Latin Manharlal Chat
BSE Prices delayed by 5 minutes...
     Prices as on Nov 26, 2021     
  ABB India 1993.15 [ -2.64% ]
  ACC 2309.3 [ -3.21% ]
  Axis Bank Ltd. 661.8 [ -2.68% ]
  Bajaj Auto Ltd. 3333.95 [ -1.66% ]
  Bank of Baroda 88.9 [ -4.41% ]
  Bharti Airtel 737.45 [ -3.60% ]
  Bharat Heavy Ele 59.45 [ -5.26% ]
  Bharat Petroleum 376.95 [ -5.79% ]
  Britannia Ind. 3543.1 [ -0.78% ]
  Cipla 966.15 [ 7.36% ]
  Coal India 155.85 [ -1.67% ]
  Colgate Palm. 1459.7 [ 0.17% ]
  Dabur India 602 [ -0.69% ]
  DLF Ltd. 376.65 [ -7.53% ]
  GAIL (India) 133.65 [ -5.61% ]
  Grasim Inds. 1689.5 [ -4.38% ]
  HDFC 2742.1 [ -4.49% ]
  HDFC Bank 1490.1 [ -2.24% ]
  Hero MotoCorp 2529.5 [ -2.51% ]
  Hindalco Indus. 417.1 [ -6.75% ]
  ICICI Bank 721.95 [ -3.86% ]
  IDFC L 54.35 [ -6.13% ]
  Indian Hotels Co 182.5 [ -11.13% ]
  IndusInd Bank 901.45 [ -6.01% ]
  Infosys 1690.45 [ -1.86% ]
  ITC Ltd. 223.95 [ -3.18% ]
  Jindal St & Pwr 354.35 [ -7.13% ]
  L&T 1777.35 [ -3.88% ]
  Lupin Ltd. 915.35 [ 1.85% ]
  Mahi. & Mahi 852.9 [ -4.27% ]
  MTNL 18.55 [ -3.64% ]
  Nestle India 19210.35 [ 0.11% ]
  NIIT Ltd. 423.6 [ -0.07% ]
  NMDC Ltd. 135.95 [ -5.03% ]
  NTPC 128.65 [ -4.84% ]
  ONGC 147.15 [ -5.06% ]
  Punj. NationlBak 38.5 [ -3.63% ]
  Power Grid Corpo 201.85 [ -1.15% ]
  Reliance Inds. 2412.15 [ -3.30% ]
  SBI 470.5 [ -4.09% ]
  Vedanta 353.75 [ -3.75% ]
  Shipping Corpn. 147.4 [ 2.36% ]
  Sun Pharma. 766.35 [ -2.03% ]
  Tata Chemicals 853.75 [ -5.20% ]
  Tata Motors Ltd. 460.25 [ -6.60% ]
  Tata Steel 1112.25 [ -5.23% ]
  Tata Power Co. 227.3 [ -6.40% ]
  Tech Mahindra 1520.4 [ -2.46% ]
  United Spirits 886.7 [ -5.91% ]
  Wipro 620.95 [ -2.45% ]

Company Information

Home » Market » Company Information

Supreme Infrastructure India Ltd.

Nov 26
15.05 +0.70 (+ 4.88 %)
 
VOLUME : 1160
Prev. Close 14.35
Open Price 14.70
TODAY'S LOW / HIGH
13.65
 
 
 
15.05
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
9.00
 
 
 
22.75
Nov 26
14.75 +0.70 (+ 4.98 %)
 
VOLUME : 3687
Prev. Close 14.05
Open Price 14.00
TODAY'S LOW / HIGH
14.00
 
 
 
14.75
Bid PRICE (QTY.) 0.00 (0)
Offer PRICE (Qty.) 0.00 (0)
52 WK LOW / HIGH
9.05
 
 
 
22.35
Company Information Menu

Search Company

Market Cap. ( ₹ ) 37.91 Cr. P/BV -0.01 Book Value ( ₹ ) -1,514.34
52 Week High/Low ( ₹ ) 22/9 FV/ML 10/1 P/E(X) 0.00
Bookclosure 04/06/2021 TTM EPS ( ₹ ) -403.90 Div Yield (%) 0.00
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2018-03 

