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Notes to Accounts of National General Industries Ltd.

Mar 31, 2015

1. Corporate information

National General Industries Limited ('The Company') is engaged in the production and selling of Steel. The Company has manufacturing facilities at Ghaziabad, Uttar Pradesh and Bhiwadi, Rajasthan. During the year under review the Company has explored an opportunity of handling services business for steel product in the State of Punjab.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs 10 per share. The holder of each fully paid equity share is entitled to one vote. Each share is entitled to equal dividend if any declared by the Company and approved by the Share holders of the Company.

In the event of liquidation of the company, holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Loan from HDFC Bank - Vehicle Loan against hypothecation of Vehicle having repayment terms of 36 equated monthly instalments starting from March, 2014 and ending on February, 2017 at rate of interest @ 10.52% p.a. The Loan is further secured by personal guarantee of Director of the Company.

Working Capital loans from State Bank of Patiala are secured by first charge on all current assets of company, both present & future, including stocks of raw materials, finished and semi-finished goods and book debts of the Company. These facilities are further secured by collateral security of land of the company situated at 9th Milestone, Ghaziabad. The managing director and director have given personnel guarantee to the bank for the facility. The working capital loan are repayable on demand and carry interest @ 12.50% p.a.

Term loan from State Bank of Patiala of Rs 50 lakh for purchase and installation of Plant & Machinery against hypothecation of said Plant & Machinery having repayment terms of 36 Equated Monthly Instalments starting from May, 2014 and ending on April, 2017 and carry interest @ 12.50% p.a.

3. Segment Information

Business Segments:

The Company operates in three segments i.e. manufacturing of steel, handling services of steel products and investing.

Geographical Segments:

The Company operates in India and all assets of the Company are located within India only and hence secondary segment by geographical region is not applicable for the company.

4. Related Party Disclosures

Names of Related Parties

A. Parties under common control Modi Power Pvt. Ltd.

Modi Metal & Allied Industries Pvt. Ltd. J.P.Modi&Sons-HUF A.K.Modi- HUF P.K.Modi - HUF

B. Key Managerial personnel & their relatives Relationship

Mr Ashok Kumar Modi Managing Director

Mr Pawan Kumar Modi Jt. Managing Director

Mr Vasu Modi Director

Mr Madhur Modi Vice President

Mrs Shakuntala Modi Relative of Managing Director

5. There are no Micro, Small and Medium Enterprises to whom company owes dues which are outstanding for more than 45 days as on 31.03.2015. The information as required to be disclosed under MSMED Act, 2006, has been determined to the extent such parties has been identified on the basis of information available with the Company.

6. The Company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013 during financial year 2014-15.

7. Gratuity and other Post- employment benefit plans:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. At the end of accounting year actuarial valuation is done as per the Projected unit credit method and any shortfall is further provided for the following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the Gratuity.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors on long term basis.

8. Figures of the previous year have been rearranged/ regrouped wherever necessary to make them comparable. Figures have been rounded off to nearest of rupee.


Mar 31, 2014

1. Share Capital

a. Terms/rights attached to equity share

The company has only one class of equity shares having a par value of Rs 10 per share. The holder of each fully paid equity share is entitled to one vote. Each share is entitled to equal dividend if any declared by the Company and approved by the Share holders of the Company.

In the event of liquidation of the company, holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. During the year 1995-96, 327,551 Equity shares of Rs. 10/- each fully paid up were issued as Bonus Shares out of General Reserve on 07/07/1995.

2. Long-term borrowings

Loan from RIICO Ltd. - Deferred Payment Loan against cost of Leasehold Land for Bhiwadi unit purchased from RIICO Ltd. on repayment terms of 19 quarterly installments with simple rate of interest @ 12% p.a. on reducing balance starting from December, 2009 and ending on June, 2014.

Loan from HDFC Bank - Vehicle Loan against hypothecation of Vehicle having repayment terms of 36 equated monthly instalments starting from March, 2014 and ending on February, 2017 at rate of interest @ 10.52% p.a. The Loan is further secured by personal guarantee of Director of the Company.

3. Short-term borrowings

Working Capital loans from State Bank of Patiala are secured by first charge on all current assets of company, both present & future, including stocks of raw materials, finished and semi-finished goods and book debts of the Company. These facilities are further secured by collateral security of land of the company situated at 9th Milestone, Ghaziabad. The managing director and director have given personnel guarantee to the bank for the facility. The working capital loan are repayable on demand and carry interest @ 12.50% p.a.

