annual report 2011-12 - Heavy Engineering Corporation Limited

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Shri R Misra, CMD, HEC is seen receiving the “BT-Star PSU Excellence Awaed 2012” in Turn Around Category 

from Shri Oscar Fernandes, Chairman, Committee on Human Resource Development, Shri TKA Nair, Advisor to 

the Hon'ble Prime Minister & Shri Nishi Kant Sinha, Former Chairman, PESB at Hotel Taj Mansingh, New Delhi 

on 25.05.2012. 

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efMeueevÙeeme keâjles ngS DeOÙe#e-men-heÇyebOe efveosMekeâ, SÛeÊF&ÊmeerÊ, ßeer DeejÊ efceßee 

Sri R. Misra, CMD of Heavy Engineering Corporation, is seen laying the foundation stone of an 

“Effluent Treatment Plant” at the company Foundry Forge Plant in Ranchi on 19th September 2012.

GLIMPSES OF SOME IMPORTANT EVENTS 

Sri R. Misra, CMD, HEC inaugurating the dispatch of first “CNC Deep Hole Boring Machine”, 

Model BDH 140N to Ordinance Factory, Kanpur. 

Celebration of Shri Vishkarma Puja at HEC Plants on 17.09.2012

iegCeJeòee veerefle 

QUALITY POLICY 

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iegCeJeòeehetCe& GlheeoeW, heÇCeeefueÙeeW SJeb mesJeDeeW kesâ 

efJeÕemeveerÙe mehueeÙej kesâ he ceW DeieÇCeer mLeeve heÇehle 

keâjvee leLee Gmes yeveeÙes jKevee 

To achieve and maintain a leading 

position as supplier of reliable quality 

products, systems and services to meet 

customer needs and expectations

CONTENTS 

ANNUAL REPORT 2011-12 

1. Notice of AGM 2 

2. Directors' Report 3 

- R&D, Technology Absorption, Adaptation, Innovation and Energy Conservation 10 

- Report on Corporate Governance 12 

- Auditors Report and Management's Replies 14 

- Comments on the Accounts by C & AG 19 

3. Annual Accounts 

- Significant Accounting Policies 20 

- Audited Accounts with Notes & Cash Flow Statement 22 

4. Additional Information 46 

BOARD OF DIRECTORS 

(As on 30.11.2012) 

Chairman-cum-Managing Director : Shri R.Misra 

Director (Production) : Shri Kushal Saha 

Director (Personnel) : Shri Subhra Banerjee 

Director (Marketing) : Shri A.V. Krishna 

Director : Shri Vijay Shankar Madan 

: Shri Harbhajan Singh 

Company Secretary : Shri Abhay Kumar Kanth 

Auditors : M/s Anjali Jain & Associates, 

Chartered Accountants 

Bankers : State Bank of India 

Registered Office : Plant Plaza Road, Dhurwa, 

Ranchi- 834004 (Jharkhand) 

1


NOTICE OF ANNUAL GENERAL MEETING 

Notice is hereby given to the Shareholders of Heavy Engineering Corporation Limited that 53rd Annual General Meeting of the Company will be held on 

Friday, the 30th November, 2012 at 3.00 PM at its Registered Office located at Plant Plaza Road, Dhurwa, Ranchi to transact the following business:- 

ORDINARY BUSINESS 

1. To receive, consider and adopt the Directors' Report to the Shareholders for the financial year ended 31st March 2012. 

2. To receiver, consider and adopt the audited Profit & Loss Account for the financial year ended 31st March, 2012 and Balance Sheet as on that date 

along with the Auditors Report thereon and our replies thereto. 

3. Appointment of Auditor under Section 619 (2) of the Companies Act, 1956 for the financial year 2012-13 authorize Board of Directors to fix 

remuneration of the Statutory for the financial year 2012-13 

By order of Board of Directors 

Date : 5.11.2012 

(A. K. Kanth) 

Co. Secretary 

Note: 1. A Member of the Company entitled to attend and vote at the meeting is entitled to appoint proxy to attend and vote instead of himself and 

proxy need not be a Member of the Company. 

2

BOARD OF DIRECTORS 

(As on 30.11.2012) 

Shri R. Misra 

Chairman-cum-Managing Director 

Shri Vijay Shankar Madan 

Director 

Shri Harbhajan Singh 

Director 

Shri Kushal Saha 

Director (Production) 

Shri Shubhra Banerjee 

Director (Personnel) 

Shri A. V. Krishna 

Director (Marketing) 

Shri Abhay Kumar Kanth 

Company Secretary

OUR PROJECTS 

Wagon Tippler at New OBBP, Rourkela Steel Plant 

Twin Boomer Stakcer at New OBBP, Rourkela Steel Plant


DIRECTORS' REPORT 

To 

The Shareholders 

Heavy Engineering Corporation Limited 

Ladies and Gentlemen, 

Heavy Engineering Corporation has completed its 53 years of service to the nation and the Directors of the Company have the pleasure to present the 53rd 

Annual Report of the Company together with Audited Accounts for the year ended 31st March, 2012. 

It is matter of great pride that your company continuously earned net profit for the 6th consecutive year and has been conferred BT – Star PSU Excellence 

Award 2012 in Turn Around Category. 

1. PERFORMANCE HIGHLIGHTS 

We are happy to inform you that inspite of odds like labour unrest, stoppage of bank operation and delay in implementation of upgradation of some 

of critical facilities your company has shown growth in terms of Gross sales. The gross sale has gone up by 6.5% over that of the last financial year. 

The gross sales during the year has been ` 725.23 crore against ` 681.21 crore during the previous year. 

2. PRODUCTION & SALES 

The production & sales figures for the year as compared to the previous year and MOU targets are as follows:- 

2011-12 2010-2011 

MOU Actual MOU Actual 

Gross Turnover 1000.00 725.23 700.00 681.21 

Production 952.22 687.74 667.70 700.55 

The Gross Sales, Production and productivity for the last ten years are given below: 

(` in crore) 

Gross Sales 

` Crore 

800 

700 

681 

725 

600 

500 

400 

413 

454 

528 

300 

304 

200 

100 

0 

159 178 

2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 

3


Production 

` Crore 

800 

700 

701 688 

600 

500 

400 

383 419 

538 

300 

281 

200 

100 

136 

166 

0 


Productivity 

There is a marked improvement in Gross sales per employee 

Gross Sales per Employee 

` Lakhs 

35 

30 

30.17 

25 

24.60 

20 

15 

10 

5 

4.41 5.15 

9.13 

13.80 

15.83 

18.42 

0 


3. FINANCIAL RESULTS 

Profitability was affected due to increase in material cost, fuel cost and employment cost. As a result, Gross margin has gone down inspite of 

improvement in productivity in terms of Gross Sales per employee. 

(` in crore) 

Particulars 

2011-2012 2010-2011 

MOU Actual MOU Actual 

Gross Margin* 62.00 18.34 54.00 42.60 

Interest 4.75 5.15 12.00 0.92 

Depreciation 5.15 4.31 5.20 4.06 

Profit before Tax 52.10 8.58 36.80 38.14 

Net Profit 52.10 8.58 36.80 38.14 

Cash Profit 57.25 12.89 42.00 42.20 

* Profit before Depreciation, Interest, Tax, Prior Period and extra ordinary items 

4


Gross Margin 

` Crore 

60 

40 

31.19 

44.02 

34.38 

42.60 

20 

0 

13.15 

18.34 

-20 

-40 

-60 

-80 

-61.49 -64.24 


Net Profit 

` Crore 

100 

50 

0 

2.86 4.17 

18.37 

44.27 38.14 

8.58 

-50 

-100 

-86.89 

-150 

-200 

-250 

-300 

-350 

-285.02 


Paid up Equity Capital of the Company on 31.03.2012 stands to be ` 606.08 crore. 

During the year your Company contributed ` 74.52 crores to Central and State Exchequers as compared to ` 66.45 crores in the previous year. 

5


4. MARKETING ACTIVITIES 

ORDERS BOOKED & ORDER BOOK POSITION : 

Inspite of delay/deferment of many high value projects/tenders by 

customers, company during the year booked orders worth ` 545.82 

crore and order book position of company stood at ` 1916.36 crore 

as on 31.3.2012. 

During the year, the Company received following important orders: 

• EOT Crane Package of various capacity from BSP Bhilai. 

• 07 nos. 5 cum Shovel equipment from different units of CIL. 

• Coal Handling Plant from NCL Krishnashila. 

• Crusher package from SAIL RMD. 

• 03 nos. CNC Lathe machine from FGK Kanpur. 

• Mining Spares from various CIL units. 

Apart from the above, a number of orders for Castings, Forgings, 

Spare items had also been received from various Steel Plants, Mining 

& general engineering industries in Private sector. 

Project Activities : 

The Project Division is currently executing the Turnkey orders of Ore 

Handling Plant, Part-A (Pkg-060) & Coal Handling Plant (062) 

of BSP Bhilai and Pkg-090 of RSP Rourkela. The execution of the 

projects at these sites is under progress and all efforts are being 

made for early execution. 

Besides this, Coal Washery at Madhuband (BCCL) and Coal Handling Plant 

of NCL Krishnashila & Crusher package of SAIL RMD is in initial stage. 

The production achieved for 2011-12 was ` 285 crore against the 

target of ` 414 crore. Shortfall has been due to land slide owing to 

heavy rainfall at BSP site and non-start of work of Coal washery at 

Madhuband, BCCL due to exorbitant delay in receipt of environmental 

clearance by BCCL from Govt. of India 

NEW BUSINESS INITIATIVES: 

a) Important MOU/Agreements Signed during 2011-12: 

• With M/s Vitkovice a.s., Czech Republic on 10.10.2011 - for 

equipments/components for Steel, Thermal power plant, Naval 

Ship, Nuclear Sectors 

• With M/s INCO Engineering, Czech Republic on 10.10.2011 - 

for Underground Mining Equipments 

• With M/s Kralovopolska, Czech Republic on 06.10.2011 - for 

Petrochemical sector & EOT Cranes 

• With M/s V R Steel, South Africa on 18.11.2011 - for manufacture 

of (a) Bucket for Dragline & Shovel, (b) Body for Mining Dumper, 

(c) Components used for Bulk Material Handling, (d) Armoring of 

Car/vehicle for personal & Military use 

b) Efforts for Export orders 

An order for ` 10 crore had been received for modernization of 

Saidpur Railway Workshop project, Bangladesh. 

5. BIFR AND REVIVAL PACKAGE 

Consequent upon winding up order of BIFR and subsequent appeal to 

AAIFR and Hon’ble High Court of Jharkhand, issue of revival of HEC 

was referred to BRPSE which recommended revival package for HEC 

on 7.10.2005. Govt. of India approved the package in Dec-2005. 

Continued efforts were made to settle the various issues pertaining to 

land, buildings, waiver of dues and fund to be provided by Govt. of 

Jharkhand. Govt. of Jharkhand (GOJ) in April 2009 agreed to waive 

outstanding electricity dues plus DPS on it and water dues; provide 

grant of ` 275.51 crore out of which HEC would pay ` 25.51 crore 

to Commercial Tax Dept. to settle the outstanding Commercial Tax 

Liabilities. HEC will transfer non-residential/residential buildings, 

which were given on rent to GOJ, and 2342 acres of land (including 

85 acres of appurtenant land with buildings) to State Govt. In 

addition, GOJ agreed for transfer of 158 acres of land by HEC to CISF 

to settle their dues. Accordingly affidavits were filed by HEC, DHI and 

Govt. of Jharkhand based on which Hon’ble Jharkhand High Court 

approved the revival package on 13.11.2009. 

Company has transferred 158 acres of Land to CISF. Govt. Jharkhand 

had taken possession of 1148 residential quarters, 17 non-residential 

buildings with 85.11 acres appurtenant land and 1902.64 acres 

of vacant land which in turn had released ` 164.21 crore out of ` 

275.51 crore agreed earlier. In addition it had waived electricity dues 

upto 31.3.2006 and Delayed Payment Surcharge (DPS) upto 31.8.08. 

The reliefs like waiver of DPS for the period 1.9.2008 to 31.3.2010 

and water dues and receipt of balance amount of grant of ` 111.30 

crore, settlement of commercial tax dues upto 31.03.2007 under the 

revival package approved by Hon’ble Jharkhand High Court is yet to 

be implemented. Efforts are being made to settle all these issues. 

However, partial implementation of the Revival Scheme of Govt. of 

Jharkhand has not been accounted for in the Accounts. 

6. SAFETY, ENVIRONMENT AND POLLUTION CONTROL 

As always, your company gives utmost importance to the occupational 

safety and health of workers in the company. Various training and 

awareness programme were conducted regularly in order to inculcate 

safety consciousness among the employees. Complete medical 

check-ups were regularly carried on as per the statutory norms. 

Safety appliances like hand gloves, goggles, protective clothing, 

safety helmets, safety belts, safety shoes etc. were provided to 

the employees. National safety day and HEC Safety Week were 

celebrated by all the units. 

6


The company does not compromise on environmental pollution and 

so takes all precautions towards pollution control as detailed below :- 

• Compliance with all statutory requirements laid down under 

Air (Prevention and Control of Pollution) Act, Water (Prevention 

and Control of Pollution) Act and Environment (Protection) Act. 

• Obtaining running consent from the State Pollution Control 

Board and compliance with the stipulated conditions. 

• Testing of water effluent samples regularly for pollutants, 

based on which consent for discharge of water to inland body 

is granted. 

• Ambient air test is carried out regularly to ascertain limit of 

pollution gases before giving consent for air emission. 

• Regular tree plantation activities are being carried out with the 

help of forest department to keep the HEC areas green and 

reduce the pollution. 

7. MANPOWER POSITION 

The manpower of the Company as on 31.03.2012 stood at 2404 as 

against 2769 on 31.03.2011. 

8. INDUSTRIAL RELATIONS 

During the period under review, the industrial relation climate, in 

general remained normal. However, gate meetings and general 

meetings organized by different trade unions to press their demands 

mainly related to wage revision, promotion, pending LTL issues, 

unauthorized occupation of Quarters and lands, increase in water 

charges, minimum wages to contract workers, regularization of 

contract workers etc. The year 2011-12 saw finalization of revision 

of scales of pay for workers, supervisors and executives. 

Indefinite Dharna is organized by dependent of deceased employees 

w.e.f. 13.04.2012 near HEC Headquarters gate seeking employment 

with HEC. 

