Mar 31, 2015
1. a) Disputed liability amounting to Rs.232381 thousands (P.Y.
Rs.275409 thousands) on account of currency fluctuations on Foreign
currency loans obtained by the Company and interest thereon, as per
BIFR scheme dated 29.07.2004 and also confirmed by AAIFR/Single Bench
of Jharkhand High Court, has not been provided by the Company pending
disposal of Letters Patent Applent Jurisdiction (LPA) filed before the
divisional bench of the Jharkhand High Court, Ranchi, against the above
order.
b) The Term Loans (Rupee and Foreign Currency) from Indian and Foreign
Financial Institutions and Banks are secured by first mortgage on all
the Company's immovable properties, both present and future and a first
charge by hypothecation of all the movable assets of the Company, save
and except book debts, but including movable machinery, machinery
spares, tools and accessories, both present and future, subject to the
prior charges created / to be created in favour of the Company's
Bankers on the Company's stocks of raw materials, semi-finished and
finished goods, consumable stores, book debts and such other movables
as may be agreed by the Financial Institutions and Commercial Banks for
securing borrowings for working capital requirements in the ordinary
course of business of the Company ranking pari-passu inter se.
c) Working Capital Loans from Banks are secured by first charge by way
of Hypothecation of all the stocks of the raw materials, semi finished
and finished goods, consumable stores, spares, book debts etc. ranking
pari-passu. There has been no balance of working capital loans since
earlier years.
d) Soft Loan (including interest thereon) under Jharkhand Industries
Rehabilitation Scheme, 2003 from the State Government of Jharkhand are
secured by
(i) A mortgage of all immovable properties both present and future; and
a charge by way of hypothecation in favour of the lender of all the
movable, including movable machinery, machinery spares, tools and
accessories, present and future, stock of raw materials, semi-finished
goods, consumable stores and such other movables as may be agreed upon
(ii) Additionally secured by way of pledge of new equity share capital
of Rs.325000 thousands allotted to the private promoter. (MLCSL)
The mortgage and charge referred to in (i) and (ii) mentioned above;
shall be in terms of the Rehabilitation Scheme 2003 of the Government
of Jharkhkand Sanctioned by the BIFR and be subject and subservient to
the mortgages and charges created and / or to be created in favour of
the secured creditors.
e) The amount of term loans (included foriegn currency loans )of
Rs.700000 thousands as per BIFR scheme dated 29.04.2004 was repayble in
30 quarterly instalments of Rs.23333 thousands each commencing from
15th July 2004 to 30th Spetember, 2011 which has been fully repaid
except the element of disputed liability on account of currency
fluctation as stated (a) above. The modification / satisfaction of the
charges to this extent is still in the process of filing.
f) As per para 8.4 of the sanctioned BIFR Scheme dated 29.07.2004, the
interest on Soft loan under Rehabilitation Scheme, 2003 from Govt.of
Jharkhand shall be funded over the entire rehabilitation period i.e.
upto 30.09.2011. The Soft loan and the funded interest is repayable
after 30.09.2011 and the defaulted amount of Principal and interst as
on 31.03.2015 comes to Rs.325000 thousands and Rs.355950 thousands (p/y
Rs. 325000 thousands and Rs. 305145 thousand) respectively, for which
the company has approached Government of Jharkhand for reschedulement
which has also been proposed in the Modified Draft Rehabitation Scheme
filed before the BIFR.
g) A sum of Rs. 265980 thuosands payable against the acceptance as on
31-3-2013 has been transfered to long term borrowing and shown as loans
and advances from a body corporate as per Party ledger wide dated
24.09.2013 which carry interest @ 8% p.a upto 09.08.2013. No interest
has been accrued since the party has waived such interest due to
uncertainty involved (i.e. shut down of the plant). Since there is no
stipulation regarding repayment, no disclosure has been made for amount
of instalments due for repayment.
h) There has been no stipulation for repayment of unsecured loans &
advances from related parties and hence no disclosure has been made.
(Rs. 000')
As at As at
31.3.15 31.3.14
2. Contingent Liabilities:
Claims not acknowledged as debts are as under: -
(i) Custom duty and interest on Imported Stores
& Spares 15459 15459
(ii) (a) JVAT Demand under appeal before the
Jt. Commissioner of Commercial Taxes (Appeals)
Jamshedpur for the Asst. Year 2006-07. 2397 2397
(excludes amount Rs.23.07 lacs and paid by the
company but not considered as credit by deptt.)
(b) Central Sales Tax demand (including
interest) under appeal before the Jt.
Commissioner of Commercial Taxes (Appeals) 311 311
Jamshedpur for the Financial Year 2006-07
(c) Disputed demand for JVAT for the F.Y.
2010-11 u/s 70(5)(b) under appeal before the
Jt. Commissioner of Commercial Taxes 5879 5879
(Appeals), Jsr. However stay has been granted
on 20.01.2012 (Amount paid as advance on appeal
Rs. 5.87 Lacs previous year Rs. 5.87 Lacs).
(d) Demand raised by DCCT, Jsr for tax due
and penalty imposed or interest payable under
JVAT Act 2005 of the F.Y. 2010-11 under 24786 24786
dispute before JCCT(Appeals), Jamshedpur.
Stay has been granted on 06-10-2012 till final
disposal(Adv paid on appeal Rs.15 lacs on
19.10.2012)
(e) JVAT demand for the assessed tax and
penalty vide demand notice No.18872 dt.
28.03.2014 (order dt.12.03.2014) for F.Y. 8140 -
2010-11 raised by the Dy. Commissioner
of Commercial Taxes, Adityapur, JSR (net of
amount paid Rs.13489 thousands) for which the
Company is seeking details for examining the
merits of demand in order to consider filing
of appeal with the appellant authority.
(f) CST Demand for assessed tax and penalty
vide demand notice dt.28.03.2014 for the
F.Y.2010-11 (vide order dt.12.03.2014) raised 3096 -
by the Dy. Commissioner of Commercial Taxes,
Adityapur, JSR (net of amount paid Rs.3055
thousands) for which the Company is seeking
details for examining the merits of demand in
order to consider filing of appeal with the
appellant authority.
(g) CST Demand for assessed tax and penalty
vide demand notice dt.24.03.2015 for the F.Y.
2011-12 vide order dt.20.03.2015 by the 70549 -
Dy. Commissioner of Commercial Tax, JSR is
(net of amount paid Rs.2353 thousands for
which the Company is seeking details for
examining the merits of demand in order to
consider filing of appeal with the appellant
authority.
(h) JVAT Demand for assessed tax and penalty
vide demand notice dt.24.03.2015 for the F.Y.
2011-12 vide order dt.20.03.2015 by 13977 -
Dy. Commissioner of Commercial Tax, JSR (net of
amount paid Rs.3060 thousands) for which the
Company is seeking details for examining the
merits of demand in order to consider filing
of appeal with the appellant authority.
(i) Demand for electricity duty raised by
the Dy. Commissioner / Asstt. Commissioner
under Electricity Duty Rules (Rule 14) vide 2281 -
Order No.18431 dt.18.03.2014 for Rs.1271
thousands (F.Y. 2012-13) for Rs.1011 thousands
(FY) 2011-12 the Company is seeking details
for examining the merits of demand in order to
consider filing of appeal with the appellant
authority.
(iii) Demand for water charges and interest
thereon disputed under writ petition before
Jharkhand High Court, Ranchi 250947 211975
(iv) Railway Authorities has imposed penalty
on the Company earlier which was dismissed by
the Jharkhand High Court, Ranchi. Railway 5600 5600
Authority has now filed a petition before
Supreme Court, Delhi.
(v) (a) Disputed liability on account of
currency fluctuation on foreign currency loans
and interest thereon, pending before the 232381 275409
Hon'ble High Court, Jharkhand, Ranchi.
