Mar 31, 2015
1) General Information
Facor Steels Limited ("The Company") is a Public Limited Company
incorporated in India under the Companies Act, 1956. It is part of
Worldwide reputed FACOR Group of Industries. The Company is listed at
Bombay Stock Exchange. The Company, is one of the leading Producers of
Carbon/Alloy steel/Stainless and special steel. The products are
manufactured at its works in Nagpur and caters both domestic and
international market.The products are meant for critical industrial
application.
2) Abridged financial statement
The abridged financial statements have been prepared in prescribed Form
AOC-3 pursuant to Rule 10 of the Companies (Accounts) Rules 2014 as per
notification F. No. 1/19/2013-CL-V, dated March 31, 2014 and are based
on the annual financial statements for the year ended March 31, 2015
approved by the Board of Directors at their meeting held on May 29,
2015.
3. (Note 27 of notes to financial statements)
Disclosure pursuant to Accounting Standard - 15 (Revised) "Employee
Benefits" :
The company provides for Gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme, the Gratuity fund
trust, administered and managed by the Life Insurance corporation of
India (LIC), make payment to vested employees at retirement, death or
termination of employment of an amount based on the respective
employees salary and the tenure of employment.
4. (Note 28 of notes to financial statements)
The slowing industrial activity and depressed market conditions had
seriously affected the operations of the company. Considering the
dwindling order position, the company has discussed with Workers union
and reached an agreement for consensus lock out effective from Jan,
2013 and which was in force upto 8th Aug, 2013. The company restarted
its operation from 9th Aug, 2013 after getting revised fund and non
fund based limits approved and released by the individual banks. The
company's application for Corporate Debt Restructure (CDR) has been
approved by CDR - Empowered Group vide its Letter of Approval dated
April 27, 2013. Inspite of the best efforts the company continued to
incurr cash loss and the capacity utilisation could not be improved to
avoid cash loss situation The Company has again reached an agreement
for consensus lock out with its workers union effective from 30th May,
2014 which is still in force and exploring various alternatives to
improve the operations of the company.
5. (Note 29 of notes to financial statements)
As per the Corporate Debt Restructure (CDR) package approved by
Empowered Group of Corporate Debt Restructuring cell (CDR-EG) approval
dated April 27, 2013 the amount of Recompense payable from cut off date
to end of package period i.e. March 31,2023 ' 852 lakhs.
6. (Note 30 of notes to financial statements)
In view of accumulated losses and no reasonable certainty of future
income to recover Deferred Tax Assets, no provision for deferred tax
assets has been considered necessary.
7. (Note 31 of notes to financial statements)
No provision for current Income-Tax is considered necessary in view of
the brought forward Business loss and unabsorbed depreciation. In view
of current year book loss no provision for Minimum Alternate Tax is
required.
8. (Note 32 of notes to financial statements)
The company and Baltic International Bank have reached and
understanding and in term of the settlement Agreement, the lender has
agreed to settle the account for an amount not less than USD 56872/-.
The lender has agreed to release the obligation of the company arising
from this loan agreement after the repayment of the above amount
towards the principal amount, payment of loan interest and penalty
charges. In view of this agreement, company has written back the
balance amount of USD 2943128/- amounting to ' 1842.11 lacs and the
same has been shown under exceptional item.
9. (Note 33 of notes to financial statements)
The company could not make the interest payment to the banks in time
and company's drawing power was reduced considerably due to suspension
of production. In view of this, All the bank accounts of the company
has been classified as Non Performing Assets by the Bankers.
10. (Note 34 of notes to financial statements)
The Company has entered into a Power Delivery agreement with Wardha
Power Company Limited (WPCL) for procurment of power for its
manufacturing activity at the term set out in the said agreement for
twenty five years from the commencement of commercial operation of
power plant to be declared by WPCL. As per the terms of another related
agreement with WPCL, the company has invested ' 440 lacs (Previous year
' 440 lacs) shown under Non current investments (Note 11) in Equity
shares of 1945867 of ' 10 each aggregating to ' 19458670- and 2454133
no of 0.01% redeemable class A preference shares aggregating to '
24541330.Therefore said shares are/shall be under lien with WPCL. Upon
the expiry of Power Delivery agreement. Class A Equity Shares and Class
A Redeemable Preference Shares will be bought back by WPCL for total
consideration of ' 1. During the year company has sold the 1061382
equity shares on their face value of ' 10 each aggregating to '
10613820/- (previous year Nil).
11. (Note 35 of notes to financial statements)
Short term loans and advances includes ' 75.58 lacs(previous year '
75.58) towards advance paid against supply of scrap by overseas
supplier against which company has initiated action for recovery
towards quality dispute.
12. (Note 36 of notes to financial statements)
M/s Madhur Engineering Pvt. Ltd. and M/s Tarini steel co. Ltd. have
filed winding up petition u/s 433 and 434 of the companies Act, 1956 in
the Nagpur bench of Bombay High court at Nagpur. The matter is yet to
be heard before the court and company has taken all steps to suitably
defend the case.
13. (Note 41 of notes to financial statements)
Segment Information :
The Management Information System of the Company identifies and
monitors Steel Products as the business segment. The Company is
managed organisationally as a single unit. In the opinion of the
management, the Company is primarily engaged in the business of Steel
Product. As the basic nature of these activities are governed by the
same set of risk and return, these constitute and are grouped as single
segment as per Accounting Standard (AS) 17 dealing with segment
reporting issued by ICAI.
