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Notes to Accounts of Kirloskar Ferrous Industries Ltd.

Mar 31, 2016

A. Rights and preferences attached to equity shares

The Company has only one class of equity shares having a par value ofRs, 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The Interim dividend declared by the Board of Directors on 10th March, 2016 and paid on 29th March, 2016 is subject to the confirmation of the shareholders at the ensuing Annual General Meeting.

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 preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. Security for Term Loans:

Secured Term Loan ofRs, 233,333,319 availed from BNP Paribas is secured by an exclusive first charge by way of hypothecation in favour of IDBI Trusteeship Services Limited as Security Trustee for the benefit of BNP Paribas, on Hot Blast Stove for MBF-I, Hot Blast Stove for MBF-II, Boiler and Turbo Generator - 5 MW capacity installed at Bevinahalli Village, Koppal District, Karnataka. The loan amount is repayable in 28 equal monthly installments on the last working day of each month. The rate of interest was 9.55 percent per annum till 2nd December, 2015 and thereafter the rate was revised to 8.95 percent per annum. The balance outstanding as at 31st March, 2016 is Rs, 99,999,975 (Previous year Rs, 199,999,983). Out of which Rs, 99,999,975 (Previous yearRs, 100,000,008), being repayable within 12 months from the reporting date has been reflected under Other Current Liabilities as "Current Maturities of Long Term Borrowings".

Security for Secured Loans:

Working capital facilities with Consortium Banks (fund based and non fund based) aggregating to Rs, 4,500,000,000 (previous year Rs, 4,500,000,000) are secured by first charge by way of hypothecation on the current assets both present and future, in favour of IDBI Trusteeship Services Limited, as Security Trustees, for the benefit of consortium banks.

# Note: There is no amount due and outstanding as at Balance Sheet date to be credited to Investor Education and Protection Fund.

##The Company leases equipments under operating lease agreements that are renewable on a periodic basis at the option of both the less or and the lessee. Rental receipts with applicable taxes under such leases areRs,782,179 for the year ended 31st March, 2016 (Previous YearRs,434,170)

The Provident Fund contributions are remitted to the Regional Provident Fund Commissioner.

The Contribution on account of Superannuation is remitted to Life Insurance Corporation of India, who manages the Superannuation Fund.

1. Disclosure pursuant to Accounting Standard 15 (Revised) Employee Benefits:

Defined Benefit Plan:

The Employee Gratuity Fund Scheme is a Defined Benefit Plan. The present value of the obligation is based on the actuarial valuation using Projected Unit Credit Method.


Mar 31, 2015

A. Rights and preferences attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. 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 in the ensuing Annual General Meeting.

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 preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.

B. Security for Term Loans / Buyers Credit:

(i) Secured Term Loan of Rs. 233,333,319 availed from BNP Paribas (Previous year from Bank of Maharashtra) is secured by an exclusive first charge by way of hypothecation in favour of IDBI Trusteeship Services Limited as Security Trustee for the benefit of BNP Paribas, on Hot Blast Stove for MBF-I, Hot Blast Stove for MBF-II, Boiler and Turbo Generator - 5 MW capacity installed at Bevinahalli Village, Koppal District, Karnataka. The loan amount is repayable in 28 equal monthly installments on the last working day of each month. The rate of interest payable is 9.55 percent per annum. The balance outstanding as at 31st March, 2015 is Rs. 199,999,983, out of which an amount of Rs. 100,000,008 being repayable within 12 months from the reporting date, has been reflected under Other Current Liabilities as "Current Maturities of Long Term Borrowings".

(ii) Buyers'' Credit of US$ 9,447,647.49 equivalent Rs. 504,619,357 as given below, availed from The Hongkong and Shanghai Banking Corporation Limited (HSBC) is secured by way of hypothecation in favour of IDBI Trusteeship Services Limited as Security Trustee for the benefit of HSBC, on the following specific assets installed at Bevinahalli Village, Koppal District, Karnataka. The Balance outstanding as at 31st March, 2015 is Rs. 252,309,680 which amount being repayable within 12 months from the reporting date, has been reflected under Other Current Liabilities as "Current Maturities of Long Term Borrowings".

b. Unsecured term loan of Rs. 150,000,000 has been availed from BNP Paribas for a tenure of 14 months (ie. repayable on 20th May, 2015) at interest rate of 10 percent per annum. Interest payable monthly and Bullet repayment of principal amount at the end of tenure. The entire amount being repayable within 12 months from the reporting date, has been reflected under Other Current Liabilities as "Current Maturities of Long Term Borrowings".

