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The Futoure is Here
35th ANNUAL REPORT
2007 -08
Andhra Pradesh Industrial Infrastructure Corporation Limited
(AGovernment of Andhra Pradesh Undertaking)
"Parisrama Bhavanam" 6th Floor, 5-9-58/B, Fateh Maidan Road,
HYDERABAD - 500 004.
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
INDEX
A
GeneralInformation 3 - 4
Notice 5 - 6
Directors'Report 7 - 12
CommentsoftheStatutoryAuditors 13
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15andRepliesoftheCorporation
CommentsoftheC &AGof India 16
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17andRepliesoftheCorporation
BalanceSheetandProfit& LossAccount 19
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37Withschedules
BalancesheetAbstract& GeneralBusinessProfile 38
CashFlowstatementfortheyear2007-08 39
Auditors'ReportoftheStatutoryAuditors 40
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35thANNUALREPORT.APIIC
(
GENERAL INFORMATION) A) Chairman & Managing Directors:B) Vice-Chairman & Managing Director:
SriB.P.Acharya, IAS
Vice-Chairman & Managing Director
21-08-2005 to 06-06-2007
C) Directors:
A
1. Smt.D.Lakshmi Parthasarathy, IAS 20-12-2007 to 06-06-2007 Chairman, APIIC
PrLSecretary to Govt. &CIP Inds. & Com.Department
2. SriB.P.Acharya, IAS 06-06-2007 to till date
Chairman & Managing Director
S.No Name of the Director Period
1. Smt.D.Lakshmi Parthasarathy, IAS 02.01.2006 to15-10-2007
PrLSecretary to Govt. & CIP Inds. & Com.Department
2. SriBusi Sam Bob, IAS 15-10-2007 to till date
PrLSecretary to Govt. & CIP Inds. & Com.Department
3 SrLRajeshwar Tiwari,IAS 30.01.2006 to 26-02-2009
Member Secretary,
AP Pollution Control Board
4 SrLK.Madhusudhana Rao 26-02-2009 to till date
Member Secretary,
AP Pollution Control Board
5 Sri Ajeya Kallam, IAS 21-08-2005 to 24-05-2007
MD. APSFC
6 SriA.Giridhar, lAS, 24-05-2007 to till date
MD. APSFC
7 Sri Tishya Chatterjee, IAS 05-07-2006 to till date
PrLSecretary to Govt., T.R.& B. Department
8 SriI.Y.R.KrishnaRao, IAS 05-07-2006 to 24-06-2008
PrLSecy. to Govt.
Finance (R&E) Department
9 SriN.Ramesh Kumar, IAS 24-06-2008 to till date
PrLSecy. to Govt.
Finance (R&E) Department
10 SrLS. Bhattacharya, IAS 21-08-2005 to 24-05-2007
Commissioner of Industries
11. SrLNeerabh Kumar Prasad, IAS 24-05-2007 to till date
Commissioner of Industries
[;:
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HyqERABAD
COMPANY SECRETARY Sri M.Siva S.Reddy BANKERS:
Syndicate Bank State Bank of India State Bank of Hyderabad Indian Overseas Bank HDFC Bank
Ing Vysya Bank Ltd
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AUDITORS:
MIs. Tukaram & Company Chartered Accountants H.No.3-6-69/209 Venkatrama Towers Basheerbagh
HYDERABAD-500 29.
REGISTERED OFFICE:
5-9-58/B, Fateh Maidan Road, 6th Floor, Parisrama Bhavanam, Basheerbagh,
Hyderabad - 500 004.
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35thANNUALREPORTA.PIIC
ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED
(An undertaking of the Government of Andhra Pradesh)
Regd.Office: 6th Floor, Parisrama Bhavan, 5-9-58/B, Fatehmaidan Road, P.O.Bag.No.5, Basheerbagh, Hyderabad-500 004
NOTICE
Notice is hereby given that the 35th Annual General Meeting of the Members of Andhra Pradesh Industrial Infrastructure Corporation Limited will be held on Monday, the 29th day of September, 2008 at 3.00 P.M. at the Registered Office of the Company to transact the following ordinary business:
1. . To receive and adopt the Balance Sheet as at ended 31st March, 2008, Directors' Report along with the Auditor's Report and the comments of the Comptroller and Auditor General of India and the replies thereon.
BY ORDER OF THE BOARD FOR APIIC LIMITED
SD\- M.SIVA S.REDDY COMPANY SECRETARY Place: Hyderabad
Date: 05-09-2008.
Note: A Member entitled to attend and vote at the meeting is entitled to appoint a proxy in the form enclosed to attend and vote instead of himself and the proxy need not be a Member of the Company.
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ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
ANDHRA PRADESH INDUSTRIAL INFRASTRUCTURE CORPORATION LIMITED
. (An undertakingof the Governmentof AndhraPradesh)
Regd.Office:6th Floor,ParisramaBhavan,5-9-58/B,FatehmaidanRoad, P.O.Bag.No.5,Basheerbagh,Hyderabad-500004
NOTICE
Notice is here by given that the Adjourned 35th Annual General Meeting of the Members of Andhra Pradesh Industrial Infrastructure Corporation Limited will be held on Tuesday, the 31st day of March, 2009 at 11.OOA.M.at the Registered Office of the
Company to transact the following ordinary business: ~
1. To receive and adopt the Balance Sheet as at ended 31st March, 2008, Profit and Loss Account for the year ended 31 st march, 2008 Directors' Report along with the Auditor's Report and the comments of the Comptroller and Auditor General of India and the replies thereon.
BY ORDER OF THE BOARD FOR APIIC LIMITED
SD\- M.SIVA S.REDDY COMPANY SECRETARY Place: Hyderabad
Date: 21-03-2009.
Note: A Member entitled to attend and vote at the meeting is entitled to appoint a proxy in the form enclosed to attend and vote instead of himself and the proxy need not be a Memberofthe Company.
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35thANNUALREPORT.A.PIIC
DIRECTORS' REPORT TO THE SHAREHOLDERS FOR THJ: YEAR
2007-2008-
Dear Members,
The Directors take pleasure in placing before you the35th Annual Report of your Company together with the audited accounts for the year ended 3151March, 2008 and report of Statutory Auditors Mis. Tukaram
& Co, Chartered Accountants.
1. SHARE CAPITAL:
During the year under review, your Company has not allotted any share capital. At the end of the financial year as on 31.3.2008, Government of Andhra Pradesh holds the paid-up share capital of your Company RS.1632.751akhsagainst theAuthorised Share Capital of Rs.2,OOO.00lakhs .
2. FINANCIAL RESULTS
Your Directors have pleasure in reporting that your company earned a net profit of RS.312.88Crores, during the year which includes the difference between the sale price and the cost price of the assets sold and kepJung~he head of account "Provision for Development of IEs & IDAs" to an extent of RS.277.62 Crores pertainingtOlh~earlier years. 1..~ change in the accounting policy is mentioned separately in this report.
During the year, the company earned a net profit of RS.39.68 Crores as against net profit of RS.52.46 Crores during the previous year. The profit of RS.39.68 crores has been arrived after providing depreciation and interest amounting to RS.50.20 crores.
Change in Accounting Policy:
Till 31-03-2007, the difference between the sale price and cost price of the assets sold was kept under the head of account "Provision for development of IEs/IDAs" as enhanced compensation claims for the lands acquired are pending disposal in various courts and the internal infrastructure works like roads, water supply, electrification are being taken up over a period. This system of accounting was not accepted by C &AG and Statutory Auditors. In deference to the suggestions made by C&AG and Statutory Auditors, it was decided to treat the amount of RS.277.62 crores lying under the. head of account "Provision for Development of Industrial Estates and Industrial DevelopmentAreas" be treated as income during the year and hence the same was transferred to Profit and Loss account for the period ended31.03.2008
Due to charge in the above Accounting Policy, the revenue generated from sale of land and sheds, the Corporation has earned a net income of RS.39.68crores during the year 2007
-08.