(b)Liability on account of currency fluctuation
on upfront payment of foreign currency loan and
additional 2% interest rate in lieu of 263714 279753
guarantee of Govt. of Jharkhand matter pending
in SLP before the Hon'ble Supreme Court, Delhi
(vi) Disputed Income Tax demand including
interest and penalty for short deduction/
collection or Tax at source based on NSDL 8334 8334
report for the F.Y. 2004-05 to 2008-09 u/s 156
raised by DCIT, JSR under appeal before the
CIT (Appeal), JSR under section 246A (1) Of
the Income Tax Act,1961.
(vii) Liability for price difference / other
claims net of counter claims, if any, arising Not Not
on account of procurement of raw materials ascer- ascer-
under a contract (since terminated) pending tained tained
before an Arbitrator / High Court.
(viii) (a) The company has received a show
cause notice to explain as to why the
production of Sponge Iron was low in comparison Not Not
to iron ore consumed. The company has furnished ascer- ascer-
its reply, justifying consumption of iron ore tained tained
viz a viz Sponge iron production. The Matter is
still pending.
(b) Demand for recovery of irregular Cenvat
Credit for Service Tax and education cess for
F.Y. 2010-11 under Rule 15(4) of CCR 2004 read 123 123
with section 78 of the Finance Act 1994 under
appeal before The Appellate Tribunal Central
Excise & Service Tax, Kolkata
(ix) Disputed penalty recovered by SECL for
short lifting of Coal quantity as per Linkage.
The matter pending under Writ Petition filed 21528 21528
by the Company before the Hon'ble High Court of
Chattisgarh, Bilaspur.
(x) Liability on account of Bank Gurantees 96175 97675
3. COMMITMENTS :
3.1 Capital Commitments:
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 4856 thousand
(Previous Year Rs. 4856 thousand).
3.2. Other Commitments: Rs. Nil (P.Y.Nil)
4. Rehabilitation Scheme:
(I) The company was declared a Sick Industrial Company within the
meaning of clause (0) of Sub-Section (1) of Section 3 of the Sick
Industrial Companies (Special Provision) Act, 1985 by the Hon'ble BIFR
vide its order dated 19.12.1996. The Hon'ble BIFR vide its order dated
29th July, 2004 had sanctioned the Rehabilitation Scheme. The said
scheme envisaged a total payment of Rs. 1350000 Thousands, Rs.650000
Thousands was to be paid as upfront payment and the balance Rs. 700000
Thousands was to be paid in 30 quarterly installments effective from
15th July, 2004.
(II) In the review hearing held on 3rd September, 2007 & 22nd
September, 2010, the BIFR, by exercising powers under Section 18 (5)
and 18 (9) of the SICA, clarified / directed that the Company shall
make payment of the due installments to its foreign lenders in 'Euro'
as per the amount reflected in Euro in the statement annexed to the
sanctioned scheme along with the applicable interest i.e. LIBOR plus 1%
per annum (LIBOR 3% in case of delay/ default in payment of
installments).
The Company has filed appeal before the Appellate Tribunal for
Industrial and Financial Reconstruction (AAIFR) challenging the above
said order. AAIFR in its order dated 23-12-2011 has dismissed the
appeal. The above order of AAIFR was challenged by the Company by
filling Writ Petition in Jharkhand High Court on 06.02.2012. In the
hearing held on 22nd February, 2012, the Appeal was dismissed.
The Company has not recognized Rs.232381 Thousands (P.Y. 275409
Thousands) the liability on account of foreign currency fluctuation in
Euro on foreign currency loans installments and interest thereon as per
the BIFR Scheme. The Company has filed a Letters Patent Appellate
Jurisdiction (LPA) on 27th July, 2012 before the higher bench in the
High Court of Jharkhand, Ranchi against the order of the Single Judge
which is still pending.
(III) The Net worth of the Company could not become positive during the
implementation of BIFR Scheme till 30-09-2011. As per Order date 5th
May 2012, BIFR directed to the company to submit Modified Draft
Rehabilitation Scheme (MDRS) within four months for the rehabilitation
of the Company.
(IV) The Modified Draft Rehabilitation Scheme of the company was filed
before the Hon'ble BIFR on 3rd December 2012. The modified scheme is
under consideration of the BFIR for which last hearing was held on
20.01.2014 in which the BIFR has made the following direction.
(i) Ministry of Coal, Government of India, Central Coalfields Limited
and Coal India Limited to extend regular supply of coal as per the
existing coal linkage with CCL, as envisaged in the sanctioned scheme
and submit its report to the Board with a copy to IFCI (MA), within a
month.
(ii) The Company to update the status of the writ petition /IA filed
before the Hon,ble High Court of Jharkhand, Ranchi as and when the
final decision is arrived at.
The Company has made an interlocutor application for the withdrawal of
the Writ Petition before the Hon'ble High Court of Jharkhand, Ranchi
and it is expected that on withdrawal of the said Writ Petition the
Fuel Supply Agreement (FSA) would be entered into for the regular
supply of the Coal. This would expedite the process of finalization and
sanction of the Draft Modified Rehabilitation Scheme with the grant of
reliefs and concessions, the restructuring of the soft loan and other
measures for the fresh induction of fund etc. for making the unit
viable as a going concern.
5. The demand of water charges Rs. 250947 thousands (inclusive of
interest on arrear of water bills of Rs.23103 thousands) as on
31.03.2015 (P.Y. Rs.231494 thousands inclusive of interest of Rs.20528
thousands as on 31.3.2014) raised by Chief Engineer, Subernarekha
Multipurpose Project, Chandil has been disputed by the company under a
Writ Petition with Jharkhand High Court, Ranchi. However, pending
disposal of Writ Petition, the company based on its own estimate of
liability has made total provision for Rs. 13869 thousands up to 31st
March, 2015, (Rs.13869 thousands as on 31.3.2014.)
6. South Eastern Coalfield Ltd. has imposed a penalty of Rs.21528
Thousands in 2011-12 on account of short lifting of coal quantity in
terms of Fuel Supply Agreement (FSA) dated 02.05.2008 and recovered the
same by encashment of the bank guarantee. The Company has taken up the
matter with Coal India Limited/ South Eastern Coalfield Ltd. for refund
of the said amount as settlement of dispute under clause 15.3 of the
FSA. No provision has been made for penalty recovered since the matter
is pending under writ petition filled by the Company before the Hon'ble
High Court of Chattisgarh, Bilaspur.
7. The company was allocated for captive use a Coal Block in the
Macherkunda Coal Block in the State of Jharkhand on 5th August 2008 by
the Ministry of Coal, Government of India. The Ministry of Coal vide
letter date 20.11.2012 deallocated the above coal block on the ground
that the company has failed to develop the coal block allotted within
the prescribed milestone/time frame.
On being aggrieved with the above order, the company has filled a Writ
Petition before the Jharkhand High Court, challenging the decision of
the Ministry of Coal to de-allocate the Coal block. The matter was
transferred to Hon'ble Supreme Court of India, and the said court vide
its order dated 24.09.2014 has cancelled all coal blocks allotted on
and after 2003. In view of the above Rs. 894 Thousands incurred by the
company on this account appearing under CWIP Coal block has been
written off during the year and shown under the head of exceptional
item.
8. The Central Coalfield Limited has recovered a penalty of Rs 5468
Thousands on account of short lifting of coal quantity in terms of fuel
supply agreements (FSA) during the Financial Year 2012-13 and F.Y.
2013-14(April 2013) and Rs.5263 Thousands for rate differences. These
amounts has been shown as exceptional items.
9. In accordance with the Companies Act, 2013 the Company has revised
the useful life of the fixed assets during the current year to comply
with the useful / remaining useful life of assets as mentioned under
Schedule II of the Act. As per the transitional provision the company
has adjusted Rs. 126918 thousands net of deferred tax (including
Rs.124981 thousands for depreciation on revaluation reserve) with the
opening balance of retained earning (i.e., deficit in the statement of
Profit and Loss on April 01,2014). Had the Company continued to follow
the earlier life, the depreciation expense for the year ended on
31.03.2015 would have been higher by 10438 Thousands(excluding
depreciation on revaluation reserve), and the loss before tax increased
with that amount.