2. Contingent Liabilities not provided for As at 31st March 2015 2014

a. In respect of following (matter subjudice) *

i. Central Excise and Customs 16,241,843 18,905,405

ii. Service Tax 30,300,099 30,300,099

iii. Income Tax 103,352,821 179,065,677

iv. Sales Tax 66,450,204 5,443,293

v. Labour matters to the extent quantifiable 2,208,266 1,930,343

b. Sales Bills discounted 178,113,066 -

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


Mar 31, 2013

1. Basis of preparation of financial statements

a. The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

b. The Company follows mercantile system of accounting and recognises income and expenditure on an accrual basis except those with significant uncertainties.

c. The accounting policies applied by the Company are consistent with those used in the previous year.

d. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. 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 in the ensuing Annual General Meeting.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

a) Terms of Warrants:

The holders of 64,782,765 warrants were entitled to apply for one equity share of Rs. 5 each per warrant at a premium of Rs. 30 at any time within the warrant exercise period i.e., between 13th March, 2008 to 13th March, 2013.

Security for Term Loans / Buyers Credit :

(i) Term Loan of Rs. 400,000,000 availed from Bank of Maharashtra (BOM) is secured by an exclusive first charge by way of hypothecation, in favour of IDBI Trusteeship Services Limited as Security Trustee for the benefit of BOM, on Hot Blast Stove for MBF - I, Hot Blast Stove for MBF - II and Boiler and Turbo Generator - 5 MW capacity installed at Bevinahalli Village, Koppal District, Karnataka. The loan amount is repayable in 48 equal monthly installments commencing from April 2013 with a rate of interest at base rate plus 0.15 percent per annum. Out of Rs. 400,000,000, an amount of Rs. 100,000,000 being repayable in 12 months from the reporting date, has been reflected under Other Current Liabilities as "Current Maturities of Long Term Borrowings".

(ii) Buyers'' Credit of USD 9,447,647.49 equivalent INR 504,619,357 availed from The Hongkong and Shanghai Banking Corporation Limited (HSBC) is secured by an exclusive first charge by way of hypothecation, in favour of IDBI Trusteeship Services Limited as Security Trustee for the benefit of HSBC, on the following specific assets installed at Bevinahalli Village, Koppal District, Karnataka.

Security for Secured Loans :

Working capital facilities with Consortium Banks (fund based and non fund based) aggregating to Rs. 4,500,000,000 (previous year Rs. 4,500,000,000) are secured by first charge by way of hypothecation on the current assets both present and future, in favour of IDBI Trusteeship Services Ltd, as Security Trustees, for the benefit of consortium banks.

2. Segment Information : The Company operates in one segment namely iron castings

3. Related Party Disclosures :

a. Associate Company : Kirloskar Industries Limited

b. Key Management Personnel : Mr. R.V.Gumaste - Managing Director


Mar 31, 2012

1. Basis of preparation of Financial Statements

a. The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

b. The Company follows mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

c. The accounting policies applied by the Company are consistent with those used in the previous year.

d. For preparation and presentation of the financial statements, erstwhile Schedule VI to the Companies Act, 1956 was used upto the year ended 31st March, 2011. For the year ended 31st March, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. Previous year's figures have been regrouped to conform to the current year classification.

a. Terms I rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. 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 in the ensuing Annual General Meeting.

In the event of Liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. Terms of Warrants:

The holders of 64,782,765 warrants are entitled to apply for one equity share of Rs.5 each per warrant at a premium of Rs.30 at any time within the warrant exercise period i.e., between 13th March, 2008 to 13th March, 2013. The Company will also have one time call option of compulsory conversion of warrants at any time within the warrant exercise period.

From the commencement of warrant exercise period (i.e. 13th March, 2008) till 31st March, 2012, the Company has received applications from warrant holders for conversion of 302,916 warrants into equity shares for an amount aggregating to Rs.1,06,02,060 (inclusive of securities premium) and have been converted into Equity Shares (Equity Share Capital Rs.1,514,580 and Securities Premium Rs.9,087,480) till 31st March, 2012.

Assuming that all warrants are converted into equity shares, the paid up equity share capital of the Company will enhance from Rs.686,540,405 (137,308,081 equity shares of Rs.5 each) to Rs.1,008,939,650 (201,787,930 equity shares of Rs.5 each). Also the securities premium will enhance by Rs.1,934,395,470.

Security for Secured Loans:

Working capital facilities with Consortium Banks (fund based and non fund based) aggregating to Rs.4,500,000,000 (previous year Rs.4,500,000,000) are secured by first charge by way of hypothecation on the current assets both present and future, in favor of IDBI Trusteeship Services Ltd, as Security Trustees, for the benefit of consortium banks.

