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Notes to Accounts of KIC Metaliks Ltd.

Mar 31, 2015

1. Estimated amount of contracts remaining to be executed (Net of advances) on capital account and not provided for Rs. 22.06 ' Lakhs (previous year Rs. 28.64 Lakhs).

2. Contingent Liabilities not provided for in respect of :

a) Excise Duty matters pending Rs. 127.08 Lakhs (previous year Rs. 127.08 Lakhs) before CESTA Tribunal.

b) West Bengal Vat Appeal matters pending Rs. 12.68 Lakhs before WB Sales Tax Tribunal and Rs. 312.31 Lakhs before Senior ; Joint Commissioner, Commercial Taxes. (previous year Rs. NIL).

c) Jharkhand Entry Tax matters pending Rs. 81.75 Lakhs (previous year Rs. 81.75 Lakhs).

d) Electricity matters with The Durgapur Projects Limited pending Rs. 97.94 Lakhs (previous year Rs. 97.94 Lakhs).

3. Employee Benefits : Disclosure Pursuant to Accounting Standard - 15 (Revised 2005). The Employee's gratuity scheme - is unfunded and the Actuarial Valuation of Gratuity Scheme is prepared as at 31st March, 2015 under revised Accounting Standard - 15 norms and accordingly Rs. 11.59 Lakhs has been provided in the books in the current financial year.

4. a) Primary Segment (by Business Segment) :

Based on the risks and returns associated with the business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of Iron and Steel during the year. The risks and returns of manufacturing of pig iron and trading of its raw material are directly associated with Iron and Steel business and hence treated as a single reportable business segment. The other activities for Cement manufacturing is less than 10% of Total Revenue and hence there are no additional disclosures to be made under Accounting Standard - 17, other than those already provided in the financial statements.

b) Secondary Segment (by Geographical Segment) :

i) Te secondary segment is based on geographical demarcation i.e., in India and outside India.

5. Tere are no micro, small and medium class enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. Te above information regarding micro, small and medium class enterprises has been determined to the extent such parties have been identified on the basis of available information with the Company.

6. In pursuance of the provisions of the Companies Act, 2013, effective from 1st April, 2014, the Company has reassessed the - remaining useful lives of Fixed Assets to comply with the useful life as mentioned in Schedule II of the said Act. As a consequence of such reassessment, the charge for depreciation for the year ended 31st March, 2015 is lower than the previously applied rates by Rs. 155.53 Lakhs. The transitional impact of Rs. 81.55 Lakhs has been adjusted from the opening balance of retained earnings.

7. Excise Duty and Cess on Inventory of Finished Goods represent differential Excise Duty and Cess on opening and closing stock of - Finished Goods.

8. There is no expenditure in foreign currency on account of royalty, know how, professional and consultancy fees, interest, etc and there is no earnings in foreign currency during the year.

9. In the opinion of the Board and to the best of their knowledge and belief, the value of the realization of Current Assets, Loan and Advances, in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

10. Previous year figures have been re-grouped/re-arranged wherever necessary.


Mar 31, 2014

1. Estimated amount of contracts remaining to be executed (Net of advances) on capital account and not provided for Rs. NIL (Previous Year Rs. 800.37 Lakhs).

2. Contingent Liabilities not provided for in respect of :

a) Excise Duty Matters Pending Rs. 127.08 Lakhs (Previous Year Rs. 127.08 Lakhs) plus Interest and Penalty if any.

b) Jharkhand Entry Tax Matters Pending Rs. 81.75 Lakhs (Previous Year Rs. 81.75 Lakhs)

c) Electricity Matters with The Durgapur Projects Limited pending Rs. 97.94 Lakhs (Previous Year Rs. 97.94 Lakhs)

3. Employee Benefits : Disclosure pursuant to Accounting Standard-15 (Revised 2005). The Employee''s Gratuity Scheme is unfunded and the Actuarial Valuation of Gratuity Scheme is prepared as at 31st March, 2014 under revised AS-15 norms and accordingly Rs. 10.67 Lakhs has been provided in the books in the current financial year.