10. (a) Shri Satish Kumar Gupta, has been appointed as Additional
Director and then Whole Time Director w.e.f. 13.12.2013. During the
F.Y. 2013-14 a sum of Rs. 325 Thousands has been provided as
remuneration as a Whole time director which was subject to the approval
of shareholders of the Company in the ensuing general meeting (32nd
AGM) and the approval of the Central Govt. in terms of the provisions
of section 198, 269,309 & Schedule XIII as amended from time to time &
other applicable provisions, if any of the Companies Act, 1956. The
Shareholders has approved the payment of aforesaid remuneration by way
of special resolution in the said Annual General Meeting (AGM).
Since, Shri S. K. Gupta vide letter dated 13.11.2014 has voluntarily
waived off his entire remuneration for the period 13.12.2013 to
12.12.2014, the provision for remuneration made in earlier year has
been reversed & not paid to him and hence no Central Govt, approval has
been sought.
(b) The remuneration to the whole tine director has been paid /provided
w.e.f. 13-12-2014 to 31-03-2015 is in compliance of Section 197 and
Schedule V of the ACT.
11. Shut down of Plant and suspension of operations.
Central Coalfields Ltd has stopped supply of linkage coal as per
existing Fuel Supply Agreements to the Company w.e.f. 5th February 2013
for reason stated at para 7 above. Due to non-supply of Coal by CCL,
the operations of the company has been shutdown and operation suspended
w.e.f. 9th August 2013. The aforesaid action of Coal India Ltd, Central
Coalfields Ltd and the Ministry of Coal, GOI. has been challenged by
the company by way of Writ Petition (C) vtde No. 1660 of 2013 before
the Hon'ble Jharkhand High Court and the same is still pending.
In view of the above, provision for the undernoted items of expense
have not been made in the accounts for the period from 10th August,
2013 to 31st March. 2015:
(a) Interest on Unsecured Loans of Rs. 686001 thousands taken from
Promoters and other Parties (amounts unascertained),
(b) Interest on Soft Loan from Government of Jharkhand under Jharkhand
Industrial Rehabilitation Scheme 2003 amounting to Rs. 81331 Thousands
(Rs. 30526 thousands upto March 2014) which is subject to
representations for waiver, and
(c) Salaries, Wages and allowances, provident fund including as well as
employee benefits expense (amount unascertained) except for KMP.
12. Related Party Transaction (RPT) in respect of renting of the
office of the Company is Rs. 6146 thousands and the availing or
rendering of services amounting to Rs. 6788 thousands as covered under
section 188 (1) (c) and (d) respectively and Rules made thereunder and
is within the overall limits of Rule 15 of the Companies (Meetings of
Board and its Power) Rules, 2014.
13. Income Tax assessment of the Company for the Asstt. Year 2012-13
has been completed under Section 143 (3) of the Act vide order
dt.24.03.2015 by the Asstt. Commissioner of Income Tax, JSR. The
Assessing Officer has disallowed the Returned loss on the ground that
the company has not furnished the required information, documents,
books of accounts and records inspite of questionnaire & the various
reminders show cause notice given to the assessee. Since the plant was
under shut down and laborers did not allow the entry of staff and
officer to factory premises and hence the information / documents /
papers were produced to the extent possible. On being aggrieved with
the said order, the Company has filed an appeal before the CIT
(Appeal-3), Patna on 27.04.2015.
14. Credit/Debit balances of the Creditors, Lenders, Debtors and
Advances are subject to reconciliation/confirmation at the year end.
15. Earning in Foreign Currency: Nil
16. Subsidiary Company:
Chandil Power Limited (CPL) has become Subsidiary of the Company under
Section 4(1)(a) of the Companies Act 1956 and Section 2 (87) of the
Companies Act, 2013 w.e.f 17th August 2011 and ceased to be subsidiary
from 29.09.2014 with the termination of Supplemental Agreement dated
15.06.2010.
17. Previous year figures have been recast / restated to conform to
the classification required by the Revised Schedule VI Notes 1 to 29
and Annexure - I containing Accounting Policies and General Notes form
part of the Financial Statements.
Mar 31, 2014
1. Segmental Reporting
The company is a single location single product company and hence the
requirements of AS -17 on Segment Reporting are not relevant.
2. Related Party Transactions - AS 18
As per AS-18 issued by the Institute of Chartered Accountants of India,
the Company''s related parties transactions with them are disclosed
below:
(a) By virtue of control
Moderate Leasing & Capital Services Ltd.
(b) Key Management Personnel and their relatives Key Managerial
Personal:
Shri U K Modi - Chairman & Managing Director upto 28.02.2014 and
Chairman & Director w.e.f. 01.03.2014.
Shri B.K. Thakur - Director Finance up to 19.12.2013
Shri Satish Kumar Gupta -Whole Time Director designated as Director
(Works) w.e.f. 20.12.2013.
Relatives to Key Managerial Persons :
Mrs. Kum Kum Modi, Director, Shri Abhishek Modi, Director and Shri
Jayesh Modi, Director are related to Shri U.K. Modi.
(c) Enterprises over which (b) above have significant influence and
with whom transactions have taken place. (i) SBEC Sugar Ltd.
(ii) SBEC Bio-Energy Ltd.
(Hi) Modi Industries Limited
(iv) Modi Mundipharma Pvt. Ltd.
(v) Modi Revlon Pvt. Ltd.
(vi) Modi Line Travel Services Pvt. Ltd.
(vii) Win Medicare Pvt. Ltd.
(viii) Modi Motors Pvt. Ltd.
(ix) Modi Senator India Pvt. Ltd
(x) Modi Hitech India Ltd.
(xi) M.G. Mobiles India Pvt. Ltd.
(xii) H.M. Tube & Containers Pvt. Ltd.
(xiii) Chandil Power Ltd.
(xiv) Longwell Investment Pvt Ltd.
(xv) A to Z Holdings Pvt Ltd.
(xvi) Jayesh Tradex Pvt. Ltd.
III: OTHER NOTES REQUIRED BY PART I & PART II OF SCHEDULE
VI (Rs. Lacs)
As at 31.3.14 As at 31.3.13
1. Contingent Liabilities:
Claims not acknowledged as debts are
as under: -
(i) Custom Duty on Plant & Machinery 106.92 106.92
(ii) Custom duty and interest on
Imported Stores & Spares 154.59 154.59
(iii) (a) JVAT Demand under appeal
before the Jt. Commissioner of Commercial
Taxes (Appeals) Jamshedpur for the 23.97 23.97
Asst. Year 2006-07. (excludes amount
Rs.23.07 lacs and paid by the
company but not considered as credit
by deptt.) Jt. Commissioner
(Appeal) Commerical Taxes, Jsr. Vide order
no. 740 dt. 08.10.2013
remanded the case to DCIT, Adityapur
to verify and allow the credit for
the amount of Rs. 23.07 lacs paid
by the company against the demand.
(b) Central Sales Tax demand
(including interest) under appeal before
the Jt. Commissioner of Commercial Taxes 3.11 3.11
(Appeals) Jamshedpur for the Financial
Year 2006-07
(c) Disputed demand for JVAT for the
F.Y. 2010-11 u/s 70(5)(b) under
appeal before the Jt. Commissioner
of Commercial 58.79 58.79
Taxes (Appeals), Jsr. However stay has
been granted on 20.01.2012 (Amount
paid as advance on appeal Rs. 5.87 Lacs
previous year Rs. 5.87 Lacs).
(d) Demand raised by DCCT, Jsr for tax
due and penalty imposed or interest
payable under JVAT Act 2005 of 247.86 247.86
the F.Y. 2010-11 under dispute before
JCCT(Appeals), Jamshedpur.
