Mar 31, 2015
1 CORPORATE INFORMATION
Impex Ferro Tech Ltd., " the Company" is domiciled in India and was
incorporated in June, 1995 under the provisions of the Companies Act,
1956. The Company has its registered office situated in Kolkata and
manufacturing facility at Kalyaneshwari, Burdwan, West Bengal. The
Company is primarly engaged in manufacture of Ferro Alloys
(Ferro-Manganese/Silico Manganese), trading in iron & steel products. As
a part of backward integration, the Company have a power plant.
(I) Terms/Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of '
10 per share. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays dividends in Indian Rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the share holders in the ensuing Annual General Meeting. However, no
dividend has been proposed by the Board for the current year. 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 amount. The distribution will be in
proportion to the number of equity shares held by the shareholders.
(II) Working Capital Term Loan (WCTL) :
Upon implementaion of the CDR Package (Refer Note 27), the overdrawn
portion of the Cash Credit Accounts of the Company has been carved out
into separate Working Capital Term Loans (WCTL).
(III) Funded Interest Term Loan (FITL) :
Upon implementaion of the CDR Package (Refer Note 27), funding of
interest has been provided for:
* Interest on existing term loans for a period of 24 months from the
Cut-Off Date i.e from May 01, 2014 to April 30, 2016;
* Interest on WCTL for a period of 24 months from the Cut-Off Date i.e
from May 01, 2014 to April 30, 2016.
(IV) Details of Security
(i) In terms of the CDR package, Rupee Term Loans , Working Capital Term
Loans, Funded Interest Term Loans and Working Capital Loan (Refer Note
27) are pooled together and secured as under:
a) First pari-passu charge on fixed assets by way of equitable mortgage
of the land & building/shed along with all movable and immovable plant
& machinery and other fixed assets thereon at Kalyaneshwari, Dist.:
Burdwan, West Bengal.
b) First pari-passu charge on the entire Current Assets of the Company
comprised of stock of raw materials, semi finished and finished goods
and book debts, outstanding moneys, receivables, both present and
future pertaining to the Company's manufacturing units/divisions at
Kalyaneshwari, Dist.: Burdwan, West Bengal.
c) Collateral Security of equitable mortgage on office space at 35, C.
R. Avenue, Kolkata is standing in the name of the Company on pari passu
basis.
d) Additional Security of Equitable mortgage of two floors at the
Corporate office of the group at SKP House, 132A, S.P. Mukherjee Road,
Kolkata - 700 026 standing in the name of Marble Arch Properties Pvt
Ltd on pari passu basis.
e) Personal guarantee of Promoters/Director - Mr. Suresh Kumar Patni,
Mr. Rohit Patni, & Mr. Ankit Patni.
f) Further, the restructured facilities has been secured by pledge of
entire promoter & promoter group stake in Company (in Demat Form),
representing 66.71% of paidup capital of Company.
2 Details of Security :
(a) Pari pasu 1st charge on all movable & immovable assets of the
Company, both present & future which is pooled and charges thereon
created to secure all the facilities of the Company which will rank
pari pasu with the other lenders. All the aforesaid facilities will
also be secured by personal guarantee of Mr. Suresh Kumar Patni, Mr.
Rohit Patni and Mr. Ankit Patni.
(b) Working Capital facilities from banks carries interest of 11.75%
p.a. (Linked to MI base rate), subject to reset of every year.
c) There are no Micro, Small and Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2015. This information as required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the Company.
d) The trade payble includes Rs. 2,774.06 Lacs (P.Y. Rs. 1,687.02) due
to related parties (Refer Note No. 37)
e) Gross Block of Rs. 103.67 Lacs on account of assets whose useful
life is already exhausted as at April 01, 2014 have been adjusted
against the opening balance of profit & loss account pursuant to
adoption of estimated useful life of fixed assets as stipulated by
Schedule II to the Companies Act, 2013.
e) Depreciation for the year would have been lower by ' 322 Lacs, if
the Company would have continued to charge depreciation as per previous
method.
3 a) Term Deposits with Banks include :
* Interest accrued but not due amounting to Rs. NIL (P.Y. Rs. 185.39
Lacs)
b) Term Deposits amounting to Rs. 690 Lacs (P.Y. Rs. 2,548.66 Lacs)
have been pledged as margin money against Letter of Credit and Bank
guarantee facilities.
c) Consumption of Stores and Spares includes Rs. 531.75 Lacs towards
cost of Electrode Carbon Paste which were previously classified under
the head Consumption of Raw Materials.
4 CORPORATE DEBT RESTRUCTURING
As a part of its financial revival process, the lenders of the Company
have already approved the Corporate Debt Restructuring of debts. CDR EG
vide its letter dated 10th November, 2014 has approved the loan
restructuring scheme for the Company. The CDR Package includes
reliefs/measures such as reduction in interest rates, funding of
interest, rearrangement of securities etc.
The salient features of which are as follows :
a) Cut off date for implementation: 30th April, 2014 and upon
implementation, the financial effect thereof has duly been taken into
accounts. The said accounts are subject to confirmation and
reconciliation with the Lenders. The reported financials would have
consequential impact once the reconciliation is completed, the quantum
where of remains unascertained.
b) Waiver of liquidated damages/compounding interest/penal interest for
the period from 30th April, 2014 till implementation of the CDR
package.
c) Restructuring of existing loans into Restructured Term Loans,
conversion of irregular portion of working capital facilities into
Working Capital Term Loan (WCTL) of Rs. 12,324 Lacs and creation of
Funded Interest Term Loan (FITL) of Rs. 3,328 Lacs from interest on
Restructured Term Loan and Working Capital Term Loan for the period
from 1st May, 2014 to 30th April, 2016.
d) Restructuring of existing fund based and non fund based financial
facilities.
