Mar 31, 2023
PROVISIONS AND CONTIGENT LIABILTY
Provisions for legal claims, warranties, discounts and returns are recognized when the Company has a present legal or constructive obligation as a
result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognized forfuture operating losses
Where thereare a number of similar obligations,the likelihood that an outflow will be required in settlement is determined by considering thedass
of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class
obligations may besmall.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the
end of the reporting period.The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the
time value of money and the risksspecificto the liability.The increase in the provision due to the passageoftime is recognized as interest expense.
xvii. CONTINGENT LIABILITY
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision
or disclosure is made.
xviii. CONTINGENT ASSETS
Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits.
Contingent Assets are not recognized though are disclosed, where an inflow of economic benefits is probable.
xix. REVENUE RECOGNITION
Sale of goods
Revenue is measured at thefair value of the consideration received or receivable. Amounts disclosed as revenue is reduced for customer discounts,
rebates granted, other similar allowances, goods and services tax (GST) and duties collected on behalf of third parties.
Revenue is measured based on transaction price, which is the fair value of the consideration received or receivable,stated net of discounts,returns
and value added tax.Transaction price is recognized based on the price specified in the contract, net of the estimated sales incentives/ discounts.
Accumulated experience is used to estimateand provide forthediscounts/rightof return,using the expected value method.
A refund liability is recognized for expected returns in relation to sales made corresponding assets are recognized for the products expected to be
returned.
In respect of sale of goods and services where the company participates in tenders, the control of the goods is transferred on dispatch and revenue
is recognized in accordance with the terms of the tender. For contracts accepted through tendering process and where separate warranty terms are
prescribed,these obligations are not deemed to beseparate performance obligations and therefore estimated and included in the total costs ofthe
products.Where required,amounts are recognized separately accordingly in line with IND AS 37 - Provisions,Contingent Liabilities and Contingent
Assets.
Export benefit duty drawback
Incomes in respect ofduty drawbackin respect of exports madeduring the yearare accounted on accrual basis
Interest and dividend income
Interest income is recognized in statement of profit and loss using effective interest method. Dividend income is recognized when the Company''s
right to receive dividend is established.
Claims
Insurance daimsare accounted on acceptance basis.AII other claims/entitlementsare accounted on the merits of each caseor on realization.
xx. RETIREMENT AND OTHER EMPLOYEE BENEFITS
Short term employee benefits
Liabilities for salaries, wages and performance incentives including non- monetary benefits that are expected to be settled wholly within twelve
months after the end ofthe period in which the employees renderthe related service are recognized in respect of employees'' services up to theend
ofthe reporting period and are measured atthe amounts expected to be paid when the liabilities are settled.The liabilities are presented as current
employee benefits obligations in the Balance Sheet.
Long term employee benefits
Defined contribution plans
The Company has Defined Contribution Plansfor its employees such as Provident Fund, Employeeâs State Insurance,etc.and contribution to these
plans are charged to the Statement of Profit and Loss as incurred,as the Company has nofurther obligation beyond making the contributions.
Defined benefit plans
Gratuity: The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets.The defined benefit obligation is calculated annually by
actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market
yieldsat the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan
assets.This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in
which they occur, directly in other comprehensive. They are included in retained earnings in the statement of changes in equity and in the
balance sheet.
Changes in present value ofthe defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit
or loss as past service cost.
xxi. LEASES
Comoanvasa lessee
The Company''s lease asset classes primarily consistof leases for Land.The Company assesses whethera contract is or contains a lease,at inception
of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses
whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all ofthe economic benefits from use ofthe asset through the period ofthe lease and
(iii) the Company has the right to direct the useof the asset.
At the date of commencement ofthe lease, the Company recognises a right-of-use asset ("ROU") and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases with a term of twelve months or less (short term leases) and leases of low value assets. For
these short term and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight line basis over
the term ofthe lease.
The right-of-use assets are initially recognised at cost, which comprises the initial amount ofthe lease liability adjusted for any lease payments
made at or prior to the commencement date ofthe lease plus any initial direct costs less any lease incentives.They are subsequently measured at
cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a
straight-line basis overthe shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at the present value ofthe future lease payments.The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates.The lease liability is subsequently remeasured by
increasing the carrying amount to reflect interest on the lease liability,reducing the carrying amount to reflect the lease payments made.
A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to
determine lease payments.The remeasurement normally also adjusts the leased assets.
Lease liability and ROU asset have been separately presented In the Balance Sheet and lease payments have been classified as financing cash
flows.
Finance Lease
Leases which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership ofthe leased item are classified and
accounted for as finance lease. Lease rental receipts are apportioned between the finance income and capital repayment based on the implicit
rate of return.Contingent rents are recognized as revenue in the period in which they are earned.
Operating Lease
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases.
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease except where scheduled increasein
rent compensates theCompany with expected inflationary costs.
xxii. OFFSETTING FINANCIAL INSTRUMENTS
Financial assets and liabilities are offset and the net amount reported in the balance sheet where there is a legally enforceable right to offset the
recognizedamountsand there isan intention to settleona net basis,or realise theassetand settle the liability simultaneously.
xxiii. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average
number of equity shares outstandingduringthe year.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted
average number ofshares outstanding during the period are adjusted forthe effects of diluted potential equity shares.
xxiv. SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).The
CODM.who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing
Director and Finance Director of theCompany.
The Company is engaged in the business of manufacturing welding consumables,copper coated wires, flux cored wiresand welding fluxes and is
organizationally managed in two units - one in Maharashtra and one in West Bengal.The Company''s business comprises of only one segment.lt
has customers in India as well as outside india.Thus, the Company has only one business segment but different geographical reporting segment
i.e.,Domesticand International.
XXV. DIVIDENDTOEQUITYSHAREHOLDERS
Dividend to equity shareholders is recognized as a liability and deducted from shareholders'' equity, in the period in which the dividends are
approved by the equity shareholders in the general meeting.
xxvi. STATEMENT OF CASH FLOWS
Cash flows are reported using the indirect method whereby profit/ioss is adjusted for the effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or payments.The cash flows from operating, investing and financing activities of the Company
are segregated based on theavailable information.
xxvii. CONTRIBUTED EQUITY
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction,net oftax,from the proceeds.
2. SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION IN APPLYING ACCOUNTING POLICIES
Estimates and judgments are continually evaluated.They are based on historical experience and other factors, including expectations of future
events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. Information about
Significant judgments and Key sources of estimation made in applying accounting policies that havethe most significant effects on theamounts
recognized in thefinancial statements is included in thefollowing notes:
⢠Recognition of Deferred Tax Assets: The extent to which deferred tax assets can be recognized is based on an assessment of the
probability of the Company''s future taxable income against which the deferred tax assets can be utilized. In addition,significant judgment
is required in assessing the impact ofany legal or economic limits.
⢠Classification of Leases: The Company has exercised judgement in determining the lease term as the noncancellable term of the
lease, together with the impact of options to extend or terminate the lease if it is reasonably certain to be exercised. Where the rate implicit
in the lease is not readily available, an incremental borrowing rate is applied.This incremental borrowing rate reflects the rate of interest
that the lessee would have to pay to borrow over a similar term, with a similar security, the funds necessary to obtain an asset of a similar
nature and value to the right of-use asset in a similar economic environment. Determination of the incremental borrowing rate requires
estimation."
⢠Defined Benefit Obligation fDBO): Employee benefit obligations are measured on the basis of actuarial assumptions which include
mortality and withdrawal rates as well as assumptions concerning future developments in discount rates.medicalcosttrends,anticipation
of future salary increases and the inflation rate. The Company considers that the assumptions used to measure its obligations are
appropriate.However,any changes intheseassumptions may havea material impact on the resulting calculations.
