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Notes to Accounts of Rohit Ferro-Tech Ltd.

Mar 31, 2015

1. Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of '10 per share. Each holder of Equity Shares is entitled to one vote per share. 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 all preferential amount. The distribution will be in proportion to the number of Equity Shares held by the share holders.

2. Pursuant to the Companies Act, 2013 the company has reworked the depreciation on the estimated useful life of Fixed Assets prescribed under Schedule II of the Act. Consequently, the depreciation for the year ended 31st March, 2015 is lower by Rs. 533.36 Lacs and profit before tax is higher to this extent. Further based on transitional provision provided in note 7(b) of Schedule II to the Act an amount of Rs. 249.45 Lacs has been adjusted in the opening balance of retained earnings in respect of assets having no useful life as on 1st April, 2014.

3. Working Capital Term Loan :

Upon implementaion of the CDR Package (Refer Note 28), the overdrawn portion of the Cash Credit Accounts of the

Company has been carved out into separate Working Capital Term Loans (WCTL).

4. Funded Interest Term Loan :

Upon implementaion of the CDR Package (Refer Note 28), funding of interest has been provided for:

* Interest on existing term loans for a period of 24 months from the Cut-Off Date i.e from October 01, 2013 to September 30, 2015;

* Interest on WCTL for a period of 24 months from the Cut-Off Date i.e from October 01, 2013 to September 30, 2015;

* Interest on residual cash credit limit for a period of 9 months from the Cut-Off Date i.e from October 01, 2013 to June 30, 2014;

5. Details of security :

(i) In terms of the CDR package, Rupee Term Loans, Working Capital Term Loans, Funded Interest Term Loans and Working Capital Loan (Refer Note 7) are pooled together and secured as under:

a) First pari-passu charge on the entire Fixed Assets of the Company (excluding value of vehicles), both present and future, including equitable mortgage of factory land & building at Bishnupur (West Bengal), Jajpur (Odisha) and Haldia (West Bengal). Also, secured by way of mortgage on Freehold land at New Town, District: North 24 Parganas measuring 50 Cottahs.

b) First pari-passu charge on the entire Current Assets of the Company comprised of stock of raw materials, semi finished and finished goods and book debts, outstanding moneys, receivables, both present and future pertaining to the Company's manufacturing units/divisions at Bishnupur (West Bengal), Jajpur (Odisha) and Haldia (West Bengal) and at other Units.

c) Collateral security by equitable mortgage on Land & Building at 1/26, Vidyadhar Nagar, Jaipur, Rajasthan held in the name of Shubham Complex Pvt. Ltd., Office space measuring 835 sq. ft. located at Flat no. 21B, 4th Floor, Bowbazar, 35, C.R. Avenue, Kolkata-12, held in the name of Mr. S.K.Patni and Flat No. A-52, Block-A, 35, Dr. Abani Dutta Road, Salkia, Howrah, held in the name of Mr. Rohit Patni.

d) Pledge of 100% of the promoter's shares representing 72% of the paid up Capital of the Company on pari passu basis.

e) Personal Guarantee of the Promoters - Mr. S.K.Patni, Mr. Rohit Patni and Mr. Ankit Patni.

f) Corporate Guarantee of the Group Companies - Vasupujya Enterprises Pvt. Ltd., Shubham Complex Pvt. Ltd., Poddar Mech Tech Services Pvt. Ltd., Invesco Finance Pvt. Ltd. and Suanvi Trading and Investment Co. Pvt. Ltd.

(ii) Loans against Vehicles & Equipments are secured by way of hypothecation of the underlying asset financed.

6. Terms of Repayment of Loans :

(i) Terms of Repayment of Rupee Term Loans availed for Haldia Project, 33 MVA Furnace and Stainless Steel Plant of the Company and Working Capital Term Loan :

Upon implementaion of the CDR Package, the existing Rupee Term Loan amounting to Rs. 33,234.93 Lacs. in respect of Haldia Project, 33 MVA Furnace and Stainless Steel Project and Working Capital Term Loan are to be repaid over a period of 8 years by way of 32 structured quarterly installments commencing from December 31, 2015 upto September 30, 2023 as per the Repayment Schedule given below. Further, such loans carry the interest rate @ 11% p.a. linked to the Base Rate of the State Bank of India, with annual reset option with the approval of CDR-EG.

(ii) Terms of Repayment of Term Loan availed for 67.5 MVA Captive Power Plant project of the Company :

Upon implementaion of the CDR Package, the Rupee Term Loan amounting to Rs. 25,699.04 Lacs. in respect of 67.5 MVA Captive Power Plant is to be repaid by way of 38 equal quarterly installments commencing from December 31, 2015 upto March 31, 2025. Further, the loan carries the interest rate @ 11% p.a. linked to the Base Rate of the State Bank of India, with annual reset option with the approval of CDR-EG.

(iii) Terms of Repayment of Funded Interest Term Loan :

Repayment of FITL is to be made in 18 equal quarterly installments commencing from December 31, 2015 with the last installment due on March 31, 2020. FITL carries interest @11% pa linked to the Base Rate of the State Bank of India, with annual reset option with the approval of CDR-EG.

(iv) Unsecured Loans from Related Parties (Interest free) are to be converted into Equity by June 30, 2015 as per CDR package. [Refer Note 2].

(v) Unsecured Loan from Body Corporates (Other than related parties) aggregating to Rs. 6,487.34 Lacs. (P.Y. Rs.6,487.34 Lacs.) are interest free. Such loans are repayable at the option of the Company and are stated by the management to be in the nature of Long term borrowings.

(vi) Loans against Vehicles and Equipments are repayable by way of Equated Monthly Installments subsequent to taking of such loan. The original period of such loans is 3 years.

a. There are no Micro, Small and Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

b. Trade Payables include Rs. 3,494.18 Lacs. (P.Y. Rs. 5,590.43 Lacs.) against pledge of stock of raw materials.

c. The Trade Payables include Rs. 536.35 Lacs. (P.Y Rs. 4.55 Lacs.) due to related parties. (Refer Note No. 36)

Pursuant to the Companies Act, 2013 the Company has reworked the depreciation on the estimated useful life of Fixed Assets prescribed under Schedule II of the Act. Consequently, the depreciation for the year ended 31st March 2015 is lower by Rs. 533.36 Lacs and profit before tax is higher to this extent. Further based on transitional provision provided in note 7(b) of Schedule II to the Act an amount of Rs. 249.45 Lacs has been adjusted in the opening balance of retained earnings in respect of assets having no useful life as on 1st April 2014.

The original cost of vehicles & equipments includes Rs. 62.91 Lacs (P.Y. Rs. 370.60 Lacs.) acquired under vehicle and equipment finance scheme from banks & financial institutions, of which Rs.16.82 Lacs. (P.Y. Rs. 105.54 Lacs. ) were outstanding as at year end.

