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Notes to Accounts of Kalyani Steels Ltd.

Mar 31, 2014

Note : 1 (a)

The Fund based and Non-Fund based Limits, sanctioned to the Company by the bankers, for meeting working capital requirements, are secured by First pari-passu charge on the Current Assets of the Company consisting of stock of raw materials, stocks in process, semi-finished and finished goods, bills receivables and book debts.

As at 31st As at 31st

March, 2014 March, 2013 NOTE ''2'' : CONTINGENT LIABILITIES : A. Contingent Liabilities not provided for in respect of :

a) Claims against the Company not acknowledged as debts 2,718,858 12,648,157

b) Excise & Service Tax Demands - Matter under dispute 29,483,533 19,143,760

c) Customers'' Bill Discounting 547,855,470 480,075,889

d) Iron Ore Supplier - Rate Difference Claim - Disputed 255,198,766 255,198,766

e) Reimbursement for Forest Development Tax on Iron Ore claimed by supplier 33,487,315 33,487,315

NOTE 3 :

Related party disclosures have been set out in a separate statement annexed to the Financial Statements. The related parties, as defined by Accounting Standard 18 ''Related Party Disclosures'' issued as prescribed by the Companies (Accounting Standard) Rules, 2006 in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key management persons and taken on record by the Board.

NOTE 4 :

Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed to the Financial Statements.

NOTE 5 :

The Company has entered into agreements in the nature of lease / leave and license agreement with different lessors / licensors for the purpose of establishment of premises and accommodation of executives. These are generally in the nature of operating lease / leave and license and period of agreements is generally for one year and renewable / cancellable at the option of the lessee or lessor. In view of above there are no disclosures required as per Accounting Standard 19 ''Leases'' as prescribed by Companies (Accounting Standard) Rules, 2006.

NOTE 6 :

During the year, the Company has given a Donation of Rs. 1.50 Crore to a Political Party viz. Bharatiya Janata Party.

NOTE 7 :

Previous Year Figures :

Previous year figures have been regrouped and reclassified wherever necessary to make them comparable with current period.


Mar 31, 2013

Basis of preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities.

1 (a) Terms / Rights attached to Shares : Equity Shares :

The Company has only one class of Equity Shares having at par value of Rs. 5/- per share. Equity Shares are pari-passu in all respects and each shareholder is eligible for one vote per share held. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

In the event of liquidation of the Company, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

2 (a) Debentures :

The Company has issued the following Secured Non-Convertible Redeemable Debentures :

(i) 400 - 10.75% Secured Non-Convertible Redeemable Debentures (NCDs) (Nineteenth Series) of Rs. 1,000,000/- each, aggregating Rs. 400,000,000/- (Rupees Four Hundred Million only) were issued on private placement basis. In terms of the Debenture Trust Hypothecation Deed dated 15th December, 2009, NCDs were to be redeemed in three annual installments commencing from the end of fourth year from the date of allotment i.e. redeemable on 18th September, 2013 Rs. 333,333/- per debenture, on 18th September, 2014 Rs. 333,333/- per debenture and on 18th September, 2015 Rs. 333,334/- per debenture. However the Company has redeemed the NCDs in full on 30th March, 2013 and satisfaction of charge has been filed with Government of India, Ministry of Corporate Affairs, Maharashtra, Pune.

(ii) 550 - 12.50% Secured Non-Convertible Redeemable Debentures (NCDs) (Seventeenth Series) of Rs. 1,000,000/- each, aggregating Rs. 550,000,000/- (Rupees Five Hundred Fifty Million only) were issued on private placement basis, held by Life Insurance Corporation of India. In terms of the Debenture Trust Hypothecation Deed dated 8th April, 2009, NCDs are to be redeemed in three annual installments commencing from the end of third year from the date of allotment i.e. redeemable on 16th January, 2012 Rs. 333,333/- per debenture, on 16th January, 2013 Rs. 333,333/- per debenture and on 16th January, 2014 Rs. 333,334/- per debenture. The first and second redemption installment are already paid by the Company on their respective due dates as aforesaid.