Effect of changes in Income Tax Act .1961
APIIC has been granted registration U/s.12A of the Income Tax Act, 1961, w.e.f.01.04.1979. This entitles the Company for exemption of income U/s.11 of the Income Tax Act as a Charitable Organization.
The claim for exemption U/s.11 read with section 2(15) for the Assessment years 1974-75 to 1977-78, 1979- 80 and 1981-82 was escalated up to the Income Tax Appellate Tribunal, Hyderabad, which by a speaking order confirmed that APIIC is a charitable organization of general public utility U/s.2(15) entitled for exemption U/s11of Income TaxAct 1961.
However, the Income Tax department went on appeal against the order to High Court of A.P
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ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
(I.T.C. No.105 of 1991) which is pending adjudication. Subsequent years also saw a similar controversy which now lay before different stages of appeal process.
Change in the scenario
The Finance Bill 2008 proposed an amendment to Sec.2 (15) which excluded entities of general public utility carrying on business from the definition of charitable purpose. In short, this proposed amendment from the financial year 2008-09 will disentitle APIIC from enjoying the benefits under Sec.11 of the Income TaxAct, 1961 as discussed above.
3. SIGNIFICANT ACCOUNTING POLICIES:
To comply with the Accounting Standards, which are mandatory from 01.04.1999, the Land, Buildings, Sheds and other development works in the Industrial Estates, Industrial Development Areas, Autonagars, etc. of the Corporation are treated as CurrentAssets, till they are disposed off either on Outright Sale or allotment on Hire Purchase.
The stale cheques lying for more than 5 years have been transferred to Profit & Loss Account.
Provision for Bad and doubtful debts is made @ 100% on interest outstanding on account of Rental, Water, PenaJ interest on hire purchase, maintenance charges, principal and interest. .-
The Government of Andhra Pradesh have entrusted certain Local Authority pm"Jars to trn!' Corporation like collection of Property Tax, maintenance of common fatiiities in respect of certain Industrial ParK~dflu inali~liia: D~'.'~!Gpme!1!A.reg5.The Corporation formed Societies entrusting the work of collection of taxes and maintenance of facilities etc. on behalf of the Corporation. The income and expenditure in this regard have not been accounted for in the accounts of the Corporation, pending transfer ofthese amounts to the Societies.
4. RESOURCE MOBILISATION
During the year 2007-08, an amount of RS.3529 crores was collected by way of sale of land as against an amount of RS.1,111crores during the year 2006-07.As per the Directions of the Govt. an amount of Rs. 3000 crores was remitted to Govt. during the year 2007-08 as against an amount t of RS.1000 crores during the year 2006-07 as resource mobilization for the Government.
5. ACTIVITIES:
The following are the current activities of your Company by way of promotional efforts towards industrial development in the State of Andhra Pradesh.
I. Acquisition of land for the establishment of Industrial Estates and Industrial Development Areas( now called as Industrial Parks).
II. Setting up of Industrial Parks /Autonagars in identified Industrial Growth Centres all over the State and other developing areas for establishment of industries by providing
necessary infrastructure facilities viz., Water, Power and Roads etc.
III. Execution of deposit contribution works for Government of India and also State Government Departments.
Development of Infrastructure Projects on Public Private Partnership mode as directed by Government of Andhra Pradesh.
IV.
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35thANNUALREPORT
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A.PIIC6. PERFORMANCE:
a)
b)
c)
d)
LAND ACgUISITION:
Your Directors are happyto inform that your Company has taken possession of 5,655.06 acres of patta land and 16,422.73 acres of Government land during the year. The aggregate extent of land taken over by your Company, since its inception is 40,412.76 acres of Patta land and 53,147.82 acres of Government land.
DEVELOPMENT AND ALLOTMENT OF PLOTS AND SHEDS:
Your Directors are happy to inform that your Company allotted 10,323.05acres of land/plots and 4 sheds/shops/houses to various industrial ventures in our State during the year.
GOVERNMENT OF INDIA SCHEMES:
Your Directors are happy to inform that various Government of India schemes like Growth Centers, Apparel Parks were also taken up by your Company during the year. By developing these projects, your Company is able to utilize various funds available under Government of India Schemes for development of Industries in the State.
CIVIL WORKS & DEPOSIT WORKS:
APIIC has developed 20123 Nos. of plots and Constructed a total 3483 Nos. of factory sheds in various Industrial Parks, Growth centers and EPIP Pashamylaram spread over Andhra Pradesh and till2006 2007. During the year 2007 2008,447 additional plots were developed, with this the total developed plots are 20570.
APIIC is having full fledged Engineering Wing supported with Engineers with vast experience.
During the year 2007 2008. Civil Works to a tune of about Rs. 237.76 Crores were executed. Out of this, Infrastructure Development works are for a value of Rs.126.03 Crores, Deposit works for Rs.37.60 Crores and Annual Maintenance Fund works amounting to Rs. 74.12 Crores.
APIIC has been undertaking deposit works for various departments of State Government, besides the works for the development of industrial parks. The following Deposit Works have been undertaken:-
1.
2.
3.
4.
5.
Construction of Forest Department Head Quarters complex atAranya Bhavan, Hyderabad.
Construction of Hostel &Auditorium building for A.P. Forest Academy at Dullapally.
Construction of Incubation Centre in Bio-Tech Park at Turkapallly.
Construction of Office cum Godown for APSTC at Mamidipally, Hyderabad.
Construction of Buildings for Indira Gandhi Centre for Animal Research laboratory at Pulivendala Kadapa District.
Providing water to Gangavaram Port by tapping Yeleru canal
Construction of Boundary wall all along 3 sides of Baba Atomic Research Centre at Achuthapuram
Renovation of Hostel building for NIPER at Balanagar 6.
7.
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ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
During the year APIIC has executed development works at various industrial parks like 1) Financial District 2)Fabcity 3)Hardware Park 4) Biotech Park 5) Knowledge city Raidurg, Hyderabad 6) Apparel Export park Vishakapatnam 7) Growth Centre Bobbili, Srikakulam 8) Auto Nagar Mangalagiri 9) Jewellery Park at Machilipatnam 10) 4 way road at APSEZ Achuthapuram 11)Providing water supply to Pharmacity and APSEZ by piping from yeleru canal at Parawada and also Construction of summer storage tank of 2000ML capacity in phar~city 12) Development of Industrial Park at Mambathu 13) Approach road from NH-5 to Apache 14)Formation of 41ane approach road forApache and SEZ in Nellore District
Further APIIC has carried out Repairs & Maintenance works at various Industrial Parks under Infrastructure Upgradation Fund, Environment Management Plan and Annual Maintenance Funds.
e) Special Economic Zones. Andhra Pradesh:
Government appointed your company as NodalAgency for development of Special Economic Zone in State of Andhra Pradesh. APIIC is developing 19 Nos of SEZs ,out of which 15 SEZs were notified and 4 SEZs got formal approval from Government of India, so far.
7. BOARD OF DIRECTORS:
...
A) Chairman & Managing Directors:
B) Vice-Chairman & Managing Director:
Sri B.P.Acharya, IAS
Vice-Chairman & Managing Director 21-08-2005 to 06-06-2007
C) Directors:
A 1. SmtD.Lakshmi Parthasarathy, IAS
Chairman, APIIC
PrLSecretary toGovt &CIP 20-12-2007 to06-06-2007
Inds. & Com.Department 2. SriB.P.Acharya, IAS
Chairman & Managing Director 06-06-2007 to till date
S.No Nameof the Director Period
1. SmtD.Lakshmi Parthasarathy, IAS 02.01.2006 t015-10-2007
PrLSecretary to Govt. & CIP Inds. & Com.Department
2. SriBusi Sam Bob, IAS 15-10-2007 to till date
PrLSecretary to Govt & CIP Inds. & Com.Department
3 Sri. Rajeshwar Tiwari, IAS 30.01.2006 to 26-02-2009
Member Secretary,
AP Pollution Control Board
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35thANNUALREPORT
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A.PIIC8. DIRECTOR'S MEETINGS:
During the year under review, four (4) meetings ofthe Board of Directors were held.
9. DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors report.
i) that in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;
iii) that the directors had taken sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv) that the directors had prepared the annual accounts on a going concern basis.
10. STATUTORY AUDITORS:
The Comptroller and Auditor General of India, New Delhi appointed Mis D.V. Ramana Rao & Co, CharteredAccountants, Hyderabad as Statutory Auditors of your Company for the financial year 2008-09 as perthe Companies Act, 1956.
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S.No Name of the Director Period
4 Sri.K.Madhusudhana Rao 26-02-2009 to till date
Member Secretary,
AP Pollution Control Board
5 Sri Ajeya Kallam, IAS 21-08-2005 to 24-05-2007
MD. APSFC
6 Sri A.Giridhar, IAS 24-05-2007 to till date
MD. APSFC
7 Sri Tishya Chatterjee, IAS 05-07-2006 to till date
PrLSecretary to Govt., T.R.& B. Department
8 Sri I.Y.R.Krishna Rao, IAS 05-07-2006 to 24-06-2008
PrLSecy. to Govt.
Finance (R&E) Department
9 Sri N.Ramesh Kumar, IAS 24-06-2008 to till date
PrLSecy. to Govt.
Finance (R&E) Department
10 SrLS. Bhattacharya, IAS 21-08-2005 to 24-05-2007
Commissioner of Industries
11 Sri.Neerabh Kumar Prasad, IAS 24-05-2007 to till date
Commissioner of Industries
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ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
11. REPLIES TO RESERVATIONS IN THE STATUTORY AUDITORS REPORT AND COMMENTS OF THE
COMPTROLLER AND AUDITOR GENERAL OF INDIA:
The explanations of the Board of Directors on the reservations/qualificationsmade by the Statutory Auditorsand comments of the Comptrollerand AuditorGeneral of India are givenatAnnexure-A &B to this Report.
12. FIXEDDEPOSITS FROM THE PUBLIC
Your Company has not accepted any deposits from the public and as such no amount of principal or interestwasoutstandingas on March 31, 2008
13. PARTICULARS OF EMPLOYEES:
There are no employees drawing Rs. 2,00,000/- per month / Rs. 24,00,000/- per annum either partly.or fully during year respectively as required to be furnished under Section 217 (2A) of the Companies Act, 1956.
14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars required to be furnished pursuant to Section 217(1)(e) of the Companies Act, 1956 are not applicableto yourCompany.
15. HUMAN RESOURCE DEVELOPMENT:
YourCompany'sconstant endeavor is to retainand keep the relations with the employees of your Company on sound and cordial line. The same was achieved during thisyear also. Your Directors place on recordtheir appreciation ofthe dedicated services rendered by employees at all levels without which it would have not been possible to achieve the Company's objectives. During the year Government permitted your company to recruit for certain important posts i.e Company Secretary and General Manager (Law).
Recruitment process was resumed in your company after a gap of nearly two decades.
16. ACKNOWLEDGEMENTS:
Your Board of Directors place on record their deep sense of gratitude to the Government of Andhra Pradesh, Government of India, Financial Institutions,Banks and all other Agencies connected with the industrial development activities in the State for their continued guidance, interest and support
The Board places on record its appreciation of the confidence reposed in your Company by the entrepreneurs who helpinthe industrialdevelopment ofthe State.
The Boardthanks itsShareholders, who continue to extend their support.
For and on behalf of the Board of APIIC LTD
Place: Hyderabad Date: 21-03-2009.
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B.P.ACHARYA, IAS CHAIRMAN
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Annexure A
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35thANNUALREPORTAP II c:
OBSERVATIONS OF STATUTORYAUDITORS AND REPLY OF THE COMPANY FOR THE YEAR 2007-08
SI.No.1
Comments of Statutory Auditors
3(d).
3(e).
The Company is showing Government Grants related to revenue as Deposits under current liabilities. However, as perAccounting Standard
"Accounting for Government Grants" - (AS-12) Government grants related to revenue should be recognized on a systematic basis in the profit and loss statement over the periods necessary to match them with the related costs which they are intended to compensate. Such grants should either be shown separately under 'other income' or deducted in reporting the related expense. The effect on current year profit cannot be ascertained.
The Company's Investments (Long term and unquoted) are stated at Cost. As per the Accounting Standard (AS-13) - "Accounting for Investment", the carrying values of Long term investments are to be adjusted for any diminution in value of Investment. Further, the indicators of the value of investments are obtained by reference to the Investee's Assets and liabilities, results and the expected cash flows. However, in absence of all the required details of Investees, we are no; in a position to verify the carrying value of investments and consequent provision, if any, for diminution in value of Investments.
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Reply of Corporation
Action is being taken to implement the suggestion w.e.f.2008.09.
The company made certain investments in various companies by virtue of Government directions or to facilitate infrastructure projects under Public Private Partnership (PPP). The nature of the company is not to invest in the enterprises but to facilitate the infrastructure projects under PPP Mode. From the reading of the Accounting Standard 13 it may be observed that the same is applicable mainly to the enterprises, which are in the business of making "Investments".
Hence, it is felt that Accounting Standard -13 is not applicable.
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
SI.No.1
Comments of Statutory Auditors
3(f).
3(g).
3(h).
3(i).
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The Management is of the view that the carrying values of fixed assets are higher than the recoverable amount. Inthe absence of adequate documentation in respect thereof, we are unable to comment on impairment loss, if any, as required by the Accounting Standard
"Impairment of Assets" - (AS-28) issued by the Institute of Chartered Accountants of India.
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The Company even though has details of Work in progress, work wise expenditure executed at various sites and the amount to be capitalized is under preparation. However, there is a difference of Rs.48, 19,625/- between the ledger and data file for which details are not provided.
In the absence of the details, the correctness of value ofworkin progress could not be verifiedby us.
The Company has given loan to VIWSCO and accounted accrued interest on such loan. The balance as per books is Rs. 45,415.65 Lakhs.
However, as per the copy of Balance sheet of VIWSCO provided to us by the Company, the amount due to Company was shown Rs.
46,141.07 Lakhs. The company has to reconcile the difference of 725.42 lakhs. The adjustment on account ofdifference and consequent, impact on profit,ifany, is not ascertainable at this stage.
The company is showing receivables on account of Navodaya Vidyalaya Samithi project for a period of more than decade. The same figures are being carried in tinancials without any recoveries or adjustments. The consequent adjustments at the time of closure of the account are not ascertainable at this stage.
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Reply of Corporation
The reading of the Accounting Standard 28 - Impairment of Assets, indicates that Impairment of Assets is necessary for the enterprises which are covered under 8 categories indicated in AS 28. As the Company is not falling under any of the 8 categories indicated under AS 28, it is felt that AS 28 is not applicable to the Company.
The difference of 48, 19,625/- between ledger and data file has since been reconciled and the same will be produced to next audit.
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The loan transaction between Vizag Industrial Water Supply Company/APIIC/National Thermal Power Corporation /Rashtriya Ispathi Nigam Ltd/Greater Visakhapatnam Municipal Corporation is a back to back arrangement. Hence there is no impact on profit of the Company.
However, this is being reconciled with the VIWSCO records.
