DIRECTORS’ REPORT - lnt.in Private LImited.pdf · S-757 LARSEN & TOUBRO HOWDEN PRIVATE LIMITED...

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LARSEN & TOUBRO HOWDEN PRIVATE LIMITED

L&T HOWDEN PRIVATE LIMITED

DIRECTORS’ REPORT

The Directors have pleasure in presenting their report and accounts for the year ended 31st March 2013.

1. FINANCIAL RESULTS (Million R)

Particulars 2012-13 2011-12

Profit / (Loss) before Depreciation & Tax (PBDT) 58.06 (71.15)

Depreciation 28.54 6.16

Profit / (Loss) before tax (PBT) 29.52 (77.31)

Provision for taxes 22.88 –

Profit / (Loss) after tax (PAT) 6.65 (77.31)

Balance brought forward from previous year (113.49) (36.18)

Balance carried to Balance Sheet (106.84) (113.49)

2. APPROPRIATIONS No appropriation is proposed.

3. DIVIDEND During the period under review, no dividend has been proposed or paid.

4. PERFORMANCE OF THE COMPANY L&T Howden’s first phase of facility establishment of air pre-heater heating element manufacturing, axial fan manufacturing and testing facilities

have been completed. These facilities are state of the art, and have been established with technical support from Howden. L&T Howden’s organisation has been setup fully as planned and its personnel have been trained in the products and in the functional areas. With this, L&T Howden have executed a major portion of orders booked in 2011. Further, L&T Howden have been awarded contracts by reputed boiler makers in India for Axial Fans and Rotary Air Pre-heaters this year, and these will be executed in the years 2013 & 2014.

5. CAPITAL EXPENDITURE Estimated amount of contracts remaining to be executed on capital account of Plant & Machinery and Civil construction is R13,163,253.

6. AUDITOR’S REPORT The notes to the accounts referred to in the Auditors’ Report are self explanatory and therefore do not call for any further comments of Directors.

7. MATERIAL CHANGES, IF ANY, BETWEEN BALANCE SHEET DATE AND DATE OF DIRECTORS’ REPORT There are no material changes between Balance Sheet date and date of Directors’ Report.

8. CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO

a. The operations of the Company are not energy intensive and is not included under the list of industries which should furnish information in Form A (Rule 2) of Companies (Disclosure of Particulars in Reporting Board of Directors) Rules,1988.

b. Technology has been imported by way of technology transfer agreements for Axial Fans with Howden Denmark A/S, Denmark and for Rotary Air Pre heaters with Howden UK Limited, Northern Ireland.

c. During the year, the Company has foreign exchange earnings and the outgo is as under :

(1) Foreign Exchange Earnings:


(Amount in R) (Amount in R)

Sales & Services 1,54,73,13,087 3,02,60,831

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(2) Foreign Exchange Outgo:


(Amount in R) (Amount in R)

Project Imports 84,47,32,021 –

Capital Goods 33,81,993 9,81,03,142

Training Fees 38,48,242 82,53,750

Royalty & Trade Mark Fees 3,55,34,310 –

Interest 3,91,13,952 1,32,21,870

Travelling 42,42,582 17,70,806

9. PARTICULARS OF EMPLOYEES U/S 217(2A) There are no employees covered by the provisions of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of

Employees) Rules, 1975.

10. SUBSIDIARY COMPANIES Your Company is not having any subsidiary companies as on date.

11. DIRECTORS’ RESPONSIBILITY STATEMENT The Board of Directors of the Company confirms:

I. that in the preparation of the annual accounts, the accounting standards have been followed to the extent applicable and there has been no material departure;

II. that the selected accounting policies were applied consistently and the

Directors made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the Statement of Income & Expenditure for the year ended 31st March 2013.

III. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

IV. that the annual accounts have been prepared on a going concern basis: and

V. that the proper systems are in place to ensure compliance of all laws applicable to the Company.

12. DIRECTORS

The present Directors of the Company are: Mr. Ian Brander, Mr. Shailendra Roy, Mr. Sunil Pande, Mr. Ravindra Misra, Mr. Elias Zabaneh, and Mr. Siddharth Shrivastav.

Alternate directors: Mr. Martinus Zijlmans is alternate to Mr. Ian Brander.

Mr. Ian Smith is alternate to Mr. Elias Zabaneh.

Mr. Kevin Musgrove is alternate to Mr. Siddharth Shrivastav.

Mr. Ravi Uppal resigned from the Board of Directors during the year with effect from September 15, 2012 and Mr. Shailendra Roy was appointed as a Director in casual vacancy in his place.

The Board of Directors appreciated the valuable contributions made by Mr. Ravi Uppal during his tenure of Directorship.

Pursuant to the Companies Act, 1956, Mr. Ian Brander and Mr. Ravindra Misra are liable to retire by rotation and being eligible offer themselves for re-appointment.

13. AUDITORS The Auditors, M/s Sharp & Tannan, hold office until the conclusion of the ensuing Annual General Meeting. The Directors recommend that M/s

Sharp & Tannan, Chartered Accountants be appointed as the Statutory Auditors of the Company at the forthcoming Annual General Meeting of the Company to hold office till the conclusion of the next Annual General Meeting of the Company.

The Company does not advocate rotation of Auditors as envisaged in Corporate Governance Voluntary Guidelines, 2009 in view of the domain knowledge acquired by the Auditors over a period of time. However, the signing partners shall be rotated every three years.

