Mar 31, 2018
Note: 1 - Capital management (a) Risk management
The Company''s objectives when managing capital are to:
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
The amount mentioned under total equity in balance sheet is considered as Capital.
(A) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
i) Trade receivables
Customer credit risk is managed by each business unit subject to the Company''s established policy, procedures and control relating to customer credit risk management. Trade receivables are non-interest bearing and are generally carrying 30 days credit terms. Outstanding customer receivables are regularly monitored. The Company has no concentration of credit risk as the customer base is widely distributed both economically and geographically. The ageing of trade receivables as of balance sheet date is given below. The age analysis have been considered from the due date:
ii) Financial instruments and deposits
Credit risk from balances with banks and financial institutions is managed by the Company''s finance department. For banks and financial institutions, only high rated banks/institutions are accepted.
Financial assets are considered to be of good quality and there is no significant credit risk.
The Company''s maximum exposure to credit risk for the components of the balance sheet at 31 March 2018, 31 March 2017 and 1 April 2016 is the carrying amounts as illustrated in Note 38.
(B) Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the underlying business, the Company maintains sufficient cash and liquid investments available to meet its obligation.
Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. The management also considers the cash flows projection and level of liquid assets necessary to meet these on a regular basis. Management monitors rolling forecasts of
76 I SHYAM CENTURY FERROUS limited
the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.
(i) Financing arrangements
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in INR.
Maturities of financial liabilities
The tables below analyses the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for all financial liabilities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.
The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31 March 2018, 31 March 2017 and 1 April 2016 the Company''s borrowings at variable rate were mainly denominated in INR.
The Company''s fixed rate borrowings are carried at Amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
(a) Interest rate risk exposure On Financial Liabilities:
The exposure of the Company''s financial liabilities to interest rate risk is as follows:
Note: 2 - Related Party Disclosures
I. Name of the related parties and related party relationship:
Names of the related parties where control exists Nature of relationship
A. Star Cement Limited (Formerly Cement Manufacturing Company Enterprise owned/influenced by KMP Limited) (SCL)
Meghalaya Power Limited (MPL) Associate
B. Key Management Personnel
Name of the Related Parties Nature of relationship
Mr. Sajjan Bhajanka Director
Mr. M.V.K.Nageswara Rao Chief Executive Officer
Mr. Uday Bahadur Chetri Chief Financial Officer (w.e.f. 30th May, 2017)
Ms. Neha Agarwal Company Secretary (w.e.f. 30th May, 2017)
(a) Based on legal opinion / decisions in similar cases, the Management believes that the Company has a fair chance of favorable decisions in cases mentioned here-in-above and hence no provision is considered necessary.
(b) Hon''ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the differential amount against furnishing of solvent surety. Based on the said judgment of Hon''ble High Court and legal opinion obtained by the Company, the differential excise duty refund of HNil (31 March 2017: H222.92 lacs, 1 April 2016: H167.69 lacs) has been recognized as revenue in the books of account.
(c) Para B2 of Ind AS 101 states that except as permitted, a first time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind ASs. As a result, no impact has been taken as on 1 April 2016.
Note: 45 - Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting, education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects.
A CSR Committee has been formed by Company as per the Act. The funds were primarily utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
a) Gross Amount required to be spent by the Company during the year is H12.37 lacs ( 31 March 2017: H6.94 lacs, 1 April 2016 H5.88 lacs)
I - Transition to Ind AS (First Time Adoption)
These are the Company''s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 1, have been applied in preparing the financial statements from the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 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). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.
A. Exemptions and exceptions availed
Set below are the applicable Ind AS optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A.1 Ind AS optional exemptions A.1.1 Deemed cost
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 recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value
A.1.2 Investments in associates
In separate financial statements, a first-time adopter that subsequently measures an investment in a associate at cost, may measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) in its separate opening Ind AS balance sheet. Selection of fair value or previous GAAP carrying amount for determining deemed cost can be done for associate .
Accordingly, the Company has elected to measure all of its investment in associate at their previous GAAP carrying value.
A.2 Ind AS mandatory exceptions A.2.1 Estimates
An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP
A.2.2 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the fact and circumstances that exits at the date of transition to Ind AS.
