year ended31.03.2012 along with the Review of Accounts of your Company byC&AG and Statutory Auditors observations along with Managementsreplies thereto are furnished in ANNEXURE-C

Dated : 27.11.2012

26. BOARD OF DIRECTORS

During the year, there were two part time Official Directors on theBoard of HEC, in addition to the CMD, Director (Finance), Director(Marketing) and Director (Production).

Shri R. Misra, Director (Finance) assumed the additional charge ofChairman-cum-Managing Director w.e.f. 1.1.2012 and took over asCMD w.e.f. 31.05.2012.

During the year Shri G.K. Pillai, CMD and Shri Bharat Prasad,Director (Marketing) superannuated. Board places on record its deepappreciation for the valuable services and contribution made by themduring their tenure on the Board of Directors of HEC Ltd. In addition,Shri Saurabh Chandra, on 17-4-2012 relinquished the position ofpart time official Director on Board of HEC Ltd.

27. AUDIT COMMITTEE

As there were no independent Directors on the Board of HEC Ltd. the

Audit Committee could not be reconstituted.28. ACKNOWLEDGEMENT

The Board also gratefully acknowledges the support and guidancereceived from the various Ministries of the Govt. of India.

The Board is particularly grateful to the Department of HeavyIndustry, Ministry of Heavy Industries & Public Enterprises for theircontinued support in the revival of this Company.

The company also wishes to place on record its thanks to the Govt. ofJharkhand for all their support in the revival process of the company.

The company wishes to place on record its appreciation of thecontinued co-operation received from all its stake holders includingthe suppliers, banks, financial institutions, the Comptroller andAuditor General of India and Statutory Auditors.

The company wishes to record its deep gratitude to all the membersof the HEC family who have worked very sincerely and dedicatedly inbringing this company to another year of profitability and growth.

For and on behalf of Board of Directors

(R. Misra)Chairman-cum-Managing Director


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RESEARCH & DEVELOPMENT ACTIVITIES

The company continued its efforts for the technology up gradation and development of products/systems during the year.

I. Specific areas in which R&D activities were carried out by the company are detailed below :-

Design development and manufacture of Rotating Head Stock Spindle Assembly, Bottle Boring facility and programmable movement of SteadyRest for CNC Deep Hole Boring machine. The machine was supplied to OFC, Kanpur.

Development of Motorised swiveling of Arms for Radial Drilling machine. Modified machine was supplied to BHEL, Jagdishpur.

Development of 100T capacity Tundish Traverse for ISP.

Development of 65T and 60T Scrap charging Traverse for BSP and ISP respectively

Design development of pushing mechanism with drive for Coke pusher for 4.45m Coke Oven Battery for DSP.

II. Import Substitution Efforts

Following important items were manufactured and supplied CNC Deep Hole Boring Machine, Model BDH-140N with special features like Rotating Spindle Head Stock, Bottle Boring facility & Programmable

Steady Rest Movement.

7 nos. of 5 Cum Rope Shovels to CIL subsidiaries

Phased dispatch of 2nd Dragline 24/96 to NCL.

III. Technology Absorption, Adaptation and Innovation

i) The 1st CNC Under Floor Wheel Lathe Machine out of 7 nos. was assembled and tested at HEC, Ranchi by engineers of M/s Hegenscheidt MFD, Germany. HEC team has absorbed the assembly technology and assembled next 5 machines themselves without the assistance of M/sHegenscheidt MFD.

ii) Upgradation of 2650T Press

To reduce the overall cycle time, production of size forging, upgradtion of 2650T Press was initiated and completed.

IV. Energy Conservation

Foundry Forge unit of the company is the most energy intensive unit which consumes more than 75% of total electrical energy and 100% of Coal.

Various efforts made for reduction in melting cycle helped in substantial reduction in specific electricity consumption in the melting area duringthe year 2007-08. However, due to production of high quality steel the energy consumption had gone up during 2008-09 onwards. In addition,electric arc furnaces need upgradation, as these were installed in 60s. Delay in upgradation of Arc Furnaces also affected specific Power consumption.Company continued its thrust to reduce power consumption. Power consumption in melting area are as under :

2011-12 2010-11 2009-10 2008-09 2007-08 2006- 07Power Consumption (KWH) per Ton of Liquid MetalProduction

917.99 960.31 937.35 981.46 868.72 1029.69

The various steps being taken in Foundry Forge unit to bring down energy overall consumption and specific energy consumption are as under:

Reduction in maximum Demand of Power by proper load planning.

Use of energy eff icient high pressure sodium vapor lamps/Tube lights.

Replacement of MG Sets by Static Transformers and Rectifiers.

Use of ceramic lining in Furnaces and by installing programmable controller in electric pit furnace.

Reduction in heat cycle time for melting furnaces etc.

ANNEXURE-A

RESEARCH & DEVELOPMENT,TECHNOLOGY ABSORPTION,ADAPTATION,INNOVATION AND ENERGY CONSERVATION


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Replacement of centralized compressor unit with decentralized Air Compressor at the load centres.

Provision of Transparent Sheets at roof tops of production shops so as to utilize sunlight for illumination.

Performance of Foundry Forge Unit in both physical and financial terms has been badly affected due to delay in upgradation program of 2650Tpress. Energy consumption in this area is quasi variable as such specific energy consumption has gone up despite overall reduction in consumptionof electricity and Coal. Coal is used for producing producer gas. Quality of Coal and deteriorating condition of gas plant has resulted in increasedconsumption of coal. Energy Consumption details per Ton of physical production of FFP during the recent years are as under :

Units Consumption per Ton of Production

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08

Electricity (KWH) 2853.50 2904.83 2554.47 2421.87 2436.91

Coal (MT) 5.44 5.55 4.62 4.49 4.32

Diesel (Liters) 13.16 24.11 24.62 20.35 18.93


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The Directors present the Companys activities on Corporate Governance.

CORPORATE MAIN OBJECTIVE ON CODE OF GOVERNANCEHeavy Engineering Corporation Limited (HEC Ltd.) believes in transparent

business activities, to enhance the value for all those who are associatedwith the Company viz., Customers, Suppliers, Govt. of India, Ministryof Heavy Industry, Department of Public Enterprises as owners and anyother capacity, various State Governments, other Governmental agencies/departments and the society at large. Essentially it involves practicing ofgood Corporate Governance policies and HEC believes honesty and integritythrough transparency, accountability and attaining maximum level ofenrichment of the enterprises. HEC also received global recognition byensuring value addition to its domestic as also the International customers.

HEC complies with all the laws and manages its affairs in a competitivemarket and monitors and regulates the management policies/decision for

executing its strategies. HEC has made its senior management accountablein the pursuit of achieving companys objectives.

HEC is committed to practicing Good Corporate Governance by letter andspirit. Keeping with the spirit of the code, the Company has enlarged andstrengthened the scope of the committees formed in accordance with theCompanies Act, 1956.

Board of Directors :

The Board of Directors oversees all major actions/ activities proposedto be undertaken by the company. The Board also reviews and

approves the strategic and business plans including monitoring ofcorporate performance.

