Batliboi

1.  Amalgamation of Batliboi SPM Pvt Limited with Company
 
 The Amalgamation of Batliboi SPM Pvt Ltd with Appointed Date as 1st
 April, 2007, has been completed and approved by the Honble High Courts
 of Judicature at Bombay and Karnataka; the financial statements
 includes effects of this amalgamation.
 
 (a) In accordance with the Scheme of Amalgamation of the erstwhile
 Batliboi SPM Pvt Limited (hereinafter referred to as SPM) with the
 Batliboi Ltd (hereinafter referred to as Company) as sanctioned by
 the Hon.ble High Courts of Bombay and Karnataka, the assets,
 liabilities and reserves of the SPM were transferred to and vested in
 the Company w.e.f 1st April, 2007.The Honble Bombay High Court passed
 their order Dt.4th July, 2008 approving the merger and the Honble
 Karnataka High Court passed their order on 2nd February, 2009. The
 certified copies of the said orders were duly filed with the Registrar
 of Companies with in the due date.
 
 (b) SPM was engaged primarily in the business of special purpose
 machine tools used in the auto sector, large bridge type CNC drilling
 machines.
 
 (c) The amalgamation has been accounted for under the pooling of
 interests method as prescribed by Accounting Standard (AS) 14-
 Accounting for Amalgamations issued by The Institute of Chartered
 Accountants of India. Accordingly, the assets, liabilities and reserves
 of erstwhile SPM have been taken over at their books values. The
 difference between the amount recorded as share capital to be issued
 and the amount of share capital of the SPM is adjusted in reserves of
 the Company.
 
 (d) As stipulated in the Scheme of Amalgamation and in accordance with
 the Accounting Standard (AS) 14- Accounting for Amalgamations issued
 by The Institute of Chartered Accountants of India all reserves of
 erstwhile SPM have been transferred to the corresponding Reserves
 account.
 
 Consequent to the amalgamation of the SPM with the Company, the Company
 has after the date of the Balance Sheet allotted 1680000 equity shares
 of Rs.5 each to the shareholders of SPM in accordance with the terms of
 Scheme of Amalgamation.
 
 (e) During the period between the Appointed Date and the Effective Date
 as erstwhile SPM carried on the existing business in trust on behalf
 of the company, all vouchers, documents, etc., for the period are in
 the name of erstwhile SPM. The title deeds for landed properties,
 licenses, agreements, loan documents, etc., are being transferred in
 the name of the Company.
 
 (f) Previous year/s figures do not include the figures of SPM and hence
 are not comparable to those of the current year.
 
 2.  Contingent Liabilities not provided for in respect of:
 
 a.  Claims against the company not acknowledged as debts: Rs 370.60
 Lacs (Previous Year: Rs. 383.00 Lacs).
 
 b.  Disputed sales tax/Excise demands under appeal Rs.91.87 Lacs
 (Previous Year: Rs. 142.81 Lacs).
 
 c.  Corporate Guarantees given to banks & financial institutions for
 credit facilities/ performance guarantees extended by them to Batliboi
 Environmental Engineering Limited (BEEL), a related party: Rs 2690.00
 Lacs (Previous year: Rs.2590.00 Lacs). Balance outstanding as on
 31.03.2009: Rs.2297.73 Lacs (Previous Year: Rs 1315.51 Lacs).
 
 d) Guarantees given on behalf of the Company by its bankers and
 outstanding Rs866.25 Lacs (Previous year: Rs. 676.60 Lacs) Out of the
 above, Guarantees issued aggregating Rs.43.53 Lacs (Previous year
 Rs.43.53 Lacs) by Companys bankers and outstanding in respect of
 contracts that have since been assigned by the Company to Batliboi
 Environmental Engineering Limited (BEEL), a related party.
 
 e) In respect of guarantees given by the company to the bankers of
 Batliboi Environmental Engineering Limited (BEEL), a related party,
 BEEL has given counter guarantees on behalf of the Company and extended
 charge on its current assets to secure the financial assistance availed
 by the Company from banks/financial institutions [Refer note II-
 5-(a)].
 
 f) Company has given Corporate Guarantee to others on behalf of its
 step down subsidiary Quickmill Inc amounting to CAD 0.74 Million
 equivalent to Rs.297.89 Lacs (P.Y CAD 0.74 Million equivalent to
 Rs.290.10 Lacs).
 
