Home  »  Company  »  Smiths & Founders  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Smiths & Founders (India) Ltd.

Mar 31, 2015

PARTICULARS Category

1. - Related Party Disclosure

Mr. Suresh Shastry Key Management Personnel

Mr. Satish Shastry Key Management Personnel

Mr. Umesh Shastry Key Management Personnel

Mrs. Supriya S. Key Management Personnel

Mrs. Hema Satish Relative of Key Management Personnel

Mr. Aneesh Shastry Relative of Key Management Personnel

Mrs.Kamala Kashinath Relative of Key Management Personnel

Master Sachin Shastry Relative of Key Management Personnel

Mrs. Shailaja Suresh Relative of Key Management Personnel

2. The financial statements have been prepared in consonance with the Schedule III to the Companies Act, 2013, to the extent possible, for presentation and previous year's figures have been accordingly regrouped wherever necessary to conform to the current year's classification.

3. Figures have been rounded off to the nearest rupee.

4. Expenditure in Foreign Currency : Rs. NIL (Previous Year Rs. NIL)

5. Earnings in Foreign Currency:

- F.O.B. Value of Exports Rs. 20.93 lakhs (Previous Period Rs. 22.18 lakhs)

6. Segment Reporting:

The Company is operating in Forgings & Castings which is treated as related products since both falls under automotive industry. The risk and rewards are not independent of each other. Therefore the Company is operating in one segment and hence no disclosure as per A.S 17 - "Segment Reporting" is made.

7. Contingent Liability:

The company is yet to receive certain C-forms for the interstate sales made. In case if the company fails to receive the same, there will be an estimated outflow of funds to the extent of Rs.6.13 lakhs (Previous Year - Rs.1.67 lakhs)

The notes above form an integral part of the financial statements.

This is the notes to accounts referred to in our report of even date.


Mar 31, 2014

NOTE 1

Corporate Information:

Amalgamating Company: Smiths and Founders (India) Limited

Amalgamated Company: Shimoga Technologies Limited

Shimoga Technologies Limited (STL) was incorporated under the Companies Act, 1956 on 22 October 1990 as a Private Limited Company under the name of Shimoga Forge Pvt. Ltd. The Company changed its name to Shimoga Technologies Limited on 17 August 2000. The Company is listed on Bombay Stock Exchange. Consequent to the Order sanctioning the Scheme of Rehabilitation by the Hon. Board for Industrial and Financial Reconstruction (BIFR) on 20 February 2014, M/s. Smiths and Founders (India) Limited (SFIL) got amalgamated with the Company. The Company''s name has been changed to Smiths and Founders (India) Limited with effect from 27.03.2014.

Further pursuant to the said Order the Share Capital of the Company has been reduced by 90% w.e.f 25.02.2014.

Scheme of Amalgamation:

Pursuant to the Scheme of Amalgamation ("the Scheme") of the amalgamating company with the amalgamated company as sanctioned by the Hon. BIFR vide their order dated 20.02.2014; the entire business and all the assets and liabilities, duties and obligations of the amalgamating company have been transferred to and vested in the amalgamated company with effect from 27.02.2014 (effective date). The Appointed date as per the Scheme is April 01, 2012.

The amalgamating company [Smiths and Founders (India) Limited] was engaged in manufacture of Forgings & Castings. The manufacturing facility of the amalgamated company was leased to the amalgamating company for carrying on their forging business.

Effective date of amalgamation for accounting purposes being 27.02.2014.

The amalgamation has been accounted for under the "Purchase" method as prescribed by the Accounting Standards (AS) 14 on "Accounting for Amalgamations" notified under the Companies (Accounting Standards) Rules. The scheme has, accordingly, been given effect to in these financial statements as under:

1) All Assets and liabilities of SFIL have been transferred at fair value to the Company.

2) The Excess of assets over liabilities has been transferred to General Reserve.

3) As per the terms of the Scheme shareholders of SFIL will be issued 5 equity shares of Re.1/- each for every 2 shares held ranking pari passu with existing shares of STL. Therefore the consideration payable by way of equity shares to the shareholders of SFIL is 9,76,76,525. [The shares outstanding in SFIL being 3,90,70,610 of Re.1/- each]

4) The value of net assets taken over is Rs.10,47,35,406 and the consideration being Rs. 9,76,76,525/-. The difference amount of Rs. 70,58,881 has been transferred to Amalgamation Reserve account.

5) The Amalgamation expense of Rs. 2,39,716/- being legal & travelling expenses is transferred to amalgamation reserve account as per the Scheme of Amalgamation.

6) The balance in the amalgamation reserve account as on 31.03.2014 is transferred to General Reserve as per the Scheme.

In view of the amalgamation of SFIL with the Company w.e.f. 27.02.2014, the figures for the current year are not comparable with those of the previous year.