e) Rate of interest on Term Loans/WCTL/FITL would be reset after
completion of 2 years and rate of interest on working capital would be
reset every year.
f) The option of selling off the 30 MW CPP or part thereof may be
explored and considered with prior approval of the lenders and the CDR
EG to liquidate the bank's dues.
g) The CDR Package as well as the provisions of the Master Circular on
Corporate Debt Restructuring issued by the Reserve Bank of India, gives
a right to the CDR Lenders to get a recompense of their waivers and
sacrifices made as part of the CDR Proposal. The recompense payable by
the Company is contingent on various factors, the outcome of which
currently is materially uncertain and hence the proportionate amount
payable as recompense has been treated as a contingent liability. The
aggregate present value of the outstanding sacrifice made/to be made by
CDR Lenders as per the CDR package is approximately Rs. 15,117 Lacs.
h) Contribution of Rs. 1,267 Lacs in the Company by the promoters in
lieu of bank sacrifices. The contribution is to be brought initially in
the form of unsecured loan and the same is to be converted into equity.
5 CONTINGENT LIABILITIES AND COMMITMENTS
Contingent Liabilities not provided for in the books of accounts in
respect of :
(a) Bills discounted with Banks outstanding as on 31st March, 2015 -
Rs. 587.38 (Previous Year Rs. 881.72 Lacs ).
(b) Excise Demand of Rs. 36.67 Lacs (Previous Year Rs. 36.67 Lacs) for
the financial year 2005-06, 2006-07 & 2007-08 disputed in appeal. The
Company has paid a sum of Rs. 20.92 Lacs (Previous Year Rs. 18.62 Lacs)
under protest.
(c) Sales Tax Demand disputed in appeal for the Financial year 2005-06,
2006-07, 2008-09 & 2009-10 aggregates to Rs. 1,743.67 Lacs (Previous
Year Rs. 3,019.76 Lacs). The Company has paid a sum of Rs. 88.62 Lacs
(Previous Year Rs. 88.62 Lacs) under protest.
(d) Several Parties including the Company have disputed the basis of
levy of Fuel Surcharge in the electricity bills of Damodar Valley
Corporation (DVC). Pending finalisation of the outcome of the matter,
an amount of Rs. 2,964.20 Lacs (Previous Year Rs. 2,991.99 Lacs) (after
considering waiver of electricity duty admitted by DVC) has not been
provided for by the Company.
(e) The Company has challenged the constitutional validity of Entry Tax
levied by the Government of West Bengal w.e.f 1st April, 2012. In view
of the stay granted by the Hon'ble High Court of Calcutta, the Company
has not provided for the same in the books of accounts amounting to Rs.
272.51 Lacs.
(f) Relating to Assessment year 2012-13, a demand of Rs. 1,606.46 Lacs
was raised by Income Tax Department against which the Company has filed
an application to respective department.
(g) Right to Recompense to CDR Lenders for the relief and sacrifice
extended, subject to provisions of CDR Guidelines, amounting to Rs.
1,045 Lacs.
6 AMOUNTS RECEIVABLE / PAYABLE IN FOREIGN CURRENCY
(a) Forward contracts/hedging instruments outstanding as at the Balance
Sheet date are Rs. Nil. (P.Y. Rs. NIL).
7 In the opinion of the management, current and non-current assets have
a value on realisation in the ordinary course of business at least equal
to the amount at which they are stated in the accounts. Adequate
provisions have been made for all known losses and liabilities.
8 Certain balances of Trade Payables, Trade Receivables and Advances are
subject to confirmation and reconciliation.
9 EMPLOYEE BENEFITS
The disclosures of Employee Benefits as defined in Accounting Standard
- 15 are given below :
Defined Benefit Plan :
The employees' gratuity fund scheme managed by a Trust is a defined
benefit plan. The present value of obligation is determined based on
the actuarial valuation using the Projected Unit Credit Method as on
31st March, 2015, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation.
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The discounting rate is considered based on market yield on government
bonds having currency and terms consistent with the currency in terms
of the post employment benefit obligations.
The above information is certified by an Actuary.
10 INTEREST IN JOINT VENTURE
The Company has the following investment, in a jointly controlled
entity:
Name of the entity : SKP Mining Pvt. Ltd.
Country of Incorporation : India
Percentage of ownership interest : 50% as at 31st March, 2015
Percentage of ownership interest : NIL as at 31st March, 2014
The Company's interest in this Joint Venture is reported as Non-current
Investment (Refer Note No. 12) and is stated at cost (net of provision
for other than temporary diminution in value). The Company's share of
each of the assets, liabilities, income, expenses, etc (each without
elimination of the effect of transactions between the Company and the
Joint Venture) related to its interest in this joint venture, based on
the audited financial statements are :
11 SEGMENT REPORTING
Business Segments: The Company is mainly engaged in the business
segment of manufacture & sale of Ferro Alloys, Trading in Iron & Steel
and Generation of Power.
Geographical segments: The Company's secondary geographical segments
have been identified based on the location of customers and are
disclosed based on revenues within India and revenues outside India.
Secondary segment assets are based on the location of such assets.
12 RELATED PARTY DISCLOSURE
(i) Name of the related parties where control exists irrespective of
whether transactions have occurred or not
(a) Enterprise on which the Company : SKP Mining Pvt. Ltd. - Joint
has control Venture
(b) Key Managerial Personnel (KMP) Mr. Suresh Kumar Patni, Managing
Director
Mr. Ankit Patni, Director
Mr. Satish Kumar Singh,
Executive Director
Mr. Sanjeet Kr. Gupta, Chief
Financial Officer
Ms. Richa Agarwal,
Company Secretary
(c) Relatives of Key Managerial Mr. Rohit Patni
Personnel: Mrs. Sarita Patni
(d) Entities/Individuals owning directly or indrectly an interest in
the voting power that gives them control :
Shubham Complex Pvt. Ltd.