⢠Provisions and Contingencies: The assessments undertaken in recognising provisions and contingencies have been made in
accordance with Indian Accounting Standards (Ind AS) 37,''Provisions,Contingent Liabilities and Contingent Assets''.The evaluation of the
likelihood of the contingent events is applied best judgment by management regarding the probability of exposure to potential loss.
⢠Impairment of Financial Assets: The Company reviews its carrying value of investments carried at amortized cost annually, or more
frequently when there is indication of impairment. If recoverable amount is less than its carrying amount,the impairment loss is accounted
for.
⢠Allowances for Doubtful Debts:The Company makes allowances for doubtful debts through appropriate estimations of irrecoverable
amount.The identification of doubtful debts requires use of judgment and estimates. Where the expectation is different from the original
estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in
which such estimate has been changed.
⢠Fair value measurement of financial Instruments: When the fair values of financial assets and financial liabilities recorded in the balance
sheet cannot be measured based on quoted prices in active markets,their fair value is measured using valuation techniques including the
Discounted Cash Flow model.The input to these models are taken from observable markets where possible, but where this not feasible, a
degree of judgments'' is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk,credit riskand
volatility.
Mar 31, 2018
1. Corporate Information:
Gee Limited is a Public Limited Company incorporated in India and listed with Bombay stock exchange. The Company is engaged in the business of manufacturing of Welding Electrodes, Copper Coated Wires, Flux Cored Wires and Welding Fluxes. The manufacturing activities are located in Maharashtra and West Bengal. It caters to local as well as export market.
The registered office of the Company is Plot No.E-''l, Road No.7,Wagle Industrial Estate, Thane (West) -400604.
Note 2:Transition to Ind AS
These are the Company''s first consolidated financial statements prepared in accordance with Ind AS.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31st March 2018, the comparative information presented in these financial statements for the year ended 31st March 2017 and in preparation of an opening Ind AS balance sheet at 1st April 2016 (the Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules,2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).
Exemptions and exceptions availed
In preparing these Ind AS financial statements, the Company has availed certain optional exemptions and mandatory exceptions in accordance with Ind AS 101 from IGAAP to Ind AS, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and IGAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).This note explains the adjustments made by the Company in restating its lGAAP financial statements, including the Balance Sheet as at 1st April 2016and the financial statements as at and for the yearended31st March 2017.
Ind AS optional exemptions
1) Deemed cost for property, plant and equipment and intangible assets
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the IGAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for Investment property covered by Ind AS 40 ''Investment Properties''. Accordingly, the Company has elected to measure all of its property, plant and equipment and investment property at their IGAAP carrying value.
2)Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.
Ind AS mandatory exemptions
1) Estimates
An entity''s estimates in accordance with Ind AS''s at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with IGAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.lnd AS estimates as at April 1,2016are consistent with the estimates as at the same ate made in conformity with IGAAP.
2) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Consequently, the Company has applied the above assessment based on facts and circumstances exist at the transition date.
3) Derecognition of Financial Assets and Financial Liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirement provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the derecognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
Reconciliations between IGAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from IGAAP to Ind AS.
The presentation requirements under IGAAP differ from Ind AS and hence the IGAAP information has been reclassified for ease of reconciliation with Ind AS. The reclassified IGAAP information is derived based on the audited financial statements of the Company for the year ended 31st March 2016 and 31st March 2017.
B Rights, Preferences and Restriction of Share holders: The company has only one class of Equity shares having par value of Rs. 2- each. The equity shares have rights, Preferences and restrictions which are in accordance with the provision of law, in particular the Companies Act 2013. The dividend proposed by the Board of Directors is subject to shareholders approval in the ensuing Annual General Meeting.
E Particulars of shares issued for consideration other than cash, shares bought back and bonus shares in last five years:
F There are no shares reserved for issue under options, contracts/commitments for sale of Shares/disinvestments.
G There are no shares forfeited during the year.
H Particulars of calls in arrears by directors and officers of the company. -NIL
I Security convertible into equity shares.
General Reserve
General Reserve can be used for the purposes and as per guidelines prescribed in the Companies Act, 2013.
Securities Premium Reserve
Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.
Other Comprehensive Income [FVTOCI] Reserve:
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the Other Comprehensive Income [FVTOCI] reserve wIthin equity.
The company transfers amount from this reserve to retained earnings when the relevant equity securities are derecognised.
3 .Contingent liabilities and commitments
a) Guarantees outstanding as at 31st March 2018 (Partially secured with the lien on Fixed Deposits to the extent of 5% of the guarantee amount): Rs 7,409,744/- (as at 31st March 2017:Rs.8,089,252/-)
b) Disputed Demands against the Company as at 31st March 2018:
Notes
1. Pre deposit is amount paid/credit reversal under protest and thereby reflecting under Loans and Advances.
2. Sales Tax:
a) The Sales Tax/VAT demand has been raised for non-submission of Central Sales Tax Declaration Forms. The Company has filed appeal for the following mentioned years seeking time for submission of Central Sales Tax Declaration Forms. The Management is of the opinion that there will be no liability as pending Central Sales Tax Declaration Forms will be submitted soon.
b) During the year, Company has received the order dated 30/08/2017fromDy Commissioner of sales Tax for Period 2009-10 granting partly relief in tax, interest and penalty at Rs.47,66,915. As a result of relief, dues payable is reduced to 21,82,23 with pre deposit made in appeal of Rs.10,00,000and hence amount payable is Rs.11,82,231.
3. Excise Duty- Rs 20,710,006 (as at 31st March 2017 :Rs 20,710,006)
The Company had received a show cause notice dated 12th May 2010 demanding Rs.4.02 Cr.of CENVAT credit on certain imported material, imported in the year 2008-09. Under the instructions from excise authorities the Company has already reversed under protest CENVAT credit of Rs. 3.09 Cr in the year 2008-09. Pending disposal of the case a sum of Rs. 2.07 Cr, reversed under protest is shown under" Claims against the excise authorities" under the head loans and advances. After filing an early hearing application on 10th August, 2015, the matter came up several times during the financial year, but was adjourned and next date of hearing is not yet received. Based on the legal opinion, the Company is hopeful of favourable order as the matter is one of interpretation of law.
4. Regarding TRACES Liability the Management has represented that necessary rectification applications are being made and there would not be any liability on this count.
The Company expects favorable outcome and hence no provision made in the book.
Except as described above, there are no pending litigations which the Company believes could reasonably be expected to have a material adverse effect on the result of Operations, cash flow or the financial position of the Company.
4. Borrowings
Secured Loan
a. During the period under review, the Company has repaid all term loans which was secured by mortgage/hypothecation of related immovable/movable assets of the Company
b. Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified immovable and movable fixed assets of the Company ranking pari-passu by way of second charge. The facilities carried interest varying from @ 9.5 %p.a.to @ 10.00% p.a.
c. Vehicle Loans are secured by hypothecation of related vehicles. The vehicle loans are repayable in installments spread over 3 to 5 years and carries interest ranging from 9.3% p.a.to 12.44% p.a. Amount of vehicle loan repayable within a period of one year is Rs.22.44 Lacs (excluding interest).
5. Dues to Micro, Small and Medium Enterprises:
As represented by the company, the Company does not owe any sum to Micro, Small, and Medium Enterprises Development Act, 2006. as at 31st March, 2018.The auditors have relied on the information given by Company, Accordingly, the company has not made a separate disclosure under trade payable in part-l balance sheet as required by the notification dated4th September, 2015 pertaining to alteration in schedule III issued by MCA.
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognised in the balance sheet.