2 (b) Rupee Term Loans :

(i) Bank of Baroda - Repaid in full on 23rd January, 2013 and satisfaction of charge has been filed with Government of India, Ministry of Corporate Affairs, Maharashtra, Pune.

(ii) Axis Bank Limited - Repaid in full on 23rd January, 2013 and satisfaction of charge has been filed with Government of India, Ministry of Corporate Affairs, Maharashtra, Pune.

(iii) Canara Bank - Repaid in full on 30th April, 2012 and satisfaction of charge has been filed with Government of India, Ministry of Corporate Affairs, Maharashtra, Pune.

2 (c) Foreign Currency Term Loans : From Bank of Baroda, London (i) External Commercial Borrowing (ECB) Term Loan balance outstanding USD 13,721,000/-. Repayable in 20 quarterly installments commencing from 30th June, 2014, carrying interest at 6 month USD LIBOR plus 400 bps p.a. payable quarterly.

(ii) External Commercial Borrowing (ECB) Term Loan balance outstanding USD 9,181,650/- comprising of :

a) Facility A of USD 4,681,650/- repayable in six half yearly installments starting from 24th month of initial drawdown i.e. repayment commencing from 22nd December, 2014 and;

b) Facility B of USD 4,500,000/- repayable in four half yearly installments starting from 27th month of initial drawdown i.e. repayment commencing from 22nd March, 2015. Both Facility A and Facility B carrying interest at 6 month USD LIBOR plus 315 bps p.a. payable six monthly. Above Debentures and Foreign Currency Term Loans are secured by mortgage of Company''s immovable properties consisting of land together with all buildings and structures thereon and all plant and machinery, attached to the earth or permanently fastened to anything attached to the earth, both present and future and hypothecation of whole of the movable fixed assets / properties of the Company, including its movable plant and machinery, machinery spares, tools and accessories and other movable fixed assets, both present and future, ranking pari passu with charges created and / or to be created in favour of the Trustees for Debenture holders and Banks / Financial Institutions for their term / foreign currency loans. The Foreign Currency Term Loans are also secured by Second Pari-passu charge on the Current Assets of the Company consisting of stock of raw materials, stocks in process, semi-finished and finished goods, bills receivables and book debts.

Note : 3 (a)

The Fund based and Non-Fund based Limits, sanctioned to the Company by the bankers, for meeting working capital requirements, are secured by First pari-passu charge on the Current Assets of the Company consisting of stock of raw materials, stocks in process, semi-finished and finished goods, bills receivables and book debts.

3 (b) PROVIDENT FUND :

In case of certain employees, the Provident Fund contribution is made to Kalyani Steels Limited Provident Fund Trust. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident Fund liability based on the assumptions listed below and determined that there is shortfall as at 31st March, 2013. The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are :

NOTE ''4'' :

Related party disclosures have been set out in a separate statement annexed to the Financial Statements. The related parties, as defined by Accounting Standard 18 ''Related Party Disclosures'' issued as prescribed by the Companies (Accounting Standard) Rules, 2006 in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key management persons and taken on record by the Board.

NOTE ''5'' :

Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed to the Financial Statements.

NOTE ''6'' :

The Company has entered into agreements in the nature of lease / leave and license agreement with different lessors / licensors for the purpose of establishment of premises and accommodation of executives. These are generally in the nature of operating lease / leave and license and period of agreements is generally for one year and renewable / cancellable at the option of the lessee or lessor. In view of above there are no disclosures required as per Accounting Standard - 19 "Leases" as prescribed by Companies (Accounting Standard) Rules, 2006.

NOTE ''7'' :

Previous Year Figures :

Previous year figures have been regrouped and reclassified wherever necessary to make them comparable with current period.


Mar 31, 2012

1 (a) Terms / Rights attached to Shares :

Equity Shares :

The Company has only one class of Equity Shares having at par value of Rs 5/- per share. Equity Shares are pari-passu in all respects and each shareholder is eligible for one vote per share held. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders at the ensuing Annual General Meeting.