C: Notes to first-time adoption:
Note 1: Fair valuation of financial liability
As per Ind AS 109, financial liabilities are to be recognized at fair value. Hence the Company has recognized its financial liability at fair value with resultant impact as on the date of transition is recognized in retained earning. Subsequently these are measured at Amortized cost and interest as per effective interest rate are recognized in Statement of Profit and Loss.
Note 2: Employee benefit obligation
Under previous GAAP, actuarial gains and losses related to the defined benefit scheme for gratuity were recognized in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability / asset which is recognized in OCI. Consequently, the tax effect of the same has also been recognized in OCI instead of profit or loss.
Note 3: Deferred tax
The various transitional adjustments lead to different temporary differences. According to the accounting policies in Note 1, the Company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity.
Note 4: De-recognition of financial assets and liabilities
Ind AS 109 requires entity to derecognize a financial asset when, and only when the contractual rights to the cash flows from the financial asset expire, or it transfers the financial asset as and the transfer qualifies for derecognition. Para B2 of Ind AS 101 states that except as permitted, a first time adopter shall apply the derecognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition.
As a result, trade receivables increased by H 1228.48 lacs as at 31 March 2017 with a corresponding impact on current borrowings. Accordingly, the said adjustment
has no impact on either equity and profit or loss for the year ended 31 March 2017.
Note 5: Statement of cash flows
The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
6. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company.
7. The standalone financial statements are approved by the Audit Committee at its meeting held on 17th May, 2018 and by the Board of Directors on the same date.
8. Notes to the standalone financial statements comprises of information relevant for the group.
Mar 31, 2016
b) Terms/Rights attached to the Equity Shares & Notes
The Company has only one class of equity shares having par value of Rs.1/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend.
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.
c) Terms of issue of shares other than cash
Pursuant to the Scheme of Arrangement ("the scheme") between Star Ferro and Cement Limited (SFCL), the Company and their respective shareholders as approved by the Hon''ble High Court of Meghalaya at Shillong vide its order dated 31st March, 2015, the Company has issued and alloted 22,21,72,990 Equity Shares to the shareholders of SFCL in ratio of 1 (one) Equity share of Rs.1/- each of the Company as fully paid-up for every 1 (one) Equity Share of Rs. 1/- each held by them in SFCL.
d) Details of Shareholders holding more than 5% shares in the Company
1. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company.
2. EXCISE DUTY REFUND
The Hon''ble High Court at Guwahati (Shillong Bench) vide its order dated 12th September, 2012, has directed the Excise Department to release 50% of the differential amount against furnishing of solvent surety in line with the Interim Order dated 13th January, 2012 passed by Hon''ble Supreme Court in case of "VVF Ltd and others". Based on the said judgment of Hon''ble High Court and legal opinion obtained by the Company, the differential excise duty refund of Rs. 167.69 Lacs (Previous Years Rs.365.90 Lacs) has been recognized as revenue in the books of account.
3. MePDCL has raised invoices for cross subsidy surcharge at the rate of Rs. 1.51/ KWH as fixed by the State Regulatory Commission of Meghalaya for electricity consumed through open access during the year. The Company has appealed through the trade association before the Appellate Tribunal of Electricity (APTEL) for revision of tariff. However, the Company has taken provision in its books at the rate of Rs. 0.44/KWH as per the tariff proposed before APTEL which is according to the formula laid down in National Consumer Tariff Policy and the differential amount has been shown as Contingent Liability.
4. Ministry of Corporate Affairs (MCA) vide notification dated 29th August, 2014 has amended Schedule II to the Companies Act, 2013 requiring mandatory componentization of fixed assets for financial statements in respect of Financial Years commencing on or after 1st April, 2015. During the year, the Company has undertaken the Componentization of fixed assets w.e.f. 1st April, 2015 on the basis of technical evaluation and useful life thereof. Consequent to the same, the Depreciation expense is higher by Rs.0.38 Lacs and Profit Before Tax is lower by Rs.0.38 lacs for the year ended 31st March, 2016.
5. EMPLOYEE DEFINED BENEFITS
(a) Defined Contribution Plans: The Company has recognized an expense of Rs. 26.74 Lacs (Previous year Rs. 24.17 Lacs) towards the defined contribution plans.
