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, 2011
1. Previous year figures/ period have been regrouped wherever
necessary to confirm to the current yearÃs 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 as per 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 flings under the KST / KVAT/ Service Tax/ TDS/ ED / PF / PF / PT as
the proceedings are underway and no indications are available as to the
direction the proceedings will take.
5. Disclosure as per Section 22 of Micro, Small and Medium Enterprises
Development Act,2006 (As certified by the management)
Names of the small industrial undertakings to whom the company owes any
sum which is outstanding for more than 45 days as at 31 March 2011: NIL
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.
6. The company has entered in to two different agreements in the
nature of lease with different lessor/lessee for the purpose of,
letting out of manufacture facilities and establishment of office
premises.
i. The leasing arrangement is for 11 months in respect of Manufacture
facilities and is renewable on mutually agreeable terms. The lease was
renewed on May 24 2010, and further amended on August 16 2010. Further
lease was renewed on February 02,2011 for 11 months. The aggregate
lease rentals receivable for the year is refected as rent received /
receivable under other income in the profit and loss account.
The lease rental was reduced in August 2010 from Rs.1,00,000 to
Rs.25,000 consequent to the receipt of additional lease rental deposits
amounting to Rs.75. lakhs. The lease rentals receivable for the
remaining term of the lease is Rs. 2,25,000.
The company has created an equitable mortgage by deposit of title deeds
on land and building situated at Plot No.N12 & N13, Industrial Estate,
Sagar Road, Shimoga and also hypothecated the plant and machinery in
favour of Smiths & Founders (India) ltd (formerly known as Bhagavathi
Enterprises Ltd) as a security for the deposit for Rs.2.40 Crores given
by them for leasing the manufacturing facilities.
ii. The leasing arrangement is for 11 months in respect of
establishment of office premises and is renewable on mutually agreeable
terms. The lease was renewed on 31st October 2010 with effective from
1st November 2010. The aggregate lease rentals payable for the year is
refected as rent paid / payable under indirect expense in the profit
and loss account. 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.44,747
2) Later than one year but not later than five year: Nil.
b) Payment recognised in the Profit and Loss account for the year ended
31st March, 2011 is Rs. 42,446
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 made an application
to the Board of Industrial and Financial Reconstruction (ÃBIFRÃ) under
the provisions of the Act and the matter is pending before the board.
9. Expenditure in Foreign Currency: Travelling, Conveyance and
Exhibition expenses Rs. Nil/- (Previous Year Rs. Nil/-),
10. 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.