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Notes to Accounts of Prakash Industries Ltd.

Mar 31, 2015

1. share capital

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 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, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all the preferential amounts, in proportion to their shareholding.

(d) Foreign Currency Convertible Bonds (FCCB) holders have an option to get their bonds converted into equity shares of the Company (refer note 4 (d)).

(b) Term loans are secured by mortgage of all immovable properties of the Company, both present and future and are also secured by way of hypothecation of the movable properties of the Company including movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future (save and except book debts), subject to prior charge of the Company's banker on specified movables for working capital requirements, ranking pari passu in all respects with existing charges and personal guarantees of the Chairman and the Managing Director.

(c) Term Loans from banks and others include Rs. 87 lacs (Rs. 182 lacs) and Rs. 1,370 lacs (Rs. 72 lacs) respe ctively secured against the vehicles financed by the concerned lenders.

(d) The Company had issued FCCB of USD 110 Million in earlier years, out of which FCCB of USD 32.9 Million got converted into Equity Shares of the Company. Out of Balance USD 77.1 Million, FCCB of USD 17.1 Million were redeemed on 13th October, 2014 and FCCB of USD 60 Million are due for redemption on 30th April, 2015 and carry interest @5.25% p.a. The Comany is in discussions with the bond holders and the bond holders have in-principle agreed for restructuring of the FCCB for a further period of 5 years, hence this amount has been shown under the above head. Outstanding FCCB are repayable in Foreign Currency and their repayments have not been hedged by any derivative instrument or otherwise by the Company.

Working Capital loan from bank, repayable on demand is secured by hypothecation of raw materials, consumables stores and spare parts, stock in process, finished goods, book debts and by personal guarantees of the Chairman and the Managing Director of the Company. Further they are also secured by way of pari passu first charge on all the immovable properties of the Company.

2. Contingent Liabilities not provided for in respect of:

This year Previous year (Rs.in lacs) (Rs. in lacs)

(a) Guarantees/Letter of credits issued by banks on behalf of the company 1,766 2,400

(b) Disputed demands of Excise Duty / Income Tax / Electricity dues/Lease rentals etc. 6,544 4,628 (Amount paid there against Rs.471 lacs (Rs.280 lacs))

3. In the opinion of the management, the Current Assets, Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for depreciation and all known liabilities is adequate, neither excess nor short than reasonably necessary.

4. The Company is in the process of identifying the Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been made. Further in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said Act, is not expected to be material.

5. In terms of the order dated 23rd August 2007 of the Hon'ble Punjab & Haryana High Court, the net deferred tax liability computed in terms of the Accounting Standard 22 'Accounting for Taxes on Income' amounting to X 361 lacs (net of amount related to transitional depreciation Rs 972 lacs)(X 554 lacs) has been adjusted against Securities Premium Account. Consequently, the profit after tax is higher by the said amount.

6. a) The Hon'ble Supreme Court of India by its Order dated 24th September, 2014 had cancelled certain Coal blocks allocated to various Companies including one operational and two under development blocks allotted to the Company.

b) The Hon'ble Supreme Court of India had also imposed an additional levy of Rs.295 per MT on extraction of Coal by the Company from its coal mine since operations commenced. Pursuant to the Order, the Company has paid Rs.234.21 crore due on the quantities extracted till 24th September, 2014. In addition, there is a liability of Rs.14.85 crore relating to the period from 25th September, 2014 to 31st March, 2015, due for payment on 30th June, 2015. Since this is an expense of exceptional nature and majorly related to the previous accounting periods, the same has been shown as an exceptional item in the profit and loss account of the Company for the year ended 31st March, 2015.

The Hon'ble Supreme Court of India by its Order dated 24th September, 2014 had cancelled the Coal blocks allocated to above Joint Venture Companies.

7. No adjustment has been made by the Company in the book values of the Investments made in mining assets as the amount of compensation receivable for the coal mines cancelled vide the Hon'ble Supreme court order, is not ascertained at present.

8. Advance with related parties include

i) A sum of Rs.9 lacs (Rs.9 lacs) paid to Madanpur (North) Coal Co. Pvt. Ltd., a joint venture Company. Maximum amount outstanding during the year Rs.9 lacs (Rs.9 lacs).

ii) A sum of Rs.172 lacs (Rs.164 lacs) paid to Fatehpur Coal Mining Co. Pvt. Ltd., a joint venture Company. Maximum amount outstanding during the year Rs.172 lacs (Rs.164 lacs).

iii) A sum of Rs.1 lac(Rs.2,827 lacs) due from other companies. Maximum amount outstanding during the year Rs.1,314 lacs (Rs.3,773 lacs).