Navodaya Vidyalaya Samithi was already addressed to make the payment. Action will be initiated for recovery ofthe amount.
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SI.No.1 Comments of Statutory Auditors 30).
3(k).
The Company is taking possession of government lands on the basis of instructions received from Government withoutany details of cost of alienated land or any payments to be made by the Company. The Company is accounting the cost of land transferred by Government to it on the basis of estimated cost.
Consequently, we are unable to comment on
correctness of Stock in Trade
(land) carriedin books and consequentimpacton profit, if any, either on account of upward or downward revision of land cost by the Government.The balances of Sundry debtors, Inter Zonal AdjustmentAlc., Hire Purchase AdjustmentAlc., creditors, loans & advances and other receivables & payables being subject to confirmation and reconciliation resulting in the balances as per books of accounts not verified by us. The consequent necessary adjustments, either of a revenue nature of otherwise, if any, upon which we are unable to comment at this stage, will be made in the year they are finally settled with the parties.
Date:30.12.2008 Place:HYDERABAD
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35thANNUALREPORT.APIIC
Reply of Corporation
Thecompany hastakenpossession of the Government lands at various places. Pending receipt of alienation orders from the Government, a provision is made towards land cost in the books of accounts. On receipt of the final land cost particulars, the difference, if any, will be accounted for.
The reconciliation work is in progress.
For and on behalf the board of APIIC Ltd.
Sd/- B.P.Acharya
Chairman
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
Annexure - B
SNo
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2
A G Comments
Balance Sheet Application of Funds
Work in progress - Rs. 187.26 crore.
The above includes an amount of RS.70.06 lakhs being the expenditure incurred on forming of approach road to Apparel park at Proddutor, Kadapa district which should have been adjusted to the deposit received from Government of Andhra Pradesh as the work was under taken as deposit contribution work. Non - adjustment of the same has resulted in overstatement of Current Assets - Work in progress and Current liabilities by Rs.70.06 lakhs.
Sundry Debtors (Schedule-?) Other Debts - Rs. 23.02 crore.
The above includes Rs. 9.61 crore being additional expenditure incurred over the actual amount of deposits received towards deposit contribution works undertaken by the company from the year 1992 onwards. However, the same could not be recovered till the end of March 2008. As these amounts were outstanding for more than 10 years, the recovery of the same is doubtful. Non-provision for the same has resulted in understatement of provision for doubtful debts and overstatement of Sundry Debtors- Other Debts and Profit for the year by RS.9.61crore.
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Reply of the Company
The grant from GoAP was actually received in 2008-09 and hence, this issue will be addressed during the year 2008-09.
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As these amounts are due from Government / Public Sector Units the Corporation is pursing with concerned for recovery of the dues. Hence, these amounts need not be considered as doubtful debts.
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SNo A G Comments
3 Current Liabilities and Provisions Liabilities Schedule -11 A
. Sundry Creditors(Others) - Rs.6.91 Crore.
The above does not include Rs.35.68 lakh being the amount payables to Mis Padmavathi Constructions towards a case settled by he sole arbitrator. The agreement with Mis Padmavathl Constructions was terminated due to non- receipt of funds from Technical education department/Government of Andhra Pradesh, which entrusted the work to the Company. The Company had agreed for payment of RS.72.22 lakh (including interest of @ 16% calculated up to Dec 2007) during negotiation in an out of court settlement with Mis Padmavathi Constructions.
However, the liability provided by the company on this account was Rs.36.54 lakh only. This has resulted in understatement of Sundry Creditors (others) and Sundry Debtors - Amount receivable from Government of Andhra Pradesh by Rs.35.68Iakh.
4 Comments on Disclosure
A reference is invited to item no.3 of Accounting Policies (Schedule-21) wherein the Accounting policy in respect of Revenue Recognition was changed during the current year. However, the impact of change in Accounting Policy resulting in recognition of income of Rs.39.68 crore for the current year has not been disclosed.
Date:30.12.2008 Place:HYDERABAD
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35thANNUALREPORTA.PIIC
Reply of the Company
A proposal was sent to Government for out of settlement for an amount of Rs.72,21,863/- with interest calculated up to December'2007 even though the appeal is pending before the Court.
Unless and until it is approved by the Government, the liability does not crystallize. The liability arouse due to the arbitration award, was only provided in the books of account to an extant of Rs.35,53,924/-.
On the above, orders were received from Government vide G 0 Rt.No.55 dated 23.01.2009 of Technical Education Department according permission to release the amount.
This Government approval was received after the accounts for the Financial year 2007-08 were approved.
Noted for future guidance.
For and on behalf the board of APIIC Ltd.
Sd/- B.P.Acharya
Chairman
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ACCOUNTS
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ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONlIMITED,HYDERABAD
BALANCE SHEET AS ON 31-03-2008
Sch.No. AS AT 31-03-2008 AS AT 31-03-2007 SOURCESOFFUNDS
SHAREHOLDERSFUNDS a)Capital
b)Shareapplicationmoney c) Reserves& surplus
163,275,000 163,275,000
2 3,830,381,261 701,545,443
3,993,656,261 864,820,443
LOANFUNDS a) SecuredLoans
b)UnsecuredLoans 3 4,548,530,796 4,570,206,154
TOTAL
4,548,530,796 8,542,187,057
4,570,206,154 5,435,026,597
ASPEROURREPORTOFEVENDATE for TUKARAM& CO
CHARTEREDACCOUNTANTS sd/-
P MURAU Partner MembershipNo.221625 Date:30.12.2008
Place:HYDERABAD
FORAND ON BEHALFOF THE BOARD
Sd/- B P ACHARYA,IAS
CHAIRMAN &
MANAGINGDIRECTOR
Sd/- BUSISAMBOB.IAS
DIRECTOR
. Sd/- MSIVAS REDDY COMPANYSECRETARY
A
APPLICATIONOFFUNDSFIXEDASSETS 4
GrossBlock 69,319,253 61,125,328
LessDepreciation 35,390,288 30,400,131
NetBlock 33,928,965 30,725,197
INVESTMENTS 5 1,126,581,540 951,952,640
CURRENTASSETS,LOANS&ADVANCES
.
a) Inventories 6 56,360,858,391 30,855,261,371
b)SundryDebtors 7 187,032,317 82,424,475
c)CashandBankBalances 8 3,095,808,452 2,794,920,628
d)OtherCurrentAssets 9 46,339,094 32,970,817
e) LoansandAdvances 10 10,319,970,143 8,666,835,549
70,010,008,397 42,432,412,840
LESS:
CurrentLiabilities& Provisions
Liabilities 11-A 62,520,221,254 35,128,882,484
Provisions 11-B 113,099,673 2,860,006,944
62,633,320,927 37,988,889,428
NETCURRENTASSETS 7,376,687,470 4,443,523,412
MiscellaneousExpendituretothe
extentnotwrittenoff
-
VRS 12 4,989,082 8,825,348TOTAL 8,542,187,057 5,435,026,597
Notesto BalanceSheetandProfit& LossAccount:scheduleNo:21
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED, HYDERABAD
Profit& LossAccountfortheYearended31stMarch,2008
ACCOUNT 31.03.2008
Rs
31.03.2007 Rs
Sch.
