Mar 31, 2016
(b) Cash credit from banks of Rs, 46,508.73 lacs (Rs, 36,691.48 lacs) are further secured by the personal guarantee of one or more promoter directors of the Company.
v) The CDR Package as well as the provisions of the Master Circular on Corporate Debt Restructuring issued by the Reserve Bank of India, gives a right to the CDR Lenders to get a recompense of their waivers and sacrifices made as part of the CDR Proposal. The recompense payable by the Company is contingent on various factors, the outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as a contingent liability. The aggregate present value of the outstanding sacrifice made/ to be made by CDR Lenders under obligor co-obligor structure (Refer Note No 5(A)) as per the CDR package is approximately Rs,173,022.00 lacs.
1. Capital and other commitments
a) As at 31st March 2016, the Company has commitments of Rs, 2,198.80 lacs (Rs, 450.31 lacs) net of advances Rs, 8,206.20 lacs (Rs, 7,777.15 lacs) relating to estimated amount of contracts to be executed on capital account and not provided for.
b) The Company has given undertaking to the lenders not to dispose of its 51% shareholding in Orissa Manganese and Minerals Limited (OMM), a wholly owned subsidiary, till the loan taken by OMM is paid in full. Further, the Company has also pledged 6,000,000 equity shares of OMM as a security against the above loan.
2.Leases:
Operating lease
a) The Company has obtained Liquid Oxygen Plant on operating lease. The lease rent payable per month is Rs, 15.00 lacs (Rs, 15.00 lacs). The lease term is for a non-cancellable period of 10 years and the initial term may be extended for such further period and on such terms and conditions as the parties may mutually agree. There are no sub leases. Future lease rentals payable under non-cancellable operating leases are as follows:
b) Certain office premises, god owns, etc. are held on operating lease. The leases range up to 3 years and are renewable for further year either mutually or at the option of the Company. There are no restrictions imposed by lease agreements. There are no subleases. The leases are cancellable.
3. DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON ''EMPLOYEE BENEFITS''
The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets Gratuity on terms not lower than the amount payable under the Payment of Gratuity Act, 1972. The aforesaid scheme are unfunded and as such there are no plan assets. The following table summarizes (to the extent applicable) the components of net benefits / expenses recognized in the financial statements.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
4. EMPLOYEE STOCK OPTION PLANS (EQUITY SETTLED)
During the earlier year, the shareholders of the Company, had approved the Adhunik Employee Stock Option Plan (''ESOP 2012'') in accordance with the Guidelines issued by Securities and Exchange Board of India (SEBI) for Employees Stock Option Plans, covering employees of the Company as well as employees of the subsidiaries. The plan provide for issue up to 12,349,954 number of options convertible into equity shares of Rs, 10 each duly adjusted for any bonus, splits, etc. The Compensation Committees of the Board administers the Scheme. The option vest subject to continuation of employment.
During the years 2012-13, the Company had granted 3,708,643 number of options convertible into equity shares of Rs, 10 each. These options carry a vesting period ranging from one to four years and at an exercise price of '' 30.15 as determined in accordance with applicable SEBI Guidelines as at the date of grant. All the options granted have an exercise period of two years from the date of vesting.
5. SEGMENT INFORMATION
(i) Business Segment: The Company''s business activity primarily falls within a single business segment i.e. Iron & steel business and hence there are no disclosures to be made under Accounting Standard-17, other than those already provided in the financial statements.
(ii) Geographical Segment: The Company primarily operates in India and therefore the analysis of geographical segment is based on the areas in which customers of the Company are located.
(iii) Since the Company has common fixed assets for producing goods for domestic and overseas markets and there are no overseas fixed assets, separate figures for fixed assets / additions to fixed assets for these two segments are not furnished.
6. INTEREST IN PARTNERSHIP FIRM
The Company has Partnership Agreement with United Minerals (jointly controlled entity), a firm registered under The Indian Partnership Act, 1932, which is engaged in mining of limestone and dolomite.
38. RELATED PARTY DISCLOSURES
a) Name of related parties and related party relationship Related parties where control exists:
Subsidiary Company Orissa Manganese & Minerals Limited
Kolkata Glass and Ceramics Private Limited (w.e.f. 16.07.2015)
Associate Company Adhunik Power & Natural Resources Limited
Related parties with whom transactions have taken place during the year:
Partnership Firm (Joint Venture) United Minerals
Key Management Personnel Mr. Manoj Kumar Agarwal (ceases to exist as director w.e.f. 14.11.2015)
Mr. Ghanshyam Das Agarwal (Chairman)
Mr. Jugal Kishore Agarwal (Director)
Mr. Nirmal Kumar Agarwal (Appointed as Managing Director w.e.f. 14.11.2015) Mr. Mohan Lal Agarwal (Director)
Mr. Mahesh Kumar Agarwal (ceases to exist as director w.e.f. 23.10.2015)
Mr. Sanjay Dey (Company Secretary)
Enterprises over which Key Management Adhunik Alloys & Power Limited
Personnel / Share Holders / Relatives have Adhunik Infotech Limited
significant influence Adhunik Industries Limited
Adhunik Corporation Limited Adhunik Meghalaya Steels Private Limited Adhunik Steels Limited Amuel Engineering Private Limited Futuristic Steels Limited Mahananda Suppliers Limited Neepaz B.C. Dagara Steels Private Limited Swarnrekha Steel Industries Limited Zion Steel Limited
# The remuneration to the key managerial personnel does not include the provisions made for gratuity and leave benefits, as they are determined on an actuarial basis for the Company as a whole.
