annual report 2011-12 - Heavy Engineering Corporation Limited
annual report 2011-12 - Heavy Engineering Corporation Limited annual report 2011-12 - Heavy Engineering Corporation Limited
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- Page 2 and 3: DeefJemcejCeerÙe #eCe (GLIMPSES OF
- Page 4 and 5: iegCeJeòee veerefle QUALITY POLICY
- Page 6 and 7: ANNUAL REPORT 2011-12 NOTICE OF ANN
- Page 8 and 9: OUR PROJECTS Wagon Tippler at New O
- Page 10 and 11: ANNUAL REPORT 2011-12 Production `
- Page 12 and 13: ANNUAL REPORT 2011-12 4. MARKETING
- Page 14 and 15: ANNUAL REPORT 2011-12 13. DEVELOPME
- Page 16 and 17: ANNUAL REPORT 2011-12 RESEARCH & DE
- Page 18 and 19: ANNUAL REPORT 2011-12 ANNEXURE - B
- Page 20 and 21: ANNUAL REPORT 2011-12 The Members o
- Page 22 and 23: ANNUAL REPORT 2011-12 4. Internal C
- Page 24 and 25: ANNUAL REPORT 2011-12 17. According
- Page 27 and 28: OUR FACILITIES 2650 T Forging Press
- Page 29 and 30: Heavy Engineering Corporation Limit
- Page 31 and 32: ANNUAL REPORT 2011-12 SIGNIFICANT A
- Page 33 and 34: ANNUAL REPORT 2011-12 BALANCE SHEET
- Page 35 and 36: ANNUAL REPORT 2011-12 NOTES FORMING
- Page 37 and 38: ANNUAL REPORT 2011-12 NOTES FORMING
- Page 39 and 40: ANNUAL REPORT 2011-12 NOTES FORMING
- Page 41 and 42: ANNUAL REPORT 2011-12 NOTES FORMING
- Page 43 and 44: ANNUAL REPORT 2011-12 NOTES FORMING
- Page 45 and 46: ANNUAL REPORT 2011-12 NOTES FORMING
- Page 47 and 48: 39 ANNUAL REPORT 2011-12 NOTES FORM
- Page 49 and 50: 41 ANNUAL REPORT 2011-12 Cash Flow
- Page 51 and 52: 43 ANNUAL REPORT 2011-12 C. Status
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DeefJemcejCeerÙe #eCe (GLIMPSES OF SOME IMPORTANT EVENTS)<br />
efoveebkeâ 25 ceF&, 20<strong>12</strong> keâes nesšue leepe ceeveefmebn, veF& efouueer ceW ceeveJe mebmeeOeve efJekeâeme meefceefle kesâ DeOÙe#e, ßeer Dee@mkeâj<br />
heâvee&efv[me, ceeveveerÙe heÇOeeve ceb$eer kesâ meueenkeâej, ßeer šerÊkesâÊSÊ veeÙej SJeb heerÊF&ÊSmeÊyeerÊ kesâ hetJe& DeOÙe#e, ßeer efveMeerkeâeble<br />
efmevne kesâ neLeeW šve&-Deje@Gv[ kewâšsiejer ceW ``yeerÊšerÊ-mšej heerÊSmeÊÙetÊ Skeämesuesvme DeeJee@[&, 20<strong>12</strong>'' heÇehle keâjles ngS<br />
DeOÙe#e-men-heÇyebOe efveosMekeâ, SÛeÊF&ÊmeerÊ, ßeer DeejÊ efceßee<br />
Shri R Misra, CMD, HEC is seen receiving the “BT-Star PSU Excellence Awaed 20<strong>12</strong>” in Turn Around Category<br />
from Shri Oscar Fernandes, Chairman, Committee on Human Resource Development, Shri TKA Nair, Advisor to<br />
the Hon'ble Prime Minister & Shri Nishi Kant Sinha, Former Chairman, PESB at Hotel Taj Mansingh, New Delhi<br />
on 25.05.20<strong>12</strong>.<br />
efoveebkeâ 19 efmelecyej, 20<strong>12</strong> keâes heâe@Gv[jer heâespe& hueebš ceW ``SheäuetSvš š^eršceWš hueebš'' keâe<br />
efMeueevÙeeme keâjles ngS DeOÙe#e-men-heÇyebOe efveosMekeâ, SÛeÊF&ÊmeerÊ, ßeer DeejÊ efceßee<br />
Sri R. Misra, CMD of <strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong>, is seen laying the foundation stone of an<br />
“Effluent Treatment Plant” at the company Foundry Forge Plant in Ranchi on 19th September 20<strong>12</strong>.
GLIMPSES OF SOME IMPORTANT EVENTS<br />
Sri R. Misra, CMD, HEC inaugurating the dispatch of first “CNC Deep Hole Boring Machine”,<br />
Model BDH 140N to Ordinance Factory, Kanpur.<br />
Celebration of Shri Vishkarma Puja at HEC Plants on 17.09.20<strong>12</strong>
iegCeJeòee veerefle<br />
QUALITY POLICY<br />
ieÇenkeâ keâer DeeJeMÙekeâleeDeeW Deewj Dehes#eeDeeW kesâ Deveghe<br />
iegCeJeòeehetCe& GlheeoeW, heÇCeeefueÙeeW SJeb mesJeDeeW kesâ<br />
efJeÕemeveerÙe mehueeÙej kesâ he ceW DeieÇCeer mLeeve heÇehle<br />
keâjvee leLee Gmes yeveeÙes jKevee<br />
To achieve and maintain a leading<br />
position as supplier of reliable quality<br />
products, systems and services to meet<br />
customer needs and expectations
CONTENTS<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
1. Notice of AGM 2<br />
2. Directors' Report 3<br />
- R&D, Technology Absorption, Adaptation, Innovation and Energy Conservation 10<br />
- Report on Corporate Governance <strong>12</strong><br />
- Auditors Report and Management's Replies 14<br />
- Comments on the Accounts by C & AG 19<br />
3. Annual Accounts<br />
- Significant Accounting Policies 20<br />
- Audited Accounts with Notes & Cash Flow Statement 22<br />
4. Additional Information 46<br />
BOARD OF DIRECTORS<br />
(As on 30.11.20<strong>12</strong>)<br />
Chairman-cum-Managing Director : Shri R.Misra<br />
Director (Production) : Shri Kushal Saha<br />
Director (Personnel) : Shri Subhra Banerjee<br />
Director (Marketing) : Shri A.V. Krishna<br />
Director : Shri Vijay Shankar Madan<br />
: Shri Harbhajan Singh<br />
Company Secretary : Shri Abhay Kumar Kanth<br />
Auditors : M/s Anjali Jain & Associates,<br />
Chartered Accountants<br />
Bankers : State Bank of India<br />
Registered Office : Plant Plaza Road, Dhurwa,<br />
Ranchi- 834004 (Jharkhand)<br />
1
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTICE OF ANNUAL GENERAL MEETING<br />
Notice is hereby given to the Shareholders of <strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong> that 53rd Annual General Meeting of the Company will be held on<br />
Friday, the 30th November, 20<strong>12</strong> at 3.00 PM at its Registered Office located at Plant Plaza Road, Dhurwa, Ranchi to transact the following business:-<br />
ORDINARY BUSINESS<br />
1. To receive, consider and adopt the Directors' Report to the Shareholders for the financial year ended 31st March 20<strong>12</strong>.<br />
2. To receiver, consider and adopt the audited Profit & Loss Account for the financial year ended 31st March, 20<strong>12</strong> and Balance Sheet as on that date<br />
along with the Auditors Report thereon and our replies thereto.<br />
3. Appointment of Auditor under Section 619 (2) of the Companies Act, 1956 for the financial year 20<strong>12</strong>-13 authorize Board of Directors to fix<br />
remuneration of the Statutory for the financial year 20<strong>12</strong>-13<br />
By order of Board of Directors<br />
Date : 5.11.20<strong>12</strong><br />
(A. K. Kanth)<br />
Co. Secretary<br />
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<br />
proxy need not be a Member of the Company.<br />
2
BOARD OF DIRECTORS<br />
(As on 30.11.20<strong>12</strong>)<br />
Shri R. Misra<br />
Chairman-cum-Managing Director<br />
Shri Vijay Shankar Madan<br />
Director<br />
Shri Harbhajan Singh<br />
Director<br />
Shri Kushal Saha<br />
Director (Production)<br />
Shri Shubhra Banerjee<br />
Director (Personnel)<br />
Shri A. V. Krishna<br />
Director (Marketing)<br />
Shri Abhay Kumar Kanth<br />
Company Secretary
OUR PROJECTS<br />
Wagon Tippler at New OBBP, Rourkela Steel Plant<br />
Twin Boomer Stakcer at New OBBP, Rourkela Steel Plant
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
DIRECTORS' REPORT<br />
To<br />
The Shareholders<br />
<strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong><br />
Ladies and Gentlemen,<br />
<strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> has completed its 53 years of service to the nation and the Directors of the Company have the pleasure to present the 53rd<br />
Annual Report of the Company together with Audited Accounts for the year ended 31st March, 20<strong>12</strong>.<br />
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<br />
Award 20<strong>12</strong> in Turn Around Category.<br />
1. PERFORMANCE HIGHLIGHTS<br />
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<br />
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.<br />
The gross sales during the year has been ` 725.23 crore against ` 681.21 crore during the previous year.<br />
2. PRODUCTION & SALES<br />
The production & sales figures for the year as compared to the previous year and MOU targets are as follows:-<br />
<strong>2011</strong>-<strong>12</strong> 2010-<strong>2011</strong><br />
MOU Actual MOU Actual<br />
Gross Turnover 1000.00 725.23 700.00 681.21<br />
Production 952.22 687.74 667.70 700.55<br />
The Gross Sales, Production and productivity for the last ten years are given below:<br />
(` in crore)<br />
Gross Sales<br />
` Crore<br />
800<br />
700<br />
681<br />
725<br />
600<br />
500<br />
400<br />
413<br />
454<br />
528<br />
300<br />
304<br />
200<br />
100<br />
0<br />
159 178<br />
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 <strong>2011</strong> -<strong>12</strong><br />
3
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Production<br />
` Crore<br />
800<br />
700<br />
701 688<br />
600<br />
500<br />
400<br />
383 419<br />
538<br />
300<br />
281<br />
200<br />
100<br />
136<br />
166<br />
0<br />
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 <strong>2011</strong> -<strong>12</strong><br />
Productivity<br />
There is a marked improvement in Gross sales per employee<br />
Gross Sales per Employee<br />
` Lakhs<br />
35<br />
30<br />
30.17<br />
25<br />
24.60<br />
20<br />
15<br />
10<br />
5<br />
4.41 5.15<br />
9.13<br />
13.80<br />
15.83<br />
18.42<br />
0<br />
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 <strong>2011</strong> -<strong>12</strong><br />
3. FINANCIAL RESULTS<br />
Profitability was affected due to increase in material cost, fuel cost and employment cost. As a result, Gross margin has gone down inspite of<br />
improvement in productivity in terms of Gross Sales per employee.<br />
(` in crore)<br />
Particulars<br />
<strong>2011</strong>-20<strong>12</strong> 2010-<strong>2011</strong><br />
MOU Actual MOU Actual<br />
Gross Margin* 62.00 18.34 54.00 42.60<br />
Interest 4.75 5.15 <strong>12</strong>.00 0.92<br />
Depreciation 5.15 4.31 5.20 4.06<br />
Profit before Tax 52.10 8.58 36.80 38.14<br />
Net Profit 52.10 8.58 36.80 38.14<br />
Cash Profit 57.25 <strong>12</strong>.89 42.00 42.20<br />
* Profit before Depreciation, Interest, Tax, Prior Period and extra ordinary items<br />
4
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Gross Margin<br />
` Crore<br />
60<br />
40<br />
31.19<br />
44.02<br />
34.38<br />
42.60<br />
20<br />
0<br />
13.15<br />
18.34<br />
-20<br />
-40<br />
-60<br />
-80<br />
-61.49 -64.24<br />
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 <strong>2011</strong> -<strong>12</strong><br />
Net Profit<br />
` Crore<br />
100<br />
50<br />
0<br />
2.86 4.17<br />
18.37<br />
44.27 38.14<br />
8.58<br />
-50<br />
-100<br />
-86.89<br />
-150<br />
-200<br />
-250<br />
-300<br />
-350<br />
-285.02<br />
2004 -05 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 <strong>2011</strong> -<strong>12</strong><br />
Paid up Equity Capital of the Company on 31.03.20<strong>12</strong> stands to be ` 606.08 crore.<br />
During the year your Company contributed ` 74.52 crores to Central and State Exchequers as compared to ` 66.45 crores in the previous year.<br />
5
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
4. MARKETING ACTIVITIES<br />
ORDERS BOOKED & ORDER BOOK POSITION :<br />
Inspite of delay/deferment of many high value projects/tenders by<br />
customers, company during the year booked orders worth ` 545.82<br />
crore and order book position of company stood at ` 1916.36 crore<br />
as on 31.3.20<strong>12</strong>.<br />
During the year, the Company received following important orders:<br />
• EOT Crane Package of various capacity from BSP Bhilai.<br />
• 07 nos. 5 cum Shovel equipment from different units of CIL.<br />
• Coal Handling Plant from NCL Krishnashila.<br />
• Crusher package from SAIL RMD.<br />
• 03 nos. CNC Lathe machine from FGK Kanpur.<br />
• Mining Spares from various CIL units.<br />
Apart from the above, a number of orders for Castings, Forgings,<br />
Spare items had also been received from various Steel Plants, Mining<br />
& general engineering industries in Private sector.<br />
Project Activities :<br />
The Project Division is currently executing the Turnkey orders of Ore<br />
Handling Plant, Part-A (Pkg-060) & Coal Handling Plant (062)<br />
of BSP Bhilai and Pkg-090 of RSP Rourkela. The execution of the<br />
projects at these sites is under progress and all efforts are being<br />
made for early execution.<br />
Besides this, Coal Washery at Madhuband (BCCL) and Coal Handling Plant<br />
of NCL Krishnashila & Crusher package of SAIL RMD is in initial stage.<br />
The production achieved for <strong>2011</strong>-<strong>12</strong> was ` 285 crore against the<br />
target of ` 414 crore. Shortfall has been due to land slide owing to<br />
heavy rainfall at BSP site and non-start of work of Coal washery at<br />
Madhuband, BCCL due to exorbitant delay in receipt of environmental<br />
clearance by BCCL from Govt. of India<br />
NEW BUSINESS INITIATIVES:<br />
a) Important MOU/Agreements Signed during <strong>2011</strong>-<strong>12</strong>:<br />
• With M/s Vitkovice a.s., Czech Republic on 10.10.<strong>2011</strong> - for<br />
equipments/components for Steel, Thermal power plant, Naval<br />
Ship, Nuclear Sectors<br />
• With M/s INCO <strong>Engineering</strong>, Czech Republic on 10.10.<strong>2011</strong> -<br />
for Underground Mining Equipments<br />
• With M/s Kralovopolska, Czech Republic on 06.10.<strong>2011</strong> - for<br />
Petrochemical sector & EOT Cranes<br />
• With M/s V R Steel, South Africa on 18.11.<strong>2011</strong> - for manufacture<br />
of (a) Bucket for Dragline & Shovel, (b) Body for Mining Dumper,<br />
(c) Components used for Bulk Material Handling, (d) Armoring of<br />
Car/vehicle for personal & Military use<br />
b) Efforts for Export orders<br />
An order for ` 10 crore had been received for modernization of<br />
Saidpur Railway Workshop project, Bangladesh.<br />
5. BIFR AND REVIVAL PACKAGE<br />
Consequent upon winding up order of BIFR and subsequent appeal to<br />
AAIFR and Hon’ble High Court of Jharkhand, issue of revival of HEC<br />
was referred to BRPSE which recommended revival package for HEC<br />
on 7.10.2005. Govt. of India approved the package in Dec-2005.<br />
Continued efforts were made to settle the various issues pertaining to<br />
land, buildings, waiver of dues and fund to be provided by Govt. of<br />
Jharkhand. Govt. of Jharkhand (GOJ) in April 2009 agreed to waive<br />
outstanding electricity dues plus DPS on it and water dues; provide<br />
grant of ` 275.51 crore out of which HEC would pay ` 25.51 crore<br />
to Commercial Tax Dept. to settle the outstanding Commercial Tax<br />
Liabilities. HEC will transfer non-residential/residential buildings,<br />
which were given on rent to GOJ, and 2342 acres of land (including<br />
85 acres of appurtenant land with buildings) to State Govt. In<br />
addition, GOJ agreed for transfer of 158 acres of land by HEC to CISF<br />
to settle their dues. Accordingly affidavits were filed by HEC, DHI and<br />
Govt. of Jharkhand based on which Hon’ble Jharkhand High Court<br />
approved the revival package on 13.11.2009.<br />
Company has transferred 158 acres of Land to CISF. Govt. Jharkhand<br />
had taken possession of 1148 residential quarters, 17 non-residential<br />
buildings with 85.11 acres appurtenant land and 1902.64 acres<br />
of vacant land which in turn had released ` 164.21 crore out of `<br />
275.51 crore agreed earlier. In addition it had waived electricity dues<br />
upto 31.3.2006 and Delayed Payment Surcharge (DPS) upto 31.8.08.<br />
The reliefs like waiver of DPS for the period 1.9.2008 to 31.3.2010<br />
and water dues and receipt of balance amount of grant of ` 111.30<br />
crore, settlement of commercial tax dues upto 31.03.2007 under the<br />
revival package approved by Hon’ble Jharkhand High Court is yet to<br />
be implemented. Efforts are being made to settle all these issues.<br />
However, partial implementation of the Revival Scheme of Govt. of<br />
Jharkhand has not been accounted for in the Accounts.<br />
6. SAFETY, ENVIRONMENT AND POLLUTION CONTROL<br />
As always, your company gives utmost importance to the occupational<br />
safety and health of workers in the company. Various training and<br />
awareness programme were conducted regularly in order to inculcate<br />