In accordance to the provisions of the Articles of Association, thenumber of Directors of the Company shall neither be less than twonor more than fifteen. The Directors are not required to hold anyqualification shares.

As on the date of reporting, the Board of HEC Ltd. consists of sixDirectors who have been classified in two classes viz., (i) FunctionalDirectors (Whole time) (ii) Government Nominee Official Directors.The Board includes (a) Chairman-cum-Managing Director (CMD),

two Functional Directors i.e. Director (Production) and Director(Personnel) (b) Two Government of India Nominee Official Directorsfrom Ministry of Heavy Industry. The terms, conditions and tenure ofappointment of Directors including CMD are decided by Governmentof India, Ministry of Heavy Industry.

The remuneration/compensation payable to Directors is also fixed byGovernment of India and the CMD and Functional Directors are paidmonthly remuneration as fixed by Government of India.

Chairman-cum-Managing Director

a) Shri G.K.Pillai : Ceased to be CMD w.e.f. 31.12.2011due to his superannuation

b) Shri R.Misra : Additional charge of CMD w.e.f.01.01.2012 and Director (Finance).

Functional Directors

a) Shri Bharat Prasad : Director (Marketing)(Ceased to be Director w.e.f.31.10.2011 due to hissuperannuation)

b) Shri Kushal Saha : Director (Production)

c) Shri Subhra Banerjee : Director (Personnel)

(w.e.f. 06. 03. 2012)Govt. of India Nominee Part-time Official Directors

a) Shri Saurabh Chandra

b) Shri Harbhajan Singh

Govt. of India Nominee Non-Official (Part- time) Director

- Nil -

Meeting of the BoardThe Board Meetings are held at Companys Registered Office at Ranchi or atsuch places as may be decided by the Board. The Company Secretary serves

as Secretary to the Board.Number of Board Meetings :-During the year 2011-12, Six (6) Meetings were held, the details of whichare given below :-

Sl.No. Date Board Strength No. of Directors present

1. 13.04.2011 05 042. 18.05.2011 05 053. 17.08.2011 06 064. 28.09.2011 06 065. 21.12.2011 05 056. 29.03.2012 05 04

ANNEXURE B

REPORT ON CORPORATE GOVERNANCE (As on 31.03.2012)


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Attendance of each Director at Board Meetings

Name of the Directors PeriodNo. of BoardMeetings held

No. of Board MeetingsAttended

No. of Directorshipin other Board

(a) Executive Directors (Whole-time Functional Directors.

1. Shri G.K.Pillai, CMD

(ceased to be CMD w.e.f. 31.12.2011due to his superannuation)

01.04.2011 to

31.12.2011 05 05

2. Shri R.Misra,Additional charge of CMD w.e.f. 01.01.2012and Director (Finance)

01.04.2011 to31.03.2012

06 06

3. Shri Bharat PrasadDirector (Marketing)(Ceased to be Director w.e.f. 31.10.2011due to his superannuation)

01.04.2011 to31.10.2011

04 03

4. Shri Kushal Saha

Director (Production)

20.06.2011 To

31.03.201204 04

5. Shri Subhra BanerjeeDirector (Personnel)(w.e.f. 06. 03. 2012)

06.03.2012 to

31.03.201201 01

(b) Govt. of India Nominee Part-time Official Director

1. Shri Saurabh Chandra01.04.2011 to31.03.2012

06 05 06

2. Shri Harbhajan Singh01.04.2011 to31.03.2012

06 06 08

c) Part-time Non-Official Director Nil

Board Agenda and Material :-The Board believes that a carefully planned Agenda is important for effective Board Meetings. All major issues included in the Agenda are backedby comprehensive background information to enable the Board to take decisions. The agenda is flexible enough to accommodate any unexpecteddevelopment (s) requiring Boards attention and its decision. Agenda papers are, generally circulated well in advance to the Members of the Board. TheBoard members, in consultation with the Chairman may bring up any relevant matter for the consideration of the Board.


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Annexure-C

AUDITORS REPORT

The Members of,HEAVY ENGINEERING CORPORATION LIMITEDRANCHI

1. We have audited the attached balance sheet of Heavy Engineering Corporation Limited as at 31st March 2012 and also the profit and loss accountfor the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibilityis to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and performthe audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227

of the Companies Act, 1956, we enclose in the Annexure-1 a statement on the matters specified in paragraphs 4 and 5 of the said Order to theextent applicable.

4. Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(b) In our opinion, proper books of account as required by law have been kept by the company as far as appears from our examination of those books.

(c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accountingstandards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(e) In terms of Notification No. GSR 829(E) dated 21-10-2003 issued by the Department of Company Affairs, Government of India, the provisionsof Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Company.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with otherAccounting Policies and Notes to Accounts give the information required by the Companies Act, 1956, in the manner so required gives a trueand fair view in conformity with the accounting principles generally accepted in India

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For Anjali Jain & AssociatesChartered Accountants

Place: Ranchi CA Anjali JainDated: 06-09-.2012 (Partner)

Membership No. 72022


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Annexure referred to in Paragraph 3 of the Auditor's Report to the members of M/s Heavy Engineering Corporation Limited on the Accounts for the yearended 31st March, 2012.

Auditors Report Replies

1 Fixed Assets

(a) The company has generally maintained proper records to show particulars of fixedassets including Quantitative details and situation of assets for all the fixed assetsexcept furniture and fixture office equipments.

(b) Some of the Fixed Assets of the Company (except building) have been physicallyverified in all units by an outside Chartered Accountant firm during the year.However, the verification has been done on test check basis. Considering the sizeof the company & nature of its business the procedure of physical verification offixed assets need to be strengthened.

Noted

Physical verification of Assets of all plants, Project,HQrs., Branch Office etc, has been done by outsideChartered Accountant firm during the year2011-12 with reference to the records of Assets inthe Assets Register and no discrepancies have beennoticed.

2. Inventories

(a) Stock of raw material and stores and spares were physically verified by an outsideChartered Accountant Firm during the year. Considering the size of the company &nature of its business the procedure of physical verification of raw materials andstores and spares need to be strengthened.

(b) In our opinion and according to the information and explanation given to us, thepresent system of SPL accounting i.e. accounting of items of different value havingdifferent specification in same material code needs thorough revision.

(c) In our opinion and according to the information and explanations given to us, the

Company has maintained proper records of its inventory. As explained to us, thediscrepancies noticed during physical verification of inventory were compared tothe book records and it has been adjusted at the year end.

(d) There were inventories in the Company which were of no use and were lying idleblocking the capital. In our opinion, the same should be sold / utilized.

Noted for future guidance.

Noted for further improvement.

Noted

Noted

3. Loans

In our opinion and according to the information and explanations given to us, theCompany has not granted nor taken any loans, secured or unsecured to or fromcompanies, firms or other parties covered in the register maintained Under Section 301of the Companies Act 1956. Consequently, clauses (iii) (a) to (iii) (g) of paragraph 4 ofCARO are not applicable.

