1. SECURED LOANS
a) Term Loan of Rs. 2123.66 Lakhs (Rs. 1380.62 Lakhs) from State Bank of
Travancore is secured by a frst charge on Fixed Assets of the Company.
Rs. 2527.56 Lakhs (Rs. 2023.43 Lakhs) from State Bank of India and Rs. 58.75
Lakhs (Rs. Nil) State Bank of Travancore for purchase of capital
equipment are Secured against respective Assets of the Project.
b) The company has availed Working Capital loan on pari-passu basis
from State Bank of India and State Bank of Hyderabad. These loans are
secured by hypothecation of inventories, book debts and movable current
assets of the Capital Goods divisions of the Company. These loans are
further secured by personal guarantees of two Directors of the company,
including the Chairman & Managing Director of the Company. The loan
from State Bank of India and State Bank of Hyderabad is further secured
by a second charge on the Fixed Assets of the company.
c) The Company has availed contract specifc Working Capital loans from
State Bank of India, State Bank of Hyderabad, State Bank of Travancore,
State Bank of Patiala, State Bank of Bikaner & Jaipur, State Bank of
Mysore, IDBI Bank, Punjab National Bank, Vijaya Bank, Indian Bank,
Indian Overseas Bank, Corporation Bank, Allahabad Bank, Bank of India,
Andhra Bank, Central Bank of India, Syndicate Bank, Axis Bank and The
Karur Vysya Bank Limited. These loans are secured by hypothecation of
inventories, book debts and movable current assets of the respective
contracts. The participating banks share the security on pari-passu
basis. Certain specifc project loans are further secured by personal
guarantees of two Directors, including the Chairman & Managing Director
of the company.
d) Secured Loans includes Rs. 581.43 lakhs (Rs. 1346.51 lakhs) for which
the respective Fixed Assets acquired under Loan are held as security.
2. CONTINGENT LIABILITIES, GUARENTEES AND CAPITAL COMMITMENTS
Rs. Lakhs
As at As at
PARTICULARS
31.03.2011 31.03.2010
a CONTINGENT LIABILITIES
Claims against the Company not acknowledged as debt
a) On account of Sales Tax 161.49 178.09
b) On account of Income Tax 3779.69 2915.49
c) On account of Service Tax 41.75 32.41
d) On account of Contractual Obligations 2350.25 2350.25
GUARANTEES
Guarantees and Counter Guarantees given on
behalf of Subsidiary and Other Company 744.49 775.83
B CAPITAL COMMITMENTS
Estimated amount of contracts remaining to
be executed on capital account 8361.54 1371.63
3. Sundry Debtors – Others, includes Retention amount of Rs. 114441.27
lakhs (Rs. 74953.81 lakhs) which, in accordance with the terms of the
contracts were not due for payments as at March 31, 2011.
4. CASH AND BANk BALANCES
i) Deposits amounting to Rs. 44068.51 lakhs (Rs. 44639.51 lakhs) are under
lien to Banks.
ii) The balance of Cash and Cash equivalents includes Rs. 13.44 Lakhs (Rs.
8.01 Lakhs) as at March 31, 2011, being amount lying in unpaid dividend
accounts.
iii) Bank balances of Rs. 3.48 Lakhs (Rs. 3.68 Lakhs) are subject to
confrmation.
iv) The balance in project specifc escrow account have been netted off
against respective project’s working capital account.
5. All the Investments held by the Company are long term in nature.
6. LOANS AND ADVANCES
cochin Project: The end client of Cochin Port Road Connectivity Project
viz., Cochin Port Road Company Ltd., (SPV of NHAI) terminated the
contract on 28.05.2007. Consequently, the end client encashed BGs for a
value of Rs. 1270 lakhs furnished by the Company on behalf of MECON – GEA
(JV). The main contractor viz., MECON – GEA (JV) contested the
termination of the contract and had taken steps to constitute the
Disputes Review Board (DRB) in terms of the contract. The DRB had given
recommendations only partly allowing the claims of the J V. The JV
preferred to approach the Arbitration Tribunal by invoking the
arbitration proceedings. The Tribunal has been constituted and
arbitration has commenced. In anticipation of determination of the
dispute and based on the legal opinion, the company has identifed a sum
of Rs. 1654.35 lakhs (Rs. 1654.35 lakhs) as on 31.03.2011 as recoverable
advances from the end client through the JV and is shown under loans
and advances.
Tuticorin Project: The end client namely Tuticorin Port Road Company
Ltd (SPV of NHAI) viz, Thirunelveli – Tuticorin Port Connectivity
Project has terminated the contract and encashed BGs furnished by the
company on behalf of MECON – GEA (JV). The High Court has ordered
restitution of the Bank Guarantee and has directed NHAI to redeposit
the amount of BGs. The main contractor viz., MECON – GEA (JV) contested
the termination of the contract and had taken steps to constitute the
Disputes Review Board (DRB) in terms of the contract and DRB gave the
recommendations favoring main contractor (MECON – GEA (JV). NHAI has
invoked the arbitration clause against the recommendation of DRB.
Arbitrators have been nominated by both parties. In view of these
developments, the Company has identifed a sum of Rs. 1460.72 Lakhs (Rs.
1460.72 lakhs) as on 31.03.2011 as recoverable advances from the end
client through the JV and is shown under loans and advances.