safety consciousness among the employees. Complete medical<br />
check-ups were regularly carried on as per the statutory norms.<br />
Safety appliances like hand gloves, goggles, protective clothing,<br />
safety helmets, safety belts, safety shoes etc. were provided to<br />
the employees. National safety day and HEC Safety Week were<br />
celebrated by all the units.<br />
6
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
The company does not compromise on environmental pollution and<br />
so takes all precautions towards pollution control as detailed below :-<br />
• Compliance with all statutory requirements laid down under<br />
Air (Prevention and Control of Pollution) Act, Water (Prevention<br />
and Control of Pollution) Act and Environment (Protection) Act.<br />
• Obtaining running consent from the State Pollution Control<br />
Board and compliance with the stipulated conditions.<br />
• Testing of water effluent samples regularly for pollutants,<br />
based on which consent for discharge of water to inland body<br />
is granted.<br />
• Ambient air test is carried out regularly to ascertain limit of<br />
pollution gases before giving consent for air emission.<br />
• Regular tree plantation activities are being carried out with the<br />
help of forest department to keep the HEC areas green and<br />
reduce the pollution.<br />
7. MANPOWER POSITION<br />
The manpower of the Company as on 31.03.20<strong>12</strong> stood at 2404 as<br />
against 2769 on 31.03.<strong>2011</strong>.<br />
8. INDUSTRIAL RELATIONS<br />
During the period under review, the industrial relation climate, in<br />
general remained normal. However, gate meetings and general<br />
meetings organized by different trade unions to press their demands<br />
mainly related to wage revision, promotion, pending LTL issues,<br />
unauthorized occupation of Quarters and lands, increase in water<br />
charges, minimum wages to contract workers, regularization of<br />
contract workers etc. The year <strong>2011</strong>-<strong>12</strong> saw finalization of revision<br />
of scales of pay for workers, supervisors and executives.<br />
Indefinite Dharna is organized by dependent of deceased employees<br />
w.e.f. 13.04.20<strong>12</strong> near HEC Headquarters gate seeking employment<br />
with HEC.<br />
9. EMPLOYEE WELFARE<br />
The company has its own Township, Plant Hospital and dispensaries<br />
for the regular employees. Contract workers are extended medical<br />
benefit under ESI Scheme for which subscription amount is paid<br />
by the Company to the respective contractors. Superannuated<br />
employees are extended free indoor & outdoor medical facility in<br />
HEC Plant Hospital.<br />
Efforts are being made to facilitate the employees/ contract<br />
workers to continue their study in order to clear the matriculation<br />
examination. <strong>Corporation</strong> will help them in getting registration etc.<br />
as private candidate.<br />
Attempts are being made to get ITI equivalent qualifications for<br />
experienced but unqualified contract workmen.<br />
10. HUMAN RESOURCE DEVELOPMENT<br />
Your company gives immense importance to human resource<br />
development. Thrust were on competency development through<br />
organizing a series of programmes on soft skills viz. attitudinal<br />
development, emotional quotient, transactional analysis, enthusing<br />
team building, leadership quality development, developing<br />
supervisory skill, subordinate development. This helped company in<br />
achieving substantial improvement in performance and company is<br />
making net profit since last 6 years.<br />
Your company is running two schools for the wards of employees &<br />
others in the neighboring areas.<br />
11. STATUS OF SCHEDULED CASTES AND SCHEDULED<br />
TRIBES<br />
i). No. of SC & ST employees as on 31.03.20<strong>12</strong> stood at 319 and<br />
442 respectively<br />
ii). Percentage of SC & ST employees w.r.t total employees stood<br />
as 13.27% and 18.30% respectively.<br />
iii). Out of 25 recruitments made during the year <strong>2011</strong>-<strong>12</strong>, 04<br />
nos. of SC candidates & 03 nos. of ST candidates have joined.<br />
<strong>12</strong>. PROGRESSIVE USE OF HINDI<br />
Rajbhasha Vibhag promotes the usage of Rajbhasha Hindi through<br />
out your company as an essential effort for wider implementation<br />
under the directives of Govt. of India.<br />
The following steps were taken by the company during the year<br />
towards progressive use of Hindi as official language :<br />
i) The typists and stenos of English have been given training for<br />
typing and stenography in Hindi.<br />
ii) Employees are being motivated and trained to become<br />
conversant with Hindi as a workable language.<br />
iii) The Official Language Implementation Committee organized<br />
its quarterly meetings regularly during the year.<br />
iv) Various checkpoints have been made to ensure successful<br />
implementation of Raj Bhasa Policy and attention of the Heads<br />
of Departments/Plants were attracted towards deficiencies found,<br />
if any. Directives were also issued to follow the rules rigidly.<br />
v) Raj Bhasha Fortnight was organized and various competitions<br />
such as Essay writings, Speech, Poetries, Noting, Drafting,<br />
Typing as well as for Raj Bhasha Shield and excellent work in<br />
Hindi were held. The winners were given attractive prizes. Two<br />
Hindi workshops were organized for the benefits of employees<br />
up to date their working knowledge in Hindi.<br />
7
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
13. DEVELOPMENT OF ANCILLARIES AND SSI UNITS<br />
As a part of its social responsibility, your company developed an<br />
ancillary area near Tupudana with the help of Ranchi Industrial<br />
Development Authority to create opportunity of employment as well<br />
as individual entrepreneurship.<br />
Regular interactions were organized with the SSI units to find out<br />
various scopes for mutual cooperation and entry in new areas<br />
commensurate with HEC’s growth.<br />
14. CORPORATE SOCIAL RESPONSIBILITY<br />
Initially HEC had a dedicated section known as “Community<br />
Development Cell” for carrying out CSR activities which included<br />
construction of culverts, helping nearby villagers for poultry farming<br />
and its training, provisions for drinking water etc. Later on with<br />
the deterioration in performance company abandoned this cell.<br />
Subsequently, company started skill development programme where<br />
preference are being given to local youths and youths from displaced<br />
family. For this company started Industrial Training Institute known<br />
as HEC Training Institute (HTI) which provides certificate equivalent<br />
to ITI. Company also runs Nursing School for local youths. Company<br />
also runs schools with a nominal fee. Company is having 350<br />
bedded Hospital where ex-employees & their spouse are provided<br />
free treatment. In addition, free health camps are being organized in<br />
nearby villages and HEC hospital.<br />
15. VIGILANCE ACTIVITIES<br />
Vigilance organization of the company operated under the overall<br />
administrative and functional control of Chief Vigilance Officer.<br />
Preventive vigilance continued to be the thrust area through periodic<br />
and surprise inspections by the Vigilance Department. Awareness<br />
amongst employees is generated by organizing training programs<br />
on various guidelines/procedures of CVC, disciplinary enquiry<br />
proceedings, their role in combating corruption etc. and need for<br />
transparent and fair working. Twelve such programs were organized<br />
during the year. In addition, regular interactions by CVO/Vigilance<br />
Officers with senior executives/ employees of HEC were organized<br />
to develop a positive approach among them towards corruption free<br />
efficient and transparent working. Efforts had been on timely disposal<br />
of complaints and enquiries. A “Compendium of Circulars” containing<br />
CVC/CTE’s guidelines/circulars besides, internal circulars was prepared<br />
and distributed amongst the senior officers of the <strong>Corporation</strong>.<br />
Vigilance Portal in Company’s website has been introduced containing<br />
vigilance related details for guidance of officers of the <strong>Corporation</strong>.<br />
Policy regarding Public Interest Disclosure and Protection of Informer<br />
(PIDPI) resolution and press release of CVC was up-loaded in<br />
Company’s website and displayed at Notice Boards for information<br />
of employees/.officers.<br />
Vigilance awareness week was observed as per CVC’s guidelines.<br />
Essay/quiz competitions were organized to enhance vigilance<br />
awareness among the employees.<br />
16. DISPOSAL OF REQUEST/APPEAL UNDER RTI ACT :<br />
Company emphasizes on transparency and timely submission of<br />
information sought was given priority.<br />
17. QUALITY CONTROL<br />
Your company never compromises on quality of the products<br />
manufactured. The company takes all measures to maintain the<br />
quality of its products and services to the utmost satisfaction of its<br />
customers, keeping this in view Quality assurance department has<br />
been centralized for three plants. The standards of Quality of products<br />
and services are being maintained as per relevant Indian standards<br />
and ISO 9001:2000.<br />
18. ENERGY AUDIT<br />
Energy Audit was carried out by Petroleum Conservation Research<br />
Association (PCRA) in 2004-05 in a limited way with the objective to<br />
study the use of alternate fuel other than the currently used Producer<br />
Gas for Heat treatment/Reheating furnaces.<br />
As Foundry Forge unit is the main energy consuming unit, energy<br />
audit of this unit with the help of an external agency M/s. Energo<br />
<strong>Engineering</strong> Projects Ltd (EEPL) was got done. Suggestions have<br />
been prioritized and action initiated in following areas:<br />
1. Revamping of the Producer Gas plant, gas cooler units,<br />
ventilators and producer gas operated furnaces<br />
2. Overhauling of HT Transformers.<br />
3. Modification in operating system of compressors for intermittent<br />
switching off.<br />
4. Replacement of MG Set of EOT Crane by Variable Frequency Device.<br />
5. Switching off the standby transformers.<br />
19. R&D, TECHNOLOGY ABSORPTION, ADAPTATION, AND<br />
INNOVATION; ENERGY CONSERVATION<br />
The particulars required under section 217(1) of the Companies<br />
Act, 1956 read with the Companies (Disclosure of particulars in<br />
the <strong>report</strong> of Board of Directors) Rules 1988, regarding R&D,<br />
Technology Absorption, Adaptation and Innovation as well as Energy<br />
Conservation are furnished in Annexure- ‘A’.<br />
20. DIRECTORS’ RESPONSIBILITY STATEMENT<br />
ii) that in the preparation of the Annual Accounts for the financial<br />
year ended March 31, 20<strong>12</strong>, the applicable accounting<br />
standards have been followed along with the proper<br />
explanation relating to material departures;<br />
8
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
iii) that the Directors have selected such accounting policies and<br />
applied them consistently and made judgments and estimates that<br />
were reasonable and prudent so as to give a true and fair view of<br />
the state of affairs of the Company for the year under review.<br />
iv) that the Directors have taken proper and sufficient care for the<br />
maintenance of adequate accounting records in accordance with<br />
the provisions of the Companies Act,1956 for safeguarding the<br />
assets of the Company and for preventing and detecting fraud<br />
and other irregularities.<br />
v) that the Directors have prepared the Annual Accounts for the<br />
financial year ended March 31, 20<strong>12</strong> on a going concern basis.<br />
21. FOREIGN EXCHANGE<br />
The foreign exchange outgo during the year was ` 56.39 Crores.<br />
22. INFORMATION UNDER SECTION 217 (2A) OF THE<br />
COMPANIES ACT, 1956<br />
None of the employees of the Company was in receipt of remuneration<br />
in excess of limits prescribed under section 217 (2A) of the Companies<br />
Act, 1956, read with Companies (Particulars of Employees) Rules,<br />
1975 during the financial year ending 31 st March, 20<strong>12</strong>.<br />
23. CORPORATE GOVERNANCE<br />
Report on Corporate Governance is placed at Annexure-B.<br />
24. STATUTORY AUDITOR<br />
The Comptroller & Auditor General of India (CAG) has appointed<br />
M/s Anjali Jain & Associates, Chartered Accountants, Ranchi as the<br />
Statutory Auditor of the company for the financial year <strong>2011</strong>-<strong>12</strong>.<br />
25. COMMENTS OF C&AG AND STATUTORY AUDITORS AND<br />
MANAGEMENT’S REPLIES THEREON<br />
The comments of C&AG under Section 619 (4) of the Companies<br />
ACT, 1956 on the Accounts of the Company for the year ended<br />
31.03.20<strong>12</strong> along with the Review of Accounts of your Company by<br />
C&AG and Statutory Auditors’ observations along with Management’s<br />
replies thereto are furnished in ANNEXURE-‘C’<br />
26. BOARD OF DIRECTORS<br />
During the year, there were two part time Official Directors on the<br />
Board of HEC, in addition to the CMD, Director (Finance), Director<br />
(Marketing) and Director (Production).<br />
Shri R. Misra, Director (Finance) assumed the additional charge of<br />
Chairman-cum-Managing Director w.e.f. 1.1.20<strong>12</strong> and took over as<br />
CMD w.e.f. 31.05.20<strong>12</strong>.<br />
During the year Shri G.K. Pillai, CMD and Shri Bharat Prasad,<br />
Director (Marketing) superannuated. Board places on record its deep<br />
appreciation for the valuable services and contribution made by them<br />
during their tenure on the Board of Directors of HEC Ltd. In addition,<br />
Shri Saurabh Chandra, on 17-4-20<strong>12</strong> relinquished the position of<br />
part time official Director on Board of HEC Ltd.<br />
27. AUDIT COMMITTEE<br />
As there were no independent Directors on the Board of HEC Ltd. the<br />
Audit Committee could not be reconstituted.<br />
28. ACKNOWLEDGEMENT<br />
The Board also gratefully acknowledges the support and guidance<br />
received from the various Ministries of the Govt. of India.<br />
The Board is particularly grateful to the Department of <strong>Heavy</strong><br />
Industry, Ministry of <strong>Heavy</strong> Industries & Public Enterprises for their<br />
continued support in the revival of this Company.<br />
The company also wishes to place on record its thanks to the Govt. of<br />
Jharkhand for all their support in the revival process of the company.<br />
The company wishes to place on record its appreciation of the<br />
continued co-operation received from all its stake holders including<br />
the suppliers, banks, financial institutions, the Comptroller and<br />
Auditor General of India and Statutory Auditors.<br />
The company wishes to record its deep gratitude to all the members<br />
of the HEC family who have worked very sincerely and dedicatedly in<br />
bringing this company to another year of profitability and growth.<br />
For and on behalf of Board of Directors<br />
Dated : 27.11.20<strong>12</strong><br />
(R. Misra)<br />
Chairman-cum-Managing Director<br />
9
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
RESEARCH & DEVELOPMENT ACTIVITIES<br />
The company continued its efforts for the technology up gradation and development of products/systems during the year.<br />
I. Specific areas in which R&D activities were carried out by the company are detailed below :-<br />
III.<br />
IV.<br />
ANNEXURE-A<br />
RESEARCH & DEVELOPMENT,TECHNOLOGY ABSORPTION,ADAPTATION,<br />
INNOVATION AND ENERGY CONSERVATION<br />
• Design development and manufacture of Rotating Head Stock Spindle Assembly, Bottle Boring facility and programmable movement of Steady<br />
Rest for CNC Deep Hole Boring machine. The machine was supplied to OFC, Kanpur.<br />