No comment

Annexure-I

Annexure to the Auditors Report


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4. Internal Controls

In our opinion and according to the information and explanations given to us, and on thebasis of test and checks carried out during the course of Audit there is adequate internalcontrol system commensurate with the size of the company and nature of its businessrelating the purchase of inventory and fixed assets and for sale of goods and service, Butthere are certain areas where internal controls needs improvement.

Some of the major areas where internal control system in operation needs to bestrengthened strictly adhered to are as follows in our opinion:-

(a) The Company has substantial LD due to non-adherence to delivery schedule.

(b) Idle time of machines is high as the labour for these are not adequate.

Noted

(a) The dearth of working capital, effectivemanpower and frequent break down of oldmachines are primarily responsible for delay inexecution of order within the delivery schedulewhich leads to recovery of LD by customer.However effective monitoring is being donefor minimizing the delayed delivery/dispatchof goods to customer.

(b) Action is being taken for recruitment of freshtechnical Workers to avoid idle time due tonon availability of adequate work force.

5. In respect of contracts or arrangement entered in the register maintained in pursuance ofSection 301 of the companies Act 1956, to the best of our knowledge and according tothe information and explanation given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed tobe entered in the register maintained under the said section have been so entered.

The transactions made in pursuance of such contracts or arrangements have been made

at prices which are reasonable having regards to the prevailing market prices at therelevant time.

Noted

Noted

6. Acceptance of deposits from Public

In our opinion and according to the information and explanations given to us, Thecompany has not accepted deposits from the public within the meaning of section 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framedthere under.

Noted

7. Internal Audit System

Internal Audit of the company was carried out by an outside Chartered Accountant Firmduring the year, however considering the size of the company and nature of its business;

it needs more coverage of financial transactions.

Noted. Already covered vast areas like Plants,Projects, Hqrs, Township, Hospital, Transport,Branch Offices, HTI, Transit Camp to the extent

possible. The internal Audit work for 2011-12 wasstarted from September, 2011

8. Cost Records

As explained to us by the Management, the Central Government has prescribedmaintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 fromfinancial year 2011-12 for the products of the Company. Currently, cost records aremaintained by an outside Cost Accountant Firm.

Outside Cost Accountant Firm has been engaged forpreparation of compliance report as required underCost Accounting record Rules 2011.


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9. Statutory Dues

A. According to the information and explanations given by the Company, undisputedstatutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax,Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues are generallydeposited regularly and no undisputed dues were outstanding as at 31st March,

2012 for a period of more than six months from the date of becoming payableexcept the cases which are stated below:

Name of the Act Type Amount Period

Municipal TaxAct

Municipal Tax 49,50,000.00Oct 1999 to Dec

2005The company is paying`50,000 per quarter for clearance of dues along with thecurrent Municipal Tax.

Payment is being made every quarter against olddues based on the agreement with MunicipalCorporation.

9. B. NotedAccording to the information and explanations given by the Company, thereis no disputed dues of Income Tax, Sales Tax, wealth Tax, Service Tax, Custom Duty,Excise, Cess that have not been deposited on account of matters pending before

appropriate authorities except the cases which are stated as below.-

Name of the Act Tribunal(`) Total (`)

Provident Fund Act 95,01,53,513.00 95,01,53,513.00

Disclosed in Notes on accounts

10. Cash Losses

The Accumulated loss of the Company as on 31st March, 2012 exceeds 50% of itsnet worth. The company has not incurred cash losses during the current financial yearcovered by our audit and also in the immediately preceding financial year.

As per Accounts of the company it transpires thatthe company has earned a cash profit ofRs 12.90crore during financial year 2011-12.

11. Repayment of Dues

In our opinion and according to the information and explanations given to us, theCompany has not defaulted in repayment of dues to financial institutions, banks ordebenture holders.

No comments

12. According to the information and explanation given to us, the company has not grantedany loan or advances on the basis of security, by way of pledge of shares, debenturesand other securities.

No comments

13. In our opinion and according to the information and explanations given to us, theCompany is not a chit fund or a Nidhi/Mutual benefit fund/society. Therefore, clause4(xiii) of the Companies (Auditor s Report) Order, 2003 is not applicable to the Company,

No comments

14. The Company has not done any transactions for trading in Shares, securities, debenturesand other investments during the financial year under audit.

No comments

15. According to the information and explanation given to us, the Company has not givenguarantees for loans taken by others for Banks or financial institutions, the terms andconditions, whereof, in our opinion, are prima facie prejudicial to the interest of thecompany.

No comments

16. According to the information and explanation given to us and on an overall examinationof the Balance Sheet of the Company, We are of the opinion that the term loans wereapplied for the purpose for which the loans were obtained.

No comments


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17. According to the information and explanation given to us and on an overall examinationof the Balance Sheet of the Company, We report that no funds raised on short-term basishave been used for long-term investment by the Company.

No comments

18. According to the information and explanation given to us, the Company has not madeany preferential allotment of shares to parties and companies covered in the registermaintained under section 301 of the Companies Act.

No comments

19. The Clauses 4(xix) & (xx) of the Companies (Auditors Report) Order, 2003 are notapplicable to the Company.

No comments

20. During the course of our examination of the books and records of the company carried outin accordance with the generally accepted auditing practices in India, and according tothe information and explanation given to us, we have neither come across any instancesof fraud on or by the company, noticed or reported during the year, nor we have beeninformed of such case by the Management

No comments

For Anjali Jain & AssociatesChartered Accountant

CA Anjali Jan (S.K.CHAKRABORTY)

(Partner) General Manager (Finance)/HEC

Membership No. 72022

Place: Ranchi

Dated:- 06.09.2012


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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OFINDIA UNDER SECTION 619 (4) OF THE COMPANIES ACT, 1956 ONTHE ACCOUNTS OF HEAVY ENGINEERING CORPORATION LIMITEDFOR THE YEAR ENDED 31 MARCH 2012

The preparation of financial statements of Heavy Engineering Corporation Limited for the year ended 31st March 2012 in accordance with thefinancial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory auditor

appointed by the Comptroller and Auditor General of India under Section 619 (2) of the Companies Act, 1956 is responsible for expressing opinion on

these financial statements under Section 227 of the Companies Act, 1956 based on independent audit in accordance with the auditing and assurance

standards prescribed by their professional body the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit

Report dated 6 September, 2012.

I, on the behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 619 (3) (b) of the Companies

Act, 1956 of the financial statements of Heavy Engineering Corporation Limited for the year ended 31 March, 2012. This supplementary audit has been

carried out independently without access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditor and

company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge

which would give rise to any comment upon or supplement to Statutory Auditors' Report under Section 619 (4) of the Companies Act, 1956.

For and on the behalf of the

Comptroller & Auditor General of India

Place: Ranchi (Sushil Kumar Jaiswal)

Date: 20 November, 2012 Principal Director of Commercial Audit

Ranchi.


