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Notes to Accounts of Garg Furnace Ltd.

Mar 31, 2015

1. Corporate Information:

Garg Furnace Limited is a Public Limited company incorporated in India under Provisions of Companies Act, 1956. Its shares are listed in Bombay Stock Exchange, Delhi stock exchange and Ludhiana stock exchange. The Company is engaged in manufacturing of Alloy and Non Alloy Steel Ingots, Wire Rod, Wire Round, Mig Wire, casting of Iron products and trading of Iron, Steel and Textile products

2. Contingent Liabilities

(I) As at 31st As at 31st March-2015 March 2014

a) For Bank Guarantees Rs. 2163.87 Lacs Rs. 2307.38 Lacs and letter of credit outstanding

b) Other Contingent Liabilities Rs. 51.11 Lacs Rs. 55.20 Lacs

c) . Other monies for which company is contingently liable:

The company has contested the demand of Punjab Power Corporation Ltd of Rs 72306370/- on account of voltage surcharge. As Against this a sum of Rs 53510589/- has been deposited under protest and stands included under the head "Advances Recoverable in cash or In kind. "The Company has filed an appeal in Punjab And Haryana High Court. Honourable High court has granted stay in disconnection of supply of electricity of company. No provision in accounts has been made in respect thereof.

(II) Commitments:

As at 31st As at 31st March-2015 March 2014

a) Estimated amount of contracts Nil Rs. 202.08 Lacs

Remaining to be executed on Capital account (net of advances.

3. Debit or Credit Balances on whatsoever account are subject to confirmation from parties.

4. In the opinion of the Board of Directors, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount of at which they are stated ,except as expressly stated otherwise.

Disclosure under Accounting Standards:

5. The Earning per share has been calculated in accordance with Accounting Standard (AS)-20 issued by the Institute of Chartered Accountants of India. The numerators and denominators used to calculate basic and Diluted Earning per share are as under:-

6. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (Last drawn salary) for each completed year of service subject to a maximum amount of Rs. 10,00,000.00.

The Accounting Standard (AS-15 Revised) prescribed by the companies Accounting Standard Rules 2006 is being followed and the following table summarize the components of net benefit/expenses recognized in the Statement of profit and loss and the funded status and the amount recognized in the balance sheet for the gratuity plan.

Method of Valuation: Projected Unit Credit Method

7. Related Party Disclosure:

i) Name of related parties and description of relationship

A. Key Management Personnel

1. Sh. Devinder Garg - Executive Chairman

2. Smt. Vaneera Garg - (Wholetime Director)

3. Sh. Toshak Garg - (Managing Director)

4. Sh. Daksh Garg - (CFO)

ii) Enterprise owned or significantly influenced by key management personnel and their relatives.

A. Vaneera Industries Ltd

B. Avtar Exports Pvt Ltd

C. Devinder Garg & Son's HUF

Summary of Associates Key Managerial Personnel

Transactions

iii) There is no provision for doubtful debts or amounts written off or written back during the year in respect of dues from or to related parties.

8. Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting issued by the Institute of Chartered Accountants of India is disclosed hereunder :-

The company has identified two reportable segments viz; Iron & Steel Products & Textile product


Mar 31, 2013

1 Corporate Information:

Garg Furnace Limited is a Public Limited company incorporated in India under Provisions of Companies Act 1956. Its shares are listed in Bombay Stock Exchange,Delhi stock exchange and Ludhiana stock exhange.The Company is engaged in manufacturing of Alloy and Non Alloy Steel Ingots, Wire Rod, Wire Round,Mig Wire,casting of Iron products and trading of Iron,Steel and Textile products.

2 Debit or Credit Balances on whatsoever account are subject to confirmation from parties.

3. In the opinion of the Board of Directors, all the Current Assets, Loans & Advances have a value on realization in the ordinary course of business at least equal to the amount of at which they are stated xcept as expressly stated otherwise.

4. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (Last drawn sala ry) for each completed year of service subject to a maximum amount of Rs. 10,00,000.00.