14. (Note 42 of notes to financial statements)
Contingent Liabilities and Commitments :
(I) Contingent Liabilities :
(a) Estimated amount of contracts on Capital Account & other
Commitments remaining to be executed and not provided for in accounts '
Nil lacs (Previous Year ' 76.75 lacs).
(b) Claims against the Company not acknowledged as debts, since
disputed ' 302.80 lacs (Previous Year ' 249.29 lacs). Amounts already
paid under protest ' 35.89 lacs (Previous year ' 33.21 lacs) have been
debited to Advance Account.
15. (Note 43 of notes to financial statements)
Related Party Disclosure:-
I List of related parties:-
A Name and nature of relationship with the related party where control
exists:
Vidarbha Iron and Steel Corporation Limited (VISCO)- Associates
B Enterprise, over which key management personnel and their relatives
exercise significant influence, with whom transactions have taken place
during the year :
I Ferro Alloys Corporation Limited 2 Facor Alloys Limited
3 Rai Bahadur Shreeram And Company
Private Limited 4 Dass Papers Products. Ltd.
5 Orchard consultancy Pvt. Ltd. 6 Godavaridevi Saraf & Sons.
7 S.D. Ores Pvt. Ltd. 8 Suchitra Investment &
Leasing Ltd.
9 Saraf Bandhu Pvt. Ltd. 10 Facor Power Ltd.
II GDP Infrastructure Pvt. Ltd. 12 Queen Consultancy
Services Pvt. Ltd.
13 Vineet Infin Pvt. Ltd. 14 Shreeram shipping services
Pvt. Ltd.
C Key Management Personnel :
i) N.D. Saraf Chairman
ii) M.D.Saraf Vice Chairman & Director
iii) Vinod Saraf Managing Director
iv) Anurag Saraf Director
16. (Note 44 of notes to financial statements)
Previous year's figures have been re-grouped wherever necessary.
Mar 31, 2014
1.1 Terms/rights attached to Equity Shares:
The Company has only one class of Equity Shares having par value of Rs.
1/- per share. Each holder of Equity Share is entitled to one vote per
share.
In the event of liquidation of the company, the holders of Equity
Shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of Equity Shares held by the
Shareholders.
1.2 Terms/rights attached to Preference Shares:
The Company has only one class of 5% Redeemable Cumulative Preference
Shares having par value of Rs.100/- per share.
The company has alloted 1500000(nos.) 5% Redeemable cumulative
Preference Share of Rs.100/- each to Rai Bahadur Shreeram And Company
Private Limited On 4th March 2011 and 1000000(nos.) to other Promoter
group entity on 17th March 2012. Further on 14th March 2013company has
alloted 778000 (nos.) 5% Redeemable cumulative Preference Share of ''
100/- each to Rai Bahadur Shreeram And Company Private Limited & other
Promoter group entity. The said 5% Redeemable Cumulative Preference
Shares ( hereinafter called "Preference Shares") shall have the
following rights,privileges and conditions attaching thereto. Viz.
a) The Preference Shares shall be entitled to fixed cumulative
Preferential dividend at the rate of 5% per annum in priority to the
equity shares, but shall not confer any further right to participate in
the profits or assets.
b) Subject to the provisions of the Act, the said Preference Shares
shall be redeemable in the manner following:
(i) The company may on the expiry of six years from the date of
allotment thereto and after giving three months notice to the holders
of the Preference shares, apply any profits or monies of the company
which may be lawfully applied for the purpose of redemption of the
Preference Shares for the time being issued and outstanding at par,
together with a sum equal to the arrears of fixed dividend
thereon,(whether earned or declared or not),upto the date of
redemption.
(ii) The said Preference Shares shall be redeemed in five annual
installments commencing from the seventh year from the date of
allotment thereof.
1.3 (a) During the previous year, Company filed an application for
Corporate Debt Restructure(CDR) through its lead banks before the CDR
cell.
The Empowered Group of Corporate Debt Restructuring cell (CDR-EG) has
approved the final restructuring pacakage of the company. The details
thereof is as under.
(b) The CDR-EG in its meeting held on March''25th 2013 has approved the
CDR package of the company. Bank of India (BOI) has been appointed as
Monitoring Institution (MI).Final Letter of approval (LOA) has been
issued by the CDR cell to all the lenders with a copy to the company on
April 27 2013. Individual sanction letter in line with LOA is received.
Company has signed the Master Restructure Agreement (MRA) with all the
member Banks of the consortium lenders.
(c) Cut-off date (COD) is Jan 01''2013 Holding on operation is allowed
i.e. continuance of working capital limits at existing sanctioned level
till implementation of CDR package.
The Letter of credit payment devolved upto Dec 312012 has been
converted into working capital Term loan -I.
(d) The Letter of credit payments devolved during the period between
Jan 01''2013 to March 31''2013 has been converted into working capital
Term loan -II (WCTL-II).
(e) WCTL-I and WCTL-II are proposed to be repaid in equal quarterly
Instalments over a period of 8 years commencing after a principal and
interest moratorium of 24 months Repayments in 32 quarterly instalments
commencing from quarter April 2015 and ending on quarter ending Jan''
2023.
