Steel Tubes of India Ltd. के अकाउंट के लिये नोट

Mar 31, 2009

1. CONTINGENT LIABILITIES:

a. There are no contracts remaining to be executed on capital account.

b. Sales Tax & Entry Tax matters under appeal Rs. 754.86 lacs (Previous Year Rs. 754.86 lacs).

c. Excise & Customs matters under appeal Rs. 63.50 lacs (Previous Year Rs. 63.50 lacs).

2) The company had filed reference with Board for Industrial & Financial Reconstruction (BIFR) u/s 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), on 20th March 2006 the company was declared as sick company u/s 3(1 )(o) of SICA and IFCI was appointed as Operating Agency to prepare a scheme for draft rehabilitation of the company.

During the hearing held on 7th December 2006 honorable Board of BIFR ordered that in view of steps of possession of manufacturing assets taken over by the Secured Creditors and subsequent sale of assets to M/s Caparo Engineering India Pvt. Ltd. the proceedings before BIFR is to be abated.

The Company has preferred an application before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) for maintaining the status quo before the BIFR. The AAIFR vide order dated 7th March 2007 has directed to maintain status quo on the application of the company.

3) In view of non-implication of any financial liability in various court cases pending against / for the Company, no provision has been considered necessary. However the accounts have been prepared on going concern basis and the liability in future, if any would be accounted for in the year of demand.

4) The Company has not provided interest amounting to Rs. 315.79 lacs (Previous year Rs. 317.26 lacs) on some of the unsecured loans & deferred credits, had the same been provided the loss for the year would have been higher by Rs. 315.79 lacs and accumulated losses by Rs. 2347.31 lacs (Previous year Rs. 2031.52 lacs.)

5) The Company had reached settlement with certain parties in respect of unsecured loans and other liabilities. As per terms of settlement the amounts foregone by the said parties are to be restored to their original amounts along with interest and penal interest on any default in the revised repayment schedule. However, in few cases the Company has not been able to adhere to the repayment schedule in terms of settlement, the liability, if any, on account of the said agreement has neither been ascertained nor provided for.

6) The Company has defaulted in repayment of Fixed Deposits on account of unclaimed/ unpaid deposits. No provision of interest has been made and the amount thereof is not ascertainable.

7) The company has not filled in the positions of Managing or Whole Time Director and Company Secretary as at 31st March, 2009 in terms of provisions of Section 269(1) and 3 83 A of the Companies Act 1956. after the resignation of erstwhile Managing Director and Company Secretary.

8) Loans & Advances, Sundry Creditors, Deposits and Other Loans are subject to reconciliation and confirmation from the parties. The extent of adjustments that may arise and their effect on the accounts cannot be ascertained at this stage. The adequacy of provision of advances and security deposits is as assessed by the management.

9) (a) There have been delays of more than six months in deposit of undisputed statutory dues amounting to Rs. 74.27 lacs (Previous year Rs. 78.25 Lacs) in respect of Provident Fund, Employees State Insurance, Tax Deducted at Source, Entry Tax, Professional Tax and, Local Sales Tax. Consequent liability towards interest and penalty, if any, on account of such delays is unascertainable and has not been provided for.

(b) Sales Tax deferment in Schedule No. 4 includes Rs. 342.34 lacs (Previous year Rs. 342.34 Lacs) due for repayment for more than six months as per scheme of deferment of tax under the Madhya Pradesh Deferment of Payment of Tax Rules, 1994.

10) No dividend on Investments in 15% Cumulative Convertible Preference Shares of Rs 100/- each in Global Stone India Ltd. (Formerly STI Granite India Ltd) has been received since financial year 1999-2000 due to losses incurred by the said Company and as per audited annual accounts for the year ended on 31 st March, 2008, the accumulated losses of the said Company have exceeded its entire net worth. However, no provision for diminution in value of investment has been made as this diminution is considered by the management to be temporary in nature considering the strategic and long term nature of the investment.

11) Sundry Creditors include outstanding dues of Small Scale Industrial Undertakings to the extent ascertained and identified from available information are Nil (Previous Year Rs. 0.12 lacs) such dues outstanding exceeding 30 days were in the name of M/s Air Tech Engineers.

12) In the absence of taxable income during the year and in view of brought forward losses, no provision for income tax has been made. Further the deferred Tax assets has also not been recognized as there is no reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

13) As the Company has not carried any manufacturing activities during the current year, no purchases of raw materials and sales of Steel Tubes and Strips have taken place, hence additional information pursuant to the provision of Schedule VI of the Companies Act, 1956 regarding particulars in respect of opening stock, production, sales and closing stock of goods dealt with and raw material consumption are not applicable.

14) The Plant & Machinery consists of Solar Power Plant, which is no longer usable in view of disposal of all manufacturing assets and suspension of production facilities thereof by the company wef 18th August 2006. As on date the said Plant continues to remain installed at the erstwhile factory premises of the company, which presently is in possession of a third party. The impairment in the value of the said plant as on date has not been assessed by the company and accordingly the amount recoverable from me prospective sale of such plant has not been measured in terms of Accounting Standard - 28 issued by Institute of Chartered Accountants of India, the impact mereof as such has not been accounted for.

15) Related Party Disclosures (As certified by Management)

a) List of Related Parties and Relationships.

S.No. Name of Related Party Relationship

1 Key Management Personnel

(a) Dr. R.B.Baheti Promoter

(b) Mr. K.N. Garg Promoter

2 SGC Multi Business (P) Ltd. : Associate Companies

3 (a) STI International Ltd. : Other Enterprises where control exist.

(b) STI Sanoh India Ltd.

(c) Global Stone India Ltd.

(d) STI Products India Ltd.

(e) STI India Limited

(f) STI Power India Pvt. Ltd.

(g) Satisfaction

(h) Satisfaction Marketing Pvt.Ltd.

(i) Satisfaction Products Ltd

16) Previous year figures have been regrouped/rearranged wherever necessary.

17) Schedule 1 to 18 forms integral part of the Balance Sheet and Profit and Loss Account and have been duly authenticated.