• Development of Motorised swiveling of Arms for Radial Drilling machine. Modified machine was supplied to BHEL, Jagdishpur.<br />
• Development of 100T capacity Tundish Traverse for ISP.<br />
• Development of 65T and 60T Scrap charging Traverse for BSP and ISP respectively<br />
• Design development of pushing mechanism with drive for Coke pusher for 4.45m Coke Oven Battery for DSP.<br />
II.<br />
Import Substitution Efforts<br />
Following important items were manufactured and supplied<br />
• CNC Deep Hole Boring Machine, Model BDH-140N with special features like Rotating Spindle Head Stock, Bottle Boring facility & Programmable<br />
Steady Rest Movement.<br />
• 7 nos. of 5 Cum Rope Shovels to CIL subsidiaries<br />
• Phased dispatch of 2 nd Dragline 24/96 to NCL.<br />
Technology Absorption, Adaptation and Innovation<br />
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 –<br />
MFD, Germany. HEC team has absorbed the assembly technology and assembled next 5 machines themselves without the assistance of M/s<br />
Hegenscheidt – MFD.<br />
ii) Upgradation of 2650T Press<br />
To reduce the overall cycle time, production of size forging, upgradtion of 2650T Press was initiated and completed.<br />
Energy Conservation<br />
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.<br />
Various efforts made for reduction in melting cycle helped in substantial reduction in specific electricity consumption in the melting area during<br />
the year 2007-08. However, due to production of high quality steel the energy consumption had gone up during 2008-09 onwards. In addition,<br />
electric arc furnaces need upgradation, as these were installed in 60s. Delay in upgradation of Arc Furnaces also affected specific Power consumption.<br />
Company continued its thrust to reduce power consumption. Power consumption in melting area are as under :<br />
Power Consumption (KWH) per Ton of Liquid Metal<br />
Production<br />
<strong>2011</strong>-<strong>12</strong> 2010-11 2009-10 2008-09 2007-08 2006- 07<br />
917.99 960.31 937.35 981.46 868.72 1029.69<br />
The various steps being taken in Foundry Forge unit to bring down energy overall consumption and specific energy consumption are as under:<br />
• Reduction in maximum Demand of Power by proper load planning.<br />
• Use of energy efficient high pressure sodium vapor lamps/Tube lights.<br />
• Replacement of MG Sets by Static Transformers and Rectifiers.<br />
• Use of ceramic lining in Furnaces and by installing programmable controller in electric pit furnace.<br />
• Reduction in heat cycle time for melting furnaces etc.<br />
10
• Replacement of centralized compressor unit with decentralized Air Compressor at the load centres.<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
• Provision of Transparent Sheets at roof tops of production shops so as to utilize sunlight for illumination.<br />
Performance of Foundry Forge Unit in both physical and financial terms has been badly affected due to delay in upgradation program of 2650T<br />
press. Energy consumption in this area is quasi variable as such specific energy consumption has gone up despite overall reduction in consumption<br />
of electricity and Coal. Coal is used for producing producer gas. Quality of Coal and deteriorating condition of gas plant has resulted in increased<br />
consumption of coal. Energy Consumption details per Ton of physical production of FFP during the recent years are as under :<br />
Units Consumption per Ton of Production<br />
Particulars <strong>2011</strong>-<strong>12</strong> 2010-11 2009-10 2008-09 2007-08<br />
Electricity (KWH) 2853.50 2904.83 2554.47 2421.87 2436.91<br />
Coal (MT) 5.44 5.55 4.62 4.49 4.32<br />
Diesel (Liters) 13.16 24.11 24.62 20.35 18.93<br />
11
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
ANNEXURE – B<br />
REPORT ON CORPORATE GOVERNANCE (As on 31.03.20<strong>12</strong>)<br />
The Directors present the Company’s activities on Corporate Governance. Chairman-cum-Managing Director<br />
CORPORATE MAIN OBJECTIVE ON CODE OF GOVERNANCE<br />
<strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong> (HEC Ltd.) believes in transparent<br />
a) Shri G.K.Pillai : Ceased to be CMD w.e.f. 31.<strong>12</strong>.<strong>2011</strong><br />
due to his superannuation<br />
business activities, to enhance the value for all those who are associated b) Shri R.Misra : Additional charge of CMD w.e.f.<br />
with the Company viz., Customers, Suppliers, Govt. of India, Ministry<br />
01.01.20<strong>12</strong> and Director (Finance).<br />
of <strong>Heavy</strong> Industry, Department of Public Enterprises as owners and any<br />
other capacity, various State Governments, other Governmental agencies/<br />
Functional Directors<br />
departments and the society at large. Essentially it involves practicing of<br />
good Corporate Governance policies and HEC believes honesty and integrity<br />
through transparency, accountability and attaining maximum level of<br />
enrichment of the enterprises. HEC also received global recognition by<br />
ensuring value addition to its domestic as also the International customers.<br />
a)<br />
b)<br />
Shri Bharat Prasad<br />
Shri Kushal Saha<br />
:<br />
:<br />
Director (Marketing)<br />
(Ceased to be Director w.e.f.<br />
31.10.<strong>2011</strong> due to his<br />
superannuation)<br />
Director (Production)<br />
HEC complies with all the laws and manages its affairs in a competitive c) Shri Subhra Banerjee : Director (Personnel)<br />
market and monitors and regulates the management policies/decision for<br />
(w.e.f. 06. 03. 20<strong>12</strong>)<br />
executing its strategies. HEC has made its senior management accountable<br />
Govt. of India Nominee Part-time Official Directors<br />
in the pursuit of achieving company’s objectives.<br />
HEC is committed to practicing Good Corporate Governance by letter and<br />
spirit. Keeping with the spirit of the code, the Company has enlarged and<br />
a)<br />
b)<br />
Shri Saurabh Chandra<br />
Shri Harbhajan Singh<br />
strengthened the scope of the committees formed in accordance with the Govt. of India Nominee Non-Official (Part- time) Director<br />
Companies Act, 1956.<br />
- Nil -<br />
Board of Directors :<br />
Meeting of the Board<br />
The Board Meetings are held at Company’s Registered Office at Ranchi or at<br />
such places as may be decided by the Board. The Company Secretary serves<br />
as Secretary to the Board.<br />
The Board of Directors oversees all major actions/ activities proposed<br />
to be undertaken by the company. The Board also reviews and<br />
approves the strategic and business plans including monitoring of<br />
corporate performance.<br />
In accordance to the provisions of the Articles of Association, the<br />
number of Directors of the Company shall neither be less than two<br />
nor more than fifteen. The Directors are not required to hold any<br />
qualification shares.<br />
As on the date of <strong>report</strong>ing, the Board of HEC Ltd. consists of six<br />
Directors who have been classified in two classes viz., (i) Functional<br />
Directors (Whole time) (ii) Government Nominee Official Directors.<br />
The Board includes (a) Chairman-cum-Managing Director (CMD),<br />
two Functional Directors i.e. Director (Production) and Director<br />
(Personnel) (b) Two Government of India Nominee Official Directors<br />
from Ministry of <strong>Heavy</strong> Industry. The terms, conditions and tenure of<br />
appointment of Directors including CMD are decided by Government<br />
of India, Ministry of <strong>Heavy</strong> Industry.<br />
The remuneration/compensation payable to Directors is also fixed by<br />
Government of India and the CMD and Functional Directors are paid<br />
monthly remuneration as fixed by Government of India.<br />
Number of Board Meetings :-<br />
During the year <strong>2011</strong>-<strong>12</strong>, Six (6) Meetings were held, the details of which<br />
are given below :-<br />
Sl.No. Date Board Strength No. of Directors present<br />
1. 13.04.<strong>2011</strong> 05 04<br />
2. 18.05.<strong>2011</strong> 05 05<br />
3. 17.08.<strong>2011</strong> 06 06<br />
4. 28.09.<strong>2011</strong> 06 06<br />
5. 21.<strong>12</strong>.<strong>2011</strong> 05 05<br />
6. 29.03.20<strong>12</strong> 05 04<br />
<strong>12</strong>
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Attendance of each Director at Board Meetings<br />
Name of the Directors<br />
(a) Executive Directors (Whole-time Functional Directors.<br />
1. Shri G.K.Pillai, CMD<br />
(ceased to be CMD w.e.f. 31.<strong>12</strong>.<strong>2011</strong><br />
due to his superannuation)<br />
2. Shri R.Misra,<br />
Additional charge of CMD w.e.f. 01.01.20<strong>12</strong><br />
and Director (Finance)<br />
3. Shri Bharat Prasad<br />
Director (Marketing)<br />
(Ceased to be Director w.e.f. 31.10.<strong>2011</strong><br />
due to his superannuation)<br />
4. Shri Kushal Saha<br />
Director (Production)<br />
5. Shri Subhra Banerjee<br />
Director (Personnel)<br />
(w.e.f. 06. 03. 20<strong>12</strong>)<br />
(b) Govt. of India Nominee Part-time Official Director<br />
1. Shri Saurabh Chandra<br />
Period<br />
01.04.<strong>2011</strong> to<br />
31.<strong>12</strong>.<strong>2011</strong><br />
01.04.<strong>2011</strong> to<br />
31.03.20<strong>12</strong><br />
01.04.<strong>2011</strong> to<br />
31.10.<strong>2011</strong><br />
20.06.<strong>2011</strong> To<br />
31.03.20<strong>12</strong><br />
06.03.20<strong>12</strong> to<br />
31.03.20<strong>12</strong><br />
01.04.<strong>2011</strong> to<br />
31.03.20<strong>12</strong><br />
No. of Board<br />
Meetings held<br />
No. of Board Meetings<br />
Attended<br />
05 05<br />
06 06<br />
04 03<br />
04 04<br />
01 01<br />
No. of Directorship<br />
in other Board<br />
06 05 06<br />
2. Shri Harbhajan Singh<br />
01.04.<strong>2011</strong> to<br />
31.03.20<strong>12</strong><br />
06 06 08<br />
c) Part-time Non-Official Director Nil<br />
Board Agenda and Material :-<br />
The Board believes that a carefully planned Agenda is important for effective Board Meetings. All major issues included in the Agenda are backed<br />
by comprehensive background information to enable the Board to take decisions. The agenda is flexible enough to accommodate any unexpected<br />
development (s) requiring Board’s attention and its decision. Agenda papers are, generally circulated well in advance to the Members of the Board. The<br />
Board members, in consultation with the Chairman may bring up any relevant matter for the consideration of the Board.<br />
13
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
The Members of,<br />
HEAVY ENGINEERING CORPORATION LIMITED<br />
RANCHI<br />
AUDITORS REPORT<br />
Annexure-C<br />
1. We have audited the attached balance sheet of <strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong> as at 31st March 20<strong>12</strong> and also the profit and loss account<br />
for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility<br />
is to express an opinion on these financial statements based on our audit.<br />
2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform<br />
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on<br />
a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles<br />
used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit<br />
provides a reasonable basis for our opinion.<br />
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<br />
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<br />
extent applicable.<br />
4. Further to our comments in the Annexure referred to above, we <strong>report</strong> that:<br />
(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<br />
audit;<br />
(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.<br />
(c) The balance sheet, profit and loss account and cash flow statement dealt with by this <strong>report</strong> are in agreement with the books of account.<br />
(d) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this <strong>report</strong> comply with the accounting<br />
standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.<br />
(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<br />
of Section 274(1)(g) of the Companies Act, 1956 are not applicable to the Company.<br />
(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<br />
Accounting Policies and Notes to Accounts give the information required by the Companies Act, 1956, in the manner so required gives a true<br />
and fair view in conformity with the accounting principles generally accepted in India<br />
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 20<strong>12</strong>;<br />
(b) In the case of the Profit and Loss Account, of the profit for the year ended on that date.<br />
(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.<br />
For Anjali Jain & Associates<br />
Chartered Accountants<br />
Place: Ranchi<br />
Dated: 06-09-.20<strong>12</strong><br />
CA Anjali Jain<br />
(Partner)<br />
Membership No. 72022<br />
14
Annexure to the Auditors Report<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Annexure-I<br />
Annexure referred to in Paragraph 3 of the Auditor's Report to the members of M/s <strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong> on the Accounts for the year<br />
ended 31st March, 20<strong>12</strong>.<br />
1 Fixed Assets<br />
Auditor’s Report<br />
Replies<br />
(a)<br />
(b)<br />
2. Inventories<br />
The company has generally maintained proper records to show particulars of fixed<br />
assets including Quantitative details and situation of assets for all the fixed assets<br />
except furniture and fixture office equipments.<br />
Some of the Fixed Assets of the Company (except building) have been physically<br />
verified in all units by an outside Chartered Accountant firm during the year.<br />
However, the verification has been done on test check basis. Considering the size<br />
of the company & nature of its business the procedure of physical verification of<br />
fixed assets need to be strengthened.<br />
(a) Stock of raw material and stores and spares were physically verified by an outside<br />
Chartered Accountant Firm during the year. Considering the size of the company &<br />
nature of its business the procedure of physical verification of raw materials and<br />
stores and spares need to be strengthened.<br />
(b) In our opinion and according to the information and explanation given to us, the<br />
present system of SPL accounting i.e. accounting of items of different value having<br />
different specification in same material code needs thorough revision.<br />
(c) In our opinion and according to the information and explanations given to us, the<br />
Company has maintained proper records of its inventory. As explained to us, the<br />
discrepancies noticed during physical verification of inventory were compared to<br />
the book records and it has been adjusted at the year end.<br />
(d) There were inventories in the Company which were of no use and were lying idle<br />
blocking the capital. In our opinion, the same should be sold / utilized.<br />
3. Loans<br />
In our opinion and according to the information and explanations given to us, the<br />
Company has not granted nor taken any loans, secured or unsecured to or from<br />
companies, firms or other parties covered in the register maintained Under Section 301<br />
of the Companies Act 1956. Consequently, clauses (iii) (a) to (iii) (g) of paragraph 4 of<br />
CARO are not applicable.<br />
Noted<br />
Physical verification of Assets of all plants, Project,<br />
HQrs., Branch Office etc, has been done by outside<br />
Chartered Accountant firm during the year<br />
<strong>2011</strong>-<strong>12</strong> with reference to the records of Assets in<br />
the Assets Register and no discrepancies have been<br />
noticed.<br />
Noted for future guidance.<br />
Noted for further improvement.<br />
Noted<br />
Noted<br />
No comment<br />
15
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
4. Internal Controls<br />