(f) Unpaid interest on working capital cash credit limit from
01.01.2013 to 31.03.2013 to be repaid within six months from
April''2013. The future interest accrued on WCTL-I and WCTL-II for the
period of two years from cut-off date will be converted into FITL-I.
The FITL is proposed to be repaid over a period of 2 3 years in equal
quarterly instalments commencing from April''2015.
( g ) All facility to carry interest at the rate of 10.75% per annum.
( h) All working capital facilities, Working capital Term
Loan(WCTL),Fresh Term loan and Funded Interest Term Loan (FITL) are
secured by....
(i) First charge by way of hypothecation of Movable Fixed Assets Plant
& machinery spares,tools and accessories and other movable Fixed assets
both present and future of the company.
(ii) First charge on Immovable Fixed Assets including building of
Factory.
(iii) second charge by way of hypothecation of entire stock of Raw
materials,stock in process, finished goods, consumable stores & sapres
and Receivables etc, and all other current assets of the company both
present andfuture on pari passu basis.
(iv) First charge by way of equtable mortgage of Lease hold Land in the
name of Vidarbha Iron & steel corporation Ltd.
(v) Pledge of 100% shares of the company held by promoters.
(vi) Inter - company guarantees by Ferro Alloys corpn.Ltd. Facor Alloys
Ltd and vidarbha Iron & Steel corporation Ltd.
(vii) Personal guarantee of two Directors.
1.4 External Commercial Borrowing (ECB loan) outstanding USD 3000000
lakhs (Pre. Yr. USD 3000000 lakhs) During the year company has taken
new ECB loan from Baltic International Bank Latvia and paid the loan of
Israel discount Bank London same is repayable in six annual Instalment
w.e.f. sept''2019.
1.5 Other loans taken in August 2011 and repayable after 31st march
2015 .
2. Disclosure pursuant to Accounting Standard - 15 ( Revised)
"Employee Benefits" :
The company provides for Gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme, the Gratuity fund trust
, administered and managed by the Life Insurance corporation of India
(LIC), make payment to vested employees at retirement , death or
termination of employment of an amount based on the respective
employees salary and the tenure of employment.
Liability for employee benefit has been determined by an acturial
valuation in conformity with the principles set out in the accounting
standard 15 (Revised) the details of which are as under.
3 The slowing industrial activity and depressed market conditions had
seriously affected the operations of the company. Considering the
dwindling order position, the company has discussed with Workers union
and reached an agreement for consensus lock out effective from Jan''
2013 and which was in force upto 8th Aug''2013. The Company restarted
its operations from 9th August, 2013 after getting revised fund and non
fund based limits approved and released by the individual banks. The
company''s application for Corporate Debt Restructure (CDR) has been
approved by CDR - Empowered Group vide its Letter of Approval dated
April 27, 2013. Inspite of the best efforts the company continued to
incurr cash loss and the capacity utilisation could not be improved to
avoid cash loss situation. The Company has again reached an agreement
for consensus lock out with its workers union effective from 30th
May''2014 and exploring various alternatives to improve the operations
of the company.
4 As per the Corporate Debt Restructure (CDR) package approved by
Empowered Group of Corporate Debt Restructuring cell (CDR-EG) approval
dated April 27, 2013 the amount of Recompense payable from cut off date
to end of package period i.e. March 31, 2023''852 lakhs.
5 Considering the present losses and accumulated depreciation, the
company feels there is no need to provide deferred tax Assets/
liability.
6 No provision for current Income-Tax is considered necessary in view
of the brought forward Business loss and unabsorbed depreciation. In
view of current year book loss no provision for Minimum Alternate Tax
is required.
7 The Company has entered into a Power Delivery agreement with Wardha
Power Company Limited (WPCL) for procurment of power for its
manufacturing activity at the term set out in the said agreement for
twenty five years from the commencement of commercial operation of
power plant to be declared by WPCL. As per the terms of another related
agreement with WPCL, the company has invested Rs.440 lacs(Previous year
Rs.440 lacs) shown under Non current investments (Note 11 ) in Equity
shares of 1945867 of Rs.10 each aggregating to Rs.19458670 and 2454133 no
of 0.01% redeemable class A preference shares aggregating to Rs.24541330.Therefore said shares are/shall be under lien with WPCL.Upon
the expiry of Power Delivery agreement. Class A Equity Shares and Class
A Redeemable Preference Shares will be bought back by WPCL for total
consideration of Rs.1.
8 Short term loans and advances includes Rs.75.58 lacs(previous year Rs.
75.58 lacs) towards advance paid against supply of scrap by overseas
supplier against which company has initiated action for recovery
towards quality dispute.
9 M/s Madhur Engineering Pvt. Ltd. and M/s Tarini steel co. Ltd. have
filed winding up petition u/s 433 and 434 of the companies Act, 1956 in
the Nagpur bench of Bombay High court at Nagpur. The matter is yet to
be heard before the court and company has taken all steps to suitably
defend the case.
10 Segment Information:
The Management Information System of the Company identifies and
monitors Steel Product as the business segment. The Company is managed
organisationally as a single unit. In the opinion of the management,
the Company is primarily engaged in the business of Steel Product. As
the basic nature of these activities are governed by the same set of
risk and return, these constitute and are grouped as single segment as
per Accounting Standard (AS) 17 dealing with segment reporting issued
by ICAI.