Term loan from State Bank of Patiala of Rs 50 lakh for purchase and installation of Plant & Machinery against hypothecation of said Plant & Machinery having repayment terms of 36 Equated Monthly Instalments starting from May, 2014 and ending on April, 2017 and carry interest @ 12.50% p.a.

4. Segment Information

Business Segments:

The Company operates in two segments i.e. manufacturing of steel and investing.

Geographical Segments:

The Company operates in India and all assets of the Company are located within India only and hence secondary segment by geographical region is not applicable for the company.

5. Related Party Disclosures

Names of Related Parties

A. Parties under common control

Modi Power Pvt. Ltd.

Modi Metal & Allied Industries Pvt. Ltd.

J.P. Modi & Sons - HUF

A.K. Modi - HUF P.K. Modi - HUF

B. Key Managerial personnel and their relatives Relationship

Mr. Ashok Kumar Modi Managing Director

Mr. Pawan Kumar Modi Jt. Managing Director

Mr. Vasu Modi Director

Mr. Madhur Modi Vice President

Mrs. Shakuntala Modi Relative of Managing Director

6. Contingent liabilities (not provided for) in respect of:

(a) Bank Guarantee in favour of Sales Tax Department - Rs. 5.28 lacs (P.Y. Rs. 5.28 lacs)

(b) Bills discounted liability - Nil (P.Y. - Nil)

7. There are no Micro, Small and Medium Enterprises to whom company owes dues which are outstanding for more than 45 days as on 31.03.2014. The information as required to be disclosed under MSMED Act, 2006, has been determined to the extent such parties has been identified on the basis of information available with the Company.

8. Gratuity and other Post-employment benefit plans:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. At the end of accounting year actuarial valuation is done as per the Projected unit credit method and any shortfall is further provided for.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the Gratuity.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors on long term basis.

9. Figures of the previous year have been rearranged/regrouped wherever necessary to make them comparable. Figures have been rounded off to nearest of rupee.


Mar 31, 2013

1. Corporate information

National General Industries Limited (''The Company'') is engaged in the production and selling of Steel. The Company has manufacturing facilities at Ghaziabad, Uttar Pradesh and Bhiwadi, Rajasthan.

2. Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Contingent liabilities (not provided for) in respect of:

(a) Bank Guarantee in favour of Sales Tax Department – Rs. 5.28 lacs (P.Y. Rs. 5.28 lacs)

(b) Bills discounted liability – Nil (P.Y. – Nil)

4. There are no Micro, Small and Medium Enterprises to whom company owes dues which are outstanding for more that 45 days as on 31.03.2013. The information as required to be disclosed under MSMED Act, 2006, has been determined to the extent such parties has been identified on the basis of information available with the Company.

5. Gratuity and other Post- employment benefit plans:

The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. At the end of accounting year actuarial valuation is done as per the Projected unit credit method and any shortfall is further provided for.

The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the Gratuity

Profit and Loss account

Net employee benefit expense (recognised in Employee Cost)


Mar 31, 2012

1.1 CONTINGENT LIABILITIES:

(a) Bank Guarantee in favor of Sales Tax Dept. Rs. 5.28 Lac (P.Y. Rs.5.28 Lac).

(b) Bills discounted liability is Nil. (P.Y. Nil)

(c) Estimated amount of contract is Nil. (P.Y. Nil)

1.2 (a) Valuation of Purchases and inventories is made exclusive of excise duty and sale tax paid, which is being claimed as CENVAT & MODVAT respectively.

(b) Sales have been shown as inclusive of excise duty paid.

1.3 Fall in market value of Shares / units are considered to be of temporary nature therefore all Investments are valued at cost.

1.4 The current assets (read with Note No.1.4) have been taken at their approximately realizable value and the realizable value of the same in the ordinary course of the business is not less than amount as shown in the financial accounts as certified by the management.

1.5 Expenses under primary heads such as salary, wages, consumption of fuel and raw material etc. are being shown as usual in their respective heads.

1.6 Certain balances of debtors, creditors & loans & advances are subject to confirmation.

1.7 There are no Micro, Small and Medium Enterprises to whom company owes dues which are outstanding for more than 45 days as on 31.03.2012. The information as required to be disclosed under MSMED Act, 2006, has been determined to the extent such parties has been identified on the basis of information available with the Company.