9. EMPLOYEE WELFARE 

The company has its own Township, Plant Hospital and dispensaries 

for the regular employees. Contract workers are extended medical 

benefit under ESI Scheme for which subscription amount is paid 

by the Company to the respective contractors. Superannuated 

employees are extended free indoor & outdoor medical facility in 

HEC Plant Hospital. 

Efforts are being made to facilitate the employees/ contract 

workers to continue their study in order to clear the matriculation 

examination. Corporation will help them in getting registration etc. 

as private candidate. 

Attempts are being made to get ITI equivalent qualifications for 

experienced but unqualified contract workmen. 

10. HUMAN RESOURCE DEVELOPMENT 

Your company gives immense importance to human resource 

development. Thrust were on competency development through 

organizing a series of programmes on soft skills viz. attitudinal 

development, emotional quotient, transactional analysis, enthusing 

team building, leadership quality development, developing 

supervisory skill, subordinate development. This helped company in 

achieving substantial improvement in performance and company is 

making net profit since last 6 years. 

Your company is running two schools for the wards of employees & 

others in the neighboring areas. 

11. STATUS OF SCHEDULED CASTES AND SCHEDULED 

TRIBES 

i). No. of SC & ST employees as on 31.03.2012 stood at 319 and 

442 respectively 

ii). Percentage of SC & ST employees w.r.t total employees stood 

as 13.27% and 18.30% respectively. 

iii). Out of 25 recruitments made during the year 2011-12, 04 

nos. of SC candidates & 03 nos. of ST candidates have joined. 

12. PROGRESSIVE USE OF HINDI 

Rajbhasha Vibhag promotes the usage of Rajbhasha Hindi through 

out your company as an essential effort for wider implementation 

under the directives of Govt. of India. 

The following steps were taken by the company during the year 

towards progressive use of Hindi as official language : 

i) The typists and stenos of English have been given training for 

typing and stenography in Hindi. 

ii) Employees are being motivated and trained to become 

conversant with Hindi as a workable language. 

iii) The Official Language Implementation Committee organized 

its quarterly meetings regularly during the year. 

iv) Various checkpoints have been made to ensure successful 

implementation of Raj Bhasa Policy and attention of the Heads 

of Departments/Plants were attracted towards deficiencies found, 

if any. Directives were also issued to follow the rules rigidly. 

v) Raj Bhasha Fortnight was organized and various competitions 

such as Essay writings, Speech, Poetries, Noting, Drafting, 

Typing as well as for Raj Bhasha Shield and excellent work in 

Hindi were held. The winners were given attractive prizes. Two 

Hindi workshops were organized for the benefits of employees 

up to date their working knowledge in Hindi. 

7


13. DEVELOPMENT OF ANCILLARIES AND SSI UNITS 

As a part of its social responsibility, your company developed an 

ancillary area near Tupudana with the help of Ranchi Industrial 

Development Authority to create opportunity of employment as well 

as individual entrepreneurship. 

Regular interactions were organized with the SSI units to find out 

various scopes for mutual cooperation and entry in new areas 

commensurate with HEC’s growth. 

14. CORPORATE SOCIAL RESPONSIBILITY 

Initially HEC had a dedicated section known as “Community 

Development Cell” for carrying out CSR activities which included 

construction of culverts, helping nearby villagers for poultry farming 

and its training, provisions for drinking water etc. Later on with 

the deterioration in performance company abandoned this cell. 

Subsequently, company started skill development programme where 

preference are being given to local youths and youths from displaced 

family. For this company started Industrial Training Institute known 

as HEC Training Institute (HTI) which provides certificate equivalent 

to ITI. Company also runs Nursing School for local youths. Company 

also runs schools with a nominal fee. Company is having 350 

bedded Hospital where ex-employees & their spouse are provided 

free treatment. In addition, free health camps are being organized in 

nearby villages and HEC hospital. 

15. VIGILANCE ACTIVITIES 

Vigilance organization of the company operated under the overall 

administrative and functional control of Chief Vigilance Officer. 

Preventive vigilance continued to be the thrust area through periodic 

and surprise inspections by the Vigilance Department. Awareness 

amongst employees is generated by organizing training programs 

on various guidelines/procedures of CVC, disciplinary enquiry 

proceedings, their role in combating corruption etc. and need for 

transparent and fair working. Twelve such programs were organized 

during the year. In addition, regular interactions by CVO/Vigilance 

Officers with senior executives/ employees of HEC were organized 

to develop a positive approach among them towards corruption free 

efficient and transparent working. Efforts had been on timely disposal 

of complaints and enquiries. A “Compendium of Circulars” containing 

CVC/CTE’s guidelines/circulars besides, internal circulars was prepared 

and distributed amongst the senior officers of the Corporation. 

Vigilance Portal in Company’s website has been introduced containing 

vigilance related details for guidance of officers of the Corporation. 

Policy regarding Public Interest Disclosure and Protection of Informer 

(PIDPI) resolution and press release of CVC was up-loaded in 

Company’s website and displayed at Notice Boards for information 

of employees/.officers. 

Vigilance awareness week was observed as per CVC’s guidelines. 

Essay/quiz competitions were organized to enhance vigilance 

awareness among the employees. 

16. DISPOSAL OF REQUEST/APPEAL UNDER RTI ACT : 

Company emphasizes on transparency and timely submission of 

information sought was given priority. 

17. QUALITY CONTROL 

Your company never compromises on quality of the products 

manufactured. The company takes all measures to maintain the 

quality of its products and services to the utmost satisfaction of its 

customers, keeping this in view Quality assurance department has 

been centralized for three plants. The standards of Quality of products 

and services are being maintained as per relevant Indian standards 

and ISO 9001:2000. 

18. ENERGY AUDIT 

Energy Audit was carried out by Petroleum Conservation Research 

Association (PCRA) in 2004-05 in a limited way with the objective to 

study the use of alternate fuel other than the currently used Producer 

Gas for Heat treatment/Reheating furnaces. 

As Foundry Forge unit is the main energy consuming unit, energy 

audit of this unit with the help of an external agency M/s. Energo 

Engineering Projects Ltd (EEPL) was got done. Suggestions have 

been prioritized and action initiated in following areas: 

1. Revamping of the Producer Gas plant, gas cooler units, 

ventilators and producer gas operated furnaces 

2. Overhauling of HT Transformers. 

3. Modification in operating system of compressors for intermittent 

switching off. 

4. Replacement of MG Set of EOT Crane by Variable Frequency Device. 

5. Switching off the standby transformers. 

19. R&D, TECHNOLOGY ABSORPTION, ADAPTATION, AND 

INNOVATION; ENERGY CONSERVATION 

The particulars required under section 217(1) of the Companies 

Act, 1956 read with the Companies (Disclosure of particulars in 

the report of Board of Directors) Rules 1988, regarding R&D, 

Technology Absorption, Adaptation and Innovation as well as Energy 

Conservation are furnished in Annexure- ‘A’. 

20. DIRECTORS’ RESPONSIBILITY STATEMENT 

ii) that in the preparation of the Annual Accounts for the financial 

year ended March 31, 2012, the applicable accounting 

standards have been followed along with the proper 

explanation relating to material departures; 

8


iii) that the Directors 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 state of affairs of the Company for the year under review. 

iv) that the Directors have taken proper and sufficient care for the 

maintenance of adequate accounting records in accordance with 

the provisions of the Companies Act,1956 for safeguarding the 

assets of the Company and for preventing and detecting fraud 

and other irregularities. 

v) that the Directors have prepared the Annual Accounts for the 

financial year ended March 31, 2012 on a going concern basis. 

21. FOREIGN EXCHANGE 

The foreign exchange outgo during the year was ` 56.39 Crores. 

22. INFORMATION UNDER SECTION 217 (2A) OF THE 

COMPANIES ACT, 1956 

None of the employees of the Company was in receipt of remuneration 

in excess of limits prescribed under section 217 (2A) of the Companies 

Act, 1956, read with Companies (Particulars of Employees) Rules, 

1975 during the financial year ending 31 st March, 2012. 

23. CORPORATE GOVERNANCE 

Report on Corporate Governance is placed at Annexure-B. 

24. STATUTORY AUDITOR 

The Comptroller & Auditor General of India (CAG) has appointed 

M/s Anjali Jain & Associates, Chartered Accountants, Ranchi as the 

Statutory Auditor of the company for the financial year 2011-12. 

25. COMMENTS OF C&AG AND STATUTORY AUDITORS AND 

MANAGEMENT’S REPLIES THEREON 

The comments of C&AG under Section 619 (4) of the Companies 

ACT, 1956 on the Accounts of the Company for the year ended 

31.03.2012 along with the Review of Accounts of your Company by 

C&AG and Statutory Auditors’ observations along with Management’s 

replies thereto are furnished in ANNEXURE-‘C’ 

26. BOARD OF DIRECTORS 

During the year, there were two part time Official Directors on the 

Board of HEC, in addition to the CMD, Director (Finance), Director 

(Marketing) and Director (Production). 

Shri R. Misra, Director (Finance) assumed the additional charge of 

Chairman-cum-Managing Director w.e.f. 1.1.2012 and took over as 

CMD w.e.f. 31.05.2012. 

During the year Shri G.K. Pillai, CMD and Shri Bharat Prasad, 

Director (Marketing) superannuated. Board places on record its deep 

appreciation for the valuable services and contribution made by them 

during their tenure on the Board of Directors of HEC Ltd. In addition, 

Shri Saurabh Chandra, on 17-4-2012 relinquished the position of 

part time official Director on Board of HEC Ltd. 

27. AUDIT COMMITTEE 

As there were no independent Directors on the Board of HEC Ltd. the 

Audit Committee could not be reconstituted. 

28. ACKNOWLEDGEMENT 

The Board also gratefully acknowledges the support and guidance 

received from the various Ministries of the Govt. of India. 

The Board is particularly grateful to the Department of Heavy 

Industry, Ministry of Heavy Industries & Public Enterprises for their 

continued support in the revival of this Company. 

The company also wishes to place on record its thanks to the Govt. of 

Jharkhand for all their support in the revival process of the company. 

The company wishes to place on record its appreciation of the 

continued co-operation received from all its stake holders including 

the suppliers, banks, financial institutions, the Comptroller and 

Auditor General of India and Statutory Auditors. 

The company wishes to record its deep gratitude to all the members 

of the HEC family who have worked very sincerely and dedicatedly in 

bringing this company to another year of profitability and growth. 

For and on behalf of Board of Directors 

Dated : 27.11.2012 

(R. Misra) 

Chairman-cum-Managing Director 

9


RESEARCH & DEVELOPMENT ACTIVITIES 

The company continued its efforts for the technology up gradation and development of products/systems during the year. 

I. Specific areas in which R&D activities were carried out by the company are detailed below :- 

III. 

IV. 

ANNEXURE-A 

RESEARCH & DEVELOPMENT,TECHNOLOGY ABSORPTION,ADAPTATION, 

INNOVATION AND ENERGY CONSERVATION 

• Design development and manufacture of Rotating Head Stock Spindle Assembly, Bottle Boring facility and programmable movement of Steady 

Rest for CNC Deep Hole Boring machine. The machine was supplied to OFC, Kanpur. 

• Development of Motorised swiveling of Arms for Radial Drilling machine. Modified machine was supplied to BHEL, Jagdishpur. 

• Development of 100T capacity Tundish Traverse for ISP. 

• Development of 65T and 60T Scrap charging Traverse for BSP and ISP respectively 

• Design development of pushing mechanism with drive for Coke pusher for 4.45m Coke Oven Battery for DSP. 

II. 

Import Substitution Efforts 

Following important items were manufactured and supplied 

• CNC Deep Hole Boring Machine, Model BDH-140N with special features like Rotating Spindle Head Stock, Bottle Boring facility & Programmable 

Steady Rest Movement. 

• 7 nos. of 5 Cum Rope Shovels to CIL subsidiaries 

• Phased dispatch of 2 nd Dragline 24/96 to NCL. 

Technology Absorption, Adaptation and Innovation 

i) The 1 st CNC Under Floor Wheel Lathe Machine out of 7 nos. was assembled and tested at HEC, Ranchi by engineers of M/s Hegenscheidt – 

MFD, Germany. HEC team has absorbed the assembly technology and assembled next 5 machines themselves without the assistance of M/s 

Hegenscheidt – MFD. 

ii) Upgradation of 2650T Press 

To reduce the overall cycle time, production of size forging, upgradtion of 2650T Press was initiated and completed. 

Energy Conservation 

Foundry Forge unit of the company is the most energy intensive unit which consumes more than 75% of total electrical energy and 100% of Coal. 

Various efforts made for reduction in melting cycle helped in substantial reduction in specific electricity consumption in the melting area during 

the year 2007-08. However, due to production of high quality steel the energy consumption had gone up during 2008-09 onwards. In addition, 

electric arc furnaces need upgradation, as these were installed in 60s. Delay in upgradation of Arc Furnaces also affected specific Power consumption. 

Company continued its thrust to reduce power consumption. Power consumption in melting area are as under : 

Power Consumption (KWH) per Ton of Liquid Metal 

Production 

2011-12 2010-11 2009-10 2008-09 2007-08 2006- 07 

917.99 960.31 937.35 981.46 868.72 1029.69 

The various steps being taken in Foundry Forge unit to bring down energy overall consumption and specific energy consumption are as under: 

• Reduction in maximum Demand of Power by proper load planning. 

• Use of energy efficient high pressure sodium vapor lamps/Tube lights. 

• Replacement of MG Sets by Static Transformers and Rectifiers. 

• Use of ceramic lining in Furnaces and by installing programmable controller in electric pit furnace. 

• Reduction in heat cycle time for melting furnaces etc. 

10

• Replacement of centralized compressor unit with decentralized Air Compressor at the load centres. 


• Provision of Transparent Sheets at roof tops of production shops so as to utilize sunlight for illumination. 

