Retirement and other employee benefits

Retirement benefit in the form of Provident Fund is a defined contribution scheme. The contributions to the provident fund are charged to the Statement of Profit and Loss for the year when the contributions are due. The Company has no obligations other than the contribution payable to the respective funds.

Gratuity liability is a defined benefit obligation and is provided for on the basis of actuarial valuation done on projected unit credit method at the end of each financial year. Actuarial gains and losses are recognised in full in the period in which they occur in the Statement of Profit and Loss.

Short term compensated absences are provided for based on estimates.

Shyam Metalics and Energy Limited
Notes to financial statements as at and for the year ended 31st March, 2014
B	NOTES ON ACCOUNTS:
25	Earnings per share (EPS)
	The following reflects the profit and share data in the basic and diluted EPS Computations:
										Amount (In Rs.)
	Particulars								2013-14	2012-13
	Profit after tax								430,880,989	265,495,476
	Net Profit for calculation of basic and diluted EPS					430,880,989	265,495,476
	Weighted average number of equity shares in calculating				Nos.	Nos.
	Basic and Diluted EPS							41,085,940	34,782,588
	Earning per Equity Share
	Nominal value of Shares (Rs.)						10	10
	Basic and diluted*							10.49	7.63
	* Including  5,643,236 Equity Shares to be issued on amalgamation ( Refer Note No. 42 below)
26	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 not funded.
	The following tables summarize the components of net benefit expenses recognized in the Statement of  Profit and Loss Account and the funded status and amounts recognized in the Balance Sheet for the Gratuity.
										Amount (In Rs.)
	Sl	Particulars								2013-14	2012-13
	i	Net Employee Expenses/ (benefit)
		Current Service Cost							2123246	2,022,949
		Interest cost on benefit Obligation					769747	776,750
		Expected return on plan asset
		Net Actuarial (gain) /loss recognized in the year.				(1862966)	(3,812,524)
		Total employer expenses recognized in Profit and Loss Account			1030027	(1,012,825)
	ii	Actual return on plan assets							-
	iii	Movement in benefit liability
		Opening defined benefit obligation					8037728	9,223,380
		Interest cost							769747	776,750
		Current service cost							2123246	2,022,949
		Benefits paid								172,827
		Actuarial (gains)/losses on obligation					(1862966)	(3,812,524)
		Closing benefit obligation						9067755	8,037,728
	iv	The principal actuarial assumptions are as follows
		Discount rate							8.25%	8%
		Salary increase							5%	5%
		Withdrawal rates	Varying between 8% per annum to 1% per annum depending on duration and age of the employees.
	v	Amount incurred as expenses for defined contributions plans			1,030,027	1,012,825
		(Contribution to Provident / Pension fund)
	vi	The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion, and other relevant factor, such as supply and demand in the employment market.
	vii	Amounts for the current and brvious year are as follows:	2013-14	2012-13	2011-12	2010-11
		Defined Benefit Obligation				9,067,755	8,037,728	9,223,380	6,394,565
		Experience adjustments on plan liabilities*			NA	NA	NA	NA
		*The management has relied on the overall actuarial valuation conducted by the actuary. However, experience adjustments on plan liabilities are not readily available and hence not disclosed.
27	Segment Information:
	a)	Primary Segment Reporting (by Business Segments)
	i)	Composition of Business Segments
		a) Integrated Iron and Steel segment, engaged in production of Manufacturing of Sponge Iron, Ingot, Billets, TMT Bars, Iron Pellet and other      products.
		b) Wind Mill Segment, engaged in generation of Power.
	ii)	Segment Revenue, Results and other information as at / for the year ended 31st March, 2014	Amount (In Rs.)
		Particulars								Integrated Iron and Steel	Wind Mill
		Segment Revenue							9,969,700,048	38,453,595
		Segment Results*							446,287,719	11,224,048
		Segment Assets							7,638,462,063	337,444,906
		* Segment result means Profit Before Tax
	b)	Information for Secondary Geographical Segments
										Amount (In Rs.)