In the event of liquidation of the Company, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

2 (a) Debenture Redemption Reserve :

Debenture Redemption Reserve has been created in accordance with Circular No.9/2002 dated 18th April, 2002 issued by Department of Company Affairs, Ministry of Law Justice and Company Affairs, Government of India and Section 117(c) of Companies Act, 1956 at 25% of the maturity amount equally over the terms of Debentures privately placed. Amount set out for the year represents the entire required amount for the year in respect of the Seventeenth Series and the Nineteenth Series of the Debentures.

3 (a) Debentures :

The Company has issued the following Secured Non-Convertible Redeemable Debentures :

(i) 400 - 10.75% Secured Non-Convertible Redeemable Debentures (NCDs) (Nineteenth Series) of Rs 1,000,000/- each, aggregating Rs 400,000,000/- (Rupees Four Hundred Million only) were issued on private placement basis. In terms of the Debenture Trust Hypothecation Deed dated 15th December, 2009, NCDs are to be redeemed in three annual installments commencing from the end of fourth year from the date of allotment i.e. redeemable on 18th September, 2013 Rs 333,333/- per debenture, on 18th September, 2014, Rs 333,333/- per debenture and on 18th September, 2015, Rs 333,334/- per debenture.

(ii) 550 - 12.50% Secured Non-Convertible Redeemable Debentures (NCDs) (Seventeenth Series) of Rs 1,000,000/- each, aggregating Rs 550,000,000/- (Rupees Five Hundred Fifty Million only) were issued on private placement basis, held by Life Insurance Corporation of India. In terms of the Debenture Trust Hypothecation Deed dated 8th April, 2009, NCDs are to be redeemed in three annual installments commencing from the end of third year from the date of allotment i.e. redeemable on 16th January, 2012 Rs 333,333/- per debenture, on 16th January, 2013, Rs 333,333/- per debenture and on 16th January, 2014, Rs 333,334/- per debenture. The first redemption installment is already paid by the Company on 16th January, 2012.

5 (b) Rupee Term Loans :

(i) Bank of Baroda - Repayable in 16 quarterly installments commencing from 10th December, 2012, carrying interest of Base Rate plus 2% p.a. payable monthly.

(ii) Axis Bank Limited - Repayable in quarterly installment of Rs 31,502,500/- each, commencing from 1st April, 2012, carrying interest of BPLR minus 4.75% p.a. payable monthly.

(iii)Canara Bank - Repayable in 8 quarterly installments, last installment due on 30th April, 2012, carrying interest of BPLR minus 2% p.a. payable monthly.

(iv)HDFC Bank Limited - Repaid in full on 2nd May, 2011 and satisfaction of charge has been filed with Government of India, Ministry of Corporate Affairs, Maharashtra, Pune.

Above debentures and loans are secured by mortgage of Company's immovable properties consisting of land together with all buildings and structures thereon and all plant and machinery, attached to the earth or permanently fastened to anything attached to the earth, both present and future and hypothecation of whole of the movable fixed assets / properties of the Company, including its movable plant and machinery, machinery spares, tools and accessories and other movable fixed assets, both present and future, ranking pari-passu with charges created and / or to be created in favour of the Trustees for Debenture holders and Banks / Financial Institutions for their term / foreign currency loans.

6 (a) On the basis of information available with the Company regarding the status of suppliers as defined vide "Micro, Small and Medium Development Act, 2006" total dues to suppliers as at 31st March, 2012 amount to Rs 583,530/-. Since there were no over dues beyond the credit period extended to the Company which is less than 45 days, no liability for payment of interest and related disclosures under the said act arose.

Note :

7 (a) Long term Inter Corporate Loans includes interest free loans aggregating Rs 11,250,000/- (Previous Year Rs 11,250,000/-) given to six private companies formed with the same purpose and obligation as the Six Employees Welfare Trusts under a Scheme in terms of Clause (b) of the proviso to Section 77(2) of the Companies Act, 1956.

7 (b) Long term advances recoverable in cash or kind represents interest free loans amounting to Rs 9,180,000/- (Previous Year Rs 9,180,000/-) to seven trusts connected with the welfare of employees.

