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WELSPUN Projects Ltd. (Formerly known as MSK Projects (India) Ltd.)
th Annual Report 17 2010-2011
Contents
Corporate Information 2
Chairman Statement 4
Directors' Report 8
Corporate Governance Report 12
Management Discussion and Analysis 22
Financial Section 30
Forward looking statement
In this Annual Report we have disclosed forward-looking information to enable investors comprehend our prospects and take informed investment decisions. We have tried, wherever possible, to identify such statements by using words as 'anticipate', 'estimate', 'expects', 'projects', 'intends', 'plans', 'believes', and words of similar substance in connection with any discussion of the future performance. We cannot guarantee that these forward-looking statements will be realized, although we believe we have been prudent in our assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should bear this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. CORPORATE INFORMATION
Board of Directors Mr. B. K. Goenka Mr. Nirmal Gangwal Mr. Ashok Khurana Mr. Shailesh Vaidya Mr. Sunil Shinde Mr. A. K. Dasgupta
Company Secretary Audit Committee Ms. Susheela Maheshwari Mr. Nirmal Gangwal Mr. Shailesh Vaidya Mr. A. K. Dasgupta Statutory Auditor Chandrakant & Sevantilal & J.K. Shah & Co.
Shareholder/Investor Grievance Committee Remuneration Committee Mr. Shailesh Vaidya Mr. Nirmal Gangwal Mr. B. K. Goenka Mr. Shailesh Vaidya Mr. Sunil Shinde Mr. A. K. Dasgupta
Registered Office Corporate Office 707-708, Sterling Centre, Welspun House, R. C. Dutt Road, Alkapuri 4th Floor, Kamla City, Vadodara 390005 Senapati Bapat Marg, Tel: 0265 - 2344756 & 2359893 Lower Parel, Mumbai 400013 Fax: 0265 – 2341642 Tel.: 022-66136000 Fax: 022-24908020
Stock Exchanges where the Company's securities are listed Bombay Stock Exchange Ltd. Vadodara Stock Exchange Ltd. Phiroze Jeejeebhoy Towers, Dalal Street, 3rd Floor, Fortune Tower, Mumbai - 400 051 Sayajigunj, Vadodara - 390005.
National Stock Exchange of India Ltd. Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051
Registrar and Transfer Agent Bankers Purva Sharegistry (India) Pvt. Ltd. Bank of Baroda State Bank of India Unit No. 9, Shivshakti Industrial Estate, Bank of India IDFC J.R Boricha Marg, Opp Kasturba Hospital Lane, Corporation Bank Dena Bank Lower Parel (E) Mumbai 400 011 HDFC Bank Limited Axis Bank IDBI BANK Punjab National Bank Kotak Mahindra Bank
2 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
KEY MANAGEMENT TEAM
B. K. Goenka Chairman*
B. R. Jaju Sunil Shinde CFO, Welspun Corp Ltd. Managing Director & CEO, Welspun Projects Ltd.
Gurpreet Nagpal Parvez Umrigar Sr. VP (HR), Welspun Group Managing Director & CEO, Welspun Infratech Ltd.
Deepak Chauhan Prasad Patwardhan President, Legal, Welspun Infratech Ltd. CFO, Welspun Projects Ltd.
*Non Executive Member of the Board of Directors
3 MESSAGE FROM CHAIRMAN
My dear fellow Stakeholders,
India today is witnessing an infrastructure Renaissance to leap forward into the league of advanced nations. With the effect of the global financial crisis of 2008–9 on the Indian economy wearing off, need for state-of-the-art infrastructure is paramount. The Infrastructure Industry in India has been experiencing a rapid growth in its different verticals with the development and urbanisation leading to increasing interest shown by foreign as well as domestic investors and infrastructure players in this field.
4 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
Powered by a ‘Reforms’ driven Central Government, the Indian infrastructure industry is showing signs of sustainable growth especially through the Public Private Partnership (PPP ) mode. The Revised Policy Framework (in FY10) governing the Build Operate Transfer (BOT ) projects in the form of Model Concession Agreements has given a significant impetus to private partnership in the overall scheme of national infrastructure development. As per the revised estimates of the Planning Commission released in March 2010, India’s infrastructure investment is likely to rise from Rs.9 trillion under the 10th Plan to Rs.20.5 trillion under the 11th Plan. The estimated spend over the 12th Plan period (FY13-FY17) in various segments will be around Rs.27 trillion. Power will lead the way with a 32% share in the total spend, followed by roads at 17% and railways at 16%. Nearly 30% of the planned expenditure is expected to come from the private sector during the 11th Plan period.
Welspun Projects Ltd (WPL) formerly known as MSK Projects (India) Ltd is fully poised to leverage on the burgeoning infrastructure space. WPL’s successful execution of projects for the past 35 years has made the company a niche player in the construction industry. With Welspun’s rich experience of dealing with EPC contracts and WPL’s business model of EPC projects in roads, industrial construction and PPP, the company is set to play a larger role in the infrastructure space.
We have executed infrastructure projects – highways, bridges, industrial, residential and commercial buildings. In the highway sector alone we have successfully completed six BOT (Toll) Road projects with a total length of over 500 km and a capital expenditure of over US $ 200 million. One of the signature project is the142.6 km long Dewas-Bhopal Corridor linking Bhopal and Dewas on SH 18 in the state of Madhya Pradesh on BOT Toll Basis. Simultaneously, we forayed into the construction and development of water supply and distribution projects & urban infrastructure. We successfully commissioned Dewas Industrial Water Supply Project – one of India’s successful BOT (PPP) projects in the water sector. It supplies 23 Million Litres Per Day (MLD) water from Narmada River to Dewas Industrial Area in the state of Madhya Pradesh on PPP basis. Till date WPL has successfully completed six BOT Road project, two Bus Terminal and one Water project. We could achieve this feat only because of our project management expertise, cutting-edge technology and design innovations.
On the immediate horizon, WPL is currently qualified to submit bids for 10 BOT National Highway Road Projects across various states of India, aggregating to a total asset size of above US$ 225 million. In addition, we has submitted Request for Quotation (RFQs) for over 50 National and State Highway road projects with a total project cost aggregating to around US$ 8,250 million. In the water sector WPL has recently been awarded the Greater Mohali Water Pipeline project in the state of Punjab.
This couldn’t have been possible without the constant support of our shareholders. Therefore, I would like to take this opportunity to thank all our stakeholders for reposing confidence in our abilities and our endevours. I’m confident that with your continued support, WPL is sure to conquer new heights.
B. K. Goenka Chairman
5 DIRECTORS’ REPORT Dear Members,
Your directors have pleasure in presenting the 17th Annual Report together with the Audited Financial Statement along with the Report of the Auditors for the year ended on March 31, 2011.
I. FINANCIAL PERFORMANCE (Rs. in Lakhs) Particulars FY 2010-11 FY 2009-10 Contract Receipt 20627.74 38988.01 Toll Collection 2786.67 2984.90 Other Income 78.79 87.65 Change in Work in Progress 2141.24 418.60 Total Income 25634.45 42479.17 Total Expenditure 28675.90 38422.99 Profit Before Tax (3041.45) 4056.17 Capital cost for own project - 64.79 Prior Period Income (29.08) 227.49 Less : Provision for Tax 214.32 1473.70 Profit After Tax (3284.85) 2874.75 Proposed Dividend - 400.00 Tax on Dividend - 67.98 Balance Carried to Balance Sheet 5757.78 9510.60 Earning Per Share (Rs.) (8.21) 12.60 Dividend Per Share (Rs.) - 1.00
II. DIVIDEND
To augment cash resources for future developmental activities and growth of the Company, your directors do not recommend any dividend on equity shares of the Company for the year ended March 31, 2011.
III. KEY CONTRACTS AND ORDERS
The order book position as on date of this Report, exceeds Rs. 570 Crore. During the year, under this Report, your company Excelled in clinching various important contracts including, Road Projects at Dahej Bharuch (Gujarat) for Gujarat State Road Development Corporation (GSRDC), Pipe Laying Water Project and Sewerage Projects at Umergaon for Gujarat Urban Development Corporation (GUDC), Pipe Laying Water Projects at Mohali for Greater Mohali Area Development Authority (GMADA).
IV. CHANGE IN MANAGEMENT CONTROL
On April 27, 2010 the Company allotted 1,71,78,888 equity shares of Rs.10/- each at Rs. 123 per share to Welspun Infratech Limited, on preferential allotment basis under chapter VI of SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009.
On August 16, 2010 Welspun Infratech Limited acquired 52,79,348 equity shares from erstwhile Promoters and others shareholders of the Company.
Welspun Infratech Limited made an open offer under Regulation 10 & 12 of SEBI (Substantial Acquisition of shares & Takeovers) Regulation, 1997 (SEBI Takeover Code) to shareholders of the Company, under which Welspun Infratech Limited acquired 180 shares at Rs.130.50 per shares.
8 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
Accordingly, Welspun Infratech Limited acquired the control over the Company by acquiring 61.12% of equity share capital of the Company. Upon acquisition of the control over the Company, by Welspun Infratech Limited, the Board was reconstituted as under on August 16, 2010: Sr. No. Name Designation 1 Mr. B. K. Goenka Chairman 2 Mr. Sunil Shinde* Managing Director & CEO 3 Mr. Ashok Khurana Director 4 Mr. Nirmal Gangwal Director 5 Mr. Yogesh Verma** Director 6 Mr. Shailesh Vaidya Director 7 Mr. Apurba Kumar Dasgupta Director *appointed w.e.f. May 16, 2011 **ceased to be Director w.e.f. May 26, 2011
V. DIRECTORS
Mr. Sunil Shinde has been appointed as Managing Director and Chief Executive Officer of the Company w.e.f. May 16, 2011.
In accordance with the requirements of the Companies Act, 1956 and Article 150 of the Articles of Association of the Company, Mr. B K Goenka and Mr. Shailesh Vaidya, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.
The details of directors seeking appointment or re-appointment as required by clause 49 of the Listing Agreement are provided in the Annexure - A to the Notice convening the Annual General Meeting. During the year under Report, following Directors resigned from the Board of Directors of the Company. Sr. No. Name of Director Date of Resignation 1 Ms. Dipti Shah May 30, 2010 2 Mr. Amit Khurana August 16, 2010 3 Mrs. Manju Khurana August 16, 2010 4 Mr. C Mohanan August 16, 2010 5 Mr. Ashok Gandhi August 16, 2010 6 Mr. Mayur Parikh August 16, 2010 7 Mr. Sanjay Mehta August 16, 2010
VI. DEPOSITS
During the financial year 2010-11, the Company did not accept any Public Deposits as per Section 58A of the Companies Act, 1956 and rules made there under.
VII. AUDITORS
The Company’s Statutory Auditors, M/s Chandrakant & Sevantilal & J. K. Shah & Company, Chartered Accountants, retire at the conclusion of this Annual General Meeting and being eligible, offer themselves for reappointment. The Auditors confirmed that, if appointed, their appointment will be within the limits as laid down under section 224(1B) of the Companies Act, 1956.
VIII. AUDITOR'S REPORT
With regards to the qualification on Disclosure of Cash Subsidy amounting to Rs.126.54 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited and Gujarat State Road Development Corporation against BOT Projects under the head ‘Reserves& Surplus’ instead of deducting the same from the Project Cost, your directors state that as per the para 10.1 of the Accounting Standard 12 – Accounting for Government Grants (reproduced hereinafter), where the subsidy received is in the nature of promoter’s contributions that is, to say without which the concessionaire cannot cover the total cost of the projects, the subsidy received can be shown as Capital Reserve under the head of Reserves and Surplus rather than deducting from the total cost of the Project. Your Directors further state that they perceive that the subsidy received is in the nature of ‘Promoter’s Contribution’ and hence has been disclosed the same as Capital Reserve and not deducted from the total cost of the Project.
9 Para 10.1 of the Accounting Standard 12 –Accounting for Government Grants, state as under:
‘Where the Government Grants are of the nature of Promoters Contribution i.e., they are given with reference to the total Investment in an undertaking or by way of contribution towards its total Capital outlay and no repayment is ordinarily expected in respect thereof, the grants are treated as Capital Reserve which can be neither distributed as dividend nor considered as deferred income.’
IX. INTERNAL CONTROL SYSTEMS
The Company has an adequate system of Internal Control to ensure compliance with policies and procedures. Internal Audits are regularly carried out to review the internal control systems. The Internal Audit Reports along with recommendations contained therein are reviewed by the Audit Committee of the Board.
X. SUBSIDIARIES
As on March 31, 2011, the following companies, were subsidiaries of the Company viz. (1) MSK Projects (Himmatnagar Bypass) Private Ltd. (2) MSK Projects (Kim Mandvi Corridor) Private Ltd. 3) Welspun Energy Maharashtra Private Limited.
The Ministry of Corporate Affairs vide its General Circular No. 2 / 2011 dated February 8, 2011 granted general exemption to the companies from attaching a copy of the Balance Sheet, the Profit and Loss Account and other documents of its subsidiary companies as required to be attached under Section 212 of the Companies Act, 1956 to the Balance Sheet of the Company subject to fulfillment of conditions stipulated in the circular.
Therefore, the said documents of the aforesaid subsidiary companies are not attached to the Annual Report.
The aforesaid documents relating to the subsidiary companies and the related detailed information will be made available upon request by any member or investor of the Company. Further, the Annual Accounts of the subsidiary companies are kept open for inspection by a member or an investor at the Registered Office of the Company.
The financial statements of Welspun Energy Maharashtra Private Limited, a subsidiary, have been consolidated based on the management estimate. Whereas accounts of other subsidiaries are consolidated in Annual Accounts based on Audited financial statements received from respective subsidiaries.
As required under the exemption, a statement containing the requisite information for each subsidiary is attached with this Report.
XI. PARTICULARS OF EMPLOYEES
As required by the provisions of Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the Annexure to Directors’ Report. However, as per provisions 219(1)(b) of the Companies Act, 1956, the Report and Accounts are being sent to all the shareholders of the Company excluding the aforesaid information. Any shareholder interested in obtaining such particulars may write to Company Secretary at the registered office of the Company.
XII. DIRECTORS’ RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your directors confirm that:
(I) in preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the Company’s state of affairs at the end of the financial year and of the Company’s profits for the period.
(iii) they have taken proper and sufficient care to maintain adequate accounting records in accordance with the provisions of this Act for safeguarding the Company’s assets and for preventing and detecting fraud and other irregularities;
(iv) they have prepared the annual accounts for the financial year ended March 31, 2011 on a going concern basis.
XIII. REPORT ON CORPORATE GOVERNANCE AND AUDITOR’S CERTIFICATE
10 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
A separate section on Corporate Governance and a certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges form part of this Report.
XIV. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTIONS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The operations of the Company are not energy intensive and therefore there is nothing to report in respect of information on Conversation of Energy and Technology Absorptions as required under Section 217 (1) (e) of the Companies Act, 1956, read with Companies (Disclosure of Particulars in report of the Board of Directors) Rules, 1988. Within the limited scope available for saving energy in construction contracts, every effort is being made for conserving and reducing its consumptions.
Foreign Exchange Earnings and Outgo Foreign Exchange Earnings – NIL Foreign Exchange Outgo – NIL
XV. ACKNOWLEDGEMENT
Your directors express deep sense of appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Creditors and Shareholders and for the devoted services rendered, by the Executives, Staff and Workers of the Company.
For and on behalf of the Board of Directors
Place : Mumbai B. K. Goenka Date : May 26, 2011 Chairman
11 REPORT ON CORPORATE GOVERNANCE
1. PHILOSOPHY ON CODE OF GOVERNANCE
The Board of Directors of the Company acts as a trustee and assumes fiduciary responsibility of protecting the interest of the shareholders and other stakeholders of the Company. The Board supports the broad principles of Corporate Governance. In order to attain highest level Corporate Governance practice, Board lays strong emphasis on transparency, accountability and integrity.
2. BOARD OF DIRECTORS
As on March 31, 2011 the Board comprises of Six Directors (all non executive directors), of which three directors are the Independent Directors. Mr. B. K. Goenka, a Non-Executive Director is the Chairman of the Company.
Composition and category of Directors; attendance of each director at board meetings and the last AGM, number of other companies on the Board or Committees of which, a director is a member or chairperson is as under:
Attendance in No. of other Attendance Name of the Director Board Meetings Number of other Directorships in Last and Category during the financial year Board Committees @ AGM 2010 - 11 Chairman* Member* Mr. B. K. Goenka $ 4 14 1 7 No Chairman Mr. Yogesh Verma 3 NIL NIL 1 No Non-Executive Director
Mr. Ashok Khurana 5** 3** NIL NIL Yes Non-Executive Director$ Mr. Nirmal Gangwal 5 5 1 1 No Independent Director
Mr. Shailesh Vaidya 3 11 1 1 No Independent Director
Mr. A. K. Dasgupta 5 3 1 3 No Independent Director
@ Only Directorships held in Indian Public Limited Companies are considered. $ Mr. B K Goenka is appointed as a Chairman in place of Mr. Ashok Khurana w.e.f. August 16, 2010 * Only Chairmanship/membership of Audit Committee and Shareholders’ Grievance Committee are considered (includes Chairmanship/membership held in Welspun Projects Limited.) ** As per declaration received for the Financial Year ended on March 31, 2010
Ms. Dipti Shah resigned from the Board w.e.f. May 30, 2010. While, Mrs. Manu Khurana, Mr. Amit Khurana, Mr. C Mohanan, Mr. Mayur Parikh, Mr. Ashok Gandhi and Mr. Sanjay Mehta resigned w.e.f. August 16, 2010.
The Board periodically reviews compliance report of all laws applicable to the company.
9 meetings of the Board of Directors were held during the financial year 2010-11 on the following dates: April, 20, 2010, April 27, 2010, May 30, 2010, August 13, 2010, August 16, 2010, October 28, 2010, December 02, 2010, December 28, 2010 and January 24, 2011.
3. AUDIT COMMITEE
a) Terms of Reference:
The Audit Committee assists the Board in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting practices of the Company and its compliance with the legal and regulatory requirements. The terms of reference stipulated by the Board of Directors to the Audit Committee are as contained under clause 49 of the Listing Agreement with the Stock Exchanges.
14 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
b) Composition:
The Audit Committee was constituted by the Board of Directors at its meeting held on January 24, 2005 and was reconstituted from time to time. The Committee comprises of 3 non-executive independent directors. The present composition of the Committee is as under:
Name of the Member Designation Mr. Nirmal Gangwal Chairman Mr. Shailesh Vaidya Member Mr. A. K. Dasgupta Member
c) Meetings and Attendance during the financial year 2010-11:
4 meetings of the Audit Committee were held during the financial year 2010 – 11 on following dates: May 30, 2010, August 13, 2010, October 28, 2010 and January 24, 2011
The attendance at the Committee meetings held during the financial year 2010-11 was as under: Number of Meetings during attended Name of the Member Designation financial year 2010-11 Mr. Mayur Parikh* Chairman 2 Mr. Ashok Gandhi* Member 2 Mr. C. Mohanan* Member 2
Mr. Nirmal Gangwal** Chairman 2 Mr. Shailesh Vaidya** Member 1 Mr. A. K. Dasgupta** Member 2
* ceased to be member of Audit Committee w.e.f. 16th August, 2010 ** Appointed as a member of Audit Committee w.e.f. 16th August, 2010
The Company’s Internal Auditors and Chief Finance Officer generally remain present at the Audit Committee meetings, the Company Secretary acts as the secretary of the Audit Committee.
4. REMUNERATION COMMITTEE
a) Terms of Reference:
The Company has duly constituted Remuneration Committee consisting of Independent Directors. The Remuneration Committee recommends the appointment, re-appointment and remuneration payable to executive directors. During 2010-11, no meeting of Remuneration Committee was held.
b) Composition of Remuneration Committee: The present composition of the Committee is as under:
Name of the Member Designation
Mr. Nirmal Gangwal Chairman Mr. Shailesh Vaidya Member Mr. A. K. Dasgupta Member
c) Remuneration Policy:
The independent directors are not paid any other remuneration except sitting fees for attending meeting of Board of Directors and Committee Meetings. The sitting fee for attending the board meeting is Rs. 15,000/- and for attending committee meeting is Rs. 5,000/- which is approved by Board of Directors in the meeting dated September 17, 2004 and by the shareholders in the Extra- ordinary General Meeting dated October 11, 2004.
15 d) The Sitting Fees paid to Non Executive Directors during the financial year 2010-11 is as under:
Name of Non Sitting Fees for Sitting Fees for Total Executive Director Board Meetings (in Rs.) Committee Meetings (in Rs.)
Mr. Nirmal Gangwal 75000 10000 85000 Mr. Shailesh Vaidya 45000 10000 55000 Mr. A. K. Dasgupta 75000 10000 85000 Mr. Mayur Parikh* 45000 10000 55000 Mr. Ashok Gandhi* 30000 10000 40000 Mr. Sanjay Mehta* 15000 - 15000 Ms. Dipti Shah# - - - *Ceased to be director w.e.f. August 16, 2010 # Ceased to be director w.e.f. May 30, 2010
e) Executive Directors’ compensation:
The Executive Directors are paid salary and perquisites as per the rules of the Company, there is no variable component in the remuneration package of the directors. The details of remuneration paid to Executive Directors during the financial year 2010 -11 is as under:
Name of Executive Director Salary + Perquisites (in Rs.) Mr. Ashok Khurana* 37,78,737.00 Mr. Amit Khurana* 37,77,778.00 Mrs. Manju Khurana* 28,33,333.00 Mr. C. Mohanan* 3,02,222.00 * ceased to be Executive Directors w.e.f. August 16, 2010.
5. SHAREHOLDERS’ AND INVESTORS’ GRIEVANCE COMMITTEE
a) Terms of Reference:
The Shareholders’ and Investors’ Grievances Committee looks into the redressal of shareholders’ complaints like non-receipt of Annual Report, non-receipt of dividends, revalidation of dividend warrants etc. The complaints are reported to the Board on quarterly basis and the status of the complaints pending at the beginning of the quarter, received during the quarter and resolved or pending at the end of the quarter, are published along with the Quarterly Unaudited Financial Results of the Company as a note thereto. None of the complaints were pending at the end of the financial year.
b) Composition:
The present composition of the Committee is as under: Name of the Member Designation Mr. Shailesh Vaidya Chairman Mr. B K Goenka Member Mr. Sunil Shinde* Member * Appointed as a Member of the Committee w.e.f. May 26, 2011 in place of Mr. Yogesh Verma
16 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
6. GENERAL BODY MEETINGS The details of Annual General Meeting held during the last three years are given hereunder: Annual General 16th Annual General Meeting 15th Annual General Meeting 14th Annual General Meeting Meeting
Day & Tuesday, Wednesday, Tuesday, Date November 30, 2010 September 30, 2009 September 30, 2008
Time 11.00 a.m. 9.00 a.m. 9.30 a.m.
Vanijya Bhavan, Race Vanijya Bhavan, Race Vanijya Bhavan, Race Venue Course, Vadodara Course, Vadodara Course, Vadodara
Sec. 31 - Alteration of Articles of Sec.198, 269, 309, 310 Special Association of the Company & 311 for all Executive Resolution – Sec. 21 - Change of name of the Company Directors Passed Sec. 269 - Appointment of Manager The details of Extraordinary General Meeting held during the year are given hereunder:
Day & Date Tuesday, April 13, 2010
Time 11.30 a.m.
Venue Registered Office, Vadodara
Special Sec 94: Increase in Authorised Share Capital Resolution Passed Sec 81(1A): Preferential Issue to Welspun Infratech Limited No Special Resolution was passed by Postal Ballot during last three years.
7. MANAGEMENT
a) Management Discussion and Analysis Management Discussion and Analysis of business of the Company is separately given in the Annual Report.
b) Disclosures by Management to the Board All details relating to financial and commercial transactions where directors may have pecuniary interest are provided to the Board, and the interested directors neither participate in the discussion, nor do they vote on such matters.
8. DISCLOSURES
a) Related Party Transaction For related party transactions, refer Note no.10 of Notes to Accounts (Schedule 8) annexed to Balance Sheet and Profit & Loss Account.
b) Non Compliance: There were no non compliance by the Company during the last three financial years and hence no penalties, strictures were imposed on the Company by Stock Exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three financial years.
c) Whistle Blower Policy: The Company has a Whistle Blower Policy and no personnel have been denied access to the Audit Committee.
d) Code of Conduct: The Board complies with Code of Conduct for Board members and senior management of the Company. A copy of the Code is also posted on the Company’s website for information of all the Board members and senior management of the Company. The Compliance of the Code is being affirmed by the Directors and senior management personnel on annual basis every year.
A declaration signed by the Chairman of the Company is given below: “I hereby confirm that all Board members and senior management personnel have affirmed compliance with the Code of Conduct of the Company.”
B. K. Goenka Chairman
e) Certification by Chief Finance Officer: A certificate obtained from Chief Finance Officer on the Financial Statements of the Company in terms of Clause 49 of the Listing Agreement was placed before the Board, who took note of it and took same on record.
17 f) Secretarial Audit: A qualified Practicing Company Secretary carried out the Secretarial Audit on quarterly basis to reconcile the share capital with National Securities Depository Services Ltd (NSDL) and Central Depository Services Ltd (CDSL) and the total issued and listed capital. The audit confirms that the total issued / paid up capital is in agreement with total number of shares in physical forms and total number of demat shares held with NSDL and CDSL.
g) Brief resume of Director being appointed / re-appointed A brief resume, nature of expertise in specific functional areas, names of companies in which the person is already holds directorship and membership of committees of the Board and his shareholdings in the Company forms part of the Notice of Annual General Meeting.
h) Accounting Standard The Accounting Standards laid down by the Institute of Chartered Accountants of India and applicable to the Company were followed by the Company in preparation of accounts of the Company. Hitherto up to 31st March 2010 expenditure incurred on Build, Operate & Transfer (BOT) Projects was amortized / written off over the period of concession. The Company has changed the policy and the said BOT expenditure is amortized / written off on the basis of projected toll revenue over the period of concession. With this change in Policy the amortization of the year is lower by Rs. 14.49 Crores
i) Details (in aggregate) of shares in the suspense account including freeze on their voting rights There are no unclaimed shares and hence no suspense account is required to be opened and credited with such shares and there is no freeze on voting rights of any shares.