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Arc Furnace

2650 T Forging Press

OUR FACILITIES


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OUR PROJECTS

Stacker cum Reclaimer at New OBBP, Rourkela Steel Plant

Conveyor System at New OBBP, Rourkela Steel Plant


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Heavy Engineering Corporation Limited

(A Government of India Enterprise)

Ranchi - 834004

Nation Building Through Machine

BALANCE SHEET

ANDSTATEMENT OF PROFIT & LOSS

FOR THE FINANCIAL YEAR 2011-12

Our Motto :


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OUR PRODUCTS

Slag Ladle

CNC Deep Hole Boring Machine, Model BDH 140N


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SIGNIFICANT ACCOUNTING POLICIES

1 The Financial statements have been prepared as of a going concernon historical cost convention and on accrual method of accounting inaccordance with the generally accepted accounting principles.

2 Fixed Assets

Fixed assets (Other than land acquired free of cost from StateGovernment) are carried at the cost of acquisition or construction lessaccumulated depreciation.

Land acquired free of cost from State Government is valued of`1/- per acre.

3 Inventory Valuation

i) Inventory is valued at actual / estimated cost or net realiasablevalue, whichever is lower.

ii) Finished goods and work in progress are valued at actual /

estimated factory cost or net realiasable value whichever islower.

iii) Raw material, components, loose tools, stores & spares arevalued at weighted average cost.

iv) Items that are not ordinarily interchangeable and goods orservices produced & segregated for specific projects- By specificidentification of individual cost.

v) Rejection and scrap/used as raw material for production isvalued at closing book rate.

vi) Bye products are valued at market price.

vii) The percentage of completion of work in progress is taken ascertified by Shop management on technical assessment.

viii) Loose tools, Drawing instruments, etc. issued to shops arecarried to inventory after writing off in 4 years in case ofordinary tools, in 10 years in case of special tools, in 2 yearsin case of Moulds and on estimated life in case of otheritems. Patterns are charged out in the year of issue itself. Onlyquantitative records are maintained in respect of these items inshops floor, wherever practicable.

4 REVENUE RECOGNITIONi) Sales are recorded when significant risks and rewards of

ownership are transferred to the customers. Part suppliesagainst long term contracts for which bills have been raised areaccounted for at contract price or provisional price. In case ofdispatches for which challans and gate passes have been issuedbut bills are not raised, sales are accounted for at contract orprovisional prices as unbilled sales.

ii) Escalations on contracts are accounted for as per the termsof relevant contact to the extent ascertained with reasonable

certainty though these are subject to confirmation/acceptanceby customers. Variation is accounted for when there is provisionin contract or evidence of acceptance by the customer.

iii) Sales are accounted for inclusive of excise duty but exclusive of

sales tax.

5 LONG TERM TURNKEY CONTRACTS

i) Revenue recognition:

Revenue is recognized on percentage completion method basedon the percentage of actual cost incurred up to the reportingdate to the total estimated cost of the contract.

Income from supply/ erection of equipment/system and civilworks is recognized based on dispatches to customers andworks done at Project Site.

ii) Revenue recognition for incomplete / part executed /unmeasured work by client :

Works executed but not measured / part executed / incompletework at the end of the year are accounted for based oncertification both by HEC Engineers at Project Site and thecustomer for the purpose of recognition of Revenue.

iii) Valuation of Work-in-progress:-

Expenditure incurred from year to year limited to the certifiedvalue of work done against the contract value includingescalation less amount credited to sales against the respective

contract, is accounted for as WIP.iv) The necessary provision for losses, if any, on work to be done is

made.

6 PROVISION FOR WARRATY

A provision of 0.5% on sales is made for liabilities under contractualobligations/ warranties. Expenses on warranties/contractualobligation are accounted for against natural heads in the year ofincurrence.

7 EMPLOYEES BENEFITS:

Long term employee benefits (benefits which are payable after the endof twelve months from the end of the period in which the employeesrender service namely sick leave and post retirement benefits namelygratuity, Retirement Traveling Assistance and Leave Encashment aremeasured on a discounted basis by the Projected Unit Credit Methodon the basis of annual third party actuarial valuation and LeaveTravel Allowance (for eligible employee) are accounted on estimatedbasis.

Long Term employee benefits recognized in the balance sheet representthe present value of the obligation as adjusted for unrecognized past


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service cost, if any, and as reduced by the fair value of plan assets,wherever applicable and actuarial gain / loss to the extent recognizedin Profit & Loss Account.

Actuarial gains and losses are recognized in the Profit and loss accountto the extent it exceeds the unrecognized portion of transitionalliability

The transitional liability in respect of long term employee benefit isrecognized as an expense on a straight line basis over a period of fiveyears.

Gratuity and Leave encashment are provided for on the basis ofactuarial valuation made, based on the data of the Balance sheetdate.

8 DEPRECIATION

Depreciation on fixed assets is charged on straight line method asper the rates prescribed in the Schedule XIV of the Companies Act

and in respect of additions to/ deductions from the fixed assetsduring the year; depreciation is charged on prorata monthly basis.Wherever breakup of foundation cost for plant and machinery andplant building is not available, depreciation is charged at the rateapplicable to plant building.

9 SUNDRY DEBTORS

This includes items billed at provisional rates pending finalization ofprices and receipt of formal orders from customers and also value ofdispatches which are unbilled after adjustment on pro-rata basis ofadvances/progress payments received against the relevant contract.

10 GRANT-IN-AID

Government grants received against Voluntary Retirement Schemeare set off against related expenses. Unspent balances of Grants-in-Aid are carried forward to subsequent years under Head Liabilities.Grants received against other revenue are recognized as other incomeover the years to which it relates.

11 INVESTMENT

Investment held/intended to be held over one year (i.e. being longterm ) are valued at cost less provision for diminution in value other

than temporary, while current quoted investments are valued at lowerof cost or market value.

12 RESEARCH & DEVELOPMENT

Major expenditure relating to Research & Development is charged toprofit & loss account in the year of incurrence. However, expenditureon fixed assets relating to Research & Development is treated in thesame way as other fixed assets. Depreciation on such fixed assets isshown along with other Research & Development Expenditure.

13 FOREIGN CURENCY TRANSACTIONS

Monetary assets and liabilities relating to foreign currency transactionsincluding deferred credit payments remaining outstanding at theBalance Sheet date are converted at year end rates. The differencesin conversion of assets and liabilities and realized gains and losseson foreign exchange transaction during the year are accounted for in

the Profit & Loss Account, except those relating to acquisition of fixedassets which are adjusted in the cost of fixed assets.

14 DEFERRED REVENUE EXPENDITURE

To lump sum payment towards foreign collaboration in the form oftechnical know-how, documentation and reports for any product istreated as Deferred Revenue Expenditure, which is written off in fiveyears.

15 CLAIM BY/AGAINST THE COMPANY

(i) Liquidated damages payable as per contracts are accounted

for on ascertainment and cases of specific damages and claimsdisputed by the company are provided for on reasonableestimate by the Company.