14. COST AUDITORS Pursuant to The Companies (Cost Accounting Records) Rules, 2011 issued by the Ministry of Corporate Affairs on June 3, 2011, certification

of the Cost Compliance Report by a Cost Accountant is essential.

In this regard M/s. Manubhai Associates, Cost Accountants having Membership Number M-2502 were appointed as Cost Auditors at the Board Meeting dated June 26, 2012 for the purpose of certifying the Cost Compliance Report for the year ended March 31, 2012.

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15. COMPLIANCE WITH CORPORATE GOVERNANCE VOLUNTARY GUIDELINES, 2009

a) Separation of Offices of Chairman & Chief Executive Officer The roles and offices of Chairman and Chief Executive are separated. Mr.Ian Brander is elected as a Chairman of the Board.

During the year Mr. Vijay Parandekar resigned as Manager with effect from October 1, 2012.

The Manager is not appointed as the Director of the Company.

b) Remuneration of Directors The Directors are not paid any remuneration by way of sitting fees, etc.

c) Independent Directors All the members of the Board of the Company are independent in the sense that none of them have any direct or indirect personal interest

in the day-to-day management of the Company.

Number of Companies in which an Individual may become a Director

The Company has apprised its board members about the restriction on number of other directorships and the same is being complied with.

d) Responsibilities of the Board Presentations to the Board are made in the areas such as financial results, budgets, business prospects etc. which give Directors, an

opportunity to interact with senior managers and other functional heads. Directors are also updated about their role, responsibilities and liabilities.

The Company ensures necessary training to the Directors relating to its business through formal/ informal interactions. Systems, procedures and resources are available to ensure that every Director is supplied, in a timely manner, with precise and concise information in a form and of a quality appropriate to effectively enable/ discharge his duties. The Directors are given time to study the data and contribute effectively to Board discussions. The Non-Executive Directors through their interactions and deliberations give suggestions for improving overall effectiveness of the Board and its Committees. Their inputs are also utilized to determine the critical skills required for prospective candidates for election to the Board. The system of risk assessment and compliance with statutory requirements are in place.

e) Internal Auditors The Corporate Audit Services department of Larsen & Toubro Limited provides internal audit services to the Company.

f) Internal Control The Board ensures the effectiveness of the Company’s system of internal controls including financial, operational and compliance controls

and risk management systems.

g) Secretarial Audit The Secretarial Audit, at regular intervals, is conducted by the Corporate Secretarial department of Larsen & Toubro Limited, which has

competent professionals to carry out the said audit.

h) Related Party Transactions The details of all the related party transactions form part of the accounts as required under Accounting Standard - 18 issued by ICAI.

16. ACKNOWLEDGMENTS The Directors acknowledge the invaluable support extended to the Company by the employees and management of the promoter companies

and other fellow subsidiaries.

For and on behalf of the Board

SIDDHARTH SRIVASTAVA R. N. MISHRA Director Director

Place: MumbaiDate: April 30, 2013

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INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF L&T HOWDEN PRIVATE LIMITED

Report on the Financial StatementsWe have audited the accompanying financial statements of L&T HOWDEN PRIVATE LIMITED (the ‘Company’) which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, and to the best of our information and according to the explanations given to us, the said financial statements give the information required by the Companies Act, 1956, in the manner so required and give a true and 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 March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report) Order, 2003 and as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004

issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. As required by Section 227(3) of the Companies Act, 1956 we report that:

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

(b) in our opinion, proper books of account as required by law have been kept by the Company, so far as appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956; and

(e) on the basis of the written representations received from directors of the Company as on March 31, 2013, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

SHARP & TANNANChartered Accountants

ICAI Registration No.000452NBy the hand of

RAJKUMAR KHULLARPlace: New Delhi PartnerDate: April 30, 2013 Membership No.92507

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ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT(Referred to in Paragraph 1 of our report of even date)

(i) (a) The Company is maintaining proper records to show full particulars, including quantitative details and situation of all fixed assets.

(b) As explained to us, these fixed assets have been physically verified by the management, in accordance with a phased programme of verification, which in our opinion, is reasonable, considering the size of the Company and nature of its assets. The frequency of physical verification is reasonable and no material discrepancies were noticed on such verification.

(c) The Company has not disposed off any substantial part of its fixed assets during the year, so as to affect its going concern status.

(ii) (a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) As per the information given to us, the procedures of physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b), (c) and (d) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(f) and (g) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business, for the purchase of fixed assets, for the sale of goods and for sale of services. During the course of audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered. However during the year, the Company has not entered into any transaction as defined.

(b) In our opinion and according to the information and explanations given to us, during the year, the Company has not made any transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 and therefore report/ comment on transactions exceeding the value of rupees five lakhs in respect of any party during the year does not arise

(vi) According to the information and explanations given to us, the Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) According to the information and explanations given to us, the Central Government has prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 in respect of Rotary Pre heater and Axial Fans and that are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

(ix) (a) According to the information and explanations given to us, in our opinion, the Company has been regular in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales tax, service tax, custom duty, excise duty, cess and other statutory dues, as applicable, with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts were in arrears as at March 31, 2013, for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and records of the Company examined by us, there were no cases of disputed income tax, sales tax, excise duty, service tax and cess as at March 31, 2013 which have not been deposited on account of any dispute.

