1. COMPANY INFORMATION
Rathi Steel And Power Limited (formerly Rathi Udyog Limited) (the
Company) is a public limited company incorporated in 1971 and engaged
in the business of manufacturing and sale of Steel and Steel related
Estimated amount of Contracts remaining to be executed on capital
account- Rs. NIL (Rs. NIL lakhs).
3. CONTINGENT LIABILITIES:
A. No provision has been made for:
a. Outstanding Bank Guarantees and Counter Guarantees given by the
Company Rs.5,05,17,112/- (Rs.5,86,07,112/-).
b. Outstanding Letter of Credit Rs. 6,94,70,000/- (Rs.2,70,00,000/-)
c. Sales tax Liability in respect of goods impounded- amount
unascertained (The Company has deposited Rs.12,39,019/- as security
with the dept.)
d. VAT/Sales Tax liability for various years in respect of which
either the Company or the department has filed appeals with higher
authority in respect of various years Rs.40,66,56,736/-.The Company is
Confident to get relief and chances of any liability is very remote.
e. Excise cases pending with various statutory authorities being
disputed Rs.29,12,69,588/-.The Company is Confident to get relief and
chances of any liability is very remote.
f. Civil suits and Labour cases pending against the Company not
acknowledged as debts -Rs.3,73,47,274/- (Rs.3,89,54,461/-).
g. The layoff at Orissa unit has been rejected by the competent Labour
Authority and raised compensation of Rs.4.65 Crores .The Company has
contested the same in the Court.
h. As per Gas sales Agreement between GAIL and Company, total annual
take or pay deficiency for the year 2014 works out to Rs.27.01 Crores
and GAIL has raised a demand of Rs.10.33 Crores which has been disputed
by the Company.
i. WESCO utility, Orissa has raised a demand of Rs.1.24 Crores towards
electricity bills charges for the period up to October 2014,which has
been disputed by the Company.
B. Surety given to sales tax dept. for others. The Company has not
considered these as contingent liability as chances of out flow of
resources are remote as Company has a right to claim the same from
C. Income Tax and Sales Tax Assessments:
a. Income tax assessments have been completed upto assessment year
2012-13.Additional liability, if any, in respect of pending
assessments, would be provided for on completion of assessments.
b. Additional demand, if any, in respect of pending assessment of
Sales Tax/ VAT/Entry Taxwould be known only on completion of the
c. A search was conducted at the Company''s premises by the Income Tax
Department in the month of January 2015. Additional liability on
account of the same would be provided for once finalized.
4. Name of the Company has been changed from Rathi Udyog Limited to
Rathi Steel And Power Limited w.e.f.20.03.2008.
5. Post approval of Corporate Debt Restructuring scheme, Company has
since implemented the same in the books of account to the extent
implemented by the member banks and provision for interest has been
made to the extent made by banks.
6. Supreme Court in the month of September 2014 has cancelled the coal
block allotted to the Company. A charge sheet was also filed against
the Company and its officials. Court in its order dated 19.05.2015 have
framed charges against Company under section 120-B IPC and under
section 420 r/w Section120 B IPC. As per the directions of Supreme
Court Enforcement Directorate is also making investigations in
connection with irregularity in Coal Block Allotment.
7. During the year there has been an increase in Depreciation due to
charging of depreciation for Orissa unit assets which was not charged
in the last year.
8. During the year company has charged an expense of Rs. 7.09 Crores
to Profit and Loss Account as extra ordinary items. The same pertains
to expenses incurred for development of Coal Block allotted to the
Company, the same was cancelled by Hon''ble Supreme Court of India
9. FOREIGN CURRENCY TRANSACTIONS:
Expenditure in Foreign Currency:
a. Raw material purchase (CIF) Rs.397777952/- (Rs.114620206/-)
b. Capital Goods (CIF) - Rs.5200000/-(Rs.5344546/-).
c. Stores Purchased(CIF)-Rs.6703760/-(Nil)
Earning in Foreign Currency (FOB):
Finished goods sale Rs. Nil (Rs. Nil)
10. Payment to auditors:
a. Audit Fee - Rs.4,00,000 (Rs.4,00,000).
b. Fee for Limited Review - Rs.1,00,000
c. Out of Pocket Expenses-Rs.15,000 (Rs.15000).
11. Sundry debtors, advances, creditors & other liabilities includes
inter parties transfers and are subject to confirmation and consequent
adjustments. In the opinion of the Board of Directors, the current
assets and loans & advances except doubtful in nature would realize at
the amount at which these are stated in the Balance Sheet. For doubtful
debts, the Board of Directors isvery much hopeful for their recovery.
Therefore, No provision has been made.
12. Sundry Creditors includes amount payable to MSME amounting to
Rs.28.53 lacs.The parties have since filed the cases in the court and
claimed interest in terms of the MSME Act alongwith Principal amount.
13. Earning Per Share (EPS):
Earning Per Share (EPS) - the numerators and denominators used to
calculate earning per share:-
14. Related Party Disclosure:
In accordance with Accounting Standard (AS-18) on related party
disclosure, where control exists and where key management personnel are
able to exercise significant influence and, where transactions have
taken place during the year, alongwith description of relationship
identified, are given below:
1. Shri Udit Rathi
2. Smt. Sonal Rathi
3. Smt. Divya Rathi
b) Key Managerial Personnel Shri Pradeep Kumar Rathi Shri P N Varshney
15. Segmental Reporting:
The business activity of the company falls within one broad segment viz
Steel. Hence the disclosure requirement of Accounting Standard-17 of
Segment Reporting issued by the Institute of Chartered Accounts of
India is not given.
16. Previous year figures have been regrouped or recast wherever
c) The following transactions were carried out with related parties in
the ordinary course of business: