Mar 31, 2015
1 CORPORATE INFORMATION
Shyam Century Ferrous Limited (the Company) is a public company domiciled in India and incorporated on 12.04.2011 under the provisions of the Companies Act, 1956. Pursuant to the Scheme of Arrangement between Star Ferro and Cement Limited (SFCL), the Company and their respective shareholders as approved by the Hon'ble High Court of Meghalaya at Shillong vide its order dated 31st March, 2015, all the assets and liabilities of the Ferro Alloys division (i.e. business and interest of SFCL in manufacture of Ferro Alloys including captive power plant at Byrnihat) have been transferred to and vested in the Company at their respective book values on a going concern basis with effect from 1st April, 2014 being the appointed date. The Company is engaged in manufacturing of Ferro Alloys and generation of Power. The manufacturing unit is located at Byrnihat, Meghalaya. The company is selling its product across India.
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 as prescribed under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ,to the extent notified. The financial statements are prepared under the historical cost convention on accrual basis and on the basis of going concern. The accounting policies are consistently followed by the company and changes in accounting policy are separately disclosed.
3. Terms/Rights attached to the Equity Shares & Notes
The company has only one class of equity shares having par value of Rs.1/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.
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 amounts. The distribution will be in proportion to the number of equity shares held bythe shareholders.
a) Rupee Term Loan from financial institution is secured by equitable mortgage of leasehold rights of land and first charge on fixed assets of the Company's Ferro Alloys Plant at Byrnihat, Meghalaya and second charge on current assets of the said unit. The Loan is to be repaid in further 18 quarterly instalments.
b) Hire Purchase Finance from bank is secured by hypothecation of respective vehicle/asset and is repayable within two years having varying date of payment.
Working Capital facility from bank is secured by first charge on the current assets and second charge on the fixed assets of the company's Ferro Alloys Plant at Byrnihat, Meghalaya.
4. Scheme of Arrangement
a) Pursuant to the Scheme of Arrangement ("The Scheme") between Star Ferro and Cement Limited (SFCL), the Company and their respective shareholders as approved by the Hon'ble High Court of Meghalaya at Shillong vide its order dated 31st March, 2015, all the assets and liabilities of the Ferro Alloys division (i.e. business and interest of the company in manufacture of Ferro Alloys including captive power plant at Byrnihat in the State of Meghalaya) and investment in 83,58,998 Equity Shares of Meghalaya Power Limited of face value of Rs.10/- each held by SFCL have been transferred to and vested in the Company at their respective book values on a going concern basis with effect from 1st April, 2014 being the appointed date. The said order of the Hon'ble High Court has been filed with the Registrar of Companies on 10th April, 2015, the effective date of the scheme and accordingly, the Scheme of Arrangement has been given effect to in these accounts.
d) Pursuant to the said Scheme of Arrangement, the Company will issue and allot Equity Shares to the shareholders of SFCL in ratio of 1 (one) Equity Share of Rs.1/- each of the Company as fully paid - up for every 1 (one) Equity Share of Rs.1/- each held by them in SFCL. Pending allotment of these shares, the amount of Rs.2,216.73 Lacs is shown as 'Share Capital - Pending Allotment' (net of shares to be cancelled pursuant to the Scheme of Arrangement).
e) Consequent to the allotment of new shares as per the Scheme of Arrangement, current share capital of the Company of Rs.5 Lacs would be cancelled.
5. Contingent Liabilities
(Rs. in Lacs)
Particulars 3103.2015 31.03.2014
Contingent Liabilities not provided for in respect of:-
(a) Bills discounted with banks 17.86 -
(b) Solvent surety given to Excise Department against differential excise duty refund 606.34 - (Refer note no. 31)
Note: Based on discussion with the solicitors/favourable decisions in similar cases/legal opinion taken by the company, the management believes that the company has a good chance of success in cases mentioned here-in-above and hence, no provision there against is considered necessary.
6. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the company.
7. Excise Duty Refund
Hon'ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the differential amount against furnishing of solvent surety in line with the Interim Order dated 13th January, 2012 passed by Hon'ble Supreme Court in case of "VVF Ltd and others". Based on the said judgment of Hon'ble High Court and legal opinion obtained by the company, the differential excise duty refund of Rs.365.90 lakhs has been recognised as revenue in the books of account.
8. The Company has charged depreciation based on the remaining useful life of the assets as per the provisions and requirements of Schedule II to the Companies Act, 2013 effective from April 1, 2014. Had there not been any change in useful life of the Assets, depreciation for the year would have been lower by Rs.6.01 Lacs and consequently profit before tax for the year would have been higher by Rs.6.01 Lacs.
9. Employee Defined Benefits
(a) Defined Contribution Plans: The Company has recognised an expense of Rs.15.97 Lacs (Previous year Rs. Nil Lacs towards the defined contribution plans).
(b) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The following table summarises the components of net benefit expenses recognised in the Statement of Profit & Loss and amounts recognised in the balance sheet for the Gratuity.
(c) Under leave encashment scheme, the company allows its employees to encash accumulated leave over and above thirty days at any time during the year.
(d) Defined Benefit Plans - As per Actuarial Valuation as at 31st March, 2015.
(a) Business Segments: The business segments have been identified on the basis of the products/activities of the Company. Accordingly, the Company has identified following business segments:
Ferro-Alloys - Manufacturing of Ferro Alloy
Power - Generation of Power
(b) Geographical Segments: The Company operates predominantly within the geographical limits of India and accordingly secondary segments have not been considered.
10. By virtue of Notification no. G.S.R. 723 (E) dated 14th October, 2014 issued by the Ministry of Corporate Affairs, a Company which does not have a subsidiary or subsidiaries but has one or more associate company, no consolidation of Financial statements in respect of associate companies is required to be made for the Financial Year commencing from the 1st day of April, 2014 and ending on the 31st March, 2015. Hence, the company is not required to consolidate its accounts in respect of its investment in associate. The disclosure for the same is made in Form No. AOC -1 .
11. Figures have been rounded off to the nearest H in Lacs. Previous year's figures including those given in brackets have been rearranged and regrouped where necessary to confirm to the current year's classifications. Further, current year's figures include figures of Ferro Alloys business and investments which have been acquired by the company pursuant to the Scheme of Arrangement (Refer note no. 27). Hence, previous year's figures are not comparable with current year's figure.