1 CORPORATE INFORMATION

Sunil Hitech Engineers Limited ("the Company") is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956 (as amended by the Companies Act, 2013). its shares are listed on two stock exchanges in India. The Company is engaged in the business of Engineering, Procurement, Construction-(EPC), Fabrication, Erection, Overhauling, Maintenance, Trading and other related activities.

2. Terms/ Rights attached to equity shares

The Company has only one class of equity shares with voting rights having a par value of Rs.1* per share. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to approval of the shareholders at the ensuing Annual General Meeting.

* The Face value of share of the company is sub-divided from Rs.10 each to Rs.1 each from record date 3rd December, 2016.

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 ownerships of shares.

3. MONEY RECEIVED AGAINST SHARE WARRANTS

3.1 During the Financial Year 2016-17, Company has allotted 50,50,000 warrants to the Companies under promoter group at a price of Rs.55.40 per warrant which entitles the allottees to subscribe 5,05,00,000 Equity shares of Rs.1* each.

* The face value of share of the company is sub-divided from Rs.10 each to Rs.1 each during the year.

3.2 Out of 50,50,000 warrants allotted to companies under Promoter group, 15,75,000 warrants converted into 1,57,50,000 Equity shares of Rs.1 each.

The Equity shares so allotted rank pari passu in all respects with the existing Equity shares of the Company.

3.3 After conversion of 15,75,000 warrants mentioned at Note 5.2 above, 34,75,000 warrants remained outstanding at end of the Financial year 2016-17 which entitles its holders to subscribe for 3,47,50,000 shares of Rs.1 each.

4.1 Term loan from Banks referred above to the extent of :

a) Rs.304.09 Lacs (Pr. Yr. Rs.439.85 Lacs) are secured by first mortgage/ pari-passu charge on the respective buildings situated at Pune and Nagpur.

b) Rs.285.08 Lacs (Pr. Yr. Rs.491.29 Lacs) secured by first hypothecation/ pari-passu charge on the respective plant and machineries including Hydra's at various sites.

c) Rs.148.19 Lacs (Pr. Yr. Rs.92.22 Lacs) are secured by first hypothecation/ pari-passu charge on the respective Vehicles at various sites.

4.2 Term loan from Financial Institutions referred above to the extent of:

a) Rs.1,332.39 Lacs (Pr. Yr. Rs.1,434.71) are secured by first mortgage/ pari-passu charge on the respective buildings situated at Nagpur and Mumbai.

b) Rs.4,493.31 Lacs (Pr. Yr. Rs.2,271.61 Lacs) are secured by first hypothecation/ pari-passu charge on the respective plant and machineries including Hydra's situated at various sites.

c) Rs.1,500.00 Lacs (Pr. Yr. Rs.2,650.00) are secured against retention money receivable from Parli Project.

5.1 Working Capital Loans are secured by hypothecation of present and future stock of raw materials, stores and spares, book debts and other receivables and have Second Charge on Fixed Assets of the Company and personal guarantee of some of the Directors.

a) Charge against certain immovable properties situated at Ramtek (Included in Freehold Land) have been created in favour of Oriental Bank of Commerce in respect of Corporate Guarantee given by Sunil Hitech Engineers Limited on behalf of one of its Subsidiary Company SEAM Industries Limited.

6. COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances Rs. Nil (Pr. Yr. 6.99 Lacs)

b) Other Commitments - Non cancellable operating Leases (Refer Note 40)

The Company has paid dividend in respect of shares held by Non-Resident Shareholders, on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External A/c. The exact amount of dividend remitted in foreign currency can not be ascertained.

7. EMPLOYEE BENEFITS

As required by Accounting Standard-15 "Employee Benefits" the disclosures are as under:

Defined Contribution Plans:

The Company offers its employees defined contribution plans in the form of Provident Fund (PF) and Employees' Pension Scheme (EPS) with the Government and certain state plans such as Employees' State insurance (ESI). PF and EPS covers substantially all regular employees and the ESI covers eligible workers. Contributions are made to the Government's funds. While both the employees and the Company pay predetermined contributions into the PF and the ESI Scheme, contributions into the EPS is made only by the Company. The contributions are normally based on a certain portion of the employee's salary.