	Particulars								2013-14	2012-13
	Domestic Revenues (Net of Excise Duty)					8,061,126,097	6,477,895,192
	Export Revenues							1,852,757,147	977,243,507
	Total								9,913,883,244	7,455,138,699
	The Company has common fixed assets for producing goods for domestic and overseas markets. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished. Export debtors at year end amount to Rs.109,948,584 (31st March, 2013 Rs. Nil).
28	Related Party Disclosures under AS-18
	a)	Name of related parties and related party relationship:
	Sl	Relationship					Party's Name
	i	Subsidiary Company					Shyam Minimet Africa Pvt. Ltd.
								Damodar Aluminium Private limited
								Singhbhum Steel and Power Private Limited
	iii	Joint Venture Company				MJSJ Coal Limited
	iv	Associate Company					Subhlabh Commercial Pvt. Ltd.
								Shyam Sel and Power Ltd.
								Avam Trades and Services Pvt. Ltd.
								Vedansh Mineral and Metals Pvt.Ltd.
								Meghana Vyapar Pvt. Ltd.
	v	Key Management Personnel and their relatives		Mr. Brij Bhushan Agarwal (Managing Director)
								Mr. Sanjay Agarwal (Whole Time Director)
								Mr. Bhagwan Shaw (Director)
								Mr. Bajrang Lal Agarwal (Director)
								Mr. Dev Kumar Tiwari (Director)
	vi	Enterprise over which key management personnel and/or their relatives have significant influence	Conventary Commodeal Pvt. Ltd
	Dorite Tracon Pvt. Ltd.
							Kalinga Energy and Power  Ltd.
							Kalinga Infra-Projects Ltd.
							Shyam Energy Ltd.
							Shyam Solar Appliances Pvt. Ltd.
							Inforev Software Pvt. Ltd.
							Narantak Dealcomm Ltd.
							Puri Port Ltd.
							Shaily Sales and Services Pvt. Ltd.
							Subham Buildwell Pvt. Ltd.
							Shyam Ferro Alloys Ltd.
							Toplight Mercantile Pvt. Ltd.
							Shyam Emco Infrastructure Ltd.
							Subham Capital Pvt. Ltd.
							Kalpataru Housefin Pvt. Ltd.
							Essel Plywood Pvt, Ltd
							Shyam Business Solution Pvt. Ltd.
							Shyam Greenfield Developers Pvt. Ltd.
							Swarnrekha Energy and Steel Pvt. Ltd
							Whispering Developers Pvt. Ltd.
							Gandhini Housing Pvt. Ltd.
							Gumla Alumunium Pvt. Ltd
							Shyam Century Multi Projects Ltd.
							Sindbad Hydro Power Pvt. Ltd.
							Eureka Hydro Power Pvt. Ltd.
							Goodlife Hydro Power Pvt. Ltd.
							Britasia Hydro Power Pvt. Ltd.
							Renaissance Hydro Power Pvt. Ltd.
29	Lease
	a	Operating Lease:
		Certain office brmises, guest houses and plant and machineries are obtained on operating lease. There is a lease agreement for a period of  1-3 years for offices and guest houses and are renewable for further period either mutually or at the option of the Company. There is also an escalation clause in certain lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The leases are cancellable.
										Amount (In Rs.)
		Particulars								2013-14	2012-13
		Lease payments made for the year					22,344,817	13,731,356
		Contingent rent recognized in Profit and Loss Account				-	-
	b	Finance Lease:
		Fixed Assets include certain Plant and Machineries and Vehicles obtained on finance lease. The year-wise break-up and future obligation towards minimum lease payment of Rs. 24,81,490 (31st March,2013 Rs. 22,57,370) consisting of brsent value of lease payments and financial charges of Rs.21,15,705 (31st March,2013 Rs. 20,75,442) and Rs. 3,65,785 (31st March,2013 Rs. 1,81,928) respectively under the relevant agreements as on 31st March, 2014 is given below:
										Amount (In Rs.)