7. The Board of Directors of the Company in its meeting held on July 22, 2013 has approved to amalgamate Zion Steel Limited (ZSL) with the Company and to amalgamate the the Company (post amalgamation of ZSL) with the wholly owned subsidiary, Orissa Manganese & Minerals Limited, through a composite scheme of amalgamation between ZSL, OMM and the Company (the Scheme) as per the provision of Section 391 to 394 of the Companies Act, 1956. The appointed date of the amalgamation is 1st July 2012. The scheme has been approved by the Shareholders and Creditors of the above Companies in their meeting held on 19th and 20th April 2014 respectively and the Official Liquidator, Orissa High Court, Cuttack has submitted its report dated 17th July 2014 that the affairs of the Company appears to have not been conducted in a manner prejudicial to the interest of its members or to public interest and the Hon''ble High Court may consider to pass order as deemed fit and proper in that manner. Upon effectiveness of the Scheme, every shareholder of ZSL holding 17 (seventeen) fully paid-up equity shares of ''10/- each shall be entitled to receive 1 (one) fully paid-up equity shares of Rs,10/- each in the Company and every shareholder of the Company (post amalgamation of ZSL) holding 1 (one) fully paid-up equity shares of Rs,10/- each shall be entitled to receive 1 (one) fully paid-up equity shares of Rs,10/- each in
the wholly owned subsidiary, Orissa Manganese & Minerals Limited.
8. The Company is in process of appointing Chief Financial Officer to comply with the provision of The Companies Act, 2013.
9. Section 2(41) of the companies Act 2013 requires all companies to have their financial year ending on 31st March. The Company has adopted this change from the current financial year and accordingly, the current financial year of the company is for nine month period from 1st July 2015 to 31st March 2016 (herein after referred as "Year ended 31st March 2016"). Accordingly, the figure for the current financial year are not comparable to those of the previous year.
10. Previous year figures including those given in brackets have been rearranged where ever necessary to conform with the current year classification.
Jun 30, 2015
(a) Terms/Rights attached to equity shares
(i) The Company has only one class of equity shares having a par value
of Rs,10 per share. Each holder of equity shares is entitled to one
vote per share. The Company declares and pays dividends in Indian
rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the General Meeting.
(ii) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
(iii) During the year ended 30th June, 2015 the amount of dividend per
share recognized as distribution to equity shareholders is Rs, Nil per
share (Rs, Nil per share).
(b) Aggregate number of bonus shares issued and shares issued for
consideration other than cash during the period of five years
immediately preceding the reporting date is Nil.
As per records of the Company, including its register of shareholders/
members and other declarations received from shareholders regarding
beneficial interest, the above shareholding represents both legal and
beneficial ownerships of shares.
(c) Employee Stock Options Scheme
For details related to shares reserved for issue under Employee Stock
Option Plan (ESOP) of the Company (Refer Note 33).
1. Effective from July 1, 2014, the Company have charged depreciation
based on the revised remaining useful life of the assets as per
requirement of Schedule II of the Companies Act, 2013. Further, as per
transitional provision provided in note 7(b) of Schedule II, an amount
of Rs, 242.01 lacs (net of deferred tax of Rs, 116.23 lacs) has been
adjusted with General Reserve for the assets in respect of which the
remaining useful life is Nil as on July 1, 2014.
(A) Secured Term Loans
The Board of Directors of the Company had accorded its approval for
restructure of the debts of the Company under Corporate Debt
Restructuring (CDR). CDR Empowered Group (CDR EG) in its meeting held
on March 18, 2015 has approved the CDR scheme and issued letter of
approval on March 20, 2015. As on June 30, 2015 CDR Master
Restructuring Agreement (MRA) have been executed. On restructuring the
following loans have been recorded in the books of the Company under
long term borrowings as on June 30, 2015:
Restructured Term Loan :
In terms of the CDR Package, outstanding term loan of the Company
amounting to Rs, 78,294.10 lacs as on August 1, 2014 (cut-off date)
which falls due to payment on or after the cutoff date has been
restructure into new term loan (herein after referred to as
"Restructured Term Loan").
Working Capital Term Loan (WCTL):
In terms of the CDR Package, the overdrawn portion of the Cash Credit
Accounts of the Company amounting to Rs, 30,470.00 lacs has been carved
out into separate Working Capital Term Loans (WCTL-I) and LC/BG
devolved amounting to Rs, 33,126.55 lacs from cut-off date till March
31, 2015 has been carved out as Working Capital Term Loan - II (WCTL-
II).
Funded Interest Term Loan (FITL):
In terms of the CDR Package, funding of interest has been provided for
:
- Interest on restructure term loans for a period of 24 months from the
cut-off date i.e. from August 01, 2014 to July 31, 2016;
- Interest on WCTL-I & on WCTL-II for a period of 24 months from the
cut-Off date i.e. from August 01, 2014 to July 31, 2016;
- Interest on regular cash credit limit for a period of 8 months from
the cut-Off date i.e. August 01, 2014 to March 31, 2015; Till June 30,
2015 Rs, 11,485.80 lacs interest on above loans have been funded from
FITL.
Priority Term Loan :
In terms of the CDR Package, priority term loan amounting to Rs,
3,777.00 lacs with a moratorium period of 2 years has been sanctioned
to meet payment obligations towards statutory liabilities, pressing
creditors and employees dues. During the year Rs, 2,102.50 lacs loan
has been availed out of above mentioned Priority Term Loan.
Capex Term Loan :
In terms of the CDR Package, capex term loan amounting to Rs, 6,096.00
lacs has been sanctioned with a moratorium period of 2 years. During
the year Rs, Nil loan has been availed out of above mentioned Capex
Term Loan.
