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Notes to Accounts of Metroglobal Ltd.

Mar 31, 2014

1 Previous year"s figures have been regrouped / reclassified wherever necessary to make them comparable with current year figures.

2 Excise Duty on Sales has been disclosed as reduction from the turnover.

3 The Ministry of Corporate Affairs, Government of India vide its General Circular No: 2/2011 dated 8th February, 2011 has granted general exemption to the Holding Companies from attaching balance sheets of subsidiary Companies with the balance sheet of the Holding Company as per Section 212(8) of the Companies Act, 1956 subject to fulfillment of certain conditions. Accordingly, the Board of Directors of the Company has passed the resolution giving consent for not attaching the balance sheets of the Subsidiary Companies with that of the Company

4 The amounts in the Balance Sheet and Profit and Loss Account are rounded off to the nearest thousand and indicated in lacs of rupees.

5 In the absence of any information from vendors regarding the status of their registration under the "Micro Small and Medium Enterprise Development Act 2006" the company is unable to comply with the disclosures required to be made under the said Act.

6 During the year under review Company has converted 1416660 Unsecured Convertible Debentures each of Rs. 100/- in to 7,87,033 Equity Shares of Rs. 10/- each at a premium of Rs. 170/- per share on preferential basis as per SEBI (ICDR) Regulations,2009 after obtaining necessary approvals from Board of directors, Shareholders and Bombay Stock Exchange Ltd under Clause 24(a) of the listing Agreement. As balance of Debenture becomes Nil outstanding balance in Debenture Redemption Reserve is transferred to General Reserve.

7 Proposed Dividend of Financial Year 2012-13 has been cancelled by the Board of Directors of the Company at its meeting held on September 10, 2013 and the same cancellation of dividend is approved by members in AGM held on 28.09.2013 and hence accordingly proposed dividend and tax on the same has been removed from the financials of the company for Financial Year 2012-13

8 During the year under review Bad debts has been write off of Rs. 738.98 Lacs which comprises outstanding loans of Monarc Engineers of Rs. 354.35 lacs for which company has filed legal suit and commodity trade receivables amounting to Rs. 384.63 lacs pertaining to various commodities contracts executed through brokers on the National Spot Exchange Limited (NSEL). Over past few months, NSEL is unable to fulfill its scheduled payment obligations as agreed by them and therefore outstanding balance of Rs. 384.63 lacs has been write off from the books of accounts during the year under review.

10 (a) No commission (Previous Year Rs. NIL) has been paid to the Managing Director / Dy. Managing Director for the year under review in view of resolution passed by the Board of directors and as agreed by the Managing Director. Computation of Net Profit as per Section 349 read with Section 309(5) and section 198 of the Companies Act, 1956 therefore has not been furnished for the year under review.

ii) Total income of the company chargeable to tax is being determined by the company in accordance with provisions of the Income Tax Act, 1961 after considering allowances, claims and relief available to the Company. As the company is having accumulated losses and unabsorbed depreciation as per books of account and also under the Income Tax Act, 1961, The company has been advised that under the circumstances it shall have no liability under the Income Tax Act, 1961 and therefore no provision has been made in books of the company.

12 Rs. 33.49 Lacs being net loss (Previous year Rs. 23.04 Lacs being net gain) on account of exchange difference have been adjusted in the respective heads of account in the profit & loss account.

13 Earning per share (EPS) - EPS is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Numbers used for calculating basic and diluted earnings per equity shares are stated below :

14 Accounting Standard (As-15) on Employee benefits

Provident Fund Contribution by the Company :

Contributions are made to Recognized Provident Fund/Government Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee"s salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs. 7.65 Lacs (Previous Year Rs. 7.79 Lacs).

Gratuity Benefits :

In respect of Gratuity, the Company has taken policy No. 40001067 from Reliance Life insurance Co. Limited. and from Future Generali insurance Co. Limited policy No: GI000041. The Defined Benefit Obligation as at 31.03.2014 works out to Rs. 21.56 lacs, Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made for all regular employees on the basis Actuarial Valuer"s certificate.

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2014

15 Based on guiding principles given in Accounting Standard on "Segment Reporting"- AS 17 as specified in the Companies (Accounting Standard) Rules, 2006 (as amended), single financial report contains both Standalone Financial Statement and Consolidated Financial Statement of the Company. Hence, the required segment information has been appended in the Consolidated Financial Statements (CFS).

16 Related party disclosures as required by Accounting Standard AS-18 issued by the Institute of Chartered Accountants of India are given below Name of the related party and nature of relationship where control exists :

Subsidiary company

1 Metrochem Capital Trust Limited

Associates Companies

Anil Dyechem Industries Pvt. Ltd Search Invatrade Pvt. Ltd.