* Includes Rs. 14.61 Lacs (P.Y. Rs. 5.05 Lacs) debited to Capital Work-in-Progress.

7. During the year 2013-14, at the request of the Company, the Corporate Debt Restructuring Proposal (CDR Proposal) was referred to CDR Empowered Group (CDR EG) by the consortium of lenders led by State Bank of India (SBI). The CDR Proposal as recommended by SBI was approved by CDR EG on March 24, 2014 and communicated vide Letter of Approval dated 28th March, 2014, as amended/modified from time to time. Under CDR package, the Company's debts were restructured/rescheduled and additional credit facilities have been sanctioned as set out in the said Letter of Approval. The cut off date for CDR package was September 30, 2013 and upon implementation, the financial effect thereof has been duly taken into accounts.

The CDR Package includes reliefs / measures such as reduction in interest rates, funding of interest, rearrangement of securities etc. The key features of the CDR Proposal are as follows:

(i) Repayment of Rupee Term Loans (RTL) (except term loan for Captive Power Plant of the Company) after moratorium of 2 years from the cut-off date in 32 structured quarterly installments commencing from December 31, 2015 to September 30, 2023.

(ii) Repayment of Rupee Term Loans for Captive Power Plant of the Company after moratorium of 2 years from the cut- off date in 38 structured quarterly installments commencing from December 31, 2015 to March 31, 2025.

(iii) Conversion of various irregular/outstanding/devolved financial facilities into Working Capital Term Loan ('WCTL'). Repayment of WCTL after moratorium period of 2 years from cut-off date in 32 structured quarterly installments commencing from December 31, 2015 to September 30, 2023.

(iv) Restructuring of existing fund based and non fund based financial facilities.

(v) Interest on RTL and WCTL during the moratorium period of 2 years from cut-off date and interest on Cash Credit limit for a period of 9 months from the cut-off date shall be converted to FITL. Repayment of FITL would be done in 18 equal quarterly installments commencing from December 31, 2015 to March 31, 2020.

(vi) The rate of interest on RTL, WCTL, FITL and Fund Based Working Capital Facilities shall be 11% (linked to the base rate of SBI) with the right to reset the rate of the Term loan(s) and FITL every year with the approval of CDR-EG.

(vii) Waiver of penal interest for irregularities in the Cash Credit accounts for the period from cut-off date to the date of implementation of the package.

(viii) Contribution of Rs. 5,664 Lacs. in the Company by the promoters in lieu of bank sacrifices and Rs. 8,577 Lacs. to meet the additional cost over run towards the Captive Power plant project of the Company. The contribution is to be brought initially in the form of unsecured loan by September 30, 2014 and the same is to be converted into equity by June 30, 2015.

(ix) The CDR Package as well as the provisions of the Master Circular on Corporate Debt Restructuring issued by the Reserve Bank of India, gives a right to the CDR Lenders to get a recompense of their waivers and sacrifices made as part of the CDR Proposal. The recompense payable by the Company is contingent on various factors, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as a contingent liability. The aggregate present value of the outstanding sacrifice made/to be made by CDR Lenders as per the CDR package is approximately Rs. 69,987 Lacs.

a. Pursuant to CDR Package, the Company has received unsecured loans amounting to Rs. 7,131.00 Lacs from promoters & promoter companies as promoter's contribution, to be converted into equity by June 30, 2015, at such price as will be determined in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations. Pending approval & determination of price by SEBI, the same has not been considered in the calculation of EPS.

(i) Contingent Liabilities not provided for in the books of accounts in respect of :

(a) Bills discounted, outstanding as on 31st March, 2015 - Rs. 697.49 Lacs (P.Y. - Rs. 2,389.29 Lacs)

(b) Corporate Guarantee to Indian Overseas Bank, Hongkong to secure the financial assistance to SKP Overseas Pte Ltd, a Wholly Owned Subsidary. Amount payable by SKP Overseas Pte Ltd. to Indian Overseas Bank, Hongkong as on 31st March 2015 is USD. 3.29 Million (P.Y. USD. 4.20 Million).

(c) Right of Recompense to CDR Lenders for the relief and sacrifice extended, subject to provisions of CDR Guidelines, amounting to Rs. 69,987 Lacs (Refer Note 28)

(d) Claims against the company not acknowledged as debt:

(Rs. in Lacs)

31-03-2015 31-03-2014

Disputed Excise Duty under appeal 720.86 720.86

Disputed Sales Tax/VAT under appeal 3,696.36 2,393.98

Disputed VAT Refund claim under appeal 1,305.99 1,305.99

Disputed Entry Tax under appeal 155.39 16.03

Excise Duty demand for which show cause notice issued 243.92 59.61

Disputed Provident Fund demand under appeal 1.88 0.84

Disputed ESI demand under appeal - 0.26

Excise Demand, pending show cause 20.00 20.00

(ii) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs. 1434.96 Lacs (Previous Year Rs. 8,008.36 Lacs).

8. In the opinion of the Board of Directors, the Current Assets, Loans & 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 accounts. Adequate provisions have been made for all known losses and liabilities.

9. Certain balances of Trade Payable, Trade Receivables and Advances are subject to confirmation and reconciliation. Advance from Parties includes Rs. 74.84 Lacs (P.Y. Rs. 185.68 Lacs) being certain receipts lying under suspense account in absence of information as to the credits in the bank account.

10. RESEARCH AND DEVELOPMENT EXPENSES

Research and Development expenses aggregating to Rs. 10.53 Lacs (P.Y. Rs. 15.05 Lacs) in the nature of revenue expenditure have been included under the appropriate account heads.

(viii) (a) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation,

seniority, promotion and other relevant factors including supply and demand in the employment market.

(b) The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency in terms of the post employment benefit obligations.

(c) Expected rate of return assumed by the insurance company is generally based on their investment pattern as stipulated by the Government of India.

(ix) The above information is certified by the actuary.

(x) The Company expects to contribute Rs. 42.37 Lacs to the Gratuity Fund managed by the Life Insurance Corporation of India during the Financial Year 2015-2016.

11. SEGMENT REPORTING

i) Business segments : Based on the synergies and in terms of Accounting Standard - 17, the Company is mainly engaged in the business segment of manufacture & sale of Ferro Alloys and Iron & Steel Products. The risks and returns of Captive Power Plant is directly associated with the manufacturing operations of Ferro Alloys and hence treated as a part of Ferro Alloys segment.

(i) Name of the related parties where control exists irrespective of whether transactions have occurred or not

(a) Enterprise on which the Company has control

SKP Overseas Pte Ltd. Wholly Owned Subsidiary

PT Bara Prima Mandiri

Subsidiary of SKP Overseas Pte. Ltd.

(b) Entities/Individuals owning directly or indirectly an interest in the voting power that gives them control

A.B Infratel Pvt. Ltd.