(1) Nature of security -
i) The rupee term loan from CDR lenders (Banks and IFCI) amounting to
Rs,155,478.95 lacs (Rs, Nil) are secured by charge over the entire
assets of the Company and over all the assets of the wholly owned
subsidiary Company, Orissa Manganese & Minerals Limited (except assets
exclusively charged to ICICI Bank) and Zion Steel Limited, the
enterprises over which Key Management Personnel have significant
influence, both present and future, ranking pari passu with the charges
in favor of other existing CDR lenders (including working capial
lenders) under obligor and co-obligor structure.
ii) The term loans from Non-CDR lender (SREI) amounting to Rs, 1,762.43
lacs (Rs,1,831.50 lacs) are secured by first charge over all the fixed
assets of the Company and over all the fixed assets of the wholly owned
subsidiary Company, Orissa Manganese & Minerals Limited, and Zion Steel
Limited, the enterprises over which Key Management Personnel have
significant influence, both present and future, ranking pari passu with
the charges created / to be created in favor of other existing and
proposed banks and financial institutions and second pari-passu charge
on all the current assets of the Company, Orissa Manganese & Minerals
Limited and Zion Steel Limited under obligor co-obligor structure.
iii) The term loans from banks and financial institutions amounting to
Rs, Nil (Rs, 13,206.87 lacs) are secured by first charge over all the
fixed assets of the Company, both present and future, ranking pari
passu with the charges created / to be created in favour of other
existing and proposed banks and financial institutions and second
pari-passu charge on all the current assets of the Company.
iv) 8,302,264 equity shares of promoters and promoters group in the
Company has been pledged as security to CDR lenders.
v) The rupee term loans from ICICI Banks amounting to Rs, 18,841.71
lacs (Rs, 9,764.42 lacs) are further secured by exclusive charged on
the fixed assets of the mining division of the wholly owned subsidiary
Company, Orissa Manganese & Minerals Limited and pledge of 30% shares
of the pre merged entity, i.e. Orissa Manganese & Minerals Limited.
However, post-merger (Refer Note No. 39), proportionate shares would
continue to be pledged with ICICI Bank as per the scheme of merger.
vi) The rupee Term Loans of Rs, 157,241.38 lacs (Rs, 88,114.17 lacs)
from banks and financial institutions are further secured by the
personal guarantee of one or more promoter directors of the Company.
vii) Finance against equipments/vehicles/housing are secured by
hypothecation of the respective equipments/vehicles/housing.
Rate of Interest charged
i) The Restructured Rupee Term Loan from CDR lenders amounting to Rs,
78,294.40 lacs shall carry floating interest rate of 11% p.a.
w.e.f. the cut-off date till March 31, 2017, 11.50% p.a. for next three
years and 12% p.a. for the balance years and shall be linked to
individual bank base rate.
ii) The Working Capital Term Loan (WCTL-I & WCTL-II) amounting to
Rs, 63,596.55 lacs and FITL amounting to Rs, 11,485.80 lacs from
CDR lenders carry floating interest rate, linked to individual bank
base rate, of 11% p.a.
iii) The Priority Term Loan from CDR lenders amounting to Rs,
2,102.50 lacs carry floating interest rate, linked to individual
bank base rate, of 11.25% p.a.
iv) The Capex Term Loan from CDR lenders amounting to Rs, Nil as on
June 30, 2015 shall carry floating interest rate, linked to individual
bank base rate, of 11.25% p.a. v) The Term Loan from Non-CDR lender
(SREI) amounting to Rs, 1,762.43 lacs shall carry floating interest
rate of 13.30% p.a.
(B) The installment and interest on Rupee Term Loan from Non-CDR lender
(SREI) amounting to Rs, 61.92 lacs and Rs, 94.86 lacs respectively due
for payment on or before June 30,2015 have not been paid. The Company
is in discussion with SREI for joining the CDR Scheme and once SREI
join the CDR Scheme the default will cease to exist.
The interest on FITL and PTL from CDR lender amounting to Rs, 0.27 lacs
due for payment on April 30,2015, Rs, 4.13 lacs due for payment on May
31, 2015 and Rs, 77.80 lacs due for payment on June 30, 2015 were
outstanding as on 30th June 2015. But the same have been subsequently
paid.
(C) Unsecured
Unsecured Loans from body corporate Rs, 777.00 lac (Rs, Nil) are to be
converted into Equity by March 31,2016 as per CDR package.
(D) Vehicle/Equipment/Housing loans carry interest ranging between
8.46% to 12.00% per annum and are secured by the respective fixed
assets purchased there against. Following is the repayment schedule of
such loans:
2. The Company has provided for deferred tax assets for Rs, 13,336.06
lacs based on future profitability projection. The management is of the
view that future taxable income will be available to realise/adjust
such deferred tax assets.
(a) Cash credit from banks of Rs, 36,691.48 lacs which is repayable on
demand are secured by charge over the entire assets of the Company and
over all the assets of the wholly owned subsidiary Company, Orissa
Manganese & Minerals Limited (except assets exclusively charged to
ICICI Bank) and Zion Steel Limited, the enterprises over which Key
Management Personnel have significant influence, both present and
future, ranking pari passu with the charges in favor of other existing
CDR lenders (including term loan lenders) under obligor and co-obligor
structure.
(b) Cash credit from banks of Rs, 36,691.48 lacs are further secured by
the personal guarantee of one or more promoter directors of the
Company.
* The classification of provision for employee benefits into current /
non current have been done by the actuary of the Company based on the
estimated amount of cash outflow during the next twelve months from the
balance sheet date.
v) The CDR Package as well as the provisions of the Master Circular on
Corporate Debt Restructuring issued by the Reserve Bank of India, gives
a right to the CDR Lenders to get a recompense of their waivers and
sacrifices made as part of the CDR Proposal. The recompense payable by
the Company is contingent on various factors, the outcome of which
currently is materially uncertain and hence the proportionate amount
payable as recompense has been treated as a contingent liability. The
aggregate present value of the outstanding sacrifice made/ to be made
by CDR Lenders under obligor co-obligor structure (Refer Note No
5(1)(i)) as per the CDR package is approximately Rs,173,022.00 lacs.
3. Capital and other commitments
a) As at 30th June 2015, the Company has commitments of Rs, 450.31 lacs
(Rs, 7,196.28 lacs) net of advances Rs, 568.52 lacs (Rs, 1,822.55 lacs)
relating to estimated amount of contracts to be executed on capital
account and not provided for.
b) The Company has given undertaking to the lenders not to dispose off
its 51% shareholding in Orissa Manganese and Minerals Limited (OMM), a
wholly owned subsidiary, till the loan taken by OMM is paid in full.
Further, the Company has also pledged 6,000,000 equity shares of OMM as
a security against the above loan.