9. MEANS OF COMMUNICATION The quarterly, half yearly and yearly financial results of the Company are sent to Stock Exchanges immediately after they are approved by the Board. The Company published its un-audited/audited financial results in one English daily newspaper and in one Gujarati daily of Gujarat State.
10. GENERAL SHAREHOLDER’S INFORMATION a) Annual General Meeting The Seventeenth Annual General Meeting of the Company will be held on Monday, August 29, 2011 at 9.30 A.M. at Vanijya Bhavan, Race Course, Vadodara - 390 007.
b) Financial year The financial year of the Company is from April 1 to March 31. Board Meetings for Quarterly Unaudited Financial results: (Tentative and subject to change) II Qtr Results (Jul- Sep) Upto November 14, 2011 III Qtr Results (Oct-Dec) Upto February 14, 2012 IV Qtr / Annual Audited Results Upto May 30, 2012 I Qtr Results (11-12) (Apr-June) Upto August 14, 2012
c) Date of Book Closure The Company’s Register of Members and Share Transfer Books will remain closed from Monday, August 22, to Thursday, August 25, 2011 (both days inclusive).
d) Listing on Stock Exchanges: The Company’s Equity Shares are listed on the following Exchanges, listing fees is paid for the Financial Year 2011-12 to all the Stock Exchanges.
National Stock Exchange of India Limited (NSE) ‘Exchange Plaza’, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051.
Bombay Stock Exchange Limited (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400 001.
Vadodara Stock Exchange Limited (VSE) Fortune Tower, Sayajigunj, Vadodara - 390005
Security Codes : The Stock Codes of the equity shares of the Company are: NSE : WELPROJ BSE : 532553 18 ISIN of the Equity Shares of the Company: INE625G01013 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011 e) Market Price Data High Low and Volume data of Shares of Welspun Projects Limited on BSE and NSE during the financial year 2010-11.
MONTH BSE NSE High Low High Low April 2010 200.70 151.10 200.70 151.55 May 2010 197.45 163.00 197.40 163.20 June 2010 188.75 166.30 188.45 166.70 July 2010 187.45 160.15 187.00 161.20 August 2010 194.30 167.00 195.40 167.50 September 2010 178.05 148.10 176.00 148.05 October 2010 163.35 131.00 163.30 130.30 November 2010 140.50 87.95 140.90 91.75 December 2010 116.50 73.00 117.20 73.00 January 2011 105.00 75.50 100.00 75.20 February 2011 79.90 57.10 82.00 57.05 March 2011 73.90 58.65 74.05 57.05 Source: respective websites of BSE and NSE.
Shares on VSE were not traded during the last financial year.
f) Performance in comparison to broad based Indices: Chart –I Comparison of Welspun Projects Limited’s (WPL) Equity Share and BSE’s Sensex
BSE & Welspun Projects Limited 25,000.00 250
20,000.00 200
15,000.00 150
Sensex 10,000.00 100 Share Price Share
5,000.00 50
0.00 0 11 11 11 10 10 10 10 10 10 10 10 10 Jan Feb Mar Apr Oct July Sep Nov Dec May Aug
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Chart –II Comparison of WPL’s Equity Share and NSE’s CNX Nifty
NSE & Welspun Projects Limited
7,000.00 200.00 180.00 6,000.00 160.00 5,000.00 140.00
4,000.00 120.00 100.00 3,000.00
NIFTY 80.00 60.00
2,000.00 Price Share 40.00 1,000.00 20.00 0.00 0.00 11 11 11
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19 g) Registrar & Share Transfer Agent The Company has appointed Registrar & Share Transfer Agent to handle the share transfer work and to resolve the complaints of shareholders. Name, address, telephone number of Registrar & Share Transfer Agent is given hereunder:
Purva Sharegistry (India) Private Limited 9, Shiv Shakti Industrial Estate, J. R. Boricha Marg, Opp Kasturba Hospital, Lower Parel (East) Mumbai - 400 011 Phone: 022-2301 6761/8281 Fax: 022-2301 2517 E-mail: [email protected]
h) Share Transfer System and Dematerialization Our Registrar and Transfer Agent register shares sent for transfer in physical form within 15 days from the receipt of the documents. The Company’s shares are transferable in electronic mode. As on March 31, 2011, 680 equity shares were in physical form being 0.001% of the total Equity Shares. i) Distribution of Shareholding as on March 31, 2011 Number of % of Total Nominal Value Value in Rs. % of Total Value Shareholders Shareholders Upto 5,000 8424 86.72 11435890 2.86 5,001 - 10,000 638 6.57 5264660 1.32 10,001- 20,000 264 2.72 4047210 1.01 20,001 - 30,000 112 1.15 2952380 0.74 30,001 - 40,000 39 0.40 1347700 0.35 40,001 - 50,000 43 0.44 2047030 0.51 50,001 - 100,000 83 0.85 6315630 1.58 1,00,001 and above 111 1.14 366539500 91.63 Total 9714 100.00 400000000 100.00 j) Shareholding Pattern as on March 31, 2011: Sr. No. Category No. of Shares Percentage of holding 1 Promoter Group 24448445 61.12 2 Resident Bodies Corporates 8706155 21.77 3 FII/Mutual Funds 619915 1.55 4 Foreign Body Corporates -- -- 5 Public 6140049 15.35 6 Others (including NRIs) 85436 0.21 Total 40000000 100.00 Others (including NRIs) Distribution of shareholding as on 31.03.2011 Public
FII/Mutual Funds
Promoter Group
Resident Bodies Corporate
k) Site Locations: The Company has presence across the Country and at present, on going projects are at various places in the states like Gujarat, Maharashtra, Madhya Pradesh, Punjab, Rajasthan etc.
l) Address for Correspondence: Shareholders may contact the Company’s Registrar and Share Transfer Agent for any query related to dividend at the following address: Compliance Officer Ms Susheela Maheshwari, Company Secretary 707-708, Sterling Center, R. C. Dutt Road, Alkapuri, Vadodara- 390 005 email: [email protected]
Shareholders correspondence may be directed to the Company’s Registrar and Share Transfer Agent, whose address is given below:
M/s. Purva Sharegistry (India) Pvt. Ltd. 9, Shiv Shakti Industrial Estate, J. R. Boricha Marg, Opp. Kasturba Hospital Lower Parel (East), Mumbai Phone: 022-2301 6761/8281 Fax: 022-2301 2517 E-mail: [email protected] 20 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
AUDITORS’ CERTIFICATE ON REPORT OF CORPORATE GOVERNANCE To the Members of
Welspun Projects Limited
We have examined the compliance conditions of Corporate Governance by Welspun Projects Limited for the year ended 31st March, 2011, as stipulated in clause 49 of the Listing Agreement of the said Company with Bombay Stock Exchange Limited, National Stock Exchange of India Limited and Vadodara Stock Exchange Limited.
The compliance of conditions of Corporate Governance is the responsibility of management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of conditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to explanations given to us, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreement.
We further state that such compliance is neither an assurance as to the future viability of the Company nor efficiency or effectiveness with which the management has conducted the affairs of the Company.
For Chandrakant & Sevantilal & J.K. Shah & Co. Chartered Accountants Firm Registration No. 101676W
(H. B. Shah) Place: Vadodara Partner Date: May 26, 2011 Membership No. 16642
21 MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion and Analysis (MD&A) should be read in conjunction with the Audited Financial Statement of MSK Projects (India) Ltd (”MSK” or the “The Company”), and the notes thereto for the year ended 31 March, 2011. This MD&A covers MSK's financial position and operations for the year ended 31 March, 2011. Amounts are stated in Indian Rupees unless otherwise indicated. The numbers used in the analysis are on a consolidated basis; the corresponding number for the previous year has been regrouped and reclassified, wherever necessary.
Forward-Looking Statements This report contains forward-looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.
BUSINESS OVERVIEW
Welspun Projects Ltd (formerly known as MSK Projects Ltd) has experience of over 3 decades in execution of infrastructure projects and also owns several BOT (Build, Operate & Transfer) assets. The company has successfully executed various works such as mass housing & township projects, multi-storied buildings. Industrial projects for coal mines, fertilizer plants, petrochemicals, water retaining structures. Welspun Projects Limited aims to cultivate itself steadily on this concrete foundation with an objective to grow bigger and achieve new heights of success.
Welspun Infratech Ltd’s (a subsidiary of Welspun Corp Ltd) acquired 61.12%.in Welspun Projects Ltd (formerly known as MSK Projects Ltd.) on 16th August 2010. The rationale behind this acquisition was WPL’s (MSK Projects Ltd) rich experience in the infrastructure development across the country. Welspun has a special focus on oil and gas pipelines, water and wastewater systems, highways, civil & industrial projects and power plant construction. With this acquisition Welspun has forayed into infrastructure and will enter into laying of oil & gas and water pipelines. This acquisition will enable Welspun to move a step forward towards complete integration by being a one-stop-solution in the Line Pipe segment. It will capture the full value chain - from Manufacturing of Plate & Coil – to Line Pipe and finally to Pipe laying enabling Welspun to progress towards complete integration by being a one-stop-solution in the Line Pipe segment, capturing the full value chain from Manufacturing of Plate & Coil to Line Pipe and finally to Pipe Laying domestically.
ECONOMY AND INDUSTRY SCENARIO
According to the advance estimates provided by the Central Statistics Office (CSO), GDP at factor cost at constant prices is expected to register a growth of 8.6 percent in the year 2010-11.
Although the expected performance of the industry and services sector in 2010-11 is not very different from what was seen in 2009-10 when industry grew by 8.0 percent and services grew by 10.1 percent, it is the much improved performance of the agriculture sector in 2010-11 that is going to provide an uptick to overall GDP growth.
As regards GDP growth in the year 2011-12, initial estimates provided by the Finance Ministry indicated that the economy would better its performance and touch the 9 percent mark. However, as things stand today, meeting this target looks increasingly difficult. Most recent trends in industrial production point towards a slowdown in industrial activity. Continued tightening of monetary policy and further escalation in global oil prices are the key downside risks to growth in 2011-12. Given the evolving situation, GDP growth in 2011-12 is expected to be in the range of 8 to 8.5 percent.
INDIA – INFRASTRUCTURE
India is one of the fastest growing economies in the world. Consequently, the need for infrastructure facilities is ever growing, across sectors. The development of adequate infrastructure has been identified as the most critical prerequisite for sustaining the current growth momentum of the economy and to ensure inclusiveness of the growth process. The Eleventh Five Year Plan envisages a total investment of US$ 514 billion in infrastructure sector for bridging the infrastructure deficit and for sustaining a growth momentum of 9 per cent per annum. This ambitious target requires 30 per cent of the total investment, i.e. US$ 154.17 billion, through private sector participation.
Over a period of time, the Government of India has taken several initiatives to accommodate and accelerate private investments in the infrastructure sector. These include sector specific policies, providing incentives and tax holidays to attract private investments, permission of 100% FDI in the infrastructure sector, special provision of Viability Gap Funding (VGF) and PPP approach. While infrastructure development is one of the top priorities of the nation, the pace of growth in infrastructure has not been commensurate to the demands and it continues to pose a major bottleneck and a challenge for the country.
The investment in infrastructure is likely to rise from 5.15 per cent of GDP during the Tenth Plan to about 7.55 per cent during the Eleventh Plan, as against a target of 7.60 per cent. This constitutes a significant shift in favour of investment in infrastructure. Except in some sectors, the overall performance of infrastructure during the Eleventh Plan compares well with the initial targets after accounting for the impact of the global financial crisis. (Source : CII) 24 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
Sector-wise Investment: Tenth Plan and Eleventh Plan (Rs. Crore at 2006-07 prices) Sector Tenth Plan Eleventh Plan Original Actual Original Revised Projections Investments Projections Projections Electricity (incl.NCE) 2,91,850 3,40,237 6,66,525 6,58,630 (33.49) (37.01) (30.42) (32.06) Roads & Bridges 1,44,892 1,27,107 3,14,152 2,78,658 (16.63) (13.83) (15.28) (13.57) Telecommunications 1,03,365 1,01,889 2,58,439 3,45,134 (11.86) (11.08) (12.57) (16.80) Railways (incl.MRTS) 1,19,658 1,02,091 2,61,808 2,00,802 (13.73) (11.11) (12.73) (9.78) Irrigation (incl.Watershed) 1,11,503 1,19,894 2,53,301 2,46,234 (12.80) (13.04) (12.32) (11.99) Water Supply & Sanitation 64,803 60,108 1,43,730 1,11,689 (7.44) (6.54) (6.99) (5.44)
Ports (incl.Inland waterways) 14,071 22,997 887,995 40,647 (1.61) (2.50) (4.28) (1.98)
Airports 6,771 6,893 30,968 36,138 (0.78) (0.75) (1.51) (1.76) Storage 4,819 5,643 22,378 8,966 (0.55) (0.61) (1.09) (0.44) Oil & gas pipelines 9,713 32,367 16,855 1,27,306 (1.11) (3.52) (0.82) (6.20) Total 8,71,445 9,19,225 20,56,150 20,54,205 (100) (100) (100) (100) Source: www.infrastructure.gov.in A preliminary assessment suggests that investment in infrastructure during the Twelfth Plan (2012-17) would need to be of the order of about Rs.40,99,240 crore (US $ 1025 billion) to achieve a share of 9.95 per cent as a proportion of GDP. This would have to be a key priority area in the Twelfth Plan in order to sustain and support the targeted growth in manufacturing, agriculture and services. Provision of world- class infrastructure would not only be necessary for improving the competitiveness of the Indian economy but also for promoting inclusive growth and improving the quality of life of the common man. (Source : infrastructure.gov.in)
The Indian economy will enter the Twelfth Plan in a much stronger position as far as infrastructure is concerned than existed at the start of the Eleventh Plan. Investment in infrastructure will be around 8.37 per cent of GDP in the base year of the Twelfth Plan. If GDP in the Twelfth Plan period grows at a rate above 9 per cent, it should be possible to increase the rate of investment in infrastructure to around 10.70 per cent in the terminal year of the Twelfth Plan period. These projections imply that the investment in the infrastructure sector during the Twelfth Plan would be of the order of Rs. 40,99,240 crore or US $ 1,024.81 billion. At least 50 per cent of this should come from the private sector. This would imply that public sector investment in infrastructure would increase from Rs. 13,11,293 crore in the Eleventh Plan to around Rs. 20,49,620 crore in the Twelfth Plan at 2006-07 prices. This requires an annual increase of about 9.34 per cent in real terms. (Source: www.infrastructure.gov.in)
A. WATER AND WASTE Providing safe and adequate water to millions across the growing number of cities in the developing countries like India, is a key task for the urban authorities. Presently about 70 percent of the urban households have access to piped water supply. In the next five years the Ministry of Urban Development will work towards providing the entire urban population including those in slums with access to piped water supply. (Source : www.urbanindia.nic.in)
The total investment in water supply and sanitation in the Eleventh Plan is now estimated at Rs. 1,11,689 crore, about 22 per cent lower than the original projection of Rs. 1,43,730 crore. The Eleventh Five Year Plan strategy for urban development includes departure from the exclusive public sector monopoly over urban infrastructure opening up the possibility of investment in this area. However, private sector investment in water supply and sanitation is likely to be small initially and may not exceed 2 per cent of the total investment in this sector.
Solid Waste management is one of the essential services provided by ULBs in the country. However, the current level of services leaves much to be desired. The government will have to work towards covering all the towns with scientific urban waste management services.
Provision of underground sewerage and drainage to cities and town is an enormous task and 100% coverage in terms of area and population may not be possible given the resources required. The government will have to work towards better sewage and septage management in the country. It will also work towards implementation of the National Urban Sanitation Policy. Cities will be encouraged to formulate City Wide Sanitation Plans and all the States shall be encouraged to adopt State Sanitation Strategies. Ministry will support these activities through financial and policy support through various schemes. A separate scheme for achieving the goals of NUSP shall be formulated in the 12th Plan. Eradication of Manual Scavenging in all forms shall be one of the goals of the Scheme. The ministry will focus on covering all cities with scientific septage management.
25 The towns and cities in country lack efficient storm water drainage systems. The Ministry will work towards improving coverage of towns by strengthening the existing natural drains and also assist cities in better provision of drainage facilities.
A study by the CII estimates that between 2011 and 2020 India will need USD 990 billion for urban services of which USD 30 billion are for water supply and USD 40 Billion for sewerage & Sanitation. In Indian rupees this amounts to 1,35,000 crores for water; 1,80,000 crore for sewerage and sanitation.
B. IRRIGATION Investment in irrigation and watershed management is a critical part of rural infrastructure. It remains a public sector activity only because the sector is nowhere near being commercially viable since water charges account for only about 20 per cent of operating costs. The total investment in this sector is expected to be about Rs. 2,46,234 crore in the Eleventh Plan which is 7.52 per cent higher than earlier anticipated and it will be more than double the investment of Rs. 1,19,894 crore realised in the Tenth Plan.
C. ROADS The projected investment in road sector is also significantly lower at Rs. 2,78,658 crore compared with Rs. 3,14,152 crore in the original projections. The investment by the Centre is expected to decline due to award of lower than projected road projects by NHAI during the first three years of the XI Plan. It is interesting to note that investment in the road sector by the States is expected to increase on account of higher investments under PMGSY.
The investment by the private sector is also expected to go down due to award of a lower number of BOT projects in the first three years of the Eleventh Plan. However, MORTH has decided to speed up the award and implementation of NHDP to achieve a completion rate of 20 kms of highways per day. This is likely to increase the investment during the last two years of the Eleventh Plan, but the major build up in expenditure consequent to this acceleration will be in the Twelfth Plan.
D. OIL AND GAS PIPELINES The investment in oil and gas pipelines in the Eleventh Plan is expected to increase to Rs. 1,27,306 crore. The investment in oil pipelines alone during the Eleventh Plan is projected at Rs. 1,08,190 crore. This category includes large investment by the Centre also. This Sector is expected to get a boost from the following:
Petroleum & Natural Gas Regulatory Board has initiated the push for more pipelines Petroleum & Natural Gas Regulatory Board (PNGRB) has initiated pipeline projects which will enhance pipe line infrastructure and facilitate PNG distribution in various cities and industries in the coming days. Recently Gujarat State Petronet Ltd (GSPL)-led consortium has bagged a contract from Petroleum and Natural Gas Regulatory Board (PNGRB) for laying three cross- country gas distribution pipelines for Mallavaram-Bhilvara (1611 km), Mehasana-Bhatinda (1688 km) and Bhatinda-Jammu (512 km) pipelines, estimated to cost Rs 12,500 crore and will have capacity to carry around 95 MMCD (million metric cubic meters per day) of gas. The laying of three major gas pipelines will facilitate the development of networks leading to the evolution of the much-awaited National Gas Grid.
City gas distribution to create value in long term Piped natural gas (PNG) is being used as a fuel in for domestic and commercial applications such as cooking, water heating, space heating and air conditioning. In the next 5 years about Rs. 280 bn will be invested in pipeline infrastructure for CGD networks in 200cities by 2015. HSAW/LSAW pipes would be used for common pipelines and ERW variety for last mile connectivity.
In a recent development, the Supreme Court ended years of uncertainty by allowing downstream oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) to process all pending applications for the grant of licenses to provide retail CNG to automobiles and piped cooking gas to households in cities. Supreme Court directed that all pending and new applications shall be dealt with by a multi-member board. The recently concluded third round in which bids were invited for installing and running a CGD network in Asansol-Durgapur (in West Bengal), Bhavnagar, Gandhidham-Anjar, Bhuj-Mundra and Jamnagar (all in Gujarat), Ludhiana and Jalandhar (in Punjab) and Panipat (in Haryana) saw an enthusiastic response. This development is positive for the CGD becoming a reality going forward.
Liquefied Natural Gas (LNG) Terminals to enhance Pipe Demand in India Currently, India has an LNG import capacity of 13.5 MTPA through two terminals, accounting for about 20% of the country’s gas equirements. Petronet LNG runs India’s first LNG receiving and regasification terminal at Dahej in Gujarat is having a capacity of 10 MTPA (which may be further expanded), equivalent to 40 MMSCMD of natural gas. A joint venture of Shell Gas BV and Total Gaz Electricite Holdings France runs a 3.5 MTPA capacity LNG terminal at Hazira, Gujarat.
Petronet LNG is also constructing another 5 MMTPA Greenfield LNG import and re-gasification plant in Kochi which is expected to be commissioned in 2012. Dhamra Port Co. Ltd (DPCL), a joint venture between Larsen and Toubro Ltd and Tata Steel Ltd is proposing an LNG terminal in the east coast of India. LNG terminal at Dabhol in Maharashtra with a capacity of 2.5 MTPA is also likely to start in 2012. IOC has also proposed a 5 MTPA LNG terminal at Ennore, Tamil Nadu. The planned Mundra LNG terminal having a capacity of 5 MTPA (with an option to scale up the capacity) is being developed at the port city of Mundra by Adani Group and is expected to commence operations by 2014. New LNG terminals as well as expansion of the existing ones is likely to result in increased pipe demand as the LNG needs to be transported from terminals to end stations.
26 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
INFRASTRUCTURE SECTOR–A SWOT ANALYSIS
Strengths Weakness • Huge investment in the infrastructure sector is expected to be • Evolving policies around US$ 1,024.81 billion during the Twelfth Five Year Plan (2012-17). • Shortfall in contracting capacity of players • Infrastructure is a key economic enabler for development • No. of Players
INFRASTRUCTURE SECTOR
Opportunities Threats • Private sector to contribute 30% of total infrastructure investment • Aggressive bidding • Public Private Partnerships (PPP) will bring further opportunities. • Execution capability of players • Increase in number of PPP projects • Political environment and security conditions • High interest rates and inflation • Government focus on infrastructure development • Global Financial conditions and volatile exchange rates • Increasing potential as a trans-shipment hub
Strength & Opportunities Against the backdrop of the financial crisis, the performance of the infrastructure sector has shown the resilience of the economy and its capacity to shield itself from such external influences. Although the projections for the Eleventh Plan have been downsized for some sectors keeping in mind the targets achieved in the first two years of the Plan, however, it is expected that with the revival of the economy and the upbeat investment sentiment prevailing, the actual performance may turn out to be better than the revised projections of the Eleventh Plan.
It is expected that the economy will enter the Twelfth Plan in a much stronger position as far as infrastructure is concerned than existed at the start of the Eleventh Plan. Investment in infrastructure will be around 8.37 per cent of GDP in the base year of the Twelfth Plan. If GDP in the Twelfth Plan period grows at a rate above 9 per cent, it should be possible to increase the rate of investment in infrastructure to around 10.70 per cent in the terminal year of the Twelfth Plan period. These projections imply that the investment in the infrastructure sector during the Twelfth Plan would be of the order of US $ 1,024.81 billion. At least 50 per cent of this should come from the private sector. This would imply that public sector investment in infrastructure would increase from Rs. 13,11,293 crore in the Eleventh Plan to around Rs. 20,49,620 crore in the Twelfth Plan at 2006-07 prices.
It is now clear that infrastructure development will continue to be in focus and will be the catalyst for the growth of the Indian economy. This gives us with a good opportunity to contribute to nation-building and at the same time provides a fillip to the need to grow as an infrastructure developer and build up our in-house contracting and execution capabilities.
Risks and Concerns Infrastructure remains a key constraint to growth in India. In several infrastructure projects significant time over runs and resultant costs overruns have delayed the actual realization of benefits of capacity addition.
Inflation- Negative supply shocks have imparted significant volatility to the inflation part particularly in food and fuel. Tightening of monetary supply by Reserve Bank of India resulting in higher interest rate which in turn increase production costs and affected capital accumulation and savings.
Delays in pre-construction activities such as land acquisition, environment clearances, changes in project design, etc. affect the cost - benefit analysis undertaken by the contractors at the time of bidding. Such issues often result in losses and delays in commissioning of projects.
The industry also faces trained manpower crunch. There are issues regarding lack of harmonized skill upgrades, absence of national plan for HRD and the lack of incentive.
Dispute resolution – The dispute resolution mechanism and process prevailing in India lacks efficiency. Arbitration is long drawn out process and can stretch upto 10 years. The contract clauses are often unclear, which could be interpreted differently by different parties involved leading to disputes.
27 WPL – A SWOT ANALYSIS
Strengths Weakness • Project Execution Skills • Current scale of operations • Strong Clientele : National Highway Authority of India (NHAI), Madhya Pradesh Road Development Corporation Limited (MPRDC) and Hindustan Petroleum Corporation Limited (HPCL) etc. • Increasing Order Book position • Portfolio of BOT assets and Experience of executing various types of projects like BOT assets in Water, Roads and Bus Terminals. • Extensive breadth of Projects across the following categories • Aggressive leadership and vision • Professionally managed company with an experienced management team&skilled employee base
WELSPUN
Opportunities Threats • Private sector to contribute 30% of total infrastructure investment • Aggressive biddings and highly competitive environment • Public Private Partnerships will bring further opportunities • Political environment and security conditions • Robust growth in the Indian Construction Industry , Transport Sector • Rising crude oil prices and its effects over the basic raw materials used in the Industry i.e. Steel, Cement and Bitumen and other sectors like Other segments like Hydro power projects, • Higher inflation and interest rates Water Supply and Waste Management, Housing and SEZ development • Availability of qualifications due to association with Leighton • Growth opportunities within the group.
WPL – STRATEGY
Focus on EPC; Target profitable growth at a faster pace The company will focus more on EPC projects. Apart from Road and water projects, the company will also explore opportunities in the industrial segment and construction of buildings, bridges flyovers, elevated corridors, multimodal logistic systems, bus terminal etc.
Strengthen systems and processes and scale up operations The company plans to scale up existing systems and process to keep in line with the growth in the volume of business.
Leverage existing approvals with clients The company plans to leverage its existing relationships with customers to consolidate its presence in existing segments and simultaneously build new partnerships to increase market share and volume of business.