Stay has been granted on 06-10-2012
till final disposalfAdv paid on
appeal Rs.15 lacs on 19.10.2012)
(iv) Demand for water charges and
interest thereon disputed under writ
petition before Jharkhand High Court,
Ranchi 2119.75 2193.91
(v) Railway Authorities has imposed
penalty on the Company earlier
which was dismissed by the Jharkhand
High Court, Ranchi. Railway Authority
has now filed a petition before Supreme
Court, Delhi. 56.00 56.00
(vi) (a) Disputed liability on account
of currency fluctuation on foreign
currency loans and interest thereon, 2754.09 2251.93
pending before the Hon''ble High Court,
Jharkhand, Ranchi.
(b) Liability on account of currency
fluctuation on upfront payment of foreign
currency loan and additional 2% interest 2797.53 2027.06
rate in lieu of guarantee of Govt, of
Jharkhand matter pending in SLP
before the Hon''ble Supreme Court, Delhi
(vii) Disputed Income Tax demand including
interest and penalty for short
deduction/collection or Tax at source
based on NSDL report for the
F.Y. 2004-05 to 2008-09 u/s 156 raised
by DCIT, JSR under appeal before the CIT
(Appeal), JSR under section 246A (1) Of
the Income Tax Act, 1961. 83.34 83.34
(viii) Liability for price difference /
other claims net of counter claims, if any,
arising on account of procurement of
Not ascertained Not ascertained raw materials
under a contract (since terminated) pending
before an Arbitrator / High Court.
(ix) (a) The company has received a show
cause notice to explain as to why the
production of Sponge Iron was Not Not
ascertained ascertained
low in comparison to iron ore consumed.
The company has furnished its reply,
justifying consumption of iron ore viz a
viz Sponge Iron production. The Matter is
still pending.
(b) Demand for recovery of irregular
Cenvat Credit for Service Tax and
education cess for F.Y. 2010-11 under 1.23 1.23
Rule 15(4) of CCR 2004 read with section
78 of the Finance Act 1994 under appeal
before The Appellate Tribunal Central
Excise & Service Tax, Kolkata
(x) 40% additional price over the
prevailing price of Coal pending before
Hon''ble High Court Jharkhand. 171.79 171.79
(xi) Disputed penalty recovered by
SECL for short lifting of Coal
quantity as per Linkage. 215.28 215.28
(xii) Liability on account of Bank
Guarantees 975.22 1058.67
2 COMMITMENTS:
2.1 Capital Commitments:
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 48.56 lacs (Previous
Year Rs 48 56 lacsl 2.2. Other Commitments: Rs. Nil (P.Y. 3.00 Lacs) -
3. Rehabilitation Scheme:
(I) The company was declared a Sick Industrial Company within the
meaning of clause (0) of Sub-Section (1) of Section 3 of the Sick
Industrial Companies (Special Provision) Act, 1985 by the Hon''ble BIFR
vide its order dated 19.12.1996. The Hon''ble BIFR vide its order dated
29th July, 2004 had sanctioned the Rehabilitation Scheme. The said
scheme envisaged a total payment of Rs. 13500 lacs, out of which
Rs.6500 lacs was to be paid as upfront payment and the balance Rs 7000
lacs was to be paid in 30 quarterly installments effective from 15th
July, 2004. The Rehabilitation Scheme is under implementation.
(II) In the review hearing held on 3rd September, 2007 & 22nd
September, 2010, the BIFR, by exercising powers under Section 18 (5)
and 18 (9) of the SICA clarified / directed that the Company shall make
payment of the due installments to its foreign lenders in ''Euro'' as per
the amount reflected in Euro in the statement''annexed to the sanctioned
scheme along with the applicable interest i.e. LIBOR plus 1% per annum
(LIBOR 3% in case of delay/ default in payment of installments) The
Company has filed appeal before the Appellate Tribunal for Industrial
and Financial Reconstruction (AAIFR) challenging the above said order.
AAIFR in its order dated 23-12-2011 has dismissed the appeal. The above
order of AAIFR was challenged by the Company by filling Writ Petition
in Jharkhand Hiah Court on 06.02.2012. In the hearing held on 22nd
February, 2012, the Appeal was dismissed.
The Company has not recognized Rs.2754.09 lacs the liability on account
of foreign currency fluctuation in Euro on foreign currency loans
installments and interest thereon as per the BIFR Scheme. The Company
has filed a Letters Patent Appellate Jurisdiction (LPA) on 27th July,
2012 before the higher bench in the High Court of Jharkhand, Ranchi
against the order of the Single Judge.
(III) The Net worth of the Company could not become positive during the
implementation of BIFR Scheme till 30-09-2011. As per Order date 5th
Mav 2012 BIFR directed to the company to submit Modified Draft
Rehabilitation Scheme (MDRS) within four months from the said date.
(IV) The Modified Draft Rehabilitation Scheme of the company was filed
before the Hon''ble BIFR on 3rd December 2012. The modified scheme is
under consideration Ot tr)6 BrIR.
4. The demand of water charges Rs. 2258.14 lacs (inclusive of interest
on arrear of water bills of Rs.226.81 lacs) as on 31.03 2014 (FY Rs
2314 94 lacs inclusive Rs 15,281 lackS raised by
Chief En9ineer. Subernarekha Multipurpose Project, Chandil has been
disputed''by the company under a Wnt Petition with Jharkhand High Court
Ranchi. However, pending disposal of Writ Petition, the company based
on its own estimate of liability has made total provision for Rs.
138.69 lacs up to 31st March, 2014, (Rs.121.03 lacs as on 31.3.2013.)
5 No provision has been penealty recorved by south eastern coal fields
ltd for rs 215.28 lacks in the fy 2011-2012 on account short lifiting
of coal quantity 2011-2012 on account short lifting of coal quantity in
terms of Fuel Suuply Agreement (FSA) since the matter is pending before
the Hon''ble High Court of Chhattisgarh, Bilaspur. However the penatty
recover of Rs 215.28 lacs is shown under Long Term Loan and Advances.
6. The company has been allotted for captive use a Coal Block in the
Macherkunda Coal Block in the State of Jharkhand on 5th August 2008 by
the Ministry of Coal Governmen of India The Ministry of Coal yide
letter date 20.11.2012 deallocated the above coal block on the ground
that the company has failed to develop the coal block allotted within
the prescribed milestone/time frame. »Â»11,ii. On being aggrieved
with the above order the company has filled a Writ Petition (C) vide
no. 7331 of 2012 before the Jharkhand High Court, challenging the
decision of the Ministry of Coal to de-a oca e the Coal block. The
Hon''ble High Court, by an order dated 12th December 2012 has passed the
interim order thit untH further order, no coercive steps shall be taken
against the petioner pursuant to the impunged order.
7. In respect of Coal supplied under Coal linkage for the month of
January 2013, the CCL has charged 40% additional price on the
prevailing price of coal by applyinq tapering linkage policy amounting
to Rs 171.79 Lacs and recovered the said amount out of the advance
payment for supply of coal and forfeited the bank guarantee. In view of
he dispute for applying tapering linkage policy, the Company has not
recognized the additional cost of coal. The sum of Rs 171 79 lacs
appear as short term loans and advance.
8. Shut down of Plant and suspension of operations.
Central Coalfields Ltd has stopped supply of linkage coal as per
existing Fuel Supply Agreements to the Company w.e.f. 5th February 2013
for reason stated at para 7 above Due to non-supp y of Coa by CCL the
operations of the company has been shutdown and operation suspended
w.e.f. 9th August 2013. The all act,of Coal lnd,a L,d'' Cen,ral
Coalfields Ltd and the Ministry of Coal, GOI, has been challenged by
the company by way of Writ Petition (C) vide No 1660 of 2013 before the
Hori''ble Jharkhand High Court and the same is still pending. .