		Particulars						Not later than 1 year	Later than 1 year but not later than 5 years
								Minimum lease payments	Present Value as on 31.03.14	Minimum lease payments	Present Value as on 31.03.14
		Finance Lease*					1,021,914	828,103	1,459,576	1,287,602
								(1,602,320)	(1,827,188)	(655,050)	(248,254)
		*  Rate of interest 8.16%-13.65%
30	Capital and other Commitments:
	(a)	Estimated Amount of contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs.381,701,780
		(31st March 2013 : Rs.498,145,813)
	(b)	For commitments relating to lease arrangements please refer Note 29.
31	(a)	Contingent Liabilities
										Amount (In Rs.)
										As at 31st March 2014	As at 31st March 2013
	i	Unredeemed Bank Guarantees on behalf of the joint venture company		100,116,000	100,116,000
	ii	Other Unredeemed Bank Guarantees					60,930,650	62,837,797
	iii	Bills discounted with banks						1,101,466,008	395,441,944
	iv	Custom duty on Import under EPCG scheme against which Export Obligation is to be fulfilled	56,857,132	56,857,132
	v	Demands/Claims by various Government authorities and others not acknowledged as debts:
		Excise Duty							76,420,510	74,548,696
		Service Tax							6,344,052	-
		Custom Duty							29,186,198	17,423,285
		Sales Tax								22,318,195	-
		Orrisa Entry Tax*							16,762,335	-
		Total								151,031,290	91,971,981
	(b)	Based on discussion with the solicitors / favourable decisions in similar cases / legal opinion taken by the Company, the management believes that the Company has good chance of success in above mentioned cases and hence no provision there against is considered necessary.
32	Derivative instruments and unhedged foreign currency exposure:
	Derivative instrument not for trading or speculation but as hedge og underlying transaction, outstanding as on the Balance Sheet date, are as follows :
	Interest rate swap :
	Hedge against exposure to variable interest outflow on loans. Swap to pay fixed interest in USD and receive a variable interest on the notional
	amount.
	Notional Amount		To Pay		To Receive
	i	USD 50,00,000 (31st March,2013 : USD 5,000,000)		2.39%		3 Months Libor
		Bitmap  [     299,350,150(31st March,2013 :       270,969,200)]			Bitmap
	ii	USD 50,00,000 (31st March,2013 : USD 5,000,000)		2.33%		3 Months Libor
		BitmapBitmap  [     299,350,150(31st March,2013 :       270,969,200)]			Bitmap
	iii	USD 50,00,000 (31st March,2013 : USD 5,000,000)		2.28%		3 Months Libor
		BitmapBitmap  [     299,350,150(31st March,2013 :       270,969,200)]			Bitmap
	Further, the following Foreign Currency exposures are not hedged as on the balance sheet date:
	Nature of Item					Currency	As at 31st March, 2014	As at 31st March, 2013
								Value In Foreign Currency	Value In INR  (Rs.)	Value In Foreign Currency	Value In INR  (Rs.)
	Buyer's Credit					USD ($)	7,147,778	429,580,050	12,060,408	655,957,149
	Creditors					USD ($)	3,667,838	220,436,330	10,349,890	545,024,247
	Debtors					USD ($)	1,829,433	109,948,584
	Term Loan					USD ($)	44,008,800	2,644,920,078	56,345,973	3,064,618,029
	Working Capital Demand Loan / Packing Credit		USD ($)	5,407,000	324,959,619	6,299,000	342,598,201
33	The water resources department of the Government of Orissa has raised bills for consumption of water by the Company on the basis of 6MGD of water i.e. the drawl sanctioned quantity till October, 2009 and thereafter at reduced quantity of 3MGD of water. However, pending execution of the agreement, the Company had asked for phase wise allocation of water and water tax was paid accordingly on a lesser quantity based on actual consumption upto 31st October 2009. The differential water tax liability i.e. difference between sanctioned quantity and actual consumption  (including penalty and interest) aggregates to Rs.230,475,313  (31st March.2013 Rs. 197,442,098), which has not been provided in the accounts since the same is being contested by the Company. Further liability, if any, in this regard will be provided on settlement of the matter.