(x) The Company is registered for a period of less than five years from the date of registration. Accordingly, paragraph 4(x) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company.

(xi) According to the information and explanations given to us, in our opinion the Company has not defaulted in the repayment of dues to any financial institutions or bank as at the Balance Sheet date. The Company has not issued any debentures.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/society are not applicable to the Company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in securities.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by associates and others, from bank or financial institutions during the period.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

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(xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956, during the year.

(xix) The Company has not issued any debentures during the year. Hence, reporting on paragraph 4 (xix) of the Companies (Auditor’s Report) Order, 2003 pertaining to creation of security or charge for debentures does not arise.

(xx) The Company has not raised any money by public issues during the year. Accordingly, paragraph 4 (xx) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company.

(xxi) During the course of our examination of books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

SHARP & TANNANChartered Accountants

ICAI Registration No.000452NBy the hand of

RAJKUMAR KHULLARPlace: New Delhi PartnerDate: April 30, 2013 Membership No.92507

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BALANCE SHEET AS AT MARCH 31, 2013

Note No.

As AtMarch 31, 2013

As AtMarch 31, 2012

R R

I. EQUITY AND LIABILITIES

Shareholders' Funds

Share capital 1 300,000,000 300,000,000

Reserves & surplus 2 (106,842,902) (113,488,130)

Non current liabilities 3

Long term borrowings 394,800,000 523,000,000

Deferred tax liabilities (Net) 18,614,510 –

Long term provisions 3,849,907 3,900,321

Current liabilities 4

Short term borrowings 21,300,562 –

Current maturities of long term borrowings 148,050,000 –

Trade payables 437,024,380 97,282,549

Other current liabilities 239,411,508 244,869,058

Short term provisions 59,615,813 7,418,284

TOTAL 1,515,823,777 1,062,982,082

II. ASSETS

Non current assets

Fixed assets 5.1

Tangible assets 489,377,562 324,206,889

Intangible assets 18,209,770 21,926,119

Capital Work in Progress – 108,470,858

Current Assets 6

Inventories 76,486,807 59,157,838

Trade receivables 706,465,397 31,378,224

Cash and bank balances 109,755,846 368,354,305

Other current assets 115,528,395 149,487,849

TOTAL 1,515,823,777 1,062,982,082

Significant accounting policies & other explanatory information forming part of the accounts 14

As per our report attached

SHARP & TANNAN For and on behalf of the BoardChartered AccountantsICAI Registration No: 000452NBy the hand of

RAJKUMAR KHULLAR SIDDHARTH SRIVASTAVA R. N. MISRAPartner Director DirectorMembership No. 92507

Place : New Delhi Place : MumbaiDate : April 30, 2013 Date : April 30, 2013

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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31,2013

Note No.2012-13 2011-12

R R

INCOME

Revenue from operations 7 1,561,240,352 30,260,831

Other Income 8 17,721,161 23,892,209

TOTAL 1,578,961,513 54,153,040

EXPENDITURE

Materials, manufacturing & operating Expenses 9 1,409,949,965 40,198,911

(Increase)/(Decrease) in inventories 10 (41,117,260) (17,774,022)

Employee benefits expenses 11 47,378,693 41,082,842

Sales, administration & other expenses 12 60,784,282 47,489,232

Finance costs 13 43,909,517 14,302,411

Depreciation and amortisation 28,535,189 6,164,032

TOTAL 1,549,440,387 131,463,406

Profit before tax 29,521,126 (77,310,366)

Provision for income tax

MAT 7,600,000 –

MAT Credit (3,338,611) –

Deferred tax 18,614,510 –

Profit after tax 6,645,227 (77,310,366)

Earning Per Share (Face value of R10 each)

Basic & Diluted 0.22 (2.78)

Weighted Average No. of Shares 30,000,000 27,814,208

SIGNIFICANT ACCOUNTING POLICIES & OTHER EXPLANATORY INFORMATION FORMING PART OF THE ACCOUNTS

14





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CASH FLOW STATEMENT FOR THE PERIOD ENDED MARCH 31, 2013

2012-13R

2011-12R

A. Cash flow from operating activities:

Net Profit/ (Loss) before tax 29,521,126 (77,310,366)

Adjustments for:

Depreciation 28,522,266 6,164,032

Unrealized forex (gain) /loss 19,850,000 –

Interest (Net) 26,290,752 (9,516,553)

Operating profit / (Loss) before working capital changes 104,184,145 (80,662,886)

Adjustment for:

(Increase) / decrease in Trade Receivables (675,087,173) (31,378,224)

(Increase) / decrease in Other Current Assets 33,959,454 (90,008,382)

(Increase) / decrease in Inventories (17,328,969) (59,157,838)

Increase / (decrease) in Trade Payables 339,741,831 83,276,898

Increase / (decrease) in Other Current Liabilities (5,457,550) 124,884,791

Increase / (decrease) in Long Term Provisions (50,414) 3,900,321

Increase / (decrease) in Short Term Provisions 47,936,140 9,481,342

Cash flow from operating activities (A) (172,102,536) (39,663,979)

B. Cash flow from investing activities:

Sale / (Purchase) of fixed assets (81,505,732) (370,774,526)

Interest received 17,618,765 23,818,964

Net cash flow (used in) /from investing activities (B) (63,886,968) (346,955,562)

C. Cash flow from financing activities:

Share capital – 200,000,000

ECB from HSBC Mauritius – 523,000,000

Bank Borrowings 21,300,562 –

Interest Paid (43,909,517) (14,302,411)

Net cash flow / (used in) from financing activities ( C ) (22,608,955) 708,697,589

Net increase in cash and cash equivalents (A+B+C) (258,598,459) 322,078,048

Cash and cash equivalents at beginning of the period 368,354,305 46,276,257

Cash and cash equivalents at end of the period 109,755,846 368,354,305

Net increase in cash and cash equivalents (A+B+C) (258,598,459) 322,078,048

Notes:1) Cash flow statement has been prepared under the indirect method as set out in Accounting Standard 3 - Cash Flow Statements as specified

in the Companies (Accounting Standards) Rules, 2006.2) Cash Balance equivalnent to R 7,624,000 (Previous year : R 7,624,000) is not available for use.