Build relationships with partners Associate with sector specific specialist organizations and leverage the relationships and prequalifications with JV partners and associates.
Utilize assets and equipments to the maximum The company plans to expand its equipment base to cater to the existing and new projects that it plans to undertake.
Focus on Pipe Laying and Leverage Welspun’s Association for more business The group has ambitious growth plans. The company will participate and contribute its execution capability and expertise in these initiatives.
Leverage Welspun’s Investments in Leighton Welspun Contractors Private Limited (Formerly Leighton Contractors (India) Private Limited) for participation in more projects Leverage on the association with Leighton for pre-qualifications and diversification into new segments and growth in the order book.
28 HUMAN RESOURCE POLICY
Our HR policies cover our objectives, eligibility and coverage, policy and procedures. We review, revise and update our Human Resource policies from time to time to make them relevant, effective and useful to its employees.
OUTLOOK
The Company has on hand a a mix of projects in different sectors ranging from Roads and highways, Industrial structures water management etc. The portfolio is further de-risked due to a mix of EPC project and BOT/BOOT projects with greater visibility of future revenues. There are however, challenges arising from domestic and international factors such as inflation, rising commodity and oil prices and delays arising from land acquisition, environmental issues etc.
Nonetheless, given the need for improved infrastructure and its importance in the growth and development of the country and people, the outlook remains positive.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place internal control systems and processes commensurate with its size and nature of business. Group synergies and best practices have been implemented to achieve economies and ensure that there are no leakages. Delegation of authority is exercised at various levels of management as per company policy. The Internal audit function is carried out through an external agency with relevant expertise and skills. The function also conducts audits to test the adequacy of internal systems and suggest continual improvements.
29 DISCUSSION OF FINANCIAL PERFORMANCE
The discussion of the Financial Performance and Analysis below relates to the consolidated audited financial statements of Welspun Projects Ltd. The discussion should be read in conjunction with the consolidated financial statements and the related ‘Notes to the Accounts’ for the year ended March 31, 2011.
(Rs. in millions) KEY FINANCIAL DATA (Profit & Loss a/c for the year ended March 31, 2011) Particulars Year ended March 31, 2011 Year ended March 31, 2010 Change in % Contract Receipt 1,781 3,288 46%
Toll Collection 606 328 85% Operating Income 2,387 3,616
Profit before Taxes (PBT) (312) 381
(316) 233 Profit after Taxes (PAT)
REVENUE
a. Operating Income The Company’s revenue is primarily generated from the various projects under Construction. Income from Civil contracts (net of Service Tax) is Rs. 3,288 mn in FY 11. Toll Collection at Rs. 606 mn in FY 11 includes income generated in the form of Toll charges from various BOT Assets. There was reduction in the contract Receipts due to completion of the construction phase of some of the Toll projects awarded to the company. Consequently there has been an increase in the Toll revenue from the projects.
b. Profit before Tax (PBT) The PBT stands at Rs. -312 mn in FY11 as compared to Rs. 381 mn in FY10. Completion of some of the earlier contracts resulted in a reduction in the revenue this year as compared to 2009-10. As a result, due to a reduction in the overall volume of operations, the company has reported a loss in FY11.
c. Profit (Loss) after Tax (PAT) The PAT stands at Rs. -316 mn in FY11 as compared to Rs. 233 mn in FY 10.
TABLE: BALANCE SHEET (Rs. in millions) Year ended Year ended Particulars Change March 31, 2011 March 31, 2010 Shareholders' Funds Capital 400 228 172
Reserves and Surplus 4,715 3,000 1,715 Total 5,115 3,228 1,886 Minority Interest 0 - - Loan Funds Secured Loans 4,315 4,097 218 Unsecured Loans 1 58 (57)
4,316 4,155 161
Deferred Tax Liability (Net) 67 65 2 Total 9,498 7,448 2,050
30 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
Application of Funds Fixed Assets Gross Block 1,273 1,271 2 Less : Depreciation 494 413 81 Net Block 780 859 (79) BOT Expenditure 5,864 5,334 529 Total 6,643 6,193 450 Investments 1,447 2 1,445
Net Current Assets 1,406 1,252 154
Miscellaneous Expenses 1 1 -
Total 9,498 7,448 2,050
NETWORTH The Net worth of the Company stands at Rs. 5,115 mn as at March 31, 2011 as compared to Rs.3,228 million as at March 31,2010. The Net Worth increase in consequent to the acquisition of the company by the Welspun Group with further infusion of Rs.2,110 million.
LOAN FUNDS The Gross Debt as on March 31, 2011 stands at Rs. 4,316 mn as against Rs. 4,155 mn in FY10
31 Corporate Social Responsibility
Welspun is committed to conduct business in a socially responsible and ethical manner. Our company is in sync with mutually accountable and responsible synergies which help us to serve with passion to our Customers, Shareholders, Employees & Society at large. To meet our commitment we seek to respect the rule of law, adopt appropriate international standards and strictly follow our 3 Guiding Principles i.e. The 3 ‘E’s - EDUCATION, EMPOWERMENT and Health and ENVIRONMENT.
In addition to our guiding principles, we at Welspun, strictly follow Ethical Business Conduct and practice the principles of accountability, honesty and integrity in all aspects of our businesses. Besides this, we also adhere to all the laws that regulate and apply to the company, its systems and the conduct of its businesses.
At Welspun we work with governments and agencies (including the Universal Declaration of Human Rights by the UN) to support and respect Human Rights within our sphere of influence. We promote universal respect for observance of human rights and fundamental freedom - particularly those of our employees, the communities within which we operate and parties with whom we do business, without distinction as to ethnicity, origin, religion, gender, language or disability.
Continuing with our pledge to reach out to the larger society Welspun has established Welspun Foundation for Health and Knowledge. The foundation is instrumental in creating impact wherever we have business presence. In our endevour to social development we adhere to our 3 guiding principles i.e Education, Empowerment and Health and Environment.
Education Initiative: To improve and enhance the quality of education system Welspun has collaborated with government and non-profit organizations that have positively impacted 3000 tribal, rural and urban children.
Collaboration with Non-Profit Organizations: Naandi Foundation: (Quality Education Programme at Primary School level)
Welspun Foundation for Health and Knowledge signed an agreement with Naandi Foundation to initiate quality education based project for three Municipal Corporation of Greater Mumbai (MCGM) schools in Mumbai.
With our financial support Naandi Foundation reached out to 230 school going children. The project will be expanded in the year 2011-12 to reach out to the more children to provide quality education.
Light of Life Trust: Project Anando: (Quality Education at Secondary School Level) at Salav, Alibaug, Maharashtra.
Light of Life Trust to initiate quality education based project at Salav in Sanjay Nagar. With Welspun’s financial support Light of Life Trust is running centre for 65 Katakari tribal children.
The project is being executed on pilot basis and then will be scaled up in other needy communities nearby Welspun Maxsteel business location.
32 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
Environment Initiative: Bombay Natural History Society: (Hornbill Club Project) at Salav, Alibaug, Maharashtra.
Hornbill Club Project on Environment and Conservation programme initiated in Welspun Vidya Mandir Salav, and Welspun Vidya Mandir Anjar – programme covers around four hundred and ninety students from standard 5th to 8th and 15 teachers. Welspun’s environment based initiatives are to improve the standard of operations and have successfully managed net reduction of CO2 emission. In addition, Welspun transformed once devastated deserts to green-belt by planting – programme covers around four hundred and ninety students from standard 5th to 8th and 15 teachers.
Welspun’s environment based initiatives are to improve the standard of operations and have successfully managed net reduction of CO2 emission. In addition, Welspun transformed once devastated deserts to green-belt by planting 100,000 saplings in and around Anjar.
Welspun has collaborated with non-profit organization to create environment awareness and conservation amongst communities.
Empowerment and Health Projects at Anjar - Kutch and Salav - Maharashtra Health Initiative: Welspun’s health centers are providing health facilities for underprivileged population from the neighboring villages, particularly on general health, mother and child health care and also by sponsoring major health expenditure.
Women Empowerment initiative at Varsamedi, Anjar: Empowerment is one of the important principles Welspun foundation work on. Welspun pioneered Mission Mangalam Scheme with Gujarat Government. This initiative brings livelihood options by building capacities and providing trainings to the rural women. Approximately 125 women are trained under this scheme. The same project has been replicated in Bhadreshwar as Public Private Partnership.
Skill development and livelihood project at Welspun Grams for women Two centers for women are being run to develop cutting and stitching skills and to bring livelihood to them. Approximately 75 women from both the centers have been trained and given jobs.
Self Help Groups at Salav: Ten self help groups have been formed in villages to empower women by providing various skills and building their capacities. Approximately 250 women are participating enthusiastically in activities and training being provided to them. The main aim behind forming SHG’s is to mobilize women for their own development as well as communities.
33 Computer centre at Salav With the growing need to computer skills and the availability of jobs a computer training centre is started in Salav village for the basic computer literacy. In last three months 120 students have been benefitted with this initiative. Along with the computer skills other soft skills sessions have also been organised for the students by Maxsteel employee volunteers.
Adoption of Industrial Training Institute at Vansda in Navsari District Welspun India Ltd, (WIL) Vapi has adopted an ITI in Vansda, District, and Navsari under the Central Govt. Scheme of “ITI upgradation by Public-Private Partnership” where three new trades i.e Spinning, Weaving and Cut & Sew are being introduced. The theoretical classes are taken care of by MS University Professors and On- Job Training is imparted by WIL, Vapi unit. The successful student of these trades will be given opportunity to be absorbed in WIL.
Tie up with MPSTME College, Sirpur, Vapi WIL has tied up with MPSTME College, Sirpur and Vapi where students belong mainly to rural background. Around 13 students are being provided opportunity of six months practical training in WIL. The boarding, lodging & transportation for these students are extended by WIL free of cost and are being trained to be made fit for the industry as soon as they complete their academics. Job opportunity will be provided by Welspun to them on completion of their course.
Volunteerism at Welspun Volunteerism is one of the crucial elements in all our CSR initiatives at all our locations. Our employee’s volunteers participate enthusiastically and consistently. Their participation is strategically planned that helps to get different set of skills.
Joy of Giving Week with Light of Life Trust As part of Joy of Giving Week the Light of Life Trust organised Spandan programme to raise funds wherein children from their Alibaug and Karjat performed. This performance was supported by Welspun with buying tickets for our Welspun Vidya Mandir community club members and teachers.
Charitable Donations: Partnered with Save The Children India to support victims of cloud burst in Ladakh.
Donation of desks and benches to Government run primary school, Korlai village in Alibaug benefiting around 350 students.
Supported orphanage/homes with donations like bed sheets and towels
Creating awareness and employee participation
Organised Blood donation Camp at Welspun Head Office 123 employees donated blood in the blood donation camp organised in Welspun HO on 27th May 2011. Employees have been provided with the blood donation card to avail blood in emergency.
World Environment Day World environment day organised at Welspun HO in order to bring about awareness on environment related issues through the competition. Overwhelming response received by Welspunites. Three best ideas to protect the environment were awarded.
34 th WELSPUN Projects Ltd. Annual Report (Formerly known as MSK Projects (India) Ltd.) 17 2010-2011
School Material Distribution Drive Welspun employees donated school material like text books, stationary that was Vatsalya foundation working for street children organization.
Corporate Yoga Sessions for Welspun Employees Corporate Yoga Sessions by Mrs. Preeti Mandawewala is organised at Anjar, Vapi, Silvassa, Zagadia, Dahej and Welspun Vidya Mandir Anjar. In all 700 employees benefitted from the sessions.
Special Achievement Welspun is honoured with India Shining CSR Award – “Outstanding CSR in Textile Sector” hosted by Wockhardt.
The award ceremony was presided by Noble Peace Laureate - The Dalai Lama, Noble Peace Laureate - Prof. Muhammad Younis and Union Cabinet Minister Dr. Salman Khurshid.
At the Wockhardt Foundation’s first ‘CSR Thought Leadership Conclave’ 2011 Industry Leaders emphasized the need for focusing on social development for economic growth.
35 FinancialSection
Standalone Accounts Auditors Report 39 Annexure to the Auditors’ Report 41 Balance Sheet 44 Profit & Loss Account 45 Schedules 46 Cash Flow Statement 67 Balance Sheet Abstract 68
Consolidated Accounts Auditors Report 69 Balance Sheet 70 Profit & Loss Account 71 Schedules 72 Cash Flow Statement 96 Section 212 Disclosure 97
38 AUDITOR'SREPORT
We have audited the attached Balance Sheet of M/s. Welspun Projects Limited (formerly known as MSK Projects (India) Limited), as at 31st March, 2011 and also the annexed Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibilityisto expressan opinion on thesefinancial statementsbased on ouraudit.
We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation; we believe that our audit provides a reasonable basis for ouropinion.
1) As required by the Companies (Auditor's Report) order, 2003 as amended by Companies (Auditor's Report) (Amendment) Order, 2004(together 'the Order') issued by the Central Governmentof India interms of Section 227 (4-A) of the Companies Act, 1956, and on the basis of information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we enclose in the Annexure a statementon the mattersspecified in paragraphs4 and 5of the saidorder.
2) FURTHERAND SUBJECT TO OUR COMMENTSIN THEANNEXUREREFERREDTO INPARAGRAPH1 ABOVE.
a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for thepurpose ofourAudit.
b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from ourexaminationof the books.
c) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of accountof theCompany.
d) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms ofclause (g) ofsub-section (1)ofsection 274of theCompanies Act, 1956.
e) In ouropinion,subjectto non compliancewiththe specifiedaccountingstandards relatingto :-
Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Costas requiredby theAccountingStandard –12 “Accounting forGovernment Grants”(See NoteNo. 11).
The Balance Sheet, the Profit & Loss Account and the Cash flow statement dealt with by this report comply with the other Accounting Standard as referredto inthe Section 211(3C) of theCompanies Act, 1956and
39 f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subjectto :
Disclosure of Cash Subsidy amounting to Rs.82.87 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against BOT Projects under the head 'Reserve & Surplus' instead of deducting the same from the Project Cost(See NoteNo. 11).
and read withtheother notes appearingthereon, give theinformation required by theCompanies Act, 1956 inthe manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.
i) In the case of the Balance sheet of the state of affairs, of the Company as at 31st March, 2011 and; ii) In the case of the Profit and Loss Account of the Loss for the year ended on that date. iii) In the case of the Cash flow statement, of the cash flow for the year ended on that date.
For Chandrakant & Sevantilal & J. K. Shah & Co. Firm Registration No. 101676W Chartered Accountants
Place: Vadodara Date : 26/05/2011
(H. B. Shah) Partner Membership No.16642
40 ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF M/S. WELSPUN PROJECTS LIMITED (FORMERLY KNOWN AS MSK PROJECTS (INDIA) LIMITED), BARODA ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011
(REFERREDTO INPARAGRAPH 1 OFOUR REPORTOF EVENDATE)
1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of itsfixed assets.
b) Major portion of fixed assets has been physically verified during the year by the management in accordance with a programme of verification, which, in ouropinion providesfor physical verification ofall thefixed assets as reasonable interval having regards to size of the Company and nature of its business. According to the information and explanation given to us the discrepancies noticed on such verification were not material and have been properly dealt withinthebooksofaccounts.
c) No disposal ofa substantialpartof fixed assetsof the Company hastaken placeduringthe year.
2. a) As explained to us, the inventories were physically verified by the management at reasonable intervals during the year.
b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
c) As the Company has not maintained quantitative records of stock, It is not possible to find out discrepancies between the physical stockand book records.
3. a) The Company has granted unsecured loan to five companies covered in the register maintained u/s 301 of the Companies Act' 1956. The maximum amount involved during the year was Rs. 1268.12 Lacs and the year end balance ofloans granted tothese Companies wasRs. 301.84 Lacs.
The Company has taken interest free unsecured loan from one Company covered in the registered maintained u/s 301 of the Companies act' 1956. The maximum amount involved during the year was Rs.1756.40 Lacs and year ended balanceof loantaken from such Company wasRs. 11.40Lacs.
b) In our opinion, the rate of interest, where applicable and other terms and conditions on which loan have been taken from / granted to the Companies listed in the register maintained us 301 of the Companies act, 1956 are not prima- facie, prejudicial to theinterestof the Company.
c) The Companies to whom advance in the nature of loan is granted there is no stipulation for repayment there of. As per the information and explanations given to us the said loan is repayable on demand. The Company is regular in repayingtheprinciple amount whereverstipulated,
4. In ouropinion and accordingto the information and explanations given to us,there are , adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with regard to the receipts of Civil Contracts. During the course of our audit, we have not observed any major weaknessin the internalcontrols.
5. a) To the best of our knowledge and belief, and according to information and explanation given to us, the transactions that needed to be entered in to the register in pursuance of Section 301 of the Companies Act, 1956, have been so entered.
b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and
41 exceeding the value of Rupees five lacs in respect of any party during the year have been made at prices which are reasonablehavingregard to prevailingmarket prices atthe relevanttime where such marketprices areavailable.
6. In ouropinionand accordingto theinformation andexplanations givento us,the Company has notacceptedanydeposits from the public, Accordingly the provisions of clause (vi) of the Companies (Auditor's Report) order 2003 are not applicable tothe Company.
7. The Company has appointed a partnership firm of Chartered Accountants, to carry out its internal audit function. In our opinion, the internal audit system is required to be strengthen in respect of its scope to cover all the area to commensuratewiththesize ofthe Companyand natureof itsbusiness.
8. The Central Government has not prescribed maintenance of cost records Under Section 209(1)(d) of the Companies Act, 1956 foranyof theproductsof the Company.
9. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax,Wealth Tax, CustomDuty, ExciseDuty, Cessand otherstatutory dueswiththe appropriate authorities.
b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2011 for a period of more than six months from the day theybecomepayableexceptSales Tax liabilityof Rs. 12.96Lacs.
c) According to the information and explanation given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except the following disputed Income Tax Demand.
Sr. Nature of the Nature of the Amount Period to which Forum where No. Status due (Rs. In Lacs) the amount relate dispute is Pending 1. Income Tax Act, Income Tax 27.43 A.Y. 2007-08 CIT (A) Baroda 1961
2. Income Tax Act, Income Tax 780.81 A.Y. 2008-09 CIT (A) Baroda 1961
10. The Company has no accumulated losses and has not incurred cash losses in the immediately proceeding financial year. The Company hasincurred cash lossesinthe current financial year.
11. The Company has notdefaultedin repaymentofduestoany financial institution orBanks.
12. The Company has not granted loans and advances on the basis ofsecurity by wayof pledge ofshares, debentures orother securities.
13. The provisions of any Special Statue applicable to Chit Funds, Nidhis or Mutual Benefit Funds/Societies are not applicable to theCompany.
14. The Company is not dealing in or trading in shares, securities, debentures, or other investments and hence, requirement of paragraph4(xiv) arenotapplicable to the Company.
15. In our opinion and according to information and explanation given to us the term and condition on which the Company has given guarantee for loan taken by others from Bank / Financial Institution are not prejudicial to the interest of the Company.
16. In ouropinion,the termloans havebeen appliedfor thepurposefor whichtheywere raised.
42 17. According to the Cash Flow Statement and other records examined by us and on the basis of information and explanations givento us, on an overall basis, funds raised on Short Term basis have, prima facie, not being used duringthe yearfor Long Terminvestmentand viseversa.
18. During the year,the Company has not made any preferential allotment ofshares to parties and Companies covered in the Register maintainedU/s 301of the Act.
19. Since theCompanydoes not have anydebentures,the questionofcreation ofsecuritiesfordebentures does notarise.
20. The Company has notraised money by public issueduringtheyear.
21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company wasnoticed orreported duringthe year.
For Chandrakant & Sevantilal & J. K. Shah & Co. Firm Registration No. 101676W Chartered Accountants
Place: Vadodara Date : 26/05/2011
(H. B. Shah) Partner Membership No.16642
43 BALANCE SHEET AS ON 31st MARCH’ 2011
As at As at Schedules March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SOURCES OF FUNDS SHARE HOLDERS' FUNDS SHARE CAPITAL A 400000000 228211120 RESERVES & SURPLUS B 4375397812 2762668122 4775397812 2990879242 LOAN FUNDS SECURED LOANS C 2223876957 2562142580 UN-SECURED LOANS D 1140700 - 2225017657 2562142580 DEFERRED TAX LIABILITY 86115000 64683000 TOTAL (Rs.) 7086530469 5617704822 APPLICATION OF FUNDS FIXED ASSETS GROSS BLOCK E 1000608783 1001305352 LESS : DEPRECIATION 492654460 412040355 507954323 589264997 REALISABLE VALUE OF IMPAIRED ASSETS 800000 - NET BLOCK 508754323 589264997 BUILD, OPERATE AND TRANSFER PROJECTS EXPENDITURE F AS PER LAST YEAR BALANCE SHEET 2669007975 2827379852 COST INCURRED DURING THE YEAR 78125055 6479018 2747133030 2833858870 LESS: UNCLAIMED LIABILITIES WRITTEN BACK - 3783017 LESS: WRITTEN OFF DURING THE YEAR 85658612 161067878 2661474418 2669007975 INVESTMENTS G 2075471395 630849621 CURRENT ASSETS, LOANS & ADVANCES INVENTORIES H 556938132 328030039 SUNDRY DEBTORS I 1363961503 1175710926 CASH & BANK BALANCES J 400409218 515120015 LOANS & ADVANCES K 454649373 423792192 2775958226 2442653172 LESS : CURRENT LIABILITIES & PROVISIONS LIABILITIES L 926538873 663902941 PROVISION M 8589021 50168002 935127894 714070943 NET CURRENT ASSETS 1840830332 1728582229 TOTAL (Rs.) 7086530469 5617704822
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 8
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
44 PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH’ 2011
Year ended Year ended Schedules March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
INCOME CONTRACT RECEIPTS, SUPPLY AND OPERATING INCOME 1 2062773907 3898801162 TOLL COLLECTION 2 278667496 298490230 OTHER INCOME 3 7878993 8765096 2349320396 4206056488 CHANGE IN WORK-IN-PROGRESS 4 214124274 41860292 TOTAL Rs. 2563444670 4247916780 EXPENDITURE MATERIALS CONSUMED 5 1291487761 2006870435 SITE COST & OTHER EXPENSES 6 1226862057 1273439532 FINANCE & BANK CHARGES (NET) 7 167585582 287391138 EXPENDITURE ON BUILD, OPERATE & TRANSFER CONTRACTS WRITTEN OFF 85658612 161067878 DEPRECIATION 95995652 113530616 2867589664 3842299599 (304144994) 405617181
LESS: COST INCURRED FOR OWNED BOT PROJECT TRANSFERRED TO BALANCE SHEET - 6479018 PROFIT / (LOSS) BEFORE PRIOR PERIOD INCOME / EXPENDITURE (304144994) 412096199 PRIOR PERIOD ITEM (NET) (2907660) 22749605 PROFIT / (LOSS) AFTER PRIOR PERIOD INCOME/EXPENDITURE (307052654) 434845804
PROVISION FOR TAXATION CURRENT TAX - 92500000 FRINGE BENEFIT TAX - (224094) DEFERRED TAX 21432000 55094000 21432000 147369906 PROFIT / (LOSS) AFTER TAXATION (328484654) 287475898 BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 904262708 663584810 PROFIT AVAILABLE FOR APPROPRIATION 575778054 951060708 PROPOSED DIVIDEND - 40000000 TAX ON DIVIDEND - 6798000 - 46798000 BALANCE CARRIED TO BALANCE SHEET 575778054 904262708 EARNING PER SHARE - (IN RUPEES) BASIC & DILUTED -8.48 12.60 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 8
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
45 SCHEDULE - A TO M, AND 8 FORMING PART OF THE BALANCE SHEET
As at As at March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - A SHARE CAPITAL
AUTHORISED CAPITAL 4,10,00,000 (PREVIOUS YEAR 2,50,00,000) EQUITY SHARES OF RS. 10/- EACH 410000000 250000000 ISSUED, SUBSCRIBED, AND PAID UP CAPITAL * 4,00,00,000 (PREVIOUS YEAR 2,28,21,112) EQUITY SHARES Rs. 10/- EACH FULLY PAID UP 400000000 228211120 TOTAL 400000000 228211120 NOTES * OUT OF THE ABOVE SHARES: 1 1874331 Shares are allotted as fully paid up without payment being received in cash earlier Year 2 720897 Shares are allotted as fully paid up by way of bonus shares, during the year 1996-97 3 1454645 Shares are allotted as fully paid up by way of bonus shares during the year 1998-99 4 1235547 Shares are allotted as fully paid up by way of bonus shares during the year 2000-01 3 250000 Shares are issued on preferential basis during the year 2005-06 4 1399566 Shares are issued on conversion of foreign currency convertible bonds during the year 2006-07 5 2353768 Shares are issued on conversion of foreign currency convertible bonds during the year 2007-08 6 4450000 Shares are issued on preferential basis during the year 2007-08 7 17178888 Shares are issued on preferential basis during the year 2010-11 30917642
SCHEDULE - B RESERVES & SURPLUS
1. CAPITAL RESERVE
CASH SUBSIDY
RECEIVED FROM MADHYA PRADESH RAJYA SETU NIRMAN NIGAM LTD AGAINST BOT PROJECTS
AS PER LAST YEAR BALANCE SHEET 828729840 838000000
LESS: DEDUCTION DURING THE YEAR - 9270160
828729840 828729840
AMALGAMATION RESERVES
AS PER LAST YEAR BALANCE SHEET 52112583 52112583
2. GENERAL RESERVES
AS PER LAST YEAR BALANCE SHEET 32177549 32177549
3. SECURITIES PREMIUM
AS PER LAST YEAR BALANCE SHEET 945385442 945385442
ON ISSUE OF SHARES ON PREFERENTIAL BASIS DURING THE YEAR 1941214344 -
2886599786 945385442
4. PROFIT & LOSS ACCOUNT
BALANCE AS PER ANNEXED ACCOUNT 575778054 904262708
TOTAL (1+2+3+4) 4375397812 2762668122
46 SCHEDULE - A TO M AND 8 FORMING PART OF THE BALANCE SHEET
As at As at March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - C SECURED LOANS
TERM LOAN FOR EQUIPMENTS & VEHICLES
FROM CORPORATION BANK - BARODA 25214141 51905370
Secured by hypothecation of the relavant plant & machineries, equipments, vehicles & the personal guarantee by the directors of the Company. (Repayable within year Rs. 1,99,24,000/- Previous Year Rs. 1,99,24,000/-)
FROM KOTAK MAHINDRA BANK LIMITED 6833956 16008922
Secured by hypothecation of relevant Plant & Machineries & Vehicles & Personal guarantee of the some of the Directors of the Company (Repayable within year Rs. 67,48,003/- Previous Year Rs. 92,52,000/-)
FROM HDFC BANK LIMITED 8418467 27240669
Secured by hypothecation of relevant Vehicles, Plant & machineries and personal guarantee of the some of the directors of the Company (Repayable within year Rs. 51,86,237/- Previous Year Rs. 1,47,92,000/-)
FROM TATA CAPITAL LIMITED 5565318 24059648
Secured by hypothecation of relevant Plant & machineries & personal guarantee of some of the Directors of the Company (Repayable within year Rs. 53,10,490/- Previous Year Rs. 1,85,35,000/-)
FROM AXIS BANK 1970501 4252221
Secured by hypothecation of relevant Plant & machineries & personal guarantee of some of the Directors of the Company (Repayable within year Rs. 11,35,371/- Previous Year Rs. 15,79,000/-)
FROM TATA MOTOR FINANCE LIMITED 987348 11232218
Secured by hypothecation of relevant Plant & machineries & personal guarantee of some of the Directors of the Company (Repayable within year Rs. 9,87,348/- Previous Year Rs. 1,07,37,000/-)
FROM SREI INFRASTRUCTURE FINANCE LIMITED 3697547 53899494
Secured by hypothecation of relevant Plant & machineries & personal guarantee of some of the Directors of the Company (Repayable within year Rs. 17,96,460/- Previous Year Rs. 4,69,98,000/-)
TOTAL (A) 52687278 188598542
TERM LOAN FOR PROJECTS
FROM DENA BANK 259625597 305228916
The above Loans are Secured by:
- A first mortgage and charged on all the Company's capital assets, specific & pertaining to the Hoshangabad - Harda - Khandwa Projects only both present and futures.