In view of the above, provision for the undernoted items of expense
have not been made in the accounts for the period from 10th August 2013
to 31st March 2014-
(a) Interest on Unsecured Loans of Rs. 6863.90 lacs taken from
Promoters and other Parties (amounts unascertained)
(b) Interest on Soft Loan from Government of Jharkhand under Jharkhand
Industrial Rehabilitation Scheme 2003 amounting to Rs. 305.26 lacs
which is subiect to representations for waiver.
(c) Salaries, Wages and allowances as well as emloyee benefits expenses
(amount unascertained).
18. Subsidiary Company:
19 Previous year figures have been recast / restated to conform to the
classification required by the Revised Schedule VI Notes 1 to 29 and
Annexure - I containing Accounting Policies and General Notes form part
of the Financial Statements.
Mar 31, 2013
1. Employee Benefits.
The disclosure of ''Employee Benefits'' as defined in Accounting Standard
15 (revised) are as under:
(a) There is no plan assets at the beginning and at the closing of the
year.
(d) Enterprise best estimate of contribution payable for the next year
the gratuity plan is Rs. 116.24 lacs and for earned leave liability for
Rs.12.49 lacs.
2 . Segmental Reporting
The company is a single location single product company and hence the
requirements of AS - 17 on Segment Reporting are not relevant.
3. Related Party Transactions - AS 18
As per AS-18 issued by the Institute of Chartered Accountants of India,
the Company''s related parties transactions with them are disclosed
below:
(a) By virtue of control
Moderate Leasing & Capital Services Ltd.
(b) Key Management Personnel and their relatives
Shri U K Modi Chairman and Managing Director, Shri B.K. Luthra,
Executive Director (Works) upto 23-08-2012 and Shri B.K. Thakur
Director-Finance w.e.f 20- 12-2012 are the Key Management Personnel.
Mrs. Kum Kum Modi, Director, Shri Abhishek Modi, Director and Shri
Jayesh Modi, Director are related to Shri U.K. Modi Chairman and
Managing Director.
(c) Enterprises over which (b) above have significant influence and
with whom transactions have taken place. (i) SBEC Sugar Ltd.
(ii) SBEC Bio-Energy Ltd.
(iii) Modi Industries Limited
(iv) Modi Mundipharma Pvt. Ltd.
(v) Modi Revlon Pvt. Ltd.
(vi) Modi Line Travel Services Pvt. Ltd.
(vii) Win Medicare Pvt. Ltd.
(viii) Modi Motors Pvt. Ltd.
(ix) Modi Senator India Pvt. Ltd
(x) Morgardshammar (India) Ltd.
(xi) M.G. Mobiles India Pvt. Ltd.
(xii) H.M. Tube & Containers Pvt. Ltd.
(xiii) Chandil Power Ltd.
(xiv) G.S. Pharmbutors Pvt Ltd.
(xv) A to Z Holdings Pvt Ltd.
4. The management is of the opinion that except the assets written off
during the year and the assets retired from active use, there is no
further impairment of assets as at 31-3-2013 as contemplated in the
Accounting Standard (AS) 28.
5. Operating Leases
The Company''s leasing arrangements are in respect of premises (for
office, godown and accommodation of Company''s officer & directors).
These arrangements are both cancelable and non-cancelable in nature and
ranging between one to three years as at 31s'' March, 2013.
6. COMMITMENTS:
6.1 Capital Commitments:
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 48.56 lacs (Previous
Year Rs. 48.56 lacs).
6.2 Other Commitments: Rs. 3.00 Lacs (P.Y. Nil)
7. Rehabilitation Scheme:
(I) The company was declared a Sick Industrial Company within the
meaning of clause (0) of Sub-Section (1) of Section 3 of the Sick
Industrial Companies (Special Provision) Act, 1985 by the Hon''ble
BIFRvide its order dated 19.12.1996. The Hon''ble BIFR vide its order
dated 29,h July, 2004 had sanctioned the Rehabilitation Scheme. The
said scheme envisaged a total payment of Rs. 13,500 lacs, Rs.6,500 lacs
was to be paid as upfront payment and the balance Rs. 7,000 lacs was to
be paid in 30 quarterly installments effective from 15,h July, 2004.
The Rehabilitation Scheme is under implementation.
(II) In the review hearing held on 3rd September, 2007 & 22n0
September, 2010, the BIFR, by exercising powers under Section 18 (5)
and 18 (9) of the SICA, clarified / directed that the Company shall
make payment of the due installments to its foreign lenders in ''Euro''
as per the amount reflected in Euro in the statement annexed to the
sanctioned scheme along with the applicable interest i.e. LIBOR plus 1%
per annum (LIBOR 3% in case of delay/ default in payment of
installments).
The Company has filed appeal before the Appellate Tribunal for
Industrial and Financial Reconstruction (AAIFR) challenging the above
said order.
AAIFR in its order dated 23-12-2011 has dismissed the appeal. The above
order of AAIFR was challenged by the Company by filling Writ Petition
in Jharkhand High Court on 06.02.2012. In the hearing held on 22na
February, 2012, the Appeal was dismissed.
The Company has not recognized Rs.2,251.93 lacs the liability on
account of foreign currency fluctuation in Euro on foreign currency
loans installments and interest thereon as per the BIFR Scheme. The
Company has filed a Letters Patent Appellate Jurisdiction (LPA) on 27''"
July, 2012 before the higher bench in the High Court of Jharkhand,
Ranchi against the order of the Single Judge.
(III) The Net worth of the Company could not become positive during the
implementation of BIFR Scheme till 30-09-2011. As per Order date 5th
May 2012, BIFR directed to the company to submit Modified Draft
Rehabilitation Scheme (MORS) within four months for the rehabilitation
of the Company.
(IV) The Modified Draft Rehabilitation Scheme of the company was filed
before the Hon''ble BIFR on 3rd December 2012. The modified scheme is
under consideration of the BIFR.
8. The demand of water charges Rs. 2,314.94 lacs (inclusive of
interest on arrear of water bills of Rs.205.28 lacs) as on 31.03.2013
(P.Y. Rs.1,843.73 lacs inclusive of interest of Rs.161.29 lacs as on
31.3.2012) raised by Chief Engineer, Subernarekha Multipurpose Project,
Chandil has been disputed by the Company under a Writ Petition with
Jharkhand High Court, Ranchi. However, pending disposal of Writ
Petition, the Company based on its own estimate of liability has made
total provision for Rs. 121.03 lacs up to 31st March, 2013, (Rs.104.94
lacs as on 31.3.2012.)
9. South Eastern Coalfield Ltd. has imposed a penalty of Rs.215.28
lacs in 2011-12 on account of short lifting of coal quantity in terms
of Fuel Supply Agreement (FSA) dated 02.05.2008 and recovered the same
by encashment of the bank guarantee. The Company has taken up the
matter with Coal India Limited/ South Eastern Coalfield Ltd. for refund
of the said amount as settlement of dispute under clause 15.3 of the
FSA. The matter is still under process as such no provision has been
made.
10. (i) Coal Block :
The Company has been allotted for captive use a Coal Block in the
Macherkunda Coal Block in the State of Jharkhand on 5th August 2008 by
the Ministry of Coal, Government of India. The Ministry of Coal vide
letter date 20.11.2012 deallocated the above coal block on the ground
that the Company has failed to develop the coal block allotted within
the prescribed milestone/time frame.
On being aggrieved with the above order, the Company has filled a Writ
Petition before the Jharkhand High Court, challenging the decision of
the Ministry of Coal to de-allocate the Coal block. The Hon''ble High
Court, by an order dated 12th December 2012 has passed the interim
order that until further order, no coercive steps shall be taken
against the petioner pursuant to the impunged order.
(ii) Coal Tapering Linkage Policy:
a) CCL by applying the Tapering Linkage Policy have stopped supplying
Coal to the Company w.e.f 05.02.2013 and insisting upon the Company to
execute a Side Agreement with it for future supply of the coal with the
following conditions;
 Coal quantity to be supplied to the BSIL would be reduced to zero in
the fourth year i.e. reduction of 25%, 50%, 75% during the 1st, 2nd,
and 3rd respectively.