In our opinion and according to the information and explanations given to us, and on the<br />
basis of test and checks carried out during the course of Audit there is adequate internal<br />
control system commensurate with the size of the company and nature of its business<br />
relating the purchase of inventory and fixed assets and for sale of goods and service, But<br />
there are certain areas where internal controls needs improvement.<br />
Some of the major areas where internal control system in operation needs to be<br />
strengthened strictly adhered to are as follows in our opinion:-<br />
(a) The Company has substantial LD due to non-adherence to delivery schedule.<br />
(b)<br />
Idle time of machines is high as the labour for these are not adequate.<br />
5. In respect of contracts or arrangement entered in the register maintained in pursuance of<br />
Section 301 of the companies Act 1956, to the best of our knowledge and according to<br />
the information and explanation given to us:<br />
(a) The particulars of contracts or arrangements referred to Section 301 that needed to<br />
be entered in the register maintained under the said section have been so entered.<br />
The transactions made in pursuance of such contracts or arrangements have been made<br />
at prices which are reasonable having regards to the prevailing market prices at the<br />
relevant time.<br />
6. Acceptance of deposits from Public<br />
In our opinion and according to the information and explanations given to us, The<br />
company has not accepted deposits from the public within the meaning of section 58<br />
AA or any other relevant provisions of the Companies Act, 1956 and the rules framed<br />
there under.<br />
7. Internal Audit System<br />
Internal Audit of the company was carried out by an outside Chartered Accountant Firm<br />
during the year, however considering the size of the company and nature of its business;<br />
it needs more coverage of financial transactions.<br />
8. Cost Records<br />
As explained to us by the Management, the Central Government has prescribed<br />
maintenance of Cost records under section 209(1) (d) of the Companies Act, 1956 from<br />
financial year <strong>2011</strong>-<strong>12</strong> for the products of the Company. Currently, cost records are<br />
maintained by an outside Cost Accountant Firm.<br />
Noted<br />
(a) The dearth of working capital, effective<br />
manpower and frequent break down of old<br />
machines are primarily responsible for delay in<br />
execution of order within the delivery schedule<br />
which leads to recovery of LD by customer.<br />
However effective monitoring is being done<br />
for minimizing the delayed delivery/dispatch<br />
of goods to customer.<br />
(b) Action is being taken for recruitment of fresh<br />
technical Workers to avoid idle time due to<br />
non availability of adequate work force.<br />
Noted<br />
Noted<br />
Noted<br />
Noted. Already covered vast areas like Plants,<br />
Projects, Hqrs, Township, Hospital, Transport,<br />
Branch Offices,’ HTI, Transit Camp to the extent<br />
possible. The internal Audit work for <strong>2011</strong>-<strong>12</strong> was<br />
started from September, <strong>2011</strong><br />
Outside Cost Accountant Firm has been engaged for<br />
preparation of compliance <strong>report</strong> as required under<br />
Cost Accounting record Rules <strong>2011</strong>.<br />
16
9. Statutory Dues<br />
A. According to the information and explanations given by the Company, undisputed<br />
statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax,<br />
Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues are generally<br />
deposited regularly and no undisputed dues were outstanding as at 31st March,<br />
20<strong>12</strong> for a period of more than six months from the date of becoming payable<br />
except the cases which are stated below:<br />
Name of the Act Type Amount Period<br />
Municipal Tax<br />
Oct 1999 to Dec<br />
Municipal Tax 49,50,000.00<br />
Act<br />
‘2005<br />
The company is paying ` 50,000 per quarter for clearance of dues along with the<br />
current Municipal Tax.<br />
9. B. NotedAccording to the information and explanations given by the Company, there<br />
is no disputed dues of Income Tax, Sales Tax, wealth Tax, Service Tax, Custom Duty,<br />
Excise, Cess that have not been deposited on account of matters pending before<br />
appropriate authorities except the cases which are stated as below.-<br />
Name of the Act Tribunal(`) Total (`)<br />
Provident Fund Act 95,01,53,513.00 95,01,53,513.00<br />
10. Cash Losses<br />
The Accumulated loss of the Company as on 31st March, 20<strong>12</strong> exceeds 50% of its<br />
net worth. The company has not incurred cash losses during the current financial year<br />
covered by our audit and also in the immediately preceding financial year.<br />
11. Repayment of Dues<br />
In our opinion and according to the information and explanations given to us, the<br />
Company has not defaulted in repayment of dues to financial institutions, banks or<br />
debenture holders.<br />
<strong>12</strong>. According to the information and explanation given to us, the company has not granted<br />
any loan or advances on the basis of security, by way of pledge of shares, debentures<br />
and other securities.<br />
13. In our opinion and according to the information and explanations given to us, the<br />
Company is not a chit fund or a Nidhi/Mutual benefit fund/society. Therefore, clause<br />
4(xiii) of the Companies (Auditor’s Report) Order, 2003 is not applicable to the Company,<br />
14. The Company has not done any transactions for trading in Shares, securities, debentures<br />
and other investments during the financial year under audit.<br />
15. According to the information and explanation given to us, the Company has not given<br />
guarantees for loans taken by others for Banks or financial institutions, the terms and<br />
conditions, whereof, in our opinion, are prima facie prejudicial to the interest of the<br />
company.<br />
16. According to the information and explanation given to us and on an overall examination<br />
of the Balance Sheet of the Company, We are of the opinion that the term loans were<br />
applied for the purpose for which the loans were obtained.<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Payment is being made every quarter against old<br />
dues based on the agreement with Municipal<br />
<strong>Corporation</strong>.<br />
Disclosed in Notes on accounts<br />
As per Accounts of the company it transpires that<br />
the company has earned a cash profit of Rs <strong>12</strong>.90<br />
crore during financial year <strong>2011</strong>-<strong>12</strong>.<br />
No comments<br />
No comments<br />
No comments<br />
No comments<br />
No comments<br />
No comments<br />
17
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
17. According to the information and explanation given to us and on an overall examination<br />
of the Balance Sheet of the Company, We <strong>report</strong> that no funds raised on short-term basis<br />
have been used for long-term investment by the Company.<br />
18. According to the information and explanation given to us, the Company has not made<br />
any preferential allotment of shares to parties and companies covered in the register<br />
maintained under section 301 of the Companies Act.<br />
19. The Clauses 4(xix) & (xx) of the Companies (Auditor’s Report) Order, 2003 are not<br />
applicable to the Company.<br />
20. During the course of our examination of the books and records of the company carried out<br />
in accordance with the generally accepted auditing practices in India, and according to<br />
the information and explanation given to us, we have neither come across any instances<br />
of fraud on or by the company, noticed or <strong>report</strong>ed during the year, nor we have been<br />
informed of such case by the Management<br />
No comments<br />
No comments<br />
No comments<br />
No comments<br />
For Anjali Jain & Associates<br />
Chartered Accountant<br />
CA Anjali Jan<br />
(Partner)<br />
Membership No. 72022<br />
(S.K.CHAKRABORTY)<br />
General Manager (Finance)/HEC<br />
Place: Ranchi<br />
Dated:- 06.09.20<strong>12</strong><br />
18
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF<br />
INDIA UNDER SECTION 619 (4) OF THE COMPANIES ACT, 1956 ON<br />
THE ACCOUNTS OF HEAVY ENGINEERING CORPORATION LIMITED<br />
FOR THE YEAR ENDED 31 MARCH 20<strong>12</strong><br />
The preparation of financial statements of <strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong> for the year ended 31st March 20<strong>12</strong> in accordance with the<br />
financial <strong>report</strong>ing framework prescribed under the Companies Act, 1956 is the responsibility of the management of the company. The statutory auditor<br />
appointed by the Comptroller and Auditor General of India under Section 619 (2) of the Companies Act, 1956 is responsible for expressing opinion on<br />
these financial statements under Section 227 of the Companies Act, 1956 based on independent audit in accordance with the auditing and assurance<br />
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<br />
Report dated 6 September, 20<strong>12</strong>.<br />
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<br />
Act, 1956 of the financial statements of <strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong> for the year ended 31 March, 20<strong>12</strong>. This supplementary audit has been<br />
carried out independently without access to the working papers of the statutory auditor and is limited primarily to inquiries of the statutory auditor and<br />
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<br />
which would give rise to any comment upon or supplement to Statutory Auditors' Report under Section 619 (4) of the Companies Act, 1956.<br />
For and on the behalf of the<br />
Comptroller & Auditor General of India<br />
Place: Ranchi<br />
Date: 20 November, 20<strong>12</strong><br />
(Sushil Kumar Jaiswal)<br />
Principal Director of Commercial Audit<br />
Ranchi.<br />
19
OUR FACILITIES<br />
2650 T Forging Press<br />
Arc Furnace
OUR PROJECTS<br />
Conveyor System at New OBBP, Rourkela Steel Plant<br />
Stacker cum Reclaimer at New OBBP, Rourkela Steel Plant
<strong>Heavy</strong> <strong>Engineering</strong> <strong>Corporation</strong> <strong>Limited</strong><br />
(A Government of India Enterprise)<br />
Ranchi - 834004<br />
BALANCE SHEET<br />
AND<br />
STATEMENT OF PROFIT & LOSS<br />
FOR THE FINANCIAL YEAR <strong>2011</strong>-<strong>12</strong><br />
Our Motto :<br />
Nation Building Through Machine
OUR PRODUCTS<br />
CNC Deep Hole Boring Machine”, Model BDH 140N<br />
Slag Ladle
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
SIGNIFICANT ACCOUNTING POLICIES<br />
1 The Financial statements have been prepared as of a going concern<br />
on historical cost convention and on accrual method of accounting in<br />
accordance with the generally accepted accounting principles.<br />
2 Fixed Assets<br />
Fixed assets (Other than land acquired free of cost from State<br />
Government) are carried at the cost of acquisition or construction less<br />
accumulated depreciation.<br />
Land acquired free of cost from State Government is valued of `<br />
1/- per acre.<br />
3 Inventory Valuation<br />
i) Inventory is valued at actual / estimated cost or net realiasable<br />
value, whichever is lower.<br />
ii) Finished goods and work in progress are valued at actual /<br />
estimated factory cost or net realiasable value whichever is<br />
lower.<br />
iii) Raw material, components, loose tools, stores & spares are<br />
valued at weighted average cost.<br />
iv) Items that are not ordinarily interchangeable and goods or<br />
services produced & segregated for specific projects- By specific<br />
identification of individual cost.<br />
v) Rejection and scrap/used as raw material for production is<br />
valued at closing book rate.<br />
vi) Bye products are valued at market price.<br />
vii) The percentage of completion of work in progress is taken as<br />
certified by Shop management on technical assessment.<br />
viii) Loose tools, Drawing instruments, etc. issued to shops are<br />
carried to inventory after writing off in 4 years in case of<br />
ordinary tools, in 10 years in case of special tools, in 2 years<br />
in case of Moulds and on estimated life in case of other<br />
items. Patterns are charged out in the year of issue itself. Only<br />
quantitative records are maintained in respect of these items in<br />
shops floor, wherever practicable.<br />
4 REVENUE RECOGNITION<br />
i) Sales are recorded when significant risks and rewards of<br />
ownership are transferred to the customers. Part supplies<br />
against long term contracts for which bills have been raised are<br />
accounted for at contract price or provisional price. In case of<br />
dispatches for which challans and gate passes have been issued<br />
but bills are not raised, sales are accounted for at contract or<br />
provisional prices as unbilled sales.<br />
ii) Escalations on contracts are accounted for as per the terms<br />
of relevant contact to the extent ascertained with reasonable<br />
iii)<br />
certainty though these are subject to confirmation/acceptance<br />
by customers. Variation is accounted for when there is provision<br />
in contract or evidence of acceptance by the customer.<br />
Sales are accounted for inclusive of excise duty but exclusive of<br />
sales tax.<br />
5 LONG TERM TURNKEY CONTRACTS<br />
i) Revenue recognition:<br />
Revenue is recognized on percentage completion method based<br />
on the percentage of actual cost incurred up to the <strong>report</strong>ing<br />
date to the total estimated cost of the contract.<br />
Income from supply/ erection of equipment/system and civil<br />
works is recognized based on dispatches to customers and<br />
works done at Project Site.<br />
ii) Revenue recognition for incomplete / part executed /<br />
unmeasured work by client :<br />
Works executed but not measured / part executed / incomplete<br />
work at the end of the year are accounted for based on<br />
certification both by HEC Engineers at Project Site and the<br />
customer for the purpose of recognition of Revenue.<br />
iii) Valuation of Work-in-progress:-<br />
Expenditure incurred from year to year limited to the certified<br />
value of work done against the contract value including<br />
escalation less amount credited to sales against the respective<br />
contract, is accounted for as WIP.<br />
iv) The necessary provision for losses, if any, on work to be done is<br />
made.<br />
6 PROVISION FOR WARRATY<br />
A provision of 0.5% on sales is made for liabilities under contractual<br />
obligations/ warranties. Expenses on warranties/contractual<br />
obligation are accounted for against natural heads in the year of<br />
incurrence.<br />
7 EMPLOYEES BENEFITS:<br />
Long term employee benefits (benefits which are payable after the end<br />
of twelve months from the end of the period in which the employees<br />
render service namely sick leave and post retirement benefits namely<br />
gratuity, Retirement Traveling Assistance and Leave Encashment are<br />
measured on a discounted basis by the Projected Unit Credit Method<br />
on the basis of <strong>annual</strong> third party actuarial valuation and Leave<br />
Travel Allowance (for eligible employee) are accounted on estimated<br />
basis.<br />
Long Term employee benefits recognized in the balance sheet represent<br />
the present value of the obligation as adjusted for unrecognized past<br />
23
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
service cost, if any, and as reduced by the fair value of plan assets,<br />
wherever applicable and actuarial gain / loss to the extent recognized<br />
in Profit & Loss Account.<br />
Actuarial gains and losses are recognized in the Profit and loss account<br />
to the extent it exceeds the unrecognized portion of transitional<br />
