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Notes to Accounts of Scan Steels Ltd.
Mar 31, 2025
1.11 Provisions & Contingent Liabilities:
a. A provision is recognized if, as a result of a past event,
the Company has a present legal obligation that
can be estimated reliably, and it is probable that an
outflow of economic benefits will be required to settle
the obligation. Provisions are determined by the best
estimate of the outflow of economic benefits required
to settle the obligation at the reporting date. Where
no reliable estimate can be made, a disclosure is
made as contingent liability. Contingent assets are not
recognized.
b. Where there are a number of similar obligations, the
likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as
a whole. A provision is recognised even if the likelihood
of an outflow with respect to any one item included in
the same class of obligations may be small.
c. 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 risks specific to the liability. The
increase in the provision due to the passage of time
is recognised as interest expense.The measurement
of provision for restructuring includes only direct
expenditures arising from the restructuring, which are
both necessarily entailed by the restructuring and not
associated with the ongoing activities of the entity.
1.12 Income Tax :
i. The income tax expense or credit for the period is the
tax payable on the current period''s taxable income
based on the applicable income tax rate for each
jurisdiction adjusted by changes in deferred tax assets
and liabilities attributable to temporary differences
and to unused tax losses.
ii. The current income tax charge is calculated on the
basis of the tax laws enacted or substantively enacted
at the end of the reporting period. Management
periodically evaluates positions taken in tax returns
with respect to situations in which applicable tax
regulation is subject to interpretation.
iii. Current income tax expense comprises taxes on
income from operations in India and is determined in
accordance with the provisions of the Income Tax Act,
1961.
iv. Deferred income tax is provided in full, using the
balance sheet approach, on temporary differences
arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements.
However, deferred tax liabilities are not recognised
if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a
transaction other than a business combination that at
the time of the transaction affects neither accounting
profit nor taxable profit (tax loss). Deferred income
tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of
the reporting period and are expected to apply when
the related deferred income tax asset is realised or
the deferred income tax liability is settled.
v. Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available
to utilise those temporary differences and losses.
vi. Deferred tax assets and liabilities are set off when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are set off where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
vii. Current and deferred tax is recognised in profit
or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity,
respectively.
1.13 Revenue Recognition :
i. Revenue is measured at fair value of consideration
received or receivable. Amount disclosed as revenue
are net of returns, trade allowances, rebates, Goods
and services tax and amounts collected on behalf of
third parties.
ii. It recognises revenue when the amount of revenue
can be reliably measured and it is probable that future
economic benefits will flow to the company.
iii. The company adopts the following criteria for
recognizing the revenue:-
a) Sale of goods is recognized when all the significant
risks and rewards of ownership of the goods have
been passed to the buyer, usually on delivery of the
goods.
b) Sale of stock in trade is recognized when the goods
are dispatched to the customers.
1.14 Purchases :
Purchase of materials is recognized on dispatch of
such goods by the suppliers based on certainty of
receipt of such goods at the factory. It is shown net of
GST credit wherever applicable.
1.15 Employee Benefits :
(i) Short-term employee benefit obligations
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in
which the employees render the related service are
recognised in respect of employees'' services up to
the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
All Short term employee benefits such as salaries,
incentives, special award, medical benefits which
fall due within 12 months of the period in which the
employee renders related services, which entitles
him to avail such benefits and non accumulating
compensated absences (like maternity leave and sick
leave) are recognized on an undiscounted basis and
charged to Statement of Profit and loss.
(ii) Post-employment obligations
The entity operates the following post-employment
schemes:
(a) defined benefit plans such as gratuity,Superannuation;
and
(b) defined contribution plans such as provident fund.
Provident fund obligations
Contribution to the provident fund, which is a defined
contribution plan, made to the Regional Provident
Fund Commissioner is charged to the Statement of
Profit and loss on accrual basis.
Gratuity and Superannuation obligations
The company has not made any provision with
regard to gratuity and superannuation benefits on
actuarial basis in compliance to the provisions laid
in accounting standard on accounting for retirement
benefits. However the company has taken a group
gratuity policy with life insurance corporation of india
in respect of retirement benefits of its employees,the
annual premium of whihc is charged to the Statement
of Profit and Loss.
(iii) Bonus plans
The entity recognises a liability and an expense for
bonus. It recognises a provision where contractually
obliged or where there is a past practice that has
created a constructive obligation.
1.16 Borrowing Costs :
a) General and specific borrowing costs that are
directly attributable to the acquisition, construction
or production of a qualifying asset are capitalised
during the period of time that is required to complete
and prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take
a substantial period of time to get ready for their
intended use or sale.
b) Other borrowing costs are expensed in the period in
which they are incurred.
1.17 Segment Reporting :
(i) The Company is primarily engaged in the business of
manufacturing of steel.
(ii) The company''s products are dispatched from plants
located at Rajgangpur (Odisha) to various parts of the
country and considering the customer base which is
wide spread all over the country, no such geographical
differentiation can be done for presenting the
information.
1.18 Reserves:
(i) General Reserve: Created by transferring a portion of
the net profit to meet future obligations or expansions.
(ii) Securities Premium: Amount received in excess of the
face value of shares issued. This reserve can be utilized
in accordance with the provisions of the Companies
Act, 2013.
(iii) Capital Reserve: Represents the surplus arising from
capital transactions such as forfeiture of shares,
revaluation of assets,subsidies and gains on sale of
fixed assets.
(iv) Reserve for Investments at Fair Value through OCI:
Comprises the cumulative gains and losses arising
from changes in the fair value of equity instruments
designated through OCI.
(v) Retained Earnings: Accumulated profits after tax,
adjusted for dividends, transfers to reserves, and
other appropriations.
1.19 Rounding of Amounts :
All amounts disclosed in the financial statements
and notes have been rounded off to the nearest
lakhs as per the requirement of Schedule III, unless
otherwise stated. Also the figures of additions and/or
substractions have been rounded up/off autometically
for reporting at INR in lakhs.
NOTE - 1B: SIGNIFICANT ACCOUNTING ESTIMATES &
JUDGEMENTS
The preparation of the Company''s financial statements
requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues,
expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities.
These include recognition and measurement of financial
instruments, estimates of useful lives and residual value
of Property, Plant and Equipment and Intangible Assets,
valuation of inventories, measurement of recoverable
amounts of cash-generating units, measurement of
employee benefits, actuarial assumptions, provisions etc.
Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment
to the carrying amount of assets or liabilities affected in
future periods. The Company continually evaluates these
estimates and assumptions based on the most recently
available information. Revisions to accounting estimates are
recognized prospectively in the Statement of Profit and Loss
in the period in which the estimates are revised and in any
future periods affected.
A. JUDGEMENTS
In the process of applying the company''s accounting policies,
management has made the following judgements, which
have the significant effect on the amounts recognised in the
financial statements:
Materiality
Ind AS requires assessment of materiality by the Company
for accounting and disclosure of various transactions
in the financial statements. Accordingly, the Company
assesses materiality limits for various items for accounting
and disclosures and follows on a consistent basis. Overall
materiality is also assessed based on various financial
parameters such as Gross Block of assets, Net Block of
Assets, Total Assets, Revenue and Profit Before Tax. The
materiality limits are reviewed and approved by the Board.
Contingencies
Contingent liabilities may arise from the ordinary course
of business in relation to claims against the Company,
including legal, contractor, land access and other claims.
By their nature, contingencies will be resolved only when
one or more uncertain future events occur or fail to occur.
The assessment of the existence, and potential quantum, of
contingencies inherently involves the exercise of significant
judgement and the use of estimates regarding the outcome
of future events.
B. ESTIMATES AND ASSUMPTIONS
The key assumptions concerning the future and other
key sources of estimation at the reporting date, that have
a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year, are described below.
Existing circumstances and assumptions about future
developments, however, may change due to market changes
or circumstances arising that are beyond the control of the
company. Such changes are reflected in the assumptions
when they occur.
Income Taxes
The Company uses estimates and judgements based on the
relevant facts, circumstances, present and past experience,
rulings, and new pronouncements while determining the
provision for income tax. A deferred tax asset is recognised
to the extent that it is probable that future taxable profit
will be available against which the deductible temporary
differences and tax losses can be utilised.
Level 1 : This hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments
and mutual funds that have quoted price. The fair value of all equity instruments(including bonds) which are traded in the
stock exchange is valued using the closing price as at the reporting period.