4. Leases :
5. DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON 'EMPLOYEE
BENEFITS'
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets Gratuity on terms not
lower than the amount payable under the Payment of Gratuity Act, 1972.
The aforesaid scheme are unfunded and as such there are no plan assets.
The following table summarizes (to the extent applicable) the
components of net benefits / expenses recognized in the financial
statements.
Statement of Profit and Loss
6. EMPLOYEE STOCK OPTION PLANS (EQUITY SETTLED)
During the earlier years, the shareholders of the Company, had approved
the Adhunik Employee Stock Option Plan ('ESOP 2012') in accordance with
the Guidelines issued by Securities and Exchange Board of India (SEBI)
for Employees Stock Option Plans, covering employees of the Company as
well as employees of the subsidiaries. The plan provide for issue up to
12,349,954 number of options convertible into equity shares of Rs, 10
each duly adjusted for any bonus, splits, etc. The Compensation
Committee of the Board administers the Scheme. The options vest subject
to continuation of employment.
During the earlier years, the Company had granted 3,087,949 number of
options convertible into equity shares of Rs, 10 each. These options
carry a vesting period ranging from one to four years and at an
exercise price of Rs, 30.15 as determined in accordance with applicable
SEBI Guidlines as at the date of grant. All the options granted have an
exercise period of two years from the date of vesting.
7. SEGMENT INFORMATION
(i) Business Segment: The Company's business activity primarily falls
within a single business segment i.e. Iron & steel business and hence
there are no disclosures to be made under Accounting Standard-17, other
than those already provided in the financial statements.
(ii) Geographical Segment: The Company primarily operates in India and
therefore the analysis of geographical segment is based on the areas in
which customers of the Company are located.
Information for Secondary Geographical Segments:
Notes to Financial Statements as at and for the year ended 30th June,
2015
(iii) Since the Company has common fixed assets for producing goods for
domestic and overseas markets and there are no overseas fixed assets,
separate figures for fixed assets / additions to fixed assets for these
two segments are not furnished.
8. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
(a) Forward Contract
For minimizing the risk of currency exposure, the Forward cover
contracts are of Nil (USD 3,150,000) for trade receivables.
(b) Particulars of unheeded foreign currency exposure as at the balance
sheet date
(c) The company has outstanding derivative transaction of full currency
swap from Rs, to $ for notional amount of Rs, 1,000.00 lacs (notional $
1,790,189.76) receiving net interest benefit of 8.7450% for a period
starting from 7-Sept-2012 and ending at 31-Aug-2017 and Rs, 2,100.00
lacs (notional $ 3,493,013.97) receiving net interest benefit of
8.5500% for a period starting from 14-July-2014 and ending at
30-Jun-2020. The purpose of this transaction is to transform the
payments under the long term Rs, borrowing into $ liability and thereby
reducing effective interest rate.
9. INTEREST IN PARTNERSHIP FIRM
The Company has Partnership Agreement with United Minerals (jointly
controlled entity), a firm registered under The Indian Partnership Act,
1932, which is engaged in mining of limestone and dolomite.
10. RELATED PARTY DISCLOSURES
a) Name of related parties and related party relationship Related
parties where control exists:
Subsidiary Company Orissa Manganese & Minerals Limited
Associate Company Adhunik Power & Natural Resources Limited
Related parties with whom transactions have taken place during the
year:
Partnership Firm (Joint Venture) United Minerals
Key Management Personnel Mr. Manoj Kumar Agarwal (Managing Director)
Mr. Ghanshyam Das Agarwal (Chairman) Mr. Jugal Kishore Agarwal
(Director) Mr. Nirmal Kumar Agarwal (Director) Mr. Mohan Lal Agarwal
(Director) Mr. Mahesh Kumar Agarwal (Director) Mr. Sanjay Dey (Company
Secretary)
Enterprises over which Key Management Adhunik Alloys & Power Limited
Personnel / Share Holders / Relatives have Adhunik Infotech Limited
significant influence Adhunik Industries Limited
Adhunik Corporation Limited Adhunik Meghalaya Steels Private Limited
Adhunik Steels Limited Amuel Engineering Private Limited Futuristic
Steels Limited Mahananda Suppliers Limited Neepaz B.C. Dagara Steels
Private Limited Swarnarekha Steel Industries Limited Zion Steel Limited
# The remuneration to the key managerial personnel does not include the
provisions made for gratuity and leave benefits, as they are determined
on an actuarial basis for the Company as a whole.
11. The Board of Directors of the Company in its meeting held on July
22, 2013 has approved to amalgamate Zion Steel Limited (ZSL) with the
Company and to amalgamate the Company (post amalgamation of ZSL) with
the wholly owned subsidiary, Orissa Manganese & Minerals Limited,
through a composite scheme of amalgamation between ZSL, OMM and the
Company (the Scheme) as per the provision of Section 391 to 394 of the
Companies Act, 1956. The appointed date of the amalgamation is 1st July
2012. The scheme has been approved by the Shareholders and Creditors of
the above Companies in their meeting held on 19th and 20th April 2014
respectively and the Official Liquidator, Orissa High Court, Cuttack
has submitted its report dated 17th July 2014 that the affairs of the
Company appears to have not been conducted in a manner prejudicial to
the interest of its members or to public interest and the Hon'ble High
Court may consider to pass order as deemed fit and proper in that
manner. Upon effectiveness of the Scheme, every shareholder of ZSL
holding 17 (seventeen) fully paid-up equity shares of Rs,10/- each
shall be entitled to receive 1 (one) fully paid-up equity shares of
Rs,10/- each in the Company and every shareholder of the Company (post
amalgamation of ZSL) holding 1 (one) fully paid-up equity shares of
Rs,10/- each shall be entitled to receive 1 (one) fully paid-up equity
shares of Rs,10/- each in the wholly owned subsidiary, Orissa Manganese
& Minerals Limited.
12. The Company is in process of appointing Chief Financial Officer to
comply with the provisions of The Companies Act, 2013.
