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Notes to Accounts of Impex Ferro Tech Ltd.

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.

 
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