Everest Kanto Cylinder

1.  Loan Funds:
 
 (a) Term Loan from Citibank is secured by way of first charge on all
 the fixed assets of Gandhidham unit (excluding specific fixed assets).
 
 (b) Term Loan from State Bank of Hyderabad is secured by way of first
 charge on the office premises located in Mumbai.
 
 (c) External Commercial Borrowing from DBS Bank is to be secured by
 first charge on the specific fixed assets of the Kandla SEZ and till
 such time is guaranteed by a director.
 
 (d) Working Capital facilities are secured against hypothecation of
 stocks and book debts of the Company and further secured by way of
 second charge on all the fixed assets (excluding specific fixed assets)
 of the Company.
 
 (e) Vehicle Loan is secured by hypothecation of vehicles purchased
 there against.
 
 (f) The borrowings mentioned in (a) and (d) above are also guaranteed
 by Directors and their relatives.
 
 2.  Contingent liabilities not provided for in respect of:
 
                                       As at       As at
                                  31.03.2009    31.03.2008 
                                 (Rs. in Lac)  (Rs. in Lac)
 
 (a) Disputed Tax and other 
 Matters
 Sales Tax                             -           39.19
 Lease Tax                           16.34         16.34
 Wealth Tax                           0.23           - 
 Claims not acknowledged
 as debts                             1.77          4.77
 
 
 The Company has taken legal and other steps necessary to protect its
 position in respect of these claims, which in its opinion, based on
 professional advice are not expected to devolve. It is not possible to
 make any further determination of the liabilities which may arise or
 the amounts which may be refundable in this respect.
 
 (b) With regard to the search conducted by the Income Tax Department
 during the Financial Year 2005-06, the Company has not received any
 demand from the authorities under section 132 of Income Tax Act, 1961.
 
 Apart from various records, cash amounting to Rs. 4.07 Lac, which is
 included in cash balance, was also seized by the Department. The
 Company has paid tax as per revised income tax returns and also made an
 application to the Settlement Commission for settling any dispute
 arising out of the same and the proceedings are in process. As a
 result, the liability arising there against, if any, is not
 determinable at present.
 
 3.  (a) Sundry Creditors in Schedule L to the Accounts include
 
 (i) Rs. 2.05 Lac (Rs. Nil as at 31.03.2008) due to micro and small
 enterprises registered under the Micro, Small and Medium Enterprises
 Development Act, 2006 (MSME) and (ii) Rs. 11,654.61 Lac (Rs. 6,049.01
 Lac as at 31.03.2008) due to other creditors.
 
 (b) No interest is paid / payable during the year to any enterprise
 registered under MSME.
 
 (c) The above information has been determined to the extent such
 parties could be identified on the basis of the information available
 with the Company regarding the status of suppliers under the MSME.
 
 4.  Estimated amount of contracts remaining to be executed on 4,058.94
 3,263.88 Capital Account and not provided for (net of advances).
 
 5. During the previous year, the Company had raised a sum of USD 35
 Million by issue of Zero Coupon Foreign Currency Convertible Bonds
 (FCCB) which is due in 2012. The principal terms of the FCCBs are given
 below:
 
 (i) The bond holders can exercise the option to convert into equity
 shares at any time after 41 days from the date of issue, upto seven
 days prior to maturity, at a fixed conversion price of Rs. 303.36 per
 share with a fixed rate of Rs. 39.84 to USD 1 (i.e. a conversion ratio
 of 13,133.1279 shares per bond).
 
 (ii) On expiry of one year from the date of issue of the bonds, i.e. on
 9th October, 2008, the conversion price has been reset to Rs. 271.32
 (i.e. a conversion ratio of 14,684.0103 shares per bond).
 
 (iii) The Company may opt for early redemption of the bonds at a
 redemption premium that gives the bond holder a gross yield of 7.25%
 per annum (compounded half yearly), provided bonds outstanding are less
 than 10 per cent of the bonds originally issued.
 
 (iv) The Company may at its absolute discretion, at any time on or
 after 3 years from the date of issue of bonds, convert all outstanding
 bonds, provided the closing price of shares, during the specified
 period, is at least 130% of the applicable early redemption amount.
 
 (v) Bonds outstanding on the maturity date will be redeemed at
 142.8010% of the principal amount.
 
 Due to variables currently indeterminable, the premium on actual
 redemption is not computable and hence wili be recognised if and as and
 when the redemption option is exercised. Such premium shall be first
 charged to the available balance in securities premium account.
 
 6. Bonds / Undertakings given by the Company under concessional duty /
 exemption schemes to government authorities (net of obligations
 fulfilled) aggregate Rs. 3,104.65 Lac as at the close of the year.
 
 7. In respect of currency options contracts entered into, to hedge
 highly probable forecast export transactions, the Company has followed
 the principles set out in Accounting Standard - 30 - Financial
 Instruments: Recognition and Measurement issued by the Institute of
 Chartered Accountants of India.  Consequently, such exchange variations
 are accumulated in hedging reserve and recognized in the Profit and
 Loss Account only on completion of the transaction. Accordingly,
 debit balance in the Hedging Reserve, as at 31st March, 2009,
 representing mark to market losses, in respect of contracts maturing
 upto December, 2012, stands at Rs. 2,589.95 Lac.
 
 8.  The Company has an investment of Rs. 200 Lac in 2,000,000 equity
 shares of GPT Steel Industries Private Limited (GPT).  As per the
 latest audited financial statements of GPT, the net worth has eroded.
 However, as per information available with the Company, GPT continues
 to be a going concern and has now embarked upon a revival plan.
 Considering the same and the intention of the management to hold this
 investment on a long term basis, no diminution in the value of the
 above investment is considered necessary, at present.
 
 9.  As a part of its global expansion plans, the Company has through
 its wholly owned subsidiary incorporated step down subsidiaries in
 Hungary and further in U.S.A. which entities have acquired all the
 assets of CP Industries (a division of Reunion Industries, Inc.) for a
 total consideration of USD
 66.30 Million. For part financing the acquisition, the Company has
 extended a Corporate Guarantee of USD 45 Million to three banks who
 have part financed the acquisition. This acquisition has been
 consummated on 18th April, 2008.
 
 10.  The Company has completed the acquisition of a majority stake
 (72.65%) in Calcutta Compressions & Liquefaction Engineering Private
 Limited (CC&L) for a consideration of Rs. 238.89 Lac. CC&L has a
 subsisting agreement with Oil & Natural Gas Corporation Limited
 (ONGC) for purchase of Coal Bed Methane Gas from its gas field
 located in Jharkhand. The acquisition was completed on 18th April,
 2009.
 
 11.  Previous year figures have been regrouped / recast wherever
 necessary.