Impex Ferro Tech Ltd. - Quarterly/Annual Result Disclosures and Notes dated 30 Jun 2021

Notes:



1. The above results for the quarter ended 30th June, 2021 have been prepared in accordance with Indian Accounting Standard (Ind AS) notified under section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015 and have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on 14th August, 2021.



2. The COVID-19 pandemic has adversely impacted the economy and business. Supply Chain disruptions in India as a result of the outbreak started with restrictions on movement of goods, closure of borders etc., in several states followed by a nationwide lockdown to curb the spread of COVID-19. Due to this, the manufacturing operations of the Company along with supply and distribution got temporarily disrupted.



In light of these circumstances, the management has evaluated the impact on the carrying amounts and recoverability of its assets including financial assets, inventory, property plant and equipment, Intangibles etc. as at the balance sheet date, and has concluded that there are no material adjustments required in the financial statements. Management believes that it has taken into account all the possible impact of known events arising from COVID-19 pandemic in the preparation of the financial statements upto the date of approval of accounts. However, the impact assessment of COVID-19 is a continuing process given the uncertainties associated with its nature and duration. The Company will continue to monitor any material changes to future economic conditions.



3. The lenders have stopped charging interest on debts, since the dues from the Company have been categorised as Non Performing Asset. The Company is in active discussion/negotiation with its lenders to restructure its debt at a sustainable level. Pending finalization of the restructuring plan, the Company has not provided accrued interest in its books as the account has been declared NPA by the respective lenders. The amount of interest has been recogised in the books of accounts to the extent the amount charged/realised by the banks only. The amount of interest not so provided stands at Rs. 911.92 Lacs for the quarter ended 30th June, 2021 and penal interest and charges thereof (amount remaining unascertained) has not been provided for. The unprovided liability in respect of interest on long term and short term borrowings as on 30th June, 2021 amounted to Rs. 18,302.46 Lacs. The same have consequential impact on the reported figures of this quarter as well as earlier periods.



4. The Company has incurred profit of Rs. 374.74 Lacs for quarter ended 30th June, 2021. The accumulated loss as on 30th June, 2021 is Rs. 36,606.74 Lacs which is in excess of the entire net worth of the Company. With the substantial improvement in raw material availability, improvement in market scenario with notification of Minimum Import Price on steel, it is expected that the overall financial health would improve considerably. Considering the above developments and favourable impact thereof on the Company's operations and financials, the Company has prepared the financial results on the basis of Going Concern assumption.



5. A fire has occurred in the Captive Power Plant on 6th September, 2017 damaging turbine, alternator, etc. Pending assesment of actual loss, no effect has been given in the reported financials till 30.06.2020. During the quarter ended 30.09.2020 an amount of Rs. 424.53 lakhs has been received as full and final settlement against amount of claim filed for Rs. 560.00 lakhs to insurance company and the same is adjusted with the book value of related fixed assets. However the Company has demanded for balance amount of claim and necessary accounting adjustment of the same will be made once it is received.



6. The balance of "Trade Receivables", "Trade Payables", "Advances from Customers", "Advances Recoverable in cash or Kind" and Advance to Suppliers and Other Parties" includes balances remaining outstanding for a substantial period. The balances are subject to confirmations and reconciliations. The Balance with revenue authorities are subject to final assesment order and/or submission of returns. The reported financials might have consequential impoact once the confirmation are recieved and reconciliation if any is made.



7. Various credit facilities availed from United Bank of India (UBI) and Bank of Baroda (BOB) have been assigned in favour of Rare Asset Reconstruction Ltd under assignment agreement between UBI and Rare Asset Reconstruction Ltd executed on 29th June, 2019 and between BOB and Rare Asset Reconstruction Ltd vide letter dated 18th August, 2020. In absence of information about the terms of assignment, the Company is carrying the various credit facilities as appearing in the books as per the previous terms with resepective Banks.



8. As the Company's business activity falls within a single significant primary segment i.e, "Ferro Alloys", no separate segment information is disclosed.



9. Other Income includes Net of Liabilities no longer required amounting to ` 1,166.39 Lakhs written back for the year ended March' 2021.



10. Figures for the previous period/year have been regrouped and /or reclassified to confirm to the classification of current period/year wherever necessary.