13. Previous year figures including those given in brackets have been
rearranged where ever necessary to conform with the current year
classification.
Jun 30, 2014
1. CORPORATE INFORMATION
Adhunik Metaliks Limited (the Company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its equity shares are listed on stock exchanges in
India. The Company is primarily engaged in the manufacture and
sale of steel, both alloy & non alloy.
(a) Terms/Rights attached to equity shares
(i) The Company has only one class of equity shares having a par value
of RS.10 per share. Each holder of equity shares is entitled to one
vote per share. The Company declares and pays dividends in Indian
rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the General Meeting.
(ii) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
(iii) During the period ended 30th June, 2014 the amount of per share
dividend recognized as distribution to equity shareholders is RS. Nil
per share (RS. Nil per share).
As per records of the Company, including its register of shareholders/
members and other declarations received from shareholders regarding
beneficial interest, the above shareholding represents both legal and
beneficial ownerships of shares.
(d) Employee Stock Options Scheme
For details related to shares reserved for issue under Employee Stock
Option (ESOP) plan of the Company (Refer Note 33).
(a) Nature of security -
(i) The rupee term loans from banks amounting to RS. 13,206.87 lacs
(RS. 45,961.75 lacs) are secured by first charge over all the fixed
assets of the Company, at Chadrihariharpur Kuarmunda, Distt.
Sundargarh, Orissa, both present and future, ranking pari passu with
the charges created / to be created in favour of other existing and
proposed banks and financial institutions and second pari-passu charge
on all the current assets of the Company.
(ii) The rupee term loans from banks/financial institutions amounting
to RS. 65,142.88 lacs (RS. 15,000.00 lacs) are secured by first charge
over all the fixed assets of the Company, at Chadrihariharpur
Kuarmunda, Distt. Sundargarh, Orissa and over all the fixed assets of
the wholly owned subsidiary Company, Orissa Manganese & Minerals
Limited, and Zion Steel Limited, the enterprises over which Key
Management Personnel have significant influence, both present and
future, ranking pari passu with the charges created / to be created in
favor of other existing and proposed banks and financial institutions
and second pari-passu charge on all the current assets of the Company,
Orissa Manganese & Minerals Ltd. and Zion Steel Ltd. under obligor
co-obligor structure.
(iii) The rupee term loans from banks amounting to RS. 9,764.42 lacs
(RS. 11,593.75 lacs) are secured by second charge on entire movable and
immovable fixed assets of the Company.
(iv) The rupee term loans of RS. 88,114.17 lacs (RS. 72,555.50 lacs)
from banks and financial institutions are further secured by the
personal guarantee of one or more promoter directors of the Company.
(v) Finance against equipments/vehicles/housing are secured by
hypothecation of the respective equipments/vehicles/housing.
(b) Terms of repayment of rupee loans from banks and financial
institutions rate of interest charged -
Rupee term loans of RS. 88,114.17 lacs (RS. 72,555.50 lacs) from banks
and financial institutions carry interest ranging between respective
bank''s base rate (ranging from 10.00% to 10.25% per annum) plus premium
(ranging from 2.55% to 4.25% per annum). The repayment
terms of the said loans are as under:
(c) The installment of rupee term loans amounting to RS. 1,231.93 lacs
(RS. Nil) due for payment as on 30th June 2014 and interest amounting
to RS. 1,812.96 lacs (RS. Nil) which was due for payment in June 2014,
have not been paid. However, out of above installement and interest of
RS. 863.88 lacs and RS. 1,346.48 lacs respectively have been paid after
the balance sheet date.
(d) Vehicle/Equipment/Housing loans carry interest ranging between
8.46% to 12.00% per annum and are secured by the respective fixed
assets purchased there against. Following is the repayment schedule of
such loans:
2. SHORT-TERM BORROWINGS (SECURED)
(a) Cash credit from banks of RS. 65,486.94 lacs ( RS. 61,141.15 lacs)
which is repayable on demand and export packing credit facilities from
banks of RS. 2,167.93 ( RS. 1,343.24 lacs) which is repayable within
one year, are secured by first charge by way of hypothecation of entire
stock of raw materials, finished goods, process stock, trade
receivables and other current assets (both present and future) of the
Company and overall current assets of OMML and ZSL under obligor and
co-obligor structure, ranking pari passu amongst working capital
lenders. The same are further secured by second charge on pari-passu
basis together with other working capital lenders over the fixed assets
of the Company and overall fixed assets of OMML and ZSL under obligor
and co-obligor structure, ranking pari passu amongst working capital
lenders. Cash credit from banks carry interest ranging between bank
base rate (ranging from 10.00% to 10.25% per annum) plus premium
(ranging from 3.75% to 4.25% per annum). Export packing credit
facilities from banks carry interest of LIBOR plus 3.25% per annum.
(b) Cash credit from banks of RS. 65,486.94 lacs (RS. 61,141.15 lacs)
are further secured by the personal guarantee of one or more promoter
directors of the Company.
12.2. CAPITAL WORK IN PROGRESS
Details of Pre-operative Expenditure (Pending Allocation)
During the year, the company has incurred the following expenses
relating to ongoing projects of the company, which are accounted as
pre-operative expenses and grouped under Capital Work-in-progress.
Consequently, expenses disclosed under the respective notes are net of
the following amounts capitalized by the company.
24.1 Managerial remuneration amounting to RS. 120.00 lacs (RS. 120.00
lacs) have been expensed off in the Statement of Profit and Loss during
the current year, which is in excess of limit specified under the
Companies Act, 1956. The above remuneration has been approved by the
Remuneration Committee and Shareholders of the Company but approval of
the Ministry of Corporate Affairs (MCA) is awaited.