As at 31st As at 31st March, 2012 March, 2011

NOTE '8' : CONTINGENT LIABILITIES :

A. Contingent Liabilities not provided for in respect of :

a) Claims against the Company not acknowledged as debts 12,648,157 12,648,157

b) Service Tax Demands - Matter under dispute 1,182,269 1,182,269

B. Mysore Minerals Limited had raised an illegitimate claim aggregating to Rs 281,552,035/- for price of calibrated iron ore purchased by the Company over and above the agreed contracted price. The Company has repudiated the said claim as the same is in ultra-vires to the contract. The dispute has been referred to Arbitrator.

NOTE '9' :

In the absence of balance confirmation, the balances in respect of a Government party are as per Books of Accounts only. Adjustments having an impact of revenue nature, if any, will be made in the year in which the same are confirmed and reconciled.

NOTE '10' :

Segment information has been set out in a separate statement annexed to the Financial Statements.

NOTE '11' :

Related party disclosures have been set out in a separate statement annexed to the Financial Statements. The related parties, as defined by Accounting Standard 18 'Related Party Disclosures' issued as prescribed by the Companies (Accounting Standard) Rules, 2006 in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key management persons and taken on record by the Board.

NOTE '12' :

Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed to the Financial Statements.

NOTE '13' :

The Company has entered into agreements in the nature of lease / leave and license agreement with different lessors / licensors for the purpose of establishment of premises and accommodation of executives. These are generally in the nature of operating lease / leave and license and period of agreements is generally for one year and renewable / cancelable at the option of the lessee or lessor. In view of above there are no disclosures required as per Accounting Standard 19 'Leases' as prescribed by Companies (Accounting Standard) Rules, 2006.

NOTE '14' :

Previous Year Figures :

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. Consequent to the notification of Revised Schedule VI under 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

As at 31st As at 31st March, 2011 March, 2010

Rs Rs

1. A. Contingent Liabilities not provided for in respect of :

a) Claims against the Company not acknowledged as debts 12,648,157 16,672,364

b) Service Tax Demands - Matter under Dispute 1,182,269 1,182,269

B. Mysore Minerals Limited had raised an illegitimate claim aggregating to Rs 281,552,035/- for price of calibrated iron ore purchased by the Company over and above the agreed contracted price. The Company has repudiated the said claim as the same is in ultra-vires to the contract. The dispute has been referred to Arbitrator.

2. In furnishing information under Note No.4(b) and 7(a), the view has been taken that particulars are required only in respect of items that are incorporated in the Finished Goods produced and not for such material used for maintenance of Plant & Machinery.

3. (a) (1) 550 - 12.50% Secured Non-Convertible Redeemable Debentures (Seventeenth Series) of Rs 1,000,000/- each, allotted on 16th January, 2009, privately placed, held by Life Insurance Corporation of India, redeemable in three equal annual installments commencing from the end of three years from the date of allotment.

(2) 400 - 10.75% Secured Non-Convertible Redeemable Debentures (Nineteenth Series) of Rs 1,000,000/- each, allotted on 18th September, 2009, privately placed, held by Indian Overseas Bank, Bank of India, Union Bank of India, Bajaj Auto Limited, NPS Trust - A/c LIC Pension Fund Scheme - Central Govt. and NPS Trust - A/c LIC Pension Fund Scheme - State Govt., redeemable in three equal annual installments commencing from the end of fourth year from the date of allotment.

Above Debentures are secured by mortgage of Company's immoveable properties consisting of land together with all buildings and structures thereon and all plant and machinery, attached to the earth or permanently fastened to anything attached to the earth, both present and future and hypothecation of whole of the moveable fixed assets / properties of the Company, including its movable plant and machinery, machinery spares, tools and accessories and other movable fixed assets, both present and future, ranking pari passu with charges created and / or to be created in favour of the Banks / Financial Institutions for their term / foreign currency loans.