Place : New Delhi Place : MumbaiDate : Date :

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NOTES FORMING PART OF FINANCIAL STATEMENTS

As atMarch 31, 2013

As atMarch 31, 2012

R R

1 SHARE CAPITAL

Authorised

3,00,00,000 (Previous year 3,00,00,000) Equity Shares of R 10/- each 300,000,000 300,000,000

Issued, Subscribed & Paid up

3,00,00,000 (Previous year 3,00,00,000) Equity Shares of R 10/- each fully paid up 300,000,000 300,000,000

TOTAL 300,000,000 300,000,000

a. Equity Shares held by party with substantial interest

Name of Shareholder Relationship March 31, 2013 March 31, 2012

Number Amount Number Amount

Larsen & Toubro Limited JV Partner 15,030,000 150,300,000 15,030,000 150,300,000

Howden Holding B.V. JV Partner 14,970,000 149,700,000 14,970,000 149,700,000

b. Equity Shares in the Company held by each shareholder holding more than 5% share

Name of Shareholder Relationship March 31, 2013 March 31, 2012

Number % Number %

Larsen & Toubro Limited JV Partner 15,030,000 50.10% 15,030,000 50.10%

Howden Holding B.V. JV Partner 14,970,000 49.90% 14,970,000 49.90%

c. Reconciliation of the shares outstanding at the beginning and at end of the reporting period;

Particulars March 31, 2013 March 31, 2012

Number % Number %

Shares outstanding at the beginning of the year 30,000,000 300,000,000 10,000,000 100,000,000

Shares Issued during the year – 20,000,000 200,000,000

Shares outstanding at the end of the year 30,000,000 300,000,000 30,000,000 300,000,000

d. Terms/Rights attached to the Equity Shares The Company has only one class of Equity Shares having a par value of R 10 Per Share. Each holder of Equity Shares is entitled to one

vote per share.

As atMarch 31,2013

As atMarch 31,2012

R R

2 RESERVES & SURPLUS

Profit / (Loss) as per last Balance Sheet (113,488,130) (36,177,764)

Profit / (Loss) for the year 6,645,227 (77,310,366)

TOTAL (106,842,902) (113,488,130)

3 NON CURRENT LIABILITIES

Long Term Borrowings

Term Loan from Bank 394,800,000 523,000,000

TOTAL 394,800,000 523,000,000

Nature of Security and repayment terms:a. Term loans are in the form of External Commercial Borrowing from foreign bank secured by way of first charge on land & building (pending

registration of mortgage deed) and hypothecation of all movable fixed assets, present and future.b. ECBs are repayable in 11 equal quarterly instalments starting from Aug-13.c. ECB amount of R 148,050,000/- payable during 2013-14 (2012-13 : NIL) has been reclassified under Current Liabilities.

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NOTES FORMING PART OF FINANCIAL STATEMENTS (Contd.)

As atMarch 31,2013

As atMarch 31,2012

R R

Deferred Tax Liabilities (Net) 18,614,510 –

Total 18,614,510 –

Long Term Provisions

Provision for Gratuity & Compensated Absences 3,849,907 3,900,321

TOTAL 3,849,907 3,900,321

4 CURRENT LIABILITIES

Short Term Borrowings - Secured

Loan Repayable on Demands from Banks 21,300,562

TOTAL 21,300,562 –

Nature of Security : Short term borrowings from banks is cash credits and demand loan as part of working capital facilities secured by hypothecation of inventories, book debts and receivables.

Current Maturities of Long Term Borrowings

Secured Term Loan from Bank (Refer Note 3) 148,050,000 –

TOTAL 148,050,000 –

Trade Payables

Amounts due to MSMED Suppliers 22,484,511 –

Interest Accrued & due to MSMED Suppliers 416,863 –

Other Payables 414,123,006 97,282,549

TOTAL 437,024,380 97,282,549

Other Current Liabilities

Advance from Customers 181,517,773 233,358,965

Interest accrued but not due on loans 3,331,438 3,442,486

Duties & Taxes 17,331,133 3,923,968

Others Current Liabilities 37,231,163 4,143,639

TOTAL 239,411,508 244,869,058

Short Term Provisions

Provision for warranty and contingencies 47,699,027 –

Provision for Income Tax 5,130,190 –

Provision for Employee Expenses 6,356,434 6,908,764

Provision for Gratuity & Compensated Absences 430,162 509,520

TOTAL 59,615,813 7,418,284

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NOTES FORMING PART OF FINANCIAL STATEMENTS (Contd.)5.1 FIXED ASSETS