3. CONTINGENT LIABILITIES
(RS. in lacs)
As at As at
30,June 2014 30,June 2013
Claims & Government demands against
the Company not acknowledged as debt:
Excise/Service tax demand under 3,064.96 3,028.52
dispute/ appeal
Sales Tax matters 1,161.19 421.24
(under dispute/appeal)
Others 322.02 -
Bills discounted and Bank 12,577.03 10,573.07
Guarantees outstanding
17,125.20 14,022.83
4. CAPITAL AND OTHER COMMITMENTS
a) As at 30th June 2014, the Company has commitments of RS. 7,196.28
lacs (RS.10,260.56 lacs) net of advances RS.1,822.55 lacs (RS.
10,730.62 lacs) relating to estimated amount of contracts to be
executed on capital account and not provided for.
b) The Company has given undertaking to the lenders not to dispose off
its 51% shareholding in Orissa Manganese and Minerals Limited (OMM), a
wholly owned subsidiary, till the loan taken by OMM is paid in full.
Further, the Company has also pledged 6,000,000 equity shares of OMM as
a security against the above loan.
5. LEASES Operating lease
a) The Company has obtained Liquid Oxygen Plant on operating lease. The
lease rent payable per month is RS. 15.00 lacs (RS. 26.00 lacs). The
lease term is for a non-cancellable period of 10 years and the initial
term may be extended for such further period and on such terms and
conditions as the parties may mutually agree. There are no sub leases.
Future lease rentals payable under non-cancellable
operating leases are as follows:
(RS. in lacs)
As at As at
30,June 2014 30,June 2013
Within one year 180.00 312.00
After one year but not more 735.00 1,222.00
than five years
915.00 1,534.00
b) Certain office premises, godowns, etc. are held on operating lease.
The leases range upto 3 years and are renewable for further year either
mutually or at the option of the Company. There are no restrictions
imposed by lease agreements. There are no subleases. The leases are
cancellable.
6. DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON ''EMPLOYEE
BENEFITS''
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets Gratuity on terms not
lower than the amount payable under the Payment of Gratuity Act, 1972.
The aforesaid scheme are unfunded and as such there are no plan assets.
The following table summarizes (to the extent applicable) the
components of net benefits / expenses recognized in the financial
statements.
Statement of Profit and Loss
(a) Net employee benefit expense recognized in the employee cost
7. EMPLOYEE STOCK OPTION PLANS (EQUITY SETTLED)
During the previous year, the shareholders of the Company, had approved
the Adhunik Employee Stock Option Plan (''ESOP 2012'') in accordance with
the Guidelines issued by Securities and Exchange Board of India (SEBI)
for Employees Stock Option Plans, covering employees of the Company as
well as employees of the subsidiaries. The plan provide for issue upto
12,349,954 number of options convertible into equity shares of RS. 10
each duly adjusted for any bonus, splits, etc. The Compensation
Committees of the Board administers the Scheme. The option vest subject
to continuation of employment.
During the previous year, the Company had granted 3,708,643 number of
options convertible into equity shares of RS. 10 each. These options
carry a vesting period ranging from one to four years and at an
excercise price of RS. 30.15 as determined in accordance with
applicable SEBI Guidlines as at the date of grant. All the options
granted have an exercise period of two years from the date of vesting.
The weignted average market price of the Company''s shares during the
year ended June 30, 2014 was RS. 33.05 (RS. 32.47) per shares.
The fair value of the options granted during the previous year was
calculated by applying the Black - Scholes - Merton formula. The
following are assumptions and result.
8. SEGMENT INFORMATION
(i) Business Segment: The Company''s business activity primarily falls
within a single business segment i.e. Iron & steel business and hence
there are no disclosures to be made under Accounting Standard-17, other
than those already provided in the financial statements.
(ii) Geographical Segment: The Company primarily operates in India and
therefore the analysis of geographical segment is based on the areas in
which customers of the Company are located.
(iii) Since the Company has common fixed assets for producing goods for
domestic and overseas markets and there are no overseas fixed assets,
separate figures for fixed assets / additions to fixed assets for these
two segments are not furnished.
9. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE (a)
Forward Contract
For minimizing the risk of currency exposure, the Forward Cover
Contracts are of USD 3,150,000 (USD Nil) for trade receivables.
(c) The company has outstanding derivative transaction of full currency
swap from RS. to $ for notional amount of RS. 2,000.00 lacs (notional $
3,580,379.52) receiving net interest benefit of 5.2550% for a period
starting from 7-Sept-2012 and ending at 31-Aug-2017. The purpose of
this transaction is to transform the payments under the long term RS.
borrowing into $ liability and thereby reducing effective interest
rate.
10. INTEREST IN PARTNERSHIP FIRM
The Company has Partnership Agreement with United Minerals (jointly
controlled entity), a firm registered under The Indian Partnership Act,
1932, which is engaged in mining of limestone and dolomite.
11. RELATED PARTY DISCLOSURES
(a) Name of related parties and related party relationship Related
parties where control exists:
Subsidiary Company Orissa Manganese & Minerals Limited
Associate Company Adhunik Power & Natural Resources Limited
Related parties with whom transactions have taken place during the
year:
Partnership Firm United Minerals
(Joint Venture)
Key Management Mr. Manoj Kumar Agarwal (Managing Director)
Personnel
Mr. Ghanshyam Das Agarwal (Chairman)
Mr. Jugal Kishore Agarwal (Director)
Mr. Nirmal Kumar Agarwal (Director)
Mr. Mohan Lal Agarwal (Director)
Mr. Mahesh Kumar Agarwal (Director)
Enterprises over which Adhunik Alloys & Power Limited
Key Management Personnel
/Share Holders / Adhunik Infotech Limited
Relatives have
significant influence Adhunik Industries Limited
Adhunik Corporation Limited
Adhunik Meghalaya Steels Private Limited
Adhunik Steels Limited
Amuel Engineering Private Limited
Futuristic Steels Limited
Mahananda Suppliers Limited
Neepaz B.C. Dagara Steels Private Limited
Neepaz B.C. Dagara Steels Private Limited
Swarnarekha Steel Industries Limited
Zion Steel Limited
12. The Board of Directors of the Company in its meeting held on July
22, 2013 has approved to amalgamate Zion Steel Limited (ZSL) with the
Company and to amalgamate the the Company (post amalgamation of ZSL)
with the wholly owned subsidiary, Orissa Manganese & Minerals Limited,
through a composite scheme of amalgamation between ZSL, OMM and the
Company (the Scheme) as per the provision of Section 391 to 394 of the
Companies Act, 1956. The appointed date of the amalgamation is 1st July
2012. The scheme has been approved by the Shareholders and Creditors of
the above Companies in there meeting held on 19th and 20th April 2014
respectively and the Official Liquidator, Orissa High Court, Cuttack
has submitted its report dated 17th July 2014 that the affairs of the
Company appears to have not been conducted in a manner prejudicial to
the interest of its members or to public interest and the Hon''ble High
Court may consider to pass order as deemed fit and proper in that
manner. Upon effectiveness of the Scheme, every shareholder of ZSL
holding 17 (seventeen) fully paid-up equity shares of RS.10/- each
shall be entitled to receive 1 (one) fully paid-up equity shares of
RS.10/- each in the Company and every shareholder of the Company (post
amalgamation of ZSL) holding 1 (one) fully paid-up equity shares of
RS.10/- each shall be entitled to receive 1 (one) fully paid-up equity
shares of RS.10/- each in the wholly owned subsidiary, Orissa Manganese
& Minerals Limited.