(b) Rupee Term Loans :

(i) Canara Bank - Term Loan

(ii) Bank of Baroda - Term Loan

(iii) HDFC Bank Limited - Term Loan

(iv) Axis Bank Limited - Term Loan

Above loans are secured by mortgage of Company's immoveable properties consisting of land together with all buildings and structures thereon and all plant and machinery, attached to the earth or permanently fastened to anything attached to the earth, both present and future and hypothecation of whole of the moveable fixed assets / properties of the Company, including its movable plant and machinery, machinery spares, tools and accessories and other movable fixed assets, both present and future, ranking pari passu with charges created and / or to be created in favour of the Trustees for Debenture holders and Banks / Financial Institutions for their term / foreign currency loans.

(c) Foreign Currency Term Loans :

(i) Canara Bank - Foreign Currency Term Loan, Outstanding Balance : Nil (Previous Year : US$ 2,098,983) Above Foreign Currency Term Loan is converted into Rupee Term Loan during the year.

4. On the basis of information available with the Company regarding the status of suppliers as defined vide "Micro, Small and Medium Development Act, 2006" total dues to suppliers as at 31st March, 2011 amount to Rs 373,195/-. Since there were no overdues beyond the credit period extended to the Company which is less than 45 days, no liability for payment of interest and related disclosures under the said act arose.

5. In the absence of balance confirmation, the balances in respect of a Government party are as per Books of Account only. Adjustments having an impact of revenue nature, if any, will be made in the year in which the same are confirmed and reconciled.

6. Debentures Redemption Reserve has been created in accordance with Circular No.9/2002 dated 18th April, 2002 issued by Department of Company Affairs, Ministry of Law Justice and Company Affairs, Government of India and Section 117(c) of Companies Act, 1956 at 25% of the maturity amount equally over the terms of Debentures privately placed. Amount set out for the year represents the entire required amount for the year in respect of the Seventeenth Series and the Nineteenth Series of the Debentures.

7. Segment information has been set out in a separate statement annexed to this schedule.

8. Related party disclosures have been set out in a separate statement annexed to this Schedule. The related parties, as defined by Accounting Standard 18 'Related Party Disclosures' issued as prescribed by Companies (Accounting Standard) Rules, 2006 in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key management persons and taken on record by the Board.

9. The Company has entered into agreements in the nature of lease / leave and license agreement with different lessors / licensors for the purpose of establishment of premises and accommodation of executives. These are generally in the nature of operating lease / leave and license and period of agreements is generally for one year and renewable / cancelable at the option of the lessee or lessor. In view of above there are no disclosures required as per Accounting Standard - 19 "Leases" as prescribed by Companies (Accounting Standard) Rules, 2006.

10. Disclosures required as per Clause 32 of the Listing Agreement have been set out in a separate statement annexed hereto.

11. Previous year's figures have been regrouped wherever considered necessary to make them comparable with those of the current year.

12. Reference is invited to Statement of Significant Accounting Policies annexed hereto.


Mar 31, 2010

1. On the basis of information available with the Company regarding the status of suppliers as defined vide "Micro, Small and Medium Development Act, 2006" total dues to suppliers as at 31st March, 2010 amount to Rs.887,380/-. Since there were no overdues beyond the credit period extended to the Company which is less than 45 days, no liability for payment of interest and related disclosures under the said act arose.

2. In the absence of balance confirmations, the balances in respect of third parties are as per Books of Account only. Adjustments having an impact of revenue nature, if any, will be made in the year in which the same, are confirmed and reconciled.

3. Debentures Redemption Reserve has been created in accordance with Circular No.9/2002 dated 18th April, 2002 issued by Department of Company Affairs, Ministry of Law Justice and Company Affairs, Government of India and Section 117(c) of Companies Act, 1956 at 25% of the maturity amount equally over the terms of Debentures privately placed. Amount set out for the year represents the entire required amount for the year in respect of Seventeenth Series and the proportionate amount for the period of seven months since issued during the year in respect of the Nineteenth Series.

4. Segment information has been set out in a separate statement annexed to this Schedule.

5. Related party disclosures have been set out in a separate statement annexed to this Schedule. The related parties, as defined by Accounting Standard 18 Related Party Disclosures issued as prescribed by Companies (Accounting Standard) Rules, 2006 in respect of which the disclosures have been made, have been identified on the basis of disclosures made by the key management persons and taken on record by the Board.

 
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