liability<br />
The transitional liability in respect of long term employee benefit is<br />
recognized as an expense on a straight line basis over a period of five<br />
years.<br />
Gratuity and Leave encashment are provided for on the basis of<br />
actuarial valuation made, based on the data of the Balance sheet<br />
date.<br />
8 DEPRECIATION<br />
Depreciation on fixed assets is charged on straight line method as<br />
per the rates prescribed in the Schedule XIV of the Companies Act<br />
and in respect of additions to/ deductions from the fixed assets<br />
during the year; depreciation is charged on prorata monthly basis.<br />
Wherever breakup of foundation cost for plant and machinery and<br />
plant building is not available, depreciation is charged at the rate<br />
applicable to plant building.<br />
9 SUNDRY DEBTORS<br />
This includes items billed at provisional rates pending finalization of<br />
prices and receipt of formal orders from customers and also value of<br />
dispatches which are unbilled after adjustment on pro-rata basis of<br />
advances/progress payments received against the relevant contract.<br />
10 GRANT-IN-AID<br />
Government grants received against Voluntary Retirement Scheme<br />
are set off against related expenses. Unspent balances of Grants-in-<br />
Aid are carried forward to subsequent years under Head “Liabilities”.<br />
Grants received against other revenue are recognized as other income<br />
over the years to which it relates.<br />
11 INVESTMENT<br />
Investment held/intended to be held over one year (i.e. being long<br />
term ) are valued at cost less provision for diminution in value other<br />
than temporary, while current quoted investments are valued at lower<br />
of cost or market value.<br />
<strong>12</strong> RESEARCH & DEVELOPMENT<br />
Major expenditure relating to Research & Development is charged to<br />
profit & loss account in the year of incurrence. However, expenditure<br />
on fixed assets relating to Research & Development is treated in the<br />
same way as other fixed assets. Depreciation on such fixed assets is<br />
shown along with other Research & Development Expenditure.<br />
13 FOREIGN CURENCY TRANSACTIONS<br />
Monetary assets and liabilities relating to foreign currency transactions<br />
including deferred credit payments remaining outstanding at the<br />
Balance Sheet date are converted at year end rates. The differences<br />
in conversion of assets and liabilities and realized gains and losses<br />
on foreign exchange transaction during the year are accounted for in<br />
the Profit & Loss Account, except those relating to acquisition of fixed<br />
assets which are adjusted in the cost of fixed assets.<br />
14 DEFERRED REVENUE EXPENDITURE<br />
To lump sum payment towards foreign collaboration in the form of<br />
technical know-how, documentation and <strong>report</strong>s for any product is<br />
treated as Deferred Revenue Expenditure, which is written off in five<br />
years.<br />
15 CLAIM BY/AGAINST THE COMPANY<br />
(i) Liquidated damages payable as per contracts are accounted<br />
for on ascertainment and cases of specific damages and claims<br />
disputed by the company are provided for on reasonable<br />
estimate by the Company.<br />
(ii) Liquidated damages recovered are recognized as income after<br />
expiry of three years of recovery.<br />
(iii) Export incentives, Railways and Insurance claim sale of sundry<br />
disposable materials & certain scraps, refund of excise & custom<br />
duty and income from other similar items are accounted for on<br />
ascertainment of the amount and certainty of their realization /<br />
claim.<br />
16 INTER PLANT COST ALLOCATION<br />
The following expenses are allocated in different Plants on the basis<br />
stated hereunder:-<br />
(a) HQRS expenses (Net) -Budgeted production of each Plant.<br />
(b) Township expenses (Net) - No. of quarters allotted to each<br />
Plant.<br />
(c) Interest - Actual cash utilization by each plant in the preceding<br />
year.<br />
(d) CISF expenses- No. of CISF personnel deployed in each Plant.<br />
17 INVENTORY<br />
Non moving items of stores are analysed from time to time.<br />
Materials found surplus on physical verification are either disposed<br />
off or reviewed to find out alternative uses for the same. Loss, if any,<br />
is accounted for when it is ascertained.<br />
However non moving items for more than 3 years, the maximum<br />
provision, if required, is to be restricted to 90 % of value of inventory.<br />
24
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
BALANCE SHEET AS AT 31ST MARCH 20<strong>12</strong><br />
` in Lakhs<br />
Note No. AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
I. EQUITY & LIABILITIES<br />
(1) SHAREHOLDER'S FUND<br />
(a) Share Capital 1 60607.88 60607.88<br />
(b) Reserves & Surplus 2 (77633.67) (78024.54)<br />
(2) SHARE APPLICATION MONEY<br />
PENDING ALLOTMENT 0.01 0.01<br />
(3) NON-CURRENT LIABILITIES<br />
(a) Other Long Term Liabilities 3 60900.<strong>12</strong> 57338.47<br />
(b) Long Term Provisions 4 13882.67 <strong>12</strong>322.37<br />
(4) CURRENT LIABILITIES<br />
(a) Short Term Borrowings 5 9440.88 8965.67<br />
(b) Trade Payables 6 1<strong>12</strong>65.00 <strong>12</strong>702.94<br />
(c) Other Current Liabilities 7 10239.17 8704.24<br />
(d) Short Term Provisions 8 5982.84 5204.35<br />
II.<br />
TOTAL 94684.90 87821.39<br />
ASSETS<br />
(1) NON-CURRENT ASSETS<br />
(a) Fixed Assets<br />
(i) Tangible Assets 9 5572.61 5700.36<br />
(ii) Intangible Assets 10 151.42 305.55<br />
(iii) Capital Work in Progress 11 2629.22 2537.37<br />
(b) Non-Current Investments <strong>12</strong> 0.36 0.36<br />
(c) Long Term Loans & Advances 13 1429.37 1065.01<br />
(d) Other Non-Current Assets 14 23216.76 292<strong>12</strong>.19<br />
(2) CURRENT ASSETS<br />
(a) Inventories 15 27374.81 23455.37<br />
(b) Trade Receivables 16 28724.78 20970.92<br />
(c) Cash & Cash Equivalents 17 3136.30 2447.86<br />
(d) Short Term Loans & Advances 18 2118.35 2042.84<br />
(e) Other Current Assets 19 330.92 83.56<br />
TOTAL 94684.90 87821.39<br />
Notes on Account 29<br />
Notes No 1 to 19 , 29 & Significant Accounting Policies form an integral part of the Balance Sheet.<br />
A.K.Kanth S.K. Chakraborty Kushal Saha R.Misra<br />
Company Secretary General Manager (Finance) Director (Production) & Chairman Cum Managing Director<br />
Director Mktg. (Additional Charge)<br />
In terms of our <strong>report</strong> of even date<br />
For Anjali Jain Associates, Chartered Accountants<br />
Place : Ranchi<br />
(ANJALI JAIN)<br />
Date : 6/9/20<strong>12</strong> Partner, M No. 72022<br />
25
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
STATEMENT OF PROFIT & LOSS<br />
FOR THE YEAR ENDED 31ST MARCH, 20<strong>12</strong><br />
` in Lakhs<br />
Note No. <strong>2011</strong>-<strong>12</strong> 2010-11<br />
I. Revenue from Operation 20 69237.87 64938.37<br />
II. Other Income 21 2331.61 2874.20<br />
III. TOTAL REVENUE 71569.48 678<strong>12</strong>.57<br />
IV.<br />
EXPENSES:<br />
(a) Cost of Material Consumed 22 36895.64 3<strong>12</strong>05.09<br />
(b) Employees Benefits Expenses 23 18213.69 15270.61<br />
(c) Finance Costs 24 515.30 92.37<br />
(d) Depreciation, Amortization & Impairment 25 <strong>12</strong>59.20 1550.80<br />
(e) Research & Development Expenditure 26 58.09 45.66<br />
(f) Other Expenses 27 13739.85 15886.40<br />
TOTAL EXPENSES 70681.77 64050.93<br />
V. Profit/(Loss) before Exceptional &<br />
Extraordinary Items & Tax( III-IV ) 887.71 3761.64<br />
VI. Exceptional Items 28 (29.30) 52.34<br />
VII. Profit/(Loss) before extraordinary items<br />
& Tax ( V-VI ) 858.41 3813.98<br />
VIII. Extraordinary Items 0.00 0.00<br />
IX. Profit/ (Loss) before Tax ( VII-VIII) 858.41 3813.98<br />
X. Tax Expenses<br />
(i) Current Tax 0.00 0.00<br />
(ii) Deferred Tax 0.00 0.00 0.00 0.00<br />
XI.<br />
Profit/ (Loss) for the period from<br />
Continuing Operation ( IX-X) 858.41 3813.98<br />
XII. Profit/ (Loss) from Discontinuing Operation 0.00 0.00<br />
XIII. Tax Expenses of Discontinuing Operation 0.00 0.00<br />
XIV. Profit/ (loss) for the period from<br />
Discontinuing Operation ( XII-XIII) 0.00 0.00<br />
XV. PROFIT/ (LOSS) FOR THE PERIOD ( XI + XIV ) 858.41 3813.98<br />
XVI. Earning per share ( Face value `.1000) (1) Basic in Rupees 14.16 62.93<br />
(2) Diluted in Rupees 14.16 62.93<br />
Notes on Account 29<br />
Notes No 20 to 29 & Significant Accounting Policies form an integral part of the Statement of Profit & Loss.<br />
A.K.Kanth S.K. Chakraborty Kushal Saha R.Misra<br />
Company Secretary General Manager (Finance) Director (Production) & Chairman Cum Managing Director<br />
Director Mktg. (Additional Charge)<br />
In terms of our <strong>report</strong> of even date<br />
For Anjali Jain Associates, Chartered Accountants<br />
Place : Ranchi<br />
(ANJALI JAIN)<br />
Date : 6/9/20<strong>12</strong> Partner, M No. 72022<br />
26
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 1<br />
SHARE CAPITAL<br />
Authorised Capital<br />
1,00,00,000 (Previous Year 1,00,00,000 ) Equity Shares of ` 1000/- each 100000.00 100000.00<br />
Issued & Subscribed & Paid up Capital<br />
60,60,788 (Previous Year 60,60,788 ) Equity Shares<br />
of ` 1000/- each fully paid up,<br />
Out of which 5496 (Previous Year 5496 ) Shares<br />
allotted for consideration other than Cash 60607.88 60607.88<br />
Net Balance 60607.88 60607.88<br />
NOTE NO. - 2<br />
RESERVE & SURPLUS<br />
Capital Reserve<br />
Opening Balance <strong>12</strong>295.11 <strong>12</strong>746.58<br />
Addition during the year 0.00 16.07<br />
TOTAL <strong>12</strong>295.11 <strong>12</strong>762.65<br />
Deduction during the year 467.54 11827.57 467.54 <strong>12</strong>295.11<br />
Surplus<br />
Opening Balance (90319.65) (94133.63)<br />
Addition during the year 858.41 (89461.24) 3813.98 (90319.65)<br />
TOTAL (77633.67) (78024.54)<br />
NOTE NO. - 3<br />
OTHER LONG TERM LIABILITIES<br />
Liabilities for Employee Benefits<br />
Employees Liabilities 3723.78 3674.53<br />
VRS Liabilities 1.88 3725.66 6.84 3681.37<br />
Trade Payables<br />
Sundry Creditors 2654.81 2387.36<br />
Dues to SME 85.46 30.55<br />
Advance From Customers 3686.56 6426.83 3662.21 6080.<strong>12</strong><br />
Others<br />
Securities & Other Deposits from Contractors 17069.14 16807.38<br />
Securities & Other Deposits as per Contra Note -13 0.86 0.81<br />
Electricity Dues 27391.85 27391.85<br />
Water Dues 3538.63 3015.54<br />
Other Liabilities 2496.04 118.43<br />
Miscellaneous 251.11 50747.63 242.97 47576.98<br />
TOTAL 60900.<strong>12</strong> 57338.47<br />
27
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 4<br />
LONG TERM PROVISIONS<br />
Provision for Employee Benefits<br />
Provision for Gratuity 7939.47 79<strong>12</strong>.44<br />
Provision for Leave Encashment 3650.63 3577.52<br />
Provision for RTA 84.67 102.93<br />
Provision for Sick Leave 520.84 472.37<br />
Provision for Revision of Pay Scale for Employees <strong>12</strong>14.22 13409.83 0.00 <strong>12</strong>065.26<br />
Others<br />
Provision for Impaired Assets 79.77 17.69<br />
Provision for Warranty Expenses 393.07 472.84 239.42 257.11<br />
TOTAL 13882.67 <strong>12</strong>322.37<br />
NOTE NO. - 5<br />
SHORT TERM BORROWINGS<br />
Secured Loans<br />
Working Capital Loan from Bank 9440.88 8965.67<br />
(Secured by Hypothecation of raw materials, finished Goods,<br />
Work-in-Progress, Stores and Spare parts and Book Debts)<br />
TOTAL 9440.88 8965.67<br />
NOTE NO. - 6<br />
TRADE PAYABLES<br />
Sundry Creditors 10138.43 9718.45<br />
Dues to SME <strong>12</strong>9.06 35.76<br />
Advance from Customers 997.51 2948.73<br />
TOTAL 1<strong>12</strong>65.00 <strong>12</strong>702.94<br />
28
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 7<br />
OTHER CURRENT LIABILITIES<br />
Employees Liabilities 3702.80 1951.25<br />
Securities & Other Deposits from Contractors 393.23 922.89<br />
Book Overdraft with Scheduled Bank 139.98 323.30<br />
Electricity Dues 251.41 263.17<br />
Water Dues 256.35 525.67<br />
Other liabilities 4335.73 4008.<strong>12</strong><br />
Miscellaneous 1159.67 709.84<br />
TOTAL 10239.17 8704.24<br />
NOTE NO. - 8<br />
SHORT TERM PROVISIONS<br />
Provision for Employee Benefits<br />
Provision for Gratuity 2549.42 2065.02<br />
Provision for Leave Encashment 1527.27 1339.79<br />
Provision for RTA 20.87 20.02<br />
Provision for Sick Leave 164.25 153.03<br />
Provision for Revision of Pay Scale for Employees 1369.51 5631.32 <strong>12</strong>14.22 4792.08<br />
Others<br />
Provision for Impaired Assets 2.29 62.07<br />
Provision for Warranty Expenses 349.23 351.52 350.20 4<strong>12</strong>.27<br />
TOTAL 5982.84 5204.35<br />
29
NOTE NO.-9<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Type of Assets<br />
OTHER TANGIBLE ASSETS<br />
Cost as on<br />
01.04.11<br />
Addition/<br />
Adjustment<br />
TANGIBLE ASSETS<br />
Gross Block Depreciation Net Block<br />
Deduction/<br />
Adjustment<br />
Cost as on<br />
31.3.<strong>12</strong><br />
Upto<br />
31.03.11<br />
for the<br />
year<br />
Addition/<br />
(Deduction)<br />
upto<br />
31.03.<strong>12</strong><br />
As on<br />
31.03.<strong>12</strong><br />
1 2 3 4 5 6 7 8 9 10 11<br />
As on<br />
31.03.11<br />
Land 136.65 0.00 0.00 136.65 0.00 0.00 0.00 0.00 136.65 136.65<br />
Development of land 116.70 0.00 0.00 116.70 0.00 0.00 0.00 0.00 116.70 116.70<br />
Plant & Machinery 21691.39 248.83 45.87 21894.35 18626.75 330.89 (43.58) 18914.06 2980.29 3064.64<br />
Plant Buildings 4606.80 0.00 0.00 4606.80 4238.11 7.86 0.00 4245.97 360.83 368.69<br />
Residential Buildings 465.87 0.00 0.00 465.87 309.42 7.07 0.00 316.49 149.38 156.45<br />
Non- Residential Buildings 701.73 7.18 0.00 708.91 385.46 11.08 0.00 396.54 3<strong>12</strong>.37 316.27<br />
Road & Bridges 269.47 0.00 0.00 269.47 111.17 4.44 0.00 115.61 153.86 158.30<br />
Railway Lines & Sidings 334.67 0.00 0.00 334.67 284.62 2.33 0.00 286.95 47.72 50.05<br />
Water Works & Sewerage 589.23 0.00 0.00 589.23 539.57 1.53 0.00 541.10 48.13 49.66<br />
Electrical Installation 564.49 0.52 0.00 565.01 511.81 1.09 0.00 5<strong>12</strong>.90 52.11 52.68<br />
Vehicles & Locomotives 274.76 0.00 0.00 274.76 234.38 1.57 0.00 235.95 38.81 40.38<br />
Construction & Other Equip. 338.72 2.57 0.00 341.29 298.43 3.13 0.00 301.56 39.73 40.29<br />
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<br />
SUB-TOTAL OTHER ASSETS(A) 30810.83 303.72 45.87 31068.68 26098.34 405.64 (43.58) 26460.40 4608.28 47<strong>12</strong>.49<br />
Assets Marked for Transfer to Government of Jharkhand<br />
Land 69.03 0.00 0.00 69.03 0.00 0.00 0.00 0.00 69.03 69.03<br />
Residential Buildings 245.88 0.00 0.00 245.88 152.20 4.01 0.00 156.21 89.67 93.68<br />
Non- Residential Buildings 531.33 0.00 0.00 531.33 153.14 8.66 0.00 161.80 369.53 378.19<br />
SUB - TOTAL OTHER ASSETS (B) 846.24 0.00 0.00 846.24 305.34 <strong>12</strong>.67 0.00 318.01 528.23 540.90<br />
LEASED ASSETS<br />
Land 22.32 0.00 0.00 22.32 0.00 0.00 0.00 0.00 22.32 22.32<br />
Residential Buildings 807.08 0.00 0.00 807.08 462.20 13.16 0.00 475.36 331.72 344.88<br />
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<br />
IMPAIRED ASSETS<br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
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<br />
Plant & Machinery (During <strong>2011</strong>-<strong>12</strong>) 0.00 45.87 0.00 45.87 0.00 0.00 43.58 43.58 2.29 0.00<br />
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<br />
TANGIBLE FIXED ASSETS 34081.83 349.59 45.87 34385.55 28381.47 431.47 0.00 288<strong>12</strong>.94 5572.61 5700.36<br />
PREVIOUS YEAR FIGURES 33799.09 283.09 0.35 34081.83 27975.19 406.28 0.00 28381.47 5700.36<br />
Current period depreciation 431.37<br />
Prior period depreciation 0.10<br />
Total Depreciation 431.47<br />
Provision for Impaired Assets 2.29<br />
Notes :-<br />
1. Deed of conveyance of land for 7199.53 acres includes 2313 acres of land obtained free of cost from the State Govt.<br />