4. i] Based on the risks and returns associated with the business operations and in terms of Accounting Standard-17, the Company is predominantly engaged in a single reportable segment of Iron and Steel during the year. The risks and returns of manufacturing of pig iron and trading of its raw material are directly associated with Iron and Steel business and hence treated as a single reportable business segment. The other activities for Cement manufacturing is less than 10% of Total Revenue and hence there are no additional disclosures to be made under Accounting Standard-17, other than those already provided in the financial statements.

ii] Geographical Segments

5. RELATED PARTY DISCLOSURES

a] List of Related Parties and relationship

Party Relationship

I. KEY MANAGEMENT PERSONNEL

A. Mr. Radhey Shyam Jalan Managing Director

B. Mr. Barun Kumar Singh Executive Director

II. RELATED PARTY

A. Karni Syntex Pvt. Ltd. Holding Company

6. During the year, there has been a replacement of major equipments of the Mini Blast Furnace by way of modernization cum expansion plan. As a result, the installed annual capacity has been increased from 1.10 Lakh MT to 1.65 Lakh MT. The Company has incurred a total expenditure of Rs. 3,864.74 Lakh which has been capitalized under the head Plant and Machinery. The new Mini Blast Furnace was installed and put to use for commercial production on 15/12/2013. The major component of the existing MBF plant was substantially dismantled and the loss arising therefrom being the difference between the written down value as on 14/08/2013 i.e. Rs. 540.04 Lakhs and the value realized from the sale of the scrap and other dismantled Assets i.e. Rs. 225.90 Lakhs and thereby resulting into Net Loss of Rs. 314.14 Lakhs has been written off and disclosed as exceptional item in the Statement of Profit & Loss.

7. Excise duty and cess on Inventory of Finished Goods represent differential Excise Duty and Cess on opening and closing stock of finished goods.

8. In the opinion of the Board and to the best of their knowledge and belief, the value of the realization of Current Assets, Loan and Advances, in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

9. Previous year figures have been re-grouped/re-arranged wherever necessary.


Mar 31, 2013

1. Estimated amount of contracts remaining to be executed (Net of advances) on capital account and not provided for Rs. 800.37 Lakhs (Previous YearRs. Nil).

2. Contingent Liabilities not provided for in respect of:

a) Excise Duty Matters Pending Rs. 127.08 Lakhs (Previous Year Rs. 127.08 Lakhs) Plus Interest & Penalty if any.

b) Jharkhand Entry Tax Matters PendingRs. 81.75 Lakhs (Previous YearRs. 81.75 Lakhs).

c) Electricity Matters with The Durgapur Projects Ltd. Pending Rs. 97.94 Lakhs (Previous Year Rs. 97.94 Lakhs).

3. Employee Benefits : Disclosure Pursuant to Accounting Standard - 15 (Revised 2005). The Employee''s gratuity scheme is unfunded and the Actuarial Valuation of Gratuity Scheme is prepared as at 31st March, 2013 under revised AS -15 norms and accordingly Rs. 5.46 Lakhs has been provided in the books in the current financial year.

4. i] Based on the risks and returns associated with the business operations and in terms of Accounting Standard-17, the Company is predominantly engaged in a single reportable segment of Iron and Steel during the year. The risks and returns of manufacturing of pig iron and trading of its raw material are directly associated with Iron and Steel business and hence treated as a single reportable business segment. The other activities for Cement manufacturing is less than 10% of Total Revenue and hence there are no additional disclosures to be made under Accounting Standard-17, other than those already provided in the financial statements.

ii] Geographical Segments

a] The following table shows the distribution of the Company''s sales by Geographical Market:

5. During the year the Company has spent a sum ofRs. 263.64 Lakhs towards relining of the Mini Blast fumance which inter-alia includes replacement of the Refractories & few other major component which is quite usual in the manufacturing process of a Pig Iron Plant at a interval of every 5-6 years. Although the relining work does not result in the enhancement of the installed capacity of the Plant but is essential to retain the depleting production capacity of the plant and therefore the same has been treated as Capital expenditure. On the basis of the technical opinion and the past experience, the management has thought it prudent to amortize 95% value of the capital expenditure over a period of 5 years from the date of completion of relining work.