Performance of Foundry Forge Unit in both physical and financial terms has been badly affected due to delay in upgradation program of 2650T 

press. Energy consumption in this area is quasi variable as such specific energy consumption has gone up despite overall reduction in consumption 

of electricity and Coal. Coal is used for producing producer gas. Quality of Coal and deteriorating condition of gas plant has resulted in increased 

consumption of coal. Energy Consumption details per Ton of physical production of FFP during the recent years are as under : 

Units Consumption per Ton of Production 

Particulars 2011-12 2010-11 2009-10 2008-09 2007-08 

Electricity (KWH) 2853.50 2904.83 2554.47 2421.87 2436.91 

Coal (MT) 5.44 5.55 4.62 4.49 4.32 

Diesel (Liters) 13.16 24.11 24.62 20.35 18.93 

11


ANNEXURE – B 

REPORT ON CORPORATE GOVERNANCE (As on 31.03.2012) 

The Directors present the Company’s activities on Corporate Governance. Chairman-cum-Managing Director 

CORPORATE MAIN OBJECTIVE ON CODE OF GOVERNANCE 

Heavy Engineering Corporation Limited (HEC Ltd.) believes in transparent 

a) Shri G.K.Pillai : Ceased to be CMD w.e.f. 31.12.2011 

due to his superannuation 

business activities, to enhance the value for all those who are associated b) Shri R.Misra : Additional charge of CMD w.e.f. 

with the Company viz., Customers, Suppliers, Govt. of India, Ministry 

01.01.2012 and Director (Finance). 

of Heavy Industry, Department of Public Enterprises as owners and any 

other capacity, various State Governments, other Governmental agencies/ 

Functional Directors 

departments and the society at large. Essentially it involves practicing of 

good Corporate Governance policies and HEC believes honesty and integrity 

through transparency, accountability and attaining maximum level of 

enrichment of the enterprises. HEC also received global recognition by 

ensuring value addition to its domestic as also the International customers. 

a) 

b) 

Shri Bharat Prasad 

Shri Kushal Saha 

: 

: 


(Ceased to be Director w.e.f. 

31.10.2011 due to his 

superannuation) 


HEC complies with all the laws and manages its affairs in a competitive c) Shri Subhra Banerjee : Director (Personnel) 

market and monitors and regulates the management policies/decision for 

(w.e.f. 06. 03. 2012) 

executing its strategies. HEC has made its senior management accountable 

Govt. of India Nominee Part-time Official Directors 

in the pursuit of achieving company’s objectives. 

HEC is committed to practicing Good Corporate Governance by letter and 

spirit. Keeping with the spirit of the code, the Company has enlarged and 

a) 

b) 

Shri Saurabh Chandra 

Shri Harbhajan Singh 

strengthened the scope of the committees formed in accordance with the Govt. of India Nominee Non-Official (Part- time) Director 

Companies Act, 1956. 

- Nil - 

Board of Directors : 

Meeting of the Board 

The Board Meetings are held at Company’s Registered Office at Ranchi or at 

such places as may be decided by the Board. The Company Secretary serves 

as Secretary to the Board. 

The Board of Directors oversees all major actions/ activities proposed 

to be undertaken by the company. The Board also reviews and 

approves the strategic and business plans including monitoring of 

corporate performance. 

In accordance to the provisions of the Articles of Association, the 

number of Directors of the Company shall neither be less than two 

nor more than fifteen. The Directors are not required to hold any 

qualification shares. 

As on the date of reporting, the Board of HEC Ltd. consists of six 

Directors who have been classified in two classes viz., (i) Functional 

Directors (Whole time) (ii) Government Nominee Official Directors. 

The Board includes (a) Chairman-cum-Managing Director (CMD), 

two Functional Directors i.e. Director (Production) and Director 

(Personnel) (b) Two Government of India Nominee Official Directors 

from Ministry of Heavy Industry. The terms, conditions and tenure of 

appointment of Directors including CMD are decided by Government 

of India, Ministry of Heavy Industry. 

The remuneration/compensation payable to Directors is also fixed by 

Government of India and the CMD and Functional Directors are paid 

monthly remuneration as fixed by Government of India. 

Number of Board Meetings :- 

During the year 2011-12, Six (6) Meetings were held, the details of which 

are given below :- 

Sl.No. Date Board Strength No. of Directors present 

1. 13.04.2011 05 04 

2. 18.05.2011 05 05 

3. 17.08.2011 06 06 

4. 28.09.2011 06 06 

5. 21.12.2011 05 05 

6. 29.03.2012 05 04 

12


Attendance of each Director at Board Meetings 

Name of the Directors 

(a) Executive Directors (Whole-time Functional Directors. 

1. Shri G.K.Pillai, CMD 

(ceased to be CMD w.e.f. 31.12.2011 

due to his superannuation) 

2. Shri R.Misra, 

Additional charge of CMD w.e.f. 01.01.2012 

and Director (Finance) 

3. Shri Bharat Prasad 


(Ceased to be Director w.e.f. 31.10.2011 

due to his superannuation) 

4. Shri Kushal Saha 


5. Shri Subhra Banerjee 

Director (Personnel) 

(w.e.f. 06. 03. 2012) 

(b) Govt. of India Nominee Part-time Official Director 

1. Shri Saurabh Chandra 

Period 

01.04.2011 to 

31.12.2011 


31.03.2012 


31.10.2011 

20.06.2011 To 


06.03.2012 to 




No. of Board 

Meetings held 

No. of Board Meetings 

Attended 

05 05 

06 06 

04 03 

04 04 

01 01 

No. of Directorship 

in other Board 

06 05 06 

2. Shri Harbhajan Singh 



06 06 08 

c) Part-time Non-Official Director Nil 

Board Agenda and Material :- 

The Board believes that a carefully planned Agenda is important for effective Board Meetings. All major issues included in the Agenda are backed 

by comprehensive background information to enable the Board to take decisions. The agenda is flexible enough to accommodate any unexpected 

development (s) requiring Board’s attention and its decision. Agenda papers are, generally circulated well in advance to the Members of the Board. The 

Board members, in consultation with the Chairman may bring up any relevant matter for the consideration of the Board. 

13


The Members of, 

HEAVY ENGINEERING CORPORATION LIMITED 

RANCHI 

AUDITORS REPORT 

Annexure-C 

1. We have audited the attached balance sheet of Heavy Engineering Corporation Limited as at 31st March 2012 and also the profit and loss account 

for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility 

is to express an opinion on these financial statements based on our audit. 

2. We conducted our audit in accordance with the 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 our opinion. 

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 

of the Companies Act, 1956, we enclose in the Annexure-1 a statement on the matters specified in paragraphs 4 and 5 of the said Order to the 

extent applicable. 

4. Further to our comments in the Annexure referred to above, we report that: 

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our 

audit; 

(b) In our opinion, proper books of account as required by law have been kept by the company as far as appears from our examination of those books. 

(c) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account. 

(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting 

standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. 

(e) In terms of Notification No. GSR 829(E) dated 21-10-2003 issued by the Department of Company Affairs, Government of India, the provisions 

of Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Company. 

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with other 

Accounting Policies and Notes to Accounts give the information required by the Companies Act, 1956, in the manner so required gives a true 

and fair view in conformity with the accounting principles generally accepted in India 

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012; 

(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date. 

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date. 

For Anjali Jain & Associates 

Chartered Accountants 

Place: Ranchi 

Dated: 06-09-.2012 

CA Anjali Jain 

(Partner) 

Membership No. 72022 

14

Annexure to the Auditors Report 


Annexure-I 

Annexure referred to in Paragraph 3 of the Auditor's Report to the members of M/s Heavy Engineering Corporation Limited on the Accounts for the year 

ended 31st March, 2012. 

1 Fixed Assets 

Auditor’s Report 

Replies 

(a) 

(b) 

2. Inventories 

The company has generally maintained proper records to show particulars of fixed 

assets including Quantitative details and situation of assets for all the fixed assets 

except furniture and fixture office equipments. 

Some of the Fixed Assets of the Company (except building) have been physically 

verified in all units by an outside Chartered Accountant firm during the year. 

However, the verification has been done on test check basis. Considering the size 

of the company & nature of its business the procedure of physical verification of 

fixed assets need to be strengthened. 

(a) Stock of raw material and stores and spares were physically verified by an outside 

Chartered Accountant Firm during the year. Considering the size of the company & 

nature of its business the procedure of physical verification of raw materials and 

stores and spares need to be strengthened. 

(b) In our opinion and according to the information and explanation given to us, the 

present system of SPL accounting i.e. accounting of items of different value having 

different specification in same material code needs thorough revision. 

(c) In our opinion and according to the information and explanations given to us, the 

Company has maintained proper records of its inventory. As explained to us, the 

discrepancies noticed during physical verification of inventory were compared to 

the book records and it has been adjusted at the year end. 

(d) There were inventories in the Company which were of no use and were lying idle 

blocking the capital. In our opinion, the same should be sold / utilized. 

3. Loans 

In our opinion and according to the information and explanations given to us, the 

Company has not granted nor taken any loans, secured or unsecured to or from 

companies, firms or other parties covered in the register maintained Under Section 301 

of the Companies Act 1956. Consequently, clauses (iii) (a) to (iii) (g) of paragraph 4 of 

CARO are not applicable. 

Noted 

Physical verification of Assets of all plants, Project, 

HQrs., Branch Office etc, has been done by outside 

Chartered Accountant firm during the year 

2011-12 with reference to the records of Assets in 

the Assets Register and no discrepancies have been 

noticed. 

Noted for future guidance. 

Noted for further improvement. 

Noted 

Noted 

No comment 

15


4. Internal Controls 

In our opinion and according to the information and explanations given to us, and on the 

basis of test and checks carried out during the course of Audit there is adequate internal 

control system commensurate with the size of the company and nature of its business 

relating the purchase of inventory and fixed assets and for sale of goods and service, But 

there are certain areas where internal controls needs improvement. 

Some of the major areas where internal control system in operation needs to be 

strengthened strictly adhered to are as follows in our opinion:- 

(a) The Company has substantial LD due to non-adherence to delivery schedule. 

(b) 

Idle time of machines is high as the labour for these are not adequate. 

5. In respect of contracts or arrangement entered in the register maintained in pursuance of 

Section 301 of the companies Act 1956, to the best of our knowledge and according to 

the information and explanation given to us: 

(a) The particulars of contracts or arrangements referred to Section 301 that needed to 

be entered in the register maintained under the said section have been so entered. 

The transactions made in pursuance of such contracts or arrangements have been made 

at prices which are reasonable having regards to the prevailing market prices at the 

relevant time. 

6. Acceptance of deposits from Public 

In our opinion and according to the information and explanations given to us, The 

company has not accepted deposits from the public within the meaning of section 58 

AA or any other relevant provisions of the Companies Act, 1956 and the rules framed 

there under. 

7. Internal Audit System 

Internal Audit of the company was carried out by an outside Chartered Accountant Firm 

during the year, however considering the size of the company and nature of its business; 

it needs more coverage of financial transactions. 

8. Cost Records 

As explained to us by the Management, the Central Government has prescribed 

maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 from 

financial year 2011-12 for the products of the Company. Currently, cost records are 

maintained by an outside Cost Accountant Firm. 

Noted 

(a) The dearth of working capital, effective 

manpower and frequent break down of old 

machines are primarily responsible for delay in 

execution of order within the delivery schedule 

which leads to recovery of LD by customer. 

However effective monitoring is being done 

for minimizing the delayed delivery/dispatch 

of goods to customer. 

(b) Action is being taken for recruitment of fresh 

technical Workers to avoid idle time due to 

non availability of adequate work force. 

Noted 

Noted 

Noted 

Noted. Already covered vast areas like Plants, 

Projects, Hqrs, Township, Hospital, Transport, 

Branch Offices,’ HTI, Transit Camp to the extent 

possible. The internal Audit work for 2011-12 was 

started from September, 2011 

Outside Cost Accountant Firm has been engaged for 

preparation of compliance report as required under 

Cost Accounting record Rules 2011. 

16

9. Statutory Dues 

A. According to the information and explanations given by the Company, undisputed 

statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, 

Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues are generally 

deposited regularly and no undisputed dues were outstanding as at 31st March, 

2012 for a period of more than six months from the date of becoming payable 

except the cases which are stated below: 

Name of the Act Type Amount Period 

Municipal Tax 

Oct 1999 to Dec 

Municipal Tax 49,50,000.00 

Act 

‘2005 

The company is paying ` 50,000 per quarter for clearance of dues along with the 

current Municipal Tax. 

9. B. NotedAccording to the information and explanations given by the Company, there 

is no disputed dues of Income Tax, Sales Tax, wealth Tax, Service Tax, Custom Duty, 

Excise, Cess that have not been deposited on account of matters pending before 

appropriate authorities except the cases which are stated as below.- 

Name of the Act Tribunal(`) Total (`) 

Provident Fund Act 95,01,53,513.00 95,01,53,513.00 

10. Cash Losses 

The Accumulated loss of the Company as on 31st March, 2012 exceeds 50% of its 

net worth. The company has not incurred cash losses during the current financial year 

covered by our audit and also in the immediately preceding financial year. 

11. Repayment of Dues 

In our opinion and according to the information and explanations given to us, the 

Company has not defaulted in repayment of dues to financial institutions, banks or 

debenture holders. 

12. According to the information and explanation given to us, the company has not granted 

any loan or advances on the basis of security, by way of pledge of shares, debentures 

and other securities. 

13. In our opinion and according to the information and explanations given to us, the 

Company is not a chit fund or a Nidhi/Mutual benefit fund/society. Therefore, clause 

4(xiii) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company, 

14. The Company has not done any transactions for trading in Shares, securities, debentures 

and other investments during the financial year under audit. 

15. According to the information and explanation given to us, the Company has not given 

guarantees for loans taken by others for Banks or financial institutions, the terms and 

conditions, whereof, in our opinion, are prima facie prejudicial to the interest of the 

company. 

16. According to the information and explanation given to us and on an overall examination 

of the Balance Sheet of the Company, We are of the opinion that the term loans were 

applied for the purpose for which the loans were obtained. 


Payment is being made every quarter against old 

dues based on the agreement with Municipal 

Corporation. 

Disclosed in Notes on accounts 

As per Accounts of the company it transpires that 

the company has earned a cash profit of Rs 12.90 

crore during financial year 2011-12. 

No comments 

No comments 

No comments 

No comments 

No comments 

No comments 

17


17. According to the information and explanation given to us and on an overall examination 

of the Balance Sheet of the Company, We report that no funds raised on short-term basis 

have been used for long-term investment by the Company. 

18. According to the information and explanation given to us, the Company has not made 

any preferential allotment of shares to parties and companies covered in the register 

maintained under section 301 of the Companies Act. 

19. The Clauses 4(xix) & (xx) of the Companies (Auditor’s Report) Order, 2003 are not 

applicable to the Company. 