Level 2 : Fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the
counter derivatives) 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 is observable,
the insturment is included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable data, the instrument is included in level 3. This
is the case for unlisted equity securities, contigent consideration and indemnification assets.
(iii) As per Ind AS 107 âFinancial Instrument: Disclosure", fair value disclosures are not required when the carrying
amounts are reasonably approximate to the fair value. Accordingly fair value disclosures have not been made for the
following financial instruments:-
1. Trade receivables
2. Cash and cash Equivalent
3. Loans and advances
4. Borrowings
5. Trade Payables
6. Capital Creditors
7. Other payables
Note -34 : Financial risk management
The company''s few portion of activities are exposed to variety of financial risks i.e. market risk, credit risk and liquidity
risk. The company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential
adverse effects on its financial performance. The company''s financial instruments (excluding receivables from related
parties) are influenced mainly by the individual characteristics of each customer. The company''s exposure to credit risk is
the concentration of risk from the top few customers and the demographics of the customers.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact
of hedge accounting in the financial statements
(A) Credit risk
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum
exposure to the credit risk at the reporting date is primarily trade receivables from customers other than government
entities .These Trade receivables are typically unsecured and are derived from revenue earned from domestic and foreign
customers. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the
credit worthiness of customers to which the company grants credit terms in the normal course of business. On account
of adoption of Ind AS 109, the company uses expected credit loss model to assess impairment loss or gain. the company
uses a matrix to compute the expected credit loss allowance for trade receivable .
Credit risk management
Credit risk is managed on instrument basis.For Banks and financial institutions ,only high rated banks /institutions are
accepted.For other financial instruments, the company assesses and maintains an internal credit rating system. The
finance function consists of a separate team who assesses and maintain internal credit rating system. Internal credit
rating is performed on a company level basis for each class of financial instrument with different characterstics.
VL1 : High-quality assets, negligible credit risk
VL2 : Quality assets, low credit risk
VL3 : Standard assets, moderate credit risk
VL4 : Sub-standard assets, relatively high credit risk
VL5 : Low-quality assets, very high credit risk
VL6 : Doubt full assets, credit-impaired
The company consideres the probability of default upon initial recognition of asset and whether there has been a
significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a
significant increase in credit risk the company compares the risk of a default occuring on the asset as at the reporting
date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward¬
looking information. Especially the following indicators are incorporated:
1. Internal credit rating
2. External credit rating (as far as available)
3. Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause
a significant change to the borrower''s ability to meet the obligation.
4. Actual or expected significant changes in the operating results of the borrower.
5. Significant increase in credit risk on other financial instruments of the same borrower
6. Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees
or credit enhancements.
7. Significant changes in the expected performance and behaviour of the borrower, including changes in the payment
status of borrowers in the group and changes in the operating results of the borrower.
8. Macro economic information (such as regulatory changes, market interest rate or growth rate) is incorporated as part
of the internal rating model.
In general , it is presumed that credit risk has significantly increased since intial recognition if the payments are more than
30 days past due.
A default on a financial asset is when the counterparty fails to make contractual payment within 180 days of when they
fall due. This definition of default is determined by considering the business environment in which entity operates and
other-economic factors.
(B) Liquidity Risk
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 and to close out market
positions. Due to the dynamic nature of the underlying businesses, the company treasury maintains flexibility in funding
by maintaining available under committed credit lines.
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. This is generally carried out at local level in
accordance with practice and limits set by the company. These limits vary by locations to take into account the liquidity
of the market in which the entity operates. In addition, the company''s liquidity management policy involves, projecting
cash flows in major currencies,considering the level of liquid assets necessary , monitoring balance sheet liquidity ratios
against internal and external regulatory requirements and maintaining debt financing plans.
(ii) Maturities of financial liabilities
The tables below analyse the group''s financial liabilities into relevant maturity groupings based on their contractual
maturities for :
1. All non-derivative financial liabilities and
2. Net and gross settled derivative financial intruments for which the contractual maturities are essential for an
understanding of the timing of cash flows.
The company is not an active investor in equity market. It continues to hold certain investments in equity for long term
value accretion which are accorddingly measured at fair value through other comprehensive income. Accordingly,fair
value fluctations arisng form market volatitlity is recognised in other comprehensive income.
(i) Foreign Currency Risk
The company''s exposure to foreign currency risk & Derivative financial Instruments as on 31st March, 2025
The Company don''t have foreign currency exposure hence no foreign exchange forward contracts are required to hold
and to mitigate the risk of foreign exchange fluctuation.
(ii) Cash flow and fair value interest rate risk
The company''s main interest rate risk arises from long term borrowings with variable rates, which exposes the company
to cash flow interest rate risk. Group policy is to maintain most of its borrowings at fixed and variable rate using interest
rate swaps to achieve this when necessary.
The company''s exposure to equity securities price risk arises from investments held by the company and classified in the
balance sheet either as fair value through OCI or at fair value through profit or loss .
Profit for the period would increase/ decrease as a result of gains/losses on equity securities classified as at fair value
through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities
classified as fair value through other comprehensive income.
Note-35 : Capital Management
Risk management
The company''s objectives when managing capital are to:
(a) 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
(b) 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 on capital to shareholders or issue new shares.The company monitors capital using gearing ratio, which is net debt
divided by total Equity. Net debt comprises of long term and short term borrowings less cash and bank balances. Equity
includes equity share capital and reserves that are managed as capital.For relevant ratios please refer Note- 23 financial
ratios.
(iii) Use of Funds raised and statements submitted with Banks or Financial Institution
During the year under audit, the Company did not raise any funds from banks for working capital requirements (Previous
Year: INR 1,600 Lakhs). Additionally, no funds were raised from any Non-Banking Financial Company (NBFC) for the
acquisition of vehicles and heavy earth-moving equipment (Previous Year: INR 77.72 Lakhs). The funds disbursed in the
previous year were utilized for their intended purposes.
The Company has borrowing from banks or financial institutions on the basis of security of current assets,it shall confirm
that the quarterly returns or statements of current assets filed by the company with banks or financial institutions are in
agreement with the books of accounts.
Note -38 :
As per the requirements of Ind AS, the company has implemented / adopted the following policies and procedures for
accounting:
i Componentisation
As per prevailing practice, company compontises fixed assets as detailed in the Invoice. It does not have a separate
componetisation policy. Accordingly, components identified ( as mentioned above ) are also depreciated based on the
useful lives prescribed under Schedule-II ( of the Companies Act. ) for the main asset.
The company is in the process of identification of the major components significant to the total cost of the asset accordingly
necessary requirements to be complied.
ii Stores and Spares
The company on purchases of stores and spares,if it relates to an item of PPE, the same are capitalised on the date
of issue, and which are issued for revenue expenditure purpose, are charged to Profit & Loss Account on the date of
consumption.
Note -39 : Expected Credit Loss
On the basis of historical information and findings from analysis of the trade receivables recovery pattern, it is expected
that the trade receivables within three years are realizable, not doubtful. Hence the expected credit loss is calculated
on the trade receivable falling under the age group of more than 3 years. For this purpose, an expected credit loss rate
is taken into account considering the historical credit loss experience and is adjusted for forward-looking information.
Note -41 : Leases
Effective from April 01,2019, the company has applied Ind AS 116 ''''Leases''''. The standard is applied prospectively and the
cumulative effect of applying this standard is recognised. The adoption of Ind AS 116 did not have any significant impact
for the company.
Note -42 : Leasing Out of a Unit
The company has leased out, one of its undertaking having a sponge iron manufacturing facility situated in Bellary in the
state of Karnataka, from the 1st day of December, 2022 On monthly rental. No other consideration is charged or received
during the leasing process.
Note -43 : Corporate Social Responsibility (CSR) Activity
As per Section 135 of the Companies Act,2013 , a company, meeting the applicability threshold, need to spend at least 2%
of its average net profit for the immediately preceeding 3 financial years on corporate social responsibility (CSR) activities.
The areas for CSR activities are promoting education, animal welfare , healthcare,promoting Sports,drinking & sanitation
and for rural development projects. A CSR committee has been performed by the company as per Act. The funds were
primarily allocated to a corpus and utilised throughout the year on these activities which are specified in Schedule VII of
the Companies Act, 2013 :
Note -44
Previous year figures have been regrouped and/or rearranged wherever necessary, confirming to current year. Figures in
bracket represent previous year figure.