7. The financial statements have been prepared in consonance with Revised Schedule VI to the Companies Act, 1956, to the extent possible, for presentation and previous year''s figures have been accordingly regrouped wherever necessary to conform to the current year''s classification.

8. Figures have been rounded off to the nearest rupee.

9. Expenditure in Foreign Currency : Rs. NIL (Previous Year Rs. NIL)

10. Earnings in Foreign Currency :

- F.O.B. Value of Exports Rs. 22.18 lakhs (Previous Period Rs. NIL)

11. Segment Reporting:

The Company is operating in Forgings & Castings which is treated as related products since both falls under automotive industry. The risk and rewards are not independent of each other. Therefore the Company is operating in one segment and hence no disclosure as per A.S 17 - "Segment Reporting" is made.

12. Contingent Liability:

The company is yet to receive certain C-forms for the interstate sales made. In case if the company fails to receive the same, there will be an estimated outflow of funds to the extent of Rs. 1,67,257/- (Previous Year - NIL)


Mar 31, 2013

1. The fnancial statements have been prepared in consonance with Schedule Vi to the Companies act 1956, and previous year''s fgures have been accordingly regrouped wherever necessary.

2. Figures have been rounded off to the nearest rupee.

3. No provision has been made for taxation, as there is no taxable income in terms of the provisions of the Income-tax Act, 1961.

4. the company has entered into two lease agreements for letting out of plant and machinery and establishment of offce premises.

i. the lease arrangement is for 11 months in respect of plant and machinery and is renewable on mutually agreeable terms. the agreement was renewed for 11 months with effect march 1, 2013. the aggregate lease rentals receivable for the year is refected as rent received / receivable under other income in the Statement of proft and loss. The company has created an equitable mortgage by deposit of title deeds of land and building situated at Plots no. n12 & n13, industrial estate, Sagar road, Shimoga and also hypothecated the plant and machinery in favour of Smiths & Founders (india) Ltd as a security for the deposit for Rs. 3.25 Crores given by them for leasing the manufacturing facilities.

ii. In respect of establishment of offce premises, the lease arrangement is for 11 months and is renewable on mutually agreeable terms. the lease was further renewed for period until august 2012. the aggregate lease rentals payable for the year is refected as rent paid / payable under indirect expense in the Statement of proft and loss. The disclosure required as per accounting Standard 19 with regard to the above is as under:

a) Payments under operating lease for period:

1) not later than one year: Rs. nil

2) Later than one year but not later than fve year: Rs. nil

b) Payment recognised in the Statement of Proft and Loss for the year ended 31 March 2013 is Rs. 29,032.

5. there are no employees who are in receipt of remuneration in excess of the limits specifed under section 217 (2a) of the Companies act, 1956, read with the Companies ( Particulars of employees ) rules, 1975, as amended.

6. earnings in Foreign Currency: Rs. nil (Previous year Rs.. nil)


Mar 31, 2012

NOTE NO. 1

The company was incorporated under the Companies Act, 1956 on 22 October 1990 as a Private Limited Company under the name Shimoga Forge Pvt Ltd. The Company changed its name to Shimoga Technologies Ltd on 17 August 2000. The company is listed on Bombay Stock Exchange.

1) The financial statements have been prepared in consonance with Revised Schedule VI to the Companies Act, 1956, to the extent possible for presentation and previous year's figures have been accordingly regrouped wherever necessary to conform to the current year's classification.

2. Figures have been rounded off to the nearest rupee.

3. No provision has been made for taxation, as there is no taxable income in terms of the provisions of the income-tax Act, 1961.

4. Contingent liabilities:

We are unable to ascertain or quantify the amount towards contingent liabilities, consequent to the delays and defaults in compliances with the filings under the Karnataka Sales Tax / Karnataka Value Added Tax / Service tax/ tax Deducted at Source / excise Duty / Provident Fund / Professional Tax as the proceedings are underway and no indications are available as to the direction the proceedings will take.

5. The company has received refund order from Department of Commercial Tax in respect of 2001-02 amounting to Rs. 15,02,081. The excess provision made towards VAT, Entry Tax, Professional Tax, Excise, Service Tax etc totaling to Rs. 15,31,269 has been written back. These amounts are included in statement of Profit and loss under the head - Other incomes.

6. The company has entered into two lease agreements for letting out of plant and machinery and establishment of office premises.

i. The lease arrangement is for 11 months in respect of plant and machinery and is renewable on mutually agreeable terms. The agreement was renewed for 11 months with effect 1 February 2011 and further extended for a period of 3 months. The aggregate lease rentals receivable for the year is reflected as rent received / receivable under other income in the Statement of profit and loss.