2. This also includes 316.19 acres directly transferred by Bihar Govt. to other Govt. Agencies.<br />
30
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 10<br />
INTANGIBLE ASSETS<br />
Technical Know How fees<br />
Opening Balance 211.78 93.17<br />
Addition during the Year 53.74 118.61<br />
TOTAL (A) 265.52 211.78<br />
Less: Amortisation up to Previous Year 60.99 18.63<br />
Less: Amortisation during Current Year 53.11 42.36<br />
TOTAL (B) 114.10 60.99<br />
SUB TOTAL (A-B) 151.42 150.79<br />
Deferred Revenue Expenditures<br />
Deferred actuarial Valuation of RTA 0.00 40.18<br />
Deferred Actuarial Valuation of Sick Leave 0.00 0.00 114.58 154.76<br />
TOTAL 151.42 305.55<br />
NOTE NO. - 11<br />
CAPITAL WORK IN PROGRESS<br />
Capital Work in Progress<br />
Plant & Machinery 3500.15 3408.30<br />
Less: Provisions 870.93 870.93<br />
TOTAL 2629.22 2537.37<br />
Note :- Items under Capital Work-In-Progress above `.10 Lakhs having no / slow Progress amounts to ` 833.93 L (Previous year ` 833.93 L)<br />
NOTE NO. - <strong>12</strong><br />
NON-CURRENT INVESTMENTS<br />
Investments<br />
(Other than trade investment), Unquoted 918 (Prev.Year 918) Equity Share of `38.95<br />
each of <strong>Engineering</strong> (Projects) India <strong>Limited</strong>. 0.36 0.36<br />
TOTAL 0.36 0.36<br />
* The paid up value of equity share of <strong>Engineering</strong> (Projects) India <strong>Limited</strong> has been reduced from ` 1000/- to ` 38.95 due to restructuring as<br />
confirmed by Central Government vide order No. 40/1/2003-CL-III Dated 17.11.2003.<br />
31
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 13<br />
LONG TERM LOANS & ADVANCES<br />
Loans & Advances<br />
Advances & other amounts recoverable in cash or in kind or for value to be received<br />
(including cost of materials supplied to the contractors, outside parties and/ or pending adjustment)<br />
Unsecured Considered Good 915.25 898.54<br />
Deposits<br />
Deposits with Private Parties 2.28 2.25<br />
Deposits with Government Authorities 651.01 632.76<br />
Security deposit of Staff and Contractors<br />
as per contra in Note -3 0.86 654.15 0.81 635.82<br />
Others<br />
Advances to Employees 74.25 93.95<br />
Claims Receivable 85.76 50.40<br />
Income Tax deducted at source 472.83 325.23<br />
SUB TOTAL 2202.24 2003.94<br />
Less: Provision for bad &doubtful Advances 772.87 938.93<br />
TOTAL 1429.37 1065.01<br />
32
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 14<br />
OTHER NON-CURRENT ASSETS<br />
Long Term Trade Receivables<br />
(A) Public Sector & Govt. Deptt.<br />
Considered Good 20276.38 26410.57<br />
Considered Doubtful 5053.74 4682.77<br />
TOTAL (A) 25330.<strong>12</strong> 31093.34<br />
(B) Others<br />
Considered Good 154.39 20.54<br />
Considered Doubtful 53.47 52.53<br />
TOTAL (B) 207.86 73.07<br />
SUB TOTAL (A+B) 25537.98 31166.41<br />
Less: Provision for Doubtful debts 4561.37 4465.76<br />
Provision against LD deducted & charged 545.84 20430.77 269.54 26431.11<br />
Rent Receivables<br />
(A) Public Sector & Govt. Deptt.<br />
Considered Good 2743.51 2714.44<br />
Considered Doubtful 82.82 76.41<br />
TOTAL (A) 2826.33 2790.85<br />
(B) Others<br />
Considered Good 42.48 66.64<br />
Considered Doubtful 382.07 346.85<br />
TOTAL (B) 424.55 413.49<br />
SUB TOTAL (A+B) 3250.88 3204.34<br />
Less: Provision for Doubtful Realisation 464.89 2785.99 423.26 2781.08<br />
GRAND TOTAL 23216.76 292<strong>12</strong>.19<br />
Notes:<br />
1. Long Term Trade Receivables includes unbilled despatches ` 8170.62Lakh (Previous Year ` 17864.73 L)<br />
2. Long Term Trade Receivables also include not due ` 10353.19 Lakh (Previous Year ` 5623.63L) equipments and Spares already supplied but<br />
realization there of is subject to compliance of certain contractual obligation.<br />
33
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
NOTE NO. - 15<br />
INVENTORIES<br />
(As certified by the Management)<br />
Raw Materials & Components 7594.20 6383.34<br />
Less: Provision 1482.78 1731.47<br />
Less: Stock Adjustment 0.00 6111.42 65.56 4586.31<br />
Stores, Spares & Components including Construction Materials 1394.51 1028.70<br />
Less: Provision / Stock Adjustment 229.85 1164.66 343.41 685.29<br />
Goods-in-Transit/ Under inspection 4250.28 2160.57<br />
Less: Provision 259.52 3990.76 259.51 1901.06<br />
Loose Tools, Drawing Instruments etc. 1322.11 982.20<br />
Less: Provision 43.88 <strong>12</strong>78.23 46.87 935.33<br />
Stock of Finished Products 811.53 446.92<br />
Less: Provision 44.04 767.49 39.36 407.56<br />
Work-In-Progress 11844.95 9513.28<br />
Less: Provision <strong>12</strong>8.50 11716.45 79.41 9433.87<br />
Work-In-Progress (Turnkey Project) 2345.80 5505.95<br />
Less: Provision 0.00 2345.80 0.00 5505.95<br />
Discarded Assets 3.52 3.52<br />
Less: Provision 3.52 0.00 3.52 0.00<br />
Total Inventory 29566.90 26024.48<br />
Less: Provision 2192.09 2503.55<br />
Less: Stock Adjustment 0.00 27374.81 65.56 23455.37<br />
TOTAL 27374.81 23455.37<br />
Notes:<br />
1. Finished Stock & WIP includes items worth ` 35.<strong>12</strong> Lakh (Previous Year ` 35.<strong>12</strong> L) against closed, cancelled & old work orders which has been<br />
valued at scrap rates.<br />
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<br />
considered adequate.<br />
3. Goods In Transit includes CV Duty ` 14.18Lakh (Previous Year ` 220.35 L)<br />
4. Raw Materials & Components including scrap at shop floor ` 70.43Lakh (Previous Year ` 65.25 L)<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
34
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
NOTE NO. - 16<br />
TRADE RECEIVABLES<br />
Over Six Other Total Over Six Other Total<br />
Months Debts Months Debts<br />
Short Term Trade Receivables<br />
(A) Public Sector & Govt. Deptt.<br />
Considered Good 723.79 26860.11 27583.90 367.70 20571.43 20939.13<br />
Considered Doubtful 275.27 576.46 851.73 57.77 41.17 98.94<br />
SUB TOTAL (A) 999.06 27436.57 28435.63 425.47 206<strong>12</strong>.60 21038.07<br />
(B) Others<br />
Considered Good 5.00 1135.88 1140.88 0.68 31.11 31.79<br />
Considered Doubtful 0.00 68.53 68.53 0.00 0.00 0.00<br />
SUB TOTAL (B) 5.00 <strong>12</strong>04.41 <strong>12</strong>09.41 0.68 31.11 31.79<br />
TOTAL (A+B) 29645.04 21069.86<br />
Less: Provision for Doubtful debts 162.43 0.00<br />
Provision against LD deducted & charged 757.83 98.94<br />
NET TOTAL 28724.78 20970.92<br />
Notes:<br />
1. Short Term Trade Receivables includes unbilled despatches ` 3150.27Lakh (Previous Year ` 2022.06 L)<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 17<br />
CASH & CASH EQUIVALENTS<br />
Balance with Schedule Bank Current Account 260.77 755.47<br />
Cheques and Draft in Transit 10.48 47.88<br />
Cash in hand 4.84 276.09 7.18 810.53<br />
Others<br />
SBI Short Term Deposit 0.00 1500.00<br />
Other Bank Short Term Deposit 2860.21 2860.21 137.33 1637.33<br />
TOTAL 3136.30 2447.86<br />
35
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF BALANCE SHEET<br />
` in Lakhs<br />
AS AT 31.03.20<strong>12</strong> AS AT 31.03.<strong>2011</strong><br />
NOTE NO. - 18<br />
SHORT TERM LOANS & ADVANCES<br />
Loans and Advances<br />
Unsecured Considered Good 691.32 484.42<br />
Deposits<br />
Deposit with Private Parties 0.74 0.00<br />
Deposit with Government Authorities 635.71 636.45 368.40 368.40<br />
Others<br />
Advance to Employees 78.11 103.95<br />
Prepaid Expenses 31.31 27.99<br />
Claims Receivable 502.50 892.54<br />
Income Tax deducted at source 214.51 190.35<br />
SUB TOTAL 2154.20 2067.65<br />
Less: Provision for bad & doubtful Advances 35.85 24.81<br />
TOTAL 2118.35 2042.84<br />
NOTE NO. - 19<br />
OTHER CURRENT ASSETS<br />
Rent Receivables<br />
(A) Public Sector & Govt. Deptt.<br />
Considered Good 324.03 73.02<br />
Considered Doubtful 0.00 324.03 0.00 73.02<br />
(B) Others<br />
Considered Good 6.89 10.54<br />
Considered Doubtful 0.00 6.89 0.00 10.54<br />
SUB TOTAL (A+B) 330.92 83.56<br />
Less: Provision for Doubtful Receivables 0.00 0.00<br />
TOTAL 330.92 83.56<br />
36
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF STATEMENT OF PROFIT & LOSS<br />
NOTE NO. - 20<br />
REVENUE FROM OPERATION<br />
Sales & Services<br />
Sale of Products 71563.30 67223.79<br />
Sale of Services 959.71 896.80<br />
SUB TOTAL 72523.01 68<strong>12</strong>0.59<br />
Less: Excise Duty 4361.57 68161.44 4030.64 64089.95<br />
Other Operating Revenue<br />
Job Done for Internal Use 1076.43 820.04<br />
Add: Inter Plant Transfers 0.00 1076.43 28.38 848.42<br />
TOTAL 69237.87 64938.37<br />
NOTE NO. - 21<br />
OTHER INCOME<br />
Interest 16.48 24.20<br />
Rent 805.27 718.31<br />
Sale of Stores 137.27 282.98<br />
Miscellaneous Income 241.55 1180.43<br />
Income from HTI 15.13 23.43<br />
Excess provision written back 836.74 630.51<br />
Rent, Water & Electricity Charges 279.17 14.34<br />
TOTAL 2331.61 2874.20<br />
Note: Sales of stores (Net) includes ED `. 60.71 Lakh (Previous Year `. 22.46 Lakh).<br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
NOTE NO. - 22<br />
COST OF MATERIALS CONSUMED<br />
(A) Consumption of Raw materials & Components 18550.63 19953.29<br />
Less: Interplant Transfer 45<strong>12</strong>.04 14038.59 5<strong>12</strong>8.65 14824.64<br />
Consumption of Stores & Spares 23688.19 23565.02<br />
Less: Interplant Transfer <strong>12</strong>95.01 22393.18 2067.52 21497.50<br />
SUB TOTAL(A) 36431.77 36322.14<br />
(B) Decretion/(Accretion) to value of WIP & FG<br />
Work-In-Progress<br />
Opening Stock 15019.23 10009.94<br />
Closing Stock 14190.75 828.48 15019.23 (5009.29)<br />
Finished Stock<br />
Opening Stock 446.92 339.16<br />
Closing Stock 811.53 (364.61) 446.92 (107.76)<br />
SUB TOTAL(B) 463.87 (5117.05)<br />
Total Consumption of Raw Materials & Stores with<br />
changes in Inventories ( A + B ) 36895.64 3<strong>12</strong>05.09<br />
37
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF STATEMENT OF PROFIT & LOSS<br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
NOTE NO. - 23<br />
EMPLOYEES BENEFIT EXPENSES<br />
Salaries, Wages & Bonus 13865.41 <strong>12</strong>101.77<br />
<strong>Corporation</strong> Contribution to Provident Fund and 1163.87 1174.95<br />
Employee's Pension Fund<br />
Workmen and Staff Welfare Expenses 419.42 433.01<br />
Gratuity 2823.08 1604.50<br />
SUB TOTAL 18271.78 15314.23<br />
Less: Transferred to Research & Development Exp. 58.09 43.62<br />
TOTAL 18213.69 15270.61<br />
NOTE NO. - 24<br />
FINANCE COST<br />
Interest Expenses 515.30 92.37<br />
TOTAL 515.30 92.37<br />
NOTE NO. - 25<br />
DEPRECIATION, AMORTIZATION & IMPAIRMENT<br />
Depreciation as per Note No.-9 431.37 405.97<br />
Impairment Loss as per Note No.-9 2.29 62.20<br />
Other Amortization<br />
Tools 772.43 1040.27<br />
Technical Know How 53.11 825.54 42.36 1082.63<br />
TOTAL <strong>12</strong>59.20 1550.80<br />
NOTE NO. - 26<br />
RESEARCH & DEVELOPMENT EXPENSES<br />
Research & Development Expenses<br />
Material Stores & Spares Consumed 0.00 2.04<br />
Salary & Allowances 58.09 43.62<br />
TOTAL 58.09 45.66<br />
38
39<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF STATEMENT OF PROFIT & LOSS<br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
NOTE NO. - 27<br />
OTHER EXPENSES<br />
(A) Manufacturing Service Cost<br />
Water, Power & Fuel 2231.18 2374.16<br />
Repairs & Maintenance<br />
Plant & Machinery 199.85 357.73<br />
Buildings 57.26 89.69<br />
Others 166.55 423.66 58.92 506.34<br />
Insurance 100.09 94.76<br />
Excise Duty 242.96 265.68<br />
Wealth Tax 0.19 0.23<br />
Consultancy and Legal Expenses 20.82 23.48<br />
Municipal Tax/Charges 9.45 9.19<br />
SUB TOTAL (A) 3028.35 3273.84<br />
(B) Manufacturing & Other Operating Expenses<br />
Machining & Assembly charges 603.43 676.38<br />
Fabrication Charges 8.97 8.61<br />
Job Done by outside Agencies 2953.77 2257.42<br />
Turnkey Project Expenses 2247.28 4361.52<br />
Other Charges For Production 513.79 6327.24 370.76 7674.69<br />
Less: Interplant Transfer (Services) 565.66 608.28<br />
SUB TOTAL (B) 5761.58 7066.41<br />
(C) Administration, Selling & Distribution Expenses<br />
Rent 19.18 13.75<br />
Electricity & Drinking Water Expenses 747.68 971.21<br />
Security Expenses (CISF & Others) <strong>12</strong>84.54 <strong>12</strong>67.08<br />
Travelling & Conveyance Expenses 219.10 200.84<br />
Bank Charges 226.04 <strong>12</strong>9.83<br />
Miscellaneous Expenses 326.39 302.55<br />
Motor Vehicle Running Expenses 135.74 <strong>12</strong>1.14<br />
LD Deducted and Charged 935.19 398.88<br />
Sales Promotion <strong>12</strong>5.93 130.10<br />
Auditor's Remuneration<br />
Audit Fees 1.44 1.44<br />
Tax Audit Fees 0.20 0.20<br />
Service Tax 0.00 1.64 0.17 1.81<br />
Training Expenses 3.53 7.22<br />
SUB TOTAL (C) 4024.96 3544.41<br />
(D) Other Provisions / Expenses Written Off<br />
Provision for Bad & Doubtful Debts 414.18 613.18<br />
Provision for Bad & Doubtful Advances 21.60 91.86<br />
Provision for Warranty Expenses 365.54 346.27<br />
Miscellaneous Provisions <strong>12</strong>3.64 215.16<br />
Miscellaneous Losses Written Off 0.00 924.96 735.27 2001.74<br />
SUB TOTAL (D) 924.96 2001.74<br />
GRAND TOTAL (A+B+C+D) 13739.85 15886.40
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTES FORMING PART OF STATEMENT OF PROFIT & LOSS<br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
NOTE NO. - 28<br />
EXCEPTIONAL ITEMS<br />
Prior Period Adjustment<br />
Income<br />
Sales (including services) 51.90 (15.18)<br />
Previous year expenses written back 19.46 0.25<br />
Misc Income (0.14) 71.22 69.34 54.41<br />
Less : Expenses<br />
Raw Materials Consumed 13.50 0.00<br />
Stores & Spare Parts Consumed 76.87 0.00<br />
Payment to & Provision for Employees 1.48 0.58<br />
Depreciation 0.10 0.31<br />
Misc. expenses(net) 8.57 100.52 1.18 2.07<br />
Prior Period Adjustment (Net) (29.30) 52.34<br />
40
41<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Cash Flow Statement Annexed to the Balance Sheet<br />
For the period April <strong>2011</strong> - March 20<strong>12</strong><br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
A. CASH FLOW FROM OPERATING ACTIVITIES<br />
Net Profit before Tax 858.41 3813.98<br />
Adjustments for:<br />
Depreciation 431.47 406.28<br />
Interest Expenses 515.30 92.37<br />
Deffered Revenue Expenditure 154.13 86.89<br />
Lease Income (467.54) (467.54)<br />
Incremental Provisions 2338.79 2972.15 2196.54 2314.54<br />
Operating Profit before Working Capital Changes 3830.56 6<strong>12</strong>8.52<br />
Adjustments for:<br />
Trade and Other Receivables (2005.79) (16769.53)<br />
Inventories (3919.44) (7524.59)<br />
Trade Payables 3658.64 6348.50<br />
Loans & Advances (439.87) (2706.46) (791.24) (18736.86)<br />
Cash Generated from Operations 1<strong>12</strong>4.10 (<strong>12</strong>608.34)<br />
Net Cash from Operating Activities 1<strong>12</strong>4.10 (<strong>12</strong>608.34)<br />
B. CASH FLOW FROM INVESTING ACTIVITIES<br />
Purchase of Fixed Assets (349.59) (283.09)<br />
Sale/Adjustment of Fixed Assets 45.87 0.35<br />
Adjustment in Capital Work-in-Progress (91.85) (42.60)<br />
Lease income 467.54 467.54<br />
Net Cash from Investing Activities 71.97 142.20<br />
C. CASH FLOW FROM FINANCING ACTIVITIES<br />
Interest Payment (515.30) (92.37)<br />
Short Term Loans 475.21 (2240.88)<br />
Liability for leased assets (467.54) (451.47)<br />
Net cash from financing activities (507.63) (2784.72)<br />
Net increase /(Decrease) in cash and cash equivalents 688.44 (15250.86)<br />
Opening Balance of Cash and Cash Equivalents 2447.86 17698.72<br />
Closing Balance of Cash and Cash Equivalents 3136.30 2447.86<br />
688.44 (15250.86)<br />
Note:- Cash Flow has been prepared by following Indirect method<br />
Note - 1:<br />
Details of Opening Balance of Cash and Cash Equivalents<br />
Cash, Cheques and Draft in hand 7.18 15.41<br />
Cheques - in- Transit 47.88 181.54<br />
Balance with Schedule Bank in Current Account 755.47 320.72<br />
Balance with Schedule Bank in Short Term Deposit 1500.00 17050.00<br />