 A 40% additional price on the prevailing coal price of Coal India
Limited would be payable by the Company.
The Company has filed a Writ Petition before the Jharkhand High Court
against the CCL''s decision to apply the tapering linkage policy even
though the coal block earlier allotted to the Company has been
deallocated. The matter is pending before the High Court.
(b) In respect of Coal supplied under Coal linkage for the month of
January 2013, the CCL has charged 40% additional price on the
prevailing price of coal by applying tapering linkage policy amounting
to Rs. 171.79 Lacs and adjusted the advance payment of Rs. 80.08 Lacs
against the supply of coal for the month of February 2013. In view of
the dispute for applying tapering linkage policy, the Company has not
recognized the additional cost of coal.
11. Shri B.K.Thakur, Chartered Accountant was working as Chief
Financial Officer of the Company w.e.f. 04.06.2011.He was appointed a
Additional Director and then as the Whole-time Director of the Company
w.e.f 20th December 2012 and designated as Director Finance of the
Company. The remuneration paid to Shri B.K.Thakur as Director Finance
amounting to Rs.4.81 lacs w.e.f.201" December, 2012 till 31st March
2013 is subject to the approval of Shareholders of the Company in their
General Meeting and the Central Government in terms of the provisions
of sec 198,269,309, Schedule XIII and other applicable provisions of
the Companies Act, 1956.
12. Credit/Debit balances of some of the Creditors, Lenders, Debtors
and advances are subject to reconciliation/confirmation at the year
end.
13. In the opinion of the Board, Current Assets have a realizable
value equivalent to the amount at which they are stated in the Balance
Sheet and the provision for all known liabilities have been made except
to the extent as appearing in other notes.
14. Value of imported and indigenous raw materials and components
consumed and percentage of each to total Consumption :
15. Earning in Foreign Currency: Nil
16. Subsidiary Company:
Chandil Power Limited (CPL) has become subsidiary of the Company under
Section 4(1 )(a) of the Companies Act 1956 w.e.f 17,h August 2011.
CPL''s project is still under development stage and hence no
consolidation has been done in line with the provision of AS -21.
Since the Company does not have Share holding interest in the
Subsidiary Company, hence the discolouser w.r.t. the subsidiary company
in terms of Sec 212 (1)(f) read with section 212 (3) of the Companies
Act 1956 is not required.
17. Previous ye,ar figures have been recast / restated to conform to
the classification required by the Revised Schedule VI Notes 1 to 29
and Annexure - I containing Accounting Policies and General Notes form
part of the Financial Statements.
Mar 31, 2012
A) There has been no change in the Issued, Subscribed and Paid up Share
Capital.
b) Terms / Rights attached to equity shares.
The company has only one class of equity share having a par value of
Rs.10/- per share. Each share holder of equity share is entitled to
dividends approved by the shareholders.
In the event of liquidation of the company, the holders of equity
share will be entitled to receive remaining assets of the company after
distribution to creditors and all preferential amount. The distribution
will be in proportion to the number of equity share held by each
shareholder.
a) Disputed liability amounting to Rs.2142.17 lacs on account of
currency fluctuations on Foreign currency loans obtained by the Company
and interest thereon, as per BIFR scheme dated 29.07.2004 and also
confimed by AAIFR/Single Bench of Jharkhand High Court ,has not been
provided by the Company pending disposal of Letters Patent Applet
Jurisdiction ( LPA ) filed before the larger bench of the Jharkhand
High Court, Ranchi against the above order.
b) The Term Loans (Rupee and Foreign Currency) from Indian and Foreign
Financial Institutions and Banks are secured by first mortgage on all
the Company's immovable properties, both present and future and a
first charge by hypothecation of all the movable assets of the Company,
save and except book debts, but including movable machinery, machinery
spares, tools and accessories, both present and future, subject to the
prior charges created I to be created in favour of the Company's
Bankers on the Company's stocks of raw materials, semi-finished and
finished goods, consumable stores, book debts and such other movables
as may be agreed by the Financial Institutions and Commercial Banks for
securing borrowings for working capital requirements in the ordinary
course of business of the Company ranking pari-passu inter se.
c) Working Capital Loans from Banks are secured by first charge by way
of hypothecation of all the stocks of the raw materials, semi finished
goods and finished goods, consumable stores, spares, book debts etc.
ranking pari-passu.
d) Soft Loan (including interest thereon) under Jharkhand Industries
Rehabilitation Scheme, 2003 from the State Government of Jharkhand is
secured by
(i) A mortgage of all immovable properties both present and future; and
a charge by way of hypothecation in favour of the lender of all the
movable, including movable machinery, machinery spares, tools and
accessories, present and future, stock of raw materials, semi-finished
goods, consumable stores and such other movables as may be agreed upon
(ii) Additionally secured by way of pledge of new equity share capital
of Rs.3250 lacs allotted to the private promoters.
The mortgage and charge referred to in (i) and (ii) mentioned above;
shall be in terms of the Rehabilitation Scheme 2003 of the Government
of Jharkhkand Sanctioned by the BIFR are subject and subservient to the
mortgages and charges created and / or to be created in favour of the
secured creditors.
e) The amount of term loans (both Rupee & Foreign currency loans) of
Rs.7000 lacs as per BIFR scheme dated 29.04.2004 was repayble in 30
quarterly instalments of Rs.233 lacs each commencing from 15th July
2004 to 30thSpetember ,2011 which has been fully repaid.
f) As per clause 8.4 of the BIFR Scheme dated 29.07.2004, the interest
on Soft loan under Jharkhand Industries Rehabilitation Scheme,2003 from
Govt. of Jharkhand shall be funded over the entire rehabilitation
period i.e. upto 30.09.2011. The Soft loan and the funded interest is
repayable after 30.09.2011. The defaulted amount of Principal and
interest as on 31.03.2012 comes to Rs.3250 lacs and Rs.1852.85 Lacs
respectively, for which the Company has approached Government of
Jharkhand for reschedulement.
* Revaluation was done on March 31, 2003
** Free hold land includes at Rs.5.93 lakhs (Previous year Rs.5.93
lakhs)for which registration in favour of the company is pending for
want of mutation from competent aurthorities.
*** Vehicles includes Rs. 9.81 lakhs(Previous Year Rs.9.81 lakhs)which
are yet to be transferred in the name of the company Deferred Tax
Liability has been calculated in accordance with the Return of Income
filed / assessment made.
On conservation basis as required by the Accounting Standard 22 the
Deferred Tax Assets and Deferred Tax Liabilities have not been
recognised.
* Include margin many of Rs.792.19 Lacs (P.Y. Rs.433.91 Lacs) pledged
against bank guarantee and LCs issued in favour of Coal India Ltd South
Eastern Railway Rs.22.38 Lacs (P.Y. Rs.18.25 Lacs), Jharkhand State
Pollution Control Board Rs.4.24 Lacs (P.Y.Rs. 2.12 Lacs) and Rs. 15.00
Lacs (P.Y. Rs. 14.00 Lacs) pledged with Sales Tax Authorities. Further
the above include FDR valued Rs.281 Lacs held in the name of third
party which has been pledged with Ministry of Coal.
1. Employee Benefits.
The disclosure of ÃEmployee Benefits' as defined in Accounting
Standard 15 (revised) are as under:
(c) There is no plan assets at the beginning and at the closing of the
year.
(d) Enterprises best estimate of contribution payable for the next year
the gratuity plan is Rs. 106.56 lacs and for earned leave liability for
Rs. 21.21 lacs.
2. Segmental Reporting
The company is a single location single product company and hence the
requirements of AS - 17 on Segment Reporting are not relevant.
3. Related Party Transactions - AS 18
As per AS-18 issued by the Institute of Chartered Accountants of India,
the Company's related parties transactions with them are disclosed
below:
(a) By virtue of control
Moderate Leasing & Capital Services Ltd.