Harvest Tradelink Pvt.Ltd. Sparkling Tradefin Pvt. Ltd.

Maiden Tradefin Pvt. Ltd. Spring Trading And Investment Pvt. Ltd.

Minerva Dyechem Industries P.Ltd. Progressive Invatrade Pvt.Ltd.

Bloom Investment & Trading Pvt.Ltd. DK Metro Procon Private Limited

Charm Trading & Investment Pvt.Ltd. Miraj Impex Pvt. Ltd.

Key Management Personnel

Shri Gautam M. Jain Shri Rahul Jain

Relatives of Key Management Personnel and their Enterprises

Mahendra Mithalal HUF Gautam Rajendra HUF Rajendra Mithalal HUF

Rajendra Anil HUF Mishal M. Shah Arun R. Jain

Suhani M. Shah Yash Anil Jain Mithalal Mukanchand HUF

Nitu G. Jain Ankit Rajendra Jain Rajendra Jain HUF

Mithalal Rajendra HUF Rajendra Mithalal HUF Rajendra Gautam Bros. HUF

Mithalal Mukanchand B. HUF Bhavna G. Jain Anil Mahendra HUF

Anil M Jain HUF Mithalal M. Shah Gautamkumar Mithalal HUF

Sumitradevi M. Shah Ritu A. Jain Mahendra M. Shah

Asha R. Jain Ritu (Ekta) G. Jain Santosh M. Shah

Krati R. Jain Metrochem Industries

Related Party Disclosures:

In accordance with Accounting Standard 18 ''Related Party Disclosures" issued by the Institute of Chartered Accountants of India, the company has compiled the required information in the table below.

The transactions were carried out with the related parties in the ordinary course of business There are no write offs/write back of any amounts for any of the above parties.

17 Contingent Liabilities:

in Lacs

a)Particulars 2013-14 2012-13

Income Tax NIL 145.44

VAT/Sales Tax 53.09 53.09

Excise Duty (Interest thereon not ascertainable at present) 196.24 196.24

Others NIL 1.80

b) During 1993, the Company had imported plant and machinery under Export Promotion Capital Goods Scheme (''EPCG") at concessional rate of custom duty against export obligation under the said Scheme. As the Company could complete only partial Export obligation, it has received a notice of demand from Directorate General of Foreign Trade (''DGFT"). The Company has paid the entire differential duty amount forRs. 94,68,900 on 10.05.2011 and has made necessary submissions before the authorities. In view of this submission and pending decision of forum, interest liability is not ascertainable.

c) Certain claims/show cause notices disputed have neither been considered as contingent liabilities nor acknowledged as claims based on the opinions obtained from legal counsels.


Mar 31, 2013

1 The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

2 EXCISE DUTY on Sales has been disclosed as reduction from the turnover

3 The Ministry of Corporate Affairs, Government of India vide its General Circular No: 2/2011 dated 8th February, 2011 has granted general exemption to the Holding Companies from attaching balance sheets of subsidiary Companies with the balance sheet of the Holding Company as per Section 212(8) of the Companies Act, 1956 subject to fulfillment of certain conditions. Accordingly, the Board of Directors of the Company has passed the resolution giving consent for not attaching the balance sheets of the Subsidiary Companies with that of the Company

4 The amounts in the Balance Sheet and Profit and Loss Account are rounded off to the nearest thousand and indicated in lacs of rupees.

5 There were no amount overdue and remaining outstanding to smalt scale and/or ancillary industrial suppliers on account of principal and/or interest as at the close of the year. This disclosure by the Company is based on the information available with the Company regarding the status of the suppliers. In absence of necessary information relating to suppliers registered as Micro, Small and Medium enterprises under the Micro, Small and Medium Enterprises (Development) Act 2006, the company has not been able to identify such suppliers and the information required under the said Act could not be compiled and disclosed.

6 During the year under review Company has converted 5268000 Unsecured Convertible Debentures each of Rs. 100/- in to 29,26,667 Equity Shares of Rs. 10/-each at a premium of ^ 170/-per share on preferential basis as per SEBI (ICDR) Regulations,2009 after obtaining necessary approvals from Board of directors, Shareholders and Bombay Stock Exchange Ltd under Clause 24(a) of the listing Agreement.

7 The management is of the view that shortfall of between the aggregate book value of quoted investments and the aggregate market value thereof held by the company as long term investment as on 31st March 2013 is temporary and therefore no provision has been made.