11 CONTINGENT LIABILITIES AND COMMITMENTS
(I) Contingent Liabilities :
(a) Estimated amount of contracts on Capital Account & other
Commitments remaining to be executed and not provided for in accounts
Rs.76.75 lacs (Previous Year Rs.15.25 lacs).
(b) Claims against the Company not acknowledged as debts, since
disputed Rs.249.29 lacs (Previous Year Rs.249.29 lacs). Amounts already
paid under protest Rs.33.21lacs (Previous year Rs.33.21 lacs) have been
debited to Advance Account.
12 Related Party Disclosure:-
I List of related parties:-
A Name and nature of relationship with the related party where control
exists:
Vidarbha Iron and Steel Corporation Limited (VISCO)- Associates
B Enterprise, over which key management personnel and their relatives
exercise significant influence, with whom transactions have taken place
during the year :
1 Ferro Alloys Corporation Limited 2 Facor Alloys Limited
3 Rai Bahadur Shreeram And Company Pvt Ltd 4 Dass Papers Products. Ltd
5 Orchard consultancy Pvt. Ltd. 6 Godavari Devi Saraf & Sons.
7 S.D. Ores Pvt. Ltd. 8 Suchitra Investment &
Leasing Ltd.
9 Saraf Bandhu Pvt. Ltd. 10 Facor Power Ltd.
11 GDP Infrastructure Pvt. Ltd. 12 Queen Consultancy Services
Pvt. Ltd.
13 Vineet Infin Pvt. Ltd. 14 Shreeram shipping services
Pvt. Ltd.
C Key Management Personnel :
i) N.D. Saraf Chairman
ii) M.D.Saraf Vice Chairman & Managing Director
iii) Vinod Saraf Managing Director
iv) Anurag Saraf Director
II Transactions with Related Parties during the year ended 31-03-2014
in the ordinary course of business.
Mar 31, 2013
1. General Information
Facor Steels Limited ("The Company") is a Public Limited Company
incorporated in India under the Companies Act, 1956. It is part of
Worldwide reputed FACOR Group of Industries. The Company is listed at
Bombay Stock Exchange . The Company, is one of the leading Producers of
Carbon/Alloy steel/Stainless and special steel. The products are
manufactured at its works in Nagpur and caters both domestic and
international market.The products are meant for critical industrial
application.
2. Abridged fi nancial statement
The abridged financial statements have been prepared pursuant to Rule
7A of the Companies (Central Government'' s) General Rules and Forms,
1956 as per notification F. No. 17/51/2012-CL-V, dated May 31, 2012 and
are based on the annual financial statements for the year ended March
31, 2013 approved by the Board of Directors at their meeting held on
May 29, 2013.
3. (Note 28 of notes to fi nancial statements)
The slowing industrial activity and depressed market conditions had
seriously affected the operations of the company. Considering the
dwindling order position, the company has discussed with Workers union
and reaches an agreement for consensus lock out effective from Jan''
2013 and which is still in force. The company'' s application for
Corporate Debt Restructure (CDR) has been approved by CDR - Empowered
Group vide its Letter of Approval dated April 27, 2013. Company will
restart its operation once the revised Non fund based limits are
approved and released by the individual banks.
4. (Note 29 of notes to fi nancial statements)
As per the Corporate Debt Restructure (CDR) package approved by
Empowered Group of Corporate Debt Restructuring cell (CDR-EG) vide its
letter of approval dated April 27, 2013 the amount of Recompense
payable during this period from the cut off date i.e. January 1, 2013
to March 31, 2013 is Rs.Nil. The cummulative Recompense amount payable
from cut off date to end of package period i.e. March 31, 2023 Rs. 852
lakhs.
5. (Note 30 of notes to fi nancial statements)
The Deferred Ta x Liability accounted in the earlier period considering
the timing difference between the book value and tax basis of an assets
created tax liability in future periods. But considering the present
losses and accumulated depreciation, the company feels there is no need
for continuation of deferred tax liability of Rs. 465.60 lakhs in the
books and hence the same is reversed during the year under review.
6. (Note 31 of notes to fi nancial statements)
No provision for current Income-Tax is considered necessary in view of
the brought forward Business loss and unabsorbed depreciation. In view
of current year book loss no provision for Minimum Alternate Ta x is
required.
7. (Note 32 of notes to fi nancial statements)
The Company has entered into a Power Delivery agreement with Wardha
Power Company Limited (WPCL) for procurment of power for its
manufacturing activity at the term set out in the said agreement for
twenty five years from the commencement of commercial operation of
power plant to be declared by WPCL. As per the terms of another related
agreement with WPCL, the company has invested Rs. 440 lacs(Previous
year Rs. 440 lacs) shown under Non current investments (Note 11 ) in
Equity shares of 1945867 of Rs. 10/- each aggregating to Rs. 19458670-
and 2454133 no of 0.01% redeemable class A preference shares
aggregating to Rs. 24541330. Therefore said shares are/shall be under
lien with WPCL.Upon the expiry of Power Delivery agreement. Class A
Equity Shares and Class A Redeemable Preference Shares will be bought
back by WPCL for total consideration of Rs. 1/-.
8. (Note 33 of notes to fi nancial statements)
During the year Company has issued 778000 (nos.)[Previous year
1000000(nos.)] 5% Redeemable Cumulative Preference Shares of Rs. 100/-
each to Promoter group entities against Inter Corporate Deposit worth
Rs. 778 lacs (Previous year Rs.1000 lacs).