For Das Pattnaik & Co For and on behalf of the Board
Chartered Accountants Scan Steels Limited
F. Regd. No.321097E
Sd/- Sd/- Sd/-
Debashis Pattnaik Ankur Madaan Praveen Kumar Patro
Partner Director Director
M.No.316339 DIN: - 07002199 DIN: - 02469361
Sd/- Sd/-
17-May-2025 Prabir Kumar Das Kalyan Kiran Mishra
Bhubaneswar Company Secretary Chief Financial Officer
Mar 31, 2024
* The Company has allotted in earlier years 128.50 Lakhs Number of 1% Non - Convertible & Non-Cumulative Redeemable Preference Shares(NCRPS), at face value of Rs. 10 each fully paid up with a premium of Rs. 30 each. The preference shareholders have preferential right over payment of dividend and settlement of principal amount upon liquidation, over common shareholders. The dividend shall be paid out upon availability of profits. The preference shares shall be redeemed out of profits or out of the proceeds of fresh issue of shares after the end of the Fifth year but within a period of 20 years either in one or on more trenches as may be determined by the board of directors of the company in its absolute discretion at such price as may be decided but in any case not less than price of Rs.44 per share.
During the year, the company has issued 62.50 Lakhs Optionally Convertible Redeemable Preference Shares (OCRPS) on preferential allottment basis, to the existing Non-convertible Redeemable Preference shares (NCRPS) holders on redemption (100.18 lakhs nos. of NCRPS @ Rs. 44/- each) of the said shares, for a face value of Rs. 10/- each at a security premium of Rs. 60.53 per share.
**The balance portion of NCRPS has treated as current borrowings as the management is in the process of redeemtion within next 12 months.
Note -27 : Registration of Charges or Satisfication
The Company has filed, respective forms before Registar of Companies related to creation of charges and satisfication of charges in relation to loan availed from banks and financial institutions, timely manner within a statutory period prescribed under Companies Act'' 2013.
The Company Secretary has not been considered as related party as he is not having the authority and responsibility for planning, directing and controlling the executive decision of the entity, directly or indirectly. This is in line with Ind AS 24, "Related party transactions".
(ii) Fair value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value, and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the Ind AS 113 "Fair Value Measurements An explanation
Level 1 : This hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments(including bonds) which are traded in the stock exchange is valued using the closing price as at the reporting period.
Level 2 : Fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) 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 is observable, the instrument is included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable data, the instrument is included in level
3. This is the case for unlisted equity securities, contigent consideration and indemnification assets.
(iii) As per Ind AS 107 "Financial Instrument:Disclosure", fair value disclosures are not required when the carrying amounts are reasonably approximate to the fair value. Accordingly fair value disclosures have not been made for the following financial instruments:-
1. Trade receivables
2. Cash and cash Equivalent
3. Loans and advances
4. Borrowings
5. Trade Payables
6. Capital Creditors
7. Other payables
Note -34 : Financial risk management
The company''s few portion of activities are exposed to variety of financial risks i.e. market risk, credit risk and liquidity risk. The company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The company''s financial instruments (excluding receivables from related parties) are influenced mainly by the individual characteristics of each customer. The company''s exposure to credit risk is the concentration of risk from the top few customers and the demographics of the customers.
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily trade receivables from customers other than goverment entities .These Trade receivables are typically unsecured and are derived from revenue earned from domestic and foreign customers. Credit risk is managed through credit approvals, establishing credit limits and continously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess impairment loss or gain. the company uses a matrix to compute the expected credit loss allowance for trade receivable .
Credit risk management
Credit risk is managed on instrument basis.For Banks and financial institutions ,only high rated banks /institutions are accepted.For other financial instruments, the company assesses and maintains an internal credit rating system.The finance function consists of a separate team who assesses and maintain internal credit rating system. Internal credit rating is performed on a company level basis for each class of financial instrument with different characterstics.
VL1 : High-quality assets, negligible credit risk
VL2 : Quality assets, low credit risk
VL3 : Standard assets, moderate credit risk
VL4 : Sub-standard assets, relatively high credit risk
VL5 : Low-quality assets, very high credit risk
VL6 : Doubt full assets, credit-impaired
The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward- looking information. Especially the following indicators are incorporated:
1. Internal credit rating
2. External credit rating (as far as available)
3. Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower''s ability to meet the obligation.
4. Actual or expected significant changes in the operating results of the borrower.
5. Significant increase in credit risk on other financial instruments of the same borrower
6. Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
7. Significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the group and changes in the operating results of the borrower.
8. Macro economic information (such as regulatory changes, market interest rate or growth rate) is incorporated as part of the internal rating model.
In general , it is presumed that credit risk has significantly increased since intial recognition if the payments are more than 30 days past due.
A default on a financial asset is when the counterparty fails to make contractual payment within 180 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other-economic factors.
(B) Liquidity Risk
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 and to close out market positions. Due to the dynamic nature of the underlying businesses, the company treasury maintains flexibility in funding by maintaining available under committed credit lines.
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. This is generally carried out at local level in accordance with practice and limits set by the company. These limits vary by locations to take into account the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves, projecting cash flows in major currencies,considering the level of liquid assets necessary , monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(ii) Maturities of financial liabilities
The tables below analyse the group''s financial liabilities into relevant maturity groupings based on their contractual maturities for :
1. All non-derivative financial liabilities and
2. Net and gross settled derivative financial intruments for which the contractual maturities are essential for an understanding of the timing of cash flows.
The company is not an active investor in equity market.It continues to hold certain investments in equity for long term value accretion which are accorddingly measured at fair value thorugh other comprehensive income. Accordingly,fair value fluctations arisng form market volatitlity is recognised in other comprehensive income.
(i) Foreign Currency Risk
The company''s exposure to foreign currency risk & Derivative financial Instruments as on 31st March, 2024
The Company don''t have foreign currency exposure hence no foreign exchange forward contracts are required to hold and to mitigate the risk of foreign exchange fluctuation.
(ii) Cash flow and fair value interest rate risk
The company''s main interest rate risk arises from long term borrowings with variable rates, which exposes the company to cash flow interest rate risk. Group policy is to maintain most of its borrowings at fixed and variable rate using interest rate swaps to achieve this when necessary.
The company''s fixed rate borrowings are carried at amortised 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.
The company''s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.
Profit for the period would increase/ decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value through other comprehensive income.
Note-35 : Capital Management
Risk management
The company''s objectives when managing capital are to:
(a) 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
(b) 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 on capital to shareholders or issue new shares.The company monitors capital using gearing ratio, which is net debt divided by total Equity. Net debt comprises of long term and short term borrowings less cash and bank balances. Equity includes equity share capital and reserves that are managed as capital.For relevant ratios please refer Note- 23 financial ratios.
(iii) Use of Funds raised and statements submitted with Banks or Financial Institution
During the year under audit, the Company has raised from banks an amount of INR 1600 lakhs (previous year NIL) for working capital requirement and raised INR 77.72 Lakhs (previous year INR 30 Lakhs) from one of the Non Banking Financial Corporation(NBFC) for meeting requirement of Vehicle & Heavy Earth Moving Equipment purchase. The disbursed amount is utilised for the purpose for which it is raised.
The Company has borrowing from banks or financial institutions on the basis of security of current assets,it shall confirm that the quarterly returns or statements of current assets filed by the company with banks or financial institutions are in agreement with the books of accounts.
Note -38 :
As per the requirements of Ind AS, the company has implemented / adopted the following policies and procedures for accounting:
i Componentisation.
As per prevailing practice, company compontises fixed assets as detailed in the Invoice. It does not have a separate componetisation policy. Accordingly, components identified ( as mentioned above ) are also depreciated based on the useful lives prescribed under Schedule-II ( of the Companies Act. ) for the main asset.
The company is in the process of identification of the major components significant to the total cost of the asset accordingly necessary requirements to be complied.
ii Stores and Spares
The company on purchases of stores and spares,if it relates to an item of PPE, the same are capitalised on the date of issue, and which are issued for revenue expenditure purpose, are charged to Profit & Loss Account on the date of consumption.
Note -39 : Expected Credit Loss
On the basis of historical information and findings from analysis of the trade receivables recovery pattern, it is expected that the trade receivables within three years are realizable, not doubtful. Hence the expected credit loss is calculated on the trade receivable falling under the age group of more than 3 years. For this purpose, an expected credit loss rate is taken into account considering the historical credit loss experience and is adjusted for forwardlooking information.