34	Trade receivables includes an amount of Rs. 10.45 Crores due for more than six months as on the balance sheet date. Debtors also includes amount Rs 4.03 Crores on which legal cases are pending and as per the management same are to be considered fully recoverable and no provision is made there against in this accounts . Further debtors are subject to confirmations.
35	Sundry Creditor and Advance from Customers includes Rs. 91.08 Crores and Rs. 13.95 lacs which are lying unpaid for a considerable period of time. As per the management, no adjustments is required, and if any, would be carried out only at the time of actual payment of such dues.
	Based on the information / documents available with the Company, no creditor is covered under The Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions / payments have been made by the Company to such creditors, if any, and no disclosures thereof are made in these accounts.
36	The Company has a 9% interest in the assets and liabilities of the MJSJ Coal Limited (Joint Venture Company), incorporated in India which is yet to commence the commercial extraction of coal and hence no Profit and Loss account has been brpared by the Joint Venture Company.
	The Company's share of the assets and liabilities of the above jointly controlled entity on the basis of audited accounts, at the balance sheet date is as follows:
										(Rs. In lacs)
	Particulars								As at 31st March 2014	As at 31st March 2013
	Assets								882.88	860.41
	Liabilities								36.1	13.63
	Miscellaneous Expenditure							9.12	9.12
	(To the extent not written off or Adjusted)
	There are no capital commitments and contingent liability of the Joint Venture Company except for bank guarantee given as mentioned in note 31 (a)(i)
37	Minimum Alternate Tax (MAT) credit entitlement of Rs. 365,139,350 (Rs. 201,916,540) being available as tax credit for set off in future years as per the Income Tax Act, 1961, has been accounted for in view of accounting policy specified in 1.1 (n) above. Details are shown below:
		Year					MAT Credit Available		Remaining Year for Utilisation
		2009-10					80,988,117		6 years
		2010-11					69,643,745		7 years
		2011-12					44,340,160		8 years
		2012-13					74,766,445		9 years
		2013-14					95,389,103		10 years
38	Value of Imports calculated on CIF basis:
										Amount (In Rs.)
		Particulars								2013-14	2012-13
		Raw Materials							672,021,333	687,408,689
		Capital Goods							2873445	19,063,414
		Stores and Spares							-	2,944,678
39	Expenditure in Foreign Currency (on accrual basis)
										Amount (In Rs.)
		Particulars								2013-14	2012-13
		Travelling expenses							2,037,199	1,575,125
		Demurrage Charges on Import of Raw Materials				6,788,429	-
		Other Borrowing Cost							-	-
		Miscellaneous Expenses						192,705	-
		Interest on Loan							209,527,789	250,013,544
40	Earnings in Foreign Currency (on accrual basis)
										Amount (In Rs.)
		Particulars								2013-14	2012-13
		Exports (F.O.B. value)							1,609,063,875	861,754,207
41	Imported and indigenous Raw Materials and Stores and Spares Consumed
		Particulars						2013-14	2012-13
								Amount (Rs.)	Consumption %	Amount (Rs.)	Consumption %
	i	Raw Materials and Components:
		Indigenous					5,778,078,193	92%	4,399,573,825	84.81
		Imported						522,668,475	8%	788,089,863	15.19
		Total						6,300,746,668	100%	5,187,663,688	100.00
	ii	Stores, Chemicals and Spare Parts:
		Indigenous					463,971,393	100%	230,117,968	98.74
		Imported						-	0%	2,944,678	1.26
		Total						463,971,393	100%	233,062,646	100.00
	It is not possible to identify consumption of spare parts separately and hence consumption of stores and spares is shown above.