Note 1. Corporate Information

Supreme Infrastructure India Limited (“the Company”) having CIN L74999MH1983PLC029752, is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The Company is principally engaged in engineering and construction of roads, highways, buildings, bridges etc. The Company also owns and operates Ready Mix Concrete (“RMC”) plant, Asphalt plant and Crushing plant. Its shares are listed on two recognised stock exchanges in India - the Bombay Stock Exchange and the National Stock Exchange. The registered office of the Company is located at Supreme House, Plot No. 94/C Pratap Gad, Opp. I.I.T Main Gate, Powai, Mumbai - 400 076, India.

The standalone financial statements (“the financial statements”) of the Company for the year ended 31 March 2018 were authorised for issue in accordance with resolution of the Board of Directors on 6 June 2018.

Note 2.1 Recent accounting pronouncements

1) Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:

Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On 28 March 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

The amendment will come into force from 1 April 2018. The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 21 is expected to be insignificant.

2) Ind AS 115, Revenue from Contract with Customers:

In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (“amended rules”). As per the amended rules, Ind AS 115 “Revenue from contracts with customers” supersedes Ind AS 11, “Construction contracts” and Ind AS 18, “Revenue” and is applicable for all accounting periods commencing on or after 1 April 2018.

Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognised when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The new revenue standard is applicable to the Company from 1 April 2018.

The standard permits two possible methods of transition:

i) Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

ii) Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (cumulative catch - up approach) The Company is evaluating the requirement of the amendment and the impact on the financial statements. The effect on adoption of Ind AS 115 is expected to be insignificant

Note 3.1 The Company has pledged the following shares/ debentures in favour of the lenders as a part of the financing agreements for facilities taken by the Company, subsidiaries, jointly controlled entities and associate as indicated below:

Note 3.2 Also, the Company has given a “Non Disposal Undertaking” to the lenders to the extent of 1,899 (31 March 2017: 1,899) equity shares of Supreme Infrastructure BOT Private Limited.

Note 3.3 The Company, as at 31 March 2018, has non-current investments in Supreme Infrastructure BOT Private Limited (‘SIBPL’), a subsidiary company, and Supreme Infrastructure BOT Holdings Private Limited (‘SIBHPL’), a joint venture company, amounting to Rs. 142,556.83 lakhs and Rs. 11,096.24 lakhs, respectively and current loans as on that date recoverable from SIBHPL aggregating Rs. 17.54 lakhs. SIBPL and SIBHPL are having various Build, Operate and Transfer (BOT) SPVs under its fold. While SIBPL and SIBHPL have incurred losses during its initial years and have accumulated losses, causing the net worth of these entities to be either fully or significantly eroded as at 31 March 2018, the underlying projects are expected to achieve adequate profitability on substantial completion of the underlying projects. The net-worth of these entities does not represent its true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is higher. Further, commercial operation date (COD) in respect of the projects carried out by certain subsidiaries of SIBHPL has been delayed due to various reasons attributable to the clients primarily due to non-availability of right of way, environmental clearances etc. Management is in discussion with the respective client for the availability of right of way and other required clearances and is confident of resolving the matter without any loss to the respective companies. Therefore, based on certain estimates like future business plans, growth prospects, ongoing discussions with the clients and consortium lenders and other factors and also the valuation report of an independent valuer, the management believes that the realizable amount of these entities is higher than the carrying value of the non-current investments and other receivables as at 31 March 2018 and due to which these are considered as good and recoverable.

Note 4.1 Disclosure pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2016, in respect of loans and advances in the nature of loans

Loans and advance in the nature of loans given to subsidiaries (as defined under the Act) for business purposes.

5.1 Trade receivables and unbilled work (other current financial assets) as at 31 March 2018 include Rs. 6,616.13 lakhs (31 March 2017 : Rs. 6,616.13 lakhs) and Rs. 3,835.47 lakhs (31 March 2017 : Rs. 3,074.86 lakhs), respectively, relating to contracts which the clients terminated during earlier years and recovered the advances given against bank guarantees. The clients (government authorities) have not disputed payment of certified bills included under trade receivables. Dispute Resolution Committee has referred the matter to arbitrator and arbitration proceedings have been initiated (under the new ordinance of the arbitration rules) during the previous years, in respect of a party where net claims lodged by the Company by far exceed the amounts recoverable.