- A first Charge on all the revenues / receivable of Hoshangabad-Harda - Khandwa project account of the Company
- A First charge on all the intangible assets of the Company including but no limited to Goodwill of the Co
- A first charge on Company's bank accounts including without limitation the trust and retention account (RTA) / Escrow Account and Debt Service Reserve Account to be established by the Company
- A First charge/assignment/security on the Company right under the concession agreement, project document, contract and all licence permits approvals conserts and insurance policies in respect of the project
(Repayable within year Rs. 4,44,00,000/- Previous Year Rs. 4,44,00,000/-)
47 SCHEDULE - A TO M AND 8 FORMING PART OF THE BALANCE SHEET
As at As at March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - C SECURED LOANS
FROM CORPORATION BANK 269878003 300574761 The above Loan is Secured By: - First Mortgage & charge on all the movable & immovable properties of the Raisen - Rahathgarh BOT Projects including all receivable both and present and future. - Assignment of all rights, title and Interest of the Company in respect of all the assets of the projects, all Projects agreement and Contracts including Concession Agreement. - Assignment of contractors guarantees, performance bond and liquidated damages - Personal Guarantees of some of the Directors of the Transferors Company. (Repayable within year Rs. 3,36,00,000/- Previous Year Rs. 3,36,00,000/-) FROM PUNJAB NATIONAL BANK 92646507 125947741 - (Secured by Ludhiana & Jalandhar Bus Terminal Projects, and Personal guarantee of some of the directors of the Company). (Repayable within year Rs. 3,61,80,000/- Previous Year Rs. 3,61,80,000/-) FROM INDUSTRIAL DEVELOPMENT FINANCE CO. LIMITED 554524973 572792654 INTEREST ACCRUED & DUES 2691962 2442242 - Secured by by way of mortgage in favour of IDFC of all movable properties pertaining to the Dewas Water Supply Projects Presents, futures. - a first charge by ways of the hypothecations of the all movables including movables including movable plant machinery, machinery spares, tools, & accessories, furniture & fixture, vehicles and all other movable assets pertaining to the project present & future. - First charge of all the book debts, operating, Cash Flows, revenue, receivables of the Company pertaining to the Dewas Water Supply project, present & Future. - Assignment of all rights, title and Interest of the Company in respect of all the assets of the Dewas Water Supply Projects agreement and Contracts including Concession Agreement. - First Charge over the Escrow Account. Debt Service Reserve Account and other Reserve and any Other reserves and any other banks account the Company wherever maintained. - Personal Guarantee of the Directors of the Company (Repayable within year Rs. 2,63,25,000/- Previous Year Rs. 1,17,00,000/-) TOTAL (B) 1179367042 1306986314 OTHER LOAN FROM CORPORATION BANK SHORT DEMAND LOAN 13068785 139765340 (Secured by fixed deposits of the Company and third Parties) OVERDRAFT ACCOUNT 458378706 376430627 (Secured by hypothecation of the entire stocks & book debts of the Company & personal guarantee of some of the directors of the Company). FROM IDBI BANK LIMITED 365262779 341125151 (Secured by pari passu charge on all current assets of the company) FROM BANK OF INDIA 155112367 201103665 Secured by specific Plant & Machineries and second charge on current assets of the Company. OVERDRAFT ACCOUNT - 8132941 - Securred by the 10% Cash Margin in the form of TDR - Pledge of the shares of the promoters in favour of the Bank for Rs. 50 Lacs TOTAL (C) 991822637 1066557724 TOTAL (A) + (B) + (C) 2223876957 2562142580
SCHEDULE - D UN-SECURED LOANS
FROM COMPANIES 1140700 - Total 1140700 -
48 8 2 9 2 4 8 1 3 3 8 9 3 7 2 9 4 4 2 1 4 9 9 0 2 4 5 5 1 1 0 7 1 9 9 1 4 0 3 1 9 5 9 2 3 5 4 0 n 3 9 1 0 6 5 9 5 7 7 6 2 o / 3 5 3 7 3 0 2 5 7 2 2 s 3 0 9 1 3 2 2 4 4 9 A / 1 4 9 2 8 K 1 1 3 5 C 3 O L B 2 8 2 6 7 4 8 8 2 8 3 9 T 9 1 7 6 0 1 7 5 8 3 2 9 1 E 5 5 7 3 5 6 3 8 4 2 3 9 1 N 1 7 0 5 2 6 1 1 5 1 4 4 0 n 0 1 8 3 1 6 0 1 7 5 5 6 2 o / 7 0 2 7 2 8 9 8 1 2 9 2 s 3 1 1 0 3 4 2 3 3 6 7 9 A / 4 1 6 7 0 8 1 1 2 5 5 3 - - 2 3 3 8 0 8 0 0 5 4 1 3 1 6 9 0 9 8 6 5 7 1 7 5 6 8 6 0 6 4 3 2 0 n 7 6 5 2 6 3 2 4 0 9 2 o 0 6 8 8 2 9 6 5 4 2 / s 8 1 7 2 3 5 8 6 0 8 3 1 7 2 4 3 7 2 2 4 A / 9 4 9 1 3 1 1 4 4 2 3 ------4 3 7 2 3 1 4 4 d 8 7 5 4 o n i 7 3 1 8 r o 8 9 8 1 i e t 9 3 3 9 P c 2 2 5 8 u g 1 1 d n i e r N D u O D I T A I C - - 4 5 8 6 3 2 6 6 2 6 E 5 3 3 1 5 5 3 4 7 1 d R 2 5 2 3 7 6 4 2 8 6 o P i 8 6 5 2 1 5 6 0 4 0 E n r 4 0 9 3 6 9 8 7 9 3 o e D i 1 4 5 0 9 6 4 5 5 P t 5 5 6 1 1 3 i g 4 9 2 2 1 d 1 n d i r A u D - - 9 2 0 4 1 5 7 5 9 7 5 5 6 8 9 5 9 5 7 5 0 2 8 5 3 7 3 1 3 1 9 1 n 8 2 7 4 0 5 1 0 8 9 0 1 2 9 8 9 5 0 4 2 6 o 2 1 1 7 2 6 7 7 0 4 5 / s 1 2 3 2 5 2 2 7 3 4 A 7 0 1 0 2 / 2 4 3 1 1 8 0 2 2 1 0 3 4 4 2 2 0 7 7 9 1 3 9 8 6 1 5 6 7 1 3 8 5 5 0 5 7 2 2 3 1 1 1 1 3 1 0 4 9 8 8 3 5 8 8 0 n 0 7 0 8 8 1 0 1 9 0 3 9 2 o 9 8 7 0 1 6 6 5 1 0 3 4 / 3 3 1 1 2 1 0 6 7 1 1 1 s 3 1 3 1 0 0 1 1 A / 2 5 0 0 2 1 1 1 3 ------7 4 6 1 2 1 1 1 d 2 0 5 7 o n i 5 7 3 7 r o 6 4 9 1 i e 7 2 5 5 t P c 4 7 4 7 u 3 2 1 g d n T K i e r C E D u E O L D H B S S S E - O C 0 9 3 8 7 8 6 6 0 0 9 R 0 4 7 5 1 5 5 2 7 4 8 N d 3 2 7 1 3 5 6 4 6 G 1 4 o 5 9 2 A 8 6 8 5 2 6 7 7 i n r 7 4 1 4 0 7 6 9 9 6 L 3 o e 4 5 2 0 8 5 1 0 2 5 4 i A P t 4 3 1 1 6 3 2 i B 3 1 3 1 g d n d E i r A H u s T D t n F e O m 2 8 1 1 2 0 7 8 2 6 2 1 e T r 9 3 3 4 1 0 0 9 5 4 5 8 0 i R 5 2 7 3 8 1 7 0 3 9 3 3 1 p n 1 4 8 0 9 2 3 7 5 5 1 6 0 A o m 0 3 0 7 4 4 8 4 0 0 3 3 2 P i / 7 3 7 0 3 3 9 3 3 8 0 s 4 f 4 1 0 1 1 5 8 7 6 1 9 7 1 A G o / 1 1 0 2 7 2 s 1 N 2 0 5 9 2 t I 1 n u M o S R c c T O a N F E n o 8 M S S S s P E t T E I D I s R S n E t U R T S e U N S e E Q S T s N R m A E N s X A E t E I I , s R A N F N H M D u A j d O C E P O M I E & I I d e S A X T Y L T I x a U E R I i L S C O F M S I s E R F Q D T G S U e T U E U E W & N R N d - U T I L O A E I T O I T u P L D C l D C S - C I D N E V I N c L A - O I N M F R E T H N - n A E R I F O I E U R L O O U O A L E G L B P C A V C O T P * F L U U D D E E . r H 0 H S C 1 2 3 4 5 6 7 8 9 1 C S S
49 6 8 2 2 5 8 0 1 3 9 1 2 7 1 3 1 4 1 6 4 9 4 0 0 t 1 0 8 3 7 4 3 2 a / 9 4 5 9 0 7 3 s 3 7 1 6 1 0 4 1 0 3 3 5 1 9 A 1 7 / 6 1 8 6 6 4 1 6 6 7 3 2 2 2 - - 6 8 2 5 5 3 9 2 5 5 r d g 4 1 4 0 0 a L e n r 1 0 3 5 5 e i A r Y 9 4 9 2 2 T r u 7 1 1 1 1 u e O c 3 3 1 8 8 T h D n 6 1 7 7 t I - - - - 5 5 5 0 7 7 7 1 9 9 9 0 t 7 7 7 2 a 0 0 0 / s 0 0 0 4 9 9 9 0 A / 6 6 6 1 6 6 6 0 2 2 2 9 6 2 8 2 7 8 1 7 3 2 9 2 7 9 1 6 4 4 1 3 3 6 0 S t 2 1 3 0 5 0 7 2 T a 4 9 / 9 4 0 3 8 C s 9 7 1 1 3 8 9 9 E 4 3 1 3 0 4 2 7 J A / 6 1 5 3 2 O 1 0 1 1 R 3 1 1 1 P - - 2 6 8 5 5 Y L 2 3 9 5 5 r d P g 4 4 1 0 0 a e P n 3 1 0 r 5 5 e i r Y 9 9 4 2 2 U r u S 1 7 1 1 1 u e c 1 3 3 8 8 h D R n 6 1 7 7 t I E T A - - - - 2 2 2 0 W 2 2 2 1 3 3 3 S 0 t 5 5 5 2 A a 0 0 0 / s W 8 8 8 4 E 4 4 4 0 A / 5 5 5 D 1 0 0 0 0 1 1 1 - - - 1 0 9 9 9 T 1 5 4 9 4 C 0 0 9 8 9 t E 2 1 0 9 0 J a / 1 2 0 2 s O 3 2 5 3 5 0 R A 7 5 8 5 / P 1 3 1 3 1 1 1 1 L 3 A ------N I r d g a M e n r e R i r Y r E u u e T c h D n S t I U B - 9 9 9 0 A 4 4 4 1 N 9 9 9 0 t 0 0 0 A 2 a I / 2 2 2 s H 4 5 5 5 0 A 5 5 5 D / 3 3 3 U 1 1 1 1 L 0 - - - 1 1 5 5 4 T 1 9 5 5 6 C 0 4 6 6 1 E t J 2 5 0 0 5 a / 1 2 2 0 O s 3 5 2 2 7 R 0 A 3 2 2 8 P / 2 1 1 8 L 1 1 1 3 A ------N I r d M g a e R n r e i r E Y r u T u e c S h D n t I U B - R 5 5 5 0 5 5 5 A 1 6 6 6 0 H t 0 0 0 2 a D 2 2 2 / s N 2 2 2 4 2 2 2 0 A A / 1 1 1 L 1 1 1 1 A J 0 - - - 1 7 3 7 4 1 1 6 1 5 0 6 6 6 9 t 2 2 0 2 1 a / 1 8 1 3 s 3 1 8 1 2 0 A 2 5 2 6 / H 8 1 8 6 1 R 5 5 5 3 A ------G T T r d A g E a e H n r e E i r Y A r u R u e H c - h D n S t I N E E S - - - - I 0 7 7 7 C E 1 1 1 1 A 0 6 6 6 R N R t 2 2 2 2 a U / 1 1 A 1 s 4 T 1 1 1 L I 0 A 2 2 2 / 8 8 8 D A 1 5 5 5 N 0 B E - - - 2 2 3 9 1 E P 3 3 0 2 A 1 4 4 7 7 0 X H t W 8 8 9 8 2 E a 4 / 4 3 0 D T s 3 3 2 1 3 S N 4 4 0 4 0 A F T A / 8 6 8 2 C H 1 7 7 7 O K 3 E - J T ------A O D R r d R g R a e n r A P e A i r Y r P H u - u e R c h D D E n G t I A F B S N - - - - I A 2 2 2 0 N 3 3 3 G 1 A 4 4 4 M 0 N t 8 8 8 R 2 A a R 4 4 4 / T H s 3 3 3 4 S 4 4 4 O 0 A & 8 8 8 / O F 7 7 7 1 H E , 0 T 8 A R R D A E E P N Y E O A H , , T E D S R L G I M A N E N s E I E C U r Y R P N O a B X U D T l A E T S E D u N A R c F E M E L i A E F T C t U H R O - r S N N F T I E a N A N P - A O E L P E O S L A T M E C & A T B L I L T U & E R S A G U I C S D O N R W R D N I L I C E : E E S A A A S T E L T P O A S H H T E L A I O E C M B S R T L C C S S 50 SCHEDULE - A TO M AND 8 FORMING PART OF THE BALANCE SHEET
As at As at March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - G INVESTMENTS
INVESTMENT IN SHARES (NON TRADE) QUOTED, (LONG TERM) 7400 (P.Y. 7400) Equity Sharess in Minar Trading services Limited of Rs. 10/- each fully Paid up 74000 74000 1500 (P.Y. 1500) Equity Sharess in Sarv Shakti Synthetics Limited of Rs. 10/- each fully Paid up 15000 15000 1600 (P.Y. 1600) Equity Sharess in Corporation Bank of Rs. 10/- each fully Paid Up 128000 128000 30000 (P.Y. 30000) Equity Shares in Myraj Consultancy Limited of Rs. 10/- each fully paid up 300000 300000 517000 517000 Less : Provision for Dimunition in value of Investment 74000 74000 443000 443000 (Market Value Rs. 10,20,800/- P.Y. Rs. 7,69,600/-) UNQUOTED, ( LONG TERM) IN-SUBSIDIRY COMPANIES 242000 (P.Y. 242000) Equity Shares of MSK Projects (Himmatnagar bypass)Pvt Ltd of Rs. 10/- each fully paid up 23300000 23300000 6730000 (P.Y. 6730000) Equity shares of MSK Projects (Kim Mandvi Corridor) Private Limited of Rs. 10/- each fully paid up 67300000 67300000 50000 (P.Y. 50000) Equity Shares of Super Infrastructure and Toll Bridge Private Limited of Rs. 10/- each fully paid up - 500000 25500 ( P.Y. Nil) equity Shares in Welspun Energy Maharshtra Ltd Rs.10/- each fully paid up 255000 - OTHERS 500 (P.Y. 500) Equity shares in MSK Finance Limited of Rs. 100/- each fully paid up 50000 50000 48 (P.Y. 48) Equity shares in Nutan Nagrik Sahakari Bank Limited of Rs. 100/- each fully paid up. 4800 4800 37652 (P.Y. 37652) Equity shares in Baroda Peoples Co-Op. Bank Limited of Rs.10/- each fully paid up 376521 376521 63 (P.Y. 63) Equity shares in Baroda City Co-Op. Bank Limited of Rs. 50/- each fully paid up 3150 3150 1000 (P.Y. 1000) Equity shares in Classic Organisors Private Ltd of Rs. 10/- each fully paid up 10000 10000 960 (P.Y. 960) Equity shares in Sindh Mechantile Co-Op. Bank Ltd of Rs.10/- each fully paid up 9600 9600 50000 (P.Y. 50000) Equity shares in Bul MSK Infrastructure (India) Private Limited of Rs.10/- each Fully Paid up 27800150 27800150 50000 (P.Y. 34100) Equity shares in Dewas Bhopal Corridor Limited of Rs. 10/- each fully paid up. 510210900 510051900 INVESTMENT IN BONDS 178 ( P.Y. Nil) Bonds of IFCI - 2030 @9.70% of Rs. 1000000 each fully paid up. 183340000 - 500 ( P.Y. Nil) Bonds of IDBI - 2030 @9.65% of Rs. 1000000 each fully paid up. 514900000 - 257 ( P.Y. Nil) Bonds of West Bengal Electricity Distco Ltd - 2025 @9.34% of Rs. 1000000 each fully paid up. 263792500 - INVESTMENT ON NON CONVERTIBLE DEBENTURES 1260 ( P.Y. Nil) Bonds of DHFCL 2015 10% of Rs. 100000 each fully paid up. 127802304 - 590 ( P.Y. Nil) Bonds of DHFCL 2020 10.40 % of Rs. 100000 each fully paid up. 59857220 - INVESTMENT IN CERTIFICATE OF DEPOSITS 1500 ( P.Y. Nil) NCD of CBI Rs. 100000/- each fully paid up. 146586600 - 1500 ( P.Y. Nil) NCD of PNB Rs. 100000/- each fully paid up. 147429150 - INVESTMENT IN GOVERNMENT SECURITY Indira Vikash Patra 500 500 Two (P.Y. One) Bonds of Rs. 10,00,000/- Sardar Sarovar Narmada Nigam Limited 2000000 1000000 TOTAL 2075471395 630849621
51 SCHEDULE - A TO M AND 8 FORMING PART OF THE BALANCE SHEET
As at As at March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - H CURRENT ASSETS, LOAN & ADVACNES
INVENTORIES (as taken valued and certified by the management) WORK-IN-PROGRESS 416187464 202063190 RAW MATERIAL 140750668 125966849 TOTAL 556938132 328030039
SCHEDULE - I CURRENT ASSETS, LOAN & ADVACNES
SUNDRY DEBTORS (UNSECURED CONSIDERED GOOD) DEBT EXCEEDING SIX MONTHS 91948122 7465705 LESS: PROVISION FOR DOUBTFUL DEBTS 25633372 - 66314750 7465705 OTHER DEBTS: FROM SUBSIDIARIES COMPANIES 316884173 207958159 FROM OTHERS 988775325 960287062 (Including Retention amount Rs.51,83,42,508/- ) 1305659499 1168245221 LESS: PROVISION FOR DOUBTFUL DEBTS 8012746 - 1297646753 1168245221 TOTAL 1363961503 1175710926
SCHEDULE - J CASH & BANK BALANCES
CASH - ON - HAND 4086158 3787910 BALANCES WITH SCHEDULED BANKS IN CURRENT ACCOUNTS 263000543 222575116 IN FIXED DEPOSITS ACCOUNTS 133322517 288756988 TOTAL 400409218 515120015
SCHEDULE - K LOAN & ADVANCES
(Unsecured, Considered Good) ADVANCES RECOVERABLE IN CASH OR IN KIND OR FOR VALUE TO BE RECEIVED 216719658 243664240 LESS: PROVISION FOR DOUBTFUL DEBTS 2637198 214082460 243664240 INTEREST ACCRUED BUT NOT DUE ON FIXED DEPOSITS/BONDS 36339827 2001538 TAX DEDUCTED AT SOURCE / ADVANCE TAX 96104637 31544174 (Net of Provision for Tax) MOBILISATION ADVANCE TO SUB-CONTRACTORS 3819450 - SUNDRY DEPOSITS 110900111 146582237 LESS: PROVISION FOR DOUBTFUL DEPOSITS 6597112 104302999 TOTAL 454649373 423792190
SCHEDULE - L CURRENT LIABILITIES & PROVISION
CURRENT LIABILITIES SUNDRY CREDITORS 445167055 395191288 MOBILISATION ADVANCE FROM CUSTOMERS 338736095 104009537 OTHER LIABILITIES 142635723 164702115 TOTAL 926538873 663902941
SCHEDULE - M PROVISION PROVISION FOR LEAVE ENCASHMENT 2241298 657521 PROVISION FOR GRATUITY 6347723 2712481 PROPOSED DIVIDEND - 40000000 TAX ON PROPOSED DIVIDEND - 6798000 - 46798000 TOTAL 8589021 50168002
52 SCHEDULE 1 TO 8, FORMING PART OF THE PROFIT & LOSS ACCOUNT
For the Year Ended For the Year Ended March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - 1 CONTRACT RECEIPTS, SUPPLY, OPERATIONAL INCOME
CIVIL CONTRACTS 2080555984 3992298353 LESS: SERVICE TAX 57250077 93497191 2023305907 3898801162 (Tax Deducted at Source Rs. 5,13,24,829/- P.Y. Rs. 6,94,65,542/-) TECHNICAL SERVICES 44000000 - LESS: SERVICE TAX 4532000 - 39468000 - (Tax Deducted at Source Rs. 45,32,200/- P.Y. Rs. - NIL -) TOTAL 2062773907 3898801162
SCHEDULE - 2 TOLL COLLECTION
HOSHANGABAD - HARDA - KHANDWA PROJECTS 76646054 95306393 RAISEN-RAHATGARH PROJECTS 64245784 69821047 JALANDHAR PROJECTS 47149255 41419709 JALANDHAR PROJECT - RENT 14179708 11926662 (Tax Deducted at Source Rs. 2,25,930/- P.Y. Rs. - NIL -) LUDHIANA PROJECTS 42739986 39633996 LUDHIANA PROJECTS - RENT 9649882 8599939 (Tax Deducted at Source Rs. 1,07,305/- P.Y. Rs. - NIL -) DEWAS WATER SUPPLY PROJECTS 24056828 31782484 TOTAL 278667496 298490230
SCHEDULE - 3 OTHER INCOME
OTHER INCOME DIVIDEND ON NON-TRADE INVESTMENT 26400 46643 INSURANCE CLAIM 590995 855921 UNCLIAM LIABILITIES WRITTEN BACK 4155946 3577719 PROFIT ON SALES OF ASSETS 1581645 2118510 MISCELLANIOUS INCOME 1524007 2166303 TOTAL 7878993 8765096
SCHEDULE - 4 CHANGE IN STOCK
OPENING STOCK - WORK-IN-PROGRESS 202063190 160202898 LESS: CLOSING STOCK - WORK-IN-PROGRESS 416187464 202063190 TOTAL 214124274 41860292
SCHEDULE - 5 MATERIAL CONSUMED
STOCK AT COMMENCEMENT 125966849 69296450 ADD : PURCHASE & EXPENSES 1306271580 2063540834 1432238429 2132837284 LESS : STOCK AT CLOSE 140750668 125966849 TOTAL 1291487761 2006870435
53 SCHEDULE 1 TO 8, FORMING PART OF THE PROFIT & LOSS ACCOUNT
For the Year Ended For the Year Ended March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - 6 SITE COST & OTHER EXPENSE
AIR CONDITIONING WORK 4520400 - PROVISION FOR BAD DEBTS 42880428 4286469 BITUMANIOUS WORK 16163162 18870 BLASTING WORK 2814921 11808725 BOLDER WORK 6017319 19881212 BRIDGE WORK 10064825 13706329 CULVERT & DESIGN WORK 259100 3591902 CIVIL WORK 12576342 614443 CONCRETE WORK 15431137 7500067 CONSULTANCY CHARGE 52614895 26711621 DONATION 684429 481991 DOORS & WINDOWS WORK 5029639 5022845 EARTH WORK 148386025 167673544 ELECTRIC EXPENSE 57026515 36842390 ELECTRIC POLL SHIFTING 8703120 8462286 FABRICATION WORK 29740638 27002047 FLOORING WORK 21333404 1384144 HUTMATE 2051067 1609274 INSURANCE 3881958 4537472 MACHINERY HIRE CHARGES 20366807 47267000 MASONERY WORK 26824303 25553380 MISCELLANIOUS WORK 15616729 123004895 LAND SCAPPING WORK 3820283 PAINTING WORK 7465448 5149429 PAYMENT TO SITE WORKERS 69448618 78629269 PIPE LAYING WORK 6565067 2029106 RATE & TAXES 91047515 113283963 REINFORCEMENT WORK 22274323 40561547 RENT 15075602 17746709 ROAD WORK 63302175 66715769 SAFTY EXPENSE - 420709 SALARIES & BONUS 181193286 187944239 (Including remuneration to the Directors Rs.1,06,92,070 P.Y. Rs. 2,83,00,000/-) CONTRIBUTION TO PROVISION FUND 3986354 1543054 (Including Rs.2710/- P.Y. Rs. 7200/- to Directors) ESIC 115572 321258 PROJECT MONITORING FEES 5572891 - TENDER FEES 10625330 - SANITARY WORKS 1572311 783864 PILING WORK 5311015 400000 SECURITY SERVICE CHARGES 5414874 6574064 SHUTTERING WORK 44483933 25970440 STAFF WELFARE EXPENSE 25987834 36778946 TOLL PLAZA 3200829 1164163 TRAVELLING EXPENSE 9911606 9348390 VEHICLE HIRE CHARGES 7312227 13815869 WATER PROOFING WORK 9946840 1568471 LOSS ON SALES OF INVESTMENTS 4805661 - PENALTY SLOW PROGRESS 17817 - WBM WORK 551824 334276
54 SCHEDULE 1 TO 8, FORMING PART OF THE PROFIT & LOSS ACCOUNT
For the Year Ended For the Year Ended March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - 6 SITE COST & OTHER EXPENSE
SITE EXPENSE 25601325 UNDER DESK INSULATION 6107362 INTEREST ON INCOME TAX 119379 - BAD DEBTS 2206100 - PROVISON FOR DIMUNITION IN VALUE OF INVESTMENT - 74000 IMPAIREMENT OF FIXED ASSET 6738590 - REPAIRS & MAINTENANCE FOR MACHINERIES 15716097 42222395 ROAD MAINTAINANCE 1636117 1968721 VEHICLE, TRUCKS, TRACTORS & OTHERS 41907916 43064235 AUDITOR REMUNERATION AUDIT FEES 1000000 800000 TAXATION MATTER - 100000 CERTIFICATION WORK 41362 141000 SERVICE TAX - 104502 MISCELLANIOUS EXPENDITURE 23791411 36650232 TOTAL 1226862057 1273169526
SCHEDULE - 7 FINANCIAL EXPENSE
INTEREST ON TERM LOAN 183843002 163811782 OTHER INTEREST 144542323 77544567 BANK CHARGES 43954752 73569379 372340076 314925728 LESS: INTEREST RECEIVED ON BONDS & FIXED DEPOSITS 204754494 27534590 (Tax Deducted at Source Rs. 49,80,925/- P.Y. Rs. 24,34,297/-) TOTAL 167585582 287391138
55 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011
1. SIGNIFICANTACCOUNTING POLICIES A-1. REVENUE RECOGNITION ON CONTRACTS a. All revenues andexpenses are accounted on accrualbasis excepttothe extentstated otherwise. b. Contract Prices are either fixed or subject to price escalation clause. The Revenue is recognized on the basis of percentage of completion method and the stage of completion is determined on the basis of physical completion of proportion ofcontract work. c. Amount due in respect of the price escalation claim and/or variation in contract work approved by the customers are recognized as revenue only when there are conditions stipulated in the contracts for such claims or variations and/orthesameareevidencedinteraliabywayofconfirmationorthesameareacceptedbythecustomers. d. Disputed amount under the contract works are recognized as revenue when the same are settled and amounts arereceived. e. Liquidated damages payable, if any, as per the terms of the contract, for the delays, if any, are accounted only when suchdelayis attributable to theCompany. A-2 EXPENDITUREIN RESPECTOFBUILD, OPERATEANDTRANSFER(B.O.T)PROJECT a. Expenditure (net ofcorresponding interest income earned on deployment or other wise of fund attributable to the projects) incurred on Build, Operate and Transfer (BOT) Project which does not represent Company's own assets is classified as “BOT PROJECT EXPENDITURE” and is amortized / written off based on the projected toll revenue. The projected total revenueis based onthe tollrate &expectedincrease. b. The materials and stores etc. acquired / purchased for the construction activities of owned Build, Operate and Transfer Projects (BOT) are classified / reflected as B.O.T. Projects Expenditure and / or work in progress, as the case may be. Accordinglysuch purchasesare disclosedas itemof B.O.T. Project Expenditure. B. ADVANCESAND PROGRESS PAYMENTSAND RETENSION a. Advancesreceived from customers inrespectofcontractsaretreated asliability. b. Progress payments received are adjusted against receivables from customers in respect of the contract work performed. c. Amount(s) retained by the customers until the satisfactory completion of the contract are recognized in the final statement as receivables. Where such retention has been released by the customers against submission of bank guarantee the amount so released is adjusted against receivables from the customers and value of Bank guaranteesis disclosed ascontingent liabilityunder bank guarantees outstanding. C. FIXEDASSETS a. Fixedassets arestated atcostofacquisition asreduced byaccumulated depreciation. b. Alldirectexpenses attributable to fixed assetsarecapitalized. D. DEPRECIATION a. Depreciation is provided on written downvalue basis as per the rates and method prescribed under Schedule – XIV tothe Companies Act,1956. b. Goodwillis notdepreciated. E. BORROWING COST Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalized as part of the cost of the assets, up to the date the assets are put to use. Other borrowing costs are charged to the profit and lossaccountinthe year in whichtheyare incurred. F. VALUATIONOF INVENTORIES a. RawMaterialsarevalued atlowerofcostandnet realizable value.Costis determined onFIFO basis.