(ii) Liquidated damages recovered are recognized as income afterexpiry of three years of recovery.

(iii) Export incentives, Railways and Insurance claim sale of sundrydisposable materials & certain scraps, refund of excise & customduty and income from other similar items are accounted for onascertainment of the amount and certainty of their realization /claim.

16 INTER PLANT COST ALLOCATION

The following expenses are allocated in different Plants on the basisstated hereunder:-

(a) HQRS expenses (Net) -Budgeted production of each Plant.

(b) Township expenses (Net) - No. of quarters allotted to eachPlant.

(c) Interest - Actual cash utilization by each plant in the precedingyear.

(d) CISF expenses- No. of CISF personnel deployed in each Plant.

17 INVENTORY

Non moving items of stores are analysed from time to time.Materials found surplus on physical verification are either disposedoff or reviewed to find out alternative uses for the same. Loss, if any,is accounted for when it is ascertained.

However non moving items for more than 3 years, the maximumprovision, if required, is to be restricted to 90 % of value of inventory.


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BALANCE SHEET AS AT 31ST MARCH 2012`in Lakhs

Note No. AS AT 31.03.2012 AS AT 31.03.2011I. EQUITY & LIABILITIES

(1) SHAREHOLDER'S FUND(a) Share Capital 1 60607.88 60607.88

(b) Reserves & Surplus 2 (77633.67) (78024.54)(2) SHARE APPLICATION MONEY

PENDING ALLOTMENT 0.01 0.01(3) NON-CURRENT LIABILITIES

(a) Other Long Term Liabilities 3 60900.12 57338.47(b) Long Term Provisions 4 13882.67 12322.37

(4) CURRENT LIABILITIES(a) Short Term Borrowings 5 9440.88 8965.67(b) Trade Payables 6 11265.00 12702.94(c) Other Current Liabilities 7 10239.17 8704.24

(d) Short Term Provisions 8 5982.84 5204.35TOTAL 94684.90 87821.39II. ASSETS

(1) NON-CURRENT ASSETS(a) Fixed Assets

(i) Tangible Assets 9 5572.61 5700.36(ii) Intangible Assets 10 151.42 305.55(iii) Capital Work in Progress 11 2629.22 2537.37

(b) Non-Current Investments 12 0.36 0.36(c) Long Term Loans & Advances 13 1429.37 1065.01(d) Other Non-Current Assets 14 23216.76 29212.19

(2) CURRENT ASSETS(a) Inventories 15 27374.81 23455.37(b) Trade Receivables 16 28724.78 20970.92(c) Cash & Cash Equivalents 17 3136.30 2447.86(d) Short Term Loans & Advances 18 2118.35 2042.84(e) Other Current Assets 19 330.92 83.56

TOTAL 94684.90 87821.39Notes on Account 29Notes No 1 to 19 , 29 & Significant Accounting Policies form an integral part of the Balance Sheet.

A.K.Kanth S.K. Chakraborty Kushal Saha R.MisraCompany Secretary General Manager (Finance) Director (Production) & Chairman Cum Managing Director

Director Mktg. (Additional Charge)

In terms of our report of even dateFor Anjali Jain Associates, Chartered Accountants

Place : Ranchi (ANJALI JAIN)Date : 6/9/2012 Partner, M No. 72022


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STATEMENT OF PROFIT & LOSS

FOR THE YEAR ENDED 31ST MARCH, 2012 `in Lakhs

Note No. 2011-12 2010-11

I. Revenue from Operation 20 69237.87 64938.37

II. Other Income 21 2331.61 2874.20

III. TOTAL REVENUE 71569.48 67812.57IV. EXPENSES:

(a) Cost of Material Consumed 22 36895.64 31205.09

(b) Employees Benefits Expenses 23 18213.69 15270.61

(c) Finance Costs 24 515.30 92.37

(d) Depreciation, Amortization & Impairment 25 1259.20 1550.80

(e) Research & Development Expenditure 26 58.09 45.66

(f) Other Expenses 27 13739.85 15886.40

TOTAL EXPENSES 70681.77 64050.93V. Profit/(Loss) before Exceptional &

Extraordinary Items & Tax( III-IV ) 887.71 3761.64VI. Exceptional Items 28 (29.30) 52.34VII. Profit/(Loss) before extraordinary items

& Tax ( V-VI ) 858.41 3813.98VIII. Extraordinary Items 0.00 0.00

IX. Profit/ (Loss) before Tax ( VII-VIII) 858.41 3813.98X. Tax Expenses

(i) Current Tax 0.00 0.00

(ii) Deferred Tax 0.00 0.00 0.00 0.00

XI. Profit/ (Loss) for the period fromContinuing Operation ( IX-X) 858.41 3813.98

XII. Profit/ (Loss) from Discontinuing Operation 0.00 0.00

XIII. Tax Expenses of Discontinuing Operation 0.00 0.00

XIV. Profit/ (loss) for the period fromDiscontinuing Operation ( XII-XIII) 0.00 0.00

XV. PROFIT/ (LOSS) FOR THE PERIOD ( XI + XIV ) 858.41 3813.98

XVI. Earning per share ( Face value`.1000) (1) Basic in Rupees 14.16 62.93(2) Diluted in Rupees 14.16 62.93

Notes on Account 29Notes No 20 to 29 & Significant Accounting Policies form an integral part of the Statement of Profit & Loss.

A.K.Kanth S.K. Chakraborty Kushal Saha R.MisraCompany Secretary General Manager (Finance) Director (Production) & Chairman Cum Managing Director

Director Mktg. (Additional Charge)

In terms of our report of even dateFor Anjali Jain Associates, Chartered Accountants

Place : Ranchi (ANJALI JAIN)Date : 6/9/2012 Partner, M No. 72022


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NOTE NO. - 1 SHARE CAPITALAuthorised Capital1,00,00,000 (Previous Year 1,00,00,000 ) Equity Shares of`1000/- each 100000.00 100000.00

Issued & Subscribed & Paid up Capital60,60,788 (Previous Year 60,60,788 ) Equity Sharesof ` 1000/- each fully paid up,Out of which 5496 (Previous Year 5496 ) Sharesallotted for consideration other than Cash 60607.88 60607.88

Net Balance 60607.88 60607.88

NOTE NO. - 2 RESERVE & SURPLUS

Capital ReserveOpening Balance 12295.11 12746.58Addition during the year 0.00 16.07 TOTAL 12295.11 12762.65Deduction during the year 467.54 11827.57 467.54 12295.11SurplusOpening Balance (90319.65) (94133.63)Addition during the year 858.41 (89461.24) 3813.98 (90319.65)

TOTAL (77633.67) (78024.54)

NOTE NO. - 3 OTHER LONG TERM LIABILITIES

Liabilities for Employee BenefitsEmployees Liabilities 3723.78 3674.53VRS Liabilities 1.88 3725.66 6.84 3681.37Trade PayablesSundry Creditors 2654.81 2387.36Dues to SME 85.46 30.55Advance From Customers 3686.56 6426.83 3662.21 6080.12OthersSecurities & Other Deposits from Contractors 17069.14 16807.38Securities & Other Deposits as per Contra Note -13 0.86 0.81