5.2 Trade receivables as at 31 March 2018 include Rs. 55,396.37 lakhs (31 March 2017 : Rs. 23,507.17 lakhs), in respect of projects which were closed/substantially closed and which are overdue for a substantial period of time. These trade receivables include amounts due from developers aggregating Rs. 4,399.47 lakhs for which the Company has filed/in process of filing winding up petition with the National Company Law Tribunal (NCLT).

The Company formed a senior management team comprising personnel from contract and legal department to rigorously follow up including negotiate / initiate legal action, where necessary for matters referred above.

Based on the contract terms and these on-going recovery / arbitration procedures (which are at various stages) and an arbitration award received in favour of the Company during the previous period, the management is reasonably confident of recovering these amounts in full. Accordingly, these amounts have been considered as good and recoverable.

5.3 Trade receivables as at 31 March 2018 includes Rs. 7,409.48 lakhs (31 March 2017: Rs. 7,981.98 lakhs) due from private companies in which the Company’s director is a director or a member.

5.4 Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days.

Note 6.1 There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund as at 31 March 2018.

b. Terms/rights attached to equity shares:

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend, if any.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

d. Bonus shares/ buy back/shares for consideration other than cash issued during past five years:

(i) Aggregate number and class ofshares allotted as fullypaid up pursuant to contracts withoutpayment being received in cash -Nil

(ii) Aggregate number and class of shares allotted as fully paid up by way of bonus shares - Nil

(iii) Aggregate number and class of shares bought back - Nil

e. The shareholders of the Company at the Annual General Meeting held on 30 October 2017 approved the increase in Authorized Share capital from Rs. 5,000 lakhs consisting of 47,500,000 equity shares of Rs. 10 each and 2,500,000 preference shares of Rs. 10 each to 7,500 lakhs consisting of 72,500,000 equity shares of Rs. 10 each and 2,500,000 preference shares of Rs. 10 each.

f. 7,937,334 (31 March 2017: 8,573,795) equity shares held by the promoters of the Company as at 31 March 2018 are pledged as security in respect of amounts borrowed by the Company and its Group Companies.

g. During the year ended 31 March 2018, one of the lender has invoked 427,000 pledged equity shares of Ms. Rita Sharma aggregating Rs. 325.96 lakhs and adjusted the proceeds towards their existing overdue debts including interest payable by the Company.

Note 7.1 In September 2014, the Joint Lenders Forum (JLF) lead by State Bank of India (SBI) had appraised a Corporate Loan to the Company out of which part amount was sanctioned and disbursed by SBI and the balance was to be tied up with other lenders under exclusive security. Pending tie up with the other lenders, the JLF decided to incorporate one-time restructuring under the JLF mode of the entire borrowings of the Company. During the quarter ended 31 March 2016, based on the direction of the Reserve Bank of India (RBI) during its Assets Quality Review, borrowings from SBI were classified as NonPerforming Assets (NPA). Consequent to the classification of borrowings as NPA by SBI, borrowings from other consortium lenders got classified as NPA during the year ended 31 March 2017, however, the lenders have not recalled or initiated recovery proceedings for the existing facilities, at present. Considering, the classification of borrowing as NPA, certain lenders are not accruing interest while providing account statements of the borrowings, whereas the Company, on prudence, has accrued interest expenses at rates specified in the agreement with the respective lenders/ latest available sanction letters received from such lenders. (Also, refer note 38)

Note 7.2 Contractual loan principal amounting to Rs. 17,383.02 lakhs (31 March 2017: Rs. 8,241.97 lakhs) and the interest amount of Rs. 38,441.32 lakhs (31 March 2017: Rs. 18,228.13 lakhs) respectively is due and outstanding to be paid as at 31 March 2018.