56 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
b. Contract Work in progress is valued at tender rate having regards to unbilled work, outstanding running bills and expected recovery thereof. c. Storesand sparesarewritten offinthe yearof purchase. G. INVESTMENTS Long terms investments are stated at cost. Provision for diminution in the value of investments is made only if such declineis other thantemporary inthe opinion ofthe management. H. PROVISION FOR DOUBTFUL DEBTS /ADVANCES: Provision is made in accounts for doubtful debts / advances which in the opinion of the management are considered doubtfulof recovery. I. CLAIMS, DEMANDSAND CONTINGENCIES Disputed and / or contingent liabilities are either provided for / or disclosed depending on management's judgmentof theoutcome. J. RETIREMENT BENEFITS a. Short Term Employee benefits: Short TermEmployee Benefitsare recognized intheperiod during whichthe serviceshavebeen rendered. b. Long TermEmployee benefits: i. Provident Fund,FamilyPension fund As Per Provident Fund Act 1952 all employees of the Company are entitled to receive benefits under the providentfund and familypension fund whichis defined contribution plan.Thesecontributions are made to theplan administeredand managed by Governmentof India. The Company's contribution to these scheme are recognized as expense in the profit and loss account during the year in which the employee renders the related service,The Company has no further obligation under theseplans beyond its monthlycontribution c. Leave encashment: The Company has provided for the liability at year end on account of un-availed earned leave as per the actuarial valuation. d. Gratuity: The Company provides for gratuity obligations through a Defined benefits retirement plan (“The Gratuity Plan”) covering all employees. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation using the project unit credit method, which recognizes each period of service as giving rise to additional unit of employees benefits entitlement and measure each unit separately to build up final obligation. The obligation is measured at the present value of the estimated cash flows.The discount rate used fordetermining present value of the defined obligation under the defined benefit plan is based on the market yield on Government Securities as at the balance sheet date. Actuarial gains and losses are recognizedin Profitand Loss Accountasand when determined. The Company makes annual contributionto LICfor thegratuity plan inrespectofall theemployees. K. PROVISION FOR CURRENTANDDEFERREDTAX a) Provision for current tax is made based on taxable income for the current accounting year and in accordance withtheprovisions of theIncome tax Act,1961. b). Deferred tax resulting from “timing difference” between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date.The
57 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assetswillbe adjustedin future. L. FOREIGNCURRENCY TRANSACTION Transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction, exchange rate differences resulting from foreign exchange transaction settle during the period including year end transaction of current assets and liabilities are recognized in the profit & loss accounts. Exchange rates differences arising in relation to liabilities incurred for acquisition of fixed assets are adjusted to the carrying valueof thefixedassets. In respectofforward exchangecontract, except in case offixed assets,the difference between forward rate and the exchange rate at the inception of the forward exchange contract is recognized as income / expenses over the life of the contract. M. LEASE a. OPERATINGLEASE Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis inaccordance withrespective leaseagreements. b. FINANCE LEASE Assets acquired under leases where Company has substantially all the risk and rewards of ownership are classified as finance lease. Assets acquired under finance are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased assets at the inception of the lease. Initial costs incurred in connection with the specific leasing activities directly attributable to activities performed by the Companyareincluded aspartof theamountrecognized asan asset underthe lease. N. IMPAIRMENTOFASSET If internal / external indications suggest that an asset of the Company may be impaired, the recoverable amount of asset / cash generating asset is determined on the Balance – Sheet date and if it is less than its carrying amount of the asset / cash generating unit the carrying amount of asset is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such asset / cash generating unit, which is determined by the present value of carrying amount of the estimated future cash flow. O. USEOF ESTIMATES The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumption to be made that affect the reported amount of the assets and liabilities and disclosure ofcontingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the period in which the results are known / materialized. 2. CONTINGENT LIABILITIES NOTPROVIDEDFORIN RESPECTOF: a. Guarantees issued by the Company's banker on behalf of the Company amounting to Rs.17543.18 Lacs (P.Y. Rs. 9733.75 Lacs) b. Guarantee given by the Company to the bankers for the facilities granted to its wholly owned subsidiary companies MSK Projects (Himmatnagar Bypass) Private Limited & MSK Projects (Kim Mandvi Corridor) Private Limited. Amounting to Rs.1667 Lacs (P.Y. Rs. 1667 Lacs) Outstandingamount as on 31st March, 2011 Rs 1267.44 Lacs (Previous Year 1345.75 Lacs) and to integrated joint venture Dewas Bhopal Corridor Limited, amounting to Rs. 38500 Lacs (Previous year Rs. 34500 Lacs) Out standing amount as on 31st March 2011 Rs. 38597.66 Lacs (P.Y Rs. 34831.35 Lacs)
58 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
c. Letterofcredit issued bythe Company's bankon behalfof theCompanyRs.502.05 Lacs(P.Y.Rs. 1353.72 Lacs) d. Income Tax Demandof Rs.1045.79 Lacs(PreviousYear Rs.282.40 Lacs)disputed by theCompany. e. Civil suitfiled againsttheCompanyRs. 38.58Lacs (PreviousyearRs. 23.46 Lacs) 3. Incomplete Contract work under Contract Work In Progress at the various sites is estimated by the management having regardsto unbilledwork,outstanding runningbill and expected recovery thereof. 4. Security Deposits deducted from contract receipt and mobilization advances received against contracts are subjecttoconfirmationand adjustment, ifany,on finalization ofaccount. 5. BUILD,OPERATE& TRANSFER (BOT) PROJECTS: i. The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State IndustrialDevelopment Corporation forexecution of DewasWaterSupply project. In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Water supply charge during the concession period of 32 years (includingtheperiod ofconstruction). The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionateamountofRs.49.43Lacs(P.Y.Rs.388.36Lacs)hasbeenwrittenoffduringtheyear. ii. The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board forexecution of JalandharBus Terminal project. In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 8 years 5months and 2 daysfor Jalandhar BusTerminalProject(includingthe periodofconstruction). The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionateamountofRs.235.15Lacs(P.Y.Rs.320.35Lacs)hasbeenwrittenoffduringtheyear. iii. The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board forexecution of Ludhiana BusTerminal Project. In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 10 years 3months for Ludhiana BusTerminalProject(includingthe periodofconstruction). The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionateamountofRs.172.11Lacs(P.Y.Rs.256.05Lacs) hasbeenwrittenoffduringtheyear. iv. The MSK Infrastructure &Toll Bridge PrivateLimited ('Transferor Company') had obtained the contracton Build, Operate and Transfer (BOT) basis from Madhya Pradesh Road Development Authority for construction of Hoshangabad–Harda–Khandwa Road Project. In Terms of the Contractthe Transferor Company was entitled to collect the toll during the concession period of 5440 days (Including the period of the construction). The Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme ofamalgamation as approved bythe Honorable HighCourtof Gujaraton2nd November, 2006 witheffect from 01.01.2005. The Transferor Company had completed the construction of the above project and was put open to traffic duringtheearlier year. The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as per thescheme ofamalgamation.
59 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs. 241.09 Lacs (P.Y. 356.84 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road DevelopmentAuthority. v. The MSK Highways Limited (“Transferor Company) had obtained the contract on Build, Operate and Transfer (BOT Basis) from Madhya Pradesh Road Development Authority for construction of Raisen–Rahatgarh. In Terms of the Contract the Transferor Company entitled to collect the toll during the concession period of 5440 days (Including the period of the construction).The Transferor Company was amalgamated with MSK Projects (India) Limited pursuant to scheme of amalgamation as approved by the Honorable High Court of Gujarat on 2nd November, 2006with effectfrom01.01.2005. The Transferor Company had completed the construction of the above project and was put open to traffic duringtheearlier year. The Cost of the said project and right to collect the toll charges is transferred to and vested in the Company as per thescheme ofamalgamation. Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs.158.81 Lacs (P.Y. 289.08 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road DevelopmentAuthority. 5-A CHANGEOF POLICYOFAMORTISATION: Hitherto up to 31st March 2010 expenditure incurred on above i to v, Build, Operate & Transfer (BOT) Projects was amortized / written off over the period of concession. The Company has changed the policy and the said BOTexpenditure is amortized / written offonthe basis ofprojected tollrevenue overthe periodofconcession. Had there been on change in the method of amortization the amount of the amortization for the year would have been higher by Rs.688.30 Lacs. Consequently loss for the year would have been higher and Reserves and Surplus wouldhavebeen lower to thatextent. As the policy of amortization is changed prospectively no effect ofchange up to 31st March 2010 is given to the accounts. 6. The Company isoperating in asingle segmentonlyduringtheyear i.e.Civil Construction Contract. 7. During the year, the Company has accounted for deferred tax in accordance with the Accounting Standard 22 – “Accounting forTaxes onIncome” issued bythe Institute ofChartered Accountants ofIndia. The Breakup ofdeferredtax liabilities& assets:
Rs. In Lacs Particulars As On As On 31-03-2011 31-03-2010
Deferred Tax Liabilities Depreciation 1032.81 649.06 Deferred Tax Assets Retirement Benefits 7.28 2.23 Provision for Bad debts 164.39 - 171.67 Net Deferred Tax Liabilities 861.14 646.83 Deferred Tax liabilities provided during the year 214.31 550.94
60 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
8. Disclosurein accordance withAccounting Standard - 7(Revised). Rs. In Lacs Particulars 2010-11 2009-10 Contract Revenue 122447.91 103736.42 Contract Cost Incurred 97506.72 90402.31 Recognized Profits / Losses 9055.09 11836.43 Advances Received 4364.48 7390.33 Retention Money 4359.17 1160.47 Gross Amount due from Customers For Contract Work 9011.49 10101.24
In respect of the construction contracts, the Company follows the percentage of completion method for recognizing profit / loss but no provision is made for contingencies in respect ofcontract in progress, consistent with the practice of the Company. Accounting Standard (AS) 7 on “Accounting for Construction Contracts” issuedbytheinstituteofCharteredAccountantofIndiarequiresthatanappropriateallowancebemadeforfuture unforeseenfactors. IntheopinionoftheCompany,suchaprovisionisnotrequiredandhasnofinancialeffect. 9. Disclosures relating toEmployeeBenefits – Asper RevisedAS-15: Duringtheyear Company hasrecognized thefollowingamount inthe financial statements a. DEFINED CONTRIBUTION PLAN: Contributionto DefinedContributionPlan recognizedas Expenseforthe yearas under:
Rs. In Lacs Particulars Employer Contribution to Provident Fund 39.86 (15.43)
b. DEFINED BENEFITPLAN Reconciliation ofopeningand closing balances of Defined Benefitobligation
Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Defined Benefit obligation at the beginning of the year 27.12 6.58 (13.40) (3.82) Current Service Cost 5.07 58.43 (7.94) (4.43) Interest Cost 2.27 0.55 (1.11) (0.32) Actuarial gain/(loss) 29.00 (43.14) (4.68) (1.99) Benefits Paid NIL NIL (NIL) (NIL) Defined Benefit obligation at the year end 63.47 22.41 (27.12) (6.58)
61 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
Reconciliation of opening and closing balances of fair value of plan Assets Rs. In Lacs Particulars Gratuity (Funded)
Fair value of plan assets in the beginning of the year 32.77 (18.03) Expected return on plan assets 2.62 (2.29) Actuarial gain/(loss) (2.62) (0.99) Employer contribution 0.00 (13.44) Benefits Paid NIL (NIL) Fair Value of plan assets at the end of the year 32.77 (32.77)
Reconciliation of Fair Value of Plan Assets and Benefit Obligation. Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Fair Value of Assets as at 31st March, 2011 32.77 2.76 (32.77) (NIL) Present Value of obligation as at 31st March, 2011 63.48 22.41 (27.12) (6.58) Amount recognized in Profit & Loss Account 36.35 15.84 (12.42) (2.76)
Expenses recognized during the year (Under the head “Salaries & Bonus” – Refer Schedule 6) Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Current Service Cost 5.07 58.43 (7.94) (4.43) Interest Cost 2.28 0.55 (1.11) (0.32) Expected return on Plan Assets (2.62) NIL (2.28) (NIL) Actuarial gain/(loss) 31.62 (43.14) (4.67) (1.99) Expense Recognized in Profit and Loss Account 36.35 15.84 (12.42) (2.76)
62 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
Actuarial Assumptions Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Discount Rate ( Per Annum) 8.28% 8.40% (8.28%) (8.28%) Salary Escalation ( Per Annum) 6.00% 6.00% (6.00%) (6.00%)
10. Transactionwith relatedparties (ascertified by the management)
A. Holding Companies:
- Welspun Corp Limited - Welspun Infratech Limited
B. SubsidiaryCompanies:
- MSK Projects (Himmatnagar Bypass) Private Limited - MSK Projects (Kim Mandvi Corridor) Private Limited - Welspun Energy Maharashtra Private Limited
C. Integrated JointVentures:
- Bul MSK Infrastructure Private Limited - Dewas Bhopal Corridor Limited
D. AssociateConcern:
- Welspun Maxsteel Limited - Welspun Steel Limited - Welspun India Limited - Welspun Retail Limited - Welspun Captive Power Generation Limited
E. Key ManagementPersonnel:
- B.K. Goenka- Chairman - R.R. Mandawewala - M.L. Mittal - Asim Chakraborthy - Ashok M Khurana -Director
Rs. In Lacs Sr. Transaction with Holding Subsidiary Integrated Associate Key Relative of Related Parties Company Companies Joint Company Management Key Venture Management
1 Civil Construction 995.97 1106.50 1708.87 3546.28 - - Receipt ( - ) (1461.90) (11906.92) ( - ) ( - ) ( - ) 2 Miscellaneous Income 440.00 12.26 104.81 - - - ( - ) (1.22 ) ( 13.27 ) ( - ) ( - ) ( - ) 3 Material Purchase 1582.71 - 757.74 ( - ) ( - ) ( - )
63 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
Contd. Rs. In Lacs 4 Loan Received 5726.40 - - - - - ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) 5 Repayment of Loan 5715.00 - 2245.79 - - - Received ( - ) ( - ) (20.00) ( - ) ( - ) ( - ) 6 Loan Given 3.02 241.95 321.95 - - - ( - ) (197.24) (1000.00) ( 5.76) ( - ) ( - ) 7 Repayment of Loan - 51.58 - - - - Given ( - ) (554.63) ( - ) ( 120.82) ( - ) ( - ) 8 Guarantee Given - 1267.44 38500 - - - ( - ) ( 1345.74 ) (34500) ( - ) ( - ) ( - ) 9 Advance for Commer------cial Property Purchase ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) 10 Mobilization advance 1355.54 - - 830.27 - - Received ( - ) ( - ) ( - ) ( - ) ( - ) ( - ) 11 Mobilization advance 1005.54 - - 259.28 - - repaid ( - ) ( - ) (1296.86) ( - ) ( - ) ( - ) 12 Investment in - 2.55 - - - - Shares/Application ( - ) (-) ( - ) ( - ) ( - ) ( - ) 13 Remuneration to the - - - - 106.90 - Directors ( - ) ( - ) ( - ) ( - ) (283.00) ( - ) 14 Sales of Properties ------( - ) ( - ) ( - ) ( - ) (28.83) (41.58 ) 15 Receivable at the end 3.02 3385.50 1899.53 447.84 - - of the year ( - ) (2114.74) (2125.26 ) ( - ) ( - ) ( - ) 16 Payable at the end of 2137.05 - - 731.20 - - the year ( - ) ( - ) ( - ) ( - ) ( - ) ( - )
11. Cash Subsidy of Rs.82.87 Crores (P.Y. 82.87 Crores) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, against the Build, Operate & Transfer Project Expenditure Cost, is not reduced from the relevant projectcost butthesame isshown as“Capital Reserve” inthe BalanceSheet. 12. A.Sundrydebtors include Rs. In Lacs Particulars Closing Balance Maximum Amount out standing during the year Wholly Owned Subsidiary Companies MSK Projects (Kim Mandvi Corridor) Private Limited 3048.76 3048.76 (1964.38) (1971.80) MSK Projects (Himmatnagar Bypass) Pvt. Ltd. 120.09 120.09 (115.19) (115.19) Company Under the Same Management Dewas Bhopal Corridor Limited 1745.97 2856.76 (1017.34) (1017.34) Bull MSK Infrastructure Private Limited 71.41 71.41 (71.41) (91.41)
64 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
13. B. Disclosure of Loans and advances to subsidiaries, associates and others (pursuant to clause 32 of listing agreement) Loans andAdvances Include: Rs. In Lacs Particulars Closing Balance Maximum Amount out standing during the year Wholly Owned subdiary Co. - MSK Projects (Kim Mandvi Corridor) Pvt. Ltd 203.53 203.53 (26.29) (186.82) - MSK Projects (Himmatnagar bypass) P Ltd 13.13 13.13 (8.74) ( 8.74) Company under same management - Bull MSK Infrastructure Private Limited 36.51 36.51 (36.51) (36.51) - Dewas Bhopal Corridor Limited 45.66 1011.95 (1019.94) (1019.94)
14. Earning pershare:- Rs. In Lacs 2010-11 2009-10 A. Net profit after Tax available for equity (3284.84) 2874.76 shareholders. (Rs. In Lacs) B. Weighted average number of Equity Shares of Rs. 10/- 38729233 22821112 each outstanding during the year (Nos. of Shares) C. Basic Earning Per Share (Rs.) (8.48) 12.60 D. Diluted Earning Per Share (Rs.) (8.48) 12.60
15. Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of recovering the dues and accordingly they have been classified as “debt considered good” and therefore no provisionis considerednecessary,there against. 16. Under the Micro, Small and Medium Enterprise Development Act, 2006 (“MSMED Act”) which came into force effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises and remained unpaid after the appointed date etc. of principal and interest amounts are required to be made.The Company is inthe process ofcompilingthe relevant information. Asthe relevant information is not yet readily available and / or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprise in accordance with the provisions of the Act, would not be material andthe same,ifany, wouldbe disclosed inthe yearof paymentof interest. In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act' 2006, the information required under thesaid Actcouldnot be compiled anddisclosed.
65 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE YEAR ENDED 31st MAR'2011 (Contd.)
