1.1 Terms/rights attached to Equity Shares:
The Company has only one class of Equity Shares having a par value of Rs.
1 per share. The Equity Shares have equal rights, preferences and
restrictions which are in accordance with the provisions of law, in
particular the Companies Act, 1956.
1.2 During the year 2007-08 Company had reached One Time Settlement
with certain Preference Shareholders for pre-mature redemption of
226,058 0.01% Redeemable Preference Shares of Rs. 100/- each of Face
Value of Rs. 226.06 lacs.
Small scale industrial undertakings to whom Rs. 0.47 lac (Previous Year Rs.
1.81 lacs) are due for a period exceeding 30 days have been identified
based on the information available with the Company and are as follows
: Indo Compressed Tools Pvt. Ltd., Rock Drill (India) Pvt. Ltd. and
Odisha Air Products Pvt. Ltd.
2. Disclosure pursuant to Accounting Standard - 15 (Revised) Employee
Defined Contribution Plan :
Amount of Rs. 255.40 lacs (Previous Year Rs. 233.02 lacs) is recognised as
expense and included in Employee Benefits Expense in Note 25 of the
Statement of Profit and Loss.
Defined Benefit Plan :
The company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service is entitled to Gratuity on
terms not less favourable than the provisions of the Payment of
Gratuity Act, 1972. The scheme is funded with SBI Life Insurance in
form of qualifying insurance policy.
The Company also extends benefit of compensated absences to the
employees, whereby they are eligible to carry forward their entitlement
of privilege leave for encashment. This is an unfunded plan.
The following tables summaries the components of net expense recognised
in the Profit and Loss account and Balance Sheet for the respective
3 There are no Micro, Small and Medium Enterprises, to whom the
company owes dues, which are outstanding as at the Balance Sheet date.
The above information has been determined to the extent such parties
have been identified on the basis of information available with the
company. This has been relied upon by the auditors.
4 Contingent Liabilities and Commitments
(I) Contingent Liabilities :
(a) Claims against the Company not acknowledged as debts, since
disputed Rs. 3,870.71 lacs (Previous Year Rs. 4,311.32 lacs). Amounts paid
under protest Rs. 270.63 lacs (Previous Year Rs. 230.92 lacs) have been
debited to Advance Account.
(b) Counter guarantees in favour of Consortium Banks in respect of
their outstandings with Facor Steels Limited. Due to the nature of the
liability, its financial impact is not ascertainable.
(a) Estimated amount of contracts on Capital Account remaining to be
executed and not provided for in accounts Rs. 76.12 Lacs (Previous Year Rs.
5 a) The Company has given corporate guarantee to Rural
Electrification Corporation Ltd. (REC) in connection with granting a
Term Loan of Rs. 39,768 Lacs (Previous Year Rs. 39,768 Lacs) to Facor Power
Ltd. (FPL). The Company has also pledged 4,88,24,299 shares (Previous
Year 4,88,24,299 shares) with REC out of 13,60,74,369 shares (Previous
Year 6,48,24,369 shares) held in FPL besides giving an undertaking to
provide interest free unsecured subordinated loan or subscribe for
equity / preference shares to FPL in case of cost overrun at any stage
of the project.
b) The Company has given corporate guarantee to Central Bank of India
for granting a short term loan of Rs. NIL (Previous Year Rs. 12,500 Lacs)
and to State Bank of Mysore for granting bank guarantee limit of Rs. 300
Lacs (Previous Year Rs. 300 Lacs) to FPL.
6 The revised Schedule VI to the Companies Act, 1956 has become
effective from 01-04-2011 for preparation and presentation of financial
statements. This has significantly impacted the disclosure and
presentation made in the financial statements. Accordingly the figures
for the previous year have been reclassified, wherever necessary to
conform with the current year''s classification.
7 The Ministry of Corporate Affairs, Government of India, vide
Circular No. 2 and 3 dated 8th February, 2011 and 21st February 2011
respectively has granted a general exemption from compliance with
section 212 of the Companies Act, 1956, subject to the fulfillment of
conditions stipulated in the circular. The Company has satisfied the
conditions stipulated in the circular and hence is entitled to the
exemption. Necessary information relating to the subsidiaries has been
included in the Consolidated Financial Statements. The annual accounts
of the subsidiary companies are available for inspection by any
shareholder at the Registered office of the Company. The annual
accounts of the subsidiary companies are also available for inspection
at their respective registered offices.