Note 7.3 Terms of repayment and details of security

(A) Interest rate and terms of repayment Restructured rupee term loans (RTL)

RTL carry an interest rate of SBI Base Rate 1% plus interest tax (11% as at 31 March 2018) to be reset after a moratorium period of 2 years. These loans are repayable in 32 structured quarterly instalments commencing 31 December 2016 and ending on

8 September 2024.

Working capital term loan (WCTL)

These loans carry an interest rate of SBI Base Rate 1% plus interest tax (11 % as at 31 March 2018) to be reset after a moratorium period of 2 years. These loans are repayable in 20 structured uarterly instalments commencing 31 December 2016 and ending on 30 September 2021.

Funded interest term loan (FITL-I), (FITL-II) and (FITL-III)

(B) Security created in respect of RTL/WCTL/FITL

I Borrowings from ICICI Bank are secured by the following:

(i) Exclusive security interest in the form of:

- Pledge of 474,829 shares (31 March 2017: 474,829 shares) of the Company

- Pledge over 30% shares of Supreme Infrastructure BOT Private Limited (SIBOT) and Non Disposal Undertaking over 18.99% shares of SIBOT

- Subservient charge on current assets and movable fixed assets of the Company

- Residual charge on optionally convertible instruments and/or debt infused by the Company directly or indirectly into three projects, namely Patiala Malerkotla, Sangli-Shiroli and Ahmednagar-Tembhurni.

- Second charge on total saleable area admeasuring 284,421 Sq. ft. covering 8 floors of B Wing of Supreme Business Park, Powai, Mumbai

(ii) First charge on the cash flows of the borrower which shall be pari passu with the other lenders without any preference or priority to one over the other or others.

II Except as stated in Point (I) above, borrowings from other lenders, are secured by way of:

(i) first pari passu charge on the moveable fixed assets of the Company procured or obtained by utilizing the aforesaid facilities.

(ii) first pari passu charge (except as stated in point (g) below, where charge is second) on the existing collateral and pledge of shares.

a) Gala No. 3 to 8, admeasuring 3,000 sq. ft., in Bhawani Service Industrial Estate Limited, Mumbai bearing CTS No.76 of village Tirandaz, Powai, Mumbai

b) Chitrarath Studio, admeasuring 30,256.74 sq.ft, situated at Powai bearing Survey No.13 to 15 corresponding CTS bearing No.26 A of village Powai, Mumbai owned by a promoter director.

c) Extension of hypothecation charge on pari passu basis on the residual fixed assets of the borrower.

d) Office No. from 901 to 905, having carpet area admeasuring 6,792 sq. ft., situated in Tower “B”on 9th floor in “Millennium Plaza’ situated at Sector 27, Tehil, Gurgaon, Haryana owned by Company and its promoter directors.

e) Lien on term deposit face value of Rs. 14 lakhs on pari passu basis to working capital lenders.

f) Pledge of 2,173,000 equity shares (31 March 2017 : 2,600,000 equity shares) of the Company held by the promoter directors on pari passu basis to working capital lenders

g) Supreme House, Plot No. 94/C located at Powai, Mumbai (First charge with SREI Infrastructure Finance Limited against their term loan to SIBOT)

h) Pledge of investments as stated in Note 4.2 and 4.3

(iii) first pari passu on the current assets of the Company

(iv) first pari passu charge on the cash flows of the Company

(v) pledge of 3,642,332 equity shares held by promoters (including 2,173,000 equity shares stated in II (f) above)

(vi) Pledge of Compulsory Convertible Debentures (CCD) of Rs. 80,600 lakhs extended to Supreme Infrastructure BOT Private Limited. The Company’s lenders may exercise the right of conversion of the CCDs into equity within 18 months from the date of implementation of the JLF Restructuring Package.

(vii) first charge on the immoveable property situated at (i) Village Talavali,Taluka-Bhiwandi, Thane; and (ii) Village Mouje-Dapode, Taluka-Sudhagad, Raigad.