9. (Note 34 of notes to fi nancial statements)
Maharashtra Electricity Regulatory Commission (MERC) vide its order
dated 27th April, 2007 has directed Maharashtra State Electricity
Distribution company Limited (MSEDCL) to refund, Regulatory Liability
Charges (RLC)collected by it during the period commencing December 2003
to September 2006, to selected consumer category within which the
company gets covered. In the Financial year 2010-11 company has
recognised refund of Rs.41924123/- of which Rs. 8210503/-(previous year
18892046/-) is outstanding as on 31.03.2013 and the same is grouped
under other current assets.
10. (Note 35 of notes to fi nancial statements)
Short term loans and advances includes Rs. 75.58 lacs(previous year
Rs.75.58) towards advance paid against supply of scrap by overseas
supplier against which company has initiated action for recovery
towards quality dispute.
11. (Note 40 of notes to fi nancial statements)
Segment Information :
The Management Information System of the Company identifies and
monitors Steel Products as the business segment. The Company is managed
organisationally as a single unit. In the opinion of the management,
the Company is primarily engaged in the business of Steel Product. As
the basic nature of these activities are governed by the same set of
risk and return, these constitute and are grouped as single segment as
per Accounting Standard (AS) 17 dealing with segment reporting issued
by ICAI.
12. (Note 41 of notes to fi nancial statements) Contingent Liabilities
and Commitments :
(I) Contingent Liabilities :
(a) Estimated amount of contracts on Capital Account & other
Commitments remaining to be executed and not provided for in accounts
Rs.15.25 lacs (Previous Year Rs.15.25 lacs).
(b) Claims against the Company not acknowledged as debts, since
disputed Rs.249.29 lacs (Previous Year Rs.249.29 lacs). Amounts already
paid under protest Rs. 33.21lacs (Previous year Rs. 33.21 lacs) have
been debited to Advance Account.
13. (Note 42 of notes to fi nancial statements) Related Party
Disclosure:- I List of related parties:-
A Name and nature of relationship with the related party where control
exists:
Vidarbha Iron and Steel Corporation Limited (VISCO)- Associates
B Enterprise, over which key management personnel and their relatives
exercise significant influence, with whom transactions have taken place
during the year :
14. (Note 43 of notes to financial statements)
Previous year'' s figures have been re-grouped wherever necessary.
Mar 31, 2012
1.1 Terms/rights attached to Equity Shares:
The Company has only one class of Equity Shares having par value of Re.
1/- per share. Each holder of Equity Share is entitled to one vote per
share.
In the event of liquidation of the company, the holders of Equity
Shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of Equity Shares held by the
Shareholders.
1.2 Terms/rights attached to Preference Shares:
The Company has only one class of 5% Redeemable Cumulative Preference
Shares having par value of Rs. 100/- per share. The company has alloted
1500000 (nos.) 5% Redeemable cumulative Preference Share of Rs. 100/-
each to R.B. Shreeram & co. Pvt. Ltd. On 4th March 2011 and 1000000
(nos.) to other Promoter group entity on 17th March 2012.
The said 5% Redeemable Cumulative Preference Shares ( hereinafter
called "Preference Shares") shall have the following rights, privileges
and conditions attaching thereto. Viz.
a) The Preference Shares shall confer upon the holders thereof the
right out of the profits of the company resolved under the Articles of
Association to a fixed cumulative Preferential dividend at the rate of
5% per annum (free of income tax but subject to deduction of taxes at
the prescribed rates) on the capital for the time being paid thereon
including in a winding up to repayment of such capital and all arrears
of such fixed dividend accrued up to commencement of the winding up
(whether earned or declared or not) in priority to the equity shares,
but shall not confer any further right to participate in the profits or
assets.
b) Subject to the provisions of the Act, the said Preference Shares
shall be redeemable in the manner following:
(i) The company may on the expiry of six years from the date of
allotment thereto and after giving three months notice to the holders
of the Preference shares, apply any profits or monies of the company
which may be lawfully applied for the purpose of redemption of the
Preference Shares for the time being issued and outstanding at par,
together with a sum equal to the arrears of fixed dividend
thereon,(whether earned or declared or not),upto the date of
redemption.
(ii) The said Preference Shares shall be redeemed in five annual
installments commencing from the seventh year from the date of
allotment thereof.
(iii) The Company shall be at liberty to create and issue, from time to
time, further Preference Shares ranking pari passu in all respects with
the said Preference Shares."
1.3 During the year 2007-08 company has reached One Time Settlement
(OTS) with relevant Preference Share holder for pre-mature redemption
of 150705- 0.01% Redeemable Preference Shares of Rs. 100/- each.
2.1 Secured by hypothecation of stocks of raw-materials, finished
products, book debts, and other receivables and by way of first charge
on fixed assets of the Company and guaranteed by two Directors. These
are also secured by Inter-compnay guarantees by Ferro Alloys corpn.
Ltd. and Facor Alloys Ltd.as well as by pledge of promoter's
shareholding.
2.2 PLR-4% FITL Payable in equal 14 half yearly instalments. The
Company has not paid Rs. 47.79 lacs last instalment and interest
thereon to CBI vizag which was due in march 2011 and there is default
in payment. However same is paid in June 2012.