17. In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilitiesis adequate and not in excess of the amount reasonably necessary. 18. Remuneration to Directors Rs. In Lacs Managing Director / Director Joint Managing Director / Chairman
Salaries 37,78,737 69,13,333 (2,00,00,000) (83,00,000) Contribution to P.F. Nil 2,710 (Nil) (7,200) Total 37,78,737 69,10,623 (2,00,00,000) (83,07,200)
19. Previousyear'sfigureshavebeen regrouped, rearrangedand reclassifiedwherever necessary. 20. Additional information as required by Para 3, 4 and 4-Ato 4-D of Part – II of Schedule VI to the Companies Act, 1956. a. TURNOVER 1. Civil Work/Supply Rs. 2,08,05,55,984 (Rs 3,99,22,98,353) 2. Toll Collection Rs. 27,86,67,496 (Rs.29,84,90,230) b). Value of Indigenous and Imported Material together with percentage of consumption Value Percentage i. Imported Nil Nil (Nil) (Nil) ii. Indigenous. Rs. 1,29,14,87,761 100 (Rs. 2,00,68,70,435) (100) c). C I F Value of Import Rs. -Nil- (Rs. -Nil-) d). Expenditure in Foreign Currency Dividend Rs. Nil (Rs. Nil) e). Earning in Foreign Exchange Rs. -Nil- Rs. -Nil- f). Remittance in Foreign Currency Rs. -Nil- Rs. -Nil- (Figures in brackets indicate corresponding figures of previous year)
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
66 CASH FLOW STATEMENT
2010-11 2009-10
A. CASH-FLOW FROM OPERATIING ACTIVITIES Net (Loss) / Profit before tax & Prior Period items (304144994) 412096199 Depreciation 95995652 113530616 Amortisation of BOT Projects Cost 85658612 161067878 Interest Paid (Net) 167585582 287391138 Profit on sale of fixed assets (1581645) (2118510) Bad Debts 42880428 4286469 Unclaimed Liability written back (4458964) (3577719) Impairment of Fixed Assets 6738590 - Surplus & Deficit 209414 - Provision for Diminution in value of Investment - 74000 Sundry Debit Bal written off 2206100 - Loss on sale of Investment 4805661 - Provision for leave encasement and gratuity 5219019 - Dividend Received (26400) (46643) Operating Profit before Working Capital Changes 101087055 972703428 Adjustment For : Inventories (228908093) (98530691) Trade & Other Receivables (197427727) (246927126) Trade Payable & Provisions 262319718 (238090379) Cash Subsidy - (9270160) (164016102) (592818356) Cash Generated From Operations Before Tax, & Prior Period Items (62929047) 379885072 Less: Direct Taxes (Including FBT) Paid 64560463 75672930 Cash Generated From Operations Before Prior Period Items (127489510) 304212142 Less: Prior Period Income / (Expense) 2907660 (22749605) NET CASH GENERATED/(USED) FROM OPERATING ACTIVITIES (130397170) 326961747
B. CASH FLOW FROM INVESTING ACTIVITIES Purchases of Fixed Assets (34068658) (36092420) Sales of Fixed Assets 13425434 7793082 Investments (1449427435) - BOT Expenditure incurred during the year (78125055) (6479018) Dividend Received 26400 46643 NET CASH USED IN INVESTING ACTIVITIES (1548169315) (34731713)
C. CASH FLOW FROM FINANCING ACTIVITIES Borrowings (Net) 1140700 104501507 Repayment during the year (338265623) - Issue of shares on Preferential basis 2113003224 - Dividend Paid (Including tax thereon) (46643600) (26699560) Interest Paid (Net) (165379014) (287391138) NET CASH FROM FINANCING ACTIVITIES 1563855687 (209589191) Net Changes In Cash & Cash Equivalents (A+B+C) (114710797) 82640843 Cash & Cash Equivalent - Opening Balance 515120015 432479172 400409218 515120015 Cash & Cash Equivalent - Closing Balance 400409218 515120015
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
67 Balance Sheet Abstract & Company's General Business Profile (Pursuant to the provision of Part IV of Schedule VI to the Companies Act, 1956)
I. Registration Details
Registration No. 2 3 9 2 0 State Code 0 4
Balance Sheet Date 3 1 0 3 2 0 1 1 Date Month YEAR
II. Capital Raised during the year ( Amount Rs. In thousand)
Public Issue N I L Right Issue N I L Bonus Issue N I L Private Placement 1 7 1 7 8 8 Other (Conversion of FCCB) N I L
III. Position of Mobilisation and Deployment of Funds (Amont Rs. In Thousand)
Total Liabilities 7 0 8 6 5 3 0 Total Assets 7 0 8 6 5 3 0
Sources Of Fund
Paid Up Capital 4 0 0 0 0 0 Reserves and Surplus 4 3 7 5 3 9 8
Share Application Money N I L Secured Loans 2 2 2 3 8 7 7
Unsecured Loan 1 1 4 1 Deferred Tax Liability 8 6 1 1 5
Application
Net Fixed Assets 5 0 8 7 5 4 Investment 2 0 7 5 4 7 1
Net Current Assets 1 8 4 0 8 3 0 BOT Assets 2 6 6 1 4 7 4
Accumulated Losses N I L Misc. Expenditure N I L
IV. Performance of Company (Amount Rs. In thousand)
Turnover 2 3 4 9 3 2 0 Total Expenditure 2 8 6 7 5 9 0
Profit / Loss before Tax (3 0 7 0 5 3) Profit/Loss after Tax (3 2 8 4 8 5)
Earning per share (Rs.) (Basic) (8 . 4 8) Divident Rate (%) N I L
Earning per share (Rs.) (Diluted) N I L
V. Generic Names of The Principal Product of the Company Item Code Product Description Not Applicable Construction Activity
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Date : 26-05-2011
68 AUDITORS' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS TO THE BOARD OF DIRECTORS OF WELSPUN PROJECTS LIMITED (Formerly Known as MSK Projects (India) Ltd)
1. We have audited the attached Consolidated Balance Sheet of Welspun Projects Limited (Formerly known as MSK Projects (India) Ltd), its Subsidiarie s and Joint Ventures, as at 31 st March 2011 and also the consolidated Profit and Loss Account and the consolidated Cash Flow Statement for the year ended on that date annexed there to. These financial statements are the responsibilities of the Company's management. Our responsibility is to express anopinion on thesefinancialstatements basedon ouraudit.
2. We conducted ouraudit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audi t to obtain reasonable assurance about whether the financial statements are free of material misstatement, and audit includes examining on a test basi s, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonablebasisforouropinion.
3. We did not audit the financial statements of two Subsidiaries and One Joint Venture whose financial statements reflected total assets of Rs.653.10 Crores as at March 31st 2011 and total revenue of Rs.56.32 Crores and net cash inflow from operatingactivities amounting to Rs.-1.02 Crores for the year then ended.These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us and ouropinion is based solelyon thereportofthe otherauditors.
4. The financial statements of Bul-Msk Infrastructure Private Limited , a Joint Venture, and Welspun Energy Maharashtra Private Limited, a Subsidia ry Company have been consolidated based on the management estimate and therefore un-audited. These financial statements reflect, the total assets of Rs.7.00 Crores as at March 31st 2011 and total revenue of Rs.2.87 Crores, and net cash inflow from operating activities amounting to Rs.1.12 Crores for the year then ended
5. Subjectto non compliance withthespecified accounting standards relatingto :-
a). Disclosure of Cash Subsidy amounting to Rs.126.54 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited and Gujarat State Road Development Corporation against BOT Projects under the head 'Reserve & Surplus' instead ofdeducting the same from the Project Cost as required by theAccountingStandard –12 “Accountingfor Government Grants” (SeeNote No.10)
We report that the consolidated financial statements have been prepared by the Welspun Projects Limited's management in accordance with the requirements of Accounting standard (AS) 21 Consolidated Financial Statements and Accounting Standard (AS) 27, Financial Reporting of Interest in Joint Ventures,issued by theInstitute of Chartered Accountants of India.
6. Based on our audit and on the consideration of the reports of other auditors on separate financial statements of the Subsidiary Companies , and Joint Ventures, andto thebestofourinformation andaccordingtothe explanationsgivento us,subjectto ourcommentsin :-
Paragraph 5 relating to Disclosure of Cash Subsidy amounting to Rs.126.54 Crores received from Madhya Pradesh Rajya Setu Nirman Nigam Limited and Gujarat State Road Development Corporation against BOT Projects under the head 'Reserves& Surplus' instead of deducting the same from the Project Cost (SeeNote No.10).
We are of the opinion that attached consolidated financial statements give true and fare view in conformity with the accounting principal generally accepted inIndia.
i). In the caseof the consolidated BalanceSheet,of the stateofaffairsof the Welspun Projects Limited,as at31 stMarch 2011.
ii). In case of theconsolidatedprofit& lossAccount,of the Loss of Welspun Projects Limited for the yearended onthatdate and
iii). In the caseof the consolidated Cash Flowstatement, ofthe cash flows for the yearended onthatdate.
FOR Chandrakant & Sevantilal & J. K. Shah & Co. Firm Registration No.101676W Chartered Accountants
Place: Vadodara Date: 26/05/2011 (H. B. Shah) Partner Membership No.16642
69 CONSOLIDATED BALANCE SHEET AS ON 31st MARCH’ 2011
As at As at Schedules March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SOURCES OF FUNDS SHARE HOLDERS' FUNDS SHARE CAPITAL A 400000000 228211120 RESERVES & SURPLUS B 4714671692 3000028871 5114671692 3228239991
MINORITY INTEREST 245000 -
LOAN FUNDS SECURED LOAN C 4314659778 4096943042 UN-SECURED LOAN D 1140700 58313859 4315800478 4155256901
DEFERRED TAX LIABILITY 67090196 64683000
TOTAL (Rs.) 9497807365 7448179892 APPLICATION OF FUNDS FIXED ASSETS GROSS BLOCK E 1272843040 1271119586 LESS : DEPRECIATION 493648366 412521643 779194674 858597943 REALISABLE VALUE OF IMPAIRED ASSETS 800000 - NET BLOCK 779994674 858597943
BUILD, OPERATE AND TRANSFER PROJECTS EXPENDITURE F
AS PER LAST YEAR BALANCE SHEET 5334250736 4338901035 COST INCURRED DURING THE YEAR 742367212 1173209783 6076617948 5512110818 LESS: DEDUCTION / WRITTEN OFF DURING THE YEAR 52263051 3783017 LESS: AMORTISATION DURING THE YEAR 160620239 174077065 212883289 177860082 5863734659 5334250736
INVESTMENTS G 1446665345 2130311 CURRENT ASSETS, LOANS & ADVANCES INVENTORIES H 556938132 328030039 SUNDRY DEBTORS I 954049544 858877400 CASH & BANK BALANCES J 491143056 535534872 LOANS & ADVANCES K 435839068 323108559 2437969801 2045550870 LESS : CURRENT LIABILITIES & PROVISIONS LIABILITIES L 1021918480 743175123 PROVISION M 9572701 50168002 1031491181 793343125 NET CURRENT ASSETS 1406478621 1252207745
MISCELLANIOUS EXPENDITURE N 934066 993157 (to the extent not written off or adjusted)
TOTAL (Rs.) 9497807365 7448179892 ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 8
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
70 CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH’ 2011
Year ended Year ended Schedules March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
INCOME CONTRACT RECEIPTS, SUPPLY & OPERATING INCOME 1 1781236824 3288241374 TOLL COLLECTION 2 605762767 327960881 OTHER INCOME 3 8618993 8765942 2395618584 3624968197 CHANGE IN WORK-IN-PROGRESS 4 214124274 41860292 TOTAL Rs. 2609742858 3666828489 EXPENDITURE MATERIALS CONSUMED 5 1291601069 2006893275 SITE COST & OTHER EXPENSES 6 1265768404 1281010660 FINANCE & BANK CHARGES (NET) 7 386010871 295642909
EXPENDITURE ON BUILD, OPERATE & TRANSFER CONTRACT WRITTEN OFF 160620239 174077065 DEPRECIATION 96517753 113540997 PRELIMINARY EXPENSES WRITTEN OFF 97544 4117 3200615881 3871169023 (590873023) (204340534) Less : Cost incurred for owned BOT Project transferred to Balance Sheet - 6479018 “Less : Material Cost and Site expenses pertaining to bills raised to subsidiaries & joint venture companies" 281537083 555914643 281537083 (562393661) PROFIT / (LOSS) BEFORE PRIOR PERIOD INCOME / EXPENDITURE (309335940) 358053127 PRIOR PERIOD ITEM (NET) 2898351 (22759604) PROFIT / (LOSS) AFTER PRIOR PERIOD INCOME / EXPENDITURE (312234290) 380812731
PROVISION FOR TAXATION CURRENT TAX 980950 92500000 INCOME TAX FOR EARLIER YEAR 49087 - FRINGE BENEFIT TAX - (224094) DEFERRED TAX 2407196 55094000 3437233 147369906 - PROFIT / (LOSS) AFTER TAXATION (315671523) 233442825 BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR 794073457 607428632 PROFIT AVAILABLE FOR APPROPRIATION 478401933 840871457 PROPOSED DIVIDEND - 40000000 TAX ON DIVIDEND - 6798000 - 46798000 BALANCE CARRIED TO BALANCE SHEET 478401933 794073457 EARNING PER SHARE - (IN RUPEES) BASIC & DILUTED -8.15 10.23
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS 8
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
71 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at As at March 31, 2011 March 31, 2010 (Amount in Rs.) (Amount in Rs.)
SCHEDULE - A SHARE CAPITAL
AUTHORISED CAPITAL 41,00,00,000 (PREVIOUS YEAR 2,50,00,000) EQUITY SHARES OF RS. 10/- EACH 410000000 250000000 ISSUED, SUBSCRIBED, AND PAID UP CAPITAL * 4,00,00,000 (PREVIOUS YEAR 2,28,21,112) EQUITY SHARES Rs. 10/- EACH FULLY PAID UP 400000000 228211120 TOTAL 400000000 228211120 NOTES * OUT OF THE ABOVE SHARES: 1 1874331 Shares are allotted as fully paid up without payment being received in cash in earlier Year 2 720897 Shares are allotted as fully paid up by way of bonus shares in during the year 1996-97 3 1454645 Shares are allotted as fully paid up by way of bonus shares in during the year 1998-99 4 1235547 Shares are allotted as fully paid up by way of bonus shares in during the year 2000-01 5 250000 Shares are issued on preferential basis during the year 2005-06 6 1399566 Shares are issued on conversion of foreign currency convertible bonds during the year 2006-07 7 2353768 Shares are issued on conversion of foreign currency convertible bonds during the year 2007-08 8 4450000 Shares are issued on preferential basis during the year 2007-08 9 17178888 Shares are issued on preferential basis during the year 2010-11 30917642
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - B RESERVES & SURPLUS
RESERVES & SURPLUS CAPITAL RESERVE CASH SUBSIDY Received from Madhya Pradesh Rajya Setu Nirman Nigam Ltd against BOT Projects As per last year Balance Sheet 828729840 405000000 1233729840 838000000 230373000 1068373000 Less: Written off during the year - - - 9270160 - 9270160 828729840 405000000 1233729840 828729840 230373000 1059102840 Add: Received during the last year - - - 85527000 85527000 828729840 405000000 1233729840 828729840 315900000 1144629840 Received from Guajarat State Road Develeopment Corporation against BOT Project As per last year Balance Sheet 31650000 - 31650000 31650000 - 31650000 860379840 405000000 1265379840 860379840 315900000 1176279840 AMALGAMATION RESERVES As per last year Balance Sheet 52112583 - 52112583 52112583 - 52112583 GENERAL RESERVES As per last year Balance Sheet 32177549 - 32177549 32177549 - 32177549 SECURITIES PREMIUM As per last year Balance Sheet 945385442 - 945385442 945385442 - 945385442 On issue of shares on preferential basis during the year 1941214344 - 1941214344 - - - 2886599786 - 2886599786 945385442 - 945385442 PROFIT & LOSS ACCOUNT Balance as per annexed account 470732524 7669409 478401933 793632130 441327 794073457 TOTAL (1+2+3+4) 4302002282 412669409 4714671692 2683687544 316341327 3000028871
72 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - C SECURED LOANS
TERM LOAN FOR EQUIPMENTS & VEHICLES
FROM CORPORATION BANK - BARODA 25214141 - 25214141 51905370 51905370
Secured by hypothecation of the relevant plant & machineries, equipments, vehicles & the personal guarantee by the some of the directors of the Company.
(Repayable Within Year Rs. 1,99,24,000/- Previous Year Rs. 1,99,24,000/-)
FROM KOTAK MAHINDRA BANK LIMITED 6833956 - 6833956 16008922 16008922
Secured by hypothecation of relevant Plant & Machineries & Vehicles & Personal guarantee of the some of the Directors of the Company
(Repayable Within Year Rs. 67,48,003/- Previous Year Rs. 92,52,000/-)
FROM HDFC BANK LIMITED 8418467 - 8418467 27240669 27240669
Secured by hypothecation of relevant Vehicles, Plant & machineries and personal guarantee of the some of the directors of the Company
(Repayable Within Year Rs. 51,86,237/- Previous Year Rs. 1,47,92,000/-)
FROM TATA CAPITAL LIMITED 5565318 - 5565318 24059648 24059648
Secured by hypothecation of relevant Plant & machineries & personal guarantee of some of the Directors of the Company
(Repayable Within Year Rs. 53,10,490/- Previous Year Rs. 1,85,35,000/-)
FROM AXIS BANK 1970501 - 1970501 4252221 4252221
Secured by hypothecation of relavant Plant & machineries & personal guarantee of some of the Directors of the Company
(Repayable Within Year Rs. 11,35,371/- Previous Year Rs. 15,79,000/-)
FROM TATA MOTOR FINANCE LIMITED 987348 - 987348 11232218 11232218
Secured by hypothecation of relavant Plant & machineries & personal guarantee of some of the Directors of the Company
(Repayable Within Year Rs. 9,87,348/- Previous Year Rs. 1,03,37,000/-)
FROM SREI INFRASTRUCTURE FINANCE LIMITED 3697547 - 3697547 53899494 53899494
Secured by hypothecation of relavant Plant & machineries & personal guarantee of some of the Directors of the Company
(Repayable Within Year Rs. 17,96,460/- Previous Year Rs. 4,69,98,000/-)
TOTAL (A) 52687278 - 52687278 188598542 0 188598542
73 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - C SECURED LOANS
TERM LOAN FOR PROJECTS FROM DENA BANK 259625597 - 259625597 305228916 305228916 (REPAYABLE WITHIN YEAR RS.4,44,00,000/- PREVIOUS YEAR RS.4,44,00,000/- ) The above Loans are Secured by: - A first mortgage and charged on all the Company's capital assets, specific & pertaining to the Hoshangabad- Harda-Khandwa Projects only both present and futures - A first Charge on all the revenues / receivable of Hoshangabad-Harda - Khandwa project account of the Company - A First charge on all the intangible assets of the Company including but no limited to Goodwill of the Co - A first charge on bank accounts for the specific project including without limitation the trust and retention account (RTA) / Escrow Account and Debt Service Reserve Account to be established by the Company - A First charge/assignment/security on the Company right under the concession agreement, project document, contract and all licence permits approvals concerts and insurance policies in respect of the project FROM STATE BANK OF INDIA - COMMERCIAL BRANCH - INDORE 24153378 - 24153378 28207743 28207743 (REPAYABLE WITHIN YEAR RS.56,04,000/- PREVIOUS YEAR RS.47,00,000/- ) The above loan is secured by: - Secured by on the assignment of Project right. Movable and Immovable property intangible assets for Himmatnagar bypass projects - First charge on Company's bank account for the Himmatnagar project and revenue and receivable and project account of the Company - Personal guarantee of the some of the directors of the Company FROM STATE BANK OF INDIA - COMMERCIAL BRANCH - INDORE 102590785 0 102590785 106366749 106366749 (REPAYABLE WITHIN YEAR RS.60,00,000/- PREVIOUS YEAR RS. 69,00,000/-) The above loan is secured by: - Secured by on the assignment of Project right. Movable and Immovable property intangible assets for Kim Mandvi Corridor bypass projects - First charge on Company's bank account for the Kim Mandvi project and revenue and receivable and project account of the Company - Personal guarantee of the some of the directors of the Company FROM HDFC BANK LTD - - - 83549 83549 Secured by hypothecation of relavant Vehicles, Plant & machineries and personal guarantee of the some of the directors of the Company (REPAYABLE WITHIN YEAR RS.-NIL- PREVIOUS YEAR RS. 83,549/-) FROM PUNJAB NATIONAL BANK - 500793980 500793980 390000000 390000000 FROM STATE BANK OF BIKANAR AND JAIPUR - 150348770 150348770 117000000 117000000 FROM STATE BANK OF INDIA - 500753069 500753069 390000000 390000000 FROM STATE BANK OF INDORE - 75111311 75111311 58500000 58500000
74 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - C SECURED LOANS
FROM STATE BANK OF TRAVANCOR - 250475512 250475512 195000000 195000000
FROM DENA BANK - 250411409 250411409 195000000 195000000
INTEREST ACCRUED BUT NOT DUES - 201989414 201989414 12839122 12839122
- Secured by 1st Pari-Passu Charge with other Term Lenders
- (All Rights including step - in - charge of the project covered by Tripartita agreement with -Madhya Pradesh Road Development Corporation Limited).
- First Charge on assignment of Toll Collection rights along with Escrow on Future Toll Collection.
- Hypothecation of all movables, tangible and intangible receivable Cash and Investment & monies laying in trust & retention accounts.
- Further secured by personal guarantee of directors & Corporate Guarantee of Welspun Projects Limited & Chetak Enterprises Limited.
- Charge on debt services reserves accounts.
(Installment due within one Year Rs.9,99,99,333/- Previous year Rs.1,15,97,000/-)
FROM STATE BANK OF INDIA - COMMERCIAL BRANCH - INDORE - 34155195 34155195 41803298 41803298
The above loan is secured by:
- Secured by on the assignment of Project right. Movable and Immovable property intabgible assets for BUL-MSK Infrastrcture P Ltd
(REPAYABLE WITHIN YEAR RS.28,00,000/- PREVIOUS YEAR RS.1,54,00,000/-)
FROM CORPORATION BANK 269878003 - 269878003 300574761 300574761
The above Loan is Secured By:
- First Mortgage & charge on all the movable & immovable properties of the Raisen - Rahathgarh BOT Projects including all receivable both and present and future.
- Assignment of all rights, title and Interest of the Company in respect of all the assets of the projects, all Projects agreement and Contracts including Concession Agreement.
- Assignment of contractors guarnatees, performance bond and liquidated damages
- Personal Guarantees of some of the Directors of the Transferors Company.
(Installment due within one Year Rs.3,36,00,000/- Previous year Rs.3,36,00,000/-)
FROM PUNJAB NATIONAL BANK 92646507 - 92646507 125947741 125947741
(Secured by Ludhiana & Jalandhar Bus Terminal Projects, and Personal guarantee of some of the directors of the Company).