6. Segment Information
The Company is engaged in the business of manufacturing Welding consumables, Copper coated wires, Flux Cored Wires and Welding fluxes and is organisationally managed in two units. Based on the guiding principles given by the Accounting Standard - 17 "Segment Reporting" the company''s business comprises of only one segment. It has customers in India as well as out side India. Thus the company has only one business segment but different geographical reporting segment i.e Domestic and International
Fair Value Hierarchy
To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instrument into three levels prescribed under the accounting standard.
Level 1: Level 1 hierarchy includes financial instrument measured using quoted prices
Level 2: The fair value of financial instrument that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
7. Financial Risk Management
i. Risk management framework
The Company''s board of directors have overall responsibility for the establishment and oversight of the Company''s risk management framework.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
As informed by Management on transition the exposure to risk to Financial Assets & Liabilities is not Material.
8. Long term contracts and derivatives contract in the financial year
The Company does not have any long-term contract including long term derivative contract.
9. Investor Education and Protection Fund:
The Company has transferred Rs. 45,163/- pertaining to the financial year 2009-10 (P.Y.2016-17 Rs.46,124.70) to the Investor Education and Protection Fund towards Unclaimed Dividend. The Company will transfer Rs. 52,990.30/-pertaining to the financial year 2010-11 to the Investor Education and Protection Fund by 15th November 2018.
10. Corporate Social Responsibility (CSR):
During the year, the Company was required to spend 2% of average net profit of last three years towards CSR expenditure as per Section 135 of the Act which works to Rs.11,53,134/-for the year. The Company has spent Rs.10,00,000/-amount on CSR expenditure(PY2017-18:Rs.11,99,000).
11. The Board of Directors has recommended a dividend of 15% on the paid up equity share capital of the Company, which amounts to Rs.0.30/- per share, subject to the approval of the members at their ensuing Annual General Meeting.
12. The Company has not accepted any deposit from the public, within the meaning of Sections 73 to 76 of companies Act 2013 and the rules framed thereunder.
13. Previous year''s figures have been regrouped/rearranged wherever considered necessary, to confirm to the current period''s presentation.
Mar 31, 2016
1. Particulars of Holding Company Not Applicable
2. Rights, Preference and Restrictions of Share holders
Equity shares of the company has par value of Rs.2/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the company, the holder of equity shares will be entitled to receive remaining assets if any after distribution of all preferential accounts. The distribution will be pro-rata to the equity share held by the shareholder.
Apart from right, restrictions and preferences prescribed by the companies Act 2013.The Articles of Association of the company elaborately deal with the above he reader is requested to refer to respective documenter details.
26.Contingent liabilities and commitments
a. Guarantees outstanding as at 31 9 March, 2016, (partly secured by lien on fixed deposits to the extent of 10% of the guarantee amount) : Rs 3322,894/- (as at319 March,2015: Rs.1,683,106/-)
b. Disputed Demands against the Company as at 31" March, 2015 (paid under protest and thereby reflecting under Loans and Advances): I) Custom Duty - Rs. 1.02 Cr. against which the Company has deposited Rs. 1,500,000/- under protest (as at 31 * March 2015: Rs. 1,500,000/-).The Company expects favourable outcome and hence no provision made in the books.
ii) Excise Duty- Rs 20,710,006 (asat319March 2015 :Rs 20,710,006/-)
The Company had received a show cause notice dated 12th May 2010 demanding Rs.4.02 Cr.of CENVAT credit on certain imported material, imported in the year 2008-09. Under the instructions from excise authorities the Company has already reversed under protest CENVAT credit of Rs. 3.09 Cr. in the earlier year. Pending disposal of the case a sum of Rs. 2.1 Cr. reversed under protest is shown under "Claims against the excise authorities" under the head loans and advances. After filing an early hearing application on 10* August, 2015,the matter came up several timesduringthefinancialyear,butwasadjourned.Thenextdateofhearingis7
c. Assessment for Sales Tax/VAT for the foil owing year has been completed. The Sales Tax/Vat demand has been raised for non submission of Central Sales Tax Declaration Forms. The Company has filed appeal for the following mentioned years seeking time for submission of Central Sales Tax Declaration Forms. The Management is of the opinion that there will be no liability as pending Central Sales Tax Declaration Forms will be submitted soon.
d. Income Tax Liability as per TDS (Traces) for various years is Rs.9,96,040/-.
The Management has represented that necessary rectification applications are being made and there would not be any liability on this count. Except as described above there is no pending litigation which the Company believes could reasonably expected to have material adverse effect on the results of operations, Cash flow or the financial position of the Company.
3. Borrowings
Secured Loan
a. Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both present and future. The term loans are repayable in instalments and carried interest @ 12.70% p.a. Final repayments are due on December, 2016. Amount of term loan repayable within a period of one year is Rs. 355.54 Lacs. During the year the Company has repaid its principle and interest on due dates.
b. Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified immovable and movable fixed assets of the Company ranking pari-passu by way of second charge. The facilities carried interest varying from @11.50% p.a. to @12.25% p.a.
c Vehicle Loans are Secured by hypothecation of related vehicle. The vehicle loans are repayable in instalments spread over 3 to 5 years and carries interest ranging from 9.3% p.a.to 12.44% p^. Amount of vehicle loan repayable within a period of one year is Rs. 20.66 Lacs (excluding interest) Amount of Vehicle loan repayable within a period of 1 year is Rs. 20.66 Lacs (excluding interest).The same is shown under Note No.4''LongTerm Borrowing''.
Unsecured Loan:
The company has repaid all Interoperate deposit (ICDs) from various parties.
4. Based on the information available with the Company, the amounts due to SSI units and suppliers registered under Micro, Small and Medium Enterprises Development Act; 2006 as at 31 "March 2016 are not outstanding for more than 30days.TheSSI units have been identified by the Company and relied upon by the auditors.
5. In the opinion of the management, the current assets, loans & advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.
6. DuringtheyeartheCompanyhassoldaninvestmentinflatforacDnsiderationofRs.3.59Cr.Theresultantgainisshownasprofitfromsaleofinvestment in other income.
7. The Company has followed the Accounting Standard on ''Employee Benefits''(AS 15) as amended and the details are as under
The Company has funded the gratuity liability through LIC of India. The following actuarial assumptions are followed by LIC. Actuarial Assumptions:
Mortality Rate As per 1994-96 LIC mortality tables (Std.)
Withdrawal Rate Actual during last three years
Salary Escalation Rate 4% for each year
Discounting Rate Present discounting rate at LIC 8%
Gratuity Benefits As per Company rules
8. Related Party Disclosures
Related Party disclosures, as required by AS-18"Related Party Disclosures''^ given below:-Relationship
(D Key Management Personnel
Mr.S.L.Agarwal- Managing Director Mr.S.M.Agarwal - Executive Director Mr.G.ICSaraf-Executive Director Mr.M.P.Dhanuka -Executive Director (Marketing)
Mrs.Payal Agarwal-Director Finance&CFO Mr.O.P.Agarwal-Chief Marketing Officer Mr.Umesh Agarwal - Chief Operating Officer Mr.Nikhil Agarwal -General Manager-Systems Ms.Puja Agarwal - Operational Manager
(II) Relatives of Key Management Personnel
Mrs.Nirmala Agarwal - Public Relation Officer Mrs.Sneha Agarwal - Administrative Manager Mrs.Ranjana Saraf
(iil) Entities over which KMP has Significant Influence (with whom transactions have taken placeduringtheyear)
Anant Business Pvtltd R Shankarlal Sales Pvt Ltd Vidya FinvestLtd
Note: Related party relationship is as identified by the Company and relied upon by the auditors.
9. Information regarding managerial remuneration:
Statement of Profit & Loss includes managerial remuneration as per the Companies Act 2013 for the year 2015-16 is Rs. 12,765,431/-; (2014-15: Rs. 9,661,561/-).The said remuneration excludes perquisites which are not counted for the purpose of remuneration.