Gannath Commerce Pvt. Ltd.

Mahabala Merchants Pvt. Ltd.

Narmada Rivers Resources Pvt. Ltd.

Relybulls Derivatives and Commodities Pvt. Ltd.

SBM Steels Pvt. Ltd.

SKP Aviation Services Ltd.

Gajavakra Merchandise Pvt. Ltd.

(ii) Names of the other related parties with whom transactions have taken place during the year

(a) Key Managerial Personnel

Mr. Rohit Patni

Mr. Dinesh Biyanee

Mr. Vipul Jain

Mr. Anil Prasad Shaw

(b) Relatives of Key Managerial Person

Mr. Suresh Kumar Patni

Mr. Ankit Patni

Mrs. Sarita Patni

(c) Enterprises owned or significantly influenced by the Key Managerial Personnel or their relatives

Impex Metal & Ferro Alloys Ltd.

Impex Ferro Tech Ltd.

Ankit Metal & Power Ltd.

Whitestone Suppliers Pvt. Ltd.

Vasupujya Enterprises Pvt. Ltd.

Marble Arch Properties Pvt. Ltd.

SKP Power Ventures Ltd.

Poddar Mech Tech Services Pvt. Ltd.

Suanvi Trading & Investment Co. Pvt. Ltd.

Shreyansh Leafin Pvt. Ltd.

Relybulls Stock Broking Pvt. Ltd.

Sarita Steel & Power Ltd.

Shubham Complex Pvt. Ltd.

Gajkarna Merchandise Pvt. Ltd.

Astabhuja Properties Pvt. Ltd.

The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non - resident shareholders.

12. The Company has entered into an agreement dated 19th February, 2015, for the sale, transfer or otherwise disposal of Company's Manufacturing Unit at Jajpur, Odisha as a going concern to M/s Balasore Alloys Ltd. on slump sale basis. Pending compliance of certain conditions precedent to tha said agreement, the effect of the said agreement has not been given in these accounts and the said assets are continued to be shown under Fixed Assets instead of assets held for disposal. These have consequential impact on the reported financials which remains unascertained.

13. The operations of the Company are severely impacted by weak steel industry scenario and lack of demand for Company's finished product . The Company has incurred loss after tax of Rs. 35,283.46 Lacs. and accumulated loss as on 31st March, 2015 is Rs. 32,138.32 Lacs which is in excess of 50% of the net worth of the company. As a part of its financial revival process, the lenders of the company has already approved CDR package (as referred in note no 28 above). The Company has continuous support from the promoters and has put in place measures for revival and cost reduction. Considering above initiative of the company and given the overall position in India, the financial statements have been prepared under Going Concern basis.

14.Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary to conform to this year's classification. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to amounts and other disclosures relating to the current year.


Mar 31, 2014

1 Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs. 10 per share. Each holder of Equity Shares is entitled to one vote per share. 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 all preferential amount. The distribution will be in proportion to the number of Equity Shares held by the share holders.

2 As per the CDR Package approved by CDR Empowered Group (Refer Note No. 28) on March 24, 2014, the Company has during the year received unsecured loan amounting to Rs. 4,653 Lacs (Refer Note No. 4), which is to be converted to Equity by March 31, 2015. The conversion price will be determined in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations.

3 Working Capital Term Loan :

Upon implementaion of the CDR Package (Refer Note No. 28), the overdrawn portion of the Cash Credit Accounts of the Company has been carved out into separate Working Capital Term Loans (WCTL).

4 Funded Interest Term Loan :

Upon implementaion of the CDR Package (Refer Note No. 28), funding of interest has been provided for :

* Interest on existing term loans for a period of 24 months from the Cut-Off Date i.e from October 01, 2013 to September 30, 2015;

* Interest on WCTL for a period of 24 months from the Cut-Off Date i.e from October 01, 2013 to September 30, 2015;

* Interest on residual cash credit limit for a period of 9 months from the Cut-Off Date i.e from October 01, 2013 to June 30, 2014;

5 Details of security :

(i) In terms of the CDR package, Rupee Term Loans, Working Capital Term Loans, Funded Interest Term Loans and Working Capital Loan (Refer Note No. 7) are pooled together and secured as under:

a) First pari-passu charge on the entire Fixed Assets of the Company (excluding value of vehicles), both present and future, including equitable mortgage of factory land & building at Bishnupur (West Bengal), Jajpur (Odisha) and Haldia (West Bengal). Also, secured by way of mortgage on Freehold land at New Town, District : North 24 Parganas measuring 50 Cottahs.

b First pari-passu charge on the entire Current Assets of the Company comprised of stock of raw materials, semi finished and finished goods and book debts, outstanding moneys, receivables, both present and future pertaining to the Company''s manufacturing units/divisions at Bishnupur (West Bengal), Jajpur (Odisha) and Haldia (West Bengal) and at other Units.

c) Collateral security by equitable mortgage on Land & Building at 1/26, Vidyadhar Nagar, Jaipur, Rajasthan held in the name of Shubham Complex Pvt. Ltd., Office space measuring 835 sq. ft. located at Flat no. 21B, 4th Floor, Bowbazar, 35, C.R. Avenue, Kolkata-12, held in the name of Mr. S.K.Patni and Flat No. A-52, Block-A, 35, Dr. Abani Dutta Road, Salkia, Howrah, held in the name of Mr. Rohit Patni.

d) Pledge of 100% of the promoter''s shares representing 72% of the paid up Capital of the Company on pari passu basis (pending creation).

e) Personal Guarantee of the Promoters - Mr. S.K.Patni, Mr. Rohit Patni and Mr. Ankit Patni.

f) Corporate Guarantee of the Group Companies - Vasupujya Enterprises Pvt. Ltd., Shubham Complex Pvt. Ltd., Poddar Mech Tech Services Pvt. Ltd., Invesco Finance Pvt. Ltd. and Suanvi Trading and Investment Co. Pvt. Ltd.

(ii) Loans against Vehicles & Equipments are secured by way of hypothecation of the underlying asset financed.

(D) Terms of Repayment of Loans :

(i) Terms of Repayment of Rupee Term Loans availed for Haldia Project, 33 MVA Furnace and Stainless Steel Plant of the Company and Working Capital Term Loan :

Upon implementaion of the CDR Package, the existing Rupee Term Loan amounting to Rs. 32,434.42 lacs in respect of Haldia Project, 33 MVA Furnace and Stainless Steel Project and Working Capital Term Loan are to be repaid over a period of 8 years by way of 32 structured quarterly installments commencing from December 31, 2015 upto September 30, 2023 as per the Repayment Schedule given below. Further, such loans carry the interest rate @ 11% p.a. linked to the Base Rate of the State Bank of India, with annual reset option with the approval of CDR-EG.