(viii) second charge on the immoveable property situated at B Wing area admeasuring 45,208 Sq ft. and some additional area to be identified by the Company at Supreme Business Park bearing Survey No.l3/2 and l3/l (part) and CTS No. 27, Survey No. l4 and CTS No. 23- A and Survey No. 15 (part) and CTS No. 26- A situated at Supreme City, Hiranandani Complex, Powai, Mumbai (first charge being held by Syndicate Bank)

(ix) subservient charge on the immoveable property situated at B Wing total area admeasuring 284,421 Sq. ft. at Supreme Business Park bearing Survey No. l3/2 and l3/1(part) and CTS No. 27, Survey No. l4 and CTS No.23-A and Survey No. 15 (part) and CTS No 26- A situated at Supreme City, Hiranandani Complex, Powai, Mumbai (first charge being held by Syndicate Bank and second charge being held by ICICI Bank)

(x) First pari passu charge on certain plant and equipment as specified in Part B of Schedule IX to MJLF agreement and all equipment acquired by utilising the External Commercial Borrowing (ECB) loan from AXIS Bank.

(xi) a) subservient charge on certain immoveable properties:

- 13 flats with carpet area of 11,500 sq. ft. in Aishwarya Co.op. Housing Society bearing CTS No. 64/E/6 of village Tirandaz, Powai, Mumbai.

- Agricultural land of 106,170 sq. mt. bearing survey no. 119/1, 129/6, 1304b, 130/5131, 132/2s, 131/1b and 123/2b situated at Talavali village, Thane, Maharastra.

- Flat No. 510 on 5th Floor of ABW Tower located at IIFCO Chowk, Sukhrauli village, Haryana

- Fixed deposit or unconditional bank guarantee of Rs. 500.00 lakhs;

b) subservient charge on following:

- Irrevocable and unconditional personal guarantee of the Promoter(s);

- Fixed deposit or unconditional bank guarantee of Rs. 500.00 lakhs;

- Corporate Guarantee of BHS Housing Private Limited and Supreme Housing & Hospitality Private Limited

- Demand Promissory Note

III The entire facilities shall be secured by way of:

(i) an irrevocable, unconditional, joint and several corporate guarantee from BHS Housing Private Limited and Supreme Housing Hospitality Private Limited; and

(ii) an irrevocable, unconditional, joint and several personal guarantee from its promoter directors.

Note 8.4 The MJLF Agreement provides a right to the Lenders to get a recompense of their waivers and sacrifices made as part of the loan restructuring arrangement. The recompense payable by the borrowers depends on various factors including improved performance of the borrowers and other conditions. The aggregate present value of the sacrifice made/ to be made by lenders as per the MJLF Agreement is Rs. 16,842 lakhs (31 March 2017: Rs. 16,842.00 lakhs) as at the year end.

Note 8.5 Other rupee term loans from banks:

Loans from other banks carry interest in the range of @ 10.35% to 12.75% per annum and are secured by hypothecation of the assets created out of these loan and personal guarantee of a director of the Company. These loans are repayable over the period of 5-41 years.

Note 8.6 Term loans from others:

Loans from other carries interest @ base rate (18% as at 31 March 2018) minus 2.19 % per annum and are repayable in 35 monthly instalments over the tenure of the loans having various maturity dates. These loans are secured by first charge on the specific equipment financed out of the said loans, pledge of shares held by a promoter director and personal guarantee of the promoter directors.

Note 8.7 Rights, preferences, restrictions and conversion terms attached to preference shares issued by the Company

The Company had, on 13 May 2011, allotted 2,500,000 non cumulative, non convertible, redeemable preference shares of Rs.10 each at a premium of Rs. 90 per share to BHS Housing Private Limited. The Preference Shares shall be redeemable at any time after the expiry of two years but before the expiry of ten years from the date of allotment at a premium of Rs. 90 per share.

These preference shares carry preferential right of dividend at the rate of 1%. The holders of Preference Shares have no rights to receive notices of, attend or vote at general meetings except in certain limited circumstances. On a distribution of assets of the Company, on a winding-up or other return of capital (subject to certain exceptions), the holders of Preference Shares have priority over the holders of equity shares to receive the capital paid up on those shares.