42	a) Pursuant to the Scheme of Amalgamation as approved by the shareholders of the company and the Hon'ble High Court of Calcutta by an Order dated 11th June.2014 , all the assets and liabilities of  1) PONNI TREXIM PVT. LTD. ( PONNI), 2)ESKAY BUSINESS PVT. LTD. (ESKAY), and 3) NANDLAL TIE-UP  PRIVATE LTD. (NANDLAL) have been transferred to and vested in the Company from 1st April, 2013 at their respective book values.
	b) The amalgamating companies (ESKAY, NANDLAL and PONNI) were engaged in the investment business.
	c) The amalgamation company have been accounted for under the "Pooling of Interest" method as brscribed by the Accounting Standards ( AS-14) issued by the Institute of Chartered Accountants of India. Pursuant to the scheme, all the assets, liabilities and reserves of PONNI, ESKAY and NANDLAL as at 1st April, 2013 have been transferred to the Company as their respective book values at given below. Though, the Scheme has become effective after the balance sheet date, it is operative from the transfer date. i.e. 1st April 2013 and accordingly, it has been given effect to in these accounts:
	Particulars	PONNI	ESKAY	NANDLAL
	Non Current Assets
	-Fixed Assets	9,731	14,703	-
	-Long Term Investments	115,001,615	111,505,308	689,628,000
	- Loans and Advances	5,060,657	5,699,863	-
	-MAT Credit Receivable	108,985	248,323	-
	-Other Long Term Assets	1,151,836	212,477	-
	2)Current Assets
	- Cash and Bank Balance	2,680,019	1,816,051	281,935
	3) Current Liabilities and Provisions
	- Current Liabilities	18,570,303	10,865	11,200
	- Provisions for Standard Assets	12,652	14,250	-
	- Provisions for Income Tax	91,877		-
	4) Deferred Tax Liability (Assets)	2,690	4,061	-
	5) Reserves and Surplus
	- Statutory Reserve	1,923,081	2,157,810	-
	- Securities Premium	261,277,000	124,382,500	793,800,000
	- Profit and Loss Account	1,626,841	6,540,412	(246,805)
	d) Pursuant to the Scheme, 39,19,000 Equity Shares of the Company held by the Amalgamating Company stand cancelled. Further share brmium of Rs. 38,83,50,000 realised by the Company on issue of above shares in the Earlier years which is included in the investments appearing in the books of amalgamating companies have been adjusted with the Securities brmium as adjustment arisen on Amalgamation.
	e) Pursuant to the Scheme Shares held by the company in the amalgamating companies or by the amalgamating companies interse stand cancelled and the Company has to issue 14,70,536,   9,27,075 and 32,45,625 fully paid Equity shares of Rs 10 each to the shareholders of PONNI, ESKAY and NANDLAL respectively aggregating to Rs 5,64,32,360, in the ratio of 2(Two) Equity shares of the company for every 5(Five) Equity shares held in PONNI, 1(One) Equity Share of the company for every 4(Four) equity share held in ESKAY and 9(Nine) Equity shares of the company for every 4(Four) Equity shares held in NANDLAL and the same, pending allotment of shares, has been shown as Share Capital Suspense in the Balance Sheet as at 31st March, 2014.
	f) Further, Rs 3,18,39,040  being the difference between the Share Capital of the amalgamating companies after cancellation of the shares as stated above and the share to be issued to the shareholders of the amalgamating companies has been credited to Capital Reserve.
43	As per the management advance received against sale of Land amounting to Rs 14,431,429 is related to compensation against the demolition of boundry walls and other related civil works. Neither the land has been possessed by the concerned authority nor the company has received the entire sale proceeds in relation to cumpolsury acquisition of land. Due to above facts no adjustment has been made in the Fix Assets. The total area of Land which will be covered under cumpulsory  acquisation by the authorities is 0.6 decimal.
	As per our report of even date					For and on Behalf of the Board
	For S.K.PATODI and CO.
	Chartered Accountants
	FRN : 327254 E
									Brij Bhushan Agarwal, Managing Director
	S.K.PATODI
	Partner
	Membership No. 062520
	Place: Kolkata
	Date: 14th August, 2014						Sanjay Agarwal, Whole Time Director