20. During the course of our examination of the books and records of the company carried out 

in accordance with the generally accepted auditing practices in India, and according to 

the information and explanation given to us, we have neither come across any instances 

of fraud on or by the company, noticed or reported during the year, nor we have been 

informed of such case by the Management 

No comments 

No comments 

No comments 

No comments 

For Anjali Jain & Associates 

Chartered Accountant 

CA Anjali Jan 

(Partner) 

Membership No. 72022 

(S.K.CHAKRABORTY) 

General Manager (Finance)/HEC 

Place: Ranchi 

Dated:- 06.09.2012 

18


COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF 

INDIA UNDER SECTION 619 (4) OF THE COMPANIES ACT, 1956 ON 

THE ACCOUNTS OF HEAVY ENGINEERING CORPORATION LIMITED 

FOR THE YEAR ENDED 31 MARCH 2012 

The preparation of financial statements of Heavy Engineering Corporation Limited for the year ended 31st March 2012 in accordance with the 

financial reporting framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory auditor 

appointed by the Comptroller and Auditor General of India under Section 619 (2) of the Companies Act, 1956 is responsible for expressing opinion on 

these financial statements under Section 227 of the Companies Act, 1956 based on independent audit in accordance with the auditing and assurance 

standards prescribed by their professional body the Institute of Chartered Accountants of India. This is stated to have been done by them vide their Audit 

Report dated 6 September, 2012. 

I, on the behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 619 (3) (b) of the Companies 

Act, 1956 of the financial statements of Heavy Engineering Corporation Limited for the year ended 31 March, 2012. This supplementary audit has been 

carried out independently without access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditor and 

company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge 

which would give rise to any comment upon or supplement to Statutory Auditors' Report under Section 619 (4) of the Companies Act, 1956. 

For and on the behalf of the 

Comptroller & Auditor General of India 

Place: Ranchi 

Date: 20 November, 2012 

(Sushil Kumar Jaiswal) 

Principal Director of Commercial Audit 

Ranchi. 

19

OUR FACILITIES 

2650 T Forging Press 

Arc Furnace

OUR PROJECTS 

Conveyor System at New OBBP, Rourkela Steel Plant 

Stacker cum Reclaimer at New OBBP, Rourkela Steel Plant

Heavy Engineering Corporation Limited 

(A Government of India Enterprise) 

Ranchi - 834004 

BALANCE SHEET 

AND 

STATEMENT OF PROFIT & LOSS 

FOR THE FINANCIAL YEAR 2011-12 

Our Motto : 

Nation Building Through Machine

OUR PRODUCTS 

CNC Deep Hole Boring Machine”, Model BDH 140N 

Slag Ladle


SIGNIFICANT ACCOUNTING POLICIES 

1 The Financial statements have been prepared as of a going concern 

on historical cost convention and on accrual method of accounting in 

accordance with the generally accepted accounting principles. 

2 Fixed Assets 

Fixed assets (Other than land acquired free of cost from State 

Government) are carried at the cost of acquisition or construction less 

accumulated depreciation. 

Land acquired free of cost from State Government is valued of ` 

1/- per acre. 

3 Inventory Valuation 

i) Inventory is valued at actual / estimated cost or net realiasable 

value, whichever is lower. 

ii) Finished goods and work in progress are valued at actual / 

estimated factory cost or net realiasable value whichever is 

lower. 

iii) Raw material, components, loose tools, stores & spares are 

valued at weighted average cost. 

iv) Items that are not ordinarily interchangeable and goods or 

services produced & segregated for specific projects- By specific 

identification of individual cost. 

v) Rejection and scrap/used as raw material for production is 

valued at closing book rate. 

vi) Bye products are valued at market price. 

vii) The percentage of completion of work in progress is taken as 

certified by Shop management on technical assessment. 

viii) Loose tools, Drawing instruments, etc. issued to shops are 

carried to inventory after writing off in 4 years in case of 

ordinary tools, in 10 years in case of special tools, in 2 years 

in case of Moulds and on estimated life in case of other 

items. Patterns are charged out in the year of issue itself. Only 

quantitative records are maintained in respect of these items in 

shops floor, wherever practicable. 

4 REVENUE RECOGNITION 

i) Sales are recorded when significant risks and rewards of 

ownership are transferred to the customers. Part supplies 

against long term contracts for which bills have been raised are 

accounted for at contract price or provisional price. In case of 

dispatches for which challans and gate passes have been issued 

but bills are not raised, sales are accounted for at contract or 

provisional prices as unbilled sales. 

ii) Escalations on contracts are accounted for as per the terms 

of relevant contact to the extent ascertained with reasonable 

iii) 

certainty though these are subject to confirmation/acceptance 

by customers. Variation is accounted for when there is provision 

in contract or evidence of acceptance by the customer. 

Sales are accounted for inclusive of excise duty but exclusive of 

sales tax. 

5 LONG TERM TURNKEY CONTRACTS 

i) Revenue recognition: 

Revenue is recognized on percentage completion method based 

on the percentage of actual cost incurred up to the reporting 

date to the total estimated cost of the contract. 

Income from supply/ erection of equipment/system and civil 

works is recognized based on dispatches to customers and 

works done at Project Site. 

ii) Revenue recognition for incomplete / part executed / 

unmeasured work by client : 

Works executed but not measured / part executed / incomplete 

work at the end of the year are accounted for based on 

certification both by HEC Engineers at Project Site and the 

customer for the purpose of recognition of Revenue. 

iii) Valuation of Work-in-progress:- 

Expenditure incurred from year to year limited to the certified 

value of work done against the contract value including 

escalation less amount credited to sales against the respective 

contract, is accounted for as WIP. 

iv) The necessary provision for losses, if any, on work to be done is 

made. 

6 PROVISION FOR WARRATY 

A provision of 0.5% on sales is made for liabilities under contractual 

obligations/ warranties. Expenses on warranties/contractual 

obligation are accounted for against natural heads in the year of 

incurrence. 

7 EMPLOYEES BENEFITS: 

Long term employee benefits (benefits which are payable after the end 

of twelve months from the end of the period in which the employees 

render service namely sick leave and post retirement benefits namely 

gratuity, Retirement Traveling Assistance and Leave Encashment are 

measured on a discounted basis by the Projected Unit Credit Method 

on the basis of annual third party actuarial valuation and Leave 

Travel Allowance (for eligible employee) are accounted on estimated 

basis. 

Long Term employee benefits recognized in the balance sheet represent 

the present value of the obligation as adjusted for unrecognized past 

23


service cost, if any, and as reduced by the fair value of plan assets, 

wherever applicable and actuarial gain / loss to the extent recognized 

in Profit & Loss Account. 

Actuarial gains and losses are recognized in the Profit and loss account 

to the extent it exceeds the unrecognized portion of transitional 

liability 

The transitional liability in respect of long term employee benefit is 

recognized as an expense on a straight line basis over a period of five 

years. 

Gratuity and Leave encashment are provided for on the basis of 

actuarial valuation made, based on the data of the Balance sheet 

date. 

8 DEPRECIATION 

Depreciation on fixed assets is charged on straight line method as 

per the rates prescribed in the Schedule XIV of the Companies Act 

and in respect of additions to/ deductions from the fixed assets 

during the year; depreciation is charged on prorata monthly basis. 

Wherever breakup of foundation cost for plant and machinery and 

plant building is not available, depreciation is charged at the rate 

applicable to plant building. 

9 SUNDRY DEBTORS 

This includes items billed at provisional rates pending finalization of 

prices and receipt of formal orders from customers and also value of 

dispatches which are unbilled after adjustment on pro-rata basis of 

advances/progress payments received against the relevant contract. 

10 GRANT-IN-AID 

Government grants received against Voluntary Retirement Scheme 

are set off against related expenses. Unspent balances of Grants-in- 

Aid are carried forward to subsequent years under Head “Liabilities”. 

Grants received against other revenue are recognized as other income 

over the years to which it relates. 

11 INVESTMENT 

Investment held/intended to be held over one year (i.e. being long 

term ) are valued at cost less provision for diminution in value other 

than temporary, while current quoted investments are valued at lower 

of cost or market value. 

12 RESEARCH & DEVELOPMENT 

Major expenditure relating to Research & Development is charged to 

profit & loss account in the year of incurrence. However, expenditure 

on fixed assets relating to Research & Development is treated in the 

same way as other fixed assets. Depreciation on such fixed assets is 

shown along with other Research & Development Expenditure. 

13 FOREIGN CURENCY TRANSACTIONS 

Monetary assets and liabilities relating to foreign currency transactions 

including deferred credit payments remaining outstanding at the 

Balance Sheet date are converted at year end rates. The differences 

in conversion of assets and liabilities and realized gains and losses 

on foreign exchange transaction during the year are accounted for in 

the Profit & Loss Account, except those relating to acquisition of fixed 

assets which are adjusted in the cost of fixed assets. 

14 DEFERRED REVENUE EXPENDITURE 

To lump sum payment towards foreign collaboration in the form of 

technical know-how, documentation and reports for any product is 

treated as Deferred Revenue Expenditure, which is written off in five 

years. 

15 CLAIM BY/AGAINST THE COMPANY 

(i) Liquidated damages payable as per contracts are accounted 

for on ascertainment and cases of specific damages and claims 

disputed by the company are provided for on reasonable 

estimate by the Company. 

(ii) Liquidated damages recovered are recognized as income after 

expiry of three years of recovery. 

(iii) Export incentives, Railways and Insurance claim sale of sundry 

disposable materials & certain scraps, refund of excise & custom 

duty and income from other similar items are accounted for on 

ascertainment of the amount and certainty of their realization / 

claim. 

16 INTER PLANT COST ALLOCATION 

The following expenses are allocated in different Plants on the basis 

stated hereunder:- 

(a) HQRS expenses (Net) -Budgeted production of each Plant. 

(b) Township expenses (Net) - No. of quarters allotted to each 

Plant. 

(c) Interest - Actual cash utilization by each plant in the preceding 

year. 

(d) CISF expenses- No. of CISF personnel deployed in each Plant. 

17 INVENTORY 

Non moving items of stores are analysed from time to time. 

Materials found surplus on physical verification are either disposed 

off or reviewed to find out alternative uses for the same. Loss, if any, 

is accounted for when it is ascertained. 

However non moving items for more than 3 years, the maximum 

provision, if required, is to be restricted to 90 % of value of inventory. 

24


BALANCE SHEET AS AT 31ST MARCH 2012 

` in Lakhs 

Note No. AS AT 31.03.2012 AS AT 31.03.2011 

I. EQUITY & LIABILITIES 

(1) SHAREHOLDER'S FUND 

(a) Share Capital 1 60607.88 60607.88 

(b) Reserves & Surplus 2 (77633.67) (78024.54) 

(2) SHARE APPLICATION MONEY 

PENDING ALLOTMENT 0.01 0.01 

(3) NON-CURRENT LIABILITIES 

(a) Other Long Term Liabilities 3 60900.12 57338.47 

(b) Long Term Provisions 4 13882.67 12322.37 

(4) CURRENT LIABILITIES 

(a) Short Term Borrowings 5 9440.88 8965.67 

(b) Trade Payables 6 11265.00 12702.94 

(c) Other Current Liabilities 7 10239.17 8704.24 

(d) Short Term Provisions 8 5982.84 5204.35 

II. 

TOTAL 94684.90 87821.39 

ASSETS 

(1) NON-CURRENT ASSETS 

(a) Fixed Assets 

(i) Tangible Assets 9 5572.61 5700.36 

(ii) Intangible Assets 10 151.42 305.55 

(iii) Capital Work in Progress 11 2629.22 2537.37 

(b) Non-Current Investments 12 0.36 0.36 

(c) Long Term Loans & Advances 13 1429.37 1065.01 

(d) Other Non-Current Assets 14 23216.76 29212.19 

(2) CURRENT ASSETS 

(a) Inventories 15 27374.81 23455.37 

(b) Trade Receivables 16 28724.78 20970.92 

(c) Cash & Cash Equivalents 17 3136.30 2447.86 

(d) Short Term Loans & Advances 18 2118.35 2042.84 

(e) Other Current Assets 19 330.92 83.56 

TOTAL 94684.90 87821.39 

Notes on Account 29 

Notes No 1 to 19 , 29 & Significant Accounting Policies form an integral part of the Balance Sheet. 

A.K.Kanth S.K. Chakraborty Kushal Saha R.Misra 

Company Secretary General Manager (Finance) Director (Production) & Chairman Cum Managing Director 

Director Mktg. (Additional Charge) 

In terms of our report of even date 

For Anjali Jain Associates, Chartered Accountants 

Place : Ranchi 

(ANJALI JAIN) 

Date : 6/9/2012 Partner, M No. 72022 

25


STATEMENT OF PROFIT & LOSS 

FOR THE YEAR ENDED 31ST MARCH, 2012 

` in Lakhs 

Note No. 2011-12 2010-11 

I. Revenue from Operation 20 69237.87 64938.37 

II. Other Income 21 2331.61 2874.20 

III. TOTAL REVENUE 71569.48 67812.57 

IV. 

EXPENSES: 

(a) Cost of Material Consumed 22 36895.64 31205.09 

(b) Employees Benefits Expenses 23 18213.69 15270.61 

(c) Finance Costs 24 515.30 92.37 

(d) Depreciation, Amortization & Impairment 25 1259.20 1550.80 

(e) Research & Development Expenditure 26 58.09 45.66 

(f) Other Expenses 27 13739.85 15886.40 

TOTAL EXPENSES 70681.77 64050.93 

V. Profit/(Loss) before Exceptional & 

Extraordinary Items & Tax( III-IV ) 887.71 3761.64 

VI. Exceptional Items 28 (29.30) 52.34 

VII. Profit/(Loss) before extraordinary items 

& Tax ( V-VI ) 858.41 3813.98 

VIII. Extraordinary Items 0.00 0.00 

IX. Profit/ (Loss) before Tax ( VII-VIII) 858.41 3813.98 

X. Tax Expenses 

(i) Current Tax 0.00 0.00 

(ii) Deferred Tax 0.00 0.00 0.00 0.00 

XI. 