Note -41 : Leases
Effective from April 01,2019, the company has applied Ind AS 116 ''''Leases''''. The standard is applied prospectively and the cumulative effect of applying this standard is recognised. The adoption of Ind AS 116 did not have any significant impact for the company.
Note -42 : Leasing Out of a Unit
The company has leased out, one of its undertaking having a sponge iron manufacturing facility situated in Bellary in the state of Karnataka, from the 1st day of December, 2022 On monthly rental. No other consideration is charged or received during the leasing process.
Note -43 : Corporate Social Responsibility (CSR) Activity
As per Section 135 of the Companies Act,2013 , a company, meeting the applicability threshold, need to spend at least 2% of its average net profit for the immediately proceeding 3 financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are promoting education, animal welfare , healthcare,promoting Sports,drinking & sanitation and for rural development projects. A CSR committee has been performed by the company as per Act. The funds were primarily allocated to a corpus and utilised throughout the year on these activities which are specified in Schedule VII of the Companies Act, 2013 : * The Company has got deposited Rs 1.50 lacs in special current account opened as " Unspent CSR Account" towards ongoing project of promoting education and construction of crematorium project undertaken within the periphery of plant location.
Note -44
Previous year figures have been regrouped and/or rearranged wherever necessary, confirming to current year. Figures in bracket represent previous year figure.
Mar 31, 2023
No trade receivables or other receivables are due from directors or other officers of the company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner or a director. The amount due from firms / private companies are to the tune of current Year INR Nill, Prev Year INR 1478.42 Lakhs
Trade receivables are non-interest bearing and are generally on terms of 15 to 20 days.
* The Company has allotted in earlier years 12,849,605 Number of 1% Non - Convertible & Non-Cumulative Redeemable Preference Shares(NCRPS) , at face value of Rs. 10 each fully paid up with a premium of Rs. 30 each. The preference shareholders have preferential right over payment of dividend and settlement of principal amount upon liquidation, over common shareholders. The dividend shall be paid out upon availability of profits. The preference shares shall be redeemed out of profits or out of the proceeds of fresh issue of shares after the end of the Fifth year but within a period of 20 years either in one or on more trenches as may be determined by the board of directors of the company in its absolute discretion at such price as may be decided but in any case not less than price of Rs.44 per share.
However as per management perception, the above liabilities will not devolve upon the company in future.
The company had given Corportate Guarantees to M/s Scan Energy & Power Limited to the tune of INR Nil (outstanding balance as on 31.03.2023) towards fund based limit extended by Indian Bank (formerly Allahabad bank) subsequently taken over by Assets Reconstruction Company (ARC).(Previous Year INR 1580 Lakhs). For which the company has received Certificate of No Dues from Assets Reconstruction Company (ARC).
Note-27 : Right of Recompense (ROR)
The company had received a letter from State Bank of India mentioning Right of Recompense amount for the year 2018 to 2021 on account of restructuring of loan in the year 2018. During the year under audit, the company has paid out full Right of Recomense (ROR) of INR 1041.51 Lakhs (pervious year-Nil) as demand raised by State Bank of India.
Note -28 : Recognition of Corporate Gurantee as Financial Liability
Financial gurantee is a contractual right of the lender to receive cash from the guarantor, and a corresponding contractual obligation of the guarantor to pay the lender, if the borrower defaults. The contractual right and obligation exist because of a past transaction or event (assumption of the guarantee), even though the lender''s ability to exercise its right and the requirement for the guarantor to perform under its obligation are both contingent on a future act of default by the borrower. A contingent right and obligation meet the definition of a financial asset and a financial liability, even though such assets and liabilities are not always recognised in the financial statements. Based on the measurement principles laid down under Ind AS 109 "Financial Instrument Recognition and Measurement", the fair value of all those financial gurantee contracts are resonably below to the materiality threshhold limit set by the company. Accordingly the entity has made appropriate disclosure in Note -26 without additionally recognising any financial assets or liability.
Note -29 : Registration of Charges or Satisfication
The Company has filed, respective forms before Registar of Companies related to creation of charges and satisfication of charges in relation to loan availed from banks and financial institutions, timely manner within a statutory period prescribed under Companies Act'' 2013.
(ii) Fair value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value, and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the Ind AS 113 "Fair Value Measurements An explanation of each level follows underneath the table.
Level 1 : This hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments(including bonds) which are traded in the stock exchange is valued using the closing price as at the reporting period.
Level 2 : Fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) 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 is observable, the instrument is included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable data, the instrument is included in level
3. This is the case for unlisted equity securities, contigent consideration and indemnification assets.
(iii) As per Ind AS 107 "Financial Instrument:Disclosure", fair value disclosures are not required when the carrying amounts are reasonably approximate to the fair value. Accordingly fair value disclosures have not been made for the following financial instruments:-
1. Trade receivables
2. Cash and cash Equivalent
3. Loans and advances
4. Borrowings
5. Trade Payables
6. Capital Creditors
7. Other payables
Note -36 : Financial risk management
The company''s few portion of activities are exposed to variety of financial risks i.e. market risk, credit risk and liquidity risk. The company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The company''s financial instruments (excluding receivables from related parties) are influenced mainly by the individual characteristics of each customer. The company''s exposure to credit risk is the concentration of risk from the top few customers and the demographics of the customers.
(A) Credit risk
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily trade receivables from customers other than government entities .These Trade receivables are typically unsecured and are derived from revenue earned from domestic and foreign customers. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess impairment loss or gain. the company uses a matrix to compute the expected credit loss allowance for trade receivable.
Credit risk management
Credit risk is managed on instrument basis. For Banks and financial institutions ,only high rated banks /institutions are accepted. For other financial instruments, the company assesses and maintains an internal credit rating system. The finance function consists of a separate team who assesses and maintain internal credit rating system. Internal credit rating is performed on a company level basis for each class of financial instrument with different characterstics.
VL1 : High-quality assets, negligible credit risk
VL2 : Quality assets, low credit risk
VL3 : Standard assets, moderate credit risk
VL4 : Sub-standard assets, relatively high credit risk
VL5 : Low-quality assets, very high credit risk
VL6 : Doubt full assets, credit-impaired
The company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward- looking information. Especially the following indicators are incorporated:
1. Internal credit rating
2. External credit rating (as far as available)
3. Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower''s ability to meet the obligation.
4. Actual or expected significant changes in the operating results of the borrower.
5. Significant increase in credit risk on other financial instruments of the same borrower
6. Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
7. Significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the group and changes in the operating results of the borrower.
8. Macro economic information (such as regulatory changes, market interest rate or growth rate) is incorporated as part of the internal rating model.
In general , it is presumed that credit risk has significantly increased since intial recognition if the payments are more than 30 days past due.
A default on a financial asset is when the counterparty fails to make contractual payment within 180 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other-economic factors.
(B) Liquidity Risk
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 and to close out market positions. Due to the dynamic nature of the underlying businesses, the company treasury maintains flexibility in funding by maintaining available under committed credit lines.
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. This is generally carried out at local level in accordance with practice and limits set by the company. These limits vary by locations to take into account the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves, projecting cash flows in major currencies,considering the level of liquid assets necessary , monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(ii) Maturities of financial liabilities
The tables below analyse the group''s financial liabilities into relevant maturity groupings based on their contractual maturities for :
1. All non-derivative financial liabilities and
2. Net and gross settled derivative financial intruments for which the contractual maturities are essential for an understanding of the timing of cash flows.
(C) Market Risk
The company is not an active investor in equity market. It continues to hold certain investments in equity for long term value accretion which are accordingly measured at fair value through other comprehensive income. Accordingly,fair value fluctations arising form market volatitlity is recognised in other comprehensive income.
(i) Foreign Currency Risk
The company''s exposure to foreign currency risk & Derivative financial Instruments as on 31st March, 2023
The Company don''t have foreign currency exposure hence no foreign exchange forward contracts are required to hold and to mitigate the risk of foreign exchange fluctuation.
(ii) Cash flow and fair value interest rate risk
The company''s main interest rate risk arises from long term borrowings with variable rates, which exposes the company to cash flow interest rate risk. Group policy is to maintain most of its borrowings at fixed and variable rate using interest rate swaps to achieve this when necessary.