8 Rs. 23.04 lacs being net gain (Previous yearRs. 13.48 Lacs being net gain) on account of exchange difference have been adjusted in the respective heads of account in the profit & loss account.

9 Accounting Standard (As-15) on Employee benefits

Provident Fund Contribution by the Company :

Contributions are made to Recognized Provident Fund/Government Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee''s salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to f 7.79 Lacs (Previous Year Rs. 9 89 Lacs).

Gratuity Benefits :

In respect of Gratuity, the Company has taken policy No. 40001067 from Reliance Life insurance Co. Limited, and from Future Generali insurance Co. Limited. The Defined Benefit Obligation as at 31.03,2013 works out to Rs. 20.86 lacs, Actuarial Valuation for Compensated Absences is done as at the year end and the provision is made for all regular employees on the basis Actuarial Valuer''s certificate.

14 Based on guiding principles given in Accounting Standard on "Segment Reporting"- AS 17 as specified in the Companies (Accounting Standard) Rules, 2006 (as amended), single financial report contains both Standalone Financial Statement and Consolidated Financial Statement of the Company. Hence, the required segment information has been appended in the Consolidated Financial Statements (CFS).

10 Contingent Liabilities:

Rs.in Lacs

2012-13 2011-12

a) Particulars 145.44 145.44

Income Tax 53.09 53.09

VAT/SalesTax

Excise Duty (Interest thereon not ascertainable at present) 196.24 196.24

Others

b) During 1993, the Company had imported plant and machinery under Export Promotion Capital Goods Scheme f''EPCG'') at concessional rate of custom duty against export obligation under the said Scheme. As the Company could complete only partial Export obligation, it has received a notice of demand from Directorate General of Foreign Trade (''DGFT''). The Company has paid the entire differential duty amount forRs. 94, 68,900 on 10.05.2011 and has made necessary submissions before the authorities. In view of this submission and pending decision of forum, interest liability is not ascertainable.

c) The company has committed delays in payment of Provident fund dues from 1997 to 2008. As the BIFR Scheme has abated, the company may be liable to pay interest on account of delayed payments and / or penalty which isunascertainable.


Mar 31, 2012

1. The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification/disclosure.

2. EXCISE DUTY

Excise Duty on Sales has been disclosed as reduction from the turnover.

3. The Ministry of Corporate Affairs, Government of India vide its General Circular No: 2/2011 dated 8th February, 2011 has granted general exemption to the Holding Companies from attaching balance sheets of subsidiary Companies with the balance sheet of the Holding Company as per Section 212(8) of the Companies Act, 1956 subject to fulfilment of certain conditions. Accordingly, the Board of Directors of the Company has passed the resolution giving consent for not attaching the balance sheets of the Subsidiary Companies with that of the Company

4. The amounts in the Balance Sheet and Profit and Loss Account are rounded off to the nearest thousand and indicated in lacs of rupees.

5. There were no amount overdue and remaining outstanding to small scale and/or ancillary industrial suppliers on account of principal and/or interest as at the close of the year. This disclosure by the Company is based on the information available with the Company regarding the status of the suppliers. In absence of necessary information relating to suppliers registered as Micro, Small and Medium enterprises under the Micro, Small and Medium Enterprises (Development) Act 2006, the company has not been able to identify such suppliers and the information required under the said Act could not be compiled and disclosed.

6. (a) No commission (Previous Year Rs. NIL) has been paid to the Managing Director / Dy. Managing Director for the year under review in view of resolution passed by the Board of directors and as agreed by the Managing Director. Computation of Net Profit as per Section 349 read with Section 309(5) and section 198 of the Companies Act, 1956 therefore has not been furnished for the year under review.

ii) Total income of the company chargeable to tax is being determined by the company in accordance with provisions of the Income Tax Act, 1961 after considering allowances, claims and relief available to the Company. As the company is having accumulated Losses and unabsorbed depreciation as per books of account and also under the Income Tax Act, 1961, The company has been advised that under the circumstances it shall have no liability under the Income Tax Act, 1961 and therefore no provision has been made in books of the company.

7. Rs. 13.48 lacs being net gain (Previous year Rs. 4.95 Lacs being net loss) on account of exchange difference have been adjusted in the respective heads of account in the profit & Loss account.