Relybulls Derivatives & Commodities Pvt. Ltd.
SKP Power Ventures Ltd.
SKP Aviation Services Ltd.
A. B. Infratel Pvt. Ltd.
SBM Steels Pvt. Ltd.
Gajkarna Merchandise Pvt. Ltd.
Gajavakra Merchandise Pvt. Ltd.
Gannath Commerce Pvt. Ltd.
Mahabala Merchants Pvt. Ltd.
Marble Arch Properties Pvt. Ltd.
Narmada River Resources Pvt. Ltd.
(e) Enterprises owned or significantly influenced by the Key Managerial
Personnel or their relatives:
Ankit Metal & Power Ltd.
Impex Metal & Ferro Alloys Ltd.
Rohit Ferro-Tech Ltd.
Suanvi Trading & Investment Co Pvt. Ltd.
Shreyansh Leafin Pvt. Ltd.
SKP Overseas Pte. Ltd.
Vasupujya Enterprises Pvt. Ltd.
Whitestone Suppliers Pvt. Ltd.
Astabhuja Properties Pvt. Ltd.
13 The operations of the Company are severely impacted by weak steel
industry scenario and lack of demand for Company's finished product.
The Company has incurred loss after tax of Rs. 6,143.65 Lacs and
accumulated loss as on 31st March, 2015 is Rs. 6,349.26 Lacs which is
in excess of 50% of the net worth of the Company.
As a part of its financial revival process, the lenders of the Company
has already approved CDR package (as referred in note no. 27 above).
The Company has continuous support from the promoters and has put in
place measures for revival and cost reduction.
Considering the above initiative of the Company and given the overall
position of steel industry in India, the financial statements have been
prepared under Going Concern basis.
14 The Company has not made any remittance in foreign currencies on
account of dividend during the year and does not have infor- mation as
to the extent to which remittance in foreign currencies on account of
dividends have been made on behalf of non-resi- dent shareholders.
15 Previous year's figures have been reworked, re-grouped, re-arranged
and reclassified, wherever considered necessary. Accordingly amounts and
other disclosures for the preceding year are included as an integral
part of the current year financial Statements and are to be read in
relation to the amounts and other disclosures relating to the current
year.
Mar 31, 2014
1. Notes:
1. The above Cash Flow Statement has been prepared under the "Indirect
Method" as set out in the Accounting Standard- 3 on ''Cash Flow
Statement'' notified by the Companies (Accounting Standards) Rules,
2006.
2. Cash and Cash equivalents include cash and cheques in hand and bank
balances on current accounts [Refer Note No.15 to the Accounts].
3. Figures in brackets indicate cash outflows.
4. Previous year''s figures have been regrouped/rearranged, wherever
considered necessary to conform to this year''s classification.
Notes to and forming part of the Financial Statements as at 31st March,
2014
NOTE 2 CONTINGENT LIABILITIES & COMMITMENTS
A) Contingent Liabilities not provided for in the books of accounts in
respect of: -
(a) Bills discounted with Banks outstanding as on 31st March 2014 - Rs.
881.72 Lacs (P.Y. Rs. 4,725.11 Lacs)
(b) Excise Demand of Rs. 36.67 Lacs (P.Y. Rs. 36.67 Lacs) for the
financial year 2005-06, 2006-07 & 2007-08 disputed in appeal. The
Company has paid a sum of Rs. 18.62 Lacs (P.Y. Rs. 18.62 Lacs) under
protest.
(c) Sales Tax Demand disputed in appeal for the year 2005-06, 2006-07,
2008-09 & 2009-10 aggregates to Rs. 3019.76 Lacs (P.Y. Rs. 3019.76
Lacs). The Company has paid a sum of Rs. 88.43 Lacs (P.Y. Rs. 88.43
Lacs) under protest.
(d) Several Parties including the Company have disputed the basis of
levy of Fuel Surcharge in the electricity bills of Damodar Valley
Corporation (DVC). Pending finalisation of the outcome of the matter,
an amount of Rs. 3,356.29 Lacs (P.Y. Rs. 2,430.32 Lacs) (after
considering waiver of electricity duty admitted by DVC) has not been
provided for by the Company.
(e) The Company has challenged the constitutional validity of Entry Tax
levied by the Government of West Bengal w.e.f 1st April, 2012. In view
of the stay granted by the Hon''ble High Court of Calcutta, the Company
has not provided for the same in the books of accounts amounting to Rs.
272.51 Lacs (P.Y. Rs. 146.99 Lacs).
B) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for - Rs. Nil (P.Y. Rs. 44.27 Lacs). Advances
paid there against - Rs. Nil (P.Y. Rs. 82.49 Lacs).
NOTE 3
In the opinion of the management, current and non-current assets have a
value on realisation in the ordinary course of business at least equal
to the amount at which they are stated in the accounts. Adequate
provisions have been made for all known losses and liabilities.
NOTE 4
Certain balances of Trade Payables, Trade Receivables and Advances are
subject to confirmation.
NOTE 5 EMPLOYEE BENEFITS
The disclosures of Employee Benefits as defined in Accounting Standard
- 15 are given below
Defined Benefit Plan :
The employees'' gratuity fund scheme managed by a Trust is a defined
benefit plan. The present value of obligation is determined based on
the actuarial valuation using the Projected Unit Credit Method as on
31st March 2014, which recognizes each period of service as giving rise
to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation.
Expected rate of return assumed by the Insurance Company is generally
based on their investment pattern as stipulated by the Government of
India.
The Company expects to contribute Rs. 21.38 Lacs (P.Y. Rs. 5.00 Lacs)
to the Gratuity Fund managed by the SBI Life Insurance Company Limited
during the financial year 2014-15.
The above information is certified by an Actuary.
NOTE 6 SEGMENT REPORTING
Business Segments: The Company is mainly engaged in the business
segment of manufacture & sale of Ferro Alloys, Trading in Iron & steel
and Generation of Power.