Profit/ (Loss) for the period from 

Continuing Operation ( IX-X) 858.41 3813.98 

XII. Profit/ (Loss) from Discontinuing Operation 0.00 0.00 

XIII. Tax Expenses of Discontinuing Operation 0.00 0.00 

XIV. Profit/ (loss) for the period from 

Discontinuing Operation ( XII-XIII) 0.00 0.00 

XV. PROFIT/ (LOSS) FOR THE PERIOD ( XI + XIV ) 858.41 3813.98 

XVI. Earning per share ( Face value `.1000) (1) Basic in Rupees 14.16 62.93 

(2) Diluted in Rupees 14.16 62.93 

Notes on Account 29 

Notes No 20 to 29 & Significant Accounting Policies form an integral part of the Statement of Profit & Loss. 

A.K.Kanth S.K. Chakraborty Kushal Saha R.Misra 






(ANJALI JAIN) 


26


NOTES FORMING PART OF BALANCE SHEET 

` in Lakhs 

AS AT 31.03.2012 AS AT 31.03.2011 

NOTE NO. - 1 

SHARE CAPITAL 

Authorised Capital 

1,00,00,000 (Previous Year 1,00,00,000 ) Equity Shares of ` 1000/- each 100000.00 100000.00 

Issued & Subscribed & Paid up Capital 

60,60,788 (Previous Year 60,60,788 ) Equity Shares 

of ` 1000/- each fully paid up, 

Out of which 5496 (Previous Year 5496 ) Shares 

allotted for consideration other than Cash 60607.88 60607.88 

Net Balance 60607.88 60607.88 

NOTE NO. - 2 

RESERVE & SURPLUS 

Capital Reserve 

Opening Balance 12295.11 12746.58 

Addition during the year 0.00 16.07 

TOTAL 12295.11 12762.65 

Deduction during the year 467.54 11827.57 467.54 12295.11 

Surplus 

Opening Balance (90319.65) (94133.63) 

Addition during the year 858.41 (89461.24) 3813.98 (90319.65) 

TOTAL (77633.67) (78024.54) 

NOTE NO. - 3 

OTHER LONG TERM LIABILITIES 

Liabilities for Employee Benefits 

Employees Liabilities 3723.78 3674.53 

VRS Liabilities 1.88 3725.66 6.84 3681.37 

Trade Payables 

Sundry Creditors 2654.81 2387.36 

Dues to SME 85.46 30.55 

Advance From Customers 3686.56 6426.83 3662.21 6080.12 

Others 

Securities & Other Deposits from Contractors 17069.14 16807.38 

Securities & Other Deposits as per Contra Note -13 0.86 0.81 

Electricity Dues 27391.85 27391.85 

Water Dues 3538.63 3015.54 

Other Liabilities 2496.04 118.43 

Miscellaneous 251.11 50747.63 242.97 47576.98 

TOTAL 60900.12 57338.47 

27



` in Lakhs 


NOTE NO. - 4 

LONG TERM PROVISIONS 

Provision for Employee Benefits 

Provision for Gratuity 7939.47 7912.44 

Provision for Leave Encashment 3650.63 3577.52 

Provision for RTA 84.67 102.93 

Provision for Sick Leave 520.84 472.37 

Provision for Revision of Pay Scale for Employees 1214.22 13409.83 0.00 12065.26 

Others 

Provision for Impaired Assets 79.77 17.69 

Provision for Warranty Expenses 393.07 472.84 239.42 257.11 

TOTAL 13882.67 12322.37 

NOTE NO. - 5 

SHORT TERM BORROWINGS 

Secured Loans 

Working Capital Loan from Bank 9440.88 8965.67 

(Secured by Hypothecation of raw materials, finished Goods, 

Work-in-Progress, Stores and Spare parts and Book Debts) 

TOTAL 9440.88 8965.67 

NOTE NO. - 6 

TRADE PAYABLES 

Sundry Creditors 10138.43 9718.45 

Dues to SME 129.06 35.76 

Advance from Customers 997.51 2948.73 

TOTAL 11265.00 12702.94 

28



` in Lakhs 


NOTE NO. - 7 

OTHER CURRENT LIABILITIES 

Employees Liabilities 3702.80 1951.25 

Securities & Other Deposits from Contractors 393.23 922.89 

Book Overdraft with Scheduled Bank 139.98 323.30 

Electricity Dues 251.41 263.17 

Water Dues 256.35 525.67 

Other liabilities 4335.73 4008.12 

Miscellaneous 1159.67 709.84 

TOTAL 10239.17 8704.24 

NOTE NO. - 8 

SHORT TERM PROVISIONS 

Provision for Employee Benefits 

Provision for Gratuity 2549.42 2065.02 

Provision for Leave Encashment 1527.27 1339.79 

Provision for RTA 20.87 20.02 

Provision for Sick Leave 164.25 153.03 

Provision for Revision of Pay Scale for Employees 1369.51 5631.32 1214.22 4792.08 

Others 

Provision for Impaired Assets 2.29 62.07 

Provision for Warranty Expenses 349.23 351.52 350.20 412.27 

TOTAL 5982.84 5204.35 

29

NOTE NO.-9 


Type of Assets 

OTHER TANGIBLE ASSETS 

Cost as on 

01.04.11 

Addition/ 

Adjustment 

TANGIBLE ASSETS 

Gross Block Depreciation Net Block 

Deduction/ 

Adjustment 

Cost as on 


Upto 

31.03.11 

for the 

year 

Addition/ 

(Deduction) 

upto 


As on 


1 2 3 4 5 6 7 8 9 10 11 

As on 

31.03.11 

Land 136.65 0.00 0.00 136.65 0.00 0.00 0.00 0.00 136.65 136.65 

Development of land 116.70 0.00 0.00 116.70 0.00 0.00 0.00 0.00 116.70 116.70 

Plant & Machinery 21691.39 248.83 45.87 21894.35 18626.75 330.89 (43.58) 18914.06 2980.29 3064.64 

Plant Buildings 4606.80 0.00 0.00 4606.80 4238.11 7.86 0.00 4245.97 360.83 368.69 

Residential Buildings 465.87 0.00 0.00 465.87 309.42 7.07 0.00 316.49 149.38 156.45 

Non- Residential Buildings 701.73 7.18 0.00 708.91 385.46 11.08 0.00 396.54 312.37 316.27 

Road & Bridges 269.47 0.00 0.00 269.47 111.17 4.44 0.00 115.61 153.86 158.30 

Railway Lines & Sidings 334.67 0.00 0.00 334.67 284.62 2.33 0.00 286.95 47.72 50.05 

Water Works & Sewerage 589.23 0.00 0.00 589.23 539.57 1.53 0.00 541.10 48.13 49.66 

Electrical Installation 564.49 0.52 0.00 565.01 511.81 1.09 0.00 512.90 52.11 52.68 

Vehicles & Locomotives 274.76 0.00 0.00 274.76 234.38 1.57 0.00 235.95 38.81 40.38 

Construction & Other Equip. 338.72 2.57 0.00 341.29 298.43 3.13 0.00 301.56 39.73 40.29 

Furniture, Fixtures & other office Equip. 720.35 44.62 0.00 764.97 558.62 34.65 0.00 593.27 171.70 161.73 

SUB-TOTAL OTHER ASSETS(A) 30810.83 303.72 45.87 31068.68 26098.34 405.64 (43.58) 26460.40 4608.28 4712.49 

Assets Marked for Transfer to Government of Jharkhand 

Land 69.03 0.00 0.00 69.03 0.00 0.00 0.00 0.00 69.03 69.03 


Non- Residential Buildings 531.33 0.00 0.00 531.33 153.14 8.66 0.00 161.80 369.53 378.19 

SUB - TOTAL OTHER ASSETS (B) 846.24 0.00 0.00 846.24 305.34 12.67 0.00 318.01 528.23 540.90 

LEASED ASSETS 

Land 22.32 0.00 0.00 22.32 0.00 0.00 0.00 0.00 22.32 22.32 


SUB - TOTAL OTHER ASSETS (C) 829.40 0.00 0.00 829.40 462.20 13.16 0.00 475.36 354.04 367.20 

IMPAIRED ASSETS 


` in Lakhs 


Plant & Machinery(As on 31.03.11) 1595.36 0.00 0.00 1595.36 1515.59 0.00 0.00 1515.59 79.77 79.77 

Plant & Machinery (During 2011-12) 0.00 45.87 0.00 45.87 0.00 0.00 43.58 43.58 2.29 0.00 

SUB-TOTAL IMPAIRED ASSETS(D) 1595.36 45.87 0.00 1641.23 1515.59 0.00 43.58 1559.17 82.06 79.77 

TANGIBLE FIXED ASSETS 34081.83 349.59 45.87 34385.55 28381.47 431.47 0.00 28812.94 5572.61 5700.36 

PREVIOUS YEAR FIGURES 33799.09 283.09 0.35 34081.83 27975.19 406.28 0.00 28381.47 5700.36 

Current period depreciation 431.37 

Prior period depreciation 0.10 

Total Depreciation 431.47 

Provision for Impaired Assets 2.29 

Notes :- 

1. Deed of conveyance of land for 7199.53 acres includes 2313 acres of land obtained free of cost from the State Govt. 

2. This also includes 316.19 acres directly transferred by Bihar Govt. to other Govt. Agencies. 

30



` in Lakhs 


NOTE NO. - 10 

INTANGIBLE ASSETS 

Technical Know How fees 

Opening Balance 211.78 93.17 

Addition during the Year 53.74 118.61 

TOTAL (A) 265.52 211.78 

Less: Amortisation up to Previous Year 60.99 18.63 

Less: Amortisation during Current Year 53.11 42.36 

TOTAL (B) 114.10 60.99 

SUB TOTAL (A-B) 151.42 150.79 

Deferred Revenue Expenditures 

Deferred actuarial Valuation of RTA 0.00 40.18 

Deferred Actuarial Valuation of Sick Leave 0.00 0.00 114.58 154.76 

TOTAL 151.42 305.55 

NOTE NO. - 11 

CAPITAL WORK IN PROGRESS 

Capital Work in Progress 

Plant & Machinery 3500.15 3408.30 

Less: Provisions 870.93 870.93 

TOTAL 2629.22 2537.37 

Note :- Items under Capital Work-In-Progress above `.10 Lakhs having no / slow Progress amounts to ` 833.93 L (Previous year ` 833.93 L) 

NOTE NO. - 12 

NON-CURRENT INVESTMENTS 

Investments 

(Other than trade investment), Unquoted 918 (Prev.Year 918) Equity Share of `38.95 

each of Engineering (Projects) India Limited. 0.36 0.36 

TOTAL 0.36 0.36 

* The paid up value of equity share of Engineering (Projects) India Limited has been reduced from ` 1000/- to ` 38.95 due to restructuring as 

confirmed by Central Government vide order No. 40/1/2003-CL-III Dated 17.11.2003. 

31



` in Lakhs 


NOTE NO. - 13 

LONG TERM LOANS & ADVANCES 

Loans & Advances 

Advances & other amounts recoverable in cash or in kind or for value to be received 

(including cost of materials supplied to the contractors, outside parties and/ or pending adjustment) 

Unsecured Considered Good 915.25 898.54 

Deposits 

Deposits with Private Parties 2.28 2.25 

Deposits with Government Authorities 651.01 632.76 

Security deposit of Staff and Contractors 

as per contra in Note -3 0.86 654.15 0.81 635.82 

Others 

Advances to Employees 74.25 93.95 

Claims Receivable 85.76 50.40 

Income Tax deducted at source 472.83 325.23 

SUB TOTAL 2202.24 2003.94 

Less: Provision for bad &doubtful Advances 772.87 938.93 

TOTAL 1429.37 1065.01 

32



` in Lakhs 


NOTE NO. - 14 

OTHER NON-CURRENT ASSETS 

Long Term Trade Receivables 

(A) Public Sector & Govt. Deptt. 

Considered Good 20276.38 26410.57 

Considered Doubtful 5053.74 4682.77 

TOTAL (A) 25330.12 31093.34 

(B) Others 



TOTAL (B) 207.86 73.07 

SUB TOTAL (A+B) 25537.98 31166.41 

Less: Provision for Doubtful debts 4561.37 4465.76 

Provision against LD deducted & charged 545.84 20430.77 269.54 26431.11 

Rent Receivables 




TOTAL (A) 2826.33 2790.85 

(B) Others 



TOTAL (B) 424.55 413.49 

SUB TOTAL (A+B) 3250.88 3204.34 

Less: Provision for Doubtful Realisation 464.89 2785.99 423.26 2781.08 

GRAND TOTAL 23216.76 29212.19 

Notes: 

1. Long Term Trade Receivables includes unbilled despatches ` 8170.62Lakh (Previous Year ` 17864.73 L) 

2. Long Term Trade Receivables also include not due ` 10353.19 Lakh (Previous Year ` 5623.63L) equipments and Spares already supplied but 

realization there of is subject to compliance of certain contractual obligation. 

33



NOTE NO. - 15 

INVENTORIES 

(As certified by the Management) 

Raw Materials & Components 7594.20 6383.34 

Less: Provision 1482.78 1731.47 

Less: Stock Adjustment 0.00 6111.42 65.56 4586.31 

Stores, Spares & Components including Construction Materials 1394.51 1028.70 

Less: Provision / Stock Adjustment 229.85 1164.66 343.41 685.29 

Goods-in-Transit/ Under inspection 4250.28 2160.57 

Less: Provision 259.52 3990.76 259.51 1901.06 

Loose Tools, Drawing Instruments etc. 1322.11 982.20 

Less: Provision 43.88 1278.23 46.87 935.33 

Stock of Finished Products 811.53 446.92 


Work-In-Progress 11844.95 9513.28 

Less: Provision 128.50 11716.45 79.41 9433.87 

Work-In-Progress (Turnkey Project) 2345.80 5505.95 


Discarded Assets 3.52 3.52 


Total Inventory 29566.90 26024.48 

Less: Provision 2192.09 2503.55 

Less: Stock Adjustment 0.00 27374.81 65.56 23455.37 

TOTAL 27374.81 23455.37 

Notes: 

1. Finished Stock & WIP includes items worth ` 35.12 Lakh (Previous Year ` 35.12 L) against closed, cancelled & old work orders which has been 

valued at scrap rates. 

2. Non-Moving Raw Materials and Stores & Spares for more than 3 yrs are ` 1781.90Lakh (Previous Year ` 2039.54 L). The existing is provision is 

considered adequate. 