The company''s fixed rate borrowings are carried at amortised 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.
(iii) Price risk
The company''s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss .
Profit for the period would increase/ decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value through other comprehensive income.
Risk management
The company''s objectives when managing capital are to:
(a) 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
(b) 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 on capital to shareholders or issue new shares.The company monitors capital using gearing ratio, which is net debt divided by total Equity. Net debt comprises of long term and short term borrowings less cash and bank balances. Equity includes equity share capital and reserves that are managed as capital.For relevant ratios please refer Note- 23 financial ratios.
(iii) Use of Funds raised and statements submitted with Banks or Financial Institution
During the year under audit, the Company has raised an amount of INR 30 lakhs (previous year INR 1176 Lakhs for working capital requirement) from one of the Non Banking Financial Corporation(NBFC) for meeting requirement of Vehicle & Heavy Earth Moving Equipment purchase. The disbursed amount is utilised for the purpose for which it is raised.
The Company has borrowing from banks or financial institutions on the basis of security of current assets,it shall confirm that the quarterly returns or statements of current assets filed by the company with banks or financial institutions are in agreement with the books of accounts.
As per the requirements of Ind AS, the company has implemented / adopted the following policies and procedures for accounting:
i Componentisation.
As per prevailing practice, company compontises fixed assets as detailed in the Invoice. It does not have a separate componetisation policy. Accordingly, components identified ( as mentioned above ) are also depreciated based on the useful lives prescribed under Schedule-II ( of the Companies Act. ) for the main asset.
The company is in the process of identification of the major components significant to the total cost of the asset accordingly necessary requirements to be complied.
ii Stores and Spares
The company on purchases of stores and spares,if it relates to an item of PPE, the same are capitalised on the date of issue, and which are issued for revenue expenditure purpose, are charged to Profit & Loss Account on the date of consumption.
Note -41 : Expected Credit Loss
On the basis of historical information and findings from analysis of the trade receivables recovery pattern, it is expected that the trade receivables within three years are realizable, not doubtful. Hence the expected credit loss is calculated on the trade receivable falling under the age group of more than 3 years. For this purpose, an expected credit loss rate is taken into account considering the historical credit loss experience and is adjusted for forwardlooking information.
Effective from April 01,2019, the company has applied Ind AS 116 ''''Leases''''. The standard is applied prospectively and the cumulative effect of applying this standard is recognised. The adoption of Ind AS 116 did not have any significant impact for the company.
Pursuant to The Taxation Laws (Amendment) Ordinance , 2019 (''Ordinance'') issued by Ministry of Law and Justice (Legislative Department) on 20th September, 2019 which is effective 01 April 2019 , domestic companies have the option to pay corporate income tax rate at 22% plus applicable surcharge and cess (''New tax rate'') subject to certain conditions. The company had opted for New Tax Regime from AY 2020-21 onwards.
Note -45 : Leasing Out of a Unit
The company has leased out, one of its undertaking having a sponge iron manufacturing facility situated in Bellary in the state of Karnataka, from the 1st day of December, 2022 On monthly rental. No other consideration is charged or received during the leasing process. Hence, the Income from Operation for the quarter January to March 2023 does not include the turnover figure of Bellary unit. Income from 4 Months Lease Rental For Bellary ,Karnataka Unit INR 108.00 Lakhs (Prev Year Nill) is included in the Sale of Services in the Profit and Loss statement.
Note -46 : Corporate Social Responsibility (CSR) Activity
As per Section 135 of the Companies Act,2013 , a company, meeting the applicability threshold, need to spend at least 2% of its average net profit for the immediately proceeding 3 financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are promoting education, animal welfare and Infrastructure support for rural development projects. A CSR committee has been performed by the company as per Act. The funds were primarily allocated to a corpus and utilised throughout the year on these activities which are specified in Schedule VII of the Companies Act, 2013 :
Previous year figures have been regrouped and/or rearranged wherever necessary, confirming to current year. Figures in bracket represent previous year figure.
Mar 31, 2018
*The Company has allotted in earlier years 12,849,605 Number of 1% Non - Convertible & Non-Cumulative Redeemable Preference Shares(NCRPS) , at face value of Rs. 10 each fully paid up with a premium of Rs. 30 each . The preference shareholders have preferential right over payment of dividend and settlement of principal amount upon liquidation, over common shareholders. The dividend shall be paid out upon availability of profits. The preference shares shall be redeemed out of profits or out of the proceeds of fresh issue of shares after the end of the Fifth year but within a period of 20 years either in one or on more trenches as may be determined by the board of directors of the company in its absolute discretion at such price as may be decided but in any case not less than price of Rs.44.
*Post the applicability of Goods & Service Tax ( GST ) with effect from July 01, 2017, revenue from operations is disclosed net of GST. Accordingly, revenue from operations and other expenses for the year ended on March 31, 2018 are not comparable with the previous year figures.
**Other Operating Income includes sale of services alongwith gain or loss from "Commodity/Equity Derivative transactions under F&O segment" of various commodities through Stock Exchange. The profit/(Loss) on the settlement date is recognised in the financial statement and the fair value of derivative instruments measured at FVTOCI of the instruments in hand as on the reporting date and shown under "Reserves for fair valuation of derivative instruments" to be reclassified to profit & loss account on future settlement date.
NOTE-1 Additional Disclosures As per Ind AS 108 "Operating Segments "
(i) Revenue From Customers Exceeding 10% of Total revenue
As per Para 34 of Ind AS 108 ,if revenues from transactions with a single external customer amounts to 10 per cent or more of an entity''s revenue, the company is required to disclose, the total amount of revenue from each such customer, and the identity of the segment or segments reporting the revenue.The company''s revenue from any single customer doesnt exceed 10% of the total revenue and hence the disclosure requirement is not applicable
(ii) Extent of Reliance on Major Customers
Extent of Reliance on Major Customers of the company can be depicted by assessing their sales chunck compared to total revenue of the operation. The percentage of group of major customer to its total revenue is as below :
NOTE -2 Recognition of Corporate Gurantee as Financial Liability
Financial gurantee is a contractual right of the lender to receive cash from the guarantor, and a corresponding contractual obligation of the guarantor to pay the lender, if the borrower defaults. The contractual right and obligation exist because of a past transaction or event (assumption of the guarantee), even though the lender''s ability to exercise its right and the requirement for the guarantor to perform under its obligation are both contingent on a future act of default by the borrower. A contingent right and obligation meet the definition of a financial asset and a financial liability, even though such assets and liabilities are not always recognised in the financial statements. Based on the measurement principles laid down under Ind AS 109 "Financial Instrument Recognition and Measurement", the fair value of all those financial gurantee contracts are resonable below to the materiality threshhold limit set by the company. Accordingly the entity has made appropriate disclosure in Note -28 without additionally recognising any financial assets or liability.
NOTE -3 Micro, Small and Medium Enterprises (MSME) Dues Disclosure
There are no Micro and Small enterprises to whom the Company owes dues which are outstanding for a period of more than 45 days as at the balance sheet date. The above information and that given under Current liabilities regarding Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company.
(ii) Fair value Hierarchy:
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are
(a) recognised and measured at fair value, and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the company has classified its financial instruments into three levels prescribed under the Ind AS 113 "Fair Value Measurements ". An explanation of each level follows underneath the table.
Level 1 : This hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments and mutual funds that have quoted price. The fair value of all equity instruments(including bonds) which are traded in the stock exchange is valued using the closing price as at the reporting period.
Level 2 :Fair value of financial instruments that are not traded in an active market (for example, traded bonds, over the counter derivatives) 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 is observable, the insturment is included in level 2.
Level 3 : If one or more of the significant inputs is not based on observable data, the instrument is included in level 3. This is the case for unlisted equity securities, contigent consideration and indemnification assets.
(iii) As per Ind AS 107 "Financial Instrument: Disclosure", fair value disclosures are not required when the carrying amounts reasonably approximate the fair value. Accordingly fair value disclosures have not been made for the following financial instruments:-
Note -4 : Financial Risk Management
The company''s few portion of activities are exposed to variety of financial risks i.e. market risk, credit risk and liquidity risk. The company''s primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the company is foreign exchange risk. The company''s financial instruments (excluding receivables from related parties) are influenced mainly by the individual characteristics of each customer.The company''s exposure to credit risk is the concentration of risk from the top few customers and the demographics of the customers.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the impact of hedge accounting in the financial statements
(A) Credit Risk
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily trade receivables from customers other than goverment entities .These Trade receivables are typically unsecured and are derived from revenue earned from domestic and foreign customers. Credit risk is managed through credit approvals, establishing credit limits and continously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess impairment loss or gain. the company uses a matrix to compute the expected credit loss allowance for trade receivable .