10. Long term contracts and derivatives contract in take financial year:
The Company does not have any long-term contract including long term derivative contract.
11. Investor Education and Protection Fund:
The amount of Rs. 31,243.20 for F.Y. 2007-08 is required to be transferred to the Investor Education and Protection Fund. The Company has initiated the process of transferring the same to the I EPF.
12. Corporate Social Responsibility(CSR):
During the year the Company was required to spend 2% of average profits for last three years towards CSR expenditure as per Section 135 of the Act which works out to Rs.12,11,401.32fbrthe year. The Company has spent Rs.12,12,000/- amount on CSR expenditure.
13. Public deposit:
The Company has not accepted any deposit from the public within the meaning of Sections 73 to 76 of companies Act 2013 and the rules framed there under.
14. Previous year''s figures have been regrouped/rearranged wherever considered necessary, to conform to the current period''s presentation.
Mar 31, 2015
1. Particulars of Holding Company
Not Applicable
2. Rights, Preference and Restrictions of Share holders ^ Equity shares
of the company has par value of Rs. 21- per share. Each holder of equity
shares is entitled to one vote per share. In the event of liquidation of
the company, the holder of equity shares will be entitled to receive
remaining assets if any after distribution of all prefrential
accounts.The distribution will be pro-rata to the equity share held by
the shareholder.
Apart from right,restrictions and preferences prescribed by the
companies Act 1956.The Articles of Association of the company
elaborately deal with the above.The reader is requested to refer to
respective document for details.
3. There are no shares reserved for issue under options and contracts
commitments for the sale of shares / disinvestment
Pursuant of order of the Honorable High Court, Mumbai during the year
2008-09,901,786 Equity shares have been issued for the consideration
other than cash to amalgamating companies in the Scheme of Amalgamation
of Ferroseal India Private Limited, Filarc Engineers Private Limited,
Sagar Merchandise Private Limited with GEE Limited.
4. There are no securities convertible into equity and preference share.
5. Contingentliabilitiesand commitments
* Guarantees outstanding as at 31st March 2015: Rs
1,683,106/-(asat3r'Mardr2014:Rs.5,523,952/-)
* Foreign LC outstanding as at 31st March 2015 :Rs49,870,363/- (as at
31st March 2014:Rs.4,687,120/-)
* Disputed Demands against the Company as at 31st March 2015 (paid
under protest and thereby reflecting under Loans and Advances):
Custom Duty - Rs 1,500,000 (as at 31st March 2014: Rs 1,500,000)
Excise Duty - Rs 20,710,006 (as at 31st March 2014: Rs 20,710,006)
The Company had received a show cause notice dated 12th May 2010
demanding Rs.4.02 Cr.of CENVAT credit on certain imported material,
imported in the year 2008-09.Under the instructions from excise
authorities the Company has already reversed under protest CENVAT
credit ofRs.3.09Cr in the earlier year. Pending disposal of the case a
sum of Rs.2.1 Cr. reversed under protest is shown under"Claims against
the excise authorities"under the head loans and advances.The Company
has filed an early hearing application and the next hearing is
scheduled on 10th August, 2015. Based on the legal opinion, thecompany
is hopeful of favourable order as the matter is one of interpretation
of law.
* Assessment for Sales Tax/Vat for the year 2006-07 has been completed
during the current financial year and the sales tax/vat demand of Rs.
23.25 Lacs excluding interest and penalty has been raised for non
submission of Central Sales Tax Declaration Forms.The Company has filed
appeal for the above mentioned years seeking time for submission of
Central Sales Tax Declaration Forms.The management is of the opinion
that there will be no liability as pending Central SalesTax Declaration
Forms will be submitted soon. Similar SalesTax Appeal for FY 2005-06 &
2008-09 is pending before Sales Tax Authorities forthe SalesTax demand
of Rs.21.70 Lacs&30.37 Lacs excluding interest & penalty, respectively.
However the company has made payment under protest of Rs.11 lacs, Rs.
10 Lacs & Rs. 12.55 Lacs for FY 2005-06,2006-07 & 2008-09 respectively,
which is shown under sundry assets in the Balance Sheet.
* Income Tax Liability as per TDS (Traces) for various years is Rs.l
1,77,928/-. The Management has represented that necessary rectification
applications are being made and there would not be any liability on
this count.
6. Borrowings
Secured Loan
a. Term Loans from Banks are secured by mortgage/hypothecation of
related immovable/movable assets of the Company, both present and
future.The term loans are repayable in instalments and carried interest
@ 13.70% p.a. Final repayments are due on August 2016. Amount of term
loan repayable within a period of one year is Rs.636.56 lacs.
b. Working Capital Loans from Banks are secured by hypothecation of
stocks and book debts ranking pari-passu between them as also
mortgage/hypothecation of specified immovable and movable fixed assets
of the Company ranking pari-passu by way of second charge.The
facilities carried interest @ 12.25%.
c. Vehicle Loans are secured by hypothecation of related vehides.The
vehicle loans are repayable in installments spread over 3 to 5 years
and carries interest ranging from 9.3% to 12.44%. Amount of vehicle
loan repayable within a period of oneyear is Rs.7.24 lacs (excluding
interest)
The Company has exited from consortium banking arrangement with
SBI&TJSB in 2015-16. All borrowing limits from SBI have been taken over
by DBS Bank Ltd.The company has entered into a multiple banking
arrangement with DBS Bank&TJSB Bank.
This decision has been taken to reduce finance cost as ROI offered by
DBS is significantly lower than that of SBI.
Unsecured Loan:
The Company has borrowed monies in form of Inter corporate deposit
(ICDs) from various parties.The balance as at 31st March,2015 is
Rs.720.29 Lacs.The said ICDs are unsecured and bears interest @ 12%p.a.
7. Change in Depreciation Estimate
In accordance with requirements prescribed under Schedule II of the
Companies Act 2013, the company has assessed the estimated useful life
of its assets and has adopted the useful life as prescribed in the
Schedule II in respect of all assets.
(i) The depreciation charged to Statement of Profit and Loss includes
the carrying amount of those assets whose useful life is over at the
beginning ofthefinancial year amounting to Rs.79,605/-
(ii) The depreciation charged to Statement of Profit and Loss is lower
by Rs 10,433,355/- on account of changes in estimated useful life
8. Based on the information available with the Company, the amounts
due to SSI units and suppliers registered under Micro, Small and Medium
Enterprises Development Act, 2006 as at 31st March 2015 are not
outstanding for more than 30 days.The SSI units have been identified by
the Company and relied upon by the auditors.
9. In the opinion of the management, the current assets, loans &
advances are expected to realize at least the amount at which they are
stated, if realized in the ordinary course of business and provision
for all known liabilities have been adequately made in the accounts.
10. Segment Information
The Company is engaged in the business of manufacturing Welding
consumables,Copper coated wires, Flux Cored Wires and Welding fluxes
and is organisationally managed in two units. Accordingly,the Company
has only one business reporting segment.lt has customers in India as
well as outside India. However,as per AS-17,segment reporting is not
required to be furnished.
11. Related Party Disclosures
Related Party disclosures, as required by AS-18 "Related Party
Disclosures"are given below:-
Relationship
(I) Key management personnel (Whole Time Directors)
Mr.S.L.Agarwal- Managing Director Mr.S.M.Agarwal - Executive Director
Mr.G.K.Saraf-Executive Director Mr.M.P.Dhanuka-Executive Director
(Marketing)
(ii) KeyManagementPersonnel(Relativesof Directors)
Mr.O.P.Agarwal - President (Marketing)
Mr.Umesh Agarwal - Vice President (Technical)
Mrs.Payal Agarwal - Vice President (Finance)
Mrs.Nirmala Agarwal - Public Relation Officer Mrs.Sneha
Agarwal-Administrative Manager Ms.Puja Agarwal - Operational Manager
(iii) Companies where Significant Influence exists(with whom
transactions have taken place)
Anant Business Pvt.Ltd RShankarlal Sales Pvt.Ltd Vitro Commodities Pvt.