Mar 31, 2013
NOTE 1 CONTINGENT LIABILITIES & COMMITMENTS
A) Contingent Liabilities not provided for in the books of accounts in
respect of: -
(a) Bills discounted with Banks outstanding as on 31st March, 2013 - D
4,725.11 Lacs (P.Y. D 2,374.03 Lacs).
(b) Excise Demand of D 36.67 Lacs (P.Y. D 28.87 Lacs) for the Financial
Year 2005-06, 2006-07 & 2007-08 disputed in appeal. The Company has
paid a sum of D 18.62 Lacs (P.Y. D 5 Lacs) under protest.
(c) Sales Tax Demand disputed in appeal for the year 2005-06, 2006-07,
2008-09 & 2009-10 aggregates to D 3,019.76 Lacs (P.Y. D 2,400.29 Lacs).
The Company has paid a sum of D 88.62 Lacs (P.Y. D 88.62 Lacs) under
protest.
(d) Several Parties including the Company have disputed the basis of
levy of Fuel Surcharge in the electricity bills of Damodar Valley
Corporation (DVC). Pending fi nalisation of the outcome of the matter,
an amount of D 2,430.32 Lacs (P.Y. D 2,681.56 Lacs) (after considering
waiver of electricity duty admitted by DVC) has not been provided for
by the Company.
(e) Claims not acknowledged as debts for commitment charges debited by
the Bank - D Nil (P.Y. D 135.27 Lacs).
(f) The Company has challenged the constitutional validity of Entry Tax
levied by the Government of West Bengal w.e.f. 1st April, 2012. In
view of the stay granted by the Hon''ble High Court of Calcutta,
the Company has not provided for the same in the books of accounts
amounting to D 146.99 Lacs (P.Y. D Nil).
B) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for - D 44.27 Lacs (P.Y. D 150.58 Lacs).
Advances paid there against - D 82.49 Lacs (P.Y. D 92.90 Lacs).
NOTE 2 AMOUNTS RECEIVABLE / PAYABLE IN FOREIGN CURRENCY)
Forward contracts/ hedging instruments outstanding as at the Balance
Sheet date are Nil.
NOTE 3
In the opinion of the management, current and non-current assets have a
value on realisation in the ordinary course of business at least equal
to the amount at which they are stated in the accounts. Adequate
provisions have been made for all known losses and liabilities.
NOTE 4
Certain balances of Trade Payables, Trade Receivables and Advances are
subject to confi rmation.
NOTE 5 EMPLOYEE BENEFITS
The disclosures of Employee Benefi ts as defi ned in Accounting
Standard - 15 are given below
Defined Contribution Plan:
Contribution to Defi ned Contribution Plan, recognised as expense for
the year is as under:
Defi ned Benefi t Plan:
The employees'' gratuity fund scheme managed by a Trust is a defi
ned benefi t plan. The present value of obligation is determined based
on the actuarial valuation using the Projected Unit Credit Method as on
31st March, 2013, which recognises each period of service as giving
rise to additional unit of employee benefi t entitlement and measures
each unit separately to build up the fi nal obligation.
Expected rate of return assumed by the Insurance Company is generally
based on their investment pattern as stipulated by the Government of
India.
The Company expects to contribute D 5.00 Lacs (P.Y. D 4.55 Lacs) to the
Gratuity Fund managed by the SBI Life Insurance Company Limited during
the fi nancial year 2013-14.
The above information is certifi ed by an Actuary.
NOTE 6 SEGMENT REPORTING
Business Segments: The Company is mainly engaged in the business
segment of manufacture & sale of Ferro Alloys, Trading in Iron & steel
and Generation of Power.
NOTE 7 RELATED PARTY DISCLOSURE
(i) Parties where control exists irrespective of whether transactions
have occurred or not : None
(ii) Names of the other related parties with whom transactions have
taken place during the year:
(a) Key Managerial Personnel (KMP) Mr. Suresh Kumar Patni, Managing
Director
Mr. Satish Kumar Singh, Executive Director (w.e.f. 24.08.2012)
(b) Enterprises owned or signifi cantly infl uenced by the Key
Managerial Personnel or their relatives:
Ankit Metal & Power Limited
Arthodock Vinimay Private Limited
Dhodwala Enterprises Limited
Gold Mohar Steel Limited
Hira Concast Limited
Impex Cements Limited
Impex Industries Limited
Impex Metal & Ferro Alloys Limited
Impex Steel Limited
Invesco Finance Private Limited
Maa Sherawali Ispat Private Limited
Mahabali Ispat Private Limited
Patni Metal & Ferro Alloys Limited
Poddar Mech Tech Services Private Limited
Rohit Ferro-Tech Limited
Suanvi Trading & Investment Co. Private Limited
Shreyansh Leafi n Private Limited
SKP Overseas Pte Ltd.
Vasupujya Enterprises Private Limited
VSN Agro Products Limited
Whitestone Suppliers Private Limited
NOTE 8
Previous year''s fi gures have been reworked, re-grouped,
re-arranged and reclassifi ed, wherever considered necessary.
Accordingly amounts and other disclosures for the preceding year are
included as an integral part of the current year Financial Statements
and are to be read in relation to the amounts and other disclosures
relating to the current year.
Mar 31, 2012
Note 1 SHARE CAPITAL
(a) 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 Shares is entitled to one
vote per share. The Company declares and pays dividends in Indian
Rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing Annual General Meeting.
However, no dividend has been declared by the Company. 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 amount. The distribution will be in proportion to
the number of Equity Shares held by the shareholders.