No INCOME
Sales Rentals WaterCharges Interest OtherIncome
ProvisionsWrittenBack CentageCharges
13 1,877,452,188
41,604,593 52,900,545 811,270,402 255,493,800 2,776,217,908 36,191,085 5,851,130,521 14
15
EXPENSES CostofSales
SalariesandotherBenefitsto Employees Admn.& Otherexpenses
Admn.ChargesonDep.works Interest&financecharges Depreciation
MinorAssetswrittenoff ExpenditureonSocialWelfare
MiscellaneousExpenditureWrittenOff-VRS
16 17 18 19 4 4
LESS:CapitalExpenditureduringconstructionperiod
Profit(+)/Loss(-) fortheyear PriorPeriodAdjustments:(Net) Profitbeforetaxation
Provisionfortaxation Profitaftertaxation
20
Transferredto GeneralReserve Balanceof profit
FORAND ON BEHALFOF THE BOARD ASPEROURREPORTOFEVENDATE
for TUKARAM& CO CHARTEREDACCOUNTANTS
sd/- P MURAU
Partner MembershipNO.221625 Date:30.12.2008
Place:HYDERABAD
Sd/- B PACHARYA,IAS
CHAIRMAN &
MANAGINGDIRECTOR
Sd/- MSIVAS REDDY COMPANYSECRETARY
A
<..,
585,424,260 25,231,795 33,516,274 859,568,216 219,464,585 0 36,788,080 1,759,993,210
Sd/- BUSISAMBOB.IAS
DIRECTOR 1,480,662,252 585,266,336
-
217,482,125 167,233,030 635,254,154 158,797,467 16,620,448 20,598,336 496,698,914 367,500,000 4,619,684 2,633,922
672,609 470,402
4,643,723 0
.3,836,265 5,067,617 2,860,490,174 1,307,567,110
89,748,613 69,878,156 2,770,741,561 1,237,688,954 3,080,388,960 522,304,256
-48,446,859 -2,304,867 3,128,835,819 524,609,123
0 0
3,128,835,819 524,609,123 3,128,835,81 524,609,123
0 0
SCHEDULE FORMING PART OF BALANCE SHEET
~ ~
35thANNUALREPORT.APIIC
---
Sch.
No.
ACCOUNTAs at 31.03.2007 As at
31.03.2008 1 SHARECAPITAL
AUTHORISED
2,00,000equitysharesof Rs.1,OOO/- each
ISSUED,SUBSCRIBEDANDPAIDUP:
163,275(PreviousYear163,275)Equity sharesof Rs.1,OOO/-eachfullypaidup
(Rs.862.10lakhsshareswereallottedforcashandRS.770.65lakhsshares wereallottedpursuantto contractwithoutpaymentbeingreceivedincash)
2 RESERVESANDSURPLUS GENERALRESERVE
AsatthecommencementoftheYear Add:TransferfromProfit& Loss Account
BADDEBTSRESERVE
AsatthecommencementoftheYear LessWrittenoffduringtheyear
3 LOANFUNDS SECUREDLOANS UN-SECUREDLOANS Loans
Interestaccruedanddue
~
Rs. Rs.
200,000,000 200,000,000
163,275,000 163,275,000 163,275,000 163,275,000
701,545,443 3,128,835,818
176,936,320 524,609,123 3,830,381,261 701,545,443
0 0 0
3,830,381,261 0 0 0
701,545,443
0 - 0
0 0
3,500,000,000 3,500,000,000 1,048,530,796 1,070,206,154 4,548,530,796 4,570,206,154
-
0 - 0
-
4,548,530,796 4,570,206,154
SCHEDULE.4 FIXEDASSETS ason31stMarch2008
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GROSSBLOCK
I
DEPRECIATION NET BLOCKAsat1st Additons& Total Salesand Totalasat Upto1st Forthe OnSales& Totalasat Ason31st Ason31st PARTICULARS
April2007 Adjustments Adjustments 31stMarch April2007 Year Adjustments31st March March2008 March'2007
2008 2008
Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.
Land 330,344 0 330,344 0 330,344 0 0 0 0 330,344 330,344
Buildings 24,368,524 1,182,295 25,550,819 0 25,550,819 4,580,476 416,478 0 4,996,954 20,553,865 19,788,048 Refregirators&ACs 1,048,819 141,160 1,189,979 0 1,189,979 565,347 54,380 0 619,727 570,252 483,472 Furniture& Fixtures 3,105,739 2,773,941 5,879,680 0 5,879,680 2,721,970 787,496 0 3,509,466 2,37.0,213 383,769 OfficeEquipment 8,100,257 996,456 9,096,713 0 9,096,713 4,231,158 539,392 0 4,770,550 4,326,163 3,869,099 Vehicles 2,566,912 809,210 3,376,122 0 3,376,122 1,312,694 243,435 0 1,556,129 1,819,993 1,254,218 ElectricalEquipment 609,089 155,476 764,565 0 764,565 402,523 28,421 0 430,944 333,621 206,566
DrawingEquipment 213,624 0 213,624 0 213,624 147,317 9,871 0 157,188 56,436 66,307
Computers 20,240,229 2,222,052 22,462,281 86,664 22,375,617 15,964,487 3,190,514 302,135 18,852,865 3,522,751 4,275,742
QualityControlEquipment 541,790 0 541,790 0 541,790 474,159 22,304 0 496,463 45,327 67,631
Total: 61,125,327 8,280,590 69,405,917 86,664 69,319,253 30,400,131 5,292,292 302,135 35,390,288 33,928,965 30,725,196 PreviousYear: 55,835,721 5,365,072 61,200,793 75,465 61,125,328 27,299,478 3,104,324 3,671 30,400,131 30,725,197 28,536,243
SCHEDULE FORMING PART OF BALANCE SHEET
&..
35thANNUALREPORT
A
A.PIICSch.
No.
ACCOUNT
5 INVESTMENT::
UNQUOTED AT COST:
I 8900 equity shares of RS.10/- each fully paid up in Fab City Spy (India) P Ltd
II 250000 equity shares of Rs.10/- each fully paid up in Patancheru Envirotech Ltd
III 2970000 equity shares of Rs.10/- each fully paid up in L&T Infocity Ltd (including 990000 Bonus shares issued on 12.05.2003)
IV 20825 equity shares of RS.10/- each fully paid up*
in HITVEL (Previous year 42500)
V 1000 Units of RS.25000/- each fully paid up in CTCPL ( HIVE FUND)
VI 4165 equity shares of RS.10/- each fully paud up in CTCPL (Previous year 8500)*
VII 1980000 equity shares of Rs.10/- each fully paid up in Ramky Pharam City (India) Ltd
VIII 22027064 equity shares of RS.10/- each fully paid up in VIWSCO Ltd
VIII 110000 equity shares of RS.10/- each fully paid up in K Raheja IT Park Ltd
IX 44000 equity shares of Rs.10/- each fully paid up in Vizag IT Park Ltd
XI 470800 equity shares of Rs.10/- each fully paid up in Nano Tech Silican India Ltd
XII 38480000 equity shares of RS.10/- each fully paid up in Cyberabad Convention Center (P) Ltd
XIII 19749698 equity shares of RS.10/- each fully paid up in Boulder Hills Leisure (P) Ltd
XIV25032202 equity shares of RS.10/- each fully paid up in Emmar Hills Leisure (P) Ltd
XV 500 equity shares of Rs.10/- each fully paid up in Hyderabad Pharma Infrastructure & Techonalgies Ltd
A
As at 31.03.2008
Rs.
As at 31.03.2007
Rs.
89,000 0
2,500,000 2,500,000 19,800,000 19,800,000
208,250 425,000
25,000,000 25,000,000
41,650 85,000
19,800,000 0
220,270,640 65,270,640 1,100,000 1,100,000
440,000 440,000
4,708,000 4,708,000
384,800,000 384,800,00 197,496,980 197,496,980 250,322,020 250,322,020
5,000 5,000
1,126,581,540 951,952,640
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
SCHEDULE FQRMING PART OF BALANCE SHEET
Sch.
No.