(ii) Terms of Repayment of Term Loan availed for 67.5 MVA Captive Power Plant project of the Company :

Upon implementaion of the CDR Package, the Rupee Term Loan amounting to Rs. 26,410.32 lacs in respect of 67.5 MVA Captive Power Plant is to be repaid by way of 38 equal quarterly installments commencing from December 31, 2015 upto March 31, 2025. Further, the loan carries the interest rate @ 11% p.a. linked to the Base Rate of the State Bank of India, with annual reset option with the approval of CDR-EG.

(iii) Terms of Repayment of Funded Interest Term Loan :

Repayment of FITL is to be made in 18 equal quarterly installments commencing from December 31, 2015 with the last installment due on March 31, 2020. FITL carries interest @11% p.a. linked to the Base Rate of the State Bank of India, with annual reset option with the approval of CDR-EG.

(iv) Unsecured Loans from Related Parties (Interest free) are to be converted into Equity by March 31, 2015 as per CDR package. [Refer Note No. 2]

(v) Unsecured Loan from Body Corporates (Other than related parties) aggregating to Rs. 6,487.34 Lacs (P.Y. Rs. 9,184.50 Lacs) are interest free. Such loans are repayable at the option of the Company and are stated by the management to be in the nature of Long-term borrowings.

(vi) Loans against Vehicles and Equipments are repayable by way of Equated Monthly Installments subsequent to taking of such loan. The original period of such loans is 3 years.

6 CORPORATE DEBT RESTRUCTURING

During the year, at the request of the Company, the Corporate Debt Restructuring Proposal (CDR Proposal) was referred to CDR Empowered Group (CDR EG) by the consortium of lenders led by State Bank of India (SBI). The CDR Proposal as recommended by SBI was approved by CDR EG on March 24, 2014 and communicated vide Letter of Approval dated 28th March, 2014, as amended / modified from time to time. Under CDR package, the Company''s debts were restructured / rescheduled and additional credit facilities have been sanctioned as set out in the said Letter of Approval. The cut off date for CDR package was September 30, 2013 and the implementation is under progress. Pending implementation, the financial effect thereof has been taken into accounts.

The CDR Package includes reliefs / measures such as reduction in interest rates, funding of interest, rearrangement of securities etc. The key features of the CDR Proposal are as follows:

(i) Repayment of Rupee Term Loans (RTL) (except term loan for Captive Power Plant of the Company) after moratorium of 2 years from the cut-off date in 32 structured quarterly installments commencing from December 31, 2015 to September 30, 2023.

(ii) Repayment of Rupee Term Loans for Captive Power Plant of the Company after moratorium of 2 years from the cut-off date in 38 structured quarterly installments commencing from December 31, 2015 to March 31, 2025.

(iii) Conversion of various irregular/outstanding/devolved financial facilities into Working Capital Term Loan (''WCTL''). Repayment of WCTL after moratorium period of 2 years from cut-off date in 32 structured quarterly installments commencing from December 31, 2015 to September 30, 2023.

(iv) Restructuring of existing fund based and non fund based financial facilities.

(v) Interest on RTL and WCTL during the moratorium period of 2 years from cut-off date and interest on Cash Credit limit for a period of 9 months from the cut-off date shall be converted to FITL. Repayment of FITL would be done in 18 equal quarterly installments commencing from December 31, 2015 to March 31, 2020.

(vi) The rate of interest on RTL, WCTL, FITL and Fund Based Working Capital Facilities shall be 11% (linked to the base rate of SBI) with the right to reset the rate of the Term loan(s) and FITL every year with the approval of CDR-EG.

(vii) Waiver of penal interest for irregularities in the Cash Credit accounts for the period from cut-off date to the date of implementation of the package.

(viii) Contribution of Rs. 5,664 lacs in the Company by the promoters in lieu of bank sacrifices and Rs. 8,577 lacs to meet the additional cost over run towards the Captive Power Plant project of the Company. The contribution is to be brought initially in the form of unsecured loan by September 30, 2014 and the same is to be converted into equity by March 31, 2015.

(ix) The CDR Package as well as the provisions of the Master Circular on Corporate Debt Restructuring issued by the Reserve Bank of India, gives a right to the CDR Lenders to get a recompense of their waivers and sacrifices made as part of the CDR Proposal. The recompense payable by the Company is contingent on various factors, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as a contingent liability. The aggregate present value of the outstanding sacrifice made/ to be made by CDR Lenders as per the CDR package is approximately Rs. 69,987 lacs.

7 CONTINGENT LIABILITIES AND COMMITMENTS

(i) Contingent Liabilities not provided for in the books of accounts in respect of :

(a) Bills discounted, outstanding as on 31st March, 2014 - Rs. 2,389.29 Lacs (P.Y. - Rs. 4,521.85 Lacs)

(b) Corporate Guarantee to Indian Overseas Bank, Hongkong to secure the financial assistance to SKP Overseas Pte Ltd, a Wholly Owned Subsidary. Amount payable by SKP Overseas Pte Ltd. to Indian Overseas Bank, Hongkong as on 31st March, 2014 is USD. 4.20 Million (P.Y. USD. 5.35 Million).

(c) Right of Recompense to CDR Lenders for the relief and sacrifice extended, subject to provisions of CDR Guidelines, amounting to Rs. 69,987 lacs (Refer Note No. 28)

(d) Claims against the Company not acknowledged as debt : (Rs. in Lacs)

31-03-2014 31-03-2013

Disputed Excise Duty / Service Tax under appeal 720.86 546.07

Disputed Sales Tax/ VAT under appeal 2,393.98 836.77

Disputed VAT Refund claim under appeal 1,305.99 -

Disputed Entry Tax under appeal 16.03 16.03

Excise Duty demand for which show cause notice issued 59.61 20.78

Disputed Provident Fund demand under appeal 0.84 -

Disputed ESI demand under appeal 0.26 -

Excise Demand, pending show cause 20.00 20.00

Irregular Claim of Export Incentives, pending show cause from DRI - 150.00

(ii) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs. 8,008.36 Lacs (P.Y. Rs. 9,551.28 Lacs).

(iii) Estimated amount of export obligations to be fulfilled in respect of goods imported under Export Promotion Capital Goods Scheme (EPCG) - Rs. Nil (P.Y. Rs. 1,849.09 Lacs).

NOTE 8

In the opinion of the Board of Directors, the Current Assets, Loans & 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 accounts. Adequate provisions have been made for all known losses and liabilities.

NOTE 9

Certain balances of Trade Payable, Trade Receivables and Advances are subject to confirmation. Advance from Parties includes Rs. 185.68 lacs (P.Y. Rs. 1,450.49 lacs) being certain receipts lying under suspense account in absence of information as to the credits in the bank account.