3. Goods In Transit includes CV Duty ` 14.18Lakh (Previous Year ` 220.35 L) 

4. Raw Materials & Components including scrap at shop floor ` 70.43Lakh (Previous Year ` 65.25 L) 

` in Lakhs 


34



NOTE NO. - 16 

TRADE RECEIVABLES 

Over Six Other Total Over Six Other Total 

Months Debts Months Debts 

Short Term Trade Receivables 


Considered Good 723.79 26860.11 27583.90 367.70 20571.43 20939.13 

Considered Doubtful 275.27 576.46 851.73 57.77 41.17 98.94 

SUB TOTAL (A) 999.06 27436.57 28435.63 425.47 20612.60 21038.07 

(B) Others 

Considered Good 5.00 1135.88 1140.88 0.68 31.11 31.79 

Considered Doubtful 0.00 68.53 68.53 0.00 0.00 0.00 

SUB TOTAL (B) 5.00 1204.41 1209.41 0.68 31.11 31.79 

TOTAL (A+B) 29645.04 21069.86 

Less: Provision for Doubtful debts 162.43 0.00 

Provision against LD deducted & charged 757.83 98.94 

NET TOTAL 28724.78 20970.92 

Notes: 

1. Short Term Trade Receivables includes unbilled despatches ` 3150.27Lakh (Previous Year ` 2022.06 L) 

` in Lakhs 


NOTE NO. - 17 

CASH & CASH EQUIVALENTS 

Balance with Schedule Bank Current Account 260.77 755.47 

Cheques and Draft in Transit 10.48 47.88 

Cash in hand 4.84 276.09 7.18 810.53 

Others 

SBI Short Term Deposit 0.00 1500.00 

Other Bank Short Term Deposit 2860.21 2860.21 137.33 1637.33 

TOTAL 3136.30 2447.86 

35



` in Lakhs 


NOTE NO. - 18 

SHORT TERM LOANS & ADVANCES 

Loans and Advances 

Unsecured Considered Good 691.32 484.42 

Deposits 

Deposit with Private Parties 0.74 0.00 

Deposit with Government Authorities 635.71 636.45 368.40 368.40 

Others 

Advance to Employees 78.11 103.95 

Prepaid Expenses 31.31 27.99 

Claims Receivable 502.50 892.54 

Income Tax deducted at source 214.51 190.35 

SUB TOTAL 2154.20 2067.65 

Less: Provision for bad & doubtful Advances 35.85 24.81 

TOTAL 2118.35 2042.84 

NOTE NO. - 19 

OTHER CURRENT ASSETS 

Rent Receivables 



Considered Doubtful 0.00 324.03 0.00 73.02 

(B) Others 


Considered Doubtful 0.00 6.89 0.00 10.54 

SUB TOTAL (A+B) 330.92 83.56 

Less: Provision for Doubtful Receivables 0.00 0.00 

TOTAL 330.92 83.56 

36


NOTES FORMING PART OF STATEMENT OF PROFIT & LOSS 

NOTE NO. - 20 

REVENUE FROM OPERATION 

Sales & Services 

Sale of Products 71563.30 67223.79 

Sale of Services 959.71 896.80 

SUB TOTAL 72523.01 68120.59 

Less: Excise Duty 4361.57 68161.44 4030.64 64089.95 

Other Operating Revenue 

Job Done for Internal Use 1076.43 820.04 

Add: Inter Plant Transfers 0.00 1076.43 28.38 848.42 

TOTAL 69237.87 64938.37 

NOTE NO. - 21 

OTHER INCOME 

Interest 16.48 24.20 

Rent 805.27 718.31 

Sale of Stores 137.27 282.98 

Miscellaneous Income 241.55 1180.43 

Income from HTI 15.13 23.43 

Excess provision written back 836.74 630.51 

Rent, Water & Electricity Charges 279.17 14.34 

TOTAL 2331.61 2874.20 

Note: Sales of stores (Net) includes ED `. 60.71 Lakh (Previous Year `. 22.46 Lakh). 

` in Lakhs 

2011-12 2010-11 

NOTE NO. - 22 

COST OF MATERIALS CONSUMED 

(A) Consumption of Raw materials & Components 18550.63 19953.29 

Less: Interplant Transfer 4512.04 14038.59 5128.65 14824.64 

Consumption of Stores & Spares 23688.19 23565.02 

Less: Interplant Transfer 1295.01 22393.18 2067.52 21497.50 

SUB TOTAL(A) 36431.77 36322.14 

(B) Decretion/(Accretion) to value of WIP & FG 

Work-In-Progress 

Opening Stock 15019.23 10009.94 

Closing Stock 14190.75 828.48 15019.23 (5009.29) 

Finished Stock 

Opening Stock 446.92 339.16 

Closing Stock 811.53 (364.61) 446.92 (107.76) 

SUB TOTAL(B) 463.87 (5117.05) 

Total Consumption of Raw Materials & Stores with 

changes in Inventories ( A + B ) 36895.64 31205.09 

37



` in Lakhs 


NOTE NO. - 23 

EMPLOYEES BENEFIT EXPENSES 

Salaries, Wages & Bonus 13865.41 12101.77 

Corporation Contribution to Provident Fund and 1163.87 1174.95 

Employee's Pension Fund 

Workmen and Staff Welfare Expenses 419.42 433.01 

Gratuity 2823.08 1604.50 

SUB TOTAL 18271.78 15314.23 

Less: Transferred to Research & Development Exp. 58.09 43.62 

TOTAL 18213.69 15270.61 

NOTE NO. - 24 

FINANCE COST 

Interest Expenses 515.30 92.37 

TOTAL 515.30 92.37 

NOTE NO. - 25 

DEPRECIATION, AMORTIZATION & IMPAIRMENT 

Depreciation as per Note No.-9 431.37 405.97 

Impairment Loss as per Note No.-9 2.29 62.20 

Other Amortization 

Tools 772.43 1040.27 

Technical Know How 53.11 825.54 42.36 1082.63 

TOTAL 1259.20 1550.80 

NOTE NO. - 26 

RESEARCH & DEVELOPMENT EXPENSES 

Research & Development Expenses 

Material Stores & Spares Consumed 0.00 2.04 

Salary & Allowances 58.09 43.62 

TOTAL 58.09 45.66 

38

39 



` in Lakhs 


NOTE NO. - 27 

OTHER EXPENSES 

(A) Manufacturing Service Cost 

Water, Power & Fuel 2231.18 2374.16 

Repairs & Maintenance 

Plant & Machinery 199.85 357.73 

Buildings 57.26 89.69 

Others 166.55 423.66 58.92 506.34 

Insurance 100.09 94.76 

Excise Duty 242.96 265.68 

Wealth Tax 0.19 0.23 

Consultancy and Legal Expenses 20.82 23.48 

Municipal Tax/Charges 9.45 9.19 

SUB TOTAL (A) 3028.35 3273.84 

(B) Manufacturing & Other Operating Expenses 

Machining & Assembly charges 603.43 676.38 

Fabrication Charges 8.97 8.61 

Job Done by outside Agencies 2953.77 2257.42 

Turnkey Project Expenses 2247.28 4361.52 

Other Charges For Production 513.79 6327.24 370.76 7674.69 

Less: Interplant Transfer (Services) 565.66 608.28 

SUB TOTAL (B) 5761.58 7066.41 

(C) Administration, Selling & Distribution Expenses 

Rent 19.18 13.75 

Electricity & Drinking Water Expenses 747.68 971.21 

Security Expenses (CISF & Others) 1284.54 1267.08 

Travelling & Conveyance Expenses 219.10 200.84 

Bank Charges 226.04 129.83 

Miscellaneous Expenses 326.39 302.55 

Motor Vehicle Running Expenses 135.74 121.14 

LD Deducted and Charged 935.19 398.88 

Sales Promotion 125.93 130.10 

Auditor's Remuneration 

Audit Fees 1.44 1.44 

Tax Audit Fees 0.20 0.20 

Service Tax 0.00 1.64 0.17 1.81 

Training Expenses 3.53 7.22 

SUB TOTAL (C) 4024.96 3544.41 

(D) Other Provisions / Expenses Written Off 

Provision for Bad & Doubtful Debts 414.18 613.18 

Provision for Bad & Doubtful Advances 21.60 91.86 

Provision for Warranty Expenses 365.54 346.27 

Miscellaneous Provisions 123.64 215.16 

Miscellaneous Losses Written Off 0.00 924.96 735.27 2001.74 

SUB TOTAL (D) 924.96 2001.74 

GRAND TOTAL (A+B+C+D) 13739.85 15886.40



` in Lakhs 


NOTE NO. - 28 

EXCEPTIONAL ITEMS 

Prior Period Adjustment 

Income 

Sales (including services) 51.90 (15.18) 

Previous year expenses written back 19.46 0.25 

Misc Income (0.14) 71.22 69.34 54.41 

Less : Expenses 

Raw Materials Consumed 13.50 0.00 

Stores & Spare Parts Consumed 76.87 0.00 

Payment to & Provision for Employees 1.48 0.58 

Depreciation 0.10 0.31 

Misc. expenses(net) 8.57 100.52 1.18 2.07 

Prior Period Adjustment (Net) (29.30) 52.34 

40

41 


Cash Flow Statement Annexed to the Balance Sheet 

For the period April 2011 - March 2012 

` in Lakhs 


A. CASH FLOW FROM OPERATING ACTIVITIES 

Net Profit before Tax 858.41 3813.98 

Adjustments for: 

Depreciation 431.47 406.28 

Interest Expenses 515.30 92.37 

Deffered Revenue Expenditure 154.13 86.89 

Lease Income (467.54) (467.54) 

Incremental Provisions 2338.79 2972.15 2196.54 2314.54 

Operating Profit before Working Capital Changes 3830.56 6128.52 

Adjustments for: 

Trade and Other Receivables (2005.79) (16769.53) 

Inventories (3919.44) (7524.59) 

Trade Payables 3658.64 6348.50 

Loans & Advances (439.87) (2706.46) (791.24) (18736.86) 

Cash Generated from Operations 1124.10 (12608.34) 

Net Cash from Operating Activities 1124.10 (12608.34) 

B. CASH FLOW FROM INVESTING ACTIVITIES 

Purchase of Fixed Assets (349.59) (283.09) 

Sale/Adjustment of Fixed Assets 45.87 0.35 

Adjustment in Capital Work-in-Progress (91.85) (42.60) 

Lease income 467.54 467.54 

Net Cash from Investing Activities 71.97 142.20 

C. CASH FLOW FROM FINANCING ACTIVITIES 

Interest Payment (515.30) (92.37) 

Short Term Loans 475.21 (2240.88) 

Liability for leased assets (467.54) (451.47) 

Net cash from financing activities (507.63) (2784.72) 

Net increase /(Decrease) in cash and cash equivalents 688.44 (15250.86) 

Opening Balance of Cash and Cash Equivalents 2447.86 17698.72 

Closing Balance of Cash and Cash Equivalents 3136.30 2447.86 

688.44 (15250.86) 

Note:- Cash Flow has been prepared by following Indirect method 

Note - 1: 

Details of Opening Balance of Cash and Cash Equivalents 

Cash, Cheques and Draft in hand 7.18 15.41 

Cheques - in- Transit 47.88 181.54 

Balance with Schedule Bank in Current Account 755.47 320.72 

Balance with Schedule Bank in Short Term Deposit 1500.00 17050.00 

Balance with Other Bank in Short Term Deposit 137.33 131.05 

Total 2447.86 17698.72 

Note - 2: 

Details of Closing Balance of Cash and Cash Equivalents 

Cash, Cheques and Draft in hand 4.84 7.18 

Cheques - in- Transit 10.48 47.88 

Balance with Schedule Bank in Current Account 260.77 755.47 

Balance with Schedule Bank in Cash Credit Account 

Balance with Schedule Bank in Short Term Deposit 0.00 1500.00 

Balance with Other Bank in Short Term Deposit 2860.21 137.33 

Total 3136.30 2447.86 

A.K.Kanth 

Company Secretary 

S.K. Chakraborty 

General Manager (Finance) 

Kushal Saha 

Director (Production) & 

R.Misra 

Chairman Cum Managing Director 





(ANJALI JAIN) 

Date : 06/09/2012 Partner, M No. 72022


NOTE NO. 29 

NOTES ON ACCOUNTS 

1. (i) The accounts of the company have been prepared based on “going concern – basis”. Due to prolonged suffering of losses coupled with huge 

negative net worth, the company was declared sick and was referred to BIFR on 24.2.1992. BIFR sanctioned a rehabilitation package on 

26.8.96 and the same was approved by Govt. of India on 7.2.1997. Subsequently BIFR declared that the scheme had failed and ordered for 

winding up of the company on 6.7.2004. 

(ii) Against the aforesaid winding up order, the company filed a writ petition No. 4513/04 on 18.8.04 before the Hon’ble High Court of Jharkhand 

for quashing/staying the winding up order. Hon’ble High Court of Jharkhand gave opportunity to Govt. of India, Govt. of Jharkhand and HEC to 

submit proposals for revival of HEC through affidavits before the Hon’ble Court. Thereafter a number of hearings were held between 9.9.2004 

to 13.11.2009 and ultimately Hon’ble High Court of Jharkhand vide order dated 13.11.2009 gave direction to the Govt. of India, Govt. of 

Jharkhand and the HEC Ltd. and other concerned parties to act in terms of Revival package approved by Hon’ble Court and dropped the 

winding up proceeding being CP No. 5 of 2004 with WP( c) No. 4513 of 2004 with hope and wish that past will not be repeated and HEC, 

the Nations pride and mother of Industries would fulfill its object of serving the nation. 

During the pendency of this proceeding before Hon’ble High Court of Jharkhand the following Revival Packages had been approved by Govt. 

of India and Govt. of Jharkhand. The details of such proposals and present status of implementation are as follows:- 

A. Status of Revival package approved by Govt. of India 

(Recommended by BRPSE on 7.10.2005 and approved by Govt. of India on 15.12.2005) 

Assistance approved by Govt. of India 

Status of Implementation 

a) Conversion of plan loan of ` 15.27 crores as on 31.3.2005 in to equity. Implemented in March, 2006 

b) Waiver of non-plan loan and interest on plan and non-plan loan as on 31.3.2005 of ` 1101.02 

crores. 

Implemented in March, 2006 

c) To provide non-plan loan of ` 102 crores, in the form of Non Plan loan of ` 92.03 crores, plan 

loan of ` 4.985 crores which will be repaid by the company in three years and also ` 4.985 crores 

as equity. 