Note 8.8 Net Debt Reconciliation

An analysis of net debt and the movement in net debt for the year ended 31 March 2018 is as follows:

Note 9.1 Security for cash credit facilities:

Cash credit facilities availed from bankers are secured by hypothecation charge on the current assets of the Company on first pari passu basis with existing and proposed working capital lenders in consortium arrangement. These facilities are further secured by way of certain collaterals, on pari passu basis, provided by the Company including personal guarantee of Company’s directors and corporate guarantee of BHS Housing Private Limited and Supreme Housing & Hospitality Private Limited.

The securities towards cash credit facilities also extends to the guarantees given by the banks on behalf of the Company aggregating Rs. 24,894.09 lakhs (31 March 2017: Rs. 39,178.60 lakhs).

Note 9.2 Term loan from banks include Rs. 1,697.18 lakhs (31 March 2017: Rs. 1,817.00 lakhs) which has been classified as Non-Performing Asset during September 2014 as per Reserve Bank of India guidelines. Bank has issued a notice to the Company and the Guarantor (Director) under section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 for recovery of the aforesaid amount and accordingly restrained the Guarantor from transferring any of the assets offered as security in respect of this loan, by way of sale, lease or otherwise without obtaining prior approval of the bank. Further, during the previous year, The lender has disposed off some of those assets of the Guarantor and adjusted the proceeds against the outstanding loan. The Company is presently in discussion with the banker for regularizing this borrowing. The Company has provided for interest at the reporting dates based on the communication available from the bank and the rate specified in the agreement and believes that provision is adequate and the amount payable will not exceed the liability provided in the books.

Note 9.3 Term loan from banks include Rs. 543.81 lakhs (31 March 2017: Rs. 562.24 lakhs) which has been classified as Non-Performing Asset during the previous year as per Reserve Bank of India guidelines. Bank has filed an application in the Hon’ble Debt Recovery Tribunal for recovery of the aforesaid amount and accordingly restrained the Company from transferring any of the assets offered as security in respect of this loan, by way of sale, lease or otherwise without obtaining prior approval of the bank. The Company is presently in the process of making necessary submissions with the Hon’ble Debt Recovery Tribunal and is also in discussion with the lender to resolve the matter amicably. The Company has provided for interest at the reporting dates based on the communication available from the bank and believes that the amount payable will not exceed the liability provided in the books.

Note 9.4 Non-current borrowings, short-term borrowings and other current financial liabilities as at 31 March 2018 include balances aggregating Rs. 9,324.24 lakhs, Rs. 294.21 lakhs and Rs. 11,510.27 lakhs, respectively in respect of which direct confirmations from the respective lenders have not been received. Further, out of these balance, non current borrowings, short-term borrowings and other current financial liabilities amounting to Rs. 9,324.24 lakhs, Rs. 294.21 lakhs and Rs. 3,967.81 lakhs, respectively, represent loans which were classified as Non-Performing Assets (NPAs) by the lenders. In the absence of confirmations from the lenders, the Company has provided for interest and other penal charges on these borrowings based on the latest communication available from the respective lenders at the interest rate specified in the agreement. The Company’s management believes that amount payable on settlement will not exceed the liability provided in books in respect of these borrowings. Further, certain lenders have not recalled or initiated recovery proceedings for the existing facilities at present. Accordingly, classification of these borrowings into current and non-current as at 31 March 2018 is based on the original maturity terms stated in the agreements with the lenders.

Note 10.1 The Company has amounts due to micro and small suppliers registered under the Micro, Small and Medium Enterprises Development Act 2006 (MSMED Act)

Note: This information, as required to be disclosed under the MSMED Act, has been determined to the extent such parties have been identified on the basis of information available with the Company.

Note 10.2 Trade payables are normally non-interest bearing and settled as per the payment terms stated in the contract.

Note

1. The Company has not incurred any expenditure during the year against the total amount Nil (31 March 2017 : Rs. 134.99 lakhs) required to be spent for Corporate Social Responsibility.

2. The Company has entered into cancellable operating lease for office premises, machinery and employee accommodation. Tenure of leases generally vary between one year to four years. Terms of the lease include operating terms for renewal, terms of cancellation etc. Lease payments in respect of the above leases are recognised in the statement of profit and loss under the head other expenses (Refer note 27).