(b) The Company has made preferential allotment of 17,500,000 Equity
Shares of Rs. 10/- each at Rs. 20/- per Equity Share (including a
premium of Rs. 10/-) in terms of SEBI (Issue of Capital and Disclosure
Requirements) Regulations, 2009 on 21st February, 2012. The Company
has utilised the proceeds of the issue towards the objects of the said
issue, i.e., repayment of unsecured loans, long-term working capital
requirements and other general corporate purposes.
Note 2 LONG-TERM BORROWINGS
(A) Details of Security
(a) Term loans from Banks are secured by first charge on all the
immovable & movable plant and machinery and other fixed assets
including equitable mortgage of factory land with shed & building and
office premises and second charge on the current assets of the Company
all ranking pari-passu jointly in favour of State Bank of India, Punjab
National Bank and Bank of Baroda and personally guaranteed by the
promoter Directors.
(b) Loans against Vehicles are secured by way of hypothecation of the
underlying asset financed.
(B) Terms of Repayment
b) Unsecured Loan from Bodies Corporate amounting to Rs. 5,958.81 Lacs
are interest free. Balance carry an average interest rate of 12%. The
loans are repayable at the option of the Company and are stated by the
management to be in the nature of long-term borrowings.
c) Loans against Vehicles are repayable by way of Equated Monthly
Instalments subsequent to taking of such loan. The original period of
such loans is between 3 and 5 years.
Note 3 SHORT-TERM BORROWINGS
(A) Details of security:
Working capital loans are secured by hypothecation of entire current
assets including Stocks of Raw Materials, Stock-in-Process, Finished
Goods, Stores and Spares, Receivables, both present & future ranking
pari-passu jointly in favour of State Bank of Indi, Punjab National
Bank, Bank of Baroda and United Bank of India and also secured by
second charge on all the block assets and personally guaranteed by the
promoter Directors.
(B) Bridge Loan from WBIDC was sanctioned against interest subsidy
receivable by the Company under West Bengal Incentive Scheme, 2000. As
per the stipulated repayment terms, the said Bridge Loan is overdue for
repayment since September, 2011. The Company intends to link the
repayment of the said bridge loan with the receipt of admitted subsidy
amount.
Note 4 TRADE PAYABLES
a) There are no Micro, Small and Medium Enterprises to whom the Company
owes dues, which are outstanding for more than 45 days as at 31st
March, 2012. This information as required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the Company.
b) Trade Payables include Rs. 2,019.13 Lacs (PY - Rs. 3,392.44 Lacs)
against pledge of stock of raw materials.
Note 5 CASH & BANK BALANCES
a) Balances in respect of certain inoperative bank accounts amounting
to Rs. 2.10 Lacs (P.Y. - Rs. 4.10 Lacs) are subject to confirmation.
b) Term Deposits with Banks include:
- Interest accrued but not due amounting to Rs. 144.33 Lacs (P.Y. - Rs.
74.49 Lacs)
- Overdue deposits amounting to Rs. 47.18 Lacs (P.Y. - Rs. NIL)
c) Term Deposits amounting to Rs. 2,117.27 Lacs (P.Y. - Rs. 2,049.74
Lacs) have been pledged as margin money against letter of credit
facilities.
Note 6 SHORT TERM LOANS & ADVANCES
a) VAT Credit Receivable/Refundable includes Rs. 8.24 Lacs (P.Y. - Rs.
8.24 Lacs) paid to Bureau of Investigation in course of enquiries
relating to Sales Tax matters.
b) Income Tax Payments include Rs. 21.42 Lacs (P.Y. - Rs. 21.42 Lacs)
seized pursuant to search and seizure operation conducted by the Income
Tax authorities on 5th January, 2004.
c) The Company has made current tax provision for Minimum Alternate Tax
(MAT) under Section 115JB of the Income Tax Act, 1961. As per the
provisions of Section 115JAA, MAT Credit receivable for the amount in
excess over tax liability as per normal computation has been recognised
as an asset. The said asset is created by way of a credit to the
Statement of Profit & Loss and shown as MAT Credit Entitlement.
Note 7 CONTINGENT LIABILITIES & COMMITMENTS
A) Contingent Liabilities not provided for in the books of accounts in
respect of :-
(a) Bills discounted with Banks outstanding as on 31st March, 2012 -
Rs. 2,374.03 Lacs (P.Y - Rs. 973.66 Lacs).
(b) Excise Demand of Rs. 28.87 Lacs (P.Y. - Rs. 36.12 Lacs) for the
financial year 2005-06, 2006-07 & 2007-08 disputed in appeal (Rs. 5.00
Lacs is paid under protest).
(c) Sales Tax Demand disputed in appeal for the year 2005-06, 2006-07,
2008-09 & 2009-10 aggregates to Rs. 2,400.29 Lacs (P.Y. - Rs. 1,703.79
Lacs). The Company has paid a sum of Rs. 88.62 Lacs (P.Y. - Rs. 139.66
Lacs) under protest.
(d) Several parties including the Company have disputed the basis of
levy of Fuel Surcharge in the electricity bills of Damodar Valley
Corporation (DVC). During the year, the Company has recognised amount
of Rs. 777.61 Lacs as expense being the adhoc payments made against the
bills. An amount of Rs. 2,681.56 Lacs (P.Y. - Rs. 1,952.98 Lacs) (after
considering waiver of electricity duty admitted by DVC) has not been
provided for by the Company.
(e) Claims not acknowledged as debts for commitment charges debited by
the Bank - Rs. 135.27 Lacs (P.Y. - Rs. 135.27 Lacs).
B) Estimated amount of contracts remaining to be executed on Capital
Account and not provided for - Rs. 150.58 Lacs (P.Y. - Rs. 1,961.47
Lacs). Advances paid there against - Rs. 92.90 Lacs (P.Y. - Rs.
1,182.04 Lacs)
Note 8 EMPLOYEE BENEFITS
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The discounting rate is considered based on market yield on government
bonds having currency and terms consistent with the currency in terms
of the post Employment Benefit Obligations.