Electricity Dues 27391.85 27391.85Water Dues 3538.63 3015.54Other Liabilities 2496.04 118.43Miscellaneous 251.11 50747.63 242.97 47576.98

TOTAL 60900.12 57338.47

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011

NOTES FORMING PART OF BALANCE SHEET


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NOTE NO. - 4 LONG TERM PROVISIONSProvision for Employee Benefits

Provision for Gratuity 7939.47 7912.44Provision for Leave Encashment 3650.63 3577.52Provision for RTA 84.67 102.93Provision for Sick Leave 520.84 472.37Provision for Revision of Pay Scale for Employees 1214.22 13409.83 0.00 12065.26OthersProvision for Impaired Assets 79.77 17.69Provision for Warranty Expenses 393.07 472.84 239.42 257.11 TOTAL 13882.67 12322.37

NOTE NO. - 5 SHORT TERM BORROWINGSSecured LoansWorking Capital Loan from Bank 9440.88 8965.67(Secured by Hypothecation of raw materials, finished Goods,Work-in-Progress, Stores and Spare parts and Book Debts)

TOTAL 9440.88 8965.67

NOTE NO. - 6 TRADE PAYABLESSundry Creditors 10138.43 9718.45Dues to SME 129.06 35.76Advance from Customers 997.51 2948.73

TOTAL 11265.00 12702.94

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 7 OTHER CURRENT LIABILITIESEmployees Liabilities 3702.80 1951.25

Securities & Other Deposits from Contractors 393.23 922.89Book Overdraft with Scheduled Bank 139.98 323.30Electricity Dues 251.41 263.17Water Dues 256.35 525.67Other liabilities 4335.73 4008.12Miscellaneous 1159.67 709.84

TOTAL 10239.17 8704.24

NOTE NO. - 8 SHORT TERM PROVISIONSProvision for Employee BenefitsProvision for Gratuity 2549.42 2065.02Provision for Leave Encashment 1527.27 1339.79Provision for RTA 20.87 20.02Provision for Sick Leave 164.25 153.03Provision for Revision of Pay Scale for Employees 1369.51 5631.32 1214.22 4792.08OthersProvision for Impaired Assets 2.29 62.07Provision for Warranty Expenses 349.23 351.52 350.20 412.27

TOTAL 5982.84 5204.35

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO.-9 TANGIBLE ASSETS

Gross Block Depreciation Net Block

Type of Assets Cost as on01.04.11

Addition/Adjustment

Deduction/Adjustment

Cost as on31.3.12

Upto31.03.11

for theyear

Addition/(Deduction)

upto31.03.12

As on31.03.12

As on31.03.11

1 2 3 4 5 6 7 8 9 10 11

OTHER TANGIBLE ASSETS

Land 136.65 0.00 0.00 136.65 0.00 0.00 0.00 0.00 136.65 136.65

Development of land 116.70 0.00 0.00 116.70 0.00 0.00 0.00 0.00 116.70 116.70

Plant & Machinery 21691.39 248.83 45.87 21894.35 18626.75 330.89 (43.58) 18914.06 2980.29 3064.64

Plant Buildings 4606.80 0.00 0.00 4606.80 4238.11 7.86 0.00 4245.97 360.83 368.69

Residential Buildings 465.87 0.00 0.00 465.87 309.42 7.07 0.00 316.49 149.38 156.45

Non- Residential Buildings 701.73 7.18 0.00 708.91 385.46 11.08 0.00 396.54 312.37 316.27

Road & Bridges 269.47 0.00 0.00 269.47 111.17 4.44 0.00 115.61 153.86 158.30Railway Lines & Sidings 334.67 0.00 0.00 334.67 284.62 2.33 0.00 286.95 47.72 50.05

Water Works & Sewerage 589.23 0.00 0.00 589.23 539.57 1.53 0.00 541.10 48.13 49.66

Electrical Installation 564.49 0.52 0.00 565.01 511.81 1.09 0.00 512.90 52.11 52.68

Vehicles & Locomotives 274.76 0.00 0.00 274.76 234.38 1.57 0.00 235.95 38.81 40.38

Construction & Other Equip. 338.72 2.57 0.00 341.29 298.43 3.13 0.00 301.56 39.73 40.29

Furniture, Fixtures & other office Equip. 720.35 44.62 0.00 764.97 558.62 34.65 0.00 593.27 171.70 161.73

SUB-TOTAL OTHER ASSETS(A) 30810.83 303.72 45.87 31068.68 26098.34 405.64 (43.58) 26460.40 4608.28 4712.49

Assets Marked for Transfer to Government of Jharkhand

Land 69.03 0.00 0.00 69.03 0.00 0.00 0.00 0.00 69.03 69.03

Residential Buildings 245.88 0.00 0.00 245.88 152.20 4.01 0.00 156.21 89.67 93.68Non- Residential Buildings 531.33 0.00 0.00 531.33 153.14 8.66 0.00 161.80 369.53 378.19

SUB - TOTAL OTHER ASSETS (B) 846.24 0.00 0.00 846.24 305.34 12.67 0.00 318.01 528.23 540.90

LEASED ASSETS

Land 22.32 0.00 0.00 22.32 0.00 0.00 0.00 0.00 22.32 22.32

Residential Buildings 807.08 0.00 0.00 807.08 462.20 13.16 0.00 475.36 331.72 344.88

SUB - TOTAL OTHER ASSETS (C) 829.40 0.00 0.00 829.40 462.20 13.16 0.00 475.36 354.04 367.20

IMPAIRED ASSETS

Plant & Machinery(As on 31.03.11) 1595.36 0.00 0.00 1595.36 1515.59 0.00 0.00 1515.59 79.77 79.77

Plant & Machinery (During 2011-12) 0.00 45.87 0.00 45.87 0.00 0.00 43.58 43.58 2.29 0.00

SUB-TOTAL IMPAIRED ASSETS(D) 1595.36 45.87 0.00 1641.23 1515.59 0.00 43.58 1559.17 82.06 79.77

TANGIBLE FIXED ASSETS 34081.83 349.59 45.87 34385.55 28381.47 431.47 0.00 28812.94 5572.61 5 700. 36

PREVIOUS YEAR FIGURES 33799.09 283.09 0.35 34081.83 27975.19 406.28 0.00 28381.47 5700.36

Current period depreciation 431.37

Prior period depreciation 0.10

Total Depreciation 431.47

Provision for Impaired Assets 2.29

Notes :-1. Deed of conveyance of land for 7199.53 acres includes 2313 acres of land obtained free of cost from the State Govt.2. This also includes 316.19 acres directly transferred by Bihar Govt. to other Govt. Agencies.