1. Segment Information: The Company operates in one segment namely iron castings.

2. Contingent Liabilities As at 31st March

2012 2011

Rs. Rs.

a. Central Excise (Matter Subjudice) 22,642,373 15,156,639

b. Service Tax (Matter Subjudice) 33,762,260 8,024,421

c. Income Tax (Matter Subjudice) 87,585,582 85,792,762

d. Interest on Electricity Tax (Matter Subjudice) 604,782 604,782

e. Labour Matters (Matter Subjudice), to the extent quantifiable. 1,578,867 1,420,670


Mar 31, 2011

1.01 Security:

Working Capital facilities:

Working capital facilities with Consortium Banks (fund based and non fund based) aggregating to Rs.4,500,000,000 (previous year Rs.4,500,000,000) are secured by first charge by way of hypothecation on the current assets, both present and future, in favour of IDBI Trusteeship Services Limited as Security Trustees, for the benefit of consortium banks.

1.02 Warrants:

The holders of 64,782,765 warrants are entitled to apply for one equity share of Rs. 5 each per warrant at a premium of Rs. 30 at any time within the warrant exercise period i.e., between 13th March, 2008 to 13th March, 2013. The Company will also have one time call option of compulsory conversion of warrants at any time within the warrant exercise period.

From the commencement of warrant exercise period (ie. 13th March 2008) till 31st March, 2011, the Company has received applications from warrant holders for conversion of 302,916 warrants into equity shares for an amount aggregating to Rs. 1,06,02,060 (inclusive of securities premium) and have been converted into equity shares (equity share capital Rs. 1,514,580 and securities premium Rs. 9,087,480) till 31st March, 2011

2.01 Interest paid on others Rs. 34,490,799 (Previous year Rs. 44,851,743) is net-off Rs. 4,464,666 (Previous Year Rs. 731,640) being interest received from customers/ suppliers/ contractors. [Tax deducted at source on interest received is Rs. Nil (Previous Year Rs. Nil)].

2.02 Segment Information : The Company operates in one segment namely Iron castings.

* Includes 5,891 MT for internal consumption (previous year 5,219 MT)

Note:

Castings turnover has been arrived after considering the rejections of 2,784 MT amounting to Rs.174,177,981 (Previous Year 3,277 MT amounting to Rs. 192,111,931)

2.03. Related Party Disclosures :

a) Associate Company : Kirloskar Industries Limited

b) Key Management Personnel : Mr. R.V.Gumaste - Managing Director

2.04 Disclosure pursuant to Accounting Standard 15 (Revised) Employee Benefits :

The Provident Fund contributions are remitted to the Regional Provident Fund Commissioner.

The Contribution on account of Superannuation is remitted to Life Insurance Corporation of India, who manages the Superannuation Fund.

2.05 Previous years figures have been regrouped wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2010

Sr. Particulars 2009-10 2008-09 No. (Rs.) (Rs.)

1.01 Estimated amount of contracts remaining to be executed 148,192,670 331,329,529 on capital account and not provided for

1.02 Contingent Liabilities not provided for in respect of:

a) Central Excise (Matter Subjudice) 21,833,255 17,533,337

b) Sales Tax (under Appeal) 1,626,983 3,620,604

c) Income Tax (MAT) (Matter Subjudice) 16,994,142 50,044,616

d) Interest on Electricity Tax (Matter Subjudice) 604,782 Nil

e) Labour Matters (Matter Subjudice), to the extent quantifiable. 2,021,076 1,886,448

f) Sales bills discounted covered under letter of credit issued 79,700,704 Nil by the customers (realized in April 2010)

1.03 Security:

A) Term Loan

Term Loan of Rs.220,000,000 availed from The Hongkong and Shanghai Banking Corporation Limited (HSBC) is secured by an exclusive first charge by way of hypothecation of specific fixed assets, namely Mini Blast Furnace -1 and Turbo Generators I and II in favour of IDBI Trusteeship Services Limited, as Security Trustees for the benefit of HSBC.

B) Working Capital facilities

Working capital facilities with Consortium Banks (fund based and non fund based) aggregating to Rs.4,500,000,000 (previous year Rs. 4,500,000,000) are secured by first charge by way of hypothecation on the current assets, both present and future, in favour of IDBI Trusteeship Services Limited, as Security Trustees, for the benefit of consortium banks.

1.04 Segment Information: The Company operates in one segment namely Iron castings

1.05. Related Party Disclosures:

a) Associate Company : Kirloskar Oil Engines Limited (the name changed to Kirloskar Industries Limited w.e.f. 31.03.2010)

b) Key Management Personnel: Mr. R.V.Gumaste-Managing Director

1.06 Previous years figures have been regrouped wherever considered necessary to make them comparable with those of the current year.

 
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