Note 11 Contingent liabilities and commitments

A. Contingent liabilities

B. Commitments

(i) The Company has entered into agreements with various government authorities and semi government corporations to develop roads on Build-Operate-Transfer (BOT) and Public Private Partnership (PPP) basis through certain subsidiary entities and jointly controlled entities. The Company has a commitment to fund the cost of developing the infrastructure through a mix of debt and equity as per the estimated project cost.

(ii) The Company along with its Jointly controlled entity, Supreme Infrastructure BOT Holdings Private Limited, has given an undertaking to the lenders of a Joint venture Company, not to dilute their shareholding below 51% during the tenure of the loan.

It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities except in respect of matter stated in (ii) above. Future cash outflows in respect of the above are determinable only on receipt of judgments/ decisions pending with various forums/ authorities. The Company does not expect an outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.

Note 12 Interests in other entities a) Joint operations (incorporated)

The Company’s share of interest in joint ventures is set out below . The principal place of business of all these joint ventures is in India.

i) Classification of joint arrangements

The joint venture agreements in relation to the above mentioned joint operations require unanimous consent from all the parties for all relevant activities. All co-venturers have direct rights to the assets of the joint venture and are also jointly and severally liable for the liabilities incurred by the joint venture. Company recognises its direct right to the jointly held assets, liabilities, revenue and expenses. In respect of these contracts, the services rendered to the joint ventures are accounted as income on accrual basis.

Classification of work executed on sharing basis

Contracts executed in joint operation under work sharing arrangement (consortium) is accounted to the extent work executed by the Company as that of an independent contract.

Note 13 Disclosure relating to employee benefits as per Ind AS 19 ‘Employee Benefits

A Defined benefit obligations - Gratuity (unfunded)

The gratuity plan is governed by the Payment of Gratuity Act, 1972 under which an employee who has completed five years of service is entitled to specific benefits. The level of benefits provided depends on the member’s length of service and salary at retirement age.

The attrition rate varies from 1% to 8% (31 March 2017: 1% to 6%) for various age groups

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Note 14 Financial instruments

The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair value:

(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments

(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

A Financial instruments by category

The carrying value and fair value of financial instruments by categories as at 31 March 2018 were as follows:

B Fair value hierarchy

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)

The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:

A Though the Company’s investment in these mentioned entities is below 50% of the total share capital, these entities have been classified as subsidiary. The management has assessed whether or not the Company has control over these entities based on whether the group has practical ability to direct relevant activities unilaterally. In these cases, based on specific shareholders agreement, the management concluded that the Company have practical ability to direct the relevant activities.

aa Based on specific shareholders agreement, the management has assessed that the Company has the practical ability to direct the relevant activities along with the other shareholders.

AAA Though the Company’s investment in these entities exceed 50% of the total share capital, these entities have been classified as jointly controlled entities. The management has assessed whether or not the Company has control over these entities based on whether the Company has practical ability to direct relevant activities unilaterally. In these cases, based on specific shareholders agreement, the management concluded that the group does not have practical ability to direct the relevant activities unilaterally but has such ability along with the other shareholders.

Notes:

a) Mr. Bhawanishankar Sharma, Mr. Vikram Sharma and Mr. Vikas Sharma have agreed for waiver of remuneration for the years ended 31 March 2018 and 31 March 2017 in view of the losses incurred by the Company.

b) Refer notes 4.2, 4.3,15.3 and 18.1 for personal gurantee provided by Directors, shares pledged and other security created in respect of borrowing by the Company or the related parties.

c) The Company along with its Jointly controlled entity, Supreme Infrastructure BOT Holdings Private Limited, has given an undertaking to the lenders of a Joint venture Company, not to dilute their shareholding below 51% during the tenure of the loan.

Note 15 Financial risk management objectives and policies

The Company’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

i) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk includes loans and borrowings.

a. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s total debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s loss before tax is affected through the impact on floating rate borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment, showing a significantly higher volatility than in prior years.

b. Foreign currency risk

The Company does not have significant outstanding balances in foreign currency and consequently the Company’s exposure to foreign exchange risk is less. Although, the exchange rate between the rupee and foreign currencies has changed substantially in recent years, it has not affected the results of the Company. The Company evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management policies.