Defined Benefit Plans Leave Encashment:

The Company's employees are entitled for compensated absences which are allowed to be accumulated and encashed as per the Company rules.

The Liability of compensated absences, which is non funded, has been provided based on the report of independent actuary using the "Projected Unit Credit Method" in respect of past services. Accordingly Rs.133.65 Lacs (Pr. Yr. Rs.174.41 Lacs) being the liability as at the year end for compensated absences have been provided in the accounts.

Gratuity:

The Employees' Gratuity Fund scheme is a defined benefits plan. The present value of obligation is determined based on the actuarial valuation, using the "Projected Unit Credit Method" which recognises each period of services as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation.

The Company makes contributions to the Employees' Group Gratuity-cum Life Assurance (Cash Accumulation) Scheme of the LIC, a funded defined benefit plan for employees. The scheme provides for payment to employees as under:

i) On normal retirement/ early retirement/ withdrawal/ resignation:

As per the provisions of The Payment of Gratuity Act, 1972 with vesting period of 5 years of service.

ii) On the death in service:

As per the provisions of The Payment of Gratuity Act, 1972 without any vesting period.

8. DISCLOSURE FOR OPERATING LEASES UNDER ACCOUNTING STANDARD-19 "LEASES"

The Company has taken various residential/ office premises (including furniture and fittings, therein as applicable), under operating lease or leave and license agreements. These are generally cancellable under leave and license arrangements and are renewable by mutual consent on mutually agreeable terms. The company has given refundable interest free security deposits in accordance with the agreed terms. The lease payments of Rs.628.61 Lacs (Pr. Yr. Rs.1082.19 Lacs) are recognised in the Statement of Profit and Loss.

9. in terms of the requirements of the Accounting Standard-28 on "impairment of Assets" the amount recoverable against Fixed Assets has been estimated for the period by the management based on present value of estimated future cash flows expected to arise from the continuing use of such assets. The recoverable amount so assessed was found to be adequate to cover the carrying amount of the assets, therefore no provision for impairment in value thereof has been considered necessary, by the management.

10. SEGMENT REPORTING

Based on guiding principles given in Accounting Standard on "Segment Reporting" - AS17 as specified in the Companies (Accounting Standard) Rules, 2006 (as amended), single financial report contains both Standalone financial statement and Consolidated financial statement of the Company. Hence, the required segment information has been appended in the Consolidated Financial Statements (CFS).

Notes:

i) Above Loans and Advances are repayable on demand.

ii) Loans and Advances to employees/ customers and investments by such employees/ customers in the shares of the company if any, are excluded from the above disclosure.

C. There is no investment by loanee in the shares of Parent Company/ Subsidiary Company.

11. Disclosure of Trade payables to Micro, Small and Medium Enterprises under Current Liabilities is based on the information available with the Company regarding the Status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. Amount outstanding (not overdue) as on 31 March 2017 to Micro, Small and Medium Enterprises on account of principal amount aggregate to Rs.41.23 Lacs (Pr. Yr. Rs.36.53 Lacs) and interest payable thereon Rs. Nil (Pr. Yr. Rs. Nil) and interest paid during the year Rs. Nil (Pr. Yr. Rs. Nil).

12. The Board of Directors of the Company have proposed a final dividend of Rs.0.075 per share in respect of the year ending 31st March 2017 subject to the approval of shareholders at the Annual General Meeting. if approved, the dividend would result in a cash outflow of Rs.341.22 Lacs inclusive of Dividend Distribution Tax of Rs.57.72 Lacs.

13. During the year the Company has divested 10% of its stake in GSEL of Rs.650 Lacs pursuant to a share transfer agreement as a result of which it ceases to be an Associate.

14. Balance of some of the Trade Receivables and Trade Payables are subject to confirmation/ reconciliation and adjustments, if any.

15. Previous year's figures are regrouped and recasted wherever required.