(i) Credit Risk Management
Credit risk is managed on instrument basis.For Banks and financial institutions ,only high rated banks /institutions are accepted.For other financial instruments, the company assesses and maintains an internal credit rating system.The finance function consists of a separate team who assesses and maintain internal credit rating system. Internal credit rating is performed on a company level basis for each class of financial instrument with different characterstics.
VL1 : High-quality assets, negligible credit risk
VL2 : Quality assets, low credit risk
VL3 : Standard assets, moderate credit risk
VL4 : Sub-standard assets, relatively high credit risk
VL5 : Low-quality assets, very high credit risk
VL6 : Doubt full assets, credit-impaired
The company consideres the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occuring on the asset as at the reporiting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward- looking information. Especially the following indicators are incorporated:
1. Internal credit rating
2. External credit rating (as far as available)
3. Actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to the borrower''s ability to meet the obligation.
4. Actual or expected significant changes in the operating results of the borrower.
5. Significant increase in credit risk on other financial instruments of the same borrower
6. Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
7. Significant changes in the expected performance and behaviour of the borrower, including changes in the payment status of borrowers in the group and changes in the operating results of the borrower.
8. Macro economic information (such as regulatory changes, market interest rate or growth rate) is incorporated as part of the internal rating model.
In general , it is presumed that credit risk has significantly increased since intial recognition if the payments are more than 30 days past due.
A default on a financial asset is when the counterparty fails to make contractual payment within 180 days of when they fall due. This definition of default is determined by considering the business environment in which entity operates and other-economic factors.
(B) Liquidity Risk
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 and to close out market positions. Due to the dynamic nature of the underlying businesses, the company treasury maintains flexibility in funding by maintaining available under committed credit lines.
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. This is generally carried out at local level in accordance with practice and limits set by the company. These limits vary by locations to take into account the liquidity of the market in which the entity operates. In addition, the company''s liquidity management policy involves, projecting cash flows in major currencies, considering the level of liquid assets necessary , monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(ii) Maturities of financial liabilities
The tables below analyse the group''s financial liabilities into relevant maturity groupings based on their contractual maturities for :
1. All non-derivative financial liabilities and
2. Net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing of cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows.
(C) Market Risk
The company is not an active investor in equity market.I t continues to hold certain investments in equity for long term value accretion which are accordingly measured at fair value through other comprehensive income. The value of investments in such equity instruments as at 31st March,2018 is INR 120.49 lakhs (as at 31st March, 2017 -INR 216.36 lakhs). Accordingly, fair value fluctuations arising form market volatitlity is recognised in other comprehensive income.
The company is an active trader in "Commodity/Equity Derivative transactions under F&O segment" of various commodities through Stock Exchange. The profit/(Loss) on the settlement date is recognised in the financial statement and the fair value of derivative instruments measured at FVTOCI of the instruments in hand as on the reporting date is shown under "Reserves for fair valuation of derivative instruments" to be reclassified to profit & loss account on future settlement date.
(i) Foreign Currency Risk
The company''s exposure to foreign currency risk & Derivative financial Instruments as on March 31, 2018
The Company don''t have foreign currency exposure hence no foreign exchange forward contracts are required to hold and to mitigate the risk of foreign exchange fluctuation.
(ii) Cash flow and fair value interest rate risk
The company''s main interest rate risk arises from long term borrowings with variable rates, which exposes the company to cash flow interest rate risk. Group policy is to maintain most of its borrowings at fixed and variable rate using interest rate swaps to achieve this when necessary. During 31 march 2018 and 31 march 2017 the company''s borrowings at variable rate were mainly denominated in INR.
The company''s fixed rate borrowings are carried at amortised 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
The exposure of the company''s borrowing from banks and financial institutions to interest rate changes at the end of the reporting period are as follows:
(iii) Price risk
The company''s exposure to equity securities price risk arises from investments held by the company and classified in the balance sheet either as fair value through OCI or at fair value through profit or loss.
Profit for the period would increase/ decrease as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would increase/decrease as a result of gains/losses on equity securities classified as fair value through other comprehensive income.
NOTE-5 : Capital Mangement Risk management
The company''s objectives when managing capital are to:
(a) 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
(b)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 on capital to shareholders or issue new shares.The company monitors capital using gearing ratio, which is net debt divided by total Equity. Net debt comprises of long term and short term borrowings less cash and bank balances. Equity includes equity share capital and reserves that are managed as capital. The gearing at the end of reporting period was as follows:
During the year the lead banker State Bank of India has restructured the credit facilities sanctioned earlier and the other consortium members are in the process of restructuring their facilitites for the substance of which the previous year comparitives are not disclosed.
NOTE -6
During the year, the lead banker State Bank of India has approved the restructuring proposal and has executed all related documents for restructuring of the facility and has filed with the Ministry of Corporate Affairs towards creation/modification of charges in its favour. The State Bank of India has recovered all the scheduled repayments alongwith overdues (till the date of recovery) as per proposal approved vide letter dated March 17 , 2018. The interest component of Rs. 16.92 crores, from the date of NPA to the cut off date i.e March 31, 2017 has been converted to FITL and same has been charged to current year''s financial statement. Other members to the consortium are in the process of restructuring as at the end of reporting date.
Further, the company has provided interest cost on borrowings for all the member banks except IDBI Bank Limited for the FY 2017-18 as per interest rate approved by the lead banker i.e State Bank of India. IDBI Bank Limited has recalled the loan vide letter dated October 31, 2017 for which no interest has been provided for.
NOTE -7
As per the requirements of Ind AS, the company has implemented / adopted the following policies and procedures for accounting:
i Componentisation.
As per prevailing practice, company compontises fixed assets as detailed in the Invoice. It does not have a separate componetisation policy. Accordingly, components identified ( as mentioned above ) are also depreciated based on the useful lives prescribed under Schedule-II ( of the Companies Act. ) for the main asset.
The company is in the process of identification of the major components significant to the total cost of the asset accordingly necessary requirements to be complied.
ii Stores and Spares
The company on purchases of stores and spares,if it relates to an item of PPE, the same are capitalised on the date of issue, and which are issued for revenue expenditure purpose, are charged to Profit & Loss Account on the date of consumption.
The company is in the process of identifying the doubtful debtors to make provision for impairment to iii be recognised as per the Expected Credit Loss Method.
NOTE -8
The company has allotted on Preferential basis 8,00,000 no of equity shares at a premium as decided by the Board of Directors out of the conversion of warrants allotted earlier.
NOTE -9
The company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. and hence disclosures, relating to amount unpaid as at the year end together with the interest paid /payable as required under the said act have not been given.
NOTE -10
Previous year figures have been regrouped and/or rearranged wherever necessary, confirming to current year. Figures in bracket represent previous year figure.
Mar 31, 2015
I. The exceptional items represents expenses of LC Usance Interest and
Stores, Spares and Consumables related to earlier years.
ii Amalgamation:
Pursuant to the scheme of Arrangement (the scheme) approved by the
shareholders and sanctioned by the Hon'ble High Court of Odisha and at
Bombay whereby Scan Steels Ltd. the transferor company are amalgamated
with M/s Clarus Infrastructure Realities Ltd. the transferee company.
The scheme became effective on 1st of April, 2010. Under the provisions
of the Companies Act 1956 ('the Act") , the transferor company was
transferred to and vested in the company as a going concern basis.
The Amalgamation has been accounted for in the books of account of
'Clarus Infrastructure Realties Ltd. under "Pooling of Interest Method
m" as prescribed under Accounting Standard (As) 14 "Accounting for
Amalgamations ' issued by the Institute of Chartered Accountants of
India.
iii. Trade Payable includes acceptances of bill representing liability
towards Letter of Credit and MSME RFS limit from Banks. The Letter Of
credit is primarily secured with hypothecation of merchandise covered
under said LC on pari-passu basis with Consortium member Banks. The
MSME RFS limit solely sanctioned by SIDBI is primarily secured with
pledge of Fixed Deposit, personal guarantee of directors along with
other collateral securities.
iv. The company has not received any intimation from the suppliers
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006. and hence disclosures, relating to amount unpaid
as at the year end together with the interest paid /payable as required
under the said act have not been given.
v. Debtors & Creditors balances are subject to confirmation.
vi. Previous year figures have been regrouped and/or rearranged
wherever necessary, confirming to current year. Figures in bracket
represent previous year figure.