Ltd.
BakshiChempharma Pvt.Ltd.
Note: Related party relationship is as identified by the company and
relied upon by the auditors
12. Information regarding managerial remuneration:
Statement of Profit & Loss includes managerial remuneration
fortheyear2014-15isRs.9,702,561; (2013-14: Rs.9,751,561)
Notes:
1 The Company's productsareexemptfrom licensing requirements under New
Industrial Policy in terms of Notification No. 477(E) dated 25th July,
1991 & F.No. 10/43/91 -LP dated 2nd August, 1991.
2. Opening Stock,Turnover,Closing Stock in respect of goods for resale
are included in respective product categories.
3. Installed Capacity details is given for a single standard size
production plan.
13. Long term contracts and derivatives contract in the financial
years:
The Company does not have longterm contract including long term
derivative contract.
14. Investor Education and Protection Fund:
There is noamount required to be transferred to Investor Education and
Protection Fund by the Company.
15. Corporate Social Responsibility (CSR):
During the year the company was required to spend 2% of average profits
for last three years towards CSR expenditure as per Section 135 of the
Act which works to Rs. 15,94,159/- for the year.The company has spent
Rs. 16,00,000/-amount on CSR expenditure.
16. Publicdeposit:
The company has not accepted any depositfrom the public, within the
meaning of Sections 73 to 76 of companies Act 2013 and the rules framed
there under.
17. Previous year's figures have been regrouped / rearranged wherever
considered necessary,to conform to the current period's presentation.
Mar 31, 2014
1. Rights, Preference and Restrictions of Share holders
Equity shares of the company has per value of Rs. 2/- per share. Each
holder of equity shares is entitled to one vote per share. In the event
of liquidation of the company, the holder of equity shares will be
entitled to receive remaining assets if any after distribution of all
prefrential accounts. The distribution will be pro rate to the equity
share held by the shareholder.
Apart from right, restrictions and preferences prescribed by the
companies Act 1956. The Articles of Association of the company
elaborately deal with the above. The reader is requested to refer to
respective document for details.
2. There are no shares reserved for issue under options and contracts
commitments for the sale of shares / disinvestment
3. There are no securities convertible into equity and preference
share.
4. Contingent liabilities and commitments
* Guarantees outstanding as at 31st March 2014: Rs. 5,523,952 (31st
March 2013: Rs.6,374,521)
* Foreign LC outstanding as at 31st March 2014: Rs 4,687,120 (31st
March 2013: 1,58,22,673)
* Disputed Demands against the Company as at 31st March 2014 (paid
under protest and thereby reflecting under Loans and Advances): Custom
Duty - Rs. 1,500,000 (31st March 2013: Rs. 1,500,000)
* Assessment for Sales Tax/Vat for the year 2005-06 and 2008-09 has
been completed during the current financial year and the sales tax/vat
demand of Rs. 21.70 lacs and Rs. 30.37 Lacs excluding interest and
penalty for the year 2005-06 and 2008-09 respectively has been raised
for non submission of Central Sales Tax Declaration Forms. The Company
has filed appeal for the above mentioned years seeking time for
submission of Central Sales Tax Declaration Forms. The management is of
the opinion that there will be no liability as pending Central Sales
Tax Declaration Forms will be submitted soon. However the company has
made payment under protest of Rs. 2,350,000/- which is shown under
sundry assets in the Balance Sheet
5. Secured Loan
a. Term Loans from Banks are secured by mortgage/hypothecation of
related immovable/movable assets of the Company, both present and
future. The term loans are repayable in installments and carried
interest @ 13.70% p.a. in the last fiscal. Final repayments are due on
August 2016. Amount of term loan repayable within a period of one year
is Rs.664.84 lacs.
b. Working Capital Loans from Banks are secured by hypothecation of
stocks and book debts ranking pari-passu between them as also
mortgage/hypothecation of specified immovable and movable fixed assets
of the Company ranking pari-passu by way of second charge. The
facilities bore interest @12.25% in the last fiscal.
c. Vehicle Loans are secured by hypothecation of related vehides. The
vehicle loans are repayable in installments spread over 3 to 5 years
and carries interest ranging from 9.3% to 12.44%. Amount of Vehide loan
repayable within a period of one yearis Rs. 36.58 Lacs (excluding
interest).
d. Foreign Currency Term Loan (FCTL) facility, carved out within the
overall term loan facility, has been repaid in full in the current
financial year.
e. During the year the company has borrowed money in form of Inter
corporate deposit (ICDs) from various parties. The said ICDs are
unsecured and bears interest @ 12%p.a.
6. No amount was due for credit to Investor Education & Protection
Fund as at 31st March 2014.
7. Based on the information available with the Company, the amounts
due to SSI units and suppliers registered under Micro, Small and Medium
Enterprises Development Act, 2006 to extent identified as at 31st March
2014 are not outstanding for more than 30 days. The SSI and MSME units
have been identified by the Company and relied upon by the auditors.
8. In the opinion of the management, the current assets, loans &
advances are expected to realize at least the amount at which they are
stated, if realized in the ordinary course of business and provision
for all known liabilities have been adequately made in the accounts.
9. The Company has received a show cause notice dated 12th May 2010
demanding Rs.4.02 Cr. of CENVAT credit on certain imported material,
imported in the year 2008-09. Under the instructions from excise
authorities the Company has already reversed under protest CENVAT
credit of Rs.3.09 Cr in the earlier year. Pending disposal of the case
a sum of Rs. 2.1 Cr. reversed under protest is shown under "Claims
against the excise authorities" under the head loans and advances. The
Company has replied to the show cause notice and based on the legal
opinion, is hopeful of favorable order, as the matter is one of
interpretation of law.
10. Segment Information
The Company is engaged in the business of manufacturing Welding
electrodes, Copper coated wires, Flux Cored Wires and Welding fluxes
and is organisationally managed in two units. Accordingly, the Company
has only one business reporting segment. It has customers in India as
well as outside India. However, as per AS-26, segment reporting is not
required to be furnished.
11. Related Party Disclosures
Related Party disclosures, as required by AS-18 "Related Party
Disclosures" are given below:-
Relationship
I) Key management personnel (Whole Time Directors
Mr. S. L. Agarwal - Managing Director
Mr.S.M. Agarwal - Executive Director
Mr. G. K. Saraf - Executive Director
Mr.M.P. Dhanuka - Executive Director (Marketing)
(ii) Key Management Personnel (Relatives of Directors)
Mr.O.P. Agarwal - Vice President (Marketing)
Mr. Umesh Agarwal - Vice President (Technical)
Mrs. Payal Agarwal - Vice President (Finance)
Mrs. Nirmala Agarwal - Public Relation Officer
Mrs. Sneha Agarwal - Administrative Manager
(iii) Companies where Significant Influence exists (with whom
transactions have taken place)
Anant Business Pvt. Ltd
R Shankarlal Sales Pvt. Ltd
Vitro Commodities Pvt. Ltd.
Bakshi Chempharma Pvt. Ltd.
12. a) Information regarding managerial remuneration
Statement of Profit & Loss includes managerial remuneration for the
year 2013-14 (Rs. 9,751,561);(2012-13: Rs. 9,107,132)
Note. The computation of managerial remuneration u/s 198/349 of the
Companies Act, 1956 has not been provided as no commission is paid to
the Directors.
b) Information regarding payment to relatives of directors Statement of
Profit & Loss includes payment to relatives of directors as under:
Notes:
1. The Company''s products are exempt from licensing requirements under
New Industrial Policy in terms of Notification No. 477(E) dated 25th
July, 1991 & F.No. 10/43/91 -LP dated 2nd August 1991.