Balance with Other Bank in Short Term Deposit 137.33 131.05<br />
Total 2447.86 17698.72<br />
Note - 2:<br />
Details of Closing Balance of Cash and Cash Equivalents<br />
Cash, Cheques and Draft in hand 4.84 7.18<br />
Cheques - in- Transit 10.48 47.88<br />
Balance with Schedule Bank in Current Account 260.77 755.47<br />
Balance with Schedule Bank in Cash Credit Account<br />
Balance with Schedule Bank in Short Term Deposit 0.00 1500.00<br />
Balance with Other Bank in Short Term Deposit 2860.21 137.33<br />
Total 3136.30 2447.86<br />
A.K.Kanth<br />
Company Secretary<br />
S.K. Chakraborty<br />
General Manager (Finance)<br />
Kushal Saha<br />
Director (Production) &<br />
R.Misra<br />
Chairman Cum Managing Director<br />
Director Mktg. (Additional Charge)<br />
In terms of our <strong>report</strong> of even date<br />
For Anjali Jain Associates, Chartered Accountants<br />
Place : Ranchi<br />
(ANJALI JAIN)<br />
Date : 06/09/20<strong>12</strong> Partner, M No. 72022
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
NOTE NO. 29<br />
NOTES ON ACCOUNTS<br />
1. (i) The accounts of the company have been prepared based on “going concern – basis”. Due to prolonged suffering of losses coupled with huge<br />
negative net worth, the company was declared sick and was referred to BIFR on 24.2.1992. BIFR sanctioned a rehabilitation package on<br />
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<br />
winding up of the company on 6.7.2004.<br />
(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<br />
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<br />
submit proposals for revival of HEC through affidavits before the Hon’ble Court. Thereafter a number of hearings were held between 9.9.2004<br />
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<br />
Jharkhand and the HEC Ltd. and other concerned parties to act in terms of Revival package approved by Hon’ble Court and dropped the<br />
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,<br />
the Nations pride and mother of Industries would fulfill its object of serving the nation.<br />
During the pendency of this proceeding before Hon’ble High Court of Jharkhand the following Revival Packages had been approved by Govt.<br />
of India and Govt. of Jharkhand. The details of such proposals and present status of implementation are as follows:-<br />
A. Status of Revival package approved by Govt. of India<br />
(Recommended by BRPSE on 7.10.2005 and approved by Govt. of India on 15.<strong>12</strong>.2005)<br />
Assistance approved by Govt. of India<br />
Status of Implementation<br />
a) Conversion of plan loan of ` 15.27 crores as on 31.3.2005 in to equity. Implemented in March, 2006<br />
b) Waiver of non-plan loan and interest on plan and non-plan loan as on 31.3.2005 of ` 1101.02<br />
crores.<br />
Implemented in March, 2006<br />
c) To provide non-plan loan of ` 102 crores, in the form of Non Plan loan of ` 92.03 crores, plan<br />
loan of ` 4.985 crores which will be repaid by the company in three years and also ` 4.985 crores<br />
as equity.<br />
Implemented in March, 2006<br />
(Sl.No. a,b,c was approved by Hon’ble High Court of Jharkhand on 13.7.2006)<br />
d) To mobilise resources (approx. ` 330.00 crores) by transferring residential and non-residential<br />
buildings already on rent with the state government to the Jharkhand Government, settlement of<br />
residences on long term lease with the occupant employees and ex-employees of the company,<br />
settlement of commercial and institutional areas and privatization of schools and hospital.<br />
B. Revival Scheme approved by Govt. of India in September – 2008<br />
Company generated ` 85.44 crores from long<br />
term lease of residential quarters<br />
a) Conversion of Plan Loan (` 5.825 crores) and Non Plan Loan<br />
(`102.21 crores) into Equity.<br />
b) Conversion of outstanding interest of ` 44.81 crores up to<br />
18.9.2008 into Equity<br />
c) Enhancing the Govt. guarantee from ` 150 crores to ` 253<br />
crores for meeting working capital.<br />
d) To settle the liability of ` 79.06 crores of CISF by transferring<br />
commensurate amount of land of the company to the CISF.<br />
Implemented in March,2009<br />
Implemented in March,2009<br />
Implemented in March,2009<br />
158 acres of land has been transferred to CISF in March, 2009 for liquidation of dues<br />
of ` 79.06 crores. In addition, Waiver of the interest and penal interest on CISF dues<br />
amounting to ` 37.91 crores and freezing of interest and penal interest amount after<br />
31-7-2008 was approved by Govt. of India in Sept-08 and implemented<br />
42
43<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
C. Status of Revival Package : Agreed to amongst DHI,GOI, Govt. of Jharkhand and HEC Ltd.<br />
Revival Package approved by<br />
CCEA<br />
1 Not specifically mentioned<br />
as to the waival of electricity<br />
dues. But Jharkhand Govt's<br />
proposal for waiver of ` 500<br />
Crores against electricity dues<br />
was approved.<br />
2 Waiver of PHED dues of `<br />
31.03 Crores<br />
3 Waiver of Sales Tax dues of `<br />
25.51 Crores<br />
4 To authorize HEC to receive<br />
` 250 Crores from Govt.<br />
of Jharkhand with no future<br />
commitment for transfer of any<br />
more land or building.<br />
5 To allow HEC to accept the<br />
proposal of Govt. of Jharkhand<br />
to transfer 2342 acres of<br />
land. This includes 85 acres<br />
of appurtenant land to the<br />
building.<br />
6 To allow HEC to accept transfer<br />
of 17 buildings and 1155<br />
residential quarters along<br />
with land appurtenant there<br />
to valuing ` 142.23 Crores<br />
to GOJ.<br />
As per Affidavit filed by Govt.<br />
of Jharkhand and approval of<br />
Hon'ble High Court of Jharkhand.<br />
Waival of electricity dues of `<br />
306.37 crores and delayed payment<br />
surcharge up to the date of Final<br />
settlement by JSEB after approval of<br />
Hon’ble High Court of Jharkhand.<br />
Waival of PHED dues ` 32.65 crores<br />
as on 31.03.2007.<br />
The GOJ agreed that payment of<br />
` 25.51 Crores by HEC will be<br />
treated as full and final settlement<br />
of all commercial Tax liability upto<br />
31.03.2007 including penalty / penal<br />
interest for delayed payment etc. to<br />
which the assessment of CT liability<br />
pertains to. Any liability separate<br />
from it and discovered subsequently<br />
will be treated as per relevant law/<br />
guidelines.<br />
Grant of ` 275.51 crores including `<br />
25.51 crores mentioned in Sl.No. '3'<br />
above.<br />
HEC to surrender 2342 acres of land<br />
to Govt. of Jharkhand.<br />
HEC to surrender 17 nos. Non<br />
residential Building and 1148<br />
residential quarters to Govt. of<br />
Jharkhand.<br />
Amount to be<br />
Waived / Adjusted<br />
/ Received<br />
` 969.85 Crores<br />
total amount to be<br />
waived / Adjusted.<br />
` 32.65 crores<br />
(Waiver)<br />
1) ` 25.51 crores to<br />
be paid by GOJ<br />
2)The company is<br />
to deposit ` 25.51<br />
crores with GOJ<br />
Amount Waived /<br />
Adjusted / Received<br />
Waived ` 853.42 Crores<br />
(Electricity dues of `<br />
306.37 Crores and DPS<br />
of ` 547.05 Crores upto<br />
31.08.2008)<br />
` in Crore<br />
Balance amount<br />
to be Waived /<br />
Adjusted / Received<br />
` 116.42 Crores<br />
against DPS from<br />
01.09.2008 to<br />
31.03.2010 yet to be<br />
waived.<br />
0.00 ` 32.65 crores<br />
(Waiver)<br />
1) ` 25.51 crores 1) NIL<br />
2) ` 25.51 Crores<br />
deposited by HEC towards<br />
Commercial Taxes.<br />
2) NIL<br />
3) Order of waiver 3) Order not issued 3) Order for waiver<br />
all Commercial<br />
of all dues upto<br />
tax liability up to<br />
31.03.07 by Govt.<br />
31.03.2007 is to be<br />
issued by GOJ.<br />
of Jharkhand is still<br />
awaited.<br />
` 275.51 crores ` 164.21 crores ` 111.30 crores<br />
Possession of 1902.64 acres of land had been handed over to GOJ for<br />
which Deed of Conveyance is yet to be executed. Balance 354.25 acres<br />
of land is to be handed over after removal of encroachment.<br />
17 Nos. of Non Residential Buildings , 1148 Nos. of Residential Buildings<br />
and 85.11 acres of appurtenant land were already under possession of<br />
GOJ on rent upto 31.03.2009 and had been handed over to Government<br />
of Jharkhand. Registration of Buildings are yet to be executed.<br />
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<br />
registration of Buildings and deed of conveyance for land. Accordingly the amount received from Govt. of Jharkhand has been kept as advance.<br />
2. The prayer of HEC <strong>Limited</strong> to the Chairman of Central Board of Trustees, Employees Provident Fund Organisation, for waiver of damages amounting<br />
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
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
<strong>12</strong>.11.2010. Company has again filed Civil Miscellaneous Petition (CMP) in Company Petitions CP 05/2004 before Hon’ble High Court of Jharkhand.<br />
Against the aforesaid order Hon’ble High Court of Jharkhand has stayed recovery of damages till further order.<br />
3 Contingent Liabilities :<br />
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).<br />
b) Unexpired Letter of Credit ` 2,474.17 Lakhs(Previous year ` 2,522.06 Lakhs)<br />
c) Unexpired Bank Guarantee ` <strong>12</strong>,892.01 Lakhs (Previous year ` 11,278.94 Lakhs)<br />
d) Delayed payment surcharge on Energy charges ` 69592.83 Lakhs (Previous Year ` 69,592.83 Lakhs)<br />
e) Water Charges ` 1,787.06 Lakhs (Previous year ` 1,451.36 Lakhs)<br />
f) Damages towards PF dues ` 9,501.54 Lakhs (Previous year ` 9,501.54 Lakhs)<br />
g) Others including Legal Cases ` 1,<strong>12</strong>8.66 Lakhs and Commercial Taxes ` 2,379.57 Lakhs, total amounting to ` 3,508.23 Lakhs (Previous<br />
year ` 3,829.72 Lakhs)<br />
4. Out of ` 23,005.29 Lakhs received towards Long Term Lease from 1995-96 onwards to 31.03.20<strong>12</strong>, a sum of ` 467.54 Lakhs has been amortised<br />
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.<br />
5. (a) Revenue from operation includes unbilled sales amounting to ` 9,097.59 Lakhs including escalation (previous year ` 17759.47 Lakhs) due<br />
to part supply as per billing schedule under respective work order.<br />
(b) Interplant transfer of ` 6372.71 Lakhs (previous year ` 7758.38 Lakhs) have been excluded from total Revenue from operation of the Company.<br />
6. (a) Revenue from operation includes ` 28,539.25 Lakhs in respect of turnkey contract executed by Project Division (previous year ` 23,542.27<br />
lakhs) valued on the basis of as approved billing schedule and payment terms of the contract to the extent works completed, inspected,<br />
despatched/on delivery to the carrier and billed.<br />
The disclosures relating to Construction Contracts entered on or after 01.04.2003 as per the requirement of Accounting Standard AS-7<br />
(Revised) are as follows:<br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
Contract revenue recognized during the year 28539.25 23542.27<br />
In respect of Contract in progress as on 31.03.20<strong>12</strong><br />
- Cost incurred and recognized profits (less recognized losses) 62083.09 39132.80<br />
- Amount of advance received 17443.71 1<strong>12</strong>57.43<br />
- Amount of retentions (deferred debts) 2345.80 5505.95<br />
In respect of dues from customers after appropriate netting off<br />
- Gross amount due from customers for the contract work as an asset 11189.14 <strong>12</strong>107.44<br />
- Gross amount due to customers for the contract work as a liability 5<strong>12</strong>6.42 7401.76<br />
- Contingencies NIL NIL<br />
(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<br />
Accounting Standard (AS) – 7( R ) Construction Contracts are reviewed and up dated periodically during the year by the management and<br />
necessary adjustments are made in the current year’s account .<br />
7. Despite issuance of letter to Major Clients for confirmation of Sundry Debtors balance, no confirmation from clients has been received till date.<br />
Regarding Loans & Advances, Deposits, Sundry Creditors etc., confirmation could not be obtained from the respective parties.<br />
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’.<br />
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<br />
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 31.03.20<strong>12</strong>.<br />
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<br />
not been recognized in the absence of their being virtual certainty supported by convincing evidence that sufficient future taxable income would<br />
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<br />
unabsorbed depreciation and carry forward of lossess which would be set off against taxable income.<br />
44
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
11. The Company accounted for the liability towards Employee Benefits under Accounting Standard-15 (Revised 2005) as amended by the Companies<br />
(Accounting Standard ) Amendment Rules , 2008 w.e.f. 1 st April,2007. Disclosure Requirements has been shown in Annexure – II.<br />
<strong>12</strong>. Contingent liability for damages excludes the payment of damages on defaulted CPF/EPF dues for the period from October’99 to March ‘2005 as<br />
no notice for payment of the same has been received from Regional Provident Fund Commissioner, Ranchi.<br />
13. Segment information in accordance with Accounting Standard –17 (AS-17) issued by ICAI are furnished at Annexure-III.<br />
14. Disclosure as required under Accounting Standard- 18 (AS –18) “Related Party Disclosures” issued by ICAI is as follows :-<br />
Names of the Related Parties Details of Transaction ` in Lakhs<br />
Key Management Personnel Period Remunerations Terminal Benefits<br />
1 Sri G. K. Pillai, Ex. CMD 04/<strong>2011</strong>- <strong>12</strong>/<strong>2011</strong> 10.30 1.05<br />
2 Sri R Misra, CMD 04/<strong>2011</strong>-03/20<strong>12</strong> 14.82 2.03<br />
3 Sri Bharat Prasad, Ex. Director ( Mkt.) 04/<strong>2011</strong>-10/<strong>2011</strong> 6.46 0.80<br />
4 Sri Kushal Saha, Director (Production) 06/<strong>2011</strong>-03/20<strong>12</strong> 10.44 1.54<br />
5 Sri S. Banerjee, Director ( Personnel) 03/20<strong>12</strong>-03/20<strong>12</strong> 1.14 0.17<br />
In addition to the above they had been provided housing, car at concessional rate.<br />
Total : 43.16 5.59<br />
15. In Case deficit arises from Employee’s Provident Fund Trust, it is to be borne by the Company. But in this Accounting year <strong>2011</strong>-<strong>12</strong>, no deficit is<br />
noticed in Employee’s Provident Fund Trust Account.<br />
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<br />
profit of the company is increased by ` 193.72 Lakh during the current financial Year.<br />
17. In certain areas like Transport and Hospital consumables like Spare Parts, Medicines and Stationary are treated as consumed during the year.<br />
18. As required under section 211(3A), (3B) and (3C) of the companies act, 1956 the following disclosure is made. Deviation from Accounting<br />
Standards as mentioned in sub section ( 3C ) with reasons and impact are mentioned below:-<br />
a) Valuation of inventories of finished and semi finished goods covered under Inter Plant items could not be done in conformity with the<br />
requirement of AS-2 as the amount is not ascertainable.<br />
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<br />
dispatched / delivered to the carrier.<br />
19. The previous year’s figures have been regrouped, recasted, reclassified and rearranged to make them comparable as far as practicable with those<br />
of current year.<br />
20. The Note No. 1 to 29 and the Statement of Accounting Policy forms an integral part of these accounts.<br />
A. K. Kanth S. K. Chakraborty Kushal Saha R. Misra<br />
Company Secretary General Manager (Finance) Director (Production) & Chairman Cum Managing Director<br />
Director Mktg. (Additional Charge)<br />
