II NOTES ON ACCOUNTS :
1. In the opinion of the management, Loans & Advances and current
Assets are approximately of the value stated, if realised in the
ordinary course of business. The balances of sundry Debtors, sundry
creditors, loans and Advances and other accounts as at 31.03.2000 are
subject to confirmation.
2. (i) Term Loan from Central Bank of India is secured by mortgage
and/or hypothecation of all present and future assets, both movable and
immovable which includes land, building, plant and machineries, spare
parts, accessories, equipments, fixtures, dyes, tools, parts, furniture
and other movable etc. Further, the loans are guaranteed by the
Managing Director and other Director of the company in their personal
(ii) Working Capital borrowings from Central Bank of India secured by
first charge on stocks of raw materials, work-in-progress, consumable
stores and spares and book debts and also guaranteed by the Chairman
and the Managing Director of the company in their personal capacities.
(iii) Term loan from Bihar State Industrial Credit and Investment
Corporation, Patna is secured by way of equitable mortgage of company's
land measuring 6 kathas and 4 dhurs and hypothecation of all building
constructed and to be constructed and all plant & machinery installed
and to be installed on the plot of land. In addition to this, the loan
is secured by way of second charge on the assets financed by Central
Bank of India. The loan is also guaranteed personally by all the
Directors of the company.
3. No provision for taxation has been made during the year in view of
the Provisions of the Income Tax Act, 1961.
4. Expenditure on employees getting remuneration of not less than
Rs.6,00,000/- per annum, if employed throughout the year or Rs.50,000/-
per month, if employed for part of the year : Nil. (Previous Year :
5. Calls in Arrear amounting to Rs.10859500/- as shown in Schedule - 1
of the statement of Accounts are in respect of shares alloted to
persons other than Directors of the Company.
6. During the year, letter of credit to the tune of Rs.65.00 lacs
devolved upon the company. No interest has been provided on the
liability in respect of the devolved letters of credit as no interest
has been debited by the bank.
7. The total demand of Excise Duty after the introduction of
compounding system stands as follows :
Rolling Mill - Rs.81,80,777/- (Upto 31.03.1999)
Rs.68,04,060/- (For 1999-2000)
Induction Furnace - Rs.2,77,14,804 /-
Out of the demand of Rs.6804060 /- in respect of the rolling mill for
the year, Rs.1904248/- was paid during the year. No provision in
respect of the liabilities has been made as the matter is subjudice
with Supreme Court of India.
8. The total demand for fuel surcharge as on 31.3.2000 is as follows :
Rolling Mill division - 1998-99 - Rs.8,45,328/-
Previous year - Rs.9,61,055/-
Induction furnace division : 1998-99 - Rs.56,16,343/-
Previous year - Rs.58,67,196/-
The same has not been provided in the accounts.
9. Sales tax demand in respect of the financial year 1995-96 was
Rs.1,96,075.72 and in respect of the financial year 1996-97, it was
Rs.11,65,075.02. Out of this Rs.38,216/- and Rs.2,32,406/- was
deposited. The matter was subjudice with Joint Commissioner of
Commercial Taxes (Appeal) and as the matter has been decided in favour
of the company, the amount stands refundable.
10. The quantitative details of Stocks has been compiled from the
Excise records of the company.
11. Pursuant to an inspection carried out by BSEB officials in the
premises of the company, a demand of Rs.12.62 crores was raised under
clause 16.9 of the tariff of the BSEB upon the company for alleged
discrepancies in the electric line of the furnace division of the
company. Consequently the electric line of the furnace division was
disconnected on 28.08.1999. However, the bill has been stayed by the
Hon'ble Supreme Court of India and the tine has been restored on
payment of Rs. 60.00 lacs on 1 -6-2000.
12. Previous year figures have been re-grouped and/or re-arranged
wherever considered necessary.