2. Opening Stock, Turnover, Closing Stock in respect of goods for
resale are included in respective product categories.
3. Installed Capacity data is given for a single standard size
production plan.
13. Previous year''s figures have been regrouped / rearranged wherever
considered necessary, to conform to the current period''s presentation.
Mar 31, 2013
1. Secured Loan
a. Term Loans from Banks are secured by mortgage/hypothecation of
related immovable/movable assets of the Company''''both present and
future.The term loans are repayable in installments spread over 4.5
years and carries interest at 16% to 13.4% p.a. Final repayments are
due on August 2016. Amount of term loan repayable within a period of
one year is Rs.512.34 lacs (excluding interest).
b. Working Capital Loans from Banks are secured by hypothecation of
stocks and bookdebts ranking pari-passu between them as also
mortgage/hypothecation of specified immovableandmovablefixed assets of
the Company ranking pari-passu by way of second charge.The facilities
carry interest rangingfrom 15.75% to 10.60% in the last fiscal.
c. Vehicle Loans are secured by hypothecation of related vehicles.The
vehicle loans are repayable in installments spread over 3 to 5 years
and carries interest ranging from 9.3% to 12.44%. Final repayments are
due till November 2014. Amount of term loan repayable within a period
of one year is Rs.41.73 lacs (excluding interest)
d. A bank has carved-out Foreign Currency Term Loan (FCTL) facility
within the overall term loan facility sanctioned by the bank in
2011-12.The Company has repaid the FCTL as and when it became due on
maturity in 2012-13''''thereby recrediting the Rupee term loan
account.Further''''the Company has entered into fresh FCTL in 2012-13.
Since the FCTLs are repayable after a year'''' the bank recredits the
Rupee Term Loan account accordingly. Hence'''' there is no repayment
schedule for the FCTL.The carved-out portion of Loan is secured by
mortgage / hypothecation of related immovable/ movable assets of the
Company'''' both present and future and carries interest ranging from 6.5%
to 8.8%.
2. No amount was due for credit to Investor Educations Protection
Fund as at 31st March 2013.
3.The amounts due to SSI units as at 31" March 2013 are not
outstanding for more than 30 days.The SSI units have been identified by
the Company and relied upon by theauditors.
The Company has not received any intimation from "suppliers" regarding
their status under the Micro'''' Small and Medium Enterprises Development
Act'''' 2006 and hence disclosures'''' if any'''' relating to amounts unpaid as
at the year end together with interest paid / payable as required under
the said Act have notbeenfurnished.
4. In the opinion of the management'''' the current assets'''' loans &
advances are expected to realize at least the amount at which they are
stated'''' if realized in the ordinary course of business and provision
for all known liabilities have been adequately made in the accounts.
5 .The Company has received a show cause notice dated 12th May 2010
demanding Rs.4.02 Cr. of CENVAT credit on certain imported material''''
imported in the year 2008-09.Undertheinstructionsfrom excise
authorities the Company has already reversed under protest CENVAT
credit of Rs.3.09Cr in the earlier year. Pending disposal of the case a
sum of Rs.2.1 Cr. reversed under protest is shown under"Claims against
the excise authorities"underthe head loans and advances.The Company has
replied to the show cause notice and based on the legal opinion'''' is
hopeful of favorable order'''' as the matter is one of interpretation of
law.
6. Related Party Disclosures
Related Party disclosures''''as required by AS-18"Related Party
Disclosures"are given below:-
Relationship
(i) Key management personnel (Whole Time Directors)
Mr. S. L. Agarwal - Managing Director
Mr. S. M. Agarwal - Executive Director
Mr. G. K. Saraf - Executive Director
Mr. M. P. Dhanuka - Executive Director (Marketing)
(ii) Key Management Personnel (Relatives of Directors) Mr. O.P. Agarwal
- Vice President (Marketing) Mr. Umesh Agarwal - Vice President
(Technical) Mrs. Payal Agarwal - Vice President (Finance) Mrs. Nirmala
Agarwal - Public Relation Officer Mrs.Sneha Agarwal - Administrative
Manager
(iii) Companies where Significant Influence exists (with whom
transactions have taken place) Anant Business Pvt. Ltd RShankarlal
Sales Pvt. Ltd Vitro Commodities Pvt. Ltd. Bakshi Chempharma Pvt. Ltd.
7. Previous year''s figures have been regrouped / rearranged wherever
considered necessary'''' to conform to the current period''s presentation.
Mar 31, 2012
The accompanying notes are an integral part of the financial statements
The accompanying notes are an integral part of the financial statement
a) Cash Flow Statement has been prepared under the Indirect method as
set out in the Accounting Standard-3 as per the Companies (Accounting
Standards) Rule,2006
b) Fixed Deposit with bank having more than 12 months maturity are not
included in cash and cash equivalents
c) Figures in bracket indicates outflows.
d) Previous year figures are regrouped and reclassified, wherever
necessary.
1. Particulars of Holding Company Not Applicable
2. Rights, Preference and Restrictions of Share holders
Equity shares of the company has per value of Rs. 21- per share. Each
holder of equity shares is entitled to one vote per share. In the event
of liquidation of the company, the holder of equity shares will be
entitled to receive remaining assets if any after distribution of all
preferential accounts. The distribution will be pro rate to the equity
share held by the shareholder.
Apart from right, restrictions and preferences prescribed by the
companies Act 1956.The Articles of Association of the company
elaborately deal with the above. The reader is requested to refer to
respective document for details.
3 There are no shares reserved for issue under options and contracts
commitments for the sale of shares / disinvestment Pursuant of order of
the Honorable High Court, Mumbai during the year 2008-09,901,786 Equity
shares have been issued for the consideration other than cash to
amalgamating companies in the Scheme of Amalgamation of Ferro seal India
Private Limited, Filarc Engineers Private Limited, Sagar Merchandise
Private Limited with GEE Limited.
4 There are no securities convertible into equity and preference share.
5. Contingent liabilities and commitments
- Guarantees outstanding as at 31st March 2012 :Rs.5,890,216
(31stMarch 2011:Rs. 1,454,913)
- Foreign LC outstanding as at 31st March 2012:Rs. 9,373,763 (31st
March 2011: Rs.8,841,287
- Disputed Demands against the Company as at 31st March 2012 (paid
under protest and thereby reflecting under Loans and Advances): Custom
Duty:Rs.1,500,000 (31 st March 2011: Rs.1,500,000)
6. Secured Loan
a. Term Loans from Banksare secured by mortgage/hypothecation of
related immovable/movable assets of the Company, both present and
future. The term loans are repayable in installments spread over 4.5
years and carries interest at 16% p.a. Final repayments are due on
August 2016. Amount of term loan repayable within a period of one year
is Rs.240.96 lacs (excluding interest).
b. Working Capital Loans from Banks are secured by hypothecation of
stocks and book debts ranking pari-passu between them as also
mortgage/hypothecation of specified immovable and movable fixed assets
of the Company ranking pari-passu by way of second charge. The
facilities carry interest ranging from 13.70% to 14.25%.
c. Vehicle Loans are secured by hypothecation of related vehides.The
vehicle loans are repayable in installments spread over 3 to 5 years
and carries interest ranging from 9.3% to 12.44%. Final repayments are
due from Dec 2013 till November 2014. Amount of term loan repayable
within a period of one year is Rs. 25.42 lacs (excluding interest)
d. During the year, a bank has carved-out Foreign Currency Term Loan
(FCTL) facility within the overall term loan facility sanctioned by the
bank. However the Company is yet to receive repayment schedule for
this carved-out amount of FCTL. Pending formal sanction of repayment
schedule the Company is maintaining adequate margin deposit. The
carved-out portion of Loan is secured by mortgage/hypothecation of
related immovable/movable assets of the Company, both present and future
and carries interest ranging from 6.5% to 8.8%.