Particulars GROSS BLOCK (AT COST) DEPRECIATION / AMORTISATION NET BLOCK

As at 01.04.2012

Additions/Adjustments

Deductions /Adjustments

As at 31.03.2013

Upto 01.04.2012

For the year Adjustment Upto 31.03.2013

As at 31.03.2013

As at 31.03.20102

R R R R R R R R R R

Tangible Assets

Leasehold Land 35,052,301 – 35,052,301 265,548 354,064 619,611 34,432,690 34,786,753

Buildings 99,676,003 65,483,393 165,159,396 221,000 3,144,844 3,365,844 161,793,552 99,455,002

Plant & Equipments 180,729,182 119,862,032 300,591,214 1,439,015 18,572,098 20,011,112 280,580,101 179,290,167

Furniture & Fixtures 2,994,010 2,438,241 5,432,252 24,950 361,843 386,793 5,045,459 2,969,060

Office Equiments 3,236,386 206,428 3,442,814 337,688 741,709 1,079,397 2,363,417 2,898,698

Vehicles 392,498 – 392,498 13,875 55,499 69,374 323,124 378,623

Computers 5,318,335 1,870,991 –63,000 7,126,326 889,751 1,410,279 –12,923 2,287,106 4,839,219 4,428,585

SUB TOTAL (A) 327,398,715 189,861,085 –63,000 517,196,800 3,191,826 24,640,335 –12,923 27,819,238 489,377,562 324,206,889

Intangible Assets

Software 5,916,847 178,505 6,095,352 248,845 982,972 1,231,817 4,863,535 5,668,002

Technical Know-how 22,365,000 – 22,365,000 6,106,883 2,911,883 9,018,765 13,346,235 16,258,118

SUB TOTAL (B) 28,281,847 178,505 – 28,460,352 6,355,728 3,894,854 – 10,250,582 18,209,770 21,926,119

Capital Work-in-Progress 108,470,858 – –108,470,858 – – – – – – 108,470,858

SUB TOTAL ('C) 108,470,858 – –108,470,858 – – – – – – 108,470,858

TOTAL (A) + (B) + ('C) 464,151,420 190,039,590 –108,533,858 545,657,152 9,547,553 28,535,189 (12,923) 38,069,820 507,587,332 454,603,866

Previous year 370,774,526 – 464,151,420 3,383,521 6,164,032 – 9,547,553

As at 31.03.2013 As at 31.03.2012R R

6 CURRENT ASSETS

Inventories

Raw materials and components 17,409,522 41,269,375

Finished goods 58,891,282 17,774,022

Stores & Spares 186,002 114,441

TOTAL 76,486,807 59,157,838

Trade Receivables

Outstanding for a period exceeding six months from the due date of payment

Unsecured, considered good 5,043,088 –

(A) 5,043,088 –

Outstanding for less than six months from the due date of payment

Unsecured, considered good 701,422,309 31,378,224

(B) 701,422,309 31,378,224

TOTAL (A + B) 706,465,397 31,378,224

Cash & Cash Equivalents

Balance with Bank in current account 1,115,134 7,855,661

Short Term Deposits with Bank with original maturity less than 12 months * 101,016,712 352,874,644

Deposit with Bank held on lien for Bank Guarantee 7,624,000 7,624,000

TOTAL 109,755,846 368,354,305

* Short Term Deposit includes interest accrued but not due.

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As at 31.03.2013 As at 31.03.2012R R

Other Current Assets

Unsecured Considered Good

- Advance to Suppliers 15,579,881 99,032,447

- Advances recoverable in cash or in kind or for value to be received 29,367,331 13,820,143

- Input Credit Receivable for Excise & VAT 64,789,859 34,182,546

- MAT Credit 3,338,611 –

- TDS Receivable (Net) 2,452,713 2,452,713

TOTAL 115,528,395 149,487,849

2012-13 2011-12R R R R

7 REVENUE FROM OPERATIONS

Sale of Products :

Gross Sales 1,559,928,156 28,727,000

Less : Excise Duty 1,580,228 –

Sales (Net) 1,558,347,928 28,727,000

Sale of Services 2,892,424 1,533,831

TOTAL 1,561,240,352 30,260,831

8 OTHER INCOME

Interest Income on Bank Deposits 17,618,765 23,818,964

Miscellaneous Income 102,397 73,245

TOTAL 17,721,161 23,892,209

9 MATERIALS, MANUFACTURING & OPERATING EXPENSES

Materials and components consumed 1,272,877,264 36,648,698

Royalty & trademark fees on Sales 39,705,803 –

Power, Fuel and Water 8,389,445 3,520,661

Repair of Plant & Machinery 407,086 29,553

Warranty & Contingencies Cost 47,699,027 –

Other Direct Expenses 40,871,339 –

TOTAL 1,409,949,965 40,198,911

10 (INCREASE) / DECREASE IN INVENTORIES

Opening Stocks

Finished Goods 17,774,022 –

17,774,022 –

Less : Closing Stocks

Finished Goods 58,891,282 17,774,022

58,891,282 17,774,022

TOTAL (41,117,260) (17,774,022)

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2012-13 2011-12R R R R

11 EMPLOYEE BENEFITS EXPENSESSalaries & Wages 42,991,973 32,072,169Contribution to Provident & Other Funds 1,653,813 1,037,758Expenses on Employee Stock Option Scheme (ESOP) 1,072,273 2,797,323Staff Welfare 1,686,876 765,248Leave Encashment (138,824) 3,195,891Gratuity 112,582 1,214,453