ACCOUNT As at
31.03.2007
6 INVENTORIES(Asverified,valued& Certifiedby Management) a)Constructionmaterialsatcost
b}StockinTradeat IEsIIDAs c} Housingstock[atcost]
d}Worksinprogress e} HPStockatcost 7 SUNDRYDEBTORS
UNSECURED Notover6 months Otherdebts Total
Less:ProvisionforBad& DoubtfulDebts
8 CASHANDBANKBALANCES(Ascertifiedby Management) Cashonhand
ChequesandD.D.sonhand BalancewithScheduledBanks a] Incurrentaccounts b]Non-operativecollectionalcs c] PublicDepositaccount[SBH]
d] Remittenceintransit
e] i} ShorttermDepositswithBanks ii}AccruedinterestonDeposits 9 OTHERCURRENTASSETS::
DeposittowardsShareapplicationmoney Income-taxdeductedatsource
ExpenditureonProjects
A
iI
5700219 230168227 235868446 48836129
As at 31.03.2£)08
Rs.
8,014,810 54,470,082,610
3,933,905 1,872,629,127
6,197,940 56,360,858,391
187,032,317 187,032,317 27,866 18,156,191 506,525,964 88,881,114 56,000,000
0 2,355,000,000
71,217,317 3,095,808,452
0 14,936,790 31,402,304 46,339,094
Rs.
8,441,960 29,769,306,722
4,110,197 1,067,200,154
6,202,338 30,855,261,371
A
6,276,796 124,851,462 131,128,258 48,703,783 82,424,475 82,424,475 22,768 5,018,949 462,462,097 136,518,065 0 8,458,654 2,100,000,000 82,440,095 2,794,920,628 0 5,241,370 27,729,447 32,970,817
..
A ~
35thANNUALREPORT A.PIIC
Sch.
No.
ACCOUNT
SCHEDULE FORMING PART OF BALANCE SHEET
10 LOANSANDADVANCES::
Advancesrecoverablein cashorkindforthevaluetobereceived Secured
i)includesaccruedinterestof Rs.21873098/- (PreviousYearRs14910614/-)
Unsecured:
i) includesaccruedinterestRs.21246001- (PreviousYearRs2744282/-
ii) includesadvancesduefromDirectors& otherOfficers OftheCompanyMaximum-Nil
Less:ProvisionforBad& Doubtful-Loans&Advances 11 CURRENTLIABILITIES::
A) CURRENTLIABILITIES Sundrycreditors SSI
Others SundryAdvancesdueto Govt.ofAP Liabilityonaccountofstalecheques
Depositsreceivedfromallottesof plots/shedsetc Amountsreceivedinadvancetowardsrent,wateretc.
Otherliabilities UnpaidDividend 11 PROVISIONS::
ForDevelopmentof les/lDAs/Houses ForBonus
ForPSCharges ForEarnedLeaveSalary
ForGroupGratuityPremiumto LlC
ProvisonforOiminiutioninvalueof Inventories 12 MiseExpenditureto the extentnotwrittenoff (VRS)
Balanceatte beginning Add:Additions
Less:Chargedoff Balanceattheclose
A
10,284,096,534 8,639,420,038
0 9,000,000 10,319,970,143
0 9,000,000 8,666,835,549
As at As at
31.03.2008 31.03.2007
Rs. Rs.
44,873,609 36,415,511
0 0
69,147,248 7,594,733
12,363,121,868 16,804,795,804
19,618,455 15,563,189
45,510,876,250 16,168,215,344
4,243,719 4,206,051
4,548,903,264 2,124,196,913 4,310":450 4,310,450 62,520,221,254 35,128,882,484
0 2,779,420,940
34,922 0
11,269,082 0
80,310,834 59,101,168
21,342,344 21,342,345
142,491 142,491
113,099,673 2,860,006,944
8,825,348 10,763,922
0 3,129,043
3,836,266 5,067,617
4,989,082 8,825,348
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
A
SCHEDULE FORMING PART OF BALANCE SHEET
Sch. ACCOUNT As at As at
No. 31.03.2008 31.03.2007
Rs. Rs.
13 SALES
Land 1,791,071,399 491,140,387
Sheds 5,552,319 9,462,233
Houses 1,187,652 1,183,807
BUILDINGS 30,931,178 0
Land(break-up) 31,569,239 58,158,668
Developmentcharges(break-up) 17,140,401 25,479,165
1,877,452,188 585,424,260 14 INTERESTON
:.
Loansandadvances 531,866,553 401,445,206
Fixeddeposits 229,822,094 361,489,692
OutRightSales 44,035,592 90,991,502
Hire298,090 263,721
Rentals 1,519,609 1,482,728
WaterCharges 1,027,265 989,544
MaintenanceCharges 0 0
Advancesto Staff 2,701,199 2,905,823
811,270,402 859,568,216 15 OTHERINCOME
MiscellaneousReceipts 177,277,820 216,055,702
MaintenanceCharges 324,195 0
SuccessFeeonProjectstt 64,476,269 0
LocalAuthority 13,415,516 3,408,883
255,493,800 219,464,585 16 COSTOFSALES
Land 1,445,899,566 491,140,387
Sheds 3,111,029 9,462,233
Houses 1,119,331 1,025,883
Buildings 30,250,018 0
Land(break-up) 282,308 58,158,668
Developmentcharges(break-up) 0 25,479,165
1,480,662,252 585,266,336 17 PAYMENTSANDBENEFITSTOEMPLOYEES
Salaries,AllowancesandBonus 192,164,580 140,266,624
Contributionto PFandotherFunds 14,404,402 13,306,681
GroupGratuityPremium 2,268,985 8,185,053
StaffWelfareExpenses 8,644,158 5,474,672
217,482,125 167,233,030
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35thANNUALREPORTA.PIIC
A
SCHEDULE FORMING PART OF BALANCE SHEET
Sch. ACCOUNT As at As at
No. 31.03.2008 31.03.2007
Rs. Rs.
18 ADMINISTRATIVE& OTHEREXPENSES Travellingexpenses:-
Directors 206,833
Employees 12,018,013
12,224,846 14,036,226
Rent 1,524,559 1,386,393
RatesandTaxes 445,410 378273
VehiclesMaintenance 14965374 9,534,605
ElectricityCharges 5,200,315 3,624,256
WaterCharges 37,297,033 30,739,303
RepairsandMaintenance
Estates 334,414,422 26,216,188
IALA 1,400,000 1,462,673
EnvironmentalManagement 19,443,742 0
Up-gradationof Infrastructure 96,972,561 0
IndustrialForestry 4,414,532 0
Others(Vehicles,Pumpsetsetc.) 1,086,702 662,777
Insurance 62,946 59,215
Printing& Stationery 3,537,371 2,520,242
PublicityExpenses 31,785,145 17,929,206
Postage,Telegrams& Telephones 3,945,462 3,520,486
Legal& Professionalexpo 39,717,018 24,296,934
Recruitment&Trainingexpo 6,185,599 7,880,450
DirectorsSittingFee 0 6,750
FeeforStatutoryAuditors
AuditFee 150000
FeeforTaxAudit 20000
Servicetax 21012
191,012 112,240
ProvisionforBad& doubtfuldebts 132,346 300,098
ProvisionforBad& Doubtful- Loans&Advances 0 0
ProvisionforDiminutioninvalueof Inventories 0 0
BadDebts 0 0
PreliminaryLandSurveyWrittenoff 2,166,018 2,865,037
ConstructionMaterialsWrittenoff 50,459 0
SmallToolsWrittenOff 0 22,028
Donations 300,000 0
Waivalof Interest 201,726 1,028,004
OfficeMaintainance 4,487,426 2,478,456
MiscellaneousExpenses 12,756,421 7,653,643
AuditExpenses 49,164 38,090
StaffAdvancesWrittenOff 296,545 0
Lossonsaleof FixedAssets 0 45,894
635,254,154 158,797,467 19 INTEREST& FINANCIALCHARGES 496,698,914 367,500,000
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
Sch.
No.