7. No amount was due for credit to Investor Education & Protection
Fund as at 31st March 2012.
8.The amounts due to SSI units as at 31s' March 2012 are not
outstanding for more than 30 days. The SSI units have been identified by
the Company and relied upon by the auditors.
The Company has not received any intimation from "suppliers" regarding
their status under the Micro, Small and Medium Enterprises Development
Act, 2006 and hence disclosures, if any, relating to amounts unpaid as
at the yearend together with interest paid / payable as required under
the said Act have not been furnished.
9. In the opinion of the management, the current assets, loans &
advances are expected to realize at least the amount at which they are
stated, if realized in the ordinary course of business and provision
for all known liabilities have been adequately made in the accounts.
10 .The Company has received a show cause notice dated 12th May 2010
demanding Rs.4.02 Cr. of CENVAT credit on certain imported material,
imported in the year 2008-09. Under the instructions from excise
authorities the Company has already reversed under protest CENVAT
credit of Rs.3.09 Cr in the earlier year. Pending disposal of the case a
sum of Rs. 2.1 Cr. reversed under protest is shown under "Claims against
the excise authorities" under the head loans and advances. The Company
has replied to the show cause notice and based on the legal opinion, is
hopeful of favorable order, as the matter is one of interpretation of
law.
11. Segment Information
The Company is principally engaged in a single business segment viz.,
welding electrodes and related components. The Company has identified
two geographical segments which comprises of Overseas and India.
However, overseas segment reporting is not given as the turnover from
the said business is less than 10% of the total turnover
of the Company. Therefore, segment reporting as per Accounting Standard
17"Segment Reporting "is not given.
12. Related Party Disclosures
Related Party disclosures, as required by AS-18 "Related Party
Disclosures" are given below:-
Relationship
(i) Key management personnel (Whole Time Directors)
Mr.S. L. Agarwal - Managing Director
Mr. S. M. Agarwal - Executive Director
Mr. 6. K. Saraf - Executive Director
Mr. M. P. Dhanuka - Executive Director (Marketing)
(ii) Key Management Personnel (Relatives of Directors)
Mr.O.P. Agarwal - Vice President (Marketing)
Mr. Umesh Agarwal - Vice President (Technical)
Mrs.Payal Agarwal - Vice President (Finance)
(iii) Companies where Significant Influence exists (with whom
transactions have taken place)
Anant Business Pvt. Ltd
R Shankarlal Sales Pvt. Ltd Vidya Finvest Pvt. Ltd.
Vitro Commodities Pvt. Ltd.
Bakshi Chempharma Pvt. Ltd.
Note: Related party relationship is as identified by the Company and
relied upon by the auditors.
Note: The computation of managerial remuneration u/s 198/349 of
the Companies Act, 1956 has not been provided as no commission is paid
to the Directors.
Notes:
1. The Company's products are exempt from licensing requirements under
New Industrial Policy in terms of Notification No. 477(E) dated 25th
July, 1991 & F.No. 10/43/91 -LP dated 2nd August 1991.
2. Opening Stock, Turnover, Closing Stock in respect of goods for resale
are included in respective product categories.
3. Installed Capacity data is given for a single standard size
production plan.
13. Previous year's figures have been regrouped / rearranged wherever
considered necessary, to conform to the current period's presentation.
Schedules 1 to 22 annexed to and forming part of the statement of
accounts have been duly authenticated.
Mar 31, 2011
1. Contingent liabilities and commitments
- Guarantees outstanding as on 31 st March 2011:Rs. 1,454,913 (31 st
March 2010 : Rs. 3,523,222)
- Foreign LC outstanding as on 31 st March 2011:Rs. 8,841,287 (31 st
March 2010 : Rs. 1,673,914)
- Disputed Demands against the Company as on 31st March 2011 (paid
under protest and thereby reflecting under Loans and Advances):
Custom Duty - Rs. 1,500,000 (31 st March 2010: Rs. Nil)
2. Secured Loan
a. Term Loans from Banks are secured by mortgage/hypothecation of
related immovable/movable assets of the Company, both present and
future.
b. Working Capital Loans from Banks are secured by hypothecation of
stocks and book debts ranking pari-passu between them as also
mortgage/hypothecation of specified immovable and movable fixed assets
of the Company ranking pari- passu by way of second charge.
c. Vehicle Loans are secured by hypothecation of related vehicles.
Amount of term loan repayable within a period of one year:Rs.
27,683,100
3. No amount was due for credit to Investor Education & Protection
Fund as at 31 st March 2011.
4. The amounts due to SSI units as at 31st March 2011 are not
outstanding for more than 30 days. The SSI units have been identified
by the Company and relied upon by the auditors.
5. The Company has not received any intimation from suppliers
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures, if any, relating to
amounts unpaid as at the year end together with interest paid / payable
as required under the said Act have not been furnished.
6. In the opinion of the management, the current assets, loans &
advances are expected to realize at least the amount at which they are
stated, if realized in the ordinary course of business and provision
for all known liabilities have been adequately made in the accounts.
7. The Company has received a show cause notice dated 12th May 2010
demanding Rs. 4.02 Cr. of CENVAT credit on certain imported material,
imported in the year 2008-09. Under the instructions from excise
authorities the Company has already reversed under protest CENVAT
credit of Rs. 3.09 Cr in the earlier year. Pending disposal of the case
a sum ofRs. 2.1 Cr. reversed under protest is shown under "Claims against
the excise authorities" under the head loans and advances. The company
has replied the show cause notice and based on the legal opinion is
hopeful of favourable order as the matter is one of interpretation of
law.
8. Details of audit fees paid during the year:
Audit Fees - INR 175,000 Tax Audit Fees - INR 30,000 Certification &
other Fees - INR 10,000
9. Unhedged Foreign Exchange Exposure:
Details of Foreign Currency balances not hedged:
2010-11
Particulars Foreign Currency Foreign Currency Indian Rupee
Denomination Amount (equivalent in
lacs)
Assets (Sundry
Debtors) USD 1,039,498 468.45
Assets (Adva
nce to EUR 4,030.54 2.55
Sundry
Creditors) USD 95,932 42.83
Assets (Bank
Balance) USD 074 33.04
AED 12,215.20 148,681.96
Liabilities EUR - -
(Sundry
Creditors)
2009-10
Particulars Foreign Currency Foreign Currency Indian
Denomination Amount Rupee
lacs) (equivalent
t in lacs)
Assets (Sundry USD 348,334.63 157.26
Debtors)
Assets (Adva EUR - -
nce to
Sundry USD 68,703.60 30.80
Creditors)
Assets (Bank USD 3,937.19 175,691.38
Balance) AED 236.80 2,903.10
Liabilities EUR 10,674 6.46
(Sundry
Creditors)
10. Segment Information
The Company is principally engaged in a single business segment viz.,
welding electrodes and related components. The Company has identified
two geographical segments which comprises of Overseas and India.
However, overseas segment reporting is not given as the turnover from
the said business is less than 10% of the total turnover of the
Company. Therefore, segment reporting as per Accounting Standard 17
"Segment Reporting" issued by the Institute of Chartered Accountants of
India is not applicable to the Company. Therefore, segment reporting as
per Accounting Standard 17 "Segment Reporting".