2.3 0% Funded interest term loans due for payment as on March 2013.
2.4 External Commercial Borrowing (ECB loan) outstanding USD 3000000
lacs (Pre. Yr. USD 3000000 lacs) repayable in 5 equal Annual
instalments w.e.f April'2014.
2.5 During the year the Inter corporate deposits/loan of Rs. 1000 lacs
from related parties converted into 5% Redeemable cumulative Preference
shares of Rs. 100/- each.
2.6 Inter corporate Deposits/ Loans repayble after 31st march 2014 and
carrying 0% interest w.e.f. August 2009.
2.7 Other loans taken in August 2011 and repayable after 31st march
2014 .
3.1 Secured by hypothecation of stocks of raw-materials, finished
products, book debts, and other receivables and by way of first charge
on fixed assets of the Company and guaranteed by two Directors. These
are also secured by Inter-company guarantees by Ferro Alloys Corpn.
Ltd. and Facor Alloys Ltd. as well as by pledge of promoter's
shareholding.
Notes:
4.1 Depreciation on Fixed Assets capitalised up to 30.06.1986 as per
written down value method and depreciation on addition thereafter as
per straight line method has been charged at the rates of Depreciation
as per Schedule XIV of Companies Act,1956 as amended.
4.2 Additions and adjustment in Plant & machinery includes Rs. 201.60
lacs (net loss) [previous year Rs.11.70 lacs (net loss) ] on account of
exchange difference during the year.
5. Disclosure pursuant to Accounting Standard - 15 ( Revised)
"Employee Benefits" :
The company provides for Gratuity, a defined benefit retirement plan
covering eligible employees. As per the scheme, the Gratuity fund
trust, administered and managed by the Life Insurance corporation of
India (LIC), make payment to vested employees at retirement , death or
termination of employment of an amount based on the respective
employees salary and the tenure of employment.
Liability for employee benefit has been determined by an acturial
valuation in conformity with the principles set out in the accounting
standard 15 (Revised) the details of which are as under.
6 Salaries,Wages & Bonus includes reimbursement for services to
Vidarbha Iron & Steel corporation Ltd.(VISCO) upto 30th Sept 2011 Rs.
568.08 lacs. (Previous year Rs. 1064.45 lacs) w.e.f. 1st oct' 2011 the
services of all such employees have been transferred to the company.
Further the Provision for company's obligation under the employee's
leave policy is provided on actual basis for the period from Oct'11 to
March'12.
7 The Deferred Tax Assets on unabsorbed depreciation has been
recognised as timing difference to the extent of Deferred tax liability
arising in the current year.
8 No provision for current Income-Tax is considered necessary in view
of the brought forward Business loss and unabsorbed depreciation. In
view of current year book loss no provision for Minimum Alternate Tax
is required.
9 The Company has entered into a Power Delivery agreement with Wardha
Power Company Limited (WPCL) for procurment of power for its
manufacturing activity at the term set out in the said agreement for
twenty five years from the commencement of commercial operation of
power plant to be declared by WPCL. As per the terms of another related
agreement with WPCL, the company has invested Rs. 440 lacs(Previous
year Rs. 440 lacs) shown under Non current investments (Note 11 ) in
the class A Equity shares of 1945867 of Rs10 each aggregating to
Rs19458670- and 2454133 no of 0.01% redeemable class A preference
shares aggregating to Rs 24541330.Therefore said shares are/shall be
under lien with WPCL. Upon the expiry of Power Delivery agreement.
Class A Equity Shares and Class A Redeemable Preference Shares will be
bought back by WPCL for total consideration of Rs. 1.
10 During the year Company has issued 1000000 (nos.)[Previous year
1500000(nos.)] 5% Redeemable Cumulative Preference Shares of Rs. 100/-
each to Promoter group entities against Inter Corporate Deposit worth
Rs. 1000 lacs (Previous year 1500 lacs).
11 Maharashtra Electricity Regulatory Commission (MERC) vide its order
dated 27th April 2007 has directed Maharashtra State Electricity
Distribution company Limited (MSEDCL) to refund, Regulatory Liability
Charges (RLC)collected by it during the period commencing December 2003
to September 2006, to selected consumer category within which the
company gets covered. In the Financial year 2010-11 company has
recognised refund of Rs.41924123/- of which Rs. 18892046/-(previous
year 29573589/-) is outstanding as on 31.03.2012 and the same is
grouped under other current assets.
12 Short term loans and advances includes Rs. 75.58 lacs(previous year
Rs.75.58) towards advance paid against supply of scrap by overseas
supplier against which company has initiated action for recovery
towards quality dispute.
13 Earnings in Foreign Exchange on account of Export of Goods on F.O.B.
basis
14 Segment Information:
The Management Information System of the Company identifies and
monitors Steel Product as the business segment. The Company is managed
organisationally as a single unit. In the opinion of the management,
the Company is primarily engaged in the business of Steel Product. As
the basic nature of these activities are governed by the same set of
risk and return, these constitute and are grouped as single segment as
per Accounting Standard (AS) 17 dealing with segment reporting issued
by ICAI.
15 CONTINGENT LIABILITIES AND COMMITMENTS
(I) Contingent Liabilities :
(a) Estimated amount of contracts on Capital Account remaining to be
executed and not provided for in accounts Rs.15.25 lacs (Previous Year
Rs.20 lacs).