Implemented in March, 2006 

(Sl.No. a,b,c was approved by Hon’ble High Court of Jharkhand on 13.7.2006) 

d) To mobilise resources (approx. ` 330.00 crores) by transferring residential and non-residential 

buildings already on rent with the state government to the Jharkhand Government, settlement of 

residences on long term lease with the occupant employees and ex-employees of the company, 

settlement of commercial and institutional areas and privatization of schools and hospital. 

B. Revival Scheme approved by Govt. of India in September – 2008 

Company generated ` 85.44 crores from long 

term lease of residential quarters 

a) Conversion of Plan Loan (` 5.825 crores) and Non Plan Loan 

(`102.21 crores) into Equity. 

b) Conversion of outstanding interest of ` 44.81 crores up to 

18.9.2008 into Equity 

c) Enhancing the Govt. guarantee from ` 150 crores to ` 253 

crores for meeting working capital. 

d) To settle the liability of ` 79.06 crores of CISF by transferring 

commensurate amount of land of the company to the CISF. 

Implemented in March,2009 



158 acres of land has been transferred to CISF in March, 2009 for liquidation of dues 

of ` 79.06 crores. In addition, Waiver of the interest and penal interest on CISF dues 

amounting to ` 37.91 crores and freezing of interest and penal interest amount after 

31-7-2008 was approved by Govt. of India in Sept-08 and implemented 

42

43 


C. Status of Revival Package : Agreed to amongst DHI,GOI, Govt. of Jharkhand and HEC Ltd. 

Revival Package approved by 

CCEA 

1 Not specifically mentioned 

as to the waival of electricity 

dues. But Jharkhand Govt's 

proposal for waiver of ` 500 

Crores against electricity dues 

was approved. 

2 Waiver of PHED dues of ` 

31.03 Crores 

3 Waiver of Sales Tax dues of ` 

25.51 Crores 

4 To authorize HEC to receive 

` 250 Crores from Govt. 

of Jharkhand with no future 

commitment for transfer of any 

more land or building. 

5 To allow HEC to accept the 

proposal of Govt. of Jharkhand 

to transfer 2342 acres of 

land. This includes 85 acres 

of appurtenant land to the 

building. 

6 To allow HEC to accept transfer 

of 17 buildings and 1155 

residential quarters along 

with land appurtenant there 

to valuing ` 142.23 Crores 

to GOJ. 

As per Affidavit filed by Govt. 

of Jharkhand and approval of 

Hon'ble High Court of Jharkhand. 

Waival of electricity dues of ` 

306.37 crores and delayed payment 

surcharge up to the date of Final 

settlement by JSEB after approval of 

Hon’ble High Court of Jharkhand. 

Waival of PHED dues ` 32.65 crores 

as on 31.03.2007. 

The GOJ agreed that payment of 

` 25.51 Crores by HEC will be 

treated as full and final settlement 

of all commercial Tax liability upto 

31.03.2007 including penalty / penal 

interest for delayed payment etc. to 

which the assessment of CT liability 

pertains to. Any liability separate 

from it and discovered subsequently 

will be treated as per relevant law/ 

guidelines. 

Grant of ` 275.51 crores including ` 

25.51 crores mentioned in Sl.No. '3' 

above. 

HEC to surrender 2342 acres of land 

to Govt. of Jharkhand. 

HEC to surrender 17 nos. Non 

residential Building and 1148 

residential quarters to Govt. of 

Jharkhand. 

Amount to be 

Waived / Adjusted 

/ Received 

` 969.85 Crores 

total amount to be 

waived / Adjusted. 

` 32.65 crores 

(Waiver) 

1) ` 25.51 crores to 

be paid by GOJ 

2)The company is 

to deposit ` 25.51 

crores with GOJ 

Amount Waived / 

Adjusted / Received 

Waived ` 853.42 Crores 

(Electricity dues of ` 

306.37 Crores and DPS 

of ` 547.05 Crores upto 

31.08.2008) 

` in Crore 

Balance amount 

to be Waived / 

Adjusted / Received 

` 116.42 Crores 

against DPS from 

01.09.2008 to 

31.03.2010 yet to be 

waived. 

0.00 ` 32.65 crores 

(Waiver) 

1) ` 25.51 crores 1) NIL 

2) ` 25.51 Crores 

deposited by HEC towards 

Commercial Taxes. 

2) NIL 

3) Order of waiver 3) Order not issued 3) Order for waiver 

all Commercial 

of all dues upto 

tax liability up to 

31.03.07 by Govt. 

31.03.2007 is to be 

issued by GOJ. 

of Jharkhand is still 

awaited. 

` 275.51 crores ` 164.21 crores ` 111.30 crores 

Possession of 1902.64 acres of land had been handed over to GOJ for 

which Deed of Conveyance is yet to be executed. Balance 354.25 acres 

of land is to be handed over after removal of encroachment. 

17 Nos. of Non Residential Buildings , 1148 Nos. of Residential Buildings 

and 85.11 acres of appurtenant land were already under possession of 

GOJ on rent upto 31.03.2009 and had been handed over to Government 

of Jharkhand. Registration of Buildings are yet to be executed. 

The above package has not been accounted for due to non implementation of package in full by Govt. of Jharkhand and also non completion of 

registration of Buildings and deed of conveyance for land. Accordingly the amount received from Govt. of Jharkhand has been kept as advance. 

2. The prayer of HEC Limited to the Chairman of Central Board of Trustees, Employees Provident Fund Organisation, for waiver of damages amounting 

to ` 95.02 crore for the period from 03/76 to 09/99 levied by Regional Provident Commissioner, Ranchi, has been rejected vide letter dated


12.11.2010. Company has again filed Civil Miscellaneous Petition (CMP) in Company Petitions CP 05/2004 before Hon’ble High Court of Jharkhand. 

Against the aforesaid order Hon’ble High Court of Jharkhand has stayed recovery of damages till further order. 

3 Contingent Liabilities : 

a) Estimated amount of contracts, remaining to be executed on capital account and not provided for is ` 518.98 Lakhs (Previous year ` 16.85 Lakhs). 

b) Unexpired Letter of Credit ` 2,474.17 Lakhs(Previous year ` 2,522.06 Lakhs) 

c) Unexpired Bank Guarantee ` 12,892.01 Lakhs (Previous year ` 11,278.94 Lakhs) 

d) Delayed payment surcharge on Energy charges ` 69592.83 Lakhs (Previous Year ` 69,592.83 Lakhs) 

e) Water Charges ` 1,787.06 Lakhs (Previous year ` 1,451.36 Lakhs) 

f) Damages towards PF dues ` 9,501.54 Lakhs (Previous year ` 9,501.54 Lakhs) 

g) Others including Legal Cases ` 1,128.66 Lakhs and Commercial Taxes ` 2,379.57 Lakhs, total amounting to ` 3,508.23 Lakhs (Previous 

year ` 3,829.72 Lakhs) 

4. Out of ` 23,005.29 Lakhs received towards Long Term Lease from 1995-96 onwards to 31.03.2012, a sum of ` 467.54 Lakhs has been amortised 

in proportion to the period of lease irrespective of the date of agreement and the profitability for the year has been increased to that extent. 

5. (a) Revenue from operation includes unbilled sales amounting to ` 9,097.59 Lakhs including escalation (previous year ` 17759.47 Lakhs) due 

to part supply as per billing schedule under respective work order. 

(b) Interplant transfer of ` 6372.71 Lakhs (previous year ` 7758.38 Lakhs) have been excluded from total Revenue from operation of the Company. 

6. (a) Revenue from operation includes ` 28,539.25 Lakhs in respect of turnkey contract executed by Project Division (previous year ` 23,542.27 

lakhs) valued on the basis of as approved billing schedule and payment terms of the contract to the extent works completed, inspected, 

despatched/on delivery to the carrier and billed. 

The disclosures relating to Construction Contracts entered on or after 01.04.2003 as per the requirement of Accounting Standard AS-7 

(Revised) are as follows: 

` in Lakhs 


Contract revenue recognized during the year 28539.25 23542.27 

In respect of Contract in progress as on 31.03.2012 

- Cost incurred and recognized profits (less recognized losses) 62083.09 39132.80 

- Amount of advance received 17443.71 11257.43 

- Amount of retentions (deferred debts) 2345.80 5505.95 

In respect of dues from customers after appropriate netting off 

- Gross amount due from customers for the contract work as an asset 11189.14 12107.44 

- Gross amount due to customers for the contract work as a liability 5126.42 7401.76 

- Contingencies NIL NIL 

(b) The estimates of total costs and total revenue in respect of Construction Contracts entered on or after 1 st April 2003 in accordance with 

Accounting Standard (AS) – 7( R ) Construction Contracts are reviewed and up dated periodically during the year by the management and 

necessary adjustments are made in the current year’s account . 

7. Despite issuance of letter to Major Clients for confirmation of Sundry Debtors balance, no confirmation from clients has been received till date. 

Regarding Loans & Advances, Deposits, Sundry Creditors etc., confirmation could not be obtained from the respective parties. 

8. Interest on over due amount relating to Micro and Small Enterprises has not been provided and the same has also been shown in Annexure ‘I’. 

9. A sum of ` 9856.05 Lakhs has been considered as Sales based on actual delivery of goods from our premises to the carrier for delivering the same to customer 

like NCL,BSP,CCL,DSP,IISCO,WCL,MCL,BSL,NINL,BHEL,DLW and L&T etc. but the goods were not reached to the customer’s premises till 31.03.2012. 

10. As a measure of prudence, the deferred tax assets(Net) in terms of AS-22 issued by the Institute of Chartered Accountants of India (ICAI) have 

not been recognized in the absence of their being virtual certainty supported by convincing evidence that sufficient future taxable income would 

be available against which such deferred tax assets could be realised. The Provision for current Income Tax has not been made as the Company has 

unabsorbed depreciation and carry forward of lossess which would be set off against taxable income. 

44


11. The Company accounted for the liability towards Employee Benefits under Accounting Standard-15 (Revised 2005) as amended by the Companies 

(Accounting Standard ) Amendment Rules , 2008 w.e.f. 1 st April,2007. Disclosure Requirements has been shown in Annexure – II. 

12. Contingent liability for damages excludes the payment of damages on defaulted CPF/EPF dues for the period from October’99 to March ‘2005 as 

no notice for payment of the same has been received from Regional Provident Fund Commissioner, Ranchi. 

13. Segment information in accordance with Accounting Standard –17 (AS-17) issued by ICAI are furnished at Annexure-III. 

14. Disclosure as required under Accounting Standard- 18 (AS –18) “Related Party Disclosures” issued by ICAI is as follows :- 

Names of the Related Parties Details of Transaction ` in Lakhs 

Key Management Personnel Period Remunerations Terminal Benefits 

1 Sri G. K. Pillai, Ex. CMD 04/2011- 12/2011 10.30 1.05 

2 Sri R Misra, CMD 04/2011-03/2012 14.82 2.03 

3 Sri Bharat Prasad, Ex. Director ( Mkt.) 04/2011-10/2011 6.46 0.80 

4 Sri Kushal Saha, Director (Production) 06/2011-03/2012 10.44 1.54 

5 Sri S. Banerjee, Director ( Personnel) 03/2012-03/2012 1.14 0.17 

In addition to the above they had been provided housing, car at concessional rate. 

Total : 43.16 5.59 

15. In Case deficit arises from Employee’s Provident Fund Trust, it is to be borne by the Company. But in this Accounting year 2011-12, no deficit is 

noticed in Employee’s Provident Fund Trust Account. 

16. Due to change in accounting policy regarding provision for Non moving items of stores as per clause No 17 of “Significant Accounting Policies”, the 

profit of the company is increased by ` 193.72 Lakh during the current financial Year. 

17. In certain areas like Transport and Hospital consumables like Spare Parts, Medicines and Stationary are treated as consumed during the year. 

18. As required under section 211(3A), (3B) and (3C) of the companies act, 1956 the following disclosure is made. Deviation from Accounting 

Standards as mentioned in sub section ( 3C ) with reasons and impact are mentioned below:- 

a) Valuation of inventories of finished and semi finished goods covered under Inter Plant items could not be done in conformity with the 

requirement of AS-2 as the amount is not ascertainable. 

b) Accountal of Revenue from operation in a few cases as mentioned in Note No. 9 is not in conformity with AS – 9 as the goods has been 

dispatched / delivered to the carrier. 

19. The previous year’s figures have been regrouped, recasted, reclassified and rearranged to make them comparable as far as practicable with those 

of current year. 

20. The Note No. 1 to 29 and the Statement of Accounting Policy forms an integral part of these accounts. 

A. K. Kanth S. K. Chakraborty Kushal Saha R. Misra 






(ANJALI JAIN) 


45


ANNEXURE – I 

Annexure to Note No.8 of Note No 29 

Disclosure required under the Micro, Small & Medium Development Act,2006 

Delayed payments due as at the end of each accounting year on account of 

` in Lakhs 


Principle 214.52 66.31 

Interest 98.24 20.21 

Total Interest Paid on all delayed payments during the year under the provisions of the Act Nil Nil 

Interest due on principal amounts paid beyond the due date during the year but without the interest amounts 

under this Act 

Interest accrued but not due (Represents interest accrued as at the end of the year but not due as interest is 

computed at monthly rests from the due date. 

Total Interest due but not paid - ( Represent all interest amounts remaining due together with that from prior 

year(s) until such date when the interest was actually paid to the small enterprises . Mainly to acertain the amount 

of interest disallowable for Income Tax purpose) 

Nil 

Nil 

Nil 

Nil 

Nil 

Nil 

46

(A) 


Annexure to Note No. 11 of Note No. 29 

EMPLOYEE BENEFITS 

ANNEXURE – II 

The company has determined the liability for Employee Benefits as at March 31, 2012 in accordane with the revised Accounting Standard 15 - Employee 

benefits issued by ICAI 

(B) Defined benefit plans - As per Actuarial valuation on March 31,2012 

I 

II 

GRATUITY 

LEAVE 

ENCASHMENT 

RETD. TRAVEL. 

