1. Contingent Liabilities
i. Estimated amount of contracts remaining to be executed on capital
account [net of advances] and not provided for Rs. 4969.12 Lacs [P.Y.
ii. Contingent Liability not Provided for in respect of :-
[Rs. in Lacs]
Particulars As at As at
Letter of Credit 493.75 1223.69
Bank Guarantee Given 26.27 265.65
Corporate Guarantees Given to Banks
for Shah Alloys Ltd. 8,000.00 8,000.00
Claim lodged by party not acknowledge
by us 500.07 234.90
Disputed Value Added Tax Demand 365.63 -
2. Foreign currency exposure at the year end not hedged by derivative
a) The Company has not entered into any forward contracts to offset
foreign currency risks arising from the amounts denominated in
currencies other than the Indian Rupee.
3. Segment Reporting
The Company is manufacturing Ferro Alloys & Sponge Iron, which is
basically used in Iron & Steel Industry. Further power generated in the
company in its power plant is used for captive as well as trading
purpose. In view of this, the company has to consider Iron & Steel
and Power as Primary Reportable business segment, as per Accounting
Standard -17, Segment Reporting issued by The Institute of Chartered
Accountants of India. However, due to substantial competition, risk,
on-going position of Company and largely in the interest of the Company
as well as interest of the stack holders involved, therefore,
management has not made disclosure of Primary Reportable segment as per
Accounting Standard -17. Further, the Company has its business within
the geographical territory of India Therefore, Company has considered
INDIAN GEOGRAPHY as the only secondary reportable business segment,
as per the Accounting Standard 17 issued by the Institute of Chartered
Accountants of India.
4. Related Party Disclosures
Associates : Shah Alloys Ltd., Adarsh Foundation
Key Management Personnel : Rajendra V. Shah, Dr. K. C Thatoi,
Sujal A. Shah (KMP)
5. As informed to us, the Company has not received information from
the Suppliers regarding their status under The Micro, Small & Medium
Enterprises Development Act, 2006. Hence, disclosures, if any, relating
to amounts unpaid as at the Balance Sheet date together with interest
paid or payable as per the requirement under the said Act, have not
6. As per Accounting Standard - 15 Employee Benefits, the
disclosures of Employee benefits as defined in the Accounting Standard
are given below:
Defined Benefit Plan
The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method, which recognizes each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obliga- tion. The obligation for leave encashment is recognized in the
same manner as gratuity.
vi. Actuarial assumptions
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary. The expected rate of
return on plan assets is determined considering several applicable
factors, mainly the composition of plan assets held, assessed risks,
historical results of return on plan assets and the Company''s policy
for plan assets management.
7. Certain Balance of Debtors, Creditors, Loans & Advances for capital
Expenditures are non- moving / sticky since last 3 years. However in
view of management, the same is recoverable / payable. Hence no
provision for the same is made in the books of accounts.
8. Expenses have been capitalized and transferred to pre-operative
expenses on the basis of bifurcation made by the management. This being
technical matter, auditors have accepted the same as correct.
9. The company has opted for Tax Remission Scheme in place of
original composite scheme of Sales Tax. Due to this change, the VAT
collected by the Company becomes Income of the Company and accordingly
credited to Profit and Loss Account.
10. In the opinion of the Board of Directors, the current assets,
loans and advances are approxi- mately of the value stated, if realized
in the ordinary course of business and the provisions for depreciation
and all known and ascertained liabilities are adequate and not in
excess of the amounts reasonably necessary.
11. Inventories are as taken, valued and certified by the Management.
12. Balances of Unsecured Loans, Sundry debtors, Creditors and Loans
and advances are subject to confirmation from respective parties.
13. Previous year''s figures have been re-grouped / rearranged wherever
necessary so as to confirm to current year''s groupings.