ACCOUNT
SCHEDULE FORMING PART OF BALANCE SHEET
20 Priorperidadjusbnents Nature of expenditurenncome Debits
-
5380Interest
Rental Demands Misc.Rentals Traveling Expenses Other Income
Sal&A Other benefits to employees Admin & Other expenses
Other expenditure
Business Pron ,,,,tion Expenses Waival of penal interest AuditlTax audit Fees
Credits- 4210 Interest Rental Demands Misc.Receipts Water demands
Sal&A Other benefits to employees Admin & Other expenses
Lease Rentals Mise rentals
Net prior period adjustments
~
Sub-totalI
Sub- total II
As at 31.03.2008
Rs
*
1,110,261 167,295 536,692 16,944 0 1,124,821
84,147 2,050,259
24,350 0 73,142 5,187,911
7,228 0 25,232,504
8,507 8,500 15,726 28,350,491
11,814 53,634,770 -48,446,859
A
As at 31.03.2Q07
Rs
22,207 29,241 0 0 100,000 178,674 117,098 2,575 0 299,177
11,800 760,772 2,208,252
944 830,870
0 173
0 0 25,400 3,065,639 -2,304,867
A ~
35thANNUALREPORT.APII C
Schedule -21 ACCOUNTINGPOLICIES &NOTES FORMINGPARTOF ACCOUNTS I ACCOUNTINGPOLICIES:
1) BASIS OF PREPRATIONOF FINANCIALSTATEMENT:
The financial statements of the Company have been prepared based on Historicalcost convension in accordance with Indian Generally Accepted Accounting Principles (GAAP)and provisions ofthe Companies act 1956, as adopted consistently by the Company.The company follows the Mercantile system of accounting.
2) ESTIMATES:
The preparation of financial statements require the management of the company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of income and expenses during the period. Examples of such estimates includes provision for doubtful debts, employee retirement benefit plan, provision for gratuity etc.
3) REVENUE RECOGNITION:
a) Till 31-3-2007, no profiUlosswas recognised on allotment of sheds, land, houses on outright sale or hire purchase as all the contemplated development works in the estates were not yet completed and claims of pattadars in regard to enhanced land compensation are pending in various Courts. The difference between the sale price and cost price of the assets sold was kept under the head of account "Provision for Development of IEs/IDAs". During the year, ProfiULoss is recognised on allotment of sheds, land, houses on outright sale or hire-purchase and the difference between sale price and cost price of the assets sold is taken to Profit & Loss Alc. The income under this head upto 31.3.2007 (Rs.277.62 crores)is also taken as income during the year.
b) The dividend revenue is recognised on receipt basis. Other incomes are recognised on accrual basis.
4) VALUATION OF INVENTORIES:
Inventories such as land, HP stock, construction material, stock in trade at IES/IDAs, housing stock, work in progress are valued at cost.
5) FIXEDASSETS:
Fixed assets are accounted on historical cost and are shown net of accumulated depreciation.
Historical cost includes purchase price and all attributable(freight and non refundable duties and taxes) costs of bringing the asset to working condition for intended use.
A
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
Any profitllosS:~n sale, discarded /disposal of an asset is charged off to profit & loss account in that year. In the case of any purchase/addition to assets it is taken in tp account after receiving the certification from the competent authority.
The cost of fixed assets written down to <= 5000/- and in case of purchase / addition valued <=5000/- charged off to Proft & Loss Ale.
6) DEPRECIATION:
Depreciation on assets is charged on Straight Line method at the rates prescribed in schedule XIV of Companies act 1956.
In the case of any addition/transfer/deletion of an asset depreciation is charged proportionately based on number of days, from the date when the asset is ready for intended use or till the date of disposal or transfer, as the case may be.
7) INVESTMENTS:
All the long term investments (unquoted) are stated at cost of acqui$ition. Cost of the investment includes all direct cost incurred for acquisition of investments such as purchase price(Land transferred or Cash), brokerage, commission,stampduty etc. no Provision is made for permanent diminution in value of an investment in accordance with AS-13.
8) EMPLOYEE BENEFITS:
a)PROVIDENT FUND:
Company's contribution to the Provident Fund is deposited with the Trust formed by the Company under the Employee Provident Fund & Miscellaneous Provisions Act 1952 and which is recognized by the Income Taxauthorities. Such contributions are charged to Profit & Loss account each year.
b) GRATUITY:
The Group Gratuity for the employees of the Company is covered under a policy taken from Life Insurance Corporation of India (LlC).The premium paid is charged off in the accounts. The amounts paid in certain cases in excess of amounts reimbursed by LlC are also charged off in the accounts.
c) LEAVE ENCASHMENT:
In respect of Leave Salary payable to employees on retirement, provision is made in the accounts based on salary drawn at the end of the year.
d) NO PROVISION OF LEAVE SALARY IS MADE IN RESPECT OF DEPUTED EMPLOYEES.
Leave Salary and Pension Contribution payable in respect of employees on deputation as the quantum of amount is not known. The amounts so paid on demand from the respective Departments is charged off to revenue during the year of payment.
A
r
A ~
35thANNUALREPORTA.PIIC
e) VOLUNTARY RETIREMENT SCHEME:
Expenditure incurred under Voluntary Retirement Scheme is treated as deferred revenue expenditure to be written off over a period of five years including the financial year in which such expenditure is incurred.
9) PROVISION FOR BAD AND DOUBTFUL DEBTS:
Provision for bad and doubtful debts is made @ 100% on Interest receivable on account of Rentals, Penal interest on Hire purchase, water charges etc.
10) GOVERNMENT GRANTS:
Government grants received for execution/development of projects(Growth Centers etc.,) Are recognized as and when received and shown under the deposits and grouped under other liabilities Schedule 11-A current liabilities - other liabilities. Expenditure incurred for concerned projects are grouped under Schedule
-
6 Inventories as the works are under progress and on completion of the works for which the grants are received will be adjusted and the revenue will be accounted for.Grants received under agency function is shown separately under current .liabilities and disbursed for the purpose for which it is received. Balance of unutilized funds is not shown separately.
11) STALE CHEQUES:
The amount lying under Stale cheques for more than five years is treated as " Revenue" during the year.
12) CONTINGENT LIABILITIES:
Contingent liabilities not provided for are indicated by way of notes to accounts
13) TREATMENT OF EXPENDITURE DURING CONSTRUCTION/DEVELOPMENT PERIOD:
The civil works expenditure during construction period is treated as Works in progress. Like-wise, the administrative expenditure on engineering personnel/officers of the Company engaged on civil works is treated as works in progress. On completion of works and on receipt of completion reports, the works are capitalised and taken as current assets of the Company.
A
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
14) MISCELLANEOUS:
The liability on account of leave travel facilities available to the employees, liability towards electricity and
.water charges for which bills are not received and propertytax, etc., for which assessmentsare not completed, have not been taken into account as the same are not determinable.
15) TREATMENT OF INTEREST ON LOANS AND ADVANCES TO STAFF:
Interest accrued on loan or advances given to the staff is treated as interest accured but not due and shown as current asset.Recevory ofthe interest will commence after the recovery of principal amount.
II NOTES ONACCOUNTS
1. The Company has been executing civil works on behalf of various departments of State and Central Governments. These works which are in various stages of completion are in possession of the Corportion and they are to be handed over to the respective Departments after their completion. The amount excess spenUbalanceadvance outstanding are shown in Sundry debtors/Deposits - Other Liabilities depending on their nature.
2. Contingent Liabilities:
a) CIVIL WORKS:
A
b) LAND ACQUISITION:
.