Mar 31, 2014
A. Basis of Preparation of Financial Statements:
The financial statements have been prepared under the historical cost
convention on an accrual basis and materially comply with the mandatory
Accounting Standards notified by the Central Government in the
Companies (Accounting Standards) Rules, 2006 and the relevant
provisions of the Companies Act, 1956. All the significant accounting
policies applied are consistent with those used in the previous year,
unless otherwise specified.
i. Contingent Liabilities and commitments
(to the extent not provided for)
a) Estimated amount of contracts remaining to be executed on capital
accounts and not provided for Nil Lacs (Previous year: Nil)
b) The company has Issued Letter of Credit aggregating to
20,53,56,205.00 (Previous year: 19,26,36,657.00).
c) Bank Guarantee opened with Banks amounting on
2,39,17,079.00(Previous Year 1,86,56,839.00.)
d) Claims not acknowledged by the company relating to Sales tax and
Entry tax of 5,88,40,175.00 (Previous year: 5,78,69,501.00).
e) Corporate guarantee to its associates in respect of Bank Loan
Nature of Facilities Amount in(Crores)
Term loan 70.08
Cash Credit 59.00
ii. The company has not received any intimation from the suppliers
regarding their status under the Micro, Small and Medium Enterprises
Development Act, 2006. and hence disclosures, if any relating to amount
unpaid as at the year end together with the interest paid /payable as
required under the said act have not been given.
iv. Expenses and income related to earlier years Rs. Nil (Previous year Rs.
Nil) which has not been charged to profit for the Year.
v. Income And Expenditure in foreign
currency (Nil) (P.Y:Nil)
vi. The presentation of figures as regards consumptions of materials
and sale of products have been changed this year to nullify the effect
of unit transfer and/or captive consumption information, the details of
which are as follows:
vii. Long Term Advances includes Rs. 3,09,69,732/- (Previous year Rs.
968,61,151/-) paid o M/s Bafna Builders & Land Developers ("BBLD") as
advance towards booking of flats in the "Anmol Nayantara Gold Project"
at Nashik by BBLD. The company has received the allotment letter to
that extent from BBLD. Registration of the proposed flats for the
above projects are yet to be done and hence the same has been reflected
under Long Term Advances . The company is in receipt of a letter from
BBLD mentioning that the project is scheduled to be completed by 30th
September,2014.
viii. During the year,the company has received compensation from M/s
Bafna Builders & Land Developers ( " BBLD" ) amounting to Rs. 54,72,723/-
due to cancellation of flats booked earlier by the company . Same has
been recognized as under the head "Other Income" Income in the
financial year under review.
ix. Notes on Amalgamation :
Pursuant to the scheme of Arrangement (the scheme) approved by the
shareholders and sanctioned by the Hon''ble High Court of Odisha and at
Bombay whereby Scan Steels Ltd. the Transferor company are amalgamated
with M/s Clarus Infrastructure Realities Ltd. , the transferee company.
The scheme became effective on 01st of April, 2010. Under the
provisions of the Companies Act, 1956 (''the Act''),the transferor
company was transferred to and vested in the company as a going
concern and accordingly the scheme had been given effect to in these
accounts.
The Amalgamation has been accounted for in the books of account of ''
Clarus Infrastructure Realties Ltd.'' Under "Pooling of Interest method"
as prescribed under Accounting Standard (AS) 14, ''Accounting for
Amalgamations'' issued by the Institute of Chartered Accountants of
India.
x. Clarus Infrastructure Realties Ltd. (''the transferee company '')
had applied with the Registrar of companies for change of its name
M/s Scan Steels Ltd. after the completion process of amalgamation.
Subsequently, the Registrar of Companies has accepted the name change
and issued the fresh certificate containing the name change on dtd.
26th of September, 2014.
xi. Debtors & Creditors balances are subject to confirmation.
xii. Previous year figures have been regrouped and/or rearranged
wherever necessary, confirming to current year.
Mar 31, 2013
Note 1 Segment information
The Company has identified business segments as its primary segment.
Business segments are primarily Financial and Realty Revenues and
expenses directly attributable to segments are reported under each
reportable segment. Expenses which are not directly identifiable to
each reportable segment have been allocated on the basis of associated
revenues of the segment and manpower efforts. All other expenses which
are not attributable or allocable to segments have been disclosed as
unallocable expenses. Assets and liabilities that are directly
attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as
unallocable.
31st March, 2013 31st March, 2012
(Rs.) (Rs.)
2.1 Contingent liabilities and
commitments (to the extent not
provided for)
(i) Contingent liabilities
(a) Claims against the Company not
acknowledged as debt Nil Nil
(b) Guarantees Nil Nil
2.2 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006
Micro, Small and Medium Enterprises in terms of section 22 of the
Micro, Small and Medium Enterprises Development Act, 2006 have been
determined to the extent such parties have been identified on the basis
of information available with the Company and relied upon by the
auditors. Since the relevant information is not readily available, no
disclosures have been made in the accounts. However, in the opinion of
the management, the impact of interest, if any, that may be payable in
accordance with the provision of this Act is not expected to be
material.
2.3 Details of Merger
In terms of the Scheme of Arrangement (the Scheme), M/s Scan Steels Ltd
(referred to as Transfer or Company),had been proposed to be merged
with the Company ("Transferee Company"), upon which the undertaking and
the entire business, including all assets and liabilities of the
Transferor Companies shall stand transferred to and vested in the
Transferee Company at their book value as determined by the Board of
Directors of the Transferee Company.
The Scheme of Arrangement filed by the Company has been approved by the
Honourable High Court of Judicature at Mumbai on 11th May, 2012 with an
appointed date of 1 April 2010, being the date on which all the
requirements under the Companies Act, 1956 have been completed.
However, since the transferor company''s registered office is situated
in the State of Orissa, the approval of the scheme by the Hon''ble High
Court of Mumbai is subject to approval from the Hon''ble High Court of
Orrisa. The application with the Hon''ble High Court of Orissa is
pending as on the date of signing of this report. Pursuant to the
Scheme, the Company shall be allotting 2,00,00,000 equity shares of Rs.
10/- each of the company to the shareholders in the Transferor
Companies.
The present standalone annual accounts of the company are prepared
without giving effect of the above merger. The same will be reinstated
for financial years 2010-2011, 2011-2012 and 2012-13 once the scheme
has been approved by the Hon''ble High Court of Orrisa and the relevant
formalities are completed by both the transferor and transferee
companies.
2.4 Earnings per share (EPS)
The following reflects the profit and share data used in the basic and
diluted EPS computations:
2.5 The balances appearing under short term borrowings, sundry
creditors, short term loans and advances, and certain banks are subject
to confirmation and reconciliation and consequential adjustment, if
any, will be accounted for in the year of confirmation and/or
reconciliation
2.6 In the opinion of the Board, assets other than fixed assets do
have a value on realisation in the ordinary course of business at least
equal to the amount at which they are stated.
2.7 The company is not registered as a NBFC with the Reserve Bank of
India and accordingly has not complied with the direction related to
provisions of Non Banking Financial (Non Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007.
2.8 Other advances includes Rs. 9,68,61,151/- (Previous year Rs.
11,25,00,000/-) paid to M/s Bafna Builders & Land Developers
("BBLD") as advance towards booking of flats in the "Anmol
Nayantara Gold Project" at Nasik by BBLD. The company has received
the allotment letter to that extent from BBLD. Registration of the
proposed flats for the above projects are yet to be done and hence the
same has been reflected under other advances. The company is in receipt
of a letter from BBLD mentioning that the project is scheduled to be
completed by December 2013.
2.9 During the year, the company after negotiations with BBLD has
transferred its rights in certain of the above flats allotted to the
company by BBLD, in favour of third parties. The consideration for the
same of Rs. 39,63,252/- (net of transfer fees payable to BBLD for the
transfer) has been recognised as revenue for the year. Accordingly,
outstanding amount of Rs. 56,38,849/- receivable from BBLD on account
of the principal has been reflected under advance recoverable in cash
or in kind or for value to be received.