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 10 INTANGIBLE ASSETSTechnical Know How fees

Opening Balance 211.78 93.17Addition during the Year 53.74 118.61

TOTAL (A) 265.52 211.78Less: Amortisation up to Previous Year 60.99 18.63Less: Amortisation during Current Year 53.11 42.36 TOTAL (B) 114.10 60.99

SUB TOTAL (A-B) 151.42 150.79Deferred Revenue ExpendituresDeferred actuarial Valuation of RTA 0.00 40.18Deferred Actuarial Valuation of Sick Leave 0.00 0.00 114.58 154.76

TOTAL 151.42 305.55

NOTE NO. - 11 CAPITAL WORK IN PROGRESSCapital Work in ProgressPlant & Machinery 3500.15 3408.30Less: Provisions 870.93 870.93

TOTAL 2629.22 2537.37

Note :- Items under Capital Work-In-Progress above`.10 Lakhs having no / slow Progress amounts to`833.93 L (Previous year`833.93 L)

NOTE NO. - 12 NON-CURRENT INVESTMENTSInvestments

(Other than trade investment), Unquoted 918 (Prev.Year 918) Equity Share of`38.95each of Engineering (Projects) India Limited. 0.36 0.36

TOTAL 0.36 0.36

* The paid up value of equity share of Engineering (Projects) India Limited has been reduced from `1000/- to `38.95 due to restructuring asconfirmed by Central Government vide order No. 40/1/2003-CL-III Dated 17.11.2003.

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 13 LONG TERM LOANS & ADVANCESLoans & Advances

Advances & other amounts recoverable in cash or in kind or for value to be received(including cost of materials supplied to the contractors, outside parties and/ or pending adjustment)Unsecured Considered Good 915.25 898.54DepositsDeposits with Private Parties 2.28 2.25Deposits with Government Authorities 651.01 632.76Security deposit of Staff and Contractorsas per contra in Note -3 0.86 654.15 0.81 635.82OthersAdvances to Employees 74.25 93.95

Claims Receivable 85.76 50.40Income Tax deducted at source 472.83 325.23SUB TOTAL 2202.24 2003.94

Less: Provision for bad &doubtful Advances 772.87 938.93TOTAL 1429.37 1065.01

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 14 OTHER NON-CURRENT ASSETSLong Term Trade Receivables(A) Public Sector & Govt. Deptt.Considered Good 20276.38 26410.57Considered Doubtful 5053.74 4682.77

TOTAL (A) 25330.12 31093.34(B) OthersConsidered Good 154.39 20.54Considered Doubtful 53.47 52.53

TOTAL (B) 207.86 73.07SUB TOTAL (A+B) 25537.98 31166.41

Less: Provision for Doubtful debts 4561.37 4465.76

Provision against LD deducted & charged 545.84 20430.77 269.54 26431.11Rent Receivables(A) Public Sector & Govt. Deptt.Considered Good 2743.51 2714.44Considered Doubtful 82.82 76.41

TOTAL (A) 2826.33 2790.85(B) OthersConsidered Good 42.48 66.64Considered Doubtful 382.07 346.85

TOTAL (B) 424.55 413.49SUB TOTAL (A+B) 3250.88 3204.34

Less: Provision for Doubtful Realisation 464.89 2785.99 423.26 2781.08GRAND TOTAL 23216.76 29212.19

Notes:

1. Long Term Trade Receivables includes unbilled despatches`8170.62Lakh (Previous Year`17864.73 L)

2. Long Term Trade Receivables also include not due`10353.19 Lakh (Previous Year`5623.63L) equipments and Spares already supplied butrealization there of is subject to compliance of certain contractual obligation.

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 15 INVENTORIES(As certified by the Management)

Raw Materials & Components 7594.20 6383.34Less: Provision 1482.78 1731.47Less: Stock Adjustment 0.00 6111.42 65.56 4586.31Stores, Spares & Components including Construction Materials 1394.51 1028.70Less: Provision / Stock Adjustment 229.85 1164.66 343.41 685.29Goods-in-Transit/ Under inspection 4250.28 2160.57Less: Provision 259.52 3990.76 259.51 1901.06Loose Tools, Drawing Instruments etc. 1322.11 982.20Less: Provision 43.88 1278.23 46.87 935.33Stock of Finished Products 811.53 446.92

Less: Provision 44.04 767.49 39.36 407.56Work-In-Progress 11844.95 9513.28Less: Provision 128.50 11716.45 79.41 9433.87Work-In-Progress (Turnkey Project) 2345.80 5505.95Less: Provision 0.00 2345.80 0.00 5505.95Discarded Assets 3.52 3.52Less: Provision 3.52 0.00 3.52 0.00Total Inventory 29566.90 26024.48Less: Provision 2192.09 2503.55Less: Stock Adjustment 0.00 27374.81 65.56 23455.37

TOTAL 27374.81 23455.37

Notes:

1. Finished Stock & WIP includes items worth`35.12 Lakh (Previous Year`35.12 L) against closed, cancelled & old work orders which has beenvalued at scrap rates.

2. Non-Moving Raw Materials and Stores & Spares for more than 3 yrs are`1781.90Lakh (Previous Year`2039.54 L). The existing is provision isconsidered adequate.

3. Goods In Transit includes CV Duty`14.18Lakh (Previous Year`220.35 L)

4. Raw Materials & Components including scrap at shop floor`70.43Lakh (Previous Year`65.25 L)

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 16 TRADE RECEIVABLES

Over Six Other Total Over Six Other Tot al

Months Debts Months DebtsShort Term Trade Receivables

(A) Public Sector & Govt. Deptt.Considered Good 723.79 26860.11 27583.90 367.70 20571.43 20939.13Considered Doubtful 275.27 576.46 851.73 57.77 41.17 98.94

SUB TOTAL (A) 999.06 27436.57 28435.63 425.47 20612.60 21038.07(B) Others

Considered Good 5.00 1135.88 1140.88 0.68 31.11 31.79Considered Doubtful 0.00 68.53 68.53 0.00 0.00 0.00

SUB TOTAL (B) 5.00 1204.41 1209.41 0.68 31.11 31.79

TOTAL (A+B) 29645.04 21069.86Less: Provision for Doubtful debts 162.43 0.00

Provision against LD deducted & charged 757.83 98.94NET TOTAL 28724.78 20970.92

Notes:

1. Short Term Trade Receivables includes unbilled despatches`3150.27Lakh (Previous Year`2022.06 L)

NOTE NO. - 17 CASH & CASH EQUIVALENTSBalance with Schedule Bank Current Account 260.77 755.47Cheques and Draft in Transit 10.48 47.88

Cash in hand 4.84 276.09 7.18 810.53OthersSBI Short Term Deposit 0.00 1500.00Other Bank Short Term Deposit 2860.21 2860.21 137.33 1637.33

TOTAL 3136.30 2447.86

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 18 SHORT TERM LOANS & ADVANCESLoans and AdvancesUnsecured Considered Good 691.32 484.42DepositsDeposit with Private Parties 0.74 0.00Deposit with Government Authorities 635.71 636.45 368.40 368.40OthersAdvance to Employees 78.11 103.95Prepaid Expenses 31.31 27.99Claims Receivable 502.50 892.54Income Tax deducted at source 214.51 190.35