The Accounting Standard (AS -15 Revised) prescribed by the companies Accounting Standard Rules 2006 is being followed and the following table summarize the components o f net benefit/expenses recognized in the Statement of profit and loss and the funded status and the amount recognized in the balance sheet for the gratuity plan.

5. Related Party Disclosure:

i) Name of related parties and description of relationship

A. Key Management Personnel 1. Sh Devinder Garg- MD cum Chairman

2. Smt Vaneera Garg (Wholetime Director)

3. Sh Toshak Garg (Wholetime director)

ii) Enterprise owned or significantly influenced by key management personnel and their relatives.

6. Borrowing costs capitalized during the year NIL.(previous year Rs 14,47,125.50)

7. Segment Information as required by Accounting Standard (AS) -17 on Segment Reporting issued by the Institute of Chartered Accountants of India is disclosed hereunder:

The company has identified two reportable segments viz; Iron & Steel Products


Mar 31, 2012

1. Corporate Information:

Garg Furnace Limited is a Public Limited company incorporated in India under Provisions of Companies Act 1956. Its shares are listed in Bombay Stock Exchange,Delhi stock exchange and Ludhiana stock exhange.The Company is engaged in manufacturing of Alloy and Non Alloy Steel Ingots, Wire Rod,Wire Round,Mig Wire,casting of Iron products and trading of Iron,Steel and Textile products.

Term Loans From banks are Secured by equitable mortgage of entire Land & Building & Fixed Asstets (immovable and movable) of the Company both present and future ranking parri passu basis and further secured by charge on the entire current assets of the company and personal guarantee of two directors.

(b) Vehicle loans from banks and companies are secured by hypothecation of the concerned vehicles.

(c) Term Loan from Banks carry an interest rate of 12.75% p.a. are repayble.

(a) (The Working Capital Loans are Secured by hypothecation of stock in trade,Book Debts of the company,the overdraft is further secured by Equitable Mortgage of Land .Building and Hypothecation of Plant and machinery of the company and personal gurantee of two Directors.And it carries interest @12.75% p.a)

(b) Unsecured loans from Related Parties are interest free loans and are repayable on demand.

*The Company has not received information from vendors/service providers regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act has not been given.

2. Contingent Liabilities

(I) As at 31st March-2012 As at 31st March 2011

a). For Bank Guarantees Rs. 1557.38 Lacs Rs. 701.07 Lacs and letter of credit outstanding

b). Other Contingent Liabilities NIL Rs. 16475.00 Lacs

C). Other monies for which company is contingently liable:

The company has contested the demand of Punjab Power Corporation Ltd of Rs 72306370/- on account of voltage surcharge. As Against this a sum of Rs 30594899/- has been deposited under protest and stands included under the head "Advances Recoverable in cash or In kind.The Company has filed an appeal in Punjab and Haryana High Court. Honourable High court has granted stay in disconnection of supply of electricity of company. No provision in accounts has been made in respect thereof.

3. Debit or Credit Balances on whatsoever account are subject to confirmation from parties.

4. In the opinion of the Board of Directors, all the CurrentAssets, Loans &Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated, except as expressly stated otherwise.

Disclosure under Accounting Standards:

5. The Earning per share has been calculated in accordance with Accounting Standard (AS)-20 issued by the Institute of Chartered Accountants of India. The numerators and denominators used to calculate Basic and Diluted Earning per share are as under:-

6. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (Last drawn salary) for each completed year of service subject to a maximum amount of Rs. 10,00,000.00.

The Accounting Standard (AS-15 Revised) prescribed by the Companies Accounting Standard Rules 2006 is being followed and the following table summarize the components of net benefit/expenses recognized in the profit and loss statement and the funded status and the amount recognized in the balance sheet for the gratuity plan

7. Related Party Disclosure:

i) Name of related parties and description of relationship

A. Key Management Personnel 1. Late Sh. Jagdish Chand Garg

2. Sh. Davinder Garg- MD cum Chairman

3. Smt Vaneera Garg (Wholetime Director)

4. Sh Toshak Garg (Wholetime director)

ii) There is no provision for doubtful debts or amounts written off or written back during the year in respect of dues from or to related parties.