2.10 Since the Company recognises gratuity on payment basis no
liability for the same has been ascertained and provided in the
accounts. Hence, the company has not complied with the provisions of
AS-15 "Accounting for Retirement Benefit".
2.11 Previous year''s figures have been regrouped / reclassified
wherever necessary to correspond with the current year''s classification
/ disclosure.
Mar 31, 2012
Note 1 Segment Information
The Company has identified business segments as its primary segment.
Business segments are primarily Financial and Realty. Revenues and
expenses directly attributable to segments are reported under each
reportable segment. Expenses which are not directly identifiable to
each reportable seg- ment have been allocated on the basis of
associated revenues of the segment and manpower efforts. All other
expenses which are not attributable or allocable to segments have been
disclosed as unallocable expenses. Assets and liabilities that are
directly attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as
unallocable.
Note Particulars 31st March, 2012 31st March, 2011
(Rs.) (Rs.)
2.1 Contingent liabilities
and commitments
(to the extent not
provided for)
(i) Contingent liabilities
(a) Claims against the
Company not acknowledged
as debt Nil Nil
(b) Guarantees Nil Nil
2.2 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Devel- opment Act, 2006
Micro, Small and Medium Enterprises in terms of section 22 of the
Micro, Small and Medium Enterprises Development Act, 2006 have been
determined to the extent such parties have been identified on the basis
of information available with the Company and relied upon by the
auditors. Since the relevant information is not readily available, no
disclosures have been made in the accounts. However, in the opinion of
the management, the impact of interest, if any, that may be payable in
accordance with the provision of this Act is not expected to be
material.
2.3 Details of Merger
In terms of the Scheme of Arrangement (the Scheme), M/s Scan Steels Ltd
(referred to as Trans- feror Company'), had been proposed to be
merged with the Company ("Transferee Company"), upon which the
undertaking and the entire business, including all assets and
liabilities of the Transferor Companies shall stand transferred to and
vested in the Transferee Company at their book value as determined by
the Board of Directors of the Transferee Company.
The Scheme of Arrangement filed by the Company has been approved by the
Honourable High Court of Judicature at Mumbai on 11th May, 2012 with an
appointed date of 1 April 2010, being the date on which all the
requirements under the Companies Act, 1956 have been completed.
However, since the transferor company s registered office is situated
in the State of Orissa, the approval of the scheme by the Hon ble High
Court of Mumbai is subject to approval from the Hon ble High Court of
Orrisa. The application with the Hon ble High Court of Orissa is
pending as on the date of signing of this report. Pursuant to the
Scheme, the Company shall be allotting 2,00,00,000 equity shares of
10/- each of the company to the shareholders in the Transferor
Companies. "The present standalone annual accounts of the company are
prepared without giving effect of the above merger. The same will be
reinstated for financial years 2010-2011 and 2011-2012 once the scheme
has been approved by the Hon ble High Court of Orrisa and the relevant
formalities are completed by both the transferor and transferee
companies.
2.4 The balances appearing under unsecured loans, sundry creditors,
loans and advances, and certain banks are subject to confirmation and
reconciliation and consequential adjustment, if any, will be accounted
for in the year of confirmation and/or reconciliation
2.5 In the opinion of the Board, assets other than fixed assets do
have a value on realisation in the ordinary course of business at least
equal to the amount at which they are stated.
2.6 The company has neither registered as NBFC nor has complied with
the direction related to provisions of Non Banking Financial Companies
Prudential Norms (Reserve Bank) Direction, 1998.
2.7 Other advances includes Rs. 11,25,00,000/- (Previous year
710,00,00,000/-) paid to M/s Bafna Builders & Land Developers
("BBLD") as advance towards booking of flats in the "Anmol
Nayantara Gold Project" at Nasik by BBLD. The company has received
the allotment letter to that extent from BBLD. Registration of the
proposed flats for the above projects are yet to be done and hence the
same has been reflected under other advances. The company is in receipt
of a letter from BBLD mentioning that the project is scheduled to be
completed by December 2013.
2.8 Since the Company recognises gratuity and leave salary expense on
payment basis no liability for the same has been ascertained and
provided in the accounts. Hence, the company has not complied with the
provisions of AS-15 "Accounting for Retirement Benefit".
2.9 During the year, company has advanced loans (as detailed in mote
21.4 above) to parties covered in the register maintained under section
301 of the Companies Act, 1956. However, the Company has not obtained
the prior approval of Central Government for the same wherever
applicable as required by the provisions of Section 295 of Companies
Act, 1956.
2.10 Prior period items include reversal of expenses claimed in the
previous year to the extent of service tax included in it. Accordingly
Cenvat Credit under the Service tax Act has been shown as receivable
from the department (Refer note 11).
2.11 The Revised Schedule VI has become effective from 1 April, 2011
for the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the finan- cial
statements. Previous year s figures have been regrouped / reclassified
wherever neces- sary to correspond with the current year s
classification / disclosure
Mar 31, 2010
1. Contingent Liabilities
Claims against the company not acknowledged as Debts Nil
2. At the Annual General Meeting (AGM) of the company held on 27th
October, 2009, members passed a resolution to issue 148,00,000/- equity
shares of Rs. 10/- each for cash, aggregating to Rs. 14,80,00,000/- in
accordance with the provisions of the Companies Act, 1956 and
Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulation, 2009 to Promoter and non-promoters.
Accordingly, the in-principle approval of the Mumbai Stock Exchange
(BSE) was obtained and the allotment of. shares was done on the 5m
December, 2009.
3. The balances appearing under unsecured loans, sundry creditors,
loans and advances, and certain banks are subject to confirmation and
reconciliation and consequential adjustment, if any, will be accounted
for in the.year of confirmation and/or reconciliation.
4. In the opinion of the Board, the Current assets, Loans and advances
have value on realisation in the ordinary course of business, at least
equal to the amount at which they are stated in the Balance Sheet.
5. Under the Micro, Small and Medium Enterprises Development Act, 2006
certain disclosures are required to be made relating to Micro, Small
and Medium Enterprises. The Company is in the process of compiling
relevant information from its suppliers about their coverage under the
said Act. Since the relevant information is not readily available, no
disclosures have been made in the accounts. However, in the opinion of
the management, the impact of interest, if any, that may be payable in
accordance with the provision of this Act is not expected to be
material.
6. The company has neither registered as NBFC nor has complied with
the direction related to provisions of Non Banking Financial Companies
Prudential Norms (Reserve Bank) Direction, 1998.
7. Other advances includes:
- Rs.10,00,00,000/- (Previous year Rs. Nil) paid to M/s Bafna Builders
& Land Developers ("BBLD") as advance towards booking of flats in the
"Anmol Nayantara Gold Project" at Nasik by BBLD. The company has
received the allotment letter to that extent from BBLD.
- Rs. 1,50,00,000/- (Previous Year Rs. Nil) paid to M/s Shanti &
Santosh Builders (SSD) as per the Memorandum of Understanding dated 9th
December, 2009 entered by the company with SSD for allotment of flats
in the SRA Project at Mumbai by SSD.
Registration of the proposed flats for both the above projects are yet
to be done and hence the same has been reflected under other advances.
8. Since the Company recognises gratuity and leave salary expense on
payment basis no liability for the same has been ascertained and
provided in the accounts. Hence, the company has not complied with the
provisions of AS-15 "Accounting for Retirement Benefit".
9. Additional information required to be furnished as per Para 3(1)
and (2), 4 (c) and 4(d) of Part II to Schedule VI to the Companies Act,
1956.
(As Certified by the Director)
10. Disclosure as per Accounting Standard -18
(a) List of Related Parties:
Key Managerial Personnel
Manakchand Jain
Harsh Jain
Relatives of Key Managerial Personnel
Naresh Jain
Associated Concerns
Diamant Investment & Finance Limited
Obident Exports Private Limited
Verbana Mercantile Private Limited
Kisha Exim Private Limited
11. The management was of the opinion that there were no impairment
indicators that existed as on the balance sheet date. Hence no
provision for the impairment loss in accordance with the provisions of
AS-28 on "Impairment of Assets" has been done.
12. Previous years figures have been regrouped/re-classified in order
to conform to current years figures.
13. Balance Sheet and General Business Profile (in terms of Part IV of
Schedule VI to the Companies Act, 1956) is annexed herewith.
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