TOTAL 47,378,693 41,082,842

12 SALES, ADMINISTRATION & OTHER EXPENSESRent 9,049,191 10,116,096Rates & Taxes 61,044 377,653Insurance 218,659 26,022Audit & Certification Fees 390,496 177,673Travelling 13,335,667 7,831,385Vehicle Running & Maintenance 7,284,897 4,931,479Recruitment Expenses 70,666 1,511,870Printing & Stationery 361,845 498,124Office Running & Maintenance 7,214,843 8,323,484Communication Expenses 948,540 1,195,032Legal and Professional 287,504 790,242Training Fees 4,404,947 9,489,521Security Service 272,263 86,982Miscellaneous 3,128,540 2,408,122Bank Charges 844,919 606,356Foreign Currency Fluctuation (Net) (6,618,203) (1,257,997)Corporate Infrastructure Charges 19,528,466 377,186

TOTAL 60,784,282 47,489,232

13 FINANCE COSTSInterest Expense:-Term Loans 39,113,952 13,221,870-Others 2,147,699 188,005Other Borrowing Cost 2,647,866 892,536

TOTAL 43,909,517 14,302,411


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14.1 SIGNIFICANT ACCOUNTING POLICIES

Company OverviewL&T Howden Private Limited (LTHPL) is a subsidiary of Larsen & Toubro Limited (L&T). LTHPL, a joint venture between L&T and Howden Group U.K., design, engineer, manufacture, supply and provides aftermarket services for axial fans and rotary air pre-heaters for super critical thermal power plants.

A. Basis of Preparation of Financial Statements These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost

convention on the accrual basis. GAAP comprises the applicable provisions of the Companies Act, 1956 and mandatory Accounting Standards as prescribed by the Companies (Accounting Standards) Rule, 2006. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

B. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the

reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Examples of such estimates include provisions for operating expenses, future obligations under Income Tax and useful lives of fixed assets. Difference, if any, between the actual results and estimates is recognized in the period in which the results are known.

C. Revenue Recognition Revenue is recognised based on the nature of activity when consideration can be reasonably measured and there exists reasonable certainty

of its recovery.

a) Revenue from sale of goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

b) Revenue from engineering and service fees is recognised as per the terms of the contract.

c) Interest Income is accrued at applicable interest rate.

D. Fixed Assets Fixed assets are stated at cost less accumulated depreciation and amortization. Cost of fixed assets comprises purchase price (net of rebates

and discounts), non refundable duties, taxes or levies and any directly attributable cost of bringing the assets to its working condition for its intended use.

Capital work in progress comprises cost of fixed assets that are not ready to use at the reporting date. CWIP comprises cost of material consumed, erection charges thereon along with other related expenses incurred for the fan testing facility.

E. Depreciation and Amortization Depreciation and amortization on fixed assets is provided on straight line basis at the rate prescribed under Schedule XIV to the Companies

Act 1956 except the following class of assets where depreciation is provided over the useful life estimated by the management from the date of put to use.

Asset Class : Estimated Useful Life

a. Leasehold Land : Over the period of lease of 99 years.

b. IT Hardware : Four years.

c. Technical Knowhow : Seven Years

d. Specialized Software : Six Years

e. Office Equipment : Four Years

f. Canteen Equipment : Eight Years

For assets purchased or capitalized during the year, depreciation and amortization is provided on pro rata basis from the date asset is put to use. Fixed Assets individually costing v 5,000/- or below are fully depreciated in the year of commissioning / put to use.

F. Inventories Inventories are valued after providing for obsolescence, as under:

a) Raw materials, components, construction materials, stores, spares and loose tools at lower of weighted average cost or net realisable value.

b) Manufacturing work-in-progress at lower of cost including related overheads or net realisable value.

c) Finished goods at lower of weighted average cost or net realisable value.


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G. Foreign Currency Transactions The reporting currency of company is Indian Rupee. Foreign currency transactions are recorded on initial recognition in the reporting currency

using the exchange rates at the date of transaction. At each Balance Sheet date, foreign currency monetary items are reported using the closing rate. Any resulting loss /gain is charged / taken to the Statement of Profit & Loss.

Non-monetary items, carried at historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.

H. Employee Benefits

(a) Short term employee benefits: All employee benefits falling due within twelve months of rendering the service are classified as short term employee benefits, which

include benefits like salaries, short term compensated absences, expected cost of performance incentives, ex-gratia etc. are recognised as expense in the period in which the employee renders the related service.

(b) Long term employee benefits: Long term employee benefits including compensated absences that are not expected to occur within twelve months after the end of the

period in which the employee renders related services are recognised as a liability at the present value of the defined benefit obligation based on actuarial valuation (under projected unit credit method) carried out at the Balance Sheet date.

(c) Post Employment Benefits: i. Defined-contribution plans: The Company has defined contribution plans (where Company pays pre-defined amounts and does not have any legal or informal

obligation to pay additional sums) for post employment benefits (viz. Provident Fund), the Company’s contributions thereto are charged to Statement of Profit and Loss every year.

ii. Defined-benefit plan: The Company has a defined benefit plan (viz., Gratuity) for employees, the liability for which is determined on the basis of valuation

carried out by an independent actuary (under projected unit credit method) at the Balance Sheet date.