NOTE 10 RESEARCH AND DEVELOPMENT EXPENSES

Research and Development expenses aggregating to Rs. 15.05 Lacs ( P.Y. Rs. 30.19 Lacs) in the nature of revenue expenditure have been included under the appropriate account heads.

NOTE 11 EMPLOYEE BENEFITS

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

(a) Contribution to Defined Contribution Plan, recognised as expense for the year is as under :

(viii) (a) The estimates of rate of escalation in salary considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

(b) The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency in terms of the post employment benefit obligations.

(c) Expected rate of return assumed by the insurance company is generally based on their investment pattern as stipulated by the Government of India.

(ix) The above information is certified by the actuary.

(x) The Company expects to contribute Rs. 46.98 Lacs to the Gratuity Fund managed by the Life Insurance Corporation of India during the Financial Year 2014 - 2015.

NOTE 12 SEGMENT REPORTING

i) Business segments : Based on the synergies and in terms of Accounting Standard - 17, the Company is mainly engaged in the business segment of manufacture & sale of Ferro Alloys and Iron & Steel Products. The risks and returns of Captive Power Plant is directly associated with the manufacturing operations of Ferro Alloys and hence treated as a part of Ferro Alloys segment.

NOTE 13 RELATED PARTY DISCLOSURE

i) Name of the related parties where control exists irrespective of whether transactions have occurred or not

(a) Enterprise on which the Company has control

SKP Overseas Pte Ltd. Wholly Owned Subsidiary

PT Bara Prima Mandiri Subsidiary of SKP Overseas Pte Ltd.

(b) Entities / Individuals owning directly or indirectly an interest in the voting power that gives them control

None

ii) Names of the other related parties with whom transactions have taken place during the year

(a) Key Managerial Personnel Mr. Suresh Kumar Patni Mr. Rohit Patni Mr. Dinesh Biyanee

(b) Relatives of Key Managerial Person Mr. Ankit Patni Mrs. Sarita Patni

(c) Enterprises owned or significantly influenced by KMP or their relatives

Impex Metal & Ferro Alloys Ltd.

Impex Ferro Tech Ltd.

Ankit Metal & Power Ltd.

Nucore Exports Pvt. Ltd.

Arthodock Vinimay Pvt. Ltd.

Whitestone Suppliers Pvt. Ltd.

Vasupujya Enterprises Pvt. Ltd.

Marble Arch Properties Pvt. Ltd.

SKP Power Ventures Ltd.

VNG Mercantiles Pvt. Ltd.

Invesco Finance Pvt. Ltd.

Poddar Mech Tech Services Pvt. Ltd.

Suanvi Trading & Investment Co.Pvt. Ltd.

Shreyansh Leafin Pvt. Ltd.

Relybulls Stock Broking Pvt. Ltd.

Sarita Steel & Power Ltd.

Shubham Complex Pvt. Ltd.

NOTE 14

Exceptional Item in earlier year represents provision for additional power charges on retrospective revision of power tariff, net of waiver of Electricity Duty and Power Incentive recognised, on receipt of Eligibility Certificate, under the West Bengal Incentive Scheme 2000 and other approvals. The Current tax figure of P.Y. is net of Rs. 863.33 Lacs, being the tax effect on the Exceptional item.

NOTE 15

The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non - resident shareholders.

NOTE 16

The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February, 2011 and 21st February, 2011 respectively read with General Circular No. 08/2014 dated 4th April, 2014 has granted a general exemption from compliance with Section 212 of the Companies Act, 1956, subject to fulfilment of conditions stipulated in the circular. The Company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiaries has been included in the Consolidated Financial Statements.

NOTE 17

Previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary to conform to this year''s classification. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to amounts and other disclosures relating to the current year.


Mar 31, 2013

NOTE 1

In the opinion of the Board of Directors, the Current Assets, Loans & 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 accounts. Adequate provisions have been made for all known losses and liabilities.

NOTE 2

Certain balances of Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to confirmation.

NOTE 3 RESEARCH AND DEVELOPMENT EXPENSES

Research and Development expenses aggregating to Rs. 30.19 Lacs ( P.Y. Rs. 17.84 Lacs) in the nature of revenue expenditure have been included underthe appropriate account heads.

NOTE 4 SEGMENT REPORTING

(i) Business segments : Based on the synergies and in terms of Accounting Standard -17, the Company is mainly engaged in the business segment of manufacture & sale of Ferro Alloys and Iron & Steel Products. The risks and returns of Captive Power Plant is directly associated with the manufacturing operations of Ferro Alloys and hence treated as a part of Ferro Alloys segment.

(ii) Geographical segments: The Company''s secondary geographical segments have been identified based on the location of customers and are disclosed based on revenues within India and revenues outside India. Secondary segment assets are based on the location of such asset.

NOTE 5 RELATED PARTY DISCLOSURE

i) Name of the related parties where control exists irrespective of whether transactions have occurred or not

(a) Enterprise on which the Company has control

SKP Overseas PTE Ltd. Wholly Owned Subsidiary

PT Bara Prima Mandiri Subsidiary of SKP Overseas PTE Ltd.

(b) Entities / Individuals owning directly or indirectly an interest in the voting power that gives them control None

ii) Names of the other related parties with whom transactions have taken place during the year

(a) Key Managerial Personnel (KMP) Mr. Suresh Kumar Patni

Mr.RohitPatni

Mr. Ankit Patni (upto 24.08.2012)

Mr.BinitJain

(b) Relatives of KMP Mrs. Sarita Patni

Mr. Ankit Patni (from 25.08.2012)

(c) Enterprises owned or significantly influenced by KMP or their relatives Arin Minerals Pvt. Ltd.

Impex Metal & Ferro Alloys Ltd.

ImpexFerro Tech Ltd.

Ankit Metal & Power Ltd.

Nucore Exports Pvt. Ltd.

ArthodockVinimayPvtLtd.

Whitestone Suppliers Pvt. Ltd.

Vasupujya Enterprises Pvt. Ltd.

Marble Arch Properties Pvt. Ltd.

SKPPowerVenturesLtd.

VNGMercantilesPvtLtd.

Invesco Finance Pvt. Ltd.

PoddarMech Tech Services Pvt. Ltd.

Suanvi Trading & Investment Co. Pvt. Ltd.

HiraConcastLtd.

Impex Steel Ltd.

ShreyanshLeafinPvtLtd.

MahabalilspatPvtLtd.

SKP Stock Broking Pvt. Ltd.

Sarita Steel & Power Ltd.

Shubham Complex Pvt. Ltd.