9. The company has taken certain plant and machinery under operating lease during the period prior to Ist April, 2001.The company is having legal disputes with the concerned lessors and there are counter claims which are pending under arbitration/court, as such the future liability on this account, if any, is not ascertainable.

10. Gross Block of Land and Plant & Machinery includes Rs.2,014 lacs and Rs.19,824 lacs respectively added on revaluation of assets as at 31st March 2005. The depreciation as shown in the statement of Profit & Loss Account for the year is net of amount of Rs.1,274 lacs adjusted against the Revaluation reserve.

11. Depreciation for the year has been aligned to comply with requirement of Part C of Schedule II of the Companies Act,2013. Consquently, depreciation for the year is lower by Rs.2,346 lacs. Further, Rs.2,069 lacs (net of deferred tax Rs 972 lacs) in respect of the Fixed Assets where the useful life as specified in schedule II is already expired, has been adjusted to the opening balance of the Retained Earnings.

12. Land of Rs.98 lacs is yet to be transferred in the name of the Company.

13. txcise duty relating to sales has been disclosed as a deduction from sales. txcise duty related to difference between closing stock and opening stock has been disclosed in Note 19.

14. Related party disclosure as required by Accounting Standard -18 issued by the Institute of Chartered Accountants of India are as under (A) List of related parties and their relationship

a) Enterprise on which key management personnel and/or their relatives excercise significant influence with whom transactions have taken place during the year.

1. Primenet Global Limited

2. Surya Roshni Limited

3. Prakash Natural Resources Limited

4. Vanshi Farms Private Limited

b) Key Management Personnel :

1. Shri V.P.Agarwal, Chairman

2. Shri Vikram Agarwal, Managing Director

3. Shri M.L.Pareek, Whole-time Director

4. Shri PL. Gupta, Whole-time Director

5. Shri Manoj Aggarwal, Company Secretary

c) Joint Venture Entities :

1. Madanpur (North) Coal Company Private Limited

2. Fatehpur Coal Mining Company Private Limited

15. Certain balances of Debtors, Advances and Creditors are subject to confirmations. In the opinion of the management, no major adjustment will be required to be made in the accounts on receipt of these confirmations and subsequent to their reconcilations.

16. In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31st March,2015.

17. Remuneration paid to the Chairman and the Managing Director aggregating to Rs. 708.39 lacs is subject to approval of members and Central Government.

18. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. Figures have been rounded off to the nearest lac rupees except figures of Earning per share which is rounded off to nearest rupee.


Mar 31, 2013

1. Contingent Liabilities not provided for in respect of:

This year Previous year (Rs. in lacs) (Rs. in lacs)

- Guarantees/Letter of credits issued by banks on behalf of the company 2,455 2,908

- Disputed demands of Excise Duty /Electricity dues/Lease rentals etc. 3,144 2,266 (Amount paid there against Rs.280 lacs (Rs.180 lacs))

2. Estimated amount of contracts remaining to be executed on capital account andnot provided for (Net of advances) 36,191 48,983

3. In the opinion of the management, the Current Assets, Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which ttiey are stated in the Balance Sheet. The provision for depreciation and all known liabilities is adequate, neither excess nor short than reasonably necessary.

4. The Company is in the process of identifying Hie Suppliers tegarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, If any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been made. Further in view of the management, the impact of interest if any, that may be payable in accordance with the provisions of the said Act, is not expected to be material.

5. fn terms of the order dated 23rd August 2007 of the Hon''ble Punjab & Haryana High Court, the net deferred tax liability computed in terms of the Accounting Standard 22 ''Accounting for Taxes on Income'' amounting to Rs. 90 lacs (Rs. 42 lacs) has been adjusted against Securities Premium Account. Consequently, the profit after tax is higher by the said amount

6. Advance with related parties include

i) A sum of Rs. Nil (Rs. Nil lacs) paid to Madanpur (North) Cdal Co. Pvt. Ltd., a joint venture Company, Maximum amount outstanding during the year Rs. 81 lacs (Rs. 12 lacs).

if) A sum of Rs. 156 lacs (Rs.137 lacs) paid to Fatehpur Coal Mining Co. Pvt. Ltd., a joint venture Company. Maximum amount outstanding during the year Rs. 156 lacs (Rs.137 lacs).

in) A sum of Rs. 3,713 lacs (Rs. 3,011 lacs) due from other companies. Maximum amount outstanding during the year f 4,097 lacs (Rs. 4,577 lacs).