ALLOWANCE 

` in Lakhs 

SICK LEAVE 

Expense recognised in the Statement of Profit & Loss for the 

year ended March 31,2012 

1. Current Service Cost 389.05 152.36 5.56 47.25 

2. Past Service Cost 0.00 0.00 0.00 0.00 

3. Interest Cost 798.20 393.38 9.84 50.03 

4. Net actuarial(gain) / loss recognised during the year 1617.97 658.11 26.63 (37.58) 

5. Total Expense 2805.22 1203.85 42.03 59.70 

Net Asset/ (Liability) recognised in the Balance Sheet 

1. Present value of the obligation (Current) 2549.42 1527.27 20.87 164.25 

2. Present value of the obligation ( Non Current) 7939.47 3650.63 84.67 520.84 

3. Funded status [(surplus/( deficit)] (10488.89) (5177.90) (105.54) (685.09) 

4. Net Asset/ (Liability) recognised in the Balance Sheet 10488.89 5177.90 105.54 685.09 

III 

Change in the present value of the obligation during the year 

ended March 31, 2012 

1. Present value of the obligation as at April 1, 2011 9977.45 4917.30 122.95 625.39 

2. Current service cost 389.05 152.36 5.56 47.25 

3. Interest Cost 798.20 393.38 9.84 50.03 

4. Past Service Cost 0.00 0.00 0.00 0.00 

5. Benefits paid (2293.78) (943.25) (6.17) 0.00 

6. Actuarial (gain)/ loss on obligation 1617.97 658.11 (26.64) (37.58) 

7. Present value of obligation as at March 31,2012 10488.89 5177.90 105.54 685.09 

IV 

Actuarial Assumptions 

1. Discount rate 8.60% 8.60% 8.60% 8.60% 

2. Rate of Increase in Compensation 8.00% 8.00% 8.00% 8.00% 

2. Mortality rate LIC (1994-96) Table 

47


ANNEXURE – III 

REVENUE 

Annexure to Note No. 13 of Note No. 29 

Information about different business units (Segments) 2011-2012 

` in Lakhs 

FFP HMBP HMTP PROJECT HEC 

External Sales 2685.83 32100.96 4835.40 28539.25 68161.44 

Inter-plant/Job done for own use 5629.71 1424.50 394.93 0.00 7449.14 

Total Revenue 8315.54 33525.46 5230.33 28539.25 75610.58 

RESULT 

Net Profit (Before Interest) (9284.83) 9888.01 (1616.54) 2416.37 1403.01 

Interest 144.28 309.18 61.84 0.00 515.30 

Profit from ordinary activities (9429.11) 9578.83 (1678.38) 2416.37 887.71 

Prior Period Income (157.06) 77.74 30.30 19.72 (29.30) 

V.R.S. Exp. 0.00 0.00 0.00 0.00 0.00 

Net Profit (9586.17) 9656.57 (1648.08) 2436.09 858.41 

OTHER INFORAMTION 

Segment Assets 12989.54 53865.33 4829.13 13888.33 85572.33 

Addition during the year 172.30 71.23 35.69 3.03 282.25 

Unallocated Assets 8830.32 

Total Assets 94684.90 

Segment Liabilities 11991.48 22865.30 3179.64 12790.75 50827.17 

Unallocated Liabilities 60883.51 

Total Liabilities 111710.68 

Capital Expenditure 220.12 124.34 26.61 3.03 374.10 

Unallocated Capital Expendt. 21.47 

Total Capital Expendt. 395.57 

Depreciation 256.26 51.94 44.41 7.07 359.68 

Unallocated Depreciation 71.79 

Total Depreciation 431.47 

48


Additional Information Pursuant to the Provision Paragraph of 

4A, 4B, 4C & 4D of Part -II Schedule - VI to the Companies Act. 1956 

(` in Lakhs) 

Current Year Previous Year 

A.1 Employees who were in receipt of or were entitled to receive emoluments (including benefits) of 

` 24,00,000.00 or more for the year (and ` 2,00,000 or more per month when employed 

for apart of the year for current year). 

A.2 Auditor's Expenses 

Nil 

Nil 

i Statutory Auditors Remuneration 1.44 1.44 

ii Tax Audit Fees 0.20 0.20 

B. Capacity and Production 

Licensed Capacity Installed Capacity Actual Production 

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 

III / II III / II 

Goods Manufactured :- Stage in Stage in 

M.T. M.T. M.T. M.T. M.T. M.T. 

Foundry Forge Plant. 

Grey Iron Castings 33345 33345 33345 33345 1450 1644 

Steel Castings 40182 40182 40182 40182 3640 4340 

Forging and Forged Rolls 41463 41463 41463 41463 3769 2052 

Non Ferrous Castings 700 700 700 700 59 65 

G.I. Moulds 1110 1110 1110 1110 169 82 

Steel Ingots, Core and Synthetic Iron 40000 40000 40000 40000 3110 2933 

Rolls (G.I. & Steel) 17740 17740 17740 17740 0 0 

Bye-Product-Coal Tar 2039 2434 

174540 174540 174540 174540 14236 13550 

Notes : Production Figures are inclusive of production for inte plant transfer of 3932.52 MT (Prev.Yr 3594.61 MT ) & Job done for internal use of 6160.75 

MT ( Prev.Yr 4665.73 MT) and are indicated on the production of individual shop against each license. Some of the finished products are used as 

inputs in other Shops. Production figures are as certified by the management 

49


Heavy Machine Building Plant 

Metallurgical Machinery & Equipment 80000 80000 80000 80000 8482 9055 

Structurals 25000 25000 25000 25000 0 0 

105000 105000 105000 105000 8482 9055 

Notes : 1. Production figures are as certified by the management. 

2. Total Production figures derived by deduction of opening stock from total sales and closing stock. 

3. Actual Production includes despatches from off-loading parties and other supplier 

4. Production figures are inclusive of production for internal use. 

5. Production figures are inclusive of interplant sales 327.80 MT(Prev. Year 748.91 MT) 

Turn Key Project : No of Contract - 4 Nos 3 Nos 28539 23543 

Heavy Machine Tools Plant 

Machine Tools, Accessories/ 

Spares & Other products 10000 10000 10000 10000 597 420 

Including Machinery 12 Nos 5 Nos 

Including special accessories and Jobbing 852 Nos 328 Nos 

Note:- 1. Actual Production figures are inclusive of interplant transfers 36.17 MT ( Prev.year 4.80 MT) 

2. Production figures are as certified by the Management. 

50


C. SALES & SERVICES ` in Lakhs 

Quantity M.T Sales less return value 

2011-12 2010-11 2011-12 2010-11 


Grey Iron Castings 679.68 711.51 458.28 523.79 

Steel Castings 717.29 1695.00 582.93 1350.80 

Forging & Forged Rolls 706.76 439.27 739.34 553.29 

Export Sales 0.00 9.86 0.00 20.36 

Bye Product- Coal Tar 1631.13 2647.05 408.99 464.88 

Services 0.00 0.00 496.29 342.40 

TOTAL 3734.86 5502.69 2685.83 3255.52 

Note : Sales exclude Excise duty ` 246.43 lakhs ( previous Year ` 252.17 lakhs), inter unit transfer and items for internal use. 


Metalllurgical Machinery & Equipment 8060.40 8230.50 32100.96 34966.63 

TOTAL 8060.40 8230.50 32100.96 34966.63 

Turn Key Project 28539.25 23543.29 


Machine Tools 10 Nos. 496.19 236.51 4311.88 1305.04 

(pre. Year 05 Nos.) 

Special Accessories & Jobbing (852 Nos.) 65.06 178.69 523.52 1020.49 

(pre. year 328 Nos.) and services 

561.25 415.20 4835.40 2325.53 

51


D. STOCK OF FINISHED GOODS 

Opening Stock (01.04.2011) Closing Stock (31.03.2012) 

Goods Manufactured :- 

Quantity 

(MT) 

Value 

Quantity 

(MT) 

Value 


Grey Iron Castings 0.00 0.00 0.00 0.00 

0.00 0.00 0.00 0.00 

Steel Forging & Forges Rolls 1.92 0.12 1.92 0.12 

(1.92) (0.12) (1.92) (0.12) 

Non Ferrous Castings 0.00 0.00 0.00 0.00 

0.00 0.00 0.00 0.00 

Bye Product-Coal Tar 384.44 69.20 792.31 209.96 

(597.47) (102.00) (384.44) (69.20) 

386.36 69.32 794.23 210.08 

(599.39) (102.12) (386.36) (69.32) 


Metallurgical Machinery & Equipments 145.23 360.09 238.59 583.94 

(69.64) (219.53) (69.64) (360.09) 


Quantity (MT) Value Quantity (MT) Value 

Machine Tools 0 No 0.00 0.00 0 No 0.00 0.00 

0 No (0.00) (0.00) (0 No) (0.00) (0.00) 

Special Accessories & 

Spares and Jobbing work. 

1 No 17.00 17.51 1 No 17.00 17.51 

(1 No) (17.00) (17.51) (1 No ) (17.00) (17.51) 

1 No 17.00 17.51 1 No 17.00 17.51 

1 No (17.00) (17.51) (1 No ) (17.00) (17.51) 

Note : Figures in brackets are for previous year. 

52


E. Raw Material Consumption 

(Including bought out items and direct despatches ) 

ITEMS 


Quantity Value (`) Quantity Value (`) 


Alloy Steel MT 339.89 216.16 223.71 170.64 

Ferrous & Ferro Alloy MT 7255.76 1978.44 8254.55 2044.15 

Non- Ferrous Alloy MT 74.85 259.11 102.91 344.44 

Crank Shaft Nos 54 434.73 27 213.12 

Timber CM 128.00 35.12 2976.04 29.90 

Sq. Ft. 3424.00 2880.00 

TOTAL 2923.56 2802.25 


Grey Iron Castings MT 440.47 132.21 89.72 62.83 

Steel Castings MT 1477.30 2058.33 1818.17 2248.80 

Steel Forging MT 815.74 1969.99 1011.69 2374.97 

Non-Ferrous Castings MT 33.24 334.92 27.17 233.65 

Steel Plates, Profiles & MT 2664.76 1178.07 3265.07 1444.89 

Component/ Accessories & NOS 1012 2971.77 1035 4101.36 

Miscellanious (GR-99) LTR 0.00 0.00 460.00 0.06 

Fabricated Items NOS 259218 1196.64 303620 956.01 

Machinery Parts MTRS 27387.44 26010.25 

Spares KG 3598.54 11246.61 

Bolts, Nuts, Tools etc. SQR MT 184.00 38.50 

Electricals MTRS 162733.58 3678.03 133057.39 3151.35 

NOS 75705 92062 

KG 1469.91 2118.96 

Bearings NOS 3521 580.36 2899 572.73 

TOTAL 14100.32 15146.65 

53



Heavy Machine Tools Plant Quantity Value (`) Quantity Value (`) 

Castings (Indigenous) NOS 606 207.63 1790 287.34 

Components (Imported) NOS 338 784.47 872 1283.81 

Misc.Items (Indigenous) NOS 463596 534.66 487499 433.05 

TOTAL 1526.76 2004.20 

Value of comsumption of Raw Matreials, Components, Stores & Spare Parts (Including purchase of finished goods) and percentage thereof. 

(` in Lakhs) 


(a) Raw Materials Value % Value % 

(i) Imported* 3180.96 17.15 4211.78 21.11 

(ii) Indigenous 15369.67 82.85 15741.32 78.89 

TOTAL 18550.63 100.00 19953.10 100.00 

(b) Stores & Spares 

( Including stores and spares used for repairs and Maintenance) 

(I) Imported 116.83 2.70 100.92 2.34 

(ii) Indigenous 4211.85 97.30 4209.18 97.66 

TOTAL 4328.68 100.00 4310.10 100.00 

Note: Exclusive of imports through canalised agencies. 

F. Value of Imports on CIF Basis 

Raw materials, Spare Parts, 

Components 5528.27 4854.85 

Capital Goods 55.73 9.96 

TOTAL 5584.00 4864.81 

In case of HMBP CIF value of Raw Material, Spare Parts include Cost of Material and 5.5 % of cost of material for insurance and freight. 

G. Expenditure in Foreign Currency 

Technical know-how fee 45.80 112.33 

Directors & Officers Abroad 8.71 14.14 

TOTAL 54.51 126.47 

54



Annexed to and forming part of the Account 

Additional Information pursuant to Part IV of Schedules VI to the Companies Act, 1956. 

BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE 

1. Registration Details 

Registration No. 

State Code 

0 0 0 6 3 0 0 3 

Balance Sheet Date 

3 1 0 3 1 2 

Date Month Year 

2. Capital Raised during the year 

Public Issue 

Right Issue 

N I L N I L 

Bonus Issue 

Private Placement 

N I L N I L 

3. Position of Mobilisation and Deployment of Funds. 

Total Liabilities 

Total Assets 

9 4 6 8 5 9 4 6 8 5 

Sources of Funds :- 

Paid - up Capital 

Reserve & Surplus 

6 0 6 0 8 1 1 8 2 8 

Secured Loans 

Unsecured Loans 

9 4 4 1 0 

Application of Funds:- 

Net Fixed Assets 

Investment 

8 3 5 3 1 

Net Current Assets 

Misc. Expenditure 

2 5 1 4 2 1 5 1 

Accumulated Loss 

8 9 4 6 1 

4. Performance of Company 

Total Revenue 

Total Expenditure 

7 1 5 6 9 7 0 7 1 1 

+/( - ) Profit / Loss before Tax +/ ( - ) Profit / Loss after Tax 

+ 8 5 8 + 8 5 8 

Earning per Share Diluted (in ) Dividend Rate % 

1 4 0 

` in Lakhs 

5. Generic Names of three Principal 

Product /Service of the Company (as per monetary terms). 

Item Code No. (ITC Code). 

Product Description 

S T E E L P L A N T 

M I N I N G E Q U I P M E N T 


Product Description 

S T E E L C A S T I N G 

F O R G I N G S & R O L L 


Product Description H E A V Y M A C H I N E T O O L S 

55

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www.speedoprint.com 

CORPORATE OFFICE 

Plant Plaza Road, Dhurwa, 

Ranchi - 834004, Jharkhand (India) 

Phone : +91 651 2401249/2401176 

Fax : +91 651 2400579/2401571 

Email : corpmktg@hecltd.com 

NEW DELHI 

E-84, Masjid Moth, Greater Kailash 

New Delhi – 110 048 

Tel. : +91 11 29220224, 41437422 

Fax : +91 11 29220225 

Email : hecdelhi@hecltd.com 

KOLKATA 

77, Park Street 

Kolkata – 700 016 

Tel : +91 33 22172397, 22296885 

Fax : +91 33 22291509 

Email : heckolkata@hecltd.com

annual report 2011-12 - Heavy Engineering Corporation Limited

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