8. The indicators listed in Paragraph 8 to 10 of the Accounting Standard (AS) -28 "Impairment of Assets" issued by Institute of Chartered Accountants of India have been examined and on such examination, it has been found that none of the indicators are present in the case of the company. A formal estimate of the recoverable amount has not been made as there is no indication of a potential impairment loss.

9. Borrowing Costs Capitalized during the year Rs 14,47,125.50.(previousyearNil) .

10. Segment Information as required by Accounting Standard (AS)-17on Segment Reporting issued by the Institute of Chartered Accountants of India is disclosed hereunder :-

The company has identified two reportable segments viz; Iron & Steel Products & Textile product


Mar 31, 2010

1. Contingent Liabilities

a). For Bank Guarantee Rs. 49.67 Lacs (Previous Year Rs. 45.68 Lacs) b). For letter of credits Rs. 684.56 Lacs (Previous Year Rs. 544.69 Lacs)

c). For Corporate Guarantee given on behalf of others Rs. 29526.00 Lacs (Previous Year Rs. 24905.50 Lacs)

2. Debit or Credit Balances on whatsoever account are subject to confirmation from parties.

3. In the opinion of the Board of Directors, all 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, except as expressly stated otherwise.

4. The company has paid remuneration to directors within the limits prescribed in the Schedule XIII to the Companies Act, 1956 as given below:

5. The company has not received information from vendors/service providers regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act have not been given.

6. The Earning per share has been calculated in accordance with Accounting Standard (AS)-20 issued by the Institute of Chartered Accountants of India. The numerators and denominators used to calculate Basic and Diluted Earning per share are as under:-

7. During the year, the company has received Rs. 272.80 lacs being the balance amount against 560,000 convertible warrants allotted on 15-10-2008. The said warrants holders have exercised their option for conversion of warrants into equity shares and accordingly as per terms of issue 560,000 Equity Shares of Rs. 10/- each at a premium of Rs. 60/- per share were allotted on 27-03-2010. The proceeds from preferential allotment have been utilised by the company as under :-

8. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (Last drawn salary) for each completed year of service subject to a maximum amount of Rs. 3,50,000.00.

The Accounting Standard (AS-15 Revised) prescribed by the Companies Accounting Standard Rules, 2006 is being followed and the following table summarize the components of net benefit/expenses recognized in the profit and loss account and the funded status and the amount recognized in the balance sheet for the gratuity plan.

9. In accordance with Accounting Standard-22 "Accounting for taxes on Income" issued by The Institute of Chartered Accountants of India, deferred taxes have been recognised in respect of following timing differences between accounting income and taxable income: -

10. The indicators listed in Paragraph 8 to 10 of the Accounting Standard (AS) – 28 "Impairment of Assets" issued by Institute of Chartered Accountants of India have been examined and on such examination, it has been found that none of the indicators are present in the case of the company. A formal estimate of the recoverable amount has not been made as there is no indication of a potential impairment loss.

11. Segment Information as required by Accounting Standard (AS)-17 on Segment Reporting issued by the Institute of Chartered Accountants of India is disclosed hereunder :- The company has identified two reportable segments viz; Iron & Steel Products & Textile Products.

12. Previous Year figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year figures.

12. Annexure A to U form an integral part of the Balance Sheet and Profit & Loss Account and have been duly authenticated.

13. Additional Information as required by Schedule VI to the Companies Act, 1956.

Includes 2647.230 MT (3110.350 MT) by products viz Runner & Risers and end cutting produced during the year, of which 1948.190 MT (2626.710 MT) has been used for re-melting and 591.510 MT (415.040 MT) has been sold. It also includes 3519.900 MT (9165.920 MT) of ingots transferred to floor for production of Rounds and Wire Rod. Further, 507.380 MT (932.495 MT) Ingot Mould transferred to floor for self consumption and 207.000 MT (508.445 MT) rejected ingots moulds received back from floor has been re-melted.

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