8. Earning per share (EPS) - EPS is calculated by dividing the profit attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Numbers used for calculating basic and diluted earnings per equity shares are stated below :

9. Accounting Standard (As-15) on Employee benefits

Provident Fund Contribution by the Company :

Contributions are made to Recognised Provident Fund/Government Provident Fund, Family Pension Fund, ESIC and other Statutory Funds which covers all regular employees. While both the employees and the Company make predetermined contributions to the Provident Fund and ESIC, contribution to the Family Pension Fund are made only by the Company. The contributions are normally based on a certain proportion of the employee's salary. Amount recognized as expense in respect of these defined contribution plans, aggregate to Rs. 9.89 Lacs (Previous Year Rs. 11.57 Lacs).

State Gratuity Benefits Insurance Scheme (E.S.I.C.) & Contribution to Labour Welfare Fund

Gratuity Benefits :

In respect of Gratuity, the Company has taken policy No. 40000192 from Reliance Life insurance Co. Limited, and from Future General insurance Co. Limited. The Defined Benefit Obligation as at 31.03.2012 works out to Rs. 18.92 lacs, Acturial Valuation for Compensated Absences is done as at the year end and the provision is made for all regular employees on the basis Actuarial Valuer's certificate.

10. Based on guiding principles given in Accounting Standard on "Segment Reporting"- AS 17 as specified in the Companies (Accounting Standard) Rules, 2006 (as amended), single financial report contains both Standalone Financial Statement and Consolidated Financial Statement of the Company. Hence, the required segment information has been appended in the Consolidated Financial Statements (CFS).

11. Related party disclosures as required by Accounting Standard AS-18 issued by the Institute of Chartered Accountants of India are given below Name of the related party and nature of relationship where control exists:

Subsidiary company

1. Metrochem Capital Trust Limited

Associates Companies

Anil Dyechem Industries Pvt. Ltd Search Invatrade Pvt. Ltd.

Harvest Trade Finvest Pvt.Ltd. Sparkling Tradefin Pvt. Ltd.

Maiden Tradefin Pvt. Ltd. Spring Trading And Investment Pvt. Ltd.

Minerva Dyechem Industries P.Ltd. Ornet Infrastructure Pvt.Ltd.

Bloom Investment & Trading Pvt.Ltd. Progressive Invatrade Pvt.Ltd.

Charm Trading & Investment Pvt.Ltd.

Key Management Personnel

Shri Gautam M.Jain Shri Rahul Jain

Shri D.K.Singh

Relatives of Key Management Personnel and their Enterprises

Mahendra Mithalal HUF Mahendra Anil HUF Gautam Anil HUF

Rajendra Anil HUF Gautam Rajendra HUF Rajendra Mithalal HUF Suhani M.Shah Nishal M.Shah Arun R. Jain

Nitu G. Jain Yash Anil Jain Mithalal Mukanchand HUF

Mithalal Rajendra HUF Ankit Rajendra Jain Rajendra Jain HUF

M.G.& Sons HUF Rajendra Mithalal HUF Rajendra Gautam Bros. HUF

Mithalal Mukanchand B. HUF Bhavna G.Jain Anil Mahendra HUF

Anil M Jain HUF Mithalal Gautamkumar Gautamkumar Mithalal HUF HUF

Sumitradevi M. Shah MithalaL M. Shah Mahendra M, Shah

Asha R. Jain Ritu A. Jain Santosh M. Shah

Aarti P. Jain Ritu (Ekta) G. Jain Metrochem Industries

Krati R. Jain

Related Party Disclosures:

In accordance with Accounting Standard 18 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India, the company has compiled the required information in the table below.

12. Contingent Liabilities:

Rs. in Lacs

a) Particulars 2011-2012 2010-11

Income Tax 145.44 145.44

VAT/Sales Tax 53.09 53.09

Excise Duty (Interest thereon not ascertainable at present) 196.24 196.24

Others 1.80 1.80

b) During 1993, the Company had imported plant and machinery under Export Promotion Capital Goods Scheme ('EPCG') at concessional rate of custom duty against export obligation under the said Scheme. As the Company could complete only partial Export obligation, it has received a notice of demand from Directorate General of Foreign Trade ('DGFT'). The Company has paid the entire differential duty amount for Rs. 94, 68,900 on 10.05.2011 and has made necessary submissions before the authorities. In view of this submission and pending decision of forum, interest liability is not ascertainable.

c) The company has committed delays in payment of Provident fund dues from 1997 to 2008. As the BIFR Scheme has abated, the company may be liable to pay interest on account of delayed payments and/or penalty which is unascertainable.

d) The company has committed delays in payment of Profession Tax dues from time to time. The company may be liable to pay interest on account of delayed payments and/or penalty which is unascertainable.

e) The company has committed various defaults with respect to TDS - non-deduction, short eduction, non-payment, delayed payments and short payments. The company may face liability on account of interest, penalty etc which is presently not fully ascertainable.

 
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