(b) Claims against the Company not acknowledged as debts, since
disputed Rs.249.29 lacs (Previous Year Rs.249.29 lacs). Amounts already
paid under protest Rs. 33.21lacs (Previous year Rs. 33.21 lacs) have
been debited to Advance Account.
(c ) Counter guarantees in favour of Consortium Banks in respect of
their out standings with Ferro Alloys corporation Limited and Facor
Alloys Limited. Due to the nature of the liability, its financial
impact is not ascertainable.
16 The revised Schedule VI to the Companies Act, 1956 has become
effective from 1-04-2011 for preparation and presentation of financial
statements. This has significantly impacted the disclosure and
presentation made in the financial statements. Accordingly, the figures
for the previous year have been reclassified, wherever necessary to
conform with the current year's classification.
Mar 31, 2011
1 Contingent Liabilities:
(a) Estimated amount of contracts on Capital Account remaining to be
executed and not provided for in accounts is Rs. Nil lacs( Previous-
Year Rs. Nil lacs).
(b) Claims not acknowledged as debts since disputed Rs. 249.29 lacs
(Previous Year Rs. 249.29 lacs). Amounts already paid under protest Rs.
33.21 lacs(Previous Year : Rs. 33.21 lacs) have been debited to Advance
Account.
(c) Counter guarantees in favour of Consortium Banks in respect of
their outstandings with Ferro Alloys Corporation Limited and Facor
Alloys Limited. Due to the nature of the liability, its financial
impact is not ascertainable.
2 The Company has entered into a Power Delivery agreement with Wardha
Power Company Limited (WPCL) for procurement of power for its
manufacturing activity at the term set out in the said agreement for
twenty five years from the commencement of commercial operation of
power plant to be declared by WPCL. As per the terms of another related
agreement with WPCL, the company has invested Rs. 440 lacs shown under
investments (schedule F) in the class A Equity shares of 1945867 of
Rs10 each aggregating to Rs19458670/- and 2454133 no of 0.01%
redeemable class A preference shares aggregating to Rs 24541330/- and
Company is required to invest Rs275 lakhs in 0.01% class C redeemable
preference shares of 2750000 of Rs 10 each at par , prior to
commencement of commercial operation of the said power plant. Therefore
said shares are/shall be under lien with WPCL. Upon the expiry of Power
Delivery agreement. Class A Equity Shares and Class A Redeemable
Preference Shares will be bought back by WPCL for total consideration
of Rs. 1. One tenth of Class C Redeemable Preference Shares will be
redeemed on every anniversary from the date of issue at Rs. 0.01 share.
3 (Note No. 7 - Schedule ÃKÃ of Annual Accounts)
No provision for current Income-Tax is considered necessary in view of
the brought forward Business loss and unabsorbed depreciation. In view
of current year book loss no provision for Minimum Alternate Ta x is
required.
4 (Note No. 14 - Schedule of Annual Accounts)
During the year Company has issued 1500000 (nos.) 5% Redeemable
Cumulative Preference Shares of Rs. 100/- each to one of the Promoter
group entity against Inter Corporate Deposit worth Rs. 1500 lacs.
5 (Note No. 15 - Schedule 'K' of Annual Accounts)
Maharashtra Electricity Regulatory Commission (MERC) vide its order
dated 27th April 2007 has directed Maharashtra State Electricity
Distribution company Limited (MSEDCL) to refund, Regulatory Liability
Charges (RLC) collected by it during the period commencing December
2003 to September 2006, to selected consumer category within which the
company gets covered. Company has received refund of Rs. 24367270/-from
MSEDCL upto 31.03.2010. In the current Financial year company has
recognised refund of Rs.41924123/- of which Rs. 29573589/- is
outstanding as on 31.03.2011 and the same is grouped under other
current assets.
6 (Note No. 16 - Schedule 'K' of Annual Accounts)
Loans and Advances includes Rs. 75.58 lacs(previous year Rs. 75.58)
towards advance paid against supply of scrap by overseas supplier
against which company has initiated action for recovery towards quality
dispute.
7 (Note No. 17 - Schedule 'K' of Annual Accounts)
In accordance with the accounting policy followed by the Company,
Excise Duty in respect of goods manufactured by the Company is being
accounted for at the time of removal of goods from the factory. Such
Excise Duty payable on goods awaiting clearances from the factory is
estimated at Rs. 493.26 lacs.(previous year Rs. 340.21 lacs) However,
the said liability, if accounted, would have no impact on the results
for the year.
Note:
The above information and that given in Schedule -H 'Current
Liabilities and Provisions' regarding micro enterprises and small
enterprises has been determined on the basis of information available
with the Company.
8 (Note No. 27 - Schedule 'K' of Annual Accounts) Segment Information:
The Management Information System of the Company identifies and
monitors Steel Product as the business segment. The company is managed
organisationally as a single unit. In the opinion of the management,
the company is primarily enganged in the business of Steel Product. As
the basic nature of these activities are governed by the same set of
risk and return, these constitute and are grouped as single segment as
per Accounting Standard AS-17 dealing with segment reporting issued by
ICAI.
9 (Note No. 28 - Schedule 'K' of Annual Accounts)
Previous Year's figures have been re-grouped wherever necessary.