6. The outstanding balances of Contractors, Suppliers, Debtors, Creditors and others are subject to confirmation and reconciliation.

7. As required by Accounting Standard - 20 "Earnings Per Share", necessary figures are furnished below :

8. Excise Duty and cess on Inventory of Finished Goods represent differential excise duty and cess on opening and closing stock of finished goods.

9. In the opinion of the ''Board'' and to the best of their knowledge and belief, the value of the realization of Current Assets, Loan and Advances, in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

10. Previous year figures have been re-grouped/re-arranged wherever necessary.


Mar 31, 2012

1) Estimated amount of contracts remaining to be executed (Net of Advances) on capital account and not provided for Rs. NIL(Previous Year Rs. 552.14 Lakhs).

2) Contingent Liabilities not provided for in respect of:

a) Excise Duty Matters pending Rs. 127.08 Lakhs (Previous Year Rs. 132.15 Lakhs) Plus Interest and Penalty if any.

b) Jharkhand Entry Tax Matters pending Rs. 81.75 Lakhs (Previous Year Rs. 81.75 Lakhs).

c) Electricity Matters with The Durgapur Projects Limited pending Rs. 97.94 Lakhs (Previous Year Rs. 97.94 Lakhs).

3) Employee Benefits : Disclosure Pursuant to Accounting Standards (15) (Revised 2005). The Employee's gratuity scheme is unfunded and the Actuarial Valuation of Gratuity Scheme is prepared as at 31st March, 2012 under revised AS -15 norms and accordingly Rs. 6.64 Lakhs has been provided in the books in the current financial year.

4) i. Based on the risks and returns associated with the business operations and in terms of Accounting Standard-17, the Company is predominantly engaged in a single reportable segment of Iron and Steel during the year. The risks and returns of manufacturing of Pig Iron and trading of its raw material are directly associated with Iron and Steel business and hence treated as a single reportable business segment. The other activities for Cement manufacturing is less than 10% of Total Revenue and hence there are no additional disclosures to be made under Accounting Standard-17, other than those already provided in the financial statements.

ii. Geographical Segments

a) The following table shows the distribution of the Company's sales by Geographical Market:

5) Depreciation on Coke Oven Plant has not been provided during the year, since the Plant was not in operation due to commercial reasons. The total unprovided depreciation is Rs. 224.52 Lakhs (Previous year Rs. 188.80 Lakhs) which has not been charged in the Statement of Profit and Loss in the current year as well as in the earlier years since 30th September, 2005.

6) The outstanding balances of Contractors, Suppliers, Debtors, Creditors and others are subject to confirmation and reconciliation.

7) As required by Accounting Standard AS - 20 "Earnings per Share" necessary figures are furnished below :

8) Excise duty and cess on stock represent differential excise duty and cess on opening and closing stock of finished goods.

9) In the opinion of the Board and to the best of their knowledge and belief, the value of the realization of Current Assets, Loan and Advances, in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

10) The financial statements for the year ended 31st March, 2011 has 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

1. Estimated amount of contracts remaining to be executed (Net of advances) on capital account and not provided for Rs. 55,214,228 (Previous yearRs. 201,880,519).

2. Contingent Liabilities not provided for in respect of:

a) Excise Duty Matters Pending Rs. 13,215,155 (Previous year Rs. 13,215,155) plus Interest and Penalty if any.

b) Jharkhand Entry Tax Matters Pending Rs. 8,175,000 (Previous yearRs. 8,175,000)

c) Electricity Matters with The Durgapur Projects Limited Pending Rs. 9,793,882 (Previous year Rs. 9,793,882)

3. Travelling expenses include Directors Travelling Rs. 66,925 (Previous year Rs. 632,253).

4. Employee Benefits : Disclosure pursuant to Accounting Standard -15 (Revised 2005). The Employee's Gratuity Scheme is unfunded and the Actuarial Valuation of Gratuity Scheme is prepared as at 31st March, 2011 under revised AS -15 norms and accordingly Rs. 1,188,775 has been provided in the books in the current financial year.