Sensitivity analysis

The Company’s exposure in foreign currency is not material and hence the impact of any significant fluctuation in the exchange rates is not expected to have a material impact of the operating profits of the Company.

c. Equity price risk

The Company’s non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.

ii. Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure of the financial assets are contributed by trade receivables, unbilled work-in-progress, cash and cash equivalents and receivable from group companies.

a. Credit risk on trade receivables and unbilled work-in-progress is limited as the customers of the Company mainly consists of the government promoted entities having a strong credit worthiness. For other customers, the Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled work-in-progress. The provision matrix takes into account available external and internal credit risk factors such as credit ratings from credit rating agencies, financial condition, ageing of accounts receivable and the Company’s historical experience for customers.

a The Company has written off Rs. 10,799.10 lakhs and Rs. 3,372.16 lakhs towards amounts not recoverable from trade receivables, advances and unbilled work during the years ended 31 March 2018 and 31 March 2017, respectively.

b Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings.

iii Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows.

Note 16 Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern so that they can maximise returns for the shareholders and benefits for other stake holders. The aim to maintain an optimal capital structure and minimise cost of capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend payment to shareholders (if permitted). Consistent with others in the industry, the Company monitors its capital using the gearing ratio which is total debt divided by total capital plus total debts

In the long run, the Company’s strategy is to maintain a gearing ratio between 60% to 75%.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements. Breaches in meeting the financial covenants would permit the lenders to immediately call loans and borrowings. Subsequent to restructuring of the borrowings as stated in note 15, there have been no communications from the banks in this regard which might have a negative impact on the gearing ratio.

Note 17 The Company has incurred net loss of Rs. 50,012.21 lakhs during the year ended 31 March 2018 and has also suffered losses from operations during the preceding financial years and as of that date, its current liabilities exceeded its current assets by Rs. 94,696.26 lakhs. The Company also has external borrowings from banks and financial institutions, principal and interest repayment of which has been delayed. In September 2014, the Joint Lenders Forum (JLF) lead by State Bank of India (SBI) had appraised a Corporate Loan to the Company out of which part amount was sanctioned and disbursed by SBI and the balance was to be tied up with other lenders under exclusive security. Pending tie up with other lenders, the JLF decided to incorporate one-time restructuring under the JLF mode of the entire borrowings of the Company. During the year ended 31 March 2016, based on the direction of the Reserve Bank of India (RBI) during its Assets Quality Review, borrowings from SBI were classified as NPA. Consequent to the classification of borrowings as NPA by SBI, borrowings from other consortium lenders were also classified as NPA during the year ended 31 March 2017. On 11 July 2017, the Overseeing Committee (OC) approved the implementation of Scheme for Sustainable Structuring of Stressed Assets (S4A Scheme) recommended by the Joint Lenders Forum. The S4A framework agreement, dated 8 December 2017, had been signed by requisite majority of the lenders with reference date as 31 December 2016. As per the approved S4A scheme, out of the total estimated debts aggregating Rs. 235,904.00 lakhs existing as on the reference date, Rs. 125,834.00 lakhs was to be classified as sustainable debt to be serviced as per the existing terms and conditions of these debts and remainder is to be converted into fully paid up equity shares and optionally convertible debentures. During the course of implementation of the S4A scheme, RBI vide its circular dated 12 February 2018, withdrew all restructuring schemes including the S4A scheme as a result of which the lenders are presently in the process of formulating a revised resolution plan. Pursuant to the discussion at the lenders meeting held on 11 March 2018, the Promoters of the Company, post year end, have arranged Rs. 10,000.00 lakhs as part of the resolution plan. Basis this, the management has prepared the standalone financial statements on a “Going Concern” basis.

Note 18 The Company is principally engaged in a single business segment viz. “Engineering and Construction”. Also, refer note 36(ii) (a) for information on revenue from major customers.

Note 19 Disclosure of unhedged foreign currency exposure as at 31 March 2018

This is a summary of significant accounting policies and other explanatory information referred to in our report of given date