Above figures are as certified by the management. Figures in bracket are for previous year. ''Figures for the current year are not available since annual accounts are yet to be finalized.

7. The company has taken certain plant and machinery under operating lease during the period prior to Ist April, 2001 .The company is having legal disputes with the concerned lessors and there are counter claims which are pending under arbitration/court, as such the future liability on this account, if any, is not ascertainable.

8. Gross Block of Land and Plant & Machinery includes Rs. 2,014 lacs and Rs. 19,824 lacs recpectlvely added on revaluation of assets as at 31st March 2005. The depreciation as shown in the statement of Profit & toss Aceouii is net of amount of Rs. 1,274 iacs adjusted against the Revaluation reserve.

9. Excise duty relating to sales has been disclosed as a deduction from sales. Excise duty related to difference between closing stock and opening stock has beefi disctosed in Note 19.

10. Related party disclosure as required by Accounting Standard -18 Issued by the Institute of Chartered Accountants of India are as under :- (A) List of related parties and their relationship

a) Enterprise on which key management personnel and/or their relatives excercise significant influence with whom transactions have taken place during the year.

1. Primenet Global Limited

2. Surya Roshni Limited

3. Prakash Natural Resources Limited

4. Vanshi Farms Private Limited

b) Key Management Personnel :

1. Shri V.RAgarwal, Chairman

2. Shri vlkram Agatwal, Managing Director

3. Shri M.LPareek, Whole-time Director

4. Shri Vipul Agarwal, Whole-time Director

5. Shri PI. Gupta, Whole-time Director

c) Joint Venture Entities:

1. Madanpur (North) Coal Company Private Limited

2. Fatehpur Coal Mining Company Private Limited

11. Certain balances of Debtors, Advances and Creditors are subject to confirmations, in the opinion of the management, no major adjustment will be required to be made in the accounts on receipt of these confirmations and subsequent to their reconcilations.

12. In view of the management, the current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the balance sheet as at 31st March,2013.

13. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (Advances paid there against Rs.4,522.83 lacs (Rs.1,969.19 lacs)) 38,992.38 9,096.29

2. In the opinion of the management, the "Current Assets, Loans and Advances have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet.

3. The Company is in the process of identifying the Suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been made.

4. In terms of the order dated 23rd August 2007 of the Honble Punjab & Haryana High Court, the net deferred tax liability computed in terms of the Accounting Standard 22 Accounting for Taxes on Income amounting to Rs. 694.28 lacs has been adjusted against Securities Premium Account. Consequently, the profit after tax is higher by the said amount.

5. Advance recoverable in cash or in kind or for value to be received include

i) A sum of Rs. 2,386.20 lacs (Rs. 1,956.16 lacs) from group companies in which directors are interested. Maximum amount outstanding during the year Rs. 2,583.93 lacs (Rs. 2,129.27 lacs).

ii) A sum of Rs. Nil lacs (Rs. 0.04 lacs) paid to Madanpur (North) Coal Co. Pvt. Ltd., a joint venture Company. Maximum amount outstanding during the year Rs. 0.04 lacs (Rs. 5.11 lacs).

6. The company has an investment of Rs 197.13 lacs in the share capital of Madanpur (North) Coal co. Pvt. Ltd., a joint venture company formed for the purpose of developing a coal block allotted to the company in consortium with others.

"Figures are as certified by the management and figures in bracket are for previous year.

7. Liabilities written back represents share warrant application money forfeited during the year. Exceptional Item include amounts paid to various lenders on settlement/prepayment.

8. Advance income tax is subject to setoff with provision for corporate tax as and when assessed.

9. The company has taken certain plant and machinery under operating lease prior to the period Ist April, 2001 The company is having legal disputes with the concerned lessors and there are counter claims which are pending under arbitration/court, as such the future liability on this account, if any, is not ascertainable.

10. The Company has repaid the matured non-convertible debentures to individual debenture holders. However, certain cheques amounting to Rs. 39.47 lacs are yet to be realised by the concerned holders.

11. During the year 62,19,800 equity shares of Rs 10 each at a premium of Rs 160 each were alloted pursuant to the conversion of US$ 22.7 mn Foreign Currency Convertible Bonds (FCCB) out of the US$ 50 mn FCCB issued by the Company in October2009 . Share capital includes 4,50,000 equity shares issued on conversion of term loan and 2,60,22,648 equity shares allotted as Bonus shares by capitalisation of Securties Premium Account in earlier years.

12. Gross Block of Land and Plant & Machinery includes Rs. 2,014.11 lacs and Rs. 19,823.69 lacs recpectively added on revaluation of assets as at 31st March 2005. The depreciation as shown in the Profit & Loss Account is net of amount of Rs. 1,447.27 lacs adjusted against the Revaluation reserve.

13. Details of Employees Benefits as required by the Accounting Standard 15 "Employee .Benefits" are given below:- a) Defined Contribution Plans:

During the year, the company has recognised the following amounts in the Profit & Loss Account (included in Contribution to Provident & Other Funds:-

The estimate of rate of escalation is, salary considered in actuarial valuation, taken into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is as certified by the actuary. 16. During the year, the Company has earned gains on sale/purchase of following investments:

14. Excise duty relating to sales has been disclosed as a deduction from sales. Excise duty related to difference between closing stock and opening stock has been disclosed in Schedule 10 - Increase/Decrease in stocks.

15. The breakup of Deferred Tax Assets/(Liabilities) is as under :-

16. Remuneration of Managing Director and the Whole-time Directors for the year is in accordance with Schedule XIII to the Companies Act, 1956:

17. The Company has raised amounts against issue of Foreign Currency Convertable Bonds (FCCBs) during the year. The said amount has been utilised towards Capital expenditure for expansion and modernisation plans of the Company during the year. Amount of Rs. 2996 lacs representing unutilised money against outstanding FCCBs at the close of the year has been kept with banks in fixed deposits. The Company has complied with all the financial and other convenants as mentioned in the Offering Circular with respect to the issue of FCCBs.

18. Related party disclosure as required by Accounting Standard -18 issued by the Institute of Chartered Accountants of India are as under:- (A) List of related parties and their relationship

a) Enterprise on which key management personnel and their relatives excercise significant influence with whom transactions have taken place during the year.

1. Primenet Global Limited

2. Surya Roshni Limited

3. Prakash Thermal Power Limted

4. Prakash Natural Resources Limited

5. Prakash Mega Power Limted

6. Prakash Urja Limted

7. Prakash Vidyut Limted

8. Vanshi Farms Private Limited

9. Ocean Ispat Private Limited

b) Key Management Personnel:

1. Shri V.P.Agarwal, Chairman & Managing Director

2. Shri Vikram Agarwal, Joint Managing Director

3. Shri G.LMohta, Whole Time Director

4. Shri Vipul Aqarwal, Whole Time Director

Note : Outstanding share warrants and FCCBs being anti dilutive have not been considered for the purpose of computing diluted earning per share.

19. Previous years figures have been shown in brackets and regrouped and/or rearranged wherever considered necessary to conform with current years presentation. The figures have been rounded off to the nearest of Rupee.

20. Schedule 1 to 16 form an integral part of accounts and have been duly authenticated.

21. Related party disclosure as required by Accounting Standard -18 issued by the Institute of Chartered Accountants of India are as under :- (A) List of related parties and their relationship

a) Enterprise on which key management personnel and their relatives excercise significant influence with whom transactions have taken place during the year.

1. Primenet Global Limited

2. Surya Roshni Limited

3. Prakash Thermal Power Limted

4. Prakash Natural Resources Limited

5. Prakash Mega Power Limted

6. Prakash Urja Limted

7. Prakash Vidyut Limted

8. Vanshi Farms Private Limited

9. Ocean Ispat Private Limited i) Key Management Personne

1. Shri V.P.Agarwal, Chairman & Managing Director

2. Shri Vikram Agarwal, Joint Managing Director

3. Shri G.LMohta, Whole Time Director

4. Shri Vipul Agarwal, Whole Time Director

1) Companies at serial nos. 3 to 9 above are incorporated for setting up new projects by the company.

2) Related party relationship in terms of Accounting Standard 18 as given above is pointed out by the management and relied upon by the Outstanding share warrants and FCCBs being anti dilutive have not been considered for the purpose of computing diluted earning per share.

22. Previous years figures have been shown in bracket regrouped and/or rearranged wherever considered necessary to conform with current years presentation. The figures have been rounded off to the nearest of Rupee.

23. Schedule 1 to 16 form an integral part of accounts and have been duly authenticated.

 
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