SUB TOTAL 2154.20 2067.65

Less: Provision for bad & doubtful Advances 35.85 24.81TOTAL 2118.35 2042.84

NOTE NO. - 19 OTHER CURRENT ASSETSRent Receivables(A) Public Sector & Govt. Deptt.Considered Good 324.03 73.02Considered Doubtful 0.00 324.03 0.00 73.02(B) OthersConsidered Good 6.89 10.54Considered Doubtful 0.00 6.89 0.00 10.54

SUB TOTAL (A+B) 330.92 83.56Less: Provision for Doubtful Receivables 0.00 0.00

TOTAL 330.92 83.56

`in Lakhs

AS AT 31.03.2012 AS AT 31.03.2011



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NOTE NO. - 23 EMPLOYEES BENEFIT EXPENSESSalaries, Wages & Bonus 13865.41 12101.77

Corporation Contribution to Provident Fund and 1163.87 1174.95Employee's Pension FundWorkmen and Staff Welfare Expenses 419.42 433.01Gratuity 2823.08 1604.50

SUB TOTAL 18271.78 15314.23Less: Transferred to Research & Development Exp. 58.09 43.62

TOTAL 18213.69 15270.61

NOTE NO. - 24 FINANCE COSTInterest Expenses 515.30 92.37

TOTAL 515.30 92.37

NOTE NO. - 25 DEPRECIATION, AMORTIZATION & IMPAIRMENTDepreciation as per Note No.-9 431.37 405.97Impairment Loss as per Note No.-9 2.29 62.20Other Amortization

Tools 772.43 1040.27Technical Know How 53.11 825.54 42.36 1082.63

TOTAL 1259.20 1550.80

NOTE NO. - 26 RESEARCH & DEVELOPMENT EXPENSES

Research & Development ExpensesMaterial Stores & Spares Consumed 0.00 2.04Salary & Allowances 58.09 43.62

TOTAL 58.09 45.66

`in Lakhs

2011-12 2010-11

NOTES FORMING PART OF STATEMENT OF PROFIT & LOSS


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NOTE NO. - 27 OTHER EXPENSES(A) Manufacturing Service Cost

Water, Power & Fuel 2231.18 2374.16Repairs & Maintenance

Plant & Machinery 199.85 357.73Buildings 57.26 89.69Others 166.55 423.66 58.92 506.34

Insurance 100.09 94.76Excise Duty 242.96 265.68Wealth Tax 0.19 0.23Consultancy and Legal Expenses 20.82 23.48Municipal Tax/Charges 9.45 9.19

SUB TOTAL (A) 3028.35 3273.84

(B) Manufacturing & Other Operating ExpensesMachining & Assembly charges 603.43 676.38Fabrication Charges 8.97 8.61Job Done by outside Agencies 2953.77 2257.42Turnkey Project Expenses 2247.28 4361.52Other Charges For Production 513.79 6327.24 370.76 7674.69Less: Interplant Transfer (Services) 565.66 608.28

SUB TOTAL (B) 5761.58 7066.41(C) Administration, Selling & Distribution Expenses

Rent 19.18 13.75Electricity & Drinking Water Expenses 747.68 971.21Security Expenses (CISF & Others) 1284.54 1267.08Travelling & Conveyance Expenses 219.10 200.84Bank Charges 226.04 129.83Miscellaneous Expenses 326.39 302.55Motor Vehicle Running Expenses 135.74 121.14LD Deducted and Charged 935.19 398.88Sales Promotion 125.93 130.10Auditor's Remuneration

Audit Fees 1.44 1.44Tax Audit Fees 0.20 0.20

Service Tax 0.00 1.64 0.17 1.81Training Expenses 3.53 7.22

SUB TOTAL (C) 4024.96 3544.41(D) Other Provisions / Expenses Written Off

Provision for Bad & Doubtful Debts 414.18 613.18Provision for Bad & Doubtful Advances 21.60 91.86Provision for Warranty Expenses 365.54 346.27Miscellaneous Provisions 123.64 215.16Miscellaneous Losses Written Off 0.00 924.96 735.27 2001.74

SUB TOTAL (D) 924.96 2001.74 GRAND TOTAL (A+B+C+D) 13739.85 15886.40

`in Lakhs

2011-12 2010-11



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NOTE NO. - 28 EXCEPTIONAL ITEMSPrior Period Adjustment

IncomeSales (including services) 51.90 (15.18)Previous year expenses written back 19.46 0.25Misc Income (0.14) 71.22 69.34 54.41

Less : ExpensesRaw Materials Consumed 13.50 0.00Stores & Spare Parts Consumed 76.87 0.00Payment to & Provision for Employees 1.48 0.58Depreciation 0.10 0.31Misc. expenses(net) 8.57 100.52 1.18 2.07

Prior Period Adjustment (Net) (29.30) 52.34

`in Lakhs

2011-12 2010-11



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A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit before Tax 858.41 3813.98Adjustments for:Depreciation 431.47 406.28Interest Expenses 515.30 92.37Deffered Revenue Expenditure 154.13 86.89Lease Income (467.54) (467.54)Incremental Provisions 2338.79 2972.15 2196.54 2314.54Operating Profit before Working Capital Changes 3830.56 6128.52Adjustments for:Trade and Other Receivables (2005.79) (16769.53)Inventories (3919.44) (7524.59)Trade Payables 3658.64 6348.50Loans & Advances (439.87) (2706.46) (791.24) (18736.86)Cash Generated from Operations 1124.10 (12608.34)Net Cash from Operating Activities 1124.10 (12608.34)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed Assets (349.59) (283.09)Sale/Adjustment of Fixed Assets 45.87 0.35Adjustment in Capital Work-in-Progress (91.85) (42.60)Lease income 467.54 467.54Net Cash from Investing Activities 71.97 142.20C. CASH FLOW FROM FINANCING ACTIVITIESInterest Payment (515.30) (92.37)Short Term Loans 475.21 (2240.88)Liability for leased assets (467.54) (451.47)Net cash from financing activities (507.63) (2784.72)Net increase /(Decrease) in cash and cash equivalents 688.44 (15250.86)Opening Balance of Cash and Cash Equivalents 2447.86 17698.72Closing Balance of Cash and Cash Equivalents 3136.30 2447.86

688.44 (15250.86)Note:- Cash Flow has been prepared by following Indirect methodNote - 1:Details of Opening Balance of Cash and Cash EquivalentsCash, Cheques and Draft in hand 7.18 15.41Cheques - in- Transit 47.88 181.54Balance with Schedule Bank in Current Account 755.47 320.72Balance with Schedule Bank in Short Term Deposit 1500.00 17050.00Balance with Other Bank in Short Term Deposit 137.33 131.05

Total 2447.86 17698.72Note - 2:Details of Closing Balance of Cash and Cash EquivalentsCash, Cheques and Draft in hand 4.84 7.18Cheques - in- Transit 10.48 47.88Balance with S

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