5. Mat Credit Entitlement amounting to Rs. 49,538,937 includes Rs. 1,37,72,489 on account of taxes paid in earlier Assessment Years under section 115JB of the Income Tax Act, being Rs. 5,204,586 for the AY. 2006-2007, Rs. 5,389,658 for the A.Y 2007- 2008, Rs. 3,178,245 for the A.Y. 2010-2011 which are eligible for credit under Section 115JAA of the Income Tax Act, from the future Financial Year Tax Liabilities of the Company and the same has been accounted for this year though part of the credit had accrued in earlier Accounting Years.

6. i) Based on the risks and returns associated with the business operations and in terms of Accounting Standard -17, the Company is predominantly engaged in a single reportable segment of Iron and Steel during the year. The risks and returns of manufacturing of Pig Iron and trading of its Raw Material, Coking Coal & Iron Ore Fines, are directly associated with Iron and Steel business and hence treated as a single reportable business segment. The management is of the view that the disclosure already provided in the financial statements relating with the quantitative details of manufacturing and trading activities under paragraph 19(B) & (C) of Notes to Accounts, are in compliance with the requirement of Accounting Standard -17. The other activities for Cement manufacturing is less than 10% of Total Revenue and hence there are no additional disclosures to be made under Accounting Standard -17, other than those already provided in the financial statements.

7. Depreciation on Coke Oven Plant has not been provided during the year, since the Plant was not in operation due to commercial reason. The total unprovoked depreciation is Rs. 18,880,168 which has not been charged in the Profit and Loss Account in the current year as well as in the earlier years since 30th September, 2005.

8. During the year the company has spent a sum of Rs. 36,262,509 towards relining of the Mini Blast Furnace which inter- alia includes replacement of the Refractory’s & few other major component which is quite usual in the manufacturing process of a Pig Iron Plant at a interval of every 5-6 years. Although the relining work does not result in the enhancement of the installed capacity of the Plant but is essential to retain the depleting production capacity of the plant and therefore the same has been treated as Capital Expenditure. On the basis of the technical opinion and the past experience, the management has thought it prudent to amortize 95% value of the Capital Expenditure over a period of 5 years from the date of completion of relining work.

9. All related expenses of project, which is under implementation, are treated as Capital Work-in-progress. Administrative Expenses to said project as identified by the management, have been transferred to Pre-Operative Expenses Account.

10. Salary, Wages, Allowances and Bonus and Contribution to Provident Fund and ESIC includes following remuneration to the Managing Director and Executive Director.

11. The outstanding balances of Contractors, Suppliers, Debtors, Creditors and other are subject to confirmation and reconciliation.

12. Unsecured Loan consists of Rs. 1,340,711,453 (Previous year Rs. 901,269,002) from Banks against Letter of Credit, and advances for Supplies and Rs. 307,946,756 (Previous year Rs. 6,487,018) from Body Corporate.

13. Excise Duty and Cess on Stock represent differential Excise Duty and Cess on Opening and Closing Stock of Finished Goods.

14. The Foundry Division of the Durgapur Plant was licensed on short term basis for 11 months to M/s. Kajaria Iron & Steel Company Private Limited with effect from 1st August, 2010 on a Lease Rental of Rs. 300,000 per month.

15. The Company has allotted on 31st March, 2011, 14,550,000 of 7% Redeemable Non-Cumulative Preference Shares of Rs. 10 each, fully paid up, which is redeemable at par at any time between end of fifth year to twelfth year from the date of allotment, subject to approval from statutory bodies and Financial Institutions, if any.

16. Balance Sheet Abstract and Company's General Business Profile (Additional Information under Part IV of the Schedule VI to the Companies Act, 1956) is annexed herewith.

17. In the opinion of the Board and to the best of their knowledge and belief, the value of the realization of Current Assets, Loan and Advances, in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

18. Micro, Small and Medium Class Enterprises :

There are no Micro, Small and Medium Class Enterprises, to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2011. The above information regarding Micro, Small and Medium Class Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

19. Previous year figures have been re-grouped/re-arranged wherever necessary. Signature to Schedules 1 to 18


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed (Net of advances) on capital account and not provided for Rs 2,018.81 Lakhs (Previous year - Rs.65.37 Lakhs).