I. Taxes on Income: • Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the

provisions of Income Tax Act, 1961, and based on the expected outcome of assessments / appeals.

• Deferred tax liability is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing, enacted or substantially enacted regulations.

• Other Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

J. Provisions, Contingent Liabilities and Contingent Assets • Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of a past event,

b) a probable outflow of resources is expected to settle the obligation; and

c) the amount of the obligation can be reliably estimated.

• Contingent liability is disclosed in case of

a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation,

b) a present obligation when no reliable estimate is possible; and

c) a possible obligation arising from past events where the probability of outflow of resources is not remote.

• Contingent Assets are neither recognized, nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

K. Impairment of Assets At the Balance Sheet date, the carrying amount of assets is tested for impairment so as to determine

a) the provision for impairment loss required, if any, or

b) the reversal required of impairment loss recognized in previous periods, if any.


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Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

a) in the case of an individual asset, at higher of the net selling price and the value in use;

b) in the case of a cash generating unit (a group of assets that generates identified, independent cash flows), at higher of the cash generating unit’s net selling price and the value in use.

Value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life.

L. Borrowing Cost Borrowing cost that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of such assets till

such time as the asset is ready for intended use or sale. Qualifying asset is an asset that necessarily takes a substantial period of time to get ready for intended use or sale. All other borrowing costs are recognized as an expense in the year in which they are incurred.

14.2 OTHER EXPLANATORY INFORMATION:

I. Capital and other commitments

2012-13 2011-12

R R

Estimated amount of contracts remaining to be executed on capital account and not provided for 13,163,253 53,996,396

TOTAL 13,163,253 53,996,396

II. Income in Foreign Currency (on accrual basis)

Sales & Services - Deemed Exports 1,547,313,087 30,260,831

TOTAL 1,547,313,087 30,260,831

III. Expenditure in Foreign Currency (on accrual basis)

Capital Goods 3,381,993 98,103,142

Training Fees 3,848,242 8,253,750

Royalty & Trade Mark Fees 35,534,310 –

Interest 39,113,952 13,221,870

Travelling 4,242,582 1,770,806

TOTAL 86,121,079 121,349,568

IV. Value of imports calculated on CIF basis

Capital Expenses 3,650,151 98,103,142

Project Imports 844,732,021 –

TOTAL 848,382,172 98,103,142

V. Payments to auditor

Statutory & Tax Audit 120,000 70,000

For Taxation Matters 50,000 70,000

For Certification works 151,000 29,223

Out of Pocket Expenses 69,496 8,450

TOTAL 390,496 177,673


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VI. Employee Benefits Disclosure for Defined Benefit Plans as per Accounting Standard 15 are as under:

The company provides for gratuity to employees in accordance with Payment of Gratuity Act 1972 wherein every employee is entitled to the benefit equivalent to 15 days salary last drawn for each completed year of service. The same is payable on termination of service, or retirement whichever is earlier. The benefit vests after five years of continuous service

2012-13 2011-12

R R

(a) Reconciliation of opening and closing balances of Defined Benefit obligation

Defined Benefit obligation at beginning of the year 1,214,453 –

Past Service Cost – –

Current Service Cost 360,259 –

Interest Cost 131,732 –

Actuarial (gain) / Loss (379,409) –

Benefits paid (48,496) –

Defined Benefit obligation at year end 1,278,539 1,214,453

(b) Reconciliation of opening and closing balances of fair value of plan assets

Fair value of plan assets at beginning of the year – –

Expected return on plan assets – –

Actuarial gain / (loss) – –

Employer contribution 48,496 –

Benefits paid (48,496) –

Fair Value of plan assets at year end – –

(c) Expense recognised during the year

Current Service Cost 360,259

Past Service Cost –

Interest Cost 131,732

Expected retun on plan assets –

Net Actuarial loss recognized during the period (379,409)

Net Cost 112,582 1,214,453

Principal assumptions used in determining Gratuity obligations are as under:

Discount rate 8.10% 8.50%

Expected rate of return on assets 0.00% 0.00%

Future salary increase 7.00% 7.00%

VII. Contingent Liabilities

2012-13 2011-12

R R

(i) Bank Guarantees 267,409,917 28,028,213

TOTAL 267,409,917 28,028,213


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VIII. Related party Disclosures

Names of related parties and description of relationship

a) Parties where control exists:

Holding Company : Larsen & Toubro Limited

J.V. Partner : Howden Holding B.V.

b) Parties under common control with whom transactions have taken place during the year being fellow subsidiaries

Howden Air & Gas India Pvt Ltd

Howden Denmark A/S

Howden Group Limited

Howden Spain, S.L.