11. Related Party Disclosures
Related Party disclosures, as required by AS-18"Related Party
Disclosures"are given below:-
Relationship
i) Key management personnel (Whole Time Directors)
Mr. S.LAgarwal- Managing Director
Mr.S.M.Agarwal - Executive Director
Mr. M.P. Dhanuka-Executive Director (Marketing)
Mr Avinash Saraf- Whole Time Director ** ÃResigned W.e.f. - 31.03.2011
ii) Key Management Personnel (Relatives of Directors)
Mr. G.K. Saraf - Chief Executive Officer **
Mr. OP. Agarwal -Vice President (Marketing)
Mr. U. Agarwal -Vice President (Technical)
Mrs. P. Agarwal -Vice President (Finance)
- Appoint as a Executives Directors W.e.f. 01.04.2011
iii) Companies where Significant Influence
exists (with whom transactions have taken place)
Anant Business Pvt. Ltd.
R Shankarlal Sales Pvt. Ltd.
Vidya Finvest Pvt. Ltd.
Vitro Commodities Pvt. Ltd.
Bakshi Chempharma Pvt. Ltd.
12. Previous year's figures have been regrouped / rearranged wherever
considered necessary, to confirm to the current period's presentation.
Mar 31, 2010
1. Contingent liabilities and commitments
. Guarantees outstanding as on 31st March 2010 Rs. 3,523,222 (31st
March 2009: Rs. 3,644,289)
. Foreign LC outstanding as on 31 st March 2010 Rs. 1,673,914 (31 st
March 2009: Rs. Nil)
2. Share Capital
a. Authorised Share Capital- Shareholders of the Company have approved
increase in authorized share capital of the Company at the annual
general meeting held on the 30th September, 2009 from existing capital
of Rs. 5 crores to Rs. 10 crores.
b. Paid-up Share Capital- During the year the Company issued 4,725,175
bonus shares of Rs. 2 each, fully paid up, in the ratio of 1 (one)
equity share for every 4 equity shares as approved by the shareholders
at the EGM held on the 14th of August, 2009. Thus, the paid up share
capital as on 31 st March, 2010 has increased by Rs. 9,450,350.
3. Secured Loan
a. Term Loan: As on 31 st March 2010, Rs. 178,936,669 (RY. Rs.
17,680,087)
During the year, the Company obtained sanction of new term loan
amounting to Rs. 33 crores, to part finance the project for expanding
capacity of two plants, out of which, Rs. 13 crores has been availed as
on 31st March, 2010. The term loan is repayable by August, 2016 with 18
months moratorium period.
Security for Term Loan (SBI)
. 1st Mortgage/ Hypothecation charge on fixed assets of the Company
including land & building, plants machinery, furniture & fixtures,
computers etc. (existing & proposed to be acquired) at Kalyan & Kolkata
excluding the leasehold land at Wagle Estate, MIDC, Thane, residential
flat and vehicles on parri-passu basis with the Thane Janata Sahakari
Bank.
. Collateral 2nd hypothecation charge on entire current assets
including stocks of raw material, work-in-progress, finished goods,
stores & spares and book debts on parri-passu basis.
Security for Term Loan (Thane Janata Sahakari Bank)
. 1st Mortgage/Hypothecation charge on fixed assets of the Company
including Land & Building and Plant & Machinery at Kalyan & Kolkata
including the leasehold land at Wagle Estate, MIDC, Thane on
parri-passu basis with the State Bank of India.
. Collateral Term Deposit kept as security with the Thane Janata
Sahakari Bank to remain as collateral covering existing and proposed
total exposure.
b. Cash Credit: As at 31 st March 2010, Rs. 160,038,412 (P.Y. Rs.
133,736,423) are secured by 1 st hypothecation charge on entire current
assets including stock of raw all stock of raw material,
work-in-progress, finished goods, stores & spares and book debts on
parri-passu basis with both the banks. It is also secured by 2nd charge
by way of mortgage/hypothecation on the assets considered under primary
security for the term loans on parri-passu basis.
The above loans sanctioned by the Thane Janata Sahakari Bank are also
guaranteed by Mr. S. L. Agarwal, Managing Director and Mr. S.M.
Agarwal, Executive Director.
c. Vehicle Loan: As at 31 st March 2010, Rs. 4,364,575 (P.Y. Rs.
4,876,899)
Vehicle loans are secured by hypothecation of vehicles.
4. No amount was due for credit to Investor Education & Protection
Fund as at 31 st March 2010.
5. The amounts due to SSI units as at 31st March 2010 are not
outstanding for more than 30 days.
6. The Company has not received any intimation from "suppliers"
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006 and hence disclosures, if any, relating to
amounts unpaid as at the year end together with interest paid / payable
as required under the said Act have not been furnished.
7. In the opinion of the management, the current assets, loans &
advances are expected to realize at least the amount at which they are
stated, if realized in the ordinary course of business and provision
for all known liabilities have been adequately made in the accounts.
8. The Company imported during financial year 2008-2009 certain
materials and after customizing and further processing sold them to
local and upcountry customers/dealers. The Company treated these goods
as inputs under CENVAT Credit Rules, 2004 and availed CENVAT credit
while dispatching/selling the materials from the factory. The Excise
Authorities have not accepted the Companys contention that they are
eligible for setting off excise duty payable on dispatches against duty
paid on imported inputs. On instructions from Excise Authorities the
Company reversed under protest the CENVAT credit availed to the tune of
Rs. 3.09 Crores comprising Basic, Education Cess, Higher Education Cess
and Additional Duty. The Company has now received Show Cause cum Demand
Notice dated 12th May, 2010 from Commissioner of Central Excise, Thane
stating why the authorities should not be demanding CENVAT credit
availed totaling Rs. 4.02 Crores. The Company has obtained legal
opinion from a top lawyer firm confirming that the Company has not
taken wrongful credit and that they were eligible for set-off of excise
duty payable on dispatches/sale. The management is in the process of
replying to the aforesaid show cause cum demand notice and is hopeful
of getting favourable orders from the authorities as the matter is one
of interpretation of law. Pending disposal of the case, a sum of Rs.
2.1 crores reversed under protest has been shown under"Claims against
the excise authorities" under the head Loans and Advances.
9.Consequent upon adoption of Accounting Standard on Employee
Benefits (AS 15) Revised 2005, issued by The Institute of Chartered
Accountants of India, the Company has followed the revised standard. As
required by the Standard, following disclosures are made. The Company
has funded the gratuity liability through LIC of India.The following
actuarial assumptions are followed by LIC.
Actuarial Assumptions:
Mortality Rate As per 1994-96 LIC mortality tables (Std.)
Withdrawal Rate Actual during last three years
Salary Escalation Rate 4% for each year
Discounting Rate Present discounting rate at LIC 8%
Gratuity Benefits As per Company rules
10.Segment Information
The Company is principally engaged in a single business segment viz.,
welding electrodes and related components.The Company has identified
two geographical segments which comprises of Overseas and India.
However, overseas segment reporting is not given as the turnover from
the said business is less than 10% of the total turnover of the
Company. Therefore, segment reporting as per Accounting Standard
17"SegmentReporting"issued by the Institute of Chartered Accountants of
India is not applicable to the Company.
11. Related Party Disclosures
Related Party disclosures, as required by AS-18"Related Party
Disclosures"are given below:-
Relationship
i) Key management personnel (Whole Time Directors)
Mr. S.L.Agarwal- Managing Director Mr.S.M.Agarwal - Executive Director
Mr. M.P. Dhanuka-Executive Director (Marketing) Mr Avinash Saraf -
Whole Time Director ii) Companies where Significant Influence exists
(with whom transactions have taken place) Anant Business Pvt. Ltd. R
Shankarlal Sales Pvt. Ltd. Vidya Finvest Pvt. Ltd. Vitro Commodities
Pvt. Ltd. Bakshi Chempharma Pvt. Ltd.
12.Previous years figures have been regrouped / rearranged wherever
considered necessary, to confirm to the current periods presentation.