(Installment due within one Year Rs.3,61,80,000/- Previous year Rs.3,61,80,000/-)
75 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - C SECURED LOANS
FROM INDUSTRIAL DEVELOPMENT FINANCE CO. LIMITED 554524973 - 554524973 572792654 572792654 INTEREST ACCRUED & DUES 2691962 - 2691962 2442242 2442242 - Secured by way of mortgage in favour of IDFC of all movable properties pertaining to the Dewas Water Supply Projects Presents, futures. - a first charge by ways of the hypothecation of the all movables including movables plant machinery, machinery spares, tools, & accessories, furniture & fixture, vehicles and all other movable assets pertaining to the project present & future. - First charge of all the book debts, operating, Cash Flows, revenue, receivables of the Company pertaining to the Dewas Water Supply project, present & Future. - Assignment of all rights, title and Interest of the Company in respect of all the assets of the Dewas Water Supply Projects agreement and Contracts including Concession Agreement. - First Charge over the Escrow Account. Debt Service Reserve Account and other Reserve and any Other reserves and any other banks account the Company wherever maintained. - Personal Guarantee of the Directors of the Company/ (Installment due within one Year Rs.2,63,25,000/- Previous year Rs.1,17,00,000/-) TOTAL (B) 1306111205 1964038658 3270149863 1441560806 1400225969 2841786775 OTHER LOAN FROM CORPORATION BANK SHORT DEMAND LOAN 13068785 - 13068785 139765340 139765340 (Secured by fixed deposits of the Company and third Parties) OVERDRAFT ACCOUNT 458378706 - 458378706 376430627 376430627 (Secured by hypothecation of the entire stocks & book debts of the Company & personal guarantee of some of the directors of the Company). FROM IDBI BANK LIMITED 365262779 - 365262779 341125151 341125151 (Secured by pari passu charge on all current assets of the company) FROM BANK OF INDIA - 201103665 201103665 (Secured by specific plant & machineries and second charge on current assets of the Company) OVERDRAFT ACCOUNT 155112367 - 155112367 8132942 8132942 - Secured by the 10% Cash Margin in the form of TDR - Pledge of the shares of the promoters in favour of the Bank for Rs. 50 Lacs TOTAL (C) 991822637 - 991822637 1066557725 - 1066557725 TOTAL (A) + (B) + (C) 2350621119 1964038658 4314659778 2696717073 1400225969 4096943042
SCHEDULE - D UN-SECURED LOANS
FROM COMPANIES 1140700 - 1140700 - 39426489 39426489 FROM OTHERS - - - 18887370 - 18887370 Total 1140700 - 1140700 18887370 39426489 58313859
76 8 3 2 2 2 4 5 2 1 3 3 0 6 9 7 7 9 4 8 3 2 4 4 2 0 8 9 4 0 5 1 5 7 0 9 9 5 1 7 6 0 5 1 9 4 0 9 0 7 1 0 n 0 4 9 5 0 6 7 8 9 9 3 4 2 o / 9 9 5 7 7 3 0 5 2 5 0 3 s 3 4 1 1 1 3 2 2 8 5 4 A / 6 1 5 9 5 2 K 1 2 1 8 3 C 3 O L B 3 2 8 8 3 1 5 3 8 8 4 4 7 4 T 4 9 1 3 8 9 5 3 5 6 7 3 0 7 1 E 9 5 5 4 5 4 7 1 8 8 6 5 9 6 1 N 7 1 7 8 9 0 6 4 1 6 4 5 1 4 0 n 9 0 1 3 1 2 8 1 1 5 9 1 1 9 2 o 5 / 7 0 2 7 9 0 5 8 9 1 4 8 1 s 8 3 1 1 4 2 2 5 5 4 9 3 6 9 A / 5 4 1 6 7 6 7 7 1 8 1 2 7 2 7 3 - - - 2 3 3 0 0 6 1 6 3 3 6 1 3 1 5 3 3 6 1 4 5 4 6 1 7 5 3 7 1 3 1 7 0 6 3 0 n 7 6 3 1 9 8 4 4 1 1 8 2 o 0 6 0 3 3 4 1 4 4 2 4 / s 8 1 8 3 6 6 6 4 8 5 6 3 1 2 4 7 3 3 8 4 2 3 A / 9 9 4 3 1 9 1 4 1 2 4 4 3 ------2 2 3 9 2 4 1 1 9 1 d 4 9 7 1 9 o n i 8 1 3 8 1 r o 1 9 9 9 9 i e t 9 3 3 9 3 P c 8 5 2 2 5 u g 1 1 1 d n i e r N D u O D I T A I C - - - 7 4 9 5 1 5 9 3 4 0 1 4 E 9 5 3 3 8 9 0 5 7 7 3 6 d R 9 2 3 5 8 6 2 7 4 2 6 8 o P 0 i 8 8 6 9 3 7 9 6 8 6 E n r 4 4 4 0 0 3 1 5 7 1 3 o e D 5 i 9 1 5 5 5 0 4 5 8 P t 3 1 6 5 1 6 6 i 1 g 9 4 2 9 2 d 1 n d i r A u D - - - 4 9 1 8 1 4 1 7 9 4 8 4 5 4 5 2 4 9 9 7 4 9 0 9 2 8 6 5 6 7 1 7 6 5 1 6 n 8 7 3 8 1 0 1 9 1 1 0 5 1 3 9 9 2 9 0 7 2 0 o 2 7 1 1 2 7 5 6 7 7 5 0 / s 7 1 2 3 2 2 5 2 2 4 4 A 0 7 1 0 1 2 / 3 4 2 4 1 1 4 8 8 2 1 0 0 5 0 3 0 0 9 6 8 6 4 9 3 9 2 3 6 3 4 7 4 8 1 8 8 6 5 0 5 8 2 9 1 0 0 2 5 1 5 6 3 1 4 9 1 2 2 4 3 0 3 9 0 n 2 5 3 0 8 1 4 5 5 1 4 4 6 1 2 o 7 9 3 7 1 6 0 2 6 5 8 8 8 1 / 2 4 6 1 2 1 7 7 1 5 2 2 1 1 s 3 1 6 3 1 1 7 7 1 7 A / 2 2 5 2 2 2 2 1 1 1 1 3 ------4 7 7 6 1 1 2 2 1 1 d 0 2 2 5 7 o n 3 i 5 5 7 7 r o 9 0 0 8 1 i e 5 8 8 2 5 t P c 4 4 4 7 7 u 1 3 3 2 g d n T K i e r C E D u E O L D H B S S S E - O C 0 0 0 9 7 5 2 9 2 1 1 7 6 R 4 0 0 4 6 3 9 4 7 8 8 7 7 N d 1 0 3 2 9 7 5 0 4 6 G 6 1 6 o A 7 9 5 9 2 0 3 5 6 8 8 9 i 3 n r L 6 4 7 4 7 4 7 3 4 2 2 1 8 o e 5 4 5 8 6 4 3 7 5 5 8 8 i A P t 3 1 2 4 6 6 1 6 i B 1 3 3 1 5 g d 1 n d E i r A H u T D F O 3 T 3 1 2 1 2 6 1 3 6 9 3 3 8 0 2 9 3 9 4 1 8 4 8 4 9 5 1 6 R 1 9 9 5 7 3 5 8 5 2 5 2 2 9 8 t n A 0 8 6 1 8 0 9 9 2 9 8 1 9 2 7 n o P 2 2 4 0 0 7 1 3 8 6 1 2 7 9 0 e / s 8 9 7 7 0 1 0 1 9 3 1 3 8 9 4 8 m G A 1 1 1 1 9 7 1 5 7 1 6 3 4 / r 2 1 i 7 1 7 2 2 6 1 N 1 a 2 2 2 5 2 I 2 1 p 1 1 M m R i R A f T E N o O Y N t O F I E n E , T * u H A M S 8 S S o T P E D T c E I I I s R c D E L G t U R a T S U e N O E N Q S I T s N S n R E N s R X A A E E o I I N A N , U F N s H D M O t D d O C E P O C N I & n I I e S A X T L L e D T I x U E R I i L L C O E F M I I E R m F Q D S T G S t U I T E U s R E & W W N L R N - - U T I L A u E I A T A O T j P L L D D C T D C S E - C I D N I d E I N L A A - Y O O I N M a F P R T T H N - A E R F O O S I E U s A L O O U O O A L E e L G G B P C A V C T C T F O U L U d O U I u l D D V c E E E n . r I H R 1 0 H S C 3 1 2 4 5 P 6 7 8 1 * 9 1 C S S
77 78
SCHEDULE - A TO N, AND 8, FORMING PART OF THE BALANCE SHEET
SCHEDULE - F BUILD, OPERATE & TRANSFER PROJECTS EXPENDITURE
CONSOLIDATED WITH SUBSIDIARIES CONSOLIDATED WITH JOINT VENTURES TOTAL Fixed Assets As at Incurred As at As at Incurred As at As at Incurred As at 01/04/2010 During the Year 31/03/2011 01/04/2010 During the Year 31/03/2011 01/04/2010 During the Year 31/03/2011
BALANCE AS PER LAST YEAR 2718556552 - 2718556552 2177128670 - 2177128670 5334250736 - 5334250736
INCREASE IN SHARES OF JOINT VENTURE - - - - 382282952 382282952 382282952 382282952
PAYMENT TO EPC CONTRACTORS - 110649669 110649669 - 166487920 166487920 - 277137589 277137589
MATERIAL CONSUMED - 63791436 63791436 - - - - 63791436 63791436
SITE COST & OTHER EXPENSE - 14774952 14774952 - 9800091 9800090 - 24575042 24575042
UTILITIES SHIFITNG (NET) - - - - (19620650) (19620650) - (19620650) (19620650)
FINANCE CHARGES (NET OF INTEREST RECEIVED) - 6792920 6792920 - 18868410 18868410 - 25661330 25661330
TOLL COLLECTION - - - - (11460487) (11460487) - -11460487 (11460487)
TOTAL 2718556552 196008977 2914565529 2177128670 546358236 2723486906 5334250736 742367212 6076617948
LESS: DEDU AR - - 52263051 - - - - - 52263051
LESS: WRITTEN OFF DURING THE YEAR - - 101059572 - - 59560667 - - 160620239
CLOSING BALANCE 2718556552 196008977 2761242906 2177128670 546358236 2663926240 5334250736 742367212 5863734659 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - G INVESTMENTS
INVESTMENT IN SHARES (NON TRADE) QUOTED, TRADE 7400 (P.Y. 7400) Equity Shares in Minar Trading Services Ltd of Rs. 10/- each fully paid up. 74000 74000 74000 - 74000 1500 (P.Y. 1500) Equity Shares in Sarv Shakti Synthetics Limited of Rs. 10/- each fully Paid up 15000 - 15000 15000 - 15000 1600 (P.Y. 1600) Equity Shares in Corporation Bank of Rs. 10/- each fully Paid Up 128000 - 128000 128000 - 128000 30000 (P.Y. 30000) Equity Shares in Myraj Consultancy Limited of Rs. 10/- each fully paid up 300000 - 300000 300000 - 300000 517000 - 517000 517000 - 517000 Less: Provision for Diminution in Value of Investment 74000 - 74000 74000 - 74000 443000 - 443000 443000 - 443000 (Market Value Rs. 10,20,800/- P.Y. Rs. 7,69,600/-) UNQUOTED, TRADE OTHERS 500 (P.Y. 500) Equity shares in MSK Finance Limited of Rs. 100/- each fully paid up 50000 - 50000 50000 - 50000 48 (P.Y. 48) Equity shares in Nutan Nagrik Sahakari Bank Limited of Rs. 100/- each fully paid up. 4800 - 4800 4800 - 4800 37652 (P.Y. 37652) Equity shares in Baroda Peoples Co-Op. Bank Limited of Rs.10/- each fully paid up 376521 - 376521 376521 - 376521 63 (P.Y. 63) Equity shares in Baroda City Co-Op. Bank Limited of Rs. 50/- each fully paid up 3150 - 3150 3150 - 3150 1000 (P.Y. 1000) Equity shares in Classic Organisors Private Ltd of Rs. 10/- each fully paid up 10000 - 10000 10000 - 10000 960 (P.Y. 960) Equity shares in Sindh Mechantile Co-Op. Bank Ltd of Rs.10/- each fully paid up 9600 - 9600 9600 - 9600 23274 (P.Y. 23274) Equtity shares of Yash Fincon Private Limited - - - 232740 - 232740 6000 (P.Y. -Nil) 8% Redemeble Preferntial Shares Worli Relaity P Ltd of Rs. 10/- each fully paid up. 60000 - 60000 - - - INVESTMENT IN BONDS 178 ( P.Y. Nil) Bonds of IFCI - 2030 @9.70% of Rs. 1000000 each fully paid up 183340000 - 183340000 - - - 500 ( P.Y. Nil) Bonds of IDBI - 2030 @9.65% of Rs. 1000000 each fully paid up 514900000 - 514900000 - - - 257 ( P.Y. Nil) Bonds of West Bengal Electricity Distco Ltd - 2025 @9.34% of Rs. 1000000 each fully paid up. 263792500 - 263792500 - - - INVESTMENT IN NON - CONVERTIBLE DEBENTURES 1260 ( P.Y. Nil) Bonds of DHFCL 2015 10% of Rs. 100000 each fully paid up 127802304 - 127802304 - - - 590 ( P.Y. Nil) Bonds of DHFCL 2020 10.40 % of Rs. 100000 each fully paid up 59857220 - 59857220 - - - INVESTMENT IN CERTIFICATE OF DEPOSITS 1500 ( P.Y. Nil) NCD of CBI Rs. 100000/- each fully paid up 146586600 - 146586600 - - - 1500 ( P.Y. Nil) NCD of PNB Rs. 100000/- each fully paid up 147429150 - 147429150 - - - INVESTMENT IN GOVERNMENT SECURITY Indira Vikash Patra 500 - 500 500 - 500 Two (P.Y. One) Bonds of Sardar Sarovar Narmada Nigam Limited 2000000 - 2000000 1000000 - 1000000 TOTAL 1446665345 - 1446665345 1687311 - 2130311
79 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - H CURRENT ASSETS, LOAN & ADVACNES
INVENTORIES (As taken valued and certified by the management) WORK-IN-PROGRESS 416187464 - 416187464 202063190 - 202063190 RAW MATERIAL 140750668 - 140750668 125966849 - 125966849 TOTAL 556938132 - 556938132 328030039 - 328030039
SCHEDULE - I CURRENT ASSETS, LOAN & ADVANCES
SUNDRY DEBTORS (UNSECURED CONSIDERED GOOD) DEBT EXCEEDING SIX MONTHS 91948122 (3570651) (3570651) 7465705 - 7465705 LESS: PROVISION FOR DOUBTFUL DEBTS 25633372 - - - - 66314750 - 66314750 7465705 - 7465705 OTHERS DEBTS 988766641 960287060 (108875365) 851411695 (Including Retention amount Rs.51,83,42,508/- ) LESS: PROVISION FOR DOUBTFUL DEBTS 8012746 - - - 980753895 (89448450) 891305445 960287060 (108875365) 851411695 TOTAL 1047068646 -93019101 954049544 967752765 -108875365 858877400
SCHEDULE - J CASH & BANK BALANCES
CASH - ON - HAND 7873396 2183243 10056639 7380583 363436 7744019 BALANCES WITH SCHEDULED BANKS IN CURRENT ACCOUNTS 282626367 63912934 346539301 224551568 13582797 238134365 IN FIXED DEPOSITS ACCOUNT 133422517 1124599 134547116 288856988 799500 289656488 TOTAL 423922280 67220776 491143056 520789139 14745733 535534872
SCHEDULE - K LOAN & ADVANCES
(Unsecured, Considered Good) ADVANCES RECOVERABLE IN CASH OR IN KIND OR FOR VALUE TO BE RECEIVED 195491154 (1890581) 193600573 241022545 (98973579) 142048966 LESS: PROVISION FOR DOUBTFUL BALANCES 2637198 - 2637198 - - - 192853956 (1890581) 190963375 241022545 (98973579) 142048966 INTEREST ACCRUED BUT NOT DUE ON FIXED DEPOSITS/BONDS 36359379 - 36359379 2012278 94479 2106757 TAX DEDUCTED AT SOURCE / ADVANCE TAX (NET OF PROVISION FOR TAX) 96104637 2331791 98436428 31714772 646872 32361644 MOBILISATION ADVANCE TO SUB-CONTRACTORS 3819450 - 3819450 - - - 136283466 2331791 138615257 33727050 741351 34468401 SUNDRY DEPOSITS 110921611 1935937 112857548 146582237 8955 146591192 LESS: PROVISION FOR DOUBTFUL BALANCES 6597112 6597112 104324499 1935937 106260436 146582237 8955 146591192 TOTAL 433461922 2377147 435839068 421331832 -98223273 323108559
SCHEDULE - L CURRENT LIABILITIES & PROVISION
CURRENT LIABILITIES SUNDRY CREDITORS 447679741 90551654 538231395 420606112 18638429 439244541 MOBILISATION ADVANCE FROM CUSTOMERS 338736095 - 338736095 104009538 - 104009537 OTHER LIABILITIES 143226932 1724058 144950990 177507377 22413668 199921045 TOTAL 929642768 92275711 1021918480 702123027 41052097 743175123
80 SCHEDULE - A TO N AND 8 FORMING PART OF THE BALANCE SHEET
As at March 31, 2011 As at March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - M PROVISION
PROVISION FOR LEAVE ENCASEMENT 2241298 - 2241298 657521 - 657521 PROVISION FOR GRATUITY 6347723 - 6347723 2712481 - 2712481 PROVISION FOR TAXATION 663880 319800 983680 - - - PROPOSED DIVIDEND - - - 40000000 - 40000000 TAX ON PROPOSED DIVIDEND - - - 6798000 - 6798000 9252901 319800 9572701 50168002 - 50168002
SCHEDULE - N MISCELLANEOUS EXPENDITURE
(to the extent not written off or adjusted) PRELIMINARY EXPENSES BALANCE AS PER LAST YEAR BALANCE SHEET 966933 26224 993157 789485 29338 818823 ADD: ADDITION DURING THE YEAR 20331 2411 22742 229300 -589 228711 987264 28635 1015899 1018785 28749 1047534 LESS: DEDUCTION DURING THE YEAR 183440 - 183440 - - - LESS: WRITTEN OFF DURING THE YEAR 92827 4717 97544 51852 2525 54377 TOTAL-1 710997 23918 734915 966933 26224 993157 PRE-OPERATIVE EXPENSE 199151 - 199151 - - - TOTAL-2 199151 - 199151 - - - TOTAL (1 + 2) 910148 23918 934066 966933 26224 993157
SCHEDULE - 1 TO 7, FORMING PART OF THE PROFIT & LOSS ACCOUNT
For the year ended March 31, 2011 For the year ended March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - 1 CONSTRUCTION WORK CONTRACT
CIVIL CONTRACTS 1799018901 - 1799018901 3381738564 - 3381738564 LESS: SERVICE TAX 57250077 - 57250077 93497190 - 93497190 1741768824 - 1741768824 3288241374 - 3288241374 (Tax Deducted at Source Rs. 5,13,24,829/- P.Y. Rs. 6,94,65,542/-) TECHNICAL SERVICES 44000000 - 44000000 - - - LESS: SERVICE TAX 4532000 4532000 39468000 39468000 (Tax Deducted at Source Rs. 45,32,200/- P.Y. Rs. - NIL -) TOTAL 1781236824 - 1781236824 3288241374 - 3288241374
SCHEDULE - 2 TOLL COLLECTION
HOSHANAGABAD - HARDA - KHANDWA PROJECT 76646054 - 76646054 95306393 - 95306393 RAISEN RAHATGARH PROJECT 64245784 - 64245784 69821047 - 69821047 JALANDHAR PROJECT 47149255 - 47149255 41419709 - 41419709 JALANDHAR PROJECTS - RENT 14179708 - 14179708 11926662 - 11926662 (Tax Deducted At Source Rs. 225930/- P.Y. -Nil-) LUDHIANA PROJECT 42739986 - 42739986 39633996 - 39633996 LUDHIANA PROJECT - RENT 9649882 - 9649882 8599939 - 8599939 (Tax Deducted At Source Rs. 107305/- P.Y. -Nil-) ------DEWAS WATER SUPPLY PROJECT 24056828 - 24056828 31782484 - 31782484 HIMMATNAGAR PROJECT 13484950 - 13484950 10416453 - 10416453 KIM MANDVI PROJECT 21787788 - 21787788 - - - BULL MSK PROJECT (JOINT VENTURE) - 27970692 27970692 - 19054198 19054198 DEWAS BHOPAL PROJECT (JOINT VENTURE) - 263851841 263851841 - - - TOTAL 313940235 291822533 605762767 308906683 19054198 327960881 81 SCHEDULE - 1 TO 7, FORMING PART OF THE PROFIT & LOSS ACCOUNT
For the year ended March 31, 2011 For the year ended March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - 3 OTHER INCOME
DIVIDEND ON NON-TRADE INVESTMENT 26400 - 26400 46643 - 46643 INSURANCE CLAIM 590995 10000 600995 855921 - 855921 UNCLIAM LIABILITIES WRT. BACK 4155946 - 4155946 3577719 - 3577719 PROFIT ON SALES OF ASSETS 1581645 - 1581645 2118510 - 2118510 MISCELLANIOUS INCOME 1524007 730000 2254007 2167149 - 2167149 TOTAL 7878993 740000 8618993 8765942 8765942
SCHEDULE - 4 CHANGE IN STOCK
OPENING STOCK - WORK-IN-PROGRESS 202063190 - 202063190 160202898 - 160202898 LESS: CLOSING STOCKS - WORK-IN-PROGRESS 416187464 - 416187464 202063190 - 202063190 TOTAL 214124274 - 214124274 41860292 - 41860292
SCHEDULE - 5 MATERIAL CONSUMED
STOCK AT COMMENCEMENT 125966849 - 125966849 69296450 - 69296450 ADD : PURCHASE & EXPENSES 1306271580 113309 1306384889 2063563674 - 2063563674 1432238429 113309 1432351738 2132860124 - 2132860124 LESS : STOCK AT CLOSE 140750668 - 140750668 125966849 125966849 TOTAL 1291487760 113309 1291601069 2006893275 - 2006893275
SCHEDULE - 6 SITE COST & OTHER EXPENSE
AIR CONDITIONING WORK 4520400 - 4520400 - - - BAD DEBTS 2206100 - 2206100 - - - BITUMANIOUS WORK 16163162 - 16163162 18870 - 18870 BLASTING WORK 2814921 - 2814921 11808725 - 11808725 BOLDER WORK 6017319 - 6017319 19881212 - 19881212 BRIDGE WORK 10064825 - 10064825 13706329 - 13706329 CD WORK 259100 - 259100 3591902 - 3591902 CIVIL WORK 12576342 - 12576342 614443 - 614443 CLEARING & FORWARDING - - - 433031 - 433031 CONCRETE WORK 15431137 - 15431137 7500067 - 7500067 CONSULTANCY CHARGE 52995226 1571125 54566351 23514621 - 23514621 DESIGN CHARGE - - - 3200000 - 3200000 DONATION 684530 - 684530 481991 - 481991 DOORS & WINDOWS WORK 5029639 - 5029639 5022845 - 5022845 EARTH WORK 148386025 - 148386025 167673544 - 167673544 ELECTRIC EXPENSE 57141337 626284 57767621 36893686 79958 36973644 ELECTRIC POLL SHIFTING 8703120 - 8703120 8462286 - 8462286 ESIC 115572 - 115572 321258 - 321258 FABRICATION WORK 29740638 - 29740638 27002047 - 27002047 FLOORING WORK 21333404 - 21333404 1384144 - 1384144 HORTICULTURAL WORK 292747 - 292747 - - HUTMATE 2051067 - 2051067 1609274 - 1609274 IMPAIRMENT OF FIXED ASSET 6738590 - 6738590 - - - INSURANCE 3881958 285915 4167873 4559272 18846 4578118 INTEREST ON INCOME TAX 119379 - 119379 - - - LAND SCAPPING 3820283 - 3820283 - - - LOSS ON SALES OF INVESTMENT 5015130 - 5015130 - - - MACHINERY HIRE CHARGES 20411807 2248196 22660003 47275838 - 47275838 MASONERY WORK 26824303 - 26824303 25553380 - 25553380
82 SCHEDULE - 1 TO 7, FORMING PART OF THE PROFIT & LOSS ACCOUNT
For the year ended March 31, 2011 For the year ended March 31, 2010 (Amount in Rs.) (Amount in Rs.) Consolidated Shares of Total Consolidated Shares of Total with Joint with Joint Subsidiaries Ventures Subsidiaries Ventures
SCHEDULE - 6 SITE COST & OTHER EXPENSE
MISCELLANEOUS WORK 15084130 5098481 20182611 122571865 - 122571865 PAINTING WORK 7465448 - 7465448 5149429 - 5149429 PAYMENT TO SITE WORKERS 69457918 334480 69792398 78700577 - 78700577 PENALTY SLOW PROGRESS 17817 - 17817 - - - PILING FOUNDATION - - - 400000 - 400000 PILING WORK 5311015 - 5311015 - - - PIPE LAYING WORK 6565067 - 6565067 2029106 - 2029106 PROJECT MONITORING FEES 5572891 5572891 - - - PROVIDENT FUND 3986354 - 3986354 1543054 - 1543054 PROVISION FOR DIMINISHED VALUE OF INVESTMENT - - - 74000 - 74000 PROVISION FOR DOUBT-FUL DEBTS 42880428 - 42880428 4286469 - 4286469 RATE & TAXES 91047515 - 91047515 113283963 - 113283963 REINFORCEMENT WORK 22274323 - 22274323 40561547 - 40561547 RENT 15148402 82750 15231152 17785309 - 17785309 ROAD WORK 63302175 - 63302175 66715769 - 66715769 SAFTY EXPENSE - - - 420709 - 420709 SALARIES & BONUS 184028265 6088651 190116916 188559664 587931 189147595 SANITARY WORKS 1572311 - 1572311 783864 - 783864 SECURITY SERVICE CHARGES 5414874 7035196 12450070 6574064 2575881 9149945 SHUTTERING WORK 44483933 - 44483933 25970600 - 25970600 SITE EXPENSE 25566661 - 25566661 - - - STAFF WELFARE EXPENSE 26839457 1643879 28483336 37000328 247082 37247410 SURVEY EXPENSE 274516 - 274516 270006 - 270006 TENDER FEES 10625330 10625330 0 - 0 TOLL PLAZA 3218494 143131 3361625 1189106 - 1189106 TRAVELING EXPENSE 9955209 768797 10724006 9353048 102814 9455862 UNDER DECK INSULATION 6107362 - 6107362 - - - VEHICLE HIRE CHARGES 7325427 193032 7518459 13815869 - 13815869 WATER PROOFING WORK 9946840 - 9946840 1568471 - 1568471 WBM WORK 551824 - 551824 334276 - 334276 REPAIRS & MAINTENANCE FOR MACHINERIES 15775896 19931 15795827 42222395 224994 42447389 ROAD MAINTENANCE 1917208 4896155 6813363 1968721 381271 2349992 VEHICLE, TRUCKS, TRACTORS & OTHERS 41907916 392664 42300580 43079729 - 43079729 AUDITOR REMUNERATION AUDIT FEES 1129051 162500 1291551 827575 - 827575 TAXATION MATTER - - 100000 - 100000 CERTIFICATION WORK 41362 41362 141000 - 141000 SERVICE TAX - - 104502 - 104502 MISCELLANEOUS EXPENDITURE 24284983 1758779 26043762 36776372 2121731 38898103 TOTAL 1232418462 33349942 1265768404 1274670152 6340508 1281010660
SCHEDULE - 7 FINANCE & BANK CHARGES
INTEREST ON TERM LOAN 194325762 207074804 401400566 167298208 4641269 171939477 OTHER INTEREST 144777674 - 144777674 77552567 - 77552567 BANK CHARGES 44073980 598892 44672871 73651186 34269 73685455 383177415 207673696 590851111 318501961 4675538 323177499 LESS: INTEREST RECEIVED FROM BOND & FIXED DEPOSITS 204763306 76934 204840240 27534590 - 27534590 (Tax Deducted at Source Rs. 49,80,925/- P.Y. Rs. 24,34,297/-) TOTAL 178414109 207596762 386010871 290967371 4675538 295642909
83 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011
1. BASIS OF CONSOLIDATION: A. Basis of Accounting: The Consolidated financial statements relate to M/s. Welspun Projects Limited, (formerly known as MSK Projects (India) Limited, its subsidiaries Companies, and joint ventures Companies are drawn up to the same reportingdateas ofthe Company, i.e.yearended31 stMarch 2011. B. Principle of Consolidation: a. The Consolidated Financial statements have been prepared by the Company in accordance with the requirements of Accounting Standard – 21 (Consolidated Financial Statements & Accounting Standard AS-27 (Financial Reporting of interest in joint ventures) issued by the Institute of Chartered Accountants of India. The Consolidated Financial Statementshavebeen prepared onthefollowingbasis. i. The financial statement of the Company and its subsidiary Companies are combined on a line by line basis by adding together the book value of the like item of assets, liabilities, income and expenses after fully eliminating intra group transaction resulting in unrealized profit. Minority Interest in subsidiaries represents the minority shareholder proportionate shares of thenetassets andnet income. ii. The Company's share in each of the assets, liabilities income and expenses of jointly controlled entities are reportedas separate item. iii. The difference between the Company's cost of investments in the subsidiaries over its position of equity at the time of acquisition of the shares is recognized in the consolidated financial statements as goodwill or Capital Reserves asthe case may be. iv. The difference between costs of the Company's interest in jointly controlled entities over its shares of net assets in the jointly controlled entities at the date on which interest is acquired, is recognized in the consolidatedfinancial statementas Goodwill orCapital Reserves asthe case maybe. v. Good-will recognized inthe Consolidated FinancialStatement is notamortized. vi. The Consolidated Financial Statements are prepared by adopting uniform accounting policies for like transactions and other events in similar circumstances and presented to the extent possible, in the financial statementsexceptother wise stated elsewhere inthisschedule. b. Adjustment is made in the financial statements of the joint venture Company i.e. Dewas Bhopal Corridor Limited, onaccountofdiverse accounting policy followedin respectofamortization of BOTCost. C. The subsidiary Companies considered in the consolidated financial statements are :
Name of the Company Country Of % of Ownership Incorporation interest as on 31st March 2011 MSK Projects (Kim Mandvi Corridor) Private Limited India 100% MSK Projects (Himmatnagar Bypass) Private Limited India 100% Welspun Maharashtra Energy Private Limited * India 51%
* Un-audited accounts (as certified by the management of the Company) as at 31st March 2011 is taken into consideration for consolidated financial statements.