Howden UK Limited

L&T - MHI Boilers Pvt. Limited

L&T - MHI Turbine & Generators Pvt. Limited

L&T General Insurance Company Limited

L&T Plastic Machinery Limited

L&T Sargent & Lundy Limited

Larsen & Toubro Infotech Limited

VIII. Related party Disclosures c) Balance of Related Parties

2012-13 2011-12

Particulars Holding Company

JV Partner Fellow Subsidiaries

Holding Company


Trade Receivables 14,030 – 706,126,030 – – 31,194,243

Advance To Vendors – – 9,305,719 – – 84,930,129

Trade Payables 35,174,100 – 265,254,165 9,336,918 – 7,634,101

Advance From Customer – – 58,970,329 – – 233,358,965

d) Transactions with Related Parties

2012-13 2011-12

Particulars Holding Company


Holding Company


Subscription to Equity – – – 100,200,000 99,800,000 –

Sale of Goods & Services – – 1,543,489,971 – – 30,125,831

Purchase of Project Goods & Services

– 845,145,149 – – –

Purchase of Fixed Assets – – 4,742,916 25,686,079 – 100,980,234

Training Fees – – 4,300,000 237,708 – 8,587,058

Insurance Charges – – 136,480 – – 516,841

ESOPs Cost – – – 2,797,323 – –

Royalty & Trade Mark Fees – – 39,705,803 – – –

Infrasturcture Charges 19,515,507 – – 377,186 – –

Administration & Sales Overheads

30,221,492 – – 17,157,019 – 22,000


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NOTES FORMING PART OF FINANCIAL STATEMENTS (Contd.) IX. Operating Leases The company has taken office premises and flats under cancelable operating leases. These lease agreements are normally renewed on

expiry.

X. Segment Reporting The Company operates in only one business segment (design, engineer, manufacture, supply and aftermarket services for axial fans

and rotary air pre-heaters for super critical thermal power plants) and in one geography viz. India. Accordingly, primary and secondary reporting disclosures for business and geographical segment, as envisaged in AS 17 ‘Segment Reporting’ is not applicable

XI. Detail of Sales, raw material and components

A) Sales:

Class of Goods 2012-13 2011-12

R R

Rotary Air Preheater & Axial Fans 1,561,240,352 30,260,831

B) Raw Material & Components Consumed:

i. Class Of Goods


R R

Steel and structure and other materials 1,272,877,264 36,648,698

ii. Inventories


R R

Steel and structure and other materials 76,486,807 59,157,838

XII. Pursuant to the Employees Stock Options Scheme established by the holding company (i.e. Larsen & Toubro Limited), stock options were granted to the employees of the Company. Total cost incurred by the holding company, in respect of the same is R9,099,837 The same is being recovered over the period of vesting by the holding company. Accordingly, cost of R5,247,824 (P.Y R 4,175,551/-) has been recovered by the holding company upto current year, out of which, R1,072,273 (P.Y.2,797,323) was recovered during the year. Balance R3,852,013/- will be recovered in future periods.

XIII. During the year the company has not paid any remuneration to its Directors.

XIV. Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals.

Deferred Tax is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.


R R

Deferred Tax Asset on account of :

Provision for Leave Encasment and Gratuity 1,388,668 –

Provision for Contingencies 5,158,650 –

Preliminery Expenses 530,635 –

Deferred Tax liabilities on account of difference in Accounting Depreciation vs Tax Depreciation (25,692,464) –

Net Deferred Tax Liabilities and Expenses (18,614,510) –

Deferred Tax assets was not recognized, on account of prudence in previous year due to loss.

The company, having inadequate taxable income in the current financial year, is required to pay minimum alternate tax (MAT) under Section 115JB of the Income Tax Act 1961. The provisions of the said Act permits the company to recover MAT paid out of future taxable profits of the company (arising from those other than under section 115JB) within a period of the following ten years. The Company’s

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NOTES FORMING PART OF FINANCIAL STATEMENTS (Contd.)future profitability as projected by management shows that the MAT paid will be recovered within the period and the manner permitted by the said Act. In accordance with guidance issued by the Institutes of Chartered Accountants of India in its “Guidance Note on Accounting for Credit Available in respect of MAT under the Income Tax Act 1961” the Company has carried forward MAT entitlement of R 3,338,611 (Previous Year R NIL) as an asset that will be recovered out of future tax payable (other than under Section 115JB).

XV. Term loan of USD 10 Million was taken in year 2011-12 from HSBC Mauritius to finance capital expenditure. To hedge the risk of adverse movement in foreign exchange rate and interest rate linked to LIBOR, the company has entered into a swap agreement with HSBC India under which all risk of foreign exchange and interest rate movement has been transferred to HSBC India.

XVI. Disclosures required by pursuant to Accounting Standard (AS) 29 “Provisions, Contingent Liabilities and Contingent Assets” :

a) Movement in provision:

Particulars Product Warranties

Contingencies & Foseeable Lease

Opening Balance as at 01-04-2012 – –

Provision during the year 31,799,351 15,899,676

Provision used during the year – –

Balance as at 31-03-2013 31,799,351 15,899,676

b) Nature of provisions: i. Product Warranties: The company gives warranties on certain products and services, undertaking to repair or replace the items

that fail to perform satisfactorily during the warranty period. Provision made as at March 31, 2013 represents the amount of the expected cost of meeting such obligations of rectifications/replacement. The timing of the outflows is expected to be within a period of two years from the date of Balance Sheet.

ii. Provision for Contingencies & Foreseeable losses: It is mainly in respect of estimated cost which company is likely to incur as per the contractual obligations including liquidity damages.

XVII. The company has not capitalized any borrowing cost during the year, as there were no qualifying assets (Previous Year Nil).

XVIII. Earnings per Share (EPS)

2012-13 2011-12

Net Profit / (loss) after tax available for Equity Shareholders (v) 6,645,227 -77,310,366

Weighted Average Number of Equity Shares (in numbers) 30,000,000 27,814,208

Face Value Per Share (v) 10 10

Basic and Diluted Earnings Per Share (v) 0.22 -2.78

XIX. The corresponding previous year figures have been regrouped where necessary to conform to the presentation of the current year’s accounts.





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