 3.  Estimated amount of contracts remaining to be executed on capital
 account not provided for: Rs 40.25 Lacs (Previous Year: Rs.  92.50
 Lacs).
 
 4.  Borrowings and Security:
 
 a.  Security for Bank Borrowings:
 
 i. Working Capital Borrowings from BOB led consortium banks on cash
 credit/overdraft/short term loan and non-fund based facilities are
 secured by way of first pari passu charge by hypothecation of stock of
 raw materials, goods in process, finished goods, stores and spares,
 books debts, outstanding monies, receivables, claims etc. pertaining to
 the manufacturing division at Udhana and the marketing branches
 situated all over India, both present and future; besides Second pari
 passu charge by way of equitable mortgage on the immovable property of
 the company together with plant and machinery attached to the earth or
 permanently fastened to anything attached to the earth situated at
 free-hold land at Udhana, Gujarat. Working capital limits of
 amalgamated SPM division (erstwhile Batliboi SPM Pvt Ltd) sanctioned
 by Canara Bank are secured by hypothecation of Book Debts and
 Inventories of SPM Division. Canara Bank also has first charge on land
 and bunding of SPM Division situated at Banglore.
 
 ii. A specific guarantee facility of Rs.288 Lacs (P.Y Rs.288 Lacs) of
 BEEL from a bank, is secured by first pari passu charge by way of an
 equitable mortgage of the immoveable properties of the company situated
 at leasehold land at Deonar, Mumbai.
 
 b.  Rupee Term Loans from a Co-operative Scheduled Bank is secured by
 first charge on the fixed assets financed by these term loans
 (hereafter the said fixed assets); and Second Charge on the Companys
 immovable and movable property at Udhana, Gujarat. Working capital
 lender banks have the second pari passu charge on the said fixed
 assets.
 
 c.  Rupee Term Loan and Foreign Currency Term Loans are secured by
 first pari passu charge on the entire fixed assets of the Company
 situated at Udhna, Gujarat along with other term lenders.
 
 5.  Balances of Debtors & Creditors are as per books of account.
 Letters have been sent to selected Debtors & Creditors seeking
 confirmation of balances, and replies in some cases are awaited.
 Adjustments, if necessary, will be made on receipt of such
 confirmations.
 
 6.  In the opinion of the Board of Directors, Current Assets, Loans and
 Advances have a realizable value in ordinary course of the business at
 least equal to the amounts at which they are stated in the Balance
 Sheet.
 
 7.  The Companys Udhana Plant had received notices from The Surat
 Municipal Corporation, Surat for acquisition of land adjoining the
 State Highway on Surat - Navsari Road admeasuring 6225 sq. mtrs approx
 for widening of State Highway in the public interest. The Udhana plant
 has received an award of Rs.3.16 Lacs as compensation for acquisition
 of above land.  However, aggrieved with award the Company has filed a
 suit claiming Rs 19 Lacs as compensation for the above acquisition.
 The same is pending before the Hon. Surat Civil Court. Necessary effect
 in the accounts will be given on completion of legal formalities for
 transfer of land and settlement of compensation.
 
 8. (a) Foreign currency long term loan includes:
 
 (i) CAD 2700000 i.e Rs.1086.90 Lacs against which the company has a
 forward cover for USD/CAD 200000. The USD/ INR leg as at balance sheet
 date is open.
 
 (ii) EURO 529300 i.e Rs.355.78 Lacs against which the company has
 forward cover of EURO/USD 40000. The USD/ INR leg as at balance sheet
 date is open.
 