Jun 30, 2013
NOTE 1. CORPORATE INFORMATION
Adhunik Metaliks Limited (''the Company") is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its equity shares are listed on stock exchanges in
India. The Company is primarily engaged in the manufacture and sale of
steel, both alloy & non alloy.
NOTE 2. CONTINGENT LIABILITIES
(Rs.in lacs)
2012-13 2011-12
(12 Months) (15 Months)
Claims & Government demands against
the Company not acknowledged as debt:
Excise/Service tax demand
under dispute/ appeal 3,028.52 2,147.93
Sales Tax matters (under dispute/appeal) 421.24 494.30
Customers / Vendors claims 122.67
Bills discounted and Bank
Guarantees outstanding 10,573.07 10,354.51
Total 14,022.83 13,119.41
NOTE 3. CAPITAL AND OTHER COMMITMENTS
a) As at 30th June, 2013, the Company has commitments of H10,260.56
lacs (H2,839.05 lacs) net of advances H10,730.62 lacs (H2,239.84 lacs)
relating to estimated amount of contracts to be executed on capital
account and not provided for.
b) The Company has given undertaking to the lenders not to dispose off
its 51% shareholding in Orissa Manganese and Minerals Limited (OMM), a
wholly owned subsidiary, till the loan taken by OMM is paid in full.
NOTE 4. DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON
''EMPLOYEE BENEFITS''
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets Gratuity on terms not
lower than the amount payable under the Payment of Gratuity Act, 1972.
The aforesaid scheme are unfunded and as such there are no plan assets.
The following table summarizes (to the extent applicable) the
components of net benefits / expenses recognized in the financial
statements.
NOTE 5. EMPLOYEE STOCK OPTION PLANS (EQUITY SETTLED)
During the year, the shareholders of the Company, had approved the
Adhunik Employee Stock Option Plan (ESOP 2012) in accordance with the
Guidelines issued by Securities and Exchange Board of India (SEBI) for
Employees Stock Option Plans, covering employees of the Company as well
as employees of the subsidiaries. The plan provide for issue upto
12,349,954 number of options convertible into equity shares of H10 each
duly adjusted for any bonus, splits, etc. The Compensation Committees
of the Board administers the Scheme. The option vest subject to
continuation of employment.
During the year, the Company had granted 3,708,643 number of options
convertible into equity shares of H10 each. These options carry a
vesting period ranging from one to four years and at an excercise price
of H30.15 as determined in accordance with applicable SEBI Guidlines as
at the date of grant. All the options granted have an exercise period
of two years from the date of vesting.
NOTE 6. SEGMENT INFORMATION
(i) Business Segment: The Company''s business activity primarily falls
within a single business segment i.e. Iron & steel business and hence
there are no disclosures to be made under Accounting Standard-17, other
than those already provided in the financial statements.
(ii) Geographical Segment: The Company primarily operates in India and
therefore the analysis of geographical segment is based on the areas in
which customers of the Company are located.
(iii) Since the Company has common fixed assets for producing goods for
domestic and overseas markets and there are no overseas fixed assets,
separate figures for fixed assets / additions to fixed assets for these
two segments are not furnished.
NOTE 7. DERIVATIVE INSTRUMENTS AND UNHEDGED FOREIGN CURRENCY EXPOSURE
(a) Forward Contract
For minimizing the risk of currency exposure, the Forward Cover
Contracts are of USD Nil (USD 1,590,527) for trade receivables and
USD Nil (USD 36,544,423) for trade payables.
(c) The company has entered into derivative transaction of full
currency swap from Hto $ for notional amount of H2,000.00 lacs
(notional $ 3,580,379.52) receiving net interest benefit of 5.2550% for
a period starting from 7-Sept-2012 and ending at 31-Aug- 2017. The
purpose of this transaction is to transform the payments under the long
term Hborrowing into $ liability and thereby reducing effective
interest rate.
NOTE 8. INTEREST IN PARTNERSHIP FIRM
The Company has Partnership Agreement with United Minerals (jointly
controlled entity), a firm registered under The Indian Partnership
Act, 1932, which is engaged in mining of limestone and dolomite.