(b) Key Management Personnel and their relatives
Shri U.K. Modi being Chairman and Managing Director and Shri B.K.
Luthra, Executive Director (Works) is the Key Management Personnel.
Mrs. Kum Kum Modi, Director is related to Shri U.K. Modi being his wife
and Shri Abhishek Modi, Director and Shri Jayesh Modi, Director are
related to Shri U.K.
Modi being his sons.
(c) Enterprises over which (b) above have significant influence and
with whom transactions have taken place.
(i) SBEC Sugar Ltd.
(ii) SBEC Bio-Energy Ltd.
(iii) Modi Industries Limited
(iv) Modi Mundipharma Pvt. Ltd.
(v) Modi Revlon Pvt. Ltd.
(vi) Modi Line Travel Services Pvt. Ltd.
(vii) Win Medicare Pvt. Ltd.
(viii) Modi Motors Pvt. Ltd.
(ix) Modi Senator India Pvt. Ltd
(x) Morgardshammar (India) Ltd.
(xi) M.G. Mobiles India Pvt. Ltd.
(xii) H.M. Tube & Containers Pvt. Ltd.
(xiii) Chandil Power Ltd.
(xiv) G.S. Pharmbutors Pvt Ltd.
(xv) A to Z Holdings Pvt Ltd.
4. The management is of the opinion that except the assets written off
during the year and the assets retired from active use, there is no
further impairment of assets as at 31-3-2012 as contemplated in the
Accounting Standard (AS) 28.
5. Operating Leases
The company's leasing arrangements are in respect of premises (for
office, godown and accommodation of company's officer & directors).
These arrangements are both cancelable and non-cancelable in nature and
ranging between one to three years as at 31s* March, 2012.
Disclosure related to operating lease as lessee as per the Accounting
Standard-19 are as under:
III: OTHER NOTES REQUIRED BY PART I & PART II OF SCHEDULE VI (Rs. Lacs)
As at As at
31.3.12 31.3.11
1. Contingent Liabilities:
Claims not acknowledged as debts are as under:-
(i) Custom Duty on Plant & Machinery 106.92 106.92
(ii) Custom duty and interest on Imported Stores
& Spares 154.59 154.59
(iii) (a) JVAT Demand under appeal before the
Jt. Commissioner of Commercial Taxes
(Appeals) Jamshedpur for the Asst. Year
2006-07. (excludes amount Rs.23.07 lacs
and paid by the company but not considered
as credit by deptt.) 23.97 23.97
(b) Central Sales Tax demand (including
interest) under appeal before the Jt.
Commissioner of Commercial Taxes (Appeals)
Jamshedpur for the Financial Year 2006-07 3.11 3.11
(c) Disputed demand for JVAT for the F.Y.
2010-11 u/s 70(5)(b) under appeal before
the Jt. Commissioner of Commercial Taxes
(Appeals), Jsr. However stay has been
granted on 20.01.2012 and a sum of
Rs.5879.23 lacs (10% of amount due) has
been deposited 58.79 58.79
(iv) Demand for water charges and interest
thereon disputed under writ petition
before Jharkhand High Court, Ranchi 1738.78 1323.19
(v) Railway Authorities has imposed penalty
on the Company earlier which was
dismissed by the Jharkhand High Court,
Ranchi. Railway Authority has now filed
a petition before Supreme Court, Delhi. 56.00 -
(vi) (a) Disputed liability on account of
currency fluctuation on foreign
currency loans and interest thereon,
pending before the Hon'ble High Court,
Jharkhand, Ranchi. 2142.17 1888.28
(b) Liability on account of currency
fluctuation on upfront payment of
foreign currency loan and additional
2% interest rate in lieu of guarantee
of Govt, of Jharkhand matter pending
in SLP before the Hon'ble Supreme
Court, Delhi 1995.43 1819.36
As at As at
31.3.12 31.3.11
(vil) Disputed Income Tax demand for short
deduction/collection or Tax at source
based on NSDL report for the F.Y.
2004-05 to 2008-09 u/s 156 raised by
DCIT, JSR under appeal before the CIT
(Appeal), JSR under section 246A (1)
OF THE Income Tax Act, 1961 (with
interest & penalty) 83.34 83.34
(viii) Liability for price difference /
other claims net of counter claims,
if any, arising on account of
procurement of raw materials under a
contract (since terminated) pending
before an Arbitrator / High Court. Not Not
ascertained ascertained
(ix) (a) The company has received a show
cause notice to explain as to why
the production of Sponge Iron was
low in comparison to iron ore
consumed. The company has furnished
its reply, justifying consumption of
iron ore viz a viz Sponge iron
production. The Matter is still Not Not
pending. ascertained ascertained
(b) Demand for recovery of irregular
Cenvat Credit for Service Tax and
education cess for F.Y. 2009-10 &
2010-11 under Rule 15(4) of CCR 2004
read with section 78 of the Finance
Act 1994 under appeal before The
Appellate Tribunal Central Excise &
Service Tax, Kolkata 3.22 4.46
(x) Liability on account of Bank Guarantees 1073.19 749.28
2. COMMITMENTS:
2.1 Capital Commitments:
Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 48.56 lacs (Previous
Year Rs. 48 56 lacs).
2.2 Other Commitments : Nil (P.Y. Nil)
3. Rehabilitation Scheme:
(I) The company was declared a Sick Industrial Company within the
meaning of clause (0) of Sub-Section (1) of Section 3 of the Sick
Industrial Companies (Special Provision) Act, 1985 by the Hon'ble
BIFRvide its order dated 19.12.1996. The Hon'ble BIFR vide its order
dated 29th July, 2004 had sanctioned the Rehabilitation Scheme. The
said scheme envisaged a total payment of Rs. 13500 lacs, Rs.6500 lacs
was to be paid as upfront payment and the balance Rs. 7000 lacs crores
was to be paid in 30 quarterly installments effective from IS"1 July,
2004. The Rehabilitation Scheme is under implementation.
(II) In the review hearing held on 3,a September, 2007 & 22nd
September, 2010, the BIFR, by exercising powers under Section 18 (5)
and 18 (9) of the SICA, clarified / directed that the Company would
make payment of the due installments to its foreign currency lenders in
'Euro' as per the amount reflected in Euro in the statement annexed to
the sanctioned scheme alongwith the applicable interest i.e. LIBOR plus
1% per annum. (LIBOR 3% in case of delay/ default in payment of
installments)
The Company has filed appeal before the Appellate Tribunal for
Industrial and Financial Reconstruction (AAIFR) challenging the above
said order.
AAIFR in its order dated 23-12-2011 has dismissed the appeal. The above
order of AAIFR was challenged by the Company by filling Writ Petition
in Jharkhand High Court on 06.02.2012. In the hearing held on 22nd
February,2012, the Appeal was dismissed.
The Company has not recognized Rs.2142.17 lacs the liability on account
of foreign currency fluctuation in Euro on foreign currency loans
installments and interest there or, as per the BIFR Scheme. The Company
has filed a Letters Patent Applate Jurisdiction (LPA) on 27th July,
2012 before the higher bench in the High Court of Jharkhand, Ranchi
against the order of the Single Judge.
(III) The Net worth of the Company could not become positive during the
implementation of BIFR Scheme till 30-09-2011. As per Order date 5th
May 2012, BIFR directed to the company to submit modified Draft
Rehabilitation Scheme (MDRS) within four months for the rehabilitation
of the Company.
4. The demand of water charges Rs. 1843.73 lacs (inclusive of interest
on arrear of water bills of Rs. 161.29 lacs) as on 31.03.2012 (P.Y. Rs.
1425.26 lacs inclusive of interest of Rs.132.91 lacs as on 31.3.2011)
raised by Chief Engineer, Subernarekha Multipurpose Project, Chandil
has been disputed by the company under a Writ Petition with Jharkhand
High Court, Ranchi. However, pending disposal of Writ Petition, the
company based on its own estimate of liability has made total provision
for Rs. 104.94 lacs up to 31st March, 2012, (Rs.102.08 lacs as on
31.3.2011.)