84 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
D. The significant joint Ventures Companies considered in the consolidated financial statements.
Name of the Company Country Of % of Ownership Incorporation interest as on 31st March 2011 Bul-MSK Infrastructure Private Limited * India 50% Dewas Bhopal Corridor Limited India 50%
* Un-audited accounts (as certified by the management of the Company) as at 31st March 2011 is taken into consideration for consolidated financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES A-1 REVENUE RECOGNITION ON CONTRACTS a). All revenues and expenses are accounted on accrual basis except to the extent stated otherwise. b). Contract Prices are either fixed or subject to price escalation clause. The Revenue is recognized on the basis of percentage of completion method and the stage of completion is determined on the basis of physical completion of proportion of contract work. c). Amount due in respect of the price escalation claim and/or variation in contract work approved by the customers are recognized as revenue only when there are conditions stipulated in the contracts for such claims or variations and/or the same are evidenced inter-alia by way of confirmation or the same are accepted by the customers. d). Liquidated damages payable, if any, as per the terms of the contract, for the delays, if any, are accounted only when such delay is attributable to the Company. A-2 EXPENDITURE IN RESPECT OF BUILD, OPERATE AND TRANSFER (B.O.T. CONTRACT) a. Expenditure (net of corresponding interest income earned on deployment or other wise of fund attributable to the projects) incurred on Build, Operate and Transfer (BOT) Project which does not represent Company's own assets is classified as “BOT PROJECT EXPENDITURE” and is amortized / written off based on the projected toll revenue. The projected total revenue is based on the toll rate & expected increase. b. The materials and stores etc. acquired / purchased for the construction activities of owned Build, Operate and Transfer Projects (BOT Projects) are classified / reflected as B.O.T. Projects Expenditure and / or work in progress, as the case may be. Accordingly such purchases are disclosed as item of B.O.T. Project Expenditure. B. ADVANCES AND PROGRESS PAYMENTS AND RETENSION a. Advances received from customers in respect of contracts are treated as liability. b. Progress payments received are adjusted against receivables from customers in respect of the contract work performed. c. Amount(s) retained by the customers until the satisfactory completion of the contract are recognized in the financial statement as receivables. Where such retention has been released by the customers against submission of bank guarantee the amount so released is adjusted against receivables from the customers and value of Bank guarantees is disclosed as contingent liability under bank guarantees outstanding. C. FIXED ASSETS a. Fixed assets are stated at cost of acquisition as reduced by accumulated depreciation. b. All direct expenses attributable to fixed assets are capitalized.
85 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
D. DEPRECIATION a. Depreciation is provided on written downvalue basis as per the rates and method prescribed under Schedule – XIV to the Companies Act,1956. b. Goodwillis notdepreciated. E. BORROWINGCOST Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalized as part of the cost of the assets, up to the date the assets are ready for its intended used. Other borrowing costs are charged tothe profitandloss accountintheyear inwhichtheyareincurred. F. VALUATIONOF INVENTORIES a. RawMaterialsarevalued atlowerofcostandnet realizable value.Costis determined onFIFO basis. b. Contract Work in progress is valued at tender rate having regards to unbilled work, outstanding running bills and expected recovery thereof. c. Storesand sparesarewritten offinthe yearof purchase. G. INVESTMENTS Long terms investments are stated at cost. Provision for diminution in the value of investments is made only if such declineis other thantemporaryin the opinionof the management. H. CLAIMS,DEMANDSAND CONTINGENCIES Disputed and / or contingent liabilities are either provided for / or disclosed depending on management's judgmentof theoutcome. I. PROVISIONFOR DOUBT FULDEBTS /ADVANCES: Provision is made in accounts for doubtful debts / advances which in the opinion of the management are considered doubtfulof recovery. J. RETIREMENT BENEFITS a. Short Term Employee benefits: Short Term Employee Benefits are recognized in the period during which the services have been rendered. b. Long TermEmployee benefits: Provident Fund, Family Pensionfund As Per Provident Fund Act 1952 all employees of the company are entitled to receive benefits under the provident fund and family pension fund which is defined contribution plan. These contributions are made to the planadministered andmanagedby GovernmentofIndia. The Company's contribution to this scheme are recognized as expense in the profit and loss account during the period in which the employee renders the related service.The Company has no further obligation under these plans beyond itsmonthlycontribution c. Leave encashment: The Company has provided for the liability at year end on account of un-availed earned leave as per the actuarial valuation. d. Gratuity: The Company provides for gratuity obligations through a Defined benefits retirement plan (“The Gratuity Plan”) covering all employees. The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation using the project unit credit method, which recognizes each period of service as giving rise to additional unit of employees benefits entitlement and measure each unit separately to build up final obligation. The obligation is measured at the present value of the estimated cash
86 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
flows.The discount rate used fordetermining present value of the defined obligation under the defined benefit plan is based on the market yield on Government Securities as at the balance sheet date. Actuarial gains and losses are recognizedin Profitand Loss Accountasand when determined. The Company makes annual contributionto LICfor thegratuity plan inrespectofall theemployees. K. PROVISION FOR CURRENTAND DEFERREDTAX a) Provision for current tax is made on the basis of estimated taxable income for the current accounting year and in accordancewiththeprovisions ofthe Income taxAct, 1961. b). Deferred tax resulting from “timing difference” between book and taxable profit for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as on the balance sheet date.The deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the assetswillbe adjustedin future. L. FOREIGN CURRENCYTRANSACTION Transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction, exchange rate differences resulting from foreign exchange transaction settle during the period including year end transaction of current assets and liabilities are recognized in the profit & loss accounts. Exchange rates differences arising in relation to liabilities incurred for acquisition of fixed assets are adjusted to the carrying valueof thefixedassets. In respectofforward exchange contract, except in case offixed assets,the difference between forward rate and the exchange rate at the inception of the forward exchange contract is recognized as income / expenses over the life of the contract. M. LEASE a). OPERATING LEASE Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis inaccordance withrespective leaseagreements. b). FINANCE LEASE Assets acquired under leases where Company has substantially all the risk and rewards of ownership are classified as finance lease. Assets acquired under finance are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased assets at the inception of the lease. Initial costs incurred in connection with the specific leasing activities directly attributable to activities performed by the Companyareincluded aspartof theamountrecognized asan asset underthe lease. N. IMPAIRMENTOFASSET If internal / external indications suggest that an asset of the Company may be impaired, the recoverable amountofasset/cash generating unit is determinedon the Balance –Sheetdateand if it islessthan its carrying amount of the asset / cash generating unit, the carrying amount of asset is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such asset / cash generating unit, which is determined by the present value ofcarryingamountof the estimated future cash flow. O. USEOF ESTIMATES The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumption to be made that affect the reported amount of the assets and liabilities and disclosure ofcontingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from these estimates and differences between actual results and estimates are recognized in the period in which the results are known / materialized. 87 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
2 CONTINGENT LIABILITIES NOTPROVIDEDFORIN RESPECTOF a. Guarantees issued by the Company's banker on behalfof the Company amounting to Rs.17570.18 Lacs (P.Y. Rs. 9743.76 Lacs) b. The Company has given a guarantee to the Bank for facilities granted to its wholly owned subsidiary companies Msk Projects (Himmatnagar Bypass) Private Limited & MSK Projects (Kim Mandvi Corridor) Private Limited for the amounting to Rs. 1667 Lacs (P.Y. Rs. 1667 Lacs). Outstanding amount as on 31st March, 2011, Rs. 1267.44 Lacs ( Previous Year 1345.73 Lacs) and to integrated joint venture Dewas Bhopal Corridor Limited amounting to Rs.38500/- Lacs (Previous year Rs.34500/- Lacs) outstanding amount as on 31st March 2011 Rs.38597.66 Lacs (P.Y.Rs. 34831.35Lacs). c. Letterofcredit issued bythe Company's bankonbehalfof theCompanyRs. 502.05 Lacs(P.Y.Rs.1353.72 Lacs) d. Income TaxDemand of Rs. 1045.79Lacs (Previous YearRs.282.40 Lacs) disputedby the company. e. Civil Suitfiled againsttheCompanyRs. 38.51Lacs ( P.Y. Rs.23.46Lacs.) f. Liabilities of Stamp Duty in respect of integrated joint venture Company for Rs.853.28 Lacs (P.Y. 853.28) under Indian Stamp Act 1899asthe liabilityhas beencontestedby theCompany. g. Liability of Labour-cess in respect of integrated joint venture Company for Rs.477.84 Lacs (Previous year Rs. 477.84 Lacs) asthe liability hasbeen contested by the Company. 3). Incomplete Contract work under Contract Work In Progress at the various sites is estimated by the management having regardsto unbilledwork,outstanding runningbill and expected recovery thereof. 4). Security Deposits deducted from contract receipt and mobilization advances received against contracts are subjecttoconfirmationand adjustment, ifany,on finalization ofaccount. 5). Build,Operate& Transfer Projects(BOTProjects) i). The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Madhya Pradesh State IndustrialDevelopment Corporation forexecution of DewasWaterSupply project. In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Water supply charge during the concession period of 32 years (includingtheperiod ofconstruction). The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditureand proportionateamountof Rs.48.99 Lacs(P.Y.388.36 Lacs) has beenwrittenoffduringtheyear. ii). The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board forexecution of JalandharBus Terminal project. In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 8 years 5months and 2 daysfor Jalandhar BusTerminalProject(includingthe periodofconstruction). The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionateamountofRs.235.15Lacs(P.Y.Rs.320.35Lacs) hasbeenwrittenoffduringtheyear. iii). The Company has obtained the contract on Build, Operate and Transfer (BOT) basis from the Punjab Infrastructure Development Board forexecution of Ludhiana BusTerminal Project. In terms of the contract the ownership of the said property vests in the government immediately. Under the contract the Company is entitled to collect Toll Charge and Rent on Shops during the concession period of 10 years 3months for Ludhiana BusTerminalProject(includingthe periodofconstruction).
88 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
The Company has completed construction of the said project in the earlier year. Having regard to the accounting policies followed by the Company the entire expenditure incurred is treated as BOT Project Expenditure and proportionate amount of Rs.172.11 Lacs (P.Y. Rs.256.05 Lacs) has been written off during the year. iv). The Company had obtained the contracton Build, Operate and Transfer (BOT) basisfrom MadhyaPradesh Road Development Authority for construction of Hoshangabad–Harda–Khandwa Road Project. In Terms of the Contract the Company was entitled to collect the toll during the concession period of 5440 days (Including the period of the construction). The Company had completed the construction of the above project and was put open to trafficduringtheearlier year. Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs. 241.08 Lacs (P.Y. 355.84 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road DevelopmentAuthority. v). TheCompany hadobtained the contracton Build, Operate andTransfer (BOT Basis) from Madhya PradeshRoad Development Authority for construction of Raisen–Rahatgarh. In Terms of the Contract the Company entitled to collect the toll during the concession period of 5440 days (Including the period of the construction). The Company had completed the construction of the above project and was put open to traffic during the earlier year. Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amount of Rs.158.81 Lacs (P.Y. 281.01 Lacs) has been written off during the year after considering the Cash Subsidy received/receivable from Madhya Pradesh State Road DevelopmentAuthority. vi). The company obtained Build, Operate, & Transfer (BOT Contract) from Gujarat State Road Development Corporation Ltd. for construction of Strengthening and Widening, and maintenance of Kim Mandvi Corridor Projects. In terms of the contract, the company has been entitled to collect toll during the concession period of 20 years (Including the period of Construction). The Company has Completed the Construction of the said projectand putto open forthe traffic duringtheyear. Having, regard to the accounting policies followed by the Company the expenditure incurred thereon, is treated as BOT Project Expenditure and proportionate amountof Rs.139.64 Lacs (P.Y. –Nil-) has been written off during the year after considering the Cash Subsidy received/receivable from Gujarat State Road Development Corporation. vii). MSK Projects (Himmatnagar bypass) Private Limited, the subsidiary, has obtained Build, Operate, & Transfer (BOT Contract) from Gujarat State Road Development Corporation for construction of Strengthen and Widening, and maintenance of Himmatnagar bypass. In terms of the contract,the company has been entitled to collecttoll duringtheconcession period of 15years.( 5112Days)(Includingthe periodof Construction). Having regards to the Accounting Policies followed by the company, the entire expenditure incurred on Construction of Road aggregating to Rs.844.47 Lacs is treated as BOT Project and shall be written off over a period of concession Agreement up to 31.03.2021 (5112 Days) Accordingly Rs. 50.93 Lacs (Previous year Rs. 60.27 Lacs) is amortized in the current year.The amortization starts from the date of start of Toll Collection i.e. 02.04.2006. viii). Dewas Bhopal Corridor Limited, the integrated Joint Venture Company has obtained Build, Operate & Transfer (BOTContract) from MadhyaPradesh Road DevelopmentAuthority for Constructionof four laneRoad Project. The Company has commenced the full operation of the projects based on the completion certificate received from MadhyaPradesh Road Development Corporation onthatdate.
89 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
Having regards to the Accounting Policies followed by the Company, the entire expenditure incurred on Construction of Road is treated as Build, Operate & Transfer Project Expenditure and is over a period of concession Agreement up to 19.03.2033 and proportionate amount of Rs.537.81 Lacs (Previous year Rs.–Nil-) (adjusted amountofamortization) isamortized inthe currentyear. 5-A Change inPolicyof Amortization: Hitherto up to 31st March 2010 expenditure incurred on above, Build, Operate & Transfer (BOT) Projects was amortized / written off over the period of concession. The Company has changed the policy and the said BOT expenditure is amortized / written offonthe basis ofprojectedtollrevenue overthe periodofconcession. Had there been no change in the method of amortization the amount of the amortization for the year would have been higher by Rs. 1178.16 Lacs (including adjustment made in case of joint venture Dewas Bhopal Corridor Limited Rs. 489.86 Lacs which is following diverse accounting policy), consequently loss for the year would have beenhigherand Reservesand Surplus would havebeen lower to thatextent. As the practice of amortization is changed prospectively no effect of change up to 31st March 2010 is given to the accounts. 6). The Company isoperating in asingle segmentonlyduringtheyear i.e.Civil ConstructionContract. 7). During the year, the Company has accounted for deferred tax in accordance with the Accounting Standard 22 – “Accounting forTaxes on Income” issued bythe Instituteof Chartered Accountants ofIndia. The Break up of deferred tax liabilities & assets into major components at the year end is as follows:
Particulars AS ON AS ON 31-03-2011 31-03-2010 DEFERRED TAX LIABILITIES:- Depreciation 1032.82 649.06 DEFERRED TAX ASSETS: Retirement Benefits 7.27 2.23 Provision for Bad Debts 164.39 – Share of Joint Venture 190.26 – TOTAL 361.92 646.83 Deferred tax Liabilities Provided during the year 670.90 550.94
8). Disclosurerelating toEmployees Benefits –As perrevisedAS-15: Duringtheyear Company hasrecognized thefollowingamount inthe financial statements. a) DEFINED CONTRIBUTION PLAN: Contributionto DefinedContributionPlan recognizedas Expenseforthe yearas under: Rs. In Lacs Particulars
Employer Contribution to Provident Fund 39.86 (15.43)
90 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
b) DEFINEDBENEFIT PLAN: Reconciliation of opening and closing balances of Defined Benefit obligation Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Defined Benefit obligation at the beginning of the year 27.12 6.58 (13.40) (3.82) Current Service Cost 5.07 58.43 (7.94) (4.43) Interest Cost 2.27 0.55 (1.11) (0.32) Actuarial (gain)/loss 29.00 (43.14) (4.68) (1.99) Benefits Paid NIL NIL (NIL) (NIL) Defined Benefit obligation at the year end 63.47 22.41 (27.12) (6.58)
Reconciliation of opening and closing balances of fair value of plan Assets Rs. In Lacs Particulars Gratuity (Funded)
Fair value of plan assets in the beginning of the year 32.77 (18.03) Expected return on plan assets 2.62 (2.29) Actuarial gain/(loss) (2.62) (0.99) Employer contribution 0.00 (13.44) Benefits Paid NIL (NIL) Fair Value of plan assets at the end of the year 32.77 (32.77)
91 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
Reconciliation of Fair Value of Plan Assets and Benefit Obligation. Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Fair Value of Assets as at 31st March, 2011 32.77 2.76 (32.77) (NIL) Present Value of obligation as at 31st March, 2011 63.48 22.41 (27.12) (6.58) Amount recognized in Profit & Loss Account 36.35 15.84 (12.42) (2.76)
Expenses recognized during the year (Under the head “Salaries & Bonus” – Refer Schedule 6) Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Current Service Cost 5.07 58.43 (7.94) (4.43) Interest Cost 2.28 0.55 (1.11) (0.32) Expected return on Plan Assets (2.62) NIL (2.28) (NIL) Actuarial gain/(loss) 31.62 (43.14) (4.67) (1.99) Expense Recognized in Profit and Loss Account 36.35 15.84 (12.42) (2.76)
Actuarial Assumptions Rs. In Lacs Particulars Gratuity Leave Encashment (Funded) (Non Funded)
Discount Rate ( Per Annum) 8.28% 8.40% (8.28%) (8.28%) Salary Escalation ( Per Annum) 6.00% 6.00% (6.00%) (6.00%)
9. Transactionwith related parties(as certifiedbythe management) a. Associate Concern: - Welspun Maxsteel Limited - Welspun Steel Limited - Welspun India Limited - Welspun Retail Limited - Welspun Captive Power Generation Limited
92 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
b. IndirectHolding Company - Welspun Corp. Limited c. HoldingCompany: - WelspunInfratech Limited d. Key Management
Name Position Name of the Company Balkrishna Goenka Director Welspun Projects Limited Nirmal Gangwal Director Yogesh Verma Director Shailesh Vaidya Director Aprurva Kumar Dasgupta Director Ashok M Khurana Director Welspun Projects Limited Dewas Bhopal Corridor Private Limited Bull MSK Infrastructure Private Limited Amit A Khurana Director Bull MSK Infrastructure Private Limited Asim Chakraborty Director MSK Projects (Himmatnagar Bypass) Private Limited Banwarilal Biyani MSK Projects (KIM Mandvi Corridor) Private Limited Udailal Anjana Director Dewas Bhopal Corridor Private Limited Hukumichand Jain Director Dewas Bhopal Corridor Private Limited Shreechand Kukreja Director Bull MSK Infrastructure Private Limited Suraj Kukreja Director Bull MSK Infrastructure Private Limited
Sr. Transaction with Holding Indirect Associate Key Relative of Related Parties Company Holding Company Management Key Company Management
1 Contract Receipt & - 1435.97 3546.28 - - Operational Income (-) ( - ) ( - ) (-) (-) 2 Material Purchase - 1582.24 752.46 - - (-) ( - ) ( - ) (-) (-) 3 Mobilization Advance - 1355.54 830.27 - - Received (-) ( - ) ( - ) (-) (-) 4 Mobilization Advance - 1005.54 259.28 - - Repayment (-) ( - ) ( - ) (-) (-) 5 Loan given - - - - - (-) (-) ( 5.76 ) (-) (-) 6 Loan Received 5729.41 3.02 - - - (-) (-) ( - ) (-) (-) 7 Repayment of 5715.00 - - - - Loan Received (-) (-) ( 5.00) (-) (-) 8 Repayment of - - - - - loan given (-) (-) (120.82) (-) (-)
93 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
Contd.
Sr. Transaction with Holding Indirect Associate Key Relative of Related Parties Company Holding Company Management Key Company Management
9 Sales of Properties - - - - - (-) (-) (-) (28.83) ( 41.58) 10 Advance for purchase - - - - - of commercial Property. (-) (-) (5.00) ( - ) ( - ) 11 Remuneration to - - 37.78 69.11 the Directors (-) (-) ( - ) (283.00) ( - ) 12 Receivable at the - 68.04 447.84 - - end of the year (0.93) 13 Payable at the 2208.21 - 731.20 - - end of the year
10. Cash Subsidy of Rs.12653.80 Lacs (P.Y. 11762.80 Lacs) received from Madhya Pradesh Rajya Setu Nirman Nigam Limited, and Gujrat State Road Development Corporation against the BOT. Project cost, is not reduced from the relevant projectcost butthesame isshown as“Capital Reserve” inthe BalanceSheet. 11). Loans &Advances includesadvances inthe natureof loan givento:
Rs. In Lacs Particulars Closing Balance Maximum Amount out standing during the year Other Companies / Parties ( - ) Rs. 3.85 Rs. 3.85 Rs. 3.85
12). Earning pershare:
Rs. In Lacs 2010-11 2009-10 A. Net profit after Tax available for equity (3156.71) 2334.43 shareholders. (Rs. In Lacs) B. Weighted average number of Equity Shares of Rs. 10/- 38729233 22821112 each outstanding during the year (Nos. of Shares) C. Basic & Diluted Earning Per Share (Rs.) (8.15) 10.48
13). Confirmations of certain parties for amounts due from them as per accounts of the company are not obtained. Amount due from customers include amounts due/with held on account of various claims. The claims will be verified and necessary adjustments, if any, shall be made in the year of settlement. Subject to this, company is confident of recovering the dues and accordingly they have been classified as “debt considered good” and therefore no provisionis considerednecessary,there against. 14). Under the Micro, Small and Medium Enterprise Development Act, 2006 (“MSMED Act”) which came into force effective from 2nd October, 2006, certain disclosures relating to amounts due to micro, small and medium enterprises and remained unpaid after the appointed date etc. of principal and interest amounts are required
94 SCHEDULE FORMING PART OF THE ACCOUNTS Schedule - 8 NOTES ON CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 stMARCH'2011 (Contd.)
to be made.The Company is inthe process ofcompilingthe relevant information. Asthe relevant information is not yet readily available and / or not given or confirmed by such enterprises, it is not possible to give required information in the accounts. However, in view of the management, the impact of interest, if any, which may subsequently become payable to such enterprise in accordance with the provisions of the Act, would not be material andthe same,ifany, wouldbe disclosed inthe yearof paymentof interest. In the absence of the necessary information with the Company relating to the registration status of the suppliers under the Micro, Small and Medium Enterprises Development Act' 2006, the information required under thesaid Actcouldnot be compiled anddisclosed. 15). In the opinion of the Directors, Current Assets, Loans and Advances have value at which they are stated in the Balance Sheet, if realized in the ordinary course of business. The provision for depreciation and for all known liabilitiesis adequate and not in excessof the amount reasonably necessary. 16). Remuneration to Directors:
Rs. In Lacs Managing Director Director / Joint Managing Director
Salaries 37,78,737 69,13,333 (2,00,00,000) (83,00,000) Contribution to P.F. Nil 2,710 (Nil) (7,200) Total 37,78,737 69,16,043 (2,00,00,000) (83,07,200)
17). Previousyear'sfigureshavebeen regrouped, rearrangedand reclassifiedwherevernecessary.
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
95 CONSOLIDATED CASH FLOW STATEMENT
2010-11 2009-10
A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax & Prior Period items (309335940) 358053127 Depreciation 96517753 113540997 Preliminary Expenses 97544 4117 Amortisation of BOT Projects 160620239 174077064 Interest Paid 386010871 295642909 Provision for Bad Debts 42880428 4286469 Unclaimed Liabilities written back (4155946) (3577719) Impairment of Fixed Assets 6738590 - Bad Debts 2206100 - Profit on sales of assets (1581645) (2118510) Dividend Received (26400) (46643) Loss on sales of Investment 5015130 - Provision for Leave Encasement & Gratuity 5219019 - Provision for Diminution in Value of Investments - 74000 Surplus & Deficit 208833 - Operating Profit before Working Capital Changes 390414576 939935811
Adjustment for : Inventories (228908093) (98530691) Trade & Other Receivables (141827869) 214618402 Trade Payable & Provisions 278743680 (182852825) (91992282) (66765114)
Cash Generated From Operations Before Tax, & Period Item 298422294 873170697 Less: Direct Taxes Paid (65725697) (76996786) Cash Generated From Operations Before Period Item Add: Prior Period (Net) 2898351 22759604 235594948 818933515 NET CASH USED IN OPERATING ACTIVITIES 235594948 818933515
B. CASH FLOW FROM INVESTING ACTIVITIES Purchases of Fixed Assets (36528681) (156883676) Sales of Fixed Assets 13425434 7793082 Investment (1444535034) 2074003 Less: BOT Expenditures (742367212) (1173209783) Cash Subsidy (Net) 89100000 76256840 Dividend Received 26400 46643 NET CASH USED IN INVESTING ACTIVITIES (2120879093) (1243922891)
C. CASH FLOW FROM FINANCING ACTIVITIES Issue of shares on Preferential basis 2113003224 - Borrowing 160543577 546138876 Dividend Paid (Including Tax thereon) (46643600) (26699560) Interest Paid (386010871) (295642909) NET CASH FROM FINANCING ACTIVITIES 1840892330 223796407
Net Changes In Cash & Cash Equivalents (A+B+C) (44391815) (201192969) Cash & Cash Equivalents - Opening Balance 535534871 736727840 491143056 535534871 Cash & Cash Equivalents - Closing Balance 491143056 535534871
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
96 SECTION 212 Details of Subsidiary Companies as requried under Section 212 (8) of the Companies Act, 1956 read with General Circular No. 2/2011 issued by Ministry o f CorporateAffairs
Name of the Subsidiary
Sr. No. Particulars MSK Projects MSK Projects Welspun Energy (Himmatnagar Bypass) (Kim Mandvi Corridor) Maharashtra Private Ltd. Private Ltd. Private Ltd.*
Financial Year ending on March 31, 2011 March 31, 2011 March 31, 2011
Currency INR INR INR
1 Capital 2,420,000 67,300,000 500,000
2 Reserves 25,828,099 31,582,709 -
3 Total Assets 66,589,794 529,607,407 226,034
4 Total Liabilities 38,341,695 430,724,697 5,515
5 Details of Investment (except in case of investment in subsidiaries) - - 60,000
6 Turnover 13,484,950 21,787,788 -
7 Profit before taxation 3,106,942 (65,345) -
8 Provision for taxation 709,487 1,946 -
9 Profit after taxation 2,394,527 (67,291) -
10 Proposed dividend - - -
* Un-audited accounts (as certified by the management of the Company) as at 31st March 2011 is taken into consideration for consolidated financial statements.
As per our report of even date FOR Chandrakant & Sevantilal & J.K. Shah & Company Chartered Accountants For and on behalf of the Board of Directors
H. B. Shah B. K. Goenka Sunil Shinde Susheela Maheshwari Partner Chairman Managing Director Company Secretary Membership No. 016642
Place : Vadodara Place : Mumbai Date : 26-05-2011 Date : 26-05-2011
97
WELSPUN Projects Ltd. (Formerly known as MSK Projects (India) Ltd.) www.welspunprojects.com Welspun House, 4th Floor, Kamala City, Senapati Bapat Marg, Lower Parel (west), Mumbai – 400 013, INDIA.