(b) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more service is entitled to Gratuity on terms not less than the provisions of The Payment of Gratuity Act, 1972. The following table summarizes the components of net benefit expenses recognized in the Statement of Profit & Loss and amounts recognized in the Balance Sheet for the Gratuity.
(c) Under leave encashment scheme, the Company allows its employees to encash accumulated leave over and above thirty days at any time during the year.
6. Value of imported and indigenous Raw-materials and Stores & Spare parts etc. and their percentage to total consumption
7. As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three Financial Years on Corporate Social Responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural developments projects.
A CSR Committee has been formed by Company as per the Act. The funds were primarily utilized through out the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
a) Gross amount required to be spent by the Company during the year is Rs.5.88 Lacs (PY Rs. Nil)
8. Figures have been rounded off to the nearest Rs. in Lacs. Previous year''s figures including those given in brackets have been rearranged and regrouped where necessary to confirm to the current year''s classifications.
Mar 31, 2015
1 CORPORATE INFORMATION
Shyam Century Ferrous Limited (the Company) is a public company
domiciled in India and incorporated on 12.04.2011 under the provisions
of the Companies Act, 1956. Pursuant to the Scheme of Arrangement
between Star Ferro and Cement Limited (SFCL), the Company and their
respective shareholders as approved by the Hon'ble High Court of
Meghalaya at Shillong vide its order dated 31st March, 2015, all the
assets and liabilities of the Ferro Alloys division (i.e. business and
interest of SFCL in manufacture of Ferro Alloys including captive power
plant at Byrnihat) have been transferred to and vested in the Company
at their respective book values on a going concern basis with effect
from 1st April, 2014 being the appointed date. The Company is engaged
in manufacturing of Ferro Alloys and generation of Power. The
manufacturing unit is located at Byrnihat, Meghalaya. The company is
selling its product across India.
2. Basis of Preparation
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the Accounting Standards as
prescribed under section 133 of the Companies Act, 2013 read with Rule
7 of the Companies (Accounts) Rules, 2014 and the relevant provisions
of the Companies Act, 2013 ,to the extent notified. The financial
statements are prepared under the historical cost convention on accrual
basis and on the basis of going concern. The accounting policies are
consistently followed by the company and changes in accounting policy
are separately disclosed.
3. Terms/Rights attached to the Equity Shares & Notes
The company has only one class of equity shares having par value of
Rs.1/- per share. Each holder of equity shares is entitled to one vote
per share. The company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting
except in case of interim dividend.
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 bythe
shareholders.
a) Rupee Term Loan from financial institution is secured by equitable
mortgage of leasehold rights of land and first charge on fixed assets
of the Company's Ferro Alloys Plant at Byrnihat, Meghalaya and second
charge on current assets of the said unit. The Loan is to be repaid in
further 18 quarterly instalments.
b) Hire Purchase Finance from bank is secured by hypothecation of
respective vehicle/asset and is repayable within two years having
varying date of payment.
Working Capital facility from bank is secured by first charge on the
current assets and second charge on the fixed assets of the company's
Ferro Alloys Plant at Byrnihat, Meghalaya.
4. Scheme of Arrangement
a) Pursuant to the Scheme of Arrangement ("The Scheme") between Star
Ferro and Cement Limited (SFCL), the Company and their respective
shareholders as approved by the Hon'ble High Court of Meghalaya at
Shillong vide its order dated 31st March, 2015, all the assets and
liabilities of the Ferro Alloys division (i.e. business and interest of
the company in manufacture of Ferro Alloys including captive power
plant at Byrnihat in the State of Meghalaya) and investment in
83,58,998 Equity Shares of Meghalaya Power Limited of face value of
Rs.10/- each held by SFCL have been transferred to and vested in the
Company at their respective book values on a going concern basis with
effect from 1st April, 2014 being the appointed date. The said order of
the Hon'ble High Court has been filed with the Registrar of Companies
on 10th April, 2015, the effective date of the scheme and accordingly,
the Scheme of Arrangement has been given effect to in these accounts.
d) Pursuant to the said Scheme of Arrangement, the Company will issue
and allot Equity Shares to the shareholders of SFCL in ratio of 1 (one)
Equity Share of Rs.1/- each of the Company as fully paid - up for every
1 (one) Equity Share of Rs.1/- each held by them in SFCL. Pending
allotment of these shares, the amount of Rs.2,216.73 Lacs is shown as
'Share Capital - Pending Allotment' (net of shares to be cancelled
pursuant to the Scheme of Arrangement).
e) Consequent to the allotment of new shares as per the Scheme of
Arrangement, current share capital of the Company of Rs.5 Lacs would be
cancelled.