Expected rate of return assumed by the insurance Company is generally
based on their investment pattern as stipulated by the Government of
India.
The Company expects to contribute Rs. 4.55 Lacs to the Gratuity Fund
managed by the SBI Life Insurance Company Limited during the financial
year 2012-13.
Note 9 RELATED PARTY DISCLOSURE
(i) Parties where control exists irrespective of whether transactions
have occurred or not : None
(ii) Names of the other related parties with whom transactions have
taken place during the year:
(a) Key Managerial Personnel (KMP) Mr. Suresh Kumar Patni, Managing
Relative of KMP Director
Mr. Virendra Kumar Jain
(b) Enterprises owned or significantly influenced by the Key Managerial
Personnel or their relatives:
Ankit Metal & Power Ltd.
Arin Minerals Private Ltd.
Arthodock Vinimay Pvt.Ltd.
Brahmand Udyog Ltd.
Dhodwala Enterprises Ltd.
Gold Mohar Steel Ltd.
Hira Concast Ltd.
Impex Cements Ltd.
Impex Industries Ltd.
Impex Metal & Ferro Alloys Ltd.
Impex Steel Ltd.
Invesco Finance Pvt. Ltd.
Mahabali Ispat Pvt. Ltd.
Patni Metal & Ferro Alloys Ltd.
Poddar Mech Tech Services Pvt. Ltd.
Rohit Ferro-Tech Ltd.
Sahyogi Distributors Ltd.
Suanvi Tradings Investment Co. Pvt. Ltd.
Shreyansh Leaf in Pvt. Ltd. Unilever Enterprises Pvt. Ltd. Vasupujya
Enterprises Pvt. Ltd. Vikash Metal & Power Ltd. Vikash Smelters &
Alloys Ltd. VSN Agro Products Ltd. Whitestone Suppliers Pvt. Ltd.
Note 10 CHANGE IN ACCOUNTING POLICY
(a) During the year, the Company has changed its accounting policy
relating to the accounting of share issue expenses from writing off
1/5th of the expenditure every year to adjusting the same against the
balance available in Securities Premium Account in line with Section 78
of the Companies Act, 1 956. Had there been no change in the accounting
policy, the profit for the year would have been lower by Rs. 25.61
Lacs.
(b) The Company has accounted for Interest Subsidy Receivable from the
Government of West Bengal under West Bengal Incentive Scheme
aggregating to Rs. 342.00 Lacs as the Company has complied with the
conditions attached thereto and there is reasonable assurance that the
grants will be received. Subsidies were hitherto recognised on receipt
basis in earlier years. Had there been no change in the accounting
policy, the profit for the year would have been lower by Rs. 342.00
Lacs.
Note 11
The Financial Statements for the year ended 31st March, 2011 had been
prepared as per the then applicable, pre-revised Schedule VI to the
Companies Act, 1956. The Financial Statements for the year ended 31st
March, 2012 are prepared as per Revised Schedule VI. Accordingly, the
previous year figures have also been reclassified to conform to this
year's classification. The adoption of Revised Schedule VI for previous
year figures does not impact recognition and measurement principles
followed for preparation of Financial Statements.
Mar 31, 2011
I. Contingent Liabilities not provided for in the books of accounts in
respect of :
a) Bank Guarantees-Rs.3,009,706 (P.Y.-Rs. Nil)
b) Letters of Credit opened in favour of suppliers, outstanding as at
31I st March, 2011 - Rs. 2,377,982 (P.Y. - Rs. 1,134,3 15).
c) Bills discounted with Banks outstanding as on 31 st March, 2011 -
Rs. 97,366,332 (P.Y.- Rs.172,442,760).
d) Excise Demand of Rs. 3,612,074 (P.Y. - Rs. 3,601,293) for the
financial year 2005-06, 2006-07 & 2007-08 disputed in appeal
(Rs.500,000 is paid under protest).
e) Sales Tax Demand disputed in appeal for the year 2005-06, 2006-07,
2007-08 & 2009-10 aggregates to Rs. 170,379,312 (P.Y - Rs.
269,148,142). The Company has paid a sum of Rs. 13,965,734 (P.Y - Rs.
11,465,734) under protest.
f)Excise duty liabilities arising out of search operations by the
Directorate General of Central Excise Intelligence and Commissioner of
Central Excise, Bolpur. However, the Company has paid under protest a
sum of Rs. 36.25 lacs (P.Y. - Rs. 32.10 lacs), pending issuance of any
show cause notice.
g) Several parties including the Company have disputed the basis of
levy of Fuel Surcharge in the electricity bills of Damodar Valley
Corporation (DVC). Accordingly an amount of Rs. 1 95,297,820 (P.Y. -
Rs. 1 62,544,658) (after considering waiver of electricity duty
admitted by DVC) has not been provided for by the Company. Pending
adjudication of final demand, the Company has made adhoc payments
against the bills.
h) Claims not acknowledged as debts for commitment charges debited by
the Bank - Rs.13,527,055 (P.Y. - Rs. 10,444,146).
2. Estimated amount of contracts remaining to be executed on Capital
Account and not provided for - Rs. 196,146,838 (P.Y. - Rs.
541,476,405). Advances paid there against - Rs. 1 18,203,890 (P.Y - Rs.
428,330,458).
3. In the opinion of the management, the Current Assets, Loans &
Advances have a value on realisation in the ordinary course of business
at least equal to the amount at which they are stated in the accounts.
Adequate provisions have been made for all known losses and
liabilities.
4. Certain balances of Sundry Creditors, Sundry Debtors and Advances
are subject to confirmation.
5. Balances in respect of certain inoperative bank accounts amounting
to Rs. 410,279 (P.Y. -Rs. 100,752) are subject to confirmation.
6. There are no Micro, Small and Medium Enterprises to whom the
Company owes dues, which are outstanding for more than 45 days as at 31
st March, 201I. This information as required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the Company.