2. Contingent Liabilities not provided for in respect of:

a) Excise Duty matters pending Rs. 132.15 Lakhs (Previous year- Rs. 209.70 Lakhs) plus interest & penalty if any.

b) Jharkhand Entry Tax matters pending Rs. 81.75 Lakhs (Previous year - Rs. 81.75 Lakhs).

c) The Durgapur Projects Limited electricity matters pending Rs. 97.94 Lakhs (Previous year- Rs. 97.94 Lakhs).

3. Traveling Expenses include Directors Travelling Rs. 6.32 Lakhs (Previous year - Rs. 3.96 Lakhs).

4. Employee Benefits: Disclosure pursuant to Accounting Standard -15 (Revised 2005). The Employees Gratuity Scheme is unfunded and the Actuarial Valuation of Gratuity Scheme is prepared as at 31st March, 2010, under revised AS -15 norms. Rs. 8.38 Lakhs has been written back in the books in the current financial year.

In accordance with Accounting Standard (AS) - 22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has accounted for Deferred Tax during the year. During the current year the Company generates a Deferred Tax Liability of Rs. 395.63 Lakhs. Deferred Tax Assets on account of carried forward business losses and unabsorbed depreciation under Income Tax Act has been recognised as there exists virtual certainty of realization on reversal of deferred tax liability in future years on account of depreciation. However, as a matter of prudence Deferred Tax Asset has been recognized to the extent there is Deferred Tax Liability.

5. In view of brought forward losses under Income Tax, the Company is liable to pay only the Minimum Alternative Tax (MAT). The Company has provided for/paid MAT (net of normal tax liabilities, if any) of Rs. 31.78 Lakhs. As per applicable provisions of Income Tax Act, the Company is eligible to adjust the MAT against its regular Income Tax Liability arising within subsequent 10 years.

6. i) The Companys business activity primarily falls within a single business segment i.e. Iron & Steel business including manufacturing activities of Pig Iron, C.I. Castings and Trading activities of Coking Coal, Met Coke and Iron Ore Fines are directly associated with manufacturing operation of Iron & Steel business and the risk and return are same with the manufacturing operations. The other activities for Cement manufacturing is less than 10% of Total Revenue and hence there are no additional disclosures to be made under Accounting Standard -17, other than those already provided in the financial statements.

ii) Geographical Segments

7. Related Party Disclosures

a) List of related parties and relationship:

I. KEY MANGEMENT PERSONNEL

A. Mr.RadheyShyamJalan Managing Director

B. Mr. Pradeep Chandra Sahoo Executive Director

C. Mr. Ravi Kumar Kajaria Ex-Managing Director (Ceases tobe director w.e.f., 30th January, 2010)

II. OTHER RELATED PARTY

A. Apex Energy Resources Limited Associate Company

B. Bengal Energy Limited Associate Company

C. Kajaria Iron & Steel Co. Pvt. Limited Associate Company

D. Kami Syntex Pvt. Limited Promoter Company

8. Depreciation on Coke Oven Plant has not been provided during the year, since the Plant was not in operation due to commercial reason.

9. The outstanding balances of Contractors, Suppliers, Debtors, Creditors and others are subject to confirmation and reconciliation.

10. Unsecured Loan consists of Rs. 9,012.69 Lakhs (Previous year Rs. Nil) from Bank being discounting of bills against Letter of Credit and Rs. 64.87 Lakhs (Previous year Rs. 1,985.21 Lakhs) from Body Corporates.

11. Balance Sheet Abstract and Companys General Business Profile (in terms of amendment to Schedule VI Part IV) is annexed herewith.

12. In the opinion of the Board and to the best of their knowledge and belief, the value of the realization of Current Assets, Loan and Advances, in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

13. Micro, Small and Medium Class Enterprises :

There are no Micro, Small and Medium Class Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2010. The above information regarding Micro, Small and Medium Class Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.

14. Previous year figures have been regrouped/rearranged wherever necessary.

15. Figures have been shown in the lakhs only in accordance with the Notification 46/116/2002 - CL III dt 01.08.2002 in term of our report of even date.

Signature to Schedules 1 to 19 referred to above which form part of the Balance Sheet and Profit & Loss Account for the year ended 31 st March, 2010.