5. Contingent Liabilities
(Rs. in Lacs)
Particulars 3103.2015 31.03.2014
Contingent Liabilities not provided
for in respect of:-
(a) Bills discounted with banks 17.86 -
(b) Solvent surety given to Excise
Department against differential
excise duty refund 606.34 -
(Refer note no. 31)
Note: Based on discussion with the solicitors/favourable decisions in
similar cases/legal opinion taken by the company, the management
believes that the company has a good chance of success in cases
mentioned here-in-above and hence, no provision there against is
considered necessary.
6. There are no Micro, Small and Medium Enterprises, as defined in
the Micro, Small and Medium Enterprises Development Act, 2006 to whom
the Company owes dues on account of principal amount together with
interest and accordingly no additional disclosures have been made. The
above information regarding Micro, Small and Medium Enterprises has
been determined to the extent such parties have been identified on the
basis of the information available with the company.
7. Excise Duty Refund
Hon'ble High Court at Guwahati (Shillong Bench) vide its order dated
12th September, 2012, has directed the Excise Department to release 50%
of the differential amount against furnishing of solvent surety in line
with the Interim Order dated 13th January, 2012 passed by Hon'ble
Supreme Court in case of "VVF Ltd and others". Based on the said
judgment of Hon'ble High Court and legal opinion obtained by the
company, the differential excise duty refund of Rs.365.90 lakhs has
been recognised as revenue in the books of account.
8. The Company has charged depreciation based on the remaining useful
life of the assets as per the provisions and requirements of Schedule
II to the Companies Act, 2013 effective from April 1, 2014. Had there
not been any change in useful life of the Assets, depreciation for the
year would have been lower by Rs.6.01 Lacs and consequently profit
before tax for the year would have been higher by Rs.6.01 Lacs.
9. Employee Defined Benefits
(a) Defined Contribution Plans: The Company has recognised an expense
of Rs.15.97 Lacs (Previous year Rs. Nil Lacs towards the defined
contribution plans).
(b) The Company has a defined benefit gratuity plan. Every employee who
has completed five years or more service is entitled to Gratuity on
terms not less than the provisions of The Payment of Gratuity Act,
1972. The following table summarises the components of net benefit
expenses recognised in the Statement of Profit & Loss and amounts
recognised in the balance sheet for the Gratuity.
(c) Under leave encashment scheme, the company allows its employees to
encash accumulated leave over and above thirty days at any time during
the year.
(d) Defined Benefit Plans - As per Actuarial Valuation as at 31st
March, 2015.
(a) Business Segments: The business segments have been identified on
the basis of the products/activities of the Company. Accordingly, the
Company has identified following business segments:
Ferro-Alloys - Manufacturing of Ferro Alloy
Power - Generation of Power
(b) Geographical Segments: The Company operates predominantly within
the geographical limits of India and accordingly secondary segments
have not been considered.
10. By virtue of Notification no. G.S.R. 723 (E) dated 14th October,
2014 issued by the Ministry of Corporate Affairs, a Company which does
not have a subsidiary or subsidiaries but has one or more associate
company, no consolidation of Financial statements in respect of
associate companies is required to be made for the Financial Year
commencing from the 1st day of April, 2014 and ending on the 31st
March, 2015. Hence, the company is not required to consolidate its
accounts in respect of its investment in associate. The disclosure for
the same is made in Form No. AOC -1 .
11. Figures have been rounded off to the nearest H in Lacs. Previous
year's figures including those given in brackets have been rearranged
and regrouped where necessary to confirm to the current year's
classifications. Further, current year's figures include figures of
Ferro Alloys business and investments which have been acquired by the
company pursuant to the Scheme of Arrangement (Refer note no. 27).
Hence, previous year's figures are not comparable with current year's
figure.