7. Plant and Machinery include Rs. 686.72 lakhs (Rs. 686.72 lakhs), which
are jointly owned along with a Joint Venture, of which the Company is a
member.
8. UTILISATION OF IPO FUNDS
The Company has raised Rs. 19012 Lakhs from IPO (Net of Issue Expenses)
during the year 2007-2008. Rs. 19012 Lakhs has been fully utilized
towards working capital requirement, as per the terms of the
prospectus.
9. Securities Premium of Rs. 31895.37 Lakhs (Rs. 31252.36 Lakhs)
represents money raised on account of IPO Rs. 31252.36 Lakhs (Rs. 31252.36
Lakhs) and ESOS Rs. 643 Lakhs (Rs. Nil).
10. During the year the Company has fled a police complaint against 3
of its employees for having stolen and passed on certain intellectual
property information and data to competitor company. The value of the
theft is not determinable. The Company has taken effective steps to
strengthen the IT architecture to prevent recurrence of such instance.
11. EMPLOYEE BENEFITS
Defned Beneft Plan
The liability for gratuity is funded through a scheme administered by
an insurer and provision is made based on actuarial valuation carried
out as at Balance Sheet date.
Gratuity Plan
The Company operates gratuity plan wherein every employee is entitled
to the beneft equivalent to ffteen days salary last drawn for each
completed year of service. The same is payable on termination of
service or retirement whichever is earlier. The beneft vests after fve
years of continuous service.
12. PARTICULARS OF RELATED PARTIES
List of Related Parties
a. Subsidiary companies
Progen Systems and Technologies Ltd.
BGR Boilers Private Limited
BGR Turbines Company Private Limited
b. associate company – Nil
c. Other companies
i. GEA Cooling Tower Technologies (India) Private Ltd.
ii. GEA BGR Energy System India Ltd.
iii. Germanischer Lloyd Industrial Services (India) Private Ltd.
iv. Mega Funds India Ltd.
v. Sasikala Estate Private Ltd.
vi. Schmitz India Private Ltd.
vii. Cuddalore Powergen Corporation Ltd.
viii. Ani Constructions Private Limited
ix. Nannilam Property Private Limited
d. Joint ventures
Mecon – GEA Energy System (India) Limited (JV)
e. key Management Personnel :
i. Mr. B.G. Raghupathy : Chairman & Managing Director
ii. Mr. T. Sankaralingam : Managing Director
iii. Mr. S. Rathinam : Director - Finance
iv. Mr. V.R. Mahadevan : Director - Technologies & HR
v. Mr. A. Swaminathan : Director - Sales & Marketing
f. Relatives of key Management Personnel
i. Ms. Swarnamugi Karthik (Daughter of Mr. B.G. Raghupathy)
ii. Ms. Priyadarshini Raghupathy (Daughter of Mr. B.G. Raghupathy)
iii. Ms. Vaani Raghupathy (Daughter of Mr. B.G. Raghupathy)
iv. Mr. R.Prabhu (Son of Mr. S. Rathinam)
13. EMPLOYEE STOCK OPTION SCHEME
Stock option granted to the employees under the stock option scheme
established are evaluated as per the accounting treatment prescribed by
the Employee Stock Option Scheme and Employee stock purchase scheme
Guidelines, 1999 issued by Securities Exchange Board of India. The
Company follow the intrinsic value method of accounting for the options
and accordingly, the excess of market value of the stock options on the
date of grant over the exercise price of the options, if any, is
recognized as deferred employee compensation and is charged to the
Profit and Loss Account.
Employee Stock Option Scheme – 2007
Pursuant to the decision of the shareholders, at their meeting held on
July 11, 2007, the Company has established an ‘Employee Stock Option
Plan 2007’ (‘ESOS 2007’ or ‘the Scheme’) to be administered by the
Compensation Committee of the Board of Directors.
ESOS 2007 provides for grant of options amounting to not more than 1.5%
of the issued and paid-up equity capital of the company outstanding at
any point of time to Officers, directors and Key employees to purchase
Equity shares of face value of Rs. 10 each, with such option conferring a
right upon the employee to apply for one equity shares of the company,
in accordance with the terms and conditions of such issue. The exercise
price of the option is Rs. 408
14. LEASES
Operating Lease
The Company has taken various commercial premises and plant and
machinery under cancellable operating leases. These lease agreements
are normally renewed on expiry. Lease rental expense in respect of
operating leases: Rs. 1181.64 Lakhs (Rs. 1001.66 Lakhs).
15. JOINT VENTURES
The company along with Mecon Ltd has formed an unincorporated Joint
Venture namely Mecon – GEA Energy System (India) Limited (JV)
(Association of Persons) for execution of two road projects.
16. IMPAIRMENT OF ASSETS
a. Cash Generating Units :
There is no impairment loss of cash generating assets and hence no
provision was made in the financial statements.
b. Other Assets :
The company has made a provision of Rs. 9.07 Lakhs (Rs. 10.71 lakhs) in the
books of accounts towards impairment of other fxed assets based on the
technical valuation.
17. PROVISIONS
The company has made a provision of Rs. 9163.30 Lakhs (Rs. 5761.19 Lakhs)
towards Warranty and Contractual obligations on the products supplied /
contracts executed by the company during the year 2010-11.
18. Previous year fgures have been regrouped wherever necessary for
comparative purposes and shown along side or in brackets. |