S.No Particulars For the year Previous Year
Amount Amount
Rsin lakhs Rsin lakhs i) Estimated amount of contracts remaining to
be executed on capital account not provided for 4589.71 1395.23 ii) Claims against the company no
acknowledged as debts 57.53 71.55
iii) Arbitration & Court cases Contingent liabilities:
Works Contracts Etc. 25.44 11.42
S.No Particulars FOR THE YEAR PREVIOUS YEAR
2007-08 2006-07
AREA AMOUNT AREA AMOUNT
(in acres) (Rs in lakhs) (in acres) (Rs in lakhs) i) Claims made by pattadars
but being contested in lower Courts 942.68 5223.37 1010.99 5414.92
ii) Claims decreed by lower courts,
but being contested in higher Courts 807.65 816.37 821.88 636.37
...
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35thANNUALREPORTA.PIIC
Note: The amounts indicated at 2(b) above are excluding Solatium,Additional Market Valueand Interest.
3. The amount of Rs.4.80 lakhs (Previous year Rs.100.88 lakhs) pertains to InterZonalAdjustmentAlC under Other Current Assets represents the differences in advances accounts (Staff Advances) givento certain employees who were transferred from one office to another office of thecompany. Reconciliationof the differences is under progress.
4. No provision for Income Tax has been made in view of the claim ofthe Company U/s 11 of Income Tax Act 1961 which was upheld by Income Tax Appelate Tribunal and the appeal made by Income Tax Department against the orders of ITAT is pending in the High Court of Andhra Pradesh.
The total Income Tax demanded by IT Department from Financial Years 1978-79to 2004-05 amountedto Rs.5152.40 lakhs (previous year Rs.3,827.70 lakhs). No Income Tax hasbeen demanded for the Financial Years 2005-06 & 2006-07 by Income Tax Department tilldate.
5. lands:
A
Name of the area Details
AlE, Bodhan Current Assets includes land, sheds, buildings etc., amounting to Rs.16.01Iakhs acquiredby Company for which sale deed is yet to be executed.
IDA, Jeedimetla, PhaseV 86.725 acres of land was taken possession from Government on lease for 99 years for which no liability was created pending fixation of lease rentals.
IE, Gudur
10 acres of land was taken possession along with super structures as per G.O.Ms.No.703, Health, dt.29.6.1977 which was not included in the assets ofthe Company pending finalization of the costand other formalitiesby Government.
Izzatnagar (v), An extent of 15.139 acres of Government land in survey Serilingamapalli mandai, N05/9(p ),5/1 O(p) and 5/11(p) at Izzatnagar (v), R R District Serilingampalli mandai of R R Districtwas takenpossession by the Corporation on 10.10.2005 as per GO Ms N0133, TR
& B (R III) Department dated 22.06.2005. The same was not taken to books ofaccount pending finalisation of land cost and other formalitiesby Government.
Krishnapatanam(v), An exteRtof 1021.67 acres of ceiling surplus land was leased Nellore district out to the Company by GO AP vide G 0 Ms No.241 dated 28.02.2005 for a period of 25 years.This land was not taken to booksof accounts as the leaseterms and conditionsare not finalised by GoAP.
ANDHRAPRADESHINDUSTRIALINFRASTRUCTURECORPORATIONLIMITED,HYDERABAD
6. On a requisition from the company, the LAO Vizianagaram passed an award for Rs.27.22 lakhs and handed over possession of 57.86 acres of land at Cheluvuru (V) of Vizinagaram District to the company on 30.10.93 for establishment of Autonagar. However, the said land has not been taken into books of accounts in view of the interim order of Hon'ble High Court of AP in the writ petition filed by the pattadars. The amount of Rs.29.00 lakhs remitted to the LAO, Vizianagaram by the Company and deposited by him in the Government Treasury is exhibited under "Loans &Advances", pending decision of the High Court of AP.
7. Assam Company Ltd alongwithfour others filed a Civil Suit N0284 of 2001 against Government of AP, Corporation and L&T Ltd for recovery of an amount of Rs.396A5 crores towards damages and compensation. The Company is contesting the case and the same Is pending for disposal before Hon'ble High Court of Kolkata. No provision is made in the books of Account.
8. MANAGERIAL REMUNERATION
For the year
Rs. Previous year
Rs.
A) Chairman Salaries & Allowances Contribution to leave salary Contribution to Pension Medical expenses Leave Travel Concession
6,96,594 NIL NIL 9,244 NIL
5,85,789 NIL NIL NIL NIL
B) Vice-Chairman & Managing Director:
Salaries and allowances Contribution to Leave Salary Contribution to Pension Medical expenses Leave Travel Concession
NIL NIL NIL NIL NIL
40,179 NIL NIL 20,377 NIL
A
Nameof the area Details
Raidurg(v), An extentof 424.325 acres of surplus land in survey No.83 of Serilingampalli mandai, Raidurg(v),Serilingampalli mandai, R R District was taken R R District possession on 14.02.2006 as per the directions in G 0 Ms No.161 dated 13.02.2006 of Revenue(UC.II) Department. An amount of RsA,OOO.OOcrores was taken to books towards cost of the above lands. A litigation is pending in various courts against this land.
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35thANNUALREPORT.APIIC
9. The Company has been appointed as Nodal Agency to execute the following schemes and the Grants released by GOI/GOAP till the end of the year are as follows: (Schedule11)
(Rs.lakhs)
These grants are treated as deposits and grouped under other liabilities in Schedule 11A
-
Current Liabilities - Other Liabilities. The expenditure incurred on these schemes is grouped under Schedule - 6 Inventories since the works are in progress and completion of the works for which grants are received will be adjusted and the revenue will be accounted for.10. ASSISTANCE TO STATES FOR DEVELOPING EXPORT INFRASTRUCTURE & ALLIED ACTIVITES (ASIDE)
Government of India has launched a scheme "Assistance to States For Developing Export Infrastructure & Allied Activites (ASIDE)" for involvement of States in export efforts. Under this scheme, funds to the State are directly disbursed to State level Nodal Agency by Government of India. APIIC has been nominated as Nodal Agency by GoAP. In this process an amount of RS.2970.00 lakhs was released by Government of India during the year 2007-08 ( Previous year Rs. 850.00 lakhs). The Company has released an amount of RS.2086.48 lakhs during 2007-08 to various projects for the development of infrastructure facilities with the approval of State level Export Promotion Committee (Previous year Rs.1279.60 lakhs).
11. INDUSTRIAL INFRASTRUCTURE DEVELOPMENT FUND ("DF)
Government of Andhra Pradesh created a fund called IIDF for taking up infrastructure works where ever there is no provision to take up such works under regular budget.
Under this scheme an mounts of RS.7861.81 lakhs was received during 2007-08(Previous year Rs.nil), the Company has spent an amount of RS.2049.57 lakhs on various projects for the development of infrastructure facilities during 2007-08 (Previous year RS.1522.79 lakhs) by utilising the same for laying approach roads, provision of water supply for FAB City, BioTech Park. Textile Park etc., in the State of AP.
12. The Government of Andhra Pradesh has entrusted certain local Authority powers to the Company like collection of Property Tax, maintenance of Common facilities in respect of certain Industrial Parks. The Company formed Societies entrusting the work of collection, and maintenance of facilities etc. on behalf of the Company. The income and expenditure in this regard have not been accounted for in the accounts of the Company.
13. Sundry debtors, loans and advances, creditors and deposits are subject to confirmation.
A.
S.No Name of the Scheme 2007-08 2006-07
Receipt Expenditure Receipt Expenditure
1 Growth Centres 2973.89 3612.53 2913.89 3612.53
2 EPIP - Pashamylaram 1300.00 1031.07 1300.00 1031.07
3 IIDC - Tada/Nandyal 159.50 369.95 159.50 369.95
4 AEP- Gundlapochampally 603.01 1382.42 603.01 1168.27
5 FPP - Kuppam 200.00 223.10 200.00 162.30