The company has created an equitable mortgage by deposit of title deeds of land and building situated at Plots No. N12 & N13, industrial Estate, Sagar Road, Shimoga and also hypothecated the plant and machinery in favour of Smiths & Founders (india) Ltd as a security for the deposit for Rs. 2.40 Crores given by them for leasing the manufacturing facilities.

ii. In respect of establishment of office premises, the lease arrangement is for 11 months and is renewable on mutually agreeable terms. The lease was further renewed for 11 months from 1 October 2011. The aggregate lease rentals payable for the year is reflected as rent paid / payable under indirect expense in the Statement of profit and loss. The disclosure required as per Accounting Standard 19 with regard to the above is as under:

a) Payments under operating lease for period:

1) Not later than one year: Rs. 47,177

2) Later than one year but not later than five year: Rs. 2,15,680

b) Payment recognised in the Statement of Profit and Loss for the year ended 31 March, 2012 is Rs. 44,748

7. There are no employees who are in receipt of remuneration in excess of the limits specified under section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended.

8. The company has been declared a sick industrial company within the meaning of clause (o) of sub section (1) of section 3 of the Sick industrial Companies Act 1985, and the company has been directed to submit draft rehabilitation scheme for revival.

9. Earnings in Foreign Currency: Nil (Previous Year Rs. Nil)


Mar 31, 2010

1. Going Concern: The Company has repaid dues to Bank of India and IDBI under a one time settlement scheme during the previous years. As a result the accumulated losses have been reduced. Due to the economic crisis, the turnover of the company declined during the period October 2008 to March 2009. Since it was not economical to run the factory at such levels, nor to keep the factory closed and with a view to curtail the mounting losses the company proposed to lease the facilities and an Extra-Ordinary General Meeting of the shareholders was called for this purpose on 20th March 2009. In accordance with the resolution of the shareholders at the Extra-ordinary General Meeting, the Company entered into an agreement on 29th March 2009 with Bhaghavathi Enterprises Ltd for leasing of the manufacturing facilities with effect from 1/4/2009 for a period of 11 months and renewed further period of 11 months on 24/05/2010. All the employees of the company have resigned at the close of business hours on 31/3/2009 and joined Bhaghavathi Enterprises Ltd. Considering the fact that the manufacturing facilities are still in use, the managements assessment of improvement in the economic conditions in general, the accounts of the Company have been prepared on a "Going Concern" basis even though the manufacturing facilities have been leased and there is an erosion in the net worth of the company due to accumulated losses.

2. Contingent Liabilities:

a) Penalties & Interest on Penalties/arrears of sales tax/tax deducted/collected at source, excise duty, service tax and provident fund - Not Ascertainable

b) Penalty for non payment of professional tax and non filing of Professional Tax Returns -Not Ascertainable.

c) Commitments: Estimated amount of contracts to be executed on capital account not provided for Rs. Nil (Previous year Rs. Nil).

3. Retirement benefit Plans:

a) Defined Contribution plans

The Company makes Provident Fund/ Superannuation contributions to the provident fund authorities/ The Life Insurance Corporation of India as a fixed percentage of the payroll costs which is recognised in the profit and loss account.

b) Defined benefit plans

The Company makes annual contributions to the Employees Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, a funded defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to fifteen days salary for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.

The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each

balance sheet date. All the employees of the company resigned on 31/03/2009 and there were no employees during the year 2009-10. Hence the company did not make any payment towards continuation of the group gratuity policy and leave encashment policy during the year. As a result the Company has not been able to obtain the details required in respect of disclosure under accounting standard 15 from the Life Insurance Corporation of India. 5. (i) The Company has received notices from the sales tax authorities for recovery of sales tax dues for the period June 2002 to March 2003 amounting to Rs.7,76,543/- and penalty for delayed payment of the same amounting to Rs.27,775/-. The Company has filed a petition before the Honourable High Court of Karnataka, which has granted a stay pending disposal of the petition. No provision has been made for the proposed penalty as the matter is sub-judice.

(ii) The assessment orders for the years 2000-01, 2003-04 & 2004-05 have been received by the company from the sales tax authorities in the earlier years. An ex-parte order had been passed for the assessment year 2001-02 and additional tax under the KST and CST Act has been demanded to the extent of Rs.11,51,936/- . For the year 2003-04 the companys contention that the goods are liable for tax @ 2% had been overruled and taxed at 4% resulting in an additional demand of Rs. 11,02,804/-. In the assessment order for the year 2004-05 Cess under Section 6D & 6E of the Karnataka Sales Tax Act, 1957 amounting to Rs.4,75,006/- had been levied, though the same is not applicable in respect of Schedule IV Goods. Further, tax of Rs.4,78,634/- has been levied @ 4% on goods sold by the company rejecting the contention of the company that the same are liable to tax @2%. The company had filed rectification applications before the appropriate authorities for the years 2002-03, 2003-04 and 2004-05. The rectification orders for the said years have been received and the contention of the company has been accepted. There is a reduction of Rs.35.58 lakhs in the taxes demanded. As provision had been made in the accounts for the entire demand and the interest payable on the same in the earlier years, a sum of Rs.35.58 lakhs has been written back towards sales tax liability and Rs. 7.86 lakhs has been written back in respect of interest thereon during the previous year.