10 (Note No. 29 - Schedule 'K' of Annual Accounts) Related Party
Disclosure:- I List of related parties:- A Name and nature of
relationship of the related party where control exists:- Vidarbha Iron
and Steel Corporation Limited (VISCO)- Associates
B Enterprises,over which Key management personnel and their relatives
exercise significant influence, with whom transactions have taken place
during the year.
I Ferro Alloys Corporation Limited 2 Facor Alloys Limited
3 Rai Bahadur Shreeram & Co. 4 Dass Papers Products. Ltd.
Pvt. Ltd.
5 Orchard Consultancy Pvt. Ltd. 6 Godavari Devi Saraf & Sons.
7 S.D. Ores Pvt. Ltd. 8 Suchitra Investment & Leasing
Ltd.
9 Saraf Bandhu Pvt. Ltd. 10 Facor Power Ltd.
II GDP Infrastructure Pvt. Ltd. 12 Queen consultancy Services
Pvt.Ltd.
13 Vineet Infin Pvt. Ltd.
C Key Management Personnel :
1 N.D. Saraf Chairman & whole Time Director
2 M.D. Saraf Vice chairman & Managing Director
3 Vinod Saraf Managing Director
4 Anurag Saraf Joint Managing Director
Mar 31, 2010
1. Contingent Liabilities:
(a) Estimated amount of contracts on Capital Account remaining to be
executed and not provided for in accounts is Rs.Nil lacs( Previous-
Year Rs.119.79 lacs).
(b) Claims not acknowledged as debts since disputed Rs.249.29lacs
(Previous Year Rs.376.63 lacs). Amounts already paid under protest
Rs.33.21 lacs(Previous Year :Rs.33.61 lacs) have been debited to
Advance Account.
(c) Counter guarantees in favour of Consortium Banks in respect of
their outstandings with Ferro Alloys Corporation Limited and Facor
Alloys Limited. Due to the nature of the liability, its financial
impact is not ascertainable.
2. The Company has entered into Share subscription and Power delivery
agreement with M/s Wardha Power co. Ltd. By way of subscription to
1945867 classA Equity shares of Rs. 10/- each and Rs. 1/- paid up and
2454133 class A 0.01% Redeemable Preference shares of Rs. 10/- each
fully paid up. The company will be entitled to 11MW of power generated
from the group captive power plant as per the power and delivery
agreement dated 28th March 2008.
3. Miscellaneous receipts includes Rs.1008.14 lacs (Previous year Rs.
509.74 lacs) towards conversion charges received.
4. No provision for current Income-Tax is considered necessary in view
of the brought forward Business loss and unabsorbed depreciation. In
view of current year book loss no provision for Minimum Alternate Tax
is required.
5 (a) The Company has been advised that the computation of net profits
for the purpose of directors remuneration under Section 349 of the
Companies Act,1956 need not be enumerated since no commission has been
paid to the Directors. Fixed monthly remuneration paid to the Directors
are well within the limits prescribed under Schedule XIII to the
Companies Act,1956.
6 Loans and Advances includes Rs. 75.58 lacs(previous year Rs. 75.58
lacs) towards advance paid against supply of scrap by overseas supplier
against which company has initiated action for recovery towards quality
dispute.
7 In accordance with the accounting policy followed by the Company,
Excise Duty in respect of goods manufactured by the Company is being
accounted for at the time of removal of goods from the factory.Such
Excise Duty payable on goods awaiting clearances from the factory is
estimated at Rs. 340.21 lacs (previous year Rs. 296.79 lacs). However,
the said liability, if accounted, would have no impact on the results
for the year.
8 Particulars of Licensed and Installed Capacity :
Licensed and Installed Capacities are not applicable,since the plant is
taken on leave and licence from Vidarbha Iron & Steel Corporation Ltd.
(VISCO).
8 Segment Information:
The Management Information System of the Company identifies and
monitors Steel Product as the business segment. The company is managed
organisationally as a single unit. In the opinion of the management,
the company is primarily enganged in the business of Steel Product. As
the basic nature of these activities are governed by the same set of
risk and return, these constitute and are grouped as single segment as
per Accounting Standard AS-17 dealing with segment reporting issued by
ICAI.
10 Previous Years figures have been re-grouped wherever necessary.
11 Related Party Disclosure:- I List of related parties:- A Name and
nature of relationship of the related party where control exists:-
Vidarbha Iron and Steel Corporation Limited (VISCO)- Associates
B Enterprises,over which Key management personnel and their relatives
exercise significant influence, with whom transactions have taken place
during the year.
1 Ferro Alloys Corporation Limited 2 Facor Alloys Limited
3 Rai Bahadur Shreeram & Co. Pvt. Ltd. 4 Dass Papers Products. Ltd.
5 Orchard Consultancy Pvt. Ltd. 6 Godavari Devi Saraf & Sons.
7 S.D. Ores Pvt. Ltd. 8 Suchitra Investment &
Leasing Ltd.
9 Saraf Bandhu Pvt. Ltd. 10 Facor Power Ltd.
11 GDP Infrastructure Pvt. Ltd. 12 Queen Consultancy Services Pvt.
Ltd.
C Key Management Personnel :
1 N.D. Saraf Chairman & whole Time Director
2 M.D. Saraf Vice chairman & Managing Director
3 Vinod Saraf Managing Director
4 Anurag Saraf Joint Managing Director
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