NOTE 9. RELATED PARTY DISCLOSURES a) Names of related parties and
related party relationship Related parties where control exists:
Subsidiary/Step down Subsidiary Companies Orissa Manganese & Minerals
Limited
Adhunik Power & Natural Resources Limited
Adhunik Power & Transmission Limited (Ceased to be a subsidiary Company
we.f 1st November 2011)
Neepaz V Forge (India) Limited (Ceased to be a subsidiary company we.f
27th April 2012) Related parties with whom transactions have taken
place during the period: Partnership Firm (Joint Venture) United
Minerals
Key Management Personnel Mr. Manoj Kumar Agarwal (Managing Director)
Mr. Ghanshyam Das Agarwal (Chairman)
Mr. Jugal Kishore Agarwal (Director)
Mr. Nirmal Kumar Agarwal (Director)
Mr. Mohan Lal Agarwal (Director)
Mr. Mahesh Kumar Agarwal (Director) Enterprises over which Key
Management Personnel / Share Holders / Relatives have significant
influence
Adhunik Alloys & Power Limited
Adhunik Infotech Limited
Adhunik Industries Limited
Adhunik Corporation Limited
Adhunik Steels Limited
Mahananda Suppliers Limited
Zion Steel Limited
NOTE 10. The Board of Directors of the Company in its meeting held on
22nd July, 2013 has approved to amalgamate Zion Steel Limited (ZSL)
with the Company and to amalgamate the Company (post amalgamation of
ZSL) with its wholly owned subsidiary, Orissa Manganese & Minerals
Limited (OMM), through a composite scheme of amalgamation between the
Company, OMM and ZSL (the Scheme) as per the provision of Section 391
to 394 of the Companies Act, 1956. The appointed date of the
amalgamation is 1st July, 2012 and the scheme is subject to necessary
approval of shareholders, creditors, statutory authorities and the
Hon''ble High Courts of Orissa.
Upon effectiveness of the Scheme, every shareholder of ZSL holding 17
(seventeen) fully paid-up equity shares of H10/- each shall be entitled
to receive 1 (one) fully paid-up equity shares of H10/- each in the
Company and every shareholder of the Company (post amalgamation of ZSL)
holding 1 (one) fully paid-up equity shares of H10/- each shall be
entitled to receive 1 (one) fully paid-up equity shares of H10/- each
in the Orissa Manganese & Minerals Limited.
NOTE 11. The Income Tax Department had conducted a Search and Seizure
operation in the Company''s premises during the previous year, under
Section 132 of the Income Tax Act, 1961. No order/ demand, consequent
to such operation, has so far been received by the Company from the
Income Tax Department and thus liability, if any, arising out of such
search and seizure is not presently ascertainable.
NOTE 12. The previous year''s figure being for fifteen months period
ended 30th June, 2012, are not comparable with those of the current
year.
Further, Previous year figures including those given in brackets have
been rearranged where ever neccessary to conform with the current
period classification.
Jun 30, 2012
Note 01 CORPORATE INFORMATION
Adhunik Metaliks Limited ("the Company") is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its equity shares are listed on stock exchanges in
India. The Company is primarily engaged in the manufacture and sale of
steel, both alloy & non alloy.
(a) Terms/ rights attached to equity shares
(i) The Company has only one class of equity shares having a par value
of Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the General Meeting.
(ii) In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
(iii) During the period ended 30th June 2012, the amount of per share
dividend recognized as distribution to equity shareholders is Rs. Nil per
share (Rs. 1.50 per share).
(a) Nature of security -
i) The rupee term loans from banks amounting to Rs. 66,141.00 lacs (Rs.
63,689.28 lacs) are secured by first charge over all the fixed assets
of the Company, both present and future, at Chadrihariharpur Kuarmunda,
Distt. Sundargarh, Orissa, ranking pari passu with the charges created
/ to be created in favour of other existing and proposed Institutions /
Banks and second pari-passu charge on all the current assets of the
Company.
ii) The rupee term loans from banks amounting to Rs. 13,750.00 lacs (Rs.
15,000.00 lacs) are secured by second charge on entire movable and
immovable assets of the Company.
iii) The rupee term loans from banks amounting to Rs. 9,125 lacs (Rs.
7,000.00 lacs) are secured by a subservient charge on the fixed and
current assets of the Company.
iv) The rupee Term Loans of Rs. 89,016.00 lacs (Rs. 85,689.28 lacs) from
banks are further secured by the personal guarantee of one or more
promoter directors of the Company.
v) Finance against equipments/vehicles are secured by hypothecation of
the respective equipments/vehicles.
(b) Terms of repayment of rupee loans from banks and rate of interest
charged - Rupee term loans of Rs. 89,016.00 lacs (Rs. 85,689.28 lacs) from
banks carry interest ranging between respective bank's base rate
(ranging between 9.75% to 10.50%) plus 2.55% to 4.25% per annum. The
repayment terms of the said loans are as under:
2.1 In view of the revised profitability projections based on expected
additional contribution arising due to raising and consumption of Iron
ore from its captive mines and considering the net deferred tax
liability as at the balance sheet date, the Company has recognized,
during the period, deferred tax assets of Rs. 3,647.73 lacs, on
unabsorbed depreciation relating to the period prior to 31st March
2011. Since the Company, in terms of the Order of the Hon'ble High
Court of Calcutta, had utilized the securities premium account towards
meeting the net deferred tax liability in the earlier years, the above
deferred tax asset of Rs. 3,647.73 lacs has been adjusted with the
opening securities premium account. Further, the net deferred tax
assets of Rs. 1,496.98 lacs on current period's timing differences and
unabsorbed depreciation has been recognised and adjusted in the
Statement of Profit and Loss instead of securities premium account
based on a legal opinion obtained by the Company.
(a) Cash credit from banks of Rs. 47,410.06 lacs (Rs. 39,116.98 lacs) which
is repayable on demand and export packing credit facilities from banks
of Rs. 1,407.73 lacs (Rs. 897.45 lacs) which is repayable within one year,
are secured by first charge on pari passu basis with other working
capital lenders by way of hypothecation of entire stock of raw
materials, finished goods, process stock, trade receivables and other
current assets (both present and future). The same are further secured
by a second charge on pari-passu basis together with other working
capital lenders over the fixed assets of the Company. Cash credit from
banks carry interest ranging between bank base rate (ranging from 9.75%
to 10.75%) plus 3.75% to 4.25% per annum. Export packing credit
facilities from banks carry interest ranging between LIBOR plus 4.00%
per annum.
(b) Short term rupee loan from bank (secured) of Rs. 5,000.00 lacs (Rs.
Nil) is secured by a first