7. Loans and Advances includes Rs. 2,141,890 (P.Y. - Rs. 2,141,890)
seized pursuant to search and seizure operation conducted by the Income
Tax authorities on 5th January, 2004 and Rs. 823,640 (P.Y. - Rs.
823,640) paid to Bureau of Investigation in course of enquiries
relating to Sales Tax matters.
8. Sundry Debtors include Rs. 26,582,378 (P.Y - Rs. 5,146,502) covered
by letters of credit in favour of the Company. Sundry Creditors include
Rs. 1,238,833,309 (P.Y. - Rs. 1,226,151,843) against which letters of
credit are outstanding at Balance Sheet date and Rs. 385,608,974 (P.Y.
- Rs. 253,332,039) against pledge of stock of raw materials.
9. Managerial Remuneration
b) Liability for gratuity is provided for on actuarial basis for the
Company as a whole. The amount pertaining to directors is not
ascertainable and, therefore, not included above.
c) The computation of net profit for the purpose of directors'
remuneration under Section 349 of the Companies Act, 1956 has not been
enumerated since no commission has been paid to any director. Fixed
managerial remuneration has been paid to the Managing Director and
Whole-time Director within the limit as per Schedule XIII of the
Companies Act, 1956.
10. Fixed Deposit includes interest accrued but not due amounting to
Rs. 7,449,420 (P.Y - Rs. 2,464,790).
11. Capital work-in-progress includes Rs. 234,956,742 (P.Y. - Rs. I3
1,006,175) as preoperative expenses relating to project under
implementation, pending allocation to Fixed Assets.
12. Employee Benefits
Defined Benefit Plan :
The employees' gratuity fund scheme managed by a trust is a defined
benefit plan. The present value of obligation is determined based on
the actuarial valuation using the Projected Unit Credit Method as on
31st March, 2011, which recognises each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation.
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The discounting rate is considered based on market yield on government
bonds having currency and terms consistent with the currency in terms
of the post employment benefit obligations.
Expected rate of return assumed by the insurance company is generally
based on their investment pattern as stipulated by the Government of
India.
The above information is certified by the actuary.
13. Segment Reporting
(a) Business segments : The Company is mainly engaged in the business
segment of manufacture & sale of Ferro Alloys and trading in Iron &
Steel.
(b) Geographical segments : The Company's secondary geographical
segments have been identified based on the location of customers and
are disclosed based on revenues within India and revenues outside
India. Secondary segment assets are based on the location of such
asset.
14. Related Party Disclosures
(i) Name of the related parties where control exists irrespective of
whether transactions have occurred or not:
None.
(ii) Names of the other related parties with whom transactions
have taken place during the year :
(a) Key Managerial Personnel Mr.Suresh Kumar Patni,Managing
Director
Mr.Virendra Kumar Jain,
Whole Time Director
(up to 28.03.2011)
(b) Enterprises owned or Ankit Metal & Power Ltd.
significantly influenced Ann Minerals Pvt. Ltd.
by the Key Managerial Brahmand Udyog Ltd.
Personnel or their relatives DC Ispat Ltd.
Dhodwala Enterprises Ltd.
Gold Mohar Steel Ltd.
Hira Concast Ltd.
Impex Cements Ltd.
Impex Industries Ltd.
Impex Metal & Ferro Alloys
Ltd.
Impex Steel Ltd.
Patni Metal & Ferro Alloys
Ltd.
Rohit Ferro-Tech Ltd.
Sahyogi Distributors Ltd.
Unilever Enterprises Pvt.
Ltd.
Vasupujya Enterprises Pvt.Ltd.
Vikash Metal & Power Ltd.
Vikash Smelters & Alloys Ltd.
VSN Agro Products Ltd.
Whitestone Suppliers Pvt.Ltd.
15. Additional information pursuant to the provisions of paragraphs 3 &
4 of Part II of Schedule VI to the Companies Act, 1956.
(a) Capacity, Production, Sales & Stock
Licensed Capacity : N.A.
Installed Capacity : Ferro-Alloys 59,025 MT Per Annum (P.Y. - 59,025 MT)
(Installed Capacity has been certified by the management and not
verified by the auditors being a technical matter)
16. Previous year's figures have been reworked, regrouped, rearranged
and reclassified wherever considered necessary. Accordingly, amounts
and other disclosures for the preceding year are included as an
integral part of the current year's financial statements and are to be
read in relation to the amounts and other disclosures relating to the
current year.
Mar 31, 2010
1. Contingent Liabilities not provided for in the books of accounts
inrespect of:(a) Bank Guarantees - Rs. Nil (Previous year Rs.
8,500,000).
(b) Letters of Credit opened in favour of suppliers, outstanding as at
31st March 2010 - Rs.1,134,315 (Previous year Rs. 12,945,085).
(c) Bills discounted with Banks outstanding as on 31st March 2010, Rs.
172,442,760 (Previous year Rs. 122,257,324).
(d) Excise Demand of Rs. 3,601,293 (Previous year Rs. 3,088,751)
forthefinancial year 2005-06,2006- 07 and 2007-08 disputed in appeal
(Rs. 500,000 is paid under protest).
(e) Sales Tax Demand disputed in appeal for the year 2005-06, 2006-07 &
2009-2010 aggregates to Rs. 269,148,142. The company has paid a sum of
Rs. 11,465,734 under protest.
(f) Excise duty liabilities arising out of search operations by the
Directorate General of Central Excise Intelligence and Commissioner of
Central Excise, Bolpur. However, the Company has paid under protest a
sum of Rs. 32.10 Lacs, pending issuance of any show cause notice.
(g) Several Parties including the Company have disputed the basis of
levy of Fuel Surcharge in the electricity bills of Damodar Valley
Corporation (DVC). Accordingly an amount of Rs. 162,544,658 (after
considering waiver of electricity duty admitted by DVC) has not been
provided for by the Company. Pending adjudication of final demand, the
Company has made adhoc payments against the bills.