NOTE 6

Exceptional Item represents provision for additional power charges for the period upto 31st March, 2012 on retrospective revision of power tariff, net of waiver of Electricity Duty and Power Incentive recognised, on receipt during the current year of Eligibilty Certificate, under the West Bengal Incentive Scheme 2000 and other approvals. Since the exceptional item relates to the previous periods, the management treated the same as a rare circumstance and, to reflect the true and fair representation of the performance of the Company for the year, considered it appropriate that the profits after tax be presented before the exceptional item, and then give effect to the exceptional item instead of making disclosure as per the currentformat in Part-ll of Schedule VI (Revised) to the Companies Act, 1956. The Current taxfigure is net ofRs.863.33 Lacs, being the tax effect on the Exceptional item.

NOTE 7

Effective 1st April 2012, the Company has adopted the principles of Hedge Accounting as set out in Accounting Standard (AS) 30 on Financial Instruments: Recognition and Measurement, in respect of foreign exchange forward contracts which have been taken against forecasted transactions and which are not covered by the requirements of Accounting Standard (AS) 11- ''The Effects of changes in Foreign Exchange Rates''. Accordingly, net loss of Rs. 110.48 lacs arising on fair valuation of outstanding derivatives as on 31st March 2013 that are designated as effective cash flow hedges has been adjusted against Hedging Reserve.

NOTE 8

The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non-resident shareholders.

NOTE 9

Previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary to conform to this year''s classification. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to amounts and other disclosures relating to the current year.


Mar 31, 2012

INCHED CONTINGENT LIABILITIES AND COMMITMENTS

(i) Contingent Liabilities not provided for in the books of accounts in respect of: -

(a) Bills discounted, outstanding as on 31st March, 2012 Rs.6,097.24 Lacs (P.Y - Rs. 892.70 Lacs)

(b) Corporate Guarantee is given to Indian Overseas Bank, Hongkong to secure the financial assistance to SKP Overseas Pte Ltd., a Wholly Owned Subsidiary. Amount payable by SKP Overseas Pte Ltd. to Indian Overseas Bank, Hongkong as on 31st March, 2012 is USD 8.35 Million (P.Y.-USD 8.35 Million).

(c) Claims agamst the Company not acknowledged as debt :

(Rs.in Lacs)

31-03-2012 31-03-2011

Disputed Excise Duty under appeal 576.91 614.99

Disputed Sales Tax/VAT under appeal 533.95 334.23

Disputed Entry Tax under appeal 0.70 1.94

Disputed Income Tax Demands under appeal 21.68 137.80

Excise Duty demand for which show cause notice issuld 4.31 34.96

Claim under Workmens' Compensation Act - 4.99

Disputed ESI under Settlement Commission 10.25 -

Irregular Claim of Export Incentives, pending show cause from DRI 150.00 -

(ii) Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs. 1 5.1 55.45 Lacs (P.Y.-Rs. 1,1 07.32 Lacs).

(iii) Estimated amount of export obligations to be fulfilled in respect of goods imported under Duty Free Import Authorisation Scheme - Rs. 988.22 Lacs (P.Y. - Rs. 862.53 Lacs) and under Export Promotion Capital Goods Scheme (EPCG) - Rs. 4,885.35 Lacs (P.Y. - Rs. Nil).

In the opinion of the Board of Directors, the Current Assets, Loans & 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 accounts. Adequate provisions have been made for all known losses and liabilities.

Certain balances of Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to confirmation.

i Note B RESEARCH AND DEVELOPMENT EXPENSES]

Research and Development expenses aggregating to Rs. 17.84 Lacs (P.Y. - Rs. 8.01 Lacs) in the nature of revenue expenditure have been included under the appropriate account heads.

i Note B EMPLOYEE BENEFITS]

Disclosure pursuant to Accounting Standard - 15 (Revised)" Employee Benefits" : Contribution to Defined Contribution Plan, recognised as expense for the year is as under:

Employer's Contribution to Provident and Other Fund Rs. 80.33 52.42

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method as on 31st March, 2012 which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non-resident shareholders.

The Financial Statements for the year ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. The financial statements for the year ended 31 st 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. Contingent Liabilities not provided for in the books of accounts in respect of :

a) Bank Guarantees - Rs. 53,088,850 (P.Y. - Rs. 35,080,618).

b) Bills discounted with Banks, outstanding as on 31st March, 2011 Rs. 892,709,093 (P.Y. - Rs. 853,625,986).

c) Letters of Credit opened in favour of suppliers, outstanding as on 31st March, 2011 - Rs. 67,529,725 (P.Y. - Rs. 338,907,794).

d) Corporate Guarantee given to Indian Overseas Bank, Hongkong to secure the financial assistance to SKP Overseas Pte Ltd, a wholly owned subsidary, amounting to USD 15 million (P.Y. - USD 15 million). Amount payable by SKP Overseas Pte Ltd. to Indian Overseas Bank, Hongkong as on 31st March, 2011 is USD. 8.35 Million (P.Y. - USD 8.5 Million).

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs. 110,732,188 (P.Y. - Rs. 454,328,844).

3. Estimated amount of export obligation to be fulfilled in respect of goods imported under Duty Free Import Authorisation Scheme - Rs. 862.53 lacs. (P.Y. - Rs. 871.99 lacs)

4. During the year, the company has changed its accounting policy relating to accounting of share issue expenses from writing off 1/5th of the expenditure every year to adjusting the same against the balance available in Securities Premium Account in line with Section 78 of the Companies Act,1956. Had there been no change in the policy, the profit for the year would have been lower by Rs. 1,078,823.

5. In the opinion of the Board of Directors, the Current Assets, Loans & 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 accounts. Adequate provisions have been made for all known losses and liabilities.

6. Securities for Loans :

i) Term Loans from banks (other than Stainless Steel Project and Captive Power Plant) are secured by way of :

a) 1st charge on pari passu basis on the entire Fixed Assets of the Company, both present and future, including equitable mortgage of factory land & building at Bishnupur (West Bengal) and Jajpur (Orissa) and exclusive 1st charge over Haldia where UBI and SBI are the Term Lenders.

b) Charge on the entire cash flows of the Company on pari passu basis.

c) Collateral security by equitable mortgage of landed properties with building at Jaipur held in the name of Shubham Complex (P) Ltd., equitable mortgage of office space at Kolkata and extention of charge over all the Current assets of the Company pertaining to all the units.

d) Personal Guarantee of the Promoter Directors & Corporate Guarantee of the group companies.

ii) Term loans from banks for Stainless Steel Project of the Company at Bishnupur (West Bengal) are secured by pari passu 1st charge over the entire fixed assets of the said project and pari passu 2nd charge on all the current assets of the said Project.

iii) Term loans from banks for Captive Power Plant of the Company at Jajpur (Orissa) are secured by pari passu 1st charge over the entire fixed assets of the said project and pari passu 2nd charge on all the current assets of the said project.

iv) Working Capital Loans (Fund Based Non Fund Based) are secured by way of :

a) Hypothecation of current assets including inventory, receivables etc., of the Company at Jajpur, Bishnupur and Haldia on pari passu basis.

b) Collateral security by equitable mortgage of landed properties with building at Jaipur held in the name of Shubham Complex (P) Ltd., equitable mortgage of office space at Kolkata and extention of charge over all the fixed assets of the Company, both present and future, located at Bishnupur (West Bengal) and Jajpur (Orissa) and exclusive charge over Haldia where UBI and SBI are the Term Lenders.

c) Personal Guarantee of the Promoter Directors & Corporate Guarantee of the group companies.