(iii) An audit under the Karnataka Value Added Tax Act has been carried out for the period 1/4/2005 to 31/3/2007. Based on the audit findings a sum of Rs.388,209/-has been demanded towards tax, Rs.68,755/- towards interest and Rs.61,283/- towards penalties. Estimated liability of Rs. 339,109/- was provided during the year 2006-07

towards tax due and interest. The differential amount of Rs.117,855/- towards tax and interest and Rs. 61,283/- towards penalty has been provided during the year 2007-08 on receipt of the order.

(iv) The Company has received notices of demand from the PF authorities for payment of interest and damages amounting to Rs.171,577/- for the years 1996-97 to 2004-05 due to delayed payment of contribution to the PF authorities. The Company has paid interest amounting to Rs.28,236/- for the years 1996-97 to 2000-01 and has sought waiver of damages. The Company is in the process of filing a similar request for the years 2001-02 to 2004- 05. However, as a matter of prudence the entire amount has been provided for. The PF authorities have initiated proceedings for recovery of dues.

4. Confirmation of balances from few of the creditors have not been received.

5. The company is a sick industrial company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985, and the Company has made an application to the Board of Industrial and Financial Reconstruction under the provisions of the said Act. The matter is pending before the Honourable Board.

Names of the Small Scale Industrial Undertakings to whom the company owes any sum which is outstanding for more than 45 days as at 31/03/2010 : Nil (Previous Year M/s Abirami Precision Works).

The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the company. The same has been relied upon by the auditors.

6. The company has leased out its manufacturing facilities during the year. The company has no other operations which are material in size other than the business of leasing during the current year. Hence segmental reporting does not arise for the year under consideration. The company did not have any other business other than the business of manufacture of forgings during the previous year.

7. No provision has been made for taxation as there is no taxable income as per the provisions of the Income tax Act, 1961.

8. Deferred tax asset has not been recognised as there is no certainty backed by convincing evidence of future taxable income.

9. The Companys significant leasing arrangements are in respect of operating leases for office premises. The leasing arrangement is for 11 months and is renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent in the Profit and Loss Account. During the year Rs. 40,095/- has been recognized in the Profit & Loss account. (Previous Year : Rs. 89,280/- ). Future minimum lease rentals payable as at 31st March 2010 as per the lease agreement within the next one year is Rs. 42,446/- .

The Company entered into an agreement on the 29th of March 2009 to lease its Factory Building and Plant and Machinery w.e.f. 1/4/2009 for a period of 11 months to Bhaghavathi Enterprises Ltd for a sum of Rs.200,000/- per month. The Company also received a sum of Rs.1.0 Crore as a deposit towards the same. The lease was renewed for a further period of 11 months. The Company received a fresh deposit of Rs.1.41 crores and the lease rental was reduced to Rs.100,000/- per month w.e.f 01.01.2010. The amount received has been utilised for repayment of unsecured loan taken from a Director. The lease is renewable by mutual consent on mutually agreeable terms. Future minimum lease rentals receivable as at 31st March 2010 as per the lease agreement within the next one year is Rs.12 lakhs. The information pertaining to future minimum lease rentals receivable is based on the lease agreements entered into by the Company and Bhaghavathi Enterprises Ltd. Lease rentals are reviewed periodically taking into account prevailing market conditions.

10. The Company had taken an unsecured loan from a director amounting to Rs.1 crore. The same was repaid during the year out of proceeds of the security deposit received towards leasing the manufacturing facilities.

11. The Company has created an equitable mortgage by deposit of title deeds on the Land and Building situated at Plot No.N12 & N13, Industrial Estate, Sagar Road, Shimoga - 577204 and also hypothecated the Plant and Machinery both present and future in favour of Bhagavathi Enterprises Ltd as a security for the deposit for Rs.2.40 crores given by them for leasing the manufacturing facilities.

12. . Expenditure in Foreign Currency: Travelling, Conveyance and Exhibition expenses Rs. Nil/- (Previous Year Rs. 413,053/-)

13. Earnings in Foreign Currency : Nil (Previous Year Rs. Nil)

14. Previous year figures have been regrouped wherever necessary to confirm to the current years classification.

15. Figures have been rounded off to the nearest Rupee. Signatories to schedules to XIII

The Schedules referred to above form part of the Balance Sheet and Profit & Loss Account.

 
Subscribe now to get personal finance updates in your inbox!