BGR Energy Systems

1.  SECURED LOANS
 
 a) Term Loan of Rs.259.36 lakhs from Corporation Bank (Rs.365.74 Lakhs)
 is secured by a first charge on fixed assets of the Company. The term
 loan is further guaranteed by the Managing Director of the Company.
 
 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 product divisions of the company. These loans are further
 secured by personal guarantees of two Directors of the company,
 including the 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 specific 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, UCO Bank, State
 Bank of Indore, State Bank of Mysore, IDBI Bank, Punjab National Bank,
 Vijaya Bank, Indian Bank, Indian Overseas Bank and Corporation Bank.
 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 specific project
 loans are further secured by personal guarantees of two Directors,
 including the Managing Director of the company.
 
 d) Secured Loans includes Rs.2222.24 lakhs (Rs. 1489.73 lakhs) for
 which the respective fixed assets acquired under Loan are held as
 security.
 
 2.  CONTINGENT LIABILITIES, GUARANTEES & CAPITAL COMMITMENTS (Rs.in
 Lakhs)
 
 Description                             As at                As at
                                    31.03.2009           31.03.2008
 
 CONTINGENT LIABILITIES
 
 i) Bills Discounted (Backed by LC)    24.84              7916.06 
 ii) Claims against the
 company not acknowledged as debt
 
 a) On account of Sales Tax           156.22               169.58
 
 b) On account of Income Tax             -                   0.39
 
 c) On account of Contractual 
                  Obligations        2930.36                  -
 
 3.  Sundry Debtors - Others includes Rs. 56512.94 lakhs (Rs. 33399.86
 lakhs) which, in accordance with the terms of the contracts were not
 due for payments as at 31st March 2009.
 
 4.  CASH AND BANK BALANCES
 
 i) Deposits amounting to Rs.20384.06 lakhs (Rs.11503.93 lakhs) are
 under lien to Banks.
 
 ii) The balance of Cash and Cash equivalents includes Rs.3.71 Lakhs as
 at 31st March 2009 set aside for payment of Dividends.
 
 iii) Bank balances of Rs.6.87 Lakhs are subject to confirmation.
 
 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) has terminated the
 contract on 28.05.2007. Consequently, the end client has encashed BGs
 for an value of Rs.1270 lakhs furnished by the company on behalf of
 MECON - GEA (JV). The main contractor viz., MECON - GEA (JV) is
 contesting the termination of the contract and has taken steps to
 constitute the Disputes Review Board in terms of the contract. In
 anticipation of determination of the dispute, the company has
 identified a sum of Rs. 1654.35 lakhs (Rs. 1522.00 lakhs) as on
 31.03.2009 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, Tirunelveli - Tuticorin Port Connectivity
 Project has terminated the contract and encashed BGs furnished by the
 company on behalf of MECON -GEA (JV). The main contractor viz., MECON -
 GEA (JV) is contesting the termination of the contract. Based on the
 legal opinion, the Company has identified a sum of Rs.1460.72 Lakhs
 (Rs. 82.73 lakhs) as on 31.03.2009 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.916.08 lakhs),
 which are jointly owned along with a Joint Venture, of which the
 Company is a member.
 
 Defined Benefit 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 benefit equivalent to fifteen days salary last drawn for each
 completed year of service. The same is payable on termination of
 service or retirement whichever is earlier. The benefit vests after
 five years of continuous service.
 
 8.  PARTICULARS OF RELATED PARTIES List of Related Parties . a.
 Subsidiary Companies
 
 Progen Systems and Technologies Ltd.
 
 b.  Associate Company
 
 Cuddalore Powergen Corporation Ltd.
 
 c.  Other Companies
 
 i.  GEA Cooling Tower Technologies (India) Pvt. Ltd.
 
 ii.  GEA BGR Energy System India Ltd.
 
 iii.  Germanischer Lloyd Industrial Services (India) Pvt. Ltd.
 
 iv.  Mega Funds India Ltd.
 
 v.  Sasikala Estate Pvt Ltd.
 
 vi.  Schmitz India Private Ltd.
 
 d.  Joint Ventures
 
 Mecon - GEA Energy System (India) Limited (JV)
 
 e.  Key Management Personnel:
 
 i.  Mr. B.G.Raghupathy : Managing Director
 
 ii.  Mr. S.Rathinam : Director - Finance
 
 iii.  Mr. V.R. Mahadevan : Director - Technologies & HR
 
 f.  Relatives of Key Management Personnel
 
 i.  Ms. Priyadarshini Raghupathy (Daughter of Mr.B.G.Raghupathy) ii.
 Ms. Vani Raghupathy (Daughter of Mr.B.G.Raghupathy) iii.  Mr. R.Prabhu
 (Son of Mr.S.Rathinam)
 
 9.  LEASES:
 
 Finance Lease
 
 i.  Plant and Machinery amounting to Rs. 686.72 Lakhs (Rs.722.27 lakhs)
 on Finance Lease and the written down value of these assets as on
 31.3.2009 is Rs.447.50 lakhs (Rs.454.83 lakhs)
 
 Operating Lease
 
 The minimum lease rentals as at 31st March 2009 in respect of assets
 acquired under Operating lease are as follows.
 
 i.  Paid till 31.03.2009 is Rs.137.20 Lakhs (Rs.107.36 Lakhs)
 
 ii.  Payable not later than 1 Year is Rs.NIL Lakhs (Rs.29.83 Lakhs)
 
 iii.  Payable later than 1 year and not later than 5 Years is Rs. Nil
 Lakhs (Rs. Nil)
 
 10.  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.
 
 11.  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. 2.24 lakhs (Rs. 9.56 lakhs) in
 the books of accounts towards impairment of other fixed assets based on
 the technical valuation.
 
 12.  Previous year figures have been regrouped wherever necessary for
 comparative purposes and shown along side or in brackets. Amounts
 furnished in above notes are in INR and same are rounded off to nearest
 rupee.