1.8 Depreciation aggregating to Rs. 440529/- on revalued amount of Fixed Assets has been directly charged to Revaluation Reserve.

1.9 The deferred tax assets or liabilities resulting from timing difference" between the book profit and taxable profit is recognized using current tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax liabilities related to fixed assets of Rs. 4, 26,029/- (P.Y. 17, 66,313/-) has been provided. The Company has recognized cumulative deferred tax liabilities, of Rs. 47, 37,082/- as on 31.03.2012.


Mar 31, 2010

1. Modi Metal Udyog Pvt. Ltd. (MMUPL), (the amalgamating company) has been amalgamated with the company. The Scheme of Amalgamation (the Scheme) was sanctioned by the Honble High Court of Judicature at Delhi vide its Order dated 26th February, 2010. The Scheme became effective on 20th April, 2010 with the appointed date of the Scheme of 1st April, 2008. In accordance with the said Scheme and as per the approval of the Honble High Courts:

a. The assets, liabilities, rights and obligations of erstwhile MMUPL have been transferred to and vested with the Company with effect from 1st April, 2008 and have been recorded at their respective book values during the financial year 2008-09, under the merger method of accounting for amalgamation.

b. 4,71,704 Equity shares of Rs 10/- each fully paid up are to be issued to the equity share holders of the Amalgamating Company, in accordance with the swap ratio in the scheme of Amalgamation i.e. 16 nos. of fully paid up equity shares of Rs. 10/- each of the company for every 10 nos. of fully paid up equity shares of Rs. 100/- each of Amalgamating Company, whose names are registered in the register of members on record date, without payment being received in cash. Pending allotment, the face value of such shares has been shown as "Equity Share Suspense". The Company has since allotted the shares on 17th May, 2010.

c. 2,35,750 Equity Shares of erstwhile MMUPL held by the Company have been cancelled during the financial year 2008-09.

d. Excess of the net assets taken over by the Company over the paid up value of Equity shares to be issued and allotted ( as referred to under ( b ) above ) of Rs. 2,47,64,460/-has been credited to Capital Reserve Account during the financial year 2008-09.

e. Rs. 4,73,985/- (Previous Year Rs. 1,06,250/-) being amount of expenditure incurred on Amalgamation as on 31.03.2010 is debited to current assets and will be amortised alongwith subsequent expenses from the financial year 2010-11 and onwards.

f. From the effective date the Authorised Share Capital will stand increased to Rs. 12,00,00,000/- consisting of 1,20,00,000 Equity Shares of Rs. 10 each.

2. CONTINGENT LIABILITIES:

a) Bank Guarantee in favour of Sales Tax Dept. Rs. 5.28 Lac (P.Y. Rs.5.28 Lac).

b) Bills discounted liability is Nil. (P.Y. Nil)

c) Estimated amount of contract is Nil. (P.Y. Nil)

3. (a) Valuation of Purchases and inventories is made exclusive of excise duty and sale tax paid, which is being claimed as CENVAT & MODVAT respectively.

(b) Sales have been shown as inclusive of excise duty paid.

4. Fall in market value of Shares / units are considered to be of temporary nature therefore all Investments are valued at cost.

5. The current assets (read with Note No.4 of Accounting Policies) have been taken at their approximately realizable value and the realizable value of the same in the ordinary course of the business is not less than amount as shown in the financial accounts as certified by the management.

6. Expenses under primary heads such as salary, wages, consumption of fuel and raw material etc. are being shown as usual in their respective heads.

7. Certain balances of Debtors, Creditors & Loans & Advances are subject to confirmation.

8. There are no Micro, Small and Medium Enterprises to whom company owes dues which are outstanding for more than 45 days as on 31.03.2010. The information as required to be disclosed under MSMED Act, 2006, has been determined to the extent such parties has been identified on the basis of information available with the Company.

9. Depreciation aggregating to Rs. 4,40,529/- on revalued amount of Fixed Assets has been directly charged to Revaluation Reserve.

10. The deferred tax assets or liabilities resulting from "timing difference" between the book profit and taxable profit is recognized using current tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax liabilities related to fixed assets of Rs. 6,49,824/- (P.Y. 54,342/-) has been provided. The Company has recognized cumulative deferred tax liabilities, of Rs. 25,44,739/- as on 31.03.2010.

11. Figures of the previous year have been rearranged/ regrouped wherever necessary to make them comparable.

12. Figures of the previous years and current years have been rounded off to nearest rupee.

 
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