7. During the year, the Company has issued and allotted 15,793,178 equity shares of Rs. 10 each on rights basis at a premium of Rs. 50 per share, aggregating to Rs. 9,475.91 Lacs to part finance Ferro Alloys Plant at Haldia and issue related expenses. The proceeds of the issue have been utilised on the objects of the issue.

8. Certain balances of Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to confirmation.

9. Sundry Debtors include Rs. 241,219,735 (P.Y. - Rs. 194,068,926) covered by letters of credit in favour of the Company.

10. The Company has accounted for Interest Subsidy recievable from the Government of West Bengal under West Bengal Incentive Scheme aggregating to Rs. NIL (P.Y. - Rs. 42,004,699) including Rs. NIL (P.Y. - Rs. 35,863,351) for earlier years. The said amount was recognised as net off with interest and finance charges in Schedule 21.

b) The computation of net profit for the purpose of Director's Remuneration under Section 349 of Companies Act, 1956 has not been enumerated since no commission has been paid to any of the directors. Fixed managerial remuneration has been paid to the wholetime directors within the limit specified in Schedule XIII of the Companies Act, 1956.

11. Amount of excise duty on variation in stocks shown in Schedule 18 represents differential excise duty on opening and closing stock of finished goods.

12. The Company has commenced commercial production of four Furnaces out of six Furnaces of 9 MVA each at its Haldia Unit. The 1st Furnace started from 10th June, 2010 ; 2nd Furnace from 10th August, 2010 ; 3rd and 4th Furnace from 23rd February, 2011. Accordingly, pre-operative expenses relating to the said project have been capitalised by transfer to Factory Shed & Building, Plant & Machinery and Electrical Installations in proportion to their respective costs.

13. Research and Development expenses aggregating to Rs. 801,584 (P.Y. - Rs. 795,500) in the nature of revenue expenditure have been included under the appropriate account heads.

14. Disclosure pursuant to Accounting Standard - 15 ( Revised) "Employee Benefits" :

a. Defined Contribution Plan : Amount of Rs. 5,241,575 (P.Y. - Rs. 3,202,466) is recognised as expense and included in "Payments to & Provisions For Employees" in Schedule -19 of the Profit & Loss Account.

b. Defined Benefit Plan :

The employee gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method as on 31st March, 2011 which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

viii. a) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

b) The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency in terms of the post employment benefit obligations.

c) Expected rate of return assumed by the insurance company is generally based on their investment pattern as stipulated by the Government of India.

ix. The above information is certified by the actuary.

x. The Company expects to contribute Rs. 8.5 Lacs to the Gratuity Fund managed by the Life Insurance Corporation of India during the financial year 2011-12.

15. A) Business segments : Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of 'Ferro Alloys' during the year. Trading of Iron and Steel & Minerals has not been considered as a separate reportable segment since segment revenue/result from the same is less than 10% of the total revenue/result.

B) Geographical segments : The Company's secondary geographical segments have been identified based on the location of customers and are disclosed based on revenues within India and revenues outside India. Secondary segment assets and liabilities are based on the location of such asset/liability.

16. Related Party Disclosures

i) Name of the related parties where control exists irrespective of whether transactions have occurred or not

a) Enterprise on which the Company has control

SKP Overseas Pte. Ltd. Wholly Owned Subsidiary

b) Entities/Individuals owning directly or indirectly an interest in the voting power that gives them control None

c) Joint Ventures

Rohit Persia Mines & Industries PJSC

ii) Names of the other related parties with whom transactions have taken place during the year

a) Key Managerial Personnel Suresh Kumar Patni

Rohit Patni

Ankit Patni

Binit Jain

b) Relatives of Key Managerial Person Sarita Patni

c) Enterprises owned or significantly influenced by the Key Managerial Personnel or their relatives

Arin Minerals Pvt. Ltd.

Impex Metal & Ferro Alloys Ltd.

Impex Ferro Tech Ltd.

Ankit Metal & Power Ltd.

Nucore Exports Pvt. Ltd.

Arthodock Vinimay Pvt. Ltd.

Whitestone Suppliers Pvt. Ltd.

Vasupujya Enterprises Pvt. Ltd.

Marble Arch Properties Pvt. Ltd.

SKP Power Ventures Ltd.

SKP Aviation Services Ltd.

VNG Mercantiles Pvt. Ltd.

Invesco Finance Pvt. Ltd.

Poddar Mech Tech Services Pvt. Ltd.

Suanvi Trading & Investment Co. Pvt. Ltd.

Hira Concast Ltd.

Impex Steel Ltd.

17. The Company has made current tax provision for Minimum Alternate Tax (MAT) under Section 115JB of the Income Tax Act, 1961. As per the provisions of Section 115JAA, MAT Credit receivable for the amount in excess over tax liability as per normal computation has been recognised as an asset. MAT credit is recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India. The said asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit Entitlement.

18. The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non-resident shareholders.

19. The Company has entered into a Joint Venture namely "Rohit Persia Mines and Industries PJSC" with 49% interest to acquire mines in Iran. The said Joint Venture is yet to acquire the same. The Company has invested a sum of Rs. 6,454,933 (P.Y. - Rs. 6,181,519) (including advances for supplies) as on 31st March, 2011.

20. There are no transactions (other than transactions with subsidiaries as given in para 17 above) which are required to be disclosed under Clause 32 of the Listing Agreement.

21. Additional information pursuant to the provisions of paragraphs 3 & 4 of Part II of Schedule VI to the Companies Act,1956.

A) The Ministry of Corporate Affairs, Government of India vide its General Notification No. S.O.301 (E) dated 8th February, 2011 issued under Section 211 (3) of the Companies Act, 1956 has exempted certain classes of companies from disclosing certain information in their Profit & Loss Account. The Company being an 'Export Oriented Company' is entitled to the exemption. Accordingly, disclosures mandated by paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b) and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have not been provided.