In terms of our <strong>report</strong> of even date<br />
For Anjali Jain Associates, Chartered Accountants<br />
Place : Ranchi<br />
(ANJALI JAIN)<br />
Date : 6/9/20<strong>12</strong> Partner, M No. 72022<br />
45
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
ANNEXURE – I<br />
Annexure to Note No.8 of Note No 29<br />
Disclosure required under the Micro, Small & Medium Development Act,2006<br />
Delayed payments due as at the end of each accounting year on account of<br />
` in Lakhs<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
Principle 214.52 66.31<br />
Interest 98.24 20.21<br />
Total Interest Paid on all delayed payments during the year under the provisions of the Act Nil Nil<br />
Interest due on principal amounts paid beyond the due date during the year but without the interest amounts<br />
under this Act<br />
Interest accrued but not due (Represents interest accrued as at the end of the year but not due as interest is<br />
computed at monthly rests from the due date.<br />
Total Interest due but not paid - ( Represent all interest amounts remaining due together with that from prior<br />
year(s) until such date when the interest was actually paid to the small enterprises . Mainly to acertain the amount<br />
of interest disallowable for Income Tax purpose)<br />
Nil<br />
Nil<br />
Nil<br />
Nil<br />
Nil<br />
Nil<br />
46
(A)<br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Annexure to Note No. 11 of Note No. 29<br />
EMPLOYEE BENEFITS<br />
ANNEXURE – II<br />
The company has determined the liability for Employee Benefits as at March 31, 20<strong>12</strong> in accordane with the revised Accounting Standard 15 - Employee<br />
benefits issued by ICAI<br />
(B) Defined benefit plans - As per Actuarial valuation on March 31,20<strong>12</strong><br />
I<br />
II<br />
GRATUITY<br />
LEAVE<br />
ENCASHMENT<br />
RETD. TRAVEL.<br />
ALLOWANCE<br />
` in Lakhs<br />
SICK LEAVE<br />
Expense recognised in the Statement of Profit & Loss for the<br />
year ended March 31,20<strong>12</strong><br />
1. Current Service Cost 389.05 152.36 5.56 47.25<br />
2. Past Service Cost 0.00 0.00 0.00 0.00<br />
3. Interest Cost 798.20 393.38 9.84 50.03<br />
4. Net actuarial(gain) / loss recognised during the year 1617.97 658.11 26.63 (37.58)<br />
5. Total Expense 2805.22 <strong>12</strong>03.85 42.03 59.70<br />
Net Asset/ (Liability) recognised in the Balance Sheet<br />
1. Present value of the obligation (Current) 2549.42 1527.27 20.87 164.25<br />
2. Present value of the obligation ( Non Current) 7939.47 3650.63 84.67 520.84<br />
3. Funded status [(surplus/( deficit)] (10488.89) (5177.90) (105.54) (685.09)<br />
4. Net Asset/ (Liability) recognised in the Balance Sheet 10488.89 5177.90 105.54 685.09<br />
III<br />
Change in the present value of the obligation during the year<br />
ended March 31, 20<strong>12</strong><br />
1. Present value of the obligation as at April 1, <strong>2011</strong> 9977.45 4917.30 <strong>12</strong>2.95 625.39<br />
2. Current service cost 389.05 152.36 5.56 47.25<br />
3. Interest Cost 798.20 393.38 9.84 50.03<br />
4. Past Service Cost 0.00 0.00 0.00 0.00<br />
5. Benefits paid (2293.78) (943.25) (6.17) 0.00<br />
6. Actuarial (gain)/ loss on obligation 1617.97 658.11 (26.64) (37.58)<br />
7. Present value of obligation as at March 31,20<strong>12</strong> 10488.89 5177.90 105.54 685.09<br />
IV<br />
Actuarial Assumptions<br />
1. Discount rate 8.60% 8.60% 8.60% 8.60%<br />
2. Rate of Increase in Compensation 8.00% 8.00% 8.00% 8.00%<br />
2. Mortality rate LIC (1994-96) Table<br />
47
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
ANNEXURE – III<br />
REVENUE<br />
Annexure to Note No. 13 of Note No. 29<br />
Information about different business units (Segments) <strong>2011</strong>-20<strong>12</strong><br />
` in Lakhs<br />
FFP HMBP HMTP PROJECT HEC<br />
External Sales 2685.83 32100.96 4835.40 28539.25 68161.44<br />
Inter-plant/Job done for own use 5629.71 1424.50 394.93 0.00 7449.14<br />
Total Revenue 8315.54 33525.46 5230.33 28539.25 75610.58<br />
RESULT<br />
Net Profit (Before Interest) (9284.83) 9888.01 (1616.54) 2416.37 1403.01<br />
Interest 144.28 309.18 61.84 0.00 515.30<br />
Profit from ordinary activities (9429.11) 9578.83 (1678.38) 2416.37 887.71<br />
Prior Period Income (157.06) 77.74 30.30 19.72 (29.30)<br />
V.R.S. Exp. 0.00 0.00 0.00 0.00 0.00<br />
Net Profit (9586.17) 9656.57 (1648.08) 2436.09 858.41<br />
OTHER INFORAMTION<br />
Segment Assets <strong>12</strong>989.54 53865.33 4829.13 13888.33 85572.33<br />
Addition during the year 172.30 71.23 35.69 3.03 282.25<br />
Unallocated Assets 8830.32<br />
Total Assets 94684.90<br />
Segment Liabilities 11991.48 22865.30 3179.64 <strong>12</strong>790.75 50827.17<br />
Unallocated Liabilities 60883.51<br />
Total Liabilities 111710.68<br />
Capital Expenditure 220.<strong>12</strong> <strong>12</strong>4.34 26.61 3.03 374.10<br />
Unallocated Capital Expendt. 21.47<br />
Total Capital Expendt. 395.57<br />
Depreciation 256.26 51.94 44.41 7.07 359.68<br />
Unallocated Depreciation 71.79<br />
Total Depreciation 431.47<br />
48
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Additional Information Pursuant to the Provision Paragraph of<br />
4A, 4B, 4C & 4D of Part -II Schedule - VI to the Companies Act. 1956<br />
(` in Lakhs)<br />
Current Year Previous Year<br />
A.1 Employees who were in receipt of or were entitled to receive emoluments (including benefits) of<br />
` 24,00,000.00 or more for the year (and ` 2,00,000 or more per month when employed<br />
for apart of the year for current year).<br />
A.2 Auditor's Expenses<br />
Nil<br />
Nil<br />
i Statutory Auditors Remuneration 1.44 1.44<br />
ii Tax Audit Fees 0.20 0.20<br />
B. Capacity and Production<br />
Licensed Capacity Installed Capacity Actual Production<br />
<strong>2011</strong>-<strong>12</strong> 2010-11 <strong>2011</strong>-<strong>12</strong> 2010-11 <strong>2011</strong>-<strong>12</strong> 2010-11<br />
III / II III / II<br />
Goods Manufactured :- Stage in Stage in<br />
M.T. M.T. M.T. M.T. M.T. M.T.<br />
Foundry Forge Plant.<br />
Grey Iron Castings 33345 33345 33345 33345 1450 1644<br />
Steel Castings 40182 40182 40182 40182 3640 4340<br />
Forging and Forged Rolls 41463 41463 41463 41463 3769 2052<br />
Non Ferrous Castings 700 700 700 700 59 65<br />
G.I. Moulds 1110 1110 1110 1110 169 82<br />
Steel Ingots, Core and Synthetic Iron 40000 40000 40000 40000 3110 2933<br />
Rolls (G.I. & Steel) 17740 17740 17740 17740 0 0<br />
Bye-Product-Coal Tar 2039 2434<br />
174540 174540 174540 174540 14236 13550<br />
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<br />
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<br />
inputs in other Shops. Production figures are as certified by the management<br />
49
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
<strong>Heavy</strong> Machine Building Plant<br />
Metallurgical Machinery & Equipment 80000 80000 80000 80000 8482 9055<br />
Structurals 25000 25000 25000 25000 0 0<br />
105000 105000 105000 105000 8482 9055<br />
Notes : 1. Production figures are as certified by the management.<br />
2. Total Production figures derived by deduction of opening stock from total sales and closing stock.<br />
3. Actual Production includes despatches from off-loading parties and other supplier<br />
4. Production figures are inclusive of production for internal use.<br />
5. Production figures are inclusive of interplant sales 327.80 MT(Prev. Year 748.91 MT)<br />
Turn Key Project : No of Contract - 4 Nos 3 Nos 28539 23543<br />
<strong>Heavy</strong> Machine Tools Plant<br />
Machine Tools, Accessories/<br />
Spares & Other products 10000 10000 10000 10000 597 420<br />
Including Machinery <strong>12</strong> Nos 5 Nos<br />
Including special accessories and Jobbing 852 Nos 328 Nos<br />
Note:- 1. Actual Production figures are inclusive of interplant transfers 36.17 MT ( Prev.year 4.80 MT)<br />
2. Production figures are as certified by the Management.<br />
50
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
C. SALES & SERVICES ` in Lakhs<br />
Quantity M.T Sales less return value<br />
<strong>2011</strong>-<strong>12</strong> 2010-11 <strong>2011</strong>-<strong>12</strong> 2010-11<br />
Foundry Forge Plant.<br />
Grey Iron Castings 679.68 711.51 458.28 523.79<br />
Steel Castings 717.29 1695.00 582.93 1350.80<br />
Forging & Forged Rolls 706.76 439.27 739.34 553.29<br />
Export Sales 0.00 9.86 0.00 20.36<br />
Bye Product- Coal Tar 1631.13 2647.05 408.99 464.88<br />
Services 0.00 0.00 496.29 342.40<br />
TOTAL 3734.86 5502.69 2685.83 3255.52<br />
Note : Sales exclude Excise duty ` 246.43 lakhs ( previous Year ` 252.17 lakhs), inter unit transfer and items for internal use.<br />
<strong>Heavy</strong> Machine Building Plant<br />
Metalllurgical Machinery & Equipment 8060.40 8230.50 32100.96 34966.63<br />
TOTAL 8060.40 8230.50 32100.96 34966.63<br />
Turn Key Project 28539.25 23543.29<br />
<strong>Heavy</strong> Machine Tools Plant<br />
Machine Tools 10 Nos. 496.19 236.51 4311.88 1305.04<br />
(pre. Year 05 Nos.)<br />
Special Accessories & Jobbing (852 Nos.) 65.06 178.69 523.52 1020.49<br />
(pre. year 328 Nos.) and services<br />
561.25 415.20 4835.40 2325.53<br />
51
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
D. STOCK OF FINISHED GOODS<br />
Opening Stock (01.04.<strong>2011</strong>) Closing Stock (31.03.20<strong>12</strong>)<br />
Goods Manufactured :-<br />
Quantity<br />
(MT)<br />
Value<br />
Quantity<br />
(MT)<br />
Value<br />
Foundry Forge Plant.<br />
Grey Iron Castings 0.00 0.00 0.00 0.00<br />
0.00 0.00 0.00 0.00<br />
Steel Forging & Forges Rolls 1.92 0.<strong>12</strong> 1.92 0.<strong>12</strong><br />
(1.92) (0.<strong>12</strong>) (1.92) (0.<strong>12</strong>)<br />
Non Ferrous Castings 0.00 0.00 0.00 0.00<br />
0.00 0.00 0.00 0.00<br />
Bye Product-Coal Tar 384.44 69.20 792.31 209.96<br />
(597.47) (102.00) (384.44) (69.20)<br />
386.36 69.32 794.23 210.08<br />
(599.39) (102.<strong>12</strong>) (386.36) (69.32)<br />
<strong>Heavy</strong> Machine Building Plant<br />
Metallurgical Machinery & Equipments 145.23 360.09 238.59 583.94<br />
(69.64) (219.53) (69.64) (360.09)<br />
<strong>Heavy</strong> Machine Tools Plant<br />
Quantity (MT) Value Quantity (MT) Value<br />
Machine Tools 0 No 0.00 0.00 0 No 0.00 0.00<br />
0 No (0.00) (0.00) (0 No) (0.00) (0.00)<br />
Special Accessories &<br />
Spares and Jobbing work.<br />
1 No 17.00 17.51 1 No 17.00 17.51<br />
(1 No) (17.00) (17.51) (1 No ) (17.00) (17.51)<br />
1 No 17.00 17.51 1 No 17.00 17.51<br />
1 No (17.00) (17.51) (1 No ) (17.00) (17.51)<br />
Note : Figures in brackets are for previous year.<br />
52
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
E. Raw Material Consumption<br />
(Including bought out items and direct despatches )<br />
ITEMS<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
Quantity Value (`) Quantity Value (`)<br />
Foundry Forge Plant.<br />
Alloy Steel MT 339.89 216.16 223.71 170.64<br />
Ferrous & Ferro Alloy MT 7255.76 1978.44 8254.55 2044.15<br />
Non- Ferrous Alloy MT 74.85 259.11 102.91 344.44<br />
Crank Shaft Nos 54 434.73 27 213.<strong>12</strong><br />
Timber CM <strong>12</strong>8.00 35.<strong>12</strong> 2976.04 29.90<br />
Sq. Ft. 3424.00 2880.00<br />
TOTAL 2923.56 2802.25<br />
<strong>Heavy</strong> Machine Building Plant<br />
Grey Iron Castings MT 440.47 132.21 89.72 62.83<br />
Steel Castings MT 1477.30 2058.33 1818.17 2248.80<br />
Steel Forging MT 815.74 1969.99 1011.69 2374.97<br />
Non-Ferrous Castings MT 33.24 334.92 27.17 233.65<br />
Steel Plates, Profiles & MT 2664.76 1178.07 3265.07 1444.89<br />
Component/ Accessories & NOS 10<strong>12</strong> 2971.77 1035 4101.36<br />
Miscellanious (GR-99) LTR 0.00 0.00 460.00 0.06<br />
Fabricated Items NOS 259218 1196.64 303620 956.01<br />
Machinery Parts MTRS 27387.44 26010.25<br />
Spares KG 3598.54 1<strong>12</strong>46.61<br />
Bolts, Nuts, Tools etc. SQR MT 184.00 38.50<br />
Electricals MTRS 162733.58 3678.03 133057.39 3151.35<br />
NOS 75705 92062<br />
KG 1469.91 2118.96<br />
Bearings NOS 3521 580.36 2899 572.73<br />
TOTAL 14100.32 15146.65<br />
53
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
<strong>Heavy</strong> Machine Tools Plant Quantity Value (`) Quantity Value (`)<br />
Castings (Indigenous) NOS 606 207.63 1790 287.34<br />
Components (Imported) NOS 338 784.47 872 <strong>12</strong>83.81<br />
Misc.Items (Indigenous) NOS 463596 534.66 487499 433.05<br />
TOTAL 1526.76 2004.20<br />
Value of comsumption of Raw Matreials, Components, Stores & Spare Parts (Including purchase of finished goods) and percentage thereof.<br />
(` in Lakhs)<br />
<strong>2011</strong>-<strong>12</strong> 2010-11<br />
(a) Raw Materials Value % Value %<br />
(i) Imported* 3180.96 17.15 4211.78 21.11<br />
(ii) Indigenous 15369.67 82.85 15741.32 78.89<br />
TOTAL 18550.63 100.00 19953.10 100.00<br />
(b) Stores & Spares<br />
( Including stores and spares used for repairs and Maintenance)<br />
(I) Imported 116.83 2.70 100.92 2.34<br />
(ii) Indigenous 4211.85 97.30 4209.18 97.66<br />
TOTAL 4328.68 100.00 4310.10 100.00<br />
Note: Exclusive of imports through canalised agencies.<br />
F. Value of Imports on CIF Basis<br />
Raw materials, Spare Parts,<br />
Components 5528.27 4854.85<br />
Capital Goods 55.73 9.96<br />
TOTAL 5584.00 4864.81<br />
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.<br />
G. Expenditure in Foreign Currency<br />
Technical know-how fee 45.80 1<strong>12</strong>.33<br />
Directors & Officers Abroad 8.71 14.14<br />
TOTAL 54.51 <strong>12</strong>6.47<br />
54
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
ANNUAL REPORT <strong>2011</strong>-<strong>12</strong><br />
Annexed to and forming part of the Account<br />
Additional Information pursuant to Part IV of Schedules VI to the Companies Act, 1956.<br />
BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE<br />
1. Registration Details<br />
Registration No.<br />
State Code<br />
0 0 0 6 3 0 0 3<br />
Balance Sheet Date<br />
3 1 0 3 1 2<br />
Date Month Year<br />
2. Capital Raised during the year<br />
Public Issue<br />
Right Issue<br />
N I L N I L<br />
Bonus Issue<br />
Private Placement<br />
N I L N I L<br />
3. Position of Mobilisation and Deployment of Funds.<br />
Total Liabilities<br />
Total Assets<br />
9 4 6 8 5 9 4 6 8 5<br />
Sources of Funds :-<br />
Paid - up Capital<br />
Reserve & Surplus<br />
6 0 6 0 8 1 1 8 2 8<br />
Secured Loans<br />
Unsecured Loans<br />
9 4 4 1 0<br />
Application of Funds:-<br />
Net Fixed Assets<br />
Investment<br />
8 3 5 3 1<br />
Net Current Assets<br />
Misc. Expenditure<br />
2 5 1 4 2 1 5 1<br />
Accumulated Loss<br />
8 9 4 6 1<br />
4. Performance of Company<br />
Total Revenue<br />
Total Expenditure<br />
7 1 5 6 9 7 0 7 1 1<br />
+/( - ) Profit / Loss before Tax +/ ( - ) Profit / Loss after Tax<br />
+ 8 5 8 + 8 5 8<br />
Earning per Share Diluted (in ) Dividend Rate %<br />
1 4 0<br />
` in Lakhs<br />
5. Generic Names of three Principal<br />
Product /Service of the Company (as per monetary terms).<br />
Item Code No. (ITC Code).<br />
Product Description<br />
S T E E L P L A N T<br />
M I N I N G E Q U I P M E N T<br />
Item Code No. (ITC Code).<br />
Product Description<br />
S T E E L C A S T I N G<br />
F O R G I N G S & R O L L<br />
Item Code No. (ITC Code).<br />
Product Description H E A V Y M A C H I N E T O O L S<br />
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www.speedoprint.com<br />
CORPORATE OFFICE<br />
Plant Plaza Road, Dhurwa,<br />
Ranchi - 834004, Jharkhand (India)<br />
Phone : +91 651 240<strong>12</strong>49/2401176<br />
Fax : +91 651 2400579/2401571<br />
Email : corpmktg@hecltd.com<br />
NEW DELHI<br />
E-84, Masjid Moth, Greater Kailash<br />
New Delhi – 110 048<br />
Tel. : +91 11 29220224, 41437422<br />
Fax : +91 11 29220225<br />
Email : hecdelhi@hecltd.com<br />
KOLKATA<br />
77, Park Street<br />
Kolkata – 700 016<br />
Tel : +91 33 22172397, 22296885<br />
Fax : +91 33 22291509<br />
Email : heckolkata@hecltd.com