 (iii) USD 410250 i.e Rs.208.12 Lacs against which the company has no
 forward cover or natural hedge.
 
 (iv) The company has no exposure by way of derivative contracts.
 
 (b) Exchange Gains/(Loss) created/(charged) to Profit and Loss Account:
 Rs 19.94 Lacs (P.Y Rs.88.32 Lacs)
 
 9.  It is the view of the company that the provisions of Items 3(ii)
 (d) of Part II of Schedule VI of the Companies Act 1956 do not require
 disclosure of the quantities and value wise information of Opening and
 Closing stock and purchases in respect of goods traded in by the
 Company.
 
 10.  Segment Reporting:
 
 The company has considered business segments as the primary segments
 for disclosure.
 
 Segments have been identified in line with the Accounting Standards on
 Segment Reporting (AS-17), taking into account the nature of business,
 products and services, the Companys organization structure as well as
 the differential risks and returns of these segments. Segments Revenue,
 Results, Assets and Liabilities include the respective amounts
 identifiable to each of the segments. Those not identifiable to the
 individual segments are included under unallocated.
 
 The company has classified its business into four major segments:
 
 a) Machine Tool Business Group, which handles manufacturing and
 marketing (including trading and agency business) of machine tool and
 components e.g. CNC and GPM machines, machine castings, machine
 carcasses, cranes etc.
 
 b) Textile Engineering Group, which deals in manufacturing and
 marketing of textile air-engineering systems range i.e Humidification,
 waste recovery, and auto control systems, besides marketing (including
 trading and agency business) of textile machinery e.g. circular
 knitting, spinning, and flat-knitting machines etc.
 
 c) Air-conditioning and Refrigeration division, which covers
 manufacturing, marketing, commissioning and servicing of packaged
 air-conditioners and chillers etc.
 
 d) Others, which covers remaining business i.e., agro-industrial
 products (e.g. pumps/motors), air and water treatment jobs etc
 
 11. Related Party Disclosures:
 
 Related party disclosures as required under Accounting Standard 18
 (AS-18) on Related Party Disclosures are given below: A)
 Relationships:
 
 i) Subsidiary companies:
 
 a) Queen Projects (Mauritius) Ltd.-Mauritius
 b) Vanderama Holdings Ltd.-Cyprus
 c) Pilatus View Holdings AG-Switzerland
 d) Quickmill Inc.-Canada
 e) Aesa Air Engineering SA-France
 f) Aesa Air Engineering SPA-ltaly
 g) Aesa Air Engineering PTE Ltd-Singapore 
 h) Aesa Air Engineering Ltd-Hong Kong
 i) Aesa Air Engineering Ltd-China 
 j) Aesa Air Engineering Pvt Ltd-lndia
 
 ii) Key Management Personnel:
 
 a) Mr. Nirmal Bhogilal, Chairman & Managing Director
 b) Mr. George Verghese, Executive Director
 c) Mr. Krushan Lai Swami, Executive Director & Group CFO 
 
 Ceased to be director w.e.f 01.06.2008
 
 iii) Relatives of Key Management Personnel:
 
 a) Mr. Pratap Bhogilal, Chairman Emeritus
 b) Mr.Kabir Bhogilal, Asst.General Manager-Business Development
 
 iv) Entities over which key management personnel are able to exercise
 significant influence:
 
 a) Batliboi Environmental Engineering Ltd.
 b) Batliboi International Limited
 c) Batliboi Impex Pvt. Ltd.
 d) Batliboi Enxco Pvt. Ltd.
 e) Sustime Pharma Pvt. Ltd.
 f) Spartan Electricals
 
 v) Entities to which management personnel are trustees
 
 a) Bhogilal Leherchand Foundation
 b) Leherchand Uttamchand Trust Fund
 
 12. In the opinion of the management there are no indications that the
 assets of the company are impaired.
 
 13. The figures in respect of the previous financial year have been
 reclassified and regrouped wherever necessary.