NOTES FORMING PART OF THE FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015 1 CORPORATE INFORMATION SVC Superchem Ltd 'the Company" was incorporated in India on 29th August'1989 and is implementing PTA project at its plant site at chhata Barsana Road, Chhata, Mathura(UP). Company's plant under construction has been under shut down condition since September, 2000 due to various reasons beyond its control, after successful trial run. Company has its Registered Office at Mumbai. 2 SIGNIFICANT ACCOUNTING POLICIES: 2.1 Basis of accounting and brparation of financial statements: I) The financial statements have been brpared under the historical cost convention on an accrual basis to comply in all material aspects with applicable accounting principles in India including accounting standards notified u/s 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts )Rules,2014. ii) The Company generally follows mercantile system of accounting and unless otherwise stated recognizes significant item of income and expenditure on accrual basis. 2.2 Use of Estimates The brsentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of incomes and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialised. 2.3 Fixed Assets(Tangible): Fixed assets are stated at cost net of cenvat. All expenditure pertaining to project under construction and other broperative expenses and losses including trial run expenses and interest cost (net of income accrued) incurred during the construction period, unless otherwise stated, are capitalized till the commencement of commercial production / till the date assets are put to use. 2.4 Debrciation and Amortizations: Debrciation on Fixed Assets except Capital work-in-progress has been provided on Straight Line Method by considering revised usefull life as specified in part 'c' of Schedule II to the Companies Act 2013. 2.5 Impairment of Assets: An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value on technical evaluation. Company has not made any evaluation about the recoverable value of its assets, hence the impairment loss, if any, are not identified and will be written off in the accounts in the Year in which such losses are identified as impaired, as specified in Accounting Standard (AS-28) on impairment of assets. 2.6 Income-Tax: No provision for the deferred tax arising out of time difference has been made, as the company has not brpared any Profit & Loss Account as commercial production has not started till the date of Balance Sheet and no trading or service activities were carried out during financial year ended on that date. 2.7 Foreign Exchange Transaction: I) Transactions in foreign currencies are recorded at the exchange rates brvailing at the time of the transactions. ii) Foreign Currency transactions remaining unsettled at the end of the year are re-stated in rupee value at the year end rates iii) Changes in liability arising out of such re-statement pertaining to acquisition of fixed assets is treated as an adjustment to the carrying cost of such fixed assets. 2.8 Inventories: Inventories are valued on first-in-first-out basis, at cost. 2.9 Cenvat Credit: Cenvat Credit is accounted by recording the capital assets/raw material, stores and spares acquired during the year net of Cenvat Credit. Cenvat Credit receivable is shown under Other Non Current Assets. 2.10 Excise duty: Excise duty is accounted on clearance of goods and provision, as applicable, is made in respect of finished goods lying unsold. 2.11 Sales: Sales are accounted net of excise duty and discounts. 2.12 Retirement Benefits(Employees): Provision for Gratuity and Leave Encashment payable on retirement to the employees are made on the basis of actual period of their services and at brscribed rates irrespective of their illegibility due to short tenure of their services. Company has not made any provisions or Investment as per AS-15 due to closure of plant activity since 2000 2.13 Borrowing Costs: Borrowing costs that are attributable to the acquisition or construction of qualifying assets are to be capitalized as part of the cost of such assets when accounts are settled with lender and interest liability crystalised subject to note no. 15 hereinafter, in terms of Accounting Standard (AS-16) on "Borrowing Cost" issued by the Institute of Chartered Accountants of India, a qualifying asset is one that necessarily takes a substantial period of time to get ready for intended use. 2.14 Related Party Transaction: Related party transaction as identified by the management within the meaning of Accounting Standard (AS-18) regarding "Related Party Disclosure" are provided as per Note No.27. 2.15 Lease Transactions: The lease rent payable during the project construction period, in terms of the lease agreement entered into by the Company and the "Lessor", is charged to "Capital Work in progress" under the head br-operative expenses. 2.16 Provisions, Contingent Liabilities & Contingent Assets: Provisions involving substantial degree of estimation in measurement are recognised when there is a brsent obligation as a result of past events and it is probable that there will be a outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes, Contingent Assets are neither recognised nor disclosed in the financial statement. 3. Most of lenders have approached DRT for recovery. However, certain bankers and Financial Institutions have assigned their claims to certain Asset reconstruction Company, Foreign bank and other Investment Companies including certain strategic investor. 20. Company has not replaced those lenders in its books of accounts due to ongoing disputes. PICUP being one of the Secured Creditors has issued notice for taking possession of assets of company, however company has already got stay order from honourable Allahabad High court against the PICUP notice of possession, till 21. further order. 4. Due to non-servicing of debt and consequential debt restructuring/One Time settlement (OTS) proposal and also due to pendency of DRT proceedings, various Banks and institutions have not provided in their books of accounts Interest/Bank charges and therefore outstanding of such Banks and Financial Institutions is un- 22. reconciled. In view of various Debt Restructuring proposals submitted earlier before the lenders and matters under One Time settlement (OTS) negotiation and also certain matters being pending before the Debt Recovery Tribunal and also due to non 23. commencement of commercial operation of the unit for more than a decade causing non-servicing of its debt to the lenders and its brsent financial position , company has not provided any interest since September' 1999, aggregating to Rs.7604.83 crores (6302.97 crores) as on 31st March 2015 on this basis of original documented rate. Neither interest is provided nor ascertained on the 24 unpaid amounts payable to creditors due to delay in project commissioning and disputes with such parties. The interest at the documented rates not provided by the company amounted to Rs 1301.86 crores(Rs. 1092.59 crores) for the year ended on 31 st March 2015 included in above on its secured borrowings. 