B) Capacity & Production - Ferro Alloys

a) Licenced Capacity : N.A.

b) Installed Capacity : 239,542 MT Per Annum (P.Y. - 172,875 MT)

(Installed Capacity has been certified by the management and not verified by the auditors being a technical matter)

c) Production : 181,360.04 MT (P. Y. - 142,289.25 MT)

22. Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary. Accordingly, amounts and other disclosures for the preceeding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2010

1. Contingent Liabilities not provided for in the books of accounts in respect of:

a) Bank Guarantees - Rs. 35,080,618/- (Previous year - Rs. 846,000/-).

b) Bills discounted with Banks, outstanding as on 31st March, 2010 Rs. 853,625,986/- (Previous year - Rs. 680,792,008/-).

c) Letters of Credit opened in favour of suppliers, outstanding as on 31st March, 2010 - Rs. 338,907,794/- (Previous year - Rs. 33,794,920/-).

d) Corporate Guarantee given to Indian Overseas Bank, Hongkong to secure the financial assistance to SKP Overseas Pte. Ltd., a wholly owned subsidary, amounting to USD 15 million (Previous year - USD 15 million). Amount payable by SKP Overseas Pte. Ltd. to Indian Overseas Bank, Hongkong as on 31st March, 2010 is USD 8.5 Million (Previous year - USD 5 Million).

e) Claim against the Company not acknowledged as debt:

(Amounts in Rs.)

As at As at

31st March, 2010 31st March, 2009

Disputed Excise Duty under appeal 11,899,557 -

Deputed Sales Tax/VAT under appeal 6,396,795 1,749,295

Disputed Entry Tax under appeal 594,010 594,010

biiputed Excise Duty for which

appeals are pending 3,395,888 -

Disputed Sales Tax/VAT for which

appeals are pending 1,912,431 -

f) Excise Duty Liability arising out of search operation by the Directorate General of Central Excise Intelligence. However, the Company has paid under protest a sum of Rs. 15,000,000 pending issuance of any show cause notice.

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of Advances) - Rs. 454,328,844/- (Previous year-Rs. 125,907,600/-).

3. In the opinion of the Board of Directors, the Current Assets, Loans & 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 accounts. Adequate provisions have been made for all known losses and liabilities.

4. Certain balances of Sundry Creditors, Sundry Debtors, Unsecured Loans and Advances are subject to confirmation.

5. Draft Letter of Offer for issue of equity shares of the Company on rights basis to the existing equity shareholders is pending approval from Securities Exchange Board of India. The Company has received an amount of Rs. 484,000,000 as share application money from the Promoter Group against the proposed rights issue.

6. In the year 2007-08, the Company had issued 8,000,000 Preferential Convertible Warrants (Exercise Price of Rs. 43 each) on preferential basis to promoters & other strategic investors. Each warrant carried a right to convert the same into one Equity Share of Rs.10 each at a premium of Rs. 33 each [as per the formula prescribed under the SEBI (DIP) guidelines] over a period of 18 months from the date of allotment.

Of the above, 5,020,000 warrants were converted into the Equity Shares during the year 2008-09. Warrent holders holding 2,980,000 warrants expressed their inability to pay the remaining amount. Accordingly, the Board of Directors forfeited the same and credited the amount of Rs. 12,814,000 received against those warrants to Capital Reserve.

7. Sundry Debtors include Rs. 194,068,926/- (Previous year - Rs. 275,901,296/-) covered by letters of credit in favour of the Company.

8. During the year, the Company has accounted for Interest Subsidy recievable from the Government of West Bengal under West Bengal Incentive Scheme aggregating to Rs. 42,004,699/- (Previous year - Nil) including Rs. 35,863,351/- (Previous year - Nil) for earlier years. The said amount recognised has been net off with interest and finance charges in Schedule 21.

b) The computation of net profit for the purpose of Directors Remuneration under Section 349 of Companies Act, 1956 has not been enumerated since no commission has been paid to any of the directors. Fixed managerial remuneration has been paid to the whole- time directors as per Schedule XIII of the Companies Act, 1956.

9. Amount of excise duty on variation in stocks shown in Schedule 18 represents differential excise duty on opening and closing stock of finished goods.

10. Research and Development expenses aggregating to Rs. 795,500/- (Previous year - Rs. 657,829/-) in the nature of revenue expenditure have been included under the appropriate account heads.

11. Disclosure pursuant to Accounting Standard-15 (Revised) "Employee Benefits" :

a. Defined Contribution Plan : Amount of Rs. 3,202,466/- (Previous year- Rs. 2,693,276/-) is recognised as expense and included in "Payments to and Provisions For Employees" in Schedule -19 of the Profit & Loss Account.

vii. a) The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

b) The discounting rate is considered based on market yield on government bonds having currency and terms consistent with the currency in terms of the post employment benefit obligations.

c) Expected rate of return assumed by the insurance Company is generally based on their investment pattern as stipulated by the Government of India.

viii.The above information is certified by the actuary.

11. (A) Business Segments : Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard -17, the Company is predominantly engaged in a single reportable segment of Ferro Alloys during the year. Trading of iron and steel & minerals has not been considered as a separate reportable segment since segment revenue/result from the same is less than 10% of the total revenue/result.

12. Related Party Disclosures

i) Name of the related parties where control exists irrespective of whether transactions have occurred or not:

a) Enterprise on which the Company has control

SKP Overseas Pte. Ltd. Wholly Owned Subsidiary

b) Entities/Individuals owning directly or

indirectly an

interest in the voting power that gives them

control None

c) Joint Ventures Rohit Persia Mines &

Industries PJSC

ii) Names of the other related parties with whom transactions have taken place during the year:

a) Key Managerial Personnel Suresh Kumar Patni

Rohit Patni

Ankit Patni

Binit Jain

b) Relatives of Key Managerial Person Sarita Patni

c) Enterprises owned or significantly

influenced by the Key Managerial Personnel

or their relatives Arin Minerals Pvt. Ltd.

Impex Metal & Ferro

Alloys Ltd.

Impex Ferro Tech Ltd.

Ankit Metal Power Ltd. Vasupujya Enterprises

(P) Ltd.

Marble Arch Properties

Pvt. Ltd.

SKP Power Ventures Ltd.

VNG Mercantiles Pvt.Ltd.

Invesco Finance Pvt.

Ltd.

PoddarMech Tech Services (P) Ltd.

Suanvi Tradings

Investment Co. Pvt.

Ltd.

13. The Company has not made any remittance in foreign currencies on account of dividend during the year and does not have information as to the extent to which remittance in foreign currencies on account of dividends have been made on behalf of non-resident shareholders.

14. The Company has entered into a Joint Venture namely "Rohit Persia Mines and Industries PJSC" with 49% interest to acquire mines in Iran. The said Joint Venture is yet to acquire the same. The Company has invested a sum of Rs. 6,181,519/- (Previous year - Rs. 6,768,571/-) (including advances for supplies) as on 31st March, 2010.

15. There are no transactions (other than transactions with subsidiaries as given in para 17 above) which are required to be disclosed under Clause 32 of the Listing Agreement.

16. Previous years figures have been re-worked, re-grouped, re-arranged and re-classified wherever considered necessary. Accordingly, amounts and other disclosures for the the preceeding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

 
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