(h) Claims not acknowledged as debts for commitment charges debited by
a Bank - Rs. 10,444,146 (Previous year- Rs. 5,839,282).
2. Estimated amount of contracts remaining to be executed on Capital
Account and not provided for - Rs. 541,476,405 (Previous year Rs.
935,528,394). Advances paid there against - Rs. 428,330,458 (Previous
year-Rs. 189,553,999).
3. In the opinion of the management, the Current Assets, Loans &
advances have a value on realization in the ordinary course of business
at least equal to the amount at which they are stated in the accounts.
Adequate provisions have been made for all known losses and
liabilities.
4. Certain balances of Sundry Creditors, Sundry Debtors and Advances
are subject to confirmation.
5. Balances in respect of certain inoperative bank accounts amounting
to Rs. 100,752 are subject to confirmation.
6. There are no Micro, Small and Medium Enterprises to whom the
Company owes dues, which are outstanding for more than 45 days as at
31st March, 2010. This information as required to be disclosed under
the Micro, Small and Medium Enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the Company.
7. The Company during the year issued 24,971,604 equity shares of Rs
10 each on right basis at a price of Rs 16 per share as per the basis
of allotment finalised in consultation with the Bombay Stock Exchange
Limited, aggregating to Rs. 399,545,664 which has been utilised for
setting up of 5th Submerged Electric Arc Furnace of 7.5 MVA capacity,
Installation of 30 MW Captive Power Plant and Issue Expenses.
8. In the year 2008-09, the Company had issued 6,000,000 Preferential
Convertible Warrants (Exercise Price of Rs.22.25 each) on preferential
basis to promoters & a non promoter. Each warrant carried a right to
convert the same into one Equity Share of Rs.10 each at a premium of
Rs.12.25 each (as per the formula prescribed under the SEBI (DIP
Guidelines) over a period of 18 months from the date of allotment.
Warrant holders having expressed their inability to pay the remaining
amount, the Board of Directors forfeited the same and credited the
amount of Rs. 13,380,000 received against those warrants to capital
reserve.
9. Loans and Advances include Rs. 2,141,890 (Previous year - Rs.
2,141,890) seized pursuant to search and seizure operation conducted by
the Income Tax authorities on 5th January, 2004 and Rs. 823,640
(Previous year - Rs. 823,640) paid to Bureau of Investigation in course
of enquiries relating to Sales Tax matters.
10. Sundry Debtors include Rs. 5,146,502 (Previous year - Rs.
7,581,360) covered by letters of credit in favour of the Company.
Sundry Creditors include Rs. 1,226,151,843 (Previous year - Rs.
573,028,915) against which letters of credit are outstanding at Balance
Sheet date and Rs. 253,332,039 (Previous year - Rs. 160,543,716)
against pledge of stock of raw materials.
(b) Liability for gratuity is provided for on actuarial basis for the
Company as a whole. The amount pertaining to directors is not
ascertainable and, therefore, not included above.
(c) The computation of net profit for the purpose of directors
remuneration under Section 349 of the Companies Act, 1956 has not been
enumerated since no commission has been paid to any director. Fixed
managerial remuneration has been paid to the Managing Director and
Whole-time Director within the limit as per Schedule XIII of the
Companies Act, 1956.
12) Amount of excise duty on variation in Stocks shown in Schedule -17
represents differential excise duty on opening and closing stock of
finished goods.
13) Forward contracts/hedging instruments outstanding as at the Balance
Sheet date are Nil
14) Fixed Deposit includes interest accrued but not due amounting to
Rs. 2,464,790 (Previous year Rs. 7,509,247).
15) Employee Benefits
The disclosures of Employee benefits as defined in Accounting Standard
-15 are given below:
Defined Contribution Plan
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The discounting rate is considered based on market yield on government
bonds having currency and terms consistent with the currency in terms
of the post employment benefit obligations. Expected rate of return
assumed by the insurance company is generally based on their investment
pattern as stipulated by the Government of India.
The above information is certified by the actuary.
16 Related party disclosures
(i) Name of the related parties where control exists irrespective of
whether transactions have occurred or not: None (ii) Names ofthe other
related parties with whom transactions have taken place during the
year:
(a) Key Managerial Personnel Mr. Suresh Kumar Patni, Managing Director
Mr. Virendra Kumar Jain, Whole Time
Director
(b) Enterprises owned or significantly Influenced by the Key Managerial
Personnel or their relatives.
Ankit Metal & Power Limited
Dhodwala Enterprises Limited
HiraConcast Limited
Impex Industries Limited
Impex Steel Limited
Patni Metal &Ferro Alloys Limited
Vasupujya Enterprises Private Limited
Vikash Smelters & Alloys Limited
BrahmandUdyog Limited
Gold Mohar Steel Limited
Impex Cements Limited
Impex Metal &Ferro Alloys Limited
DC Ispat Limited (Formerly known as Nikita Ispat Private Limited]
Sahyogi Distributors Limited
Vikash Metal & Power Limited
VSNAgro Products Limited
17 Additional information pursuant to the provisions of paragraphs 3 &
4 of Part II of Schedule VI to the Companies Act, 1956.
a) Capacity, Production, Sales & Stock
Licensed Capacity : N.A.
Installed Capacity : Ferro Alloys 59,02 M.T.Per Annum (Previous year -
59,025 M.T.)
(Installed Capacity has been certified by the management and not
verified by the auditors being a technical matter).
18) Previous years figures have been reworked, regrouped, rearranged
and reclassified wherever considered necessary, Accordingly, amounts
and other disclosures for the preceding year are included as an
integral part of the current years financial statements and are to be
read in relation to the amounts and other disclosures relating to the
current year.