5. Company's Plant under construction has been under shut down (b) since September, 2000 and with the passage of time and in the absence of any operation since then, the corrosion is taking place in the Plant due to climatic and cyclonic conditions in the area. It is difficult to exbrss the opinion about the health of the Plant on going concern basis or about the losses due to impairment of the assets of the Project, as required under Accounting Standard 28 (AS-28), since the project and its plant & machinery are one of the highly technologically oriented project whose valuation or its capabilities and conditions are technical subject, and in the absence of independent technical evaluation and health check up of the Plant at 25. brsent, one can not determine losses if any, for making any provision for impairment of the assets of the project or about its status as ongoing project. 6. Amount of Rs.61.93 lac (Rs.61.93 lac) payable to certain financer on account of Equipments / Machineries acquired under the Hire Purchase Agreement having lien on those equipment and machineries are included in the creditors for capital assets who has agreed to assign to new equipment Financier Akhil Marketing Pvt. Ltd., an Associated company in terms of tripartie agreement. 7. Since commercial production has not commenced during the year, 26. no profit and loss account has been brpared. The necessary details as per Part II of Schedule III of the Companies Act, 2013 have been disclosed in Note No. 28 hereinafter. All the expenses incurred during the year have been capitalized as per said Note 28. the terms of issue but in respect of which the Company, in exercise of its lien on such shares, has not issued the share certificates to the defaulting Debenture holders. The Company's lien on such shares will extend to the forfeiture of Contingent Liabilities not provided for in the Accounts are as follows Claims against the Company not acknowledged as debt, excluding the amount mentioned in Note No. 15 hereinabove, as certified by the management, including matter under litigation as on 31st March, 2015 Rs.835.26 lacs (P.Y.Rs.835.26 lacs) Income Tax Assessment of the company have been completed up to Assessment Year 2010-11. There is no disputed demand outstanding and payable as on date of Balance sheet. The Company had received show cause notice in the year 2003-04 from the Government authorities for demand of duty on imported spares kept beyond permissible time and still lying in Govt, approved Bonded warehouse amounting to Rs.95.57 lacs. Company has responded to said show cause notice and has also made provision accordingly. The matter is still pending before the Govt, authorities, (a) Company has filed appeal against the order of Commissioner of Excise & Service Tax before CESAT Delhi for disallowing Cenvat credit Rs. 127.95 lacs and levy of penalty of equal amount. Company has received the stay order against above demand. The company is confident that its appeal will be allowed. Accordingly. no provision has been made in its accounts. Company has received another show cause notice during the earlier year from the Excise authorities that why Cenvat Credit Rs. 217.60 lacs along with interest and penalty should not be recovered from the Company. Company has reversed the said modvats credit of Rs.217.60 lacs under protest and has brferred appeal before the CESAT Delhi, got stay order and is confident that the relief will be granted by the CESAT. Company has included such reversal of modvat credit of Rs.217.60 lacs in earlier year2010-2011 in Capital work in progress. Case is still pending for hearing. Fixed assets taken on lease amounting to Rs. 907.26 lac (Rs.907.26 lac) being lease value net of margin deposit and amount transfered to Secured Loans as referred in Note No. 5F herein above. There is no future obligations pertaining to lease rentals becoming due after the date of Balance Sheet. Outstanding dues pertaining to lease rental payable on the documented rates, excluding write off of creditors as per note 28 (a) and late payment charges, are included in Other Long Term Liabilities amounting to Rs. 291.63 lacs. Lease suppliers have exclusive charge on the leased assets provided byt hemalong with other as per Note No. 5.F hereinabove. No provision has been made by the Company for any lease rental or for late payment charges on above arrears as the plant is closed since 2000. As there is no commercial operation or fresh purchases and there are only old creditors, the company is not able to identify creditors covered by Micro, small and medium Enterprises Development Act, 2006 and as such amount payable to them, if any, could not also be ascertained. 8. Calls in arrears include unpaid Allotment Money related to 27. As per Accounting Standard (AS-18) on "Related Party Disclosures" Debentures which have been converted into Equity Shares as per the disclosure of transactions with related parties as defined therein are given below 9. In the opinion of the Board, Assets of the company excluding Capitalwork- in-progress whose no technical evaluation has been made during the year, have a value on realization, at least equal to the amount at which they are stated in the books of accounts and provision for all known liabilities, except as mentioned otherwise, has been made. 10. Commercial Tax authorities have levied penalty for the year 2007- 2008 and 2008-2009 of Rs.1,62,528/- and Rs.3,61,540/- respectively regarding use of concession form on procurement of HSD taken / used. Company has brferred appeal before the appellant authority for the stay and waiver of the penalty. The appeal has been decided partialy in favour of company by by giving 50% relief. Now, company has filed appeal before Tribunal for waiver balance amount of Penalty. Company has however deposited the disputed amount under protest pending its appeal before the Tribunal. The Matter is still pending for hearing. 11. Previous year figures have been regrouped, reworked, rearranged and reclassified wherever necessary. Figures in brackets indicate the corresponding figures for the brvious year. In term of our report of even date For B. M. CHATURVEDI & CO. Chartered Accountants ICAI FRN:114317W Animesh Kumar Dutta ICAI MN: 132389 Partner For and on behalf of Board of Directors SURESH V. CHATURVEDI : Promoter Director JAFFAR IMAM : Director I. G. MALHOTRA : Director G. S. DAHOTRE : Director P. P. SHASTRI : Director ABHA RAVI : Director SANJAY AGRAWAL Chief Financial Officer Date :23rd May 2015 Place : Mumbai |