5. South Eastern Coalfield Ltd. has recovered a penalty of Rs.215.00
lacs in 2011-12 on account of short lifting of coal quantity in terms
of Fuel Supply Agreement dated 02.05.2008.
Company has taken up the matter with the Coal India Limited for refund
of the said amount and the same is under negotiation as per the terms
Fuel Supply Agreement(FSA). Since the company is hopeful of getting of
refund, hence no provision has been made in the accounts as at
31-03-2012.
6 Credit/Debit balances of some of the Creditors, Lenders, Debtors and
advances are subject to confirmation at the year end.
7 In the opinion of the Board, Current Assets, Loans and Advances have
a realizable value equivalent to the amount at which they are stated in
the Balance Sheet and the provision for all known liabilities have been
made except to the extent as appearing in other notes.
8. Earning in Foreign Currency: Nil
9. Subsidiary Company:
Chandil Power Limited (CPL) has become Subsidiary of the Company under
Section 4(1)(a) of the Companies Act 1956 w.e.f 17th August 2011. CPL
is still under development stage and hence no consolidation has been
done in line with the provision of AS -21.
Since the Company does not have Share holding interest in the
Subsidiary Company, hence the Statement as required in terms of Sec 212
(1)(f) read with section 212 (3) of the Companies Act 1956 is not
required to be disclosed.
10. Previous year figures have been recast / restated to conform to
the classification required by the Revised Schedule VI Notes 1 to 29
and Annexure - I containing Accounting Policies and General Notes form
part of the Financial Statements.
Mar 31, 2010
1. Contingent Liabilities:
(a) Claims not acknowledged as debts are as under: -
(Rs. Thousands)
As at 31.03.10 As at 31.03.09
(i) Custom Duty on Plant &
Machinery 1,06,92 1,06,92
(ii) Custom duty and interest
on Imported Stores & Spares 1,54,59 1,54,59
(iii) (a) JVAT demand under
appeal before the Jt.
Commissioner of
Commercial Taxes
(Appeals) Jamshedpur
for the asstt. Year
2006-07.(excludes
amount Rs.23,07
thousand paid by
the company but not
considered
as credit by deptt.) 23,97 -
(b) Central Sales Tax demand
(including interest)
under appeal before
the Jt. Commissioner of
Commercial Taxes
(Appeals) Jamshedpur for
the asstt. Year 2006-07. 3,11 -
(iv) Demand for Water Charges and
interest thereon. 11,47,75 9,92,47
(v) Disputed liability on account
of currency fluctuation on
foreign currency loans and
interest thereon, pending
before the Honble AAIFR /
Honble High Court Delhi. 17,09,65 37,52,60
(vi) Liability for price difference
/ other claims net of counter
claims, if any, arising on
account of procurement of
raw materials under a
contract (since terminated)
pending before an Arbitrator /
Orissa High Court. Not ascertained Not ascertained
(vii) (a) The company
has received a show
cause notice to explain
as to why the production
of Sponge Iron was low
in comparison to iron
ore consumed. The
company has furnished
its reply, justifying
consumption
of iron ore viz a viz
iron ore comsumption.
The matter is still
pending. Not ascertained Not ascertained
(b) The Company has received
a Show Cause Notice from
Assistant Commissioner,
Central Excise Division
IV, JSR for recovery of
irregular Cenvat Credit
availed by the company
of service tax and
education cess thereon
input services availed
by the company. The
Company has furnished
its reply stating that
it has claimed cenvat
credit on input
services as per the
provision of the
CCR 2004. The matter is
pending for disposal. 1,23 -
(viii) Liability on account of
Bank Guarantee 2,81,00 2,81,00
2. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs. 46,43 thousand
(Previous Year Rs. 44,20 thousand.).
3. Rehabilitation Scheme:
The company was declared a Sick Industrial Company within the meaning
of clause (o) of Sub-Section (1) of Section 3 of the Sick Industrial
Companies (Special Provision) Act, 1985 by the Honble BIFR vide its
order dated 19.12.1996. The Honble BIFR vide its order dated 29th
July, 2004 had sanctioned the Rehabilitation Scheme. The said scheme
envisaged a total payment of Rs. 135 crores, Rs.65 crores was to be
paid as upfront payment and the balance Rs. 70 crores was to be paid in
30 quarterly installments effective from 15* July, 2004. The
Rehabilitation Scheme is under implementation.
In the review hearing held on 3rd September, 2007, the BIFR, by
exercising powers under Section 18 (5) and 18 (9) of the SICA,
clarified / directed that the Company would make payment of the due
instalments to its foreign currency lenders in Euro as per the amount
reflected in Euro in the statement annexed to the sanctioned scheme
alongwith the applicable interest i.e. LIBOR plus 1% per annum. (LIBOR
+ 3% in case of delay/ default in payment of instalments)
The Company has filed appeal with AAIFR challenging the said order of
BIFR which is pending.
4. The demand of water charges Rs. 12,49,06 thousands (inclusive of
interest on arrear of water bills of Rs.1,23,66 thousands) as on
31.03.2010 (Rs. 10,86,31 thousands as on 31.3.2009) raised by Chief
Engineer, Subernarekha Multipurpose Project, Chandil has been disputed
by the Company under a Writ Petition with Jharkhand High Court, Ranchi.
However, pending disposal of Writ Petition, the company based on its
own estimate of liability has made total provision for Rs 1,01,32
thousands upto 31st March, 2010, (Rs.93,84 thousands as on 31.3.2009).
5. The amount of borrowing cost capitalized in accordance with
requirement of AS-16, amounts to Rs.4,01 Thousand (Previous year
Rs.3,95 Thousand).
Estimated amounts of defined benefits payable for the gratuity plan
within next year is Rs. 39,82 thousands.
6. Balances from some of the Debtors, Creditors / Suppliers and
Lenders are subject to confirmation as at 31.03.2010.
7. In the opinion of the management. Current Assets, Loans and
Advances have a realizable value equivalent to the amount at which they
are stated in the Balance Sheet and the provision for all known
liabilities have been made except to the extent as appearing in other
notes.
8. Segmental Reporting
The company is a single location single product company and hence the
requirements of AS - 17 on Segment Reporting are not relevant.
9. Related Party Transactions - AS 18
As per AS-18 issued by the Institute of Chartered Accountants of India,
the Companys related parties transactions with them are disclosed
below:
(a) By virtue of control
Moderate Leasing & Capital Services Ltd. Longwell Investments Private
Ltd.
(b) Key Management Personnel and their relatives
Mr. U K Modi being Chairman and Managing Director is the Key Management
Personnel and Mr. Abhishek Modi, Director is related to him
being son.
There has been no transaction with the key management personnel except
payment of remuneration.
(c) Enterprises over which (b) above have significant influence and
with whom transactions have taken place.
(i) SBEC sugar Ltd.
(ii) SBEC Bioenergy Ltd.
(iii) Modi Industries Limited
Civ) Modi Mundipharma Pvt. Ltd.
(v) Modi Revlon Pvt. Ltd.
(vi) Modiline Travel Services Pvt. Ltd.
(vii) Win Medicare Pvt. Ltd.
(viii) Modi Motors Pvt. Ltd.
Cm) Modi Senator (India) Pvt. Ltd
(x) Morgardshammar India Ltd.
(xi) M.G. Mobiles India Pvt. Ltd.
(xii) H.M. Tube & Containers Pvt Ltd.
(xiii) Chandil Power Ltd.
10. The management is of the opinion that except the assets written
off during the year and the assets retired from active use, there is no
further impairment of assets as at 31-3-2010 as contemplated in the
accounting standard 28.
11. Previous year figures have been regrouped / rearranged wherever
necessary.
12. Schedule 1 to 18 form an integral part of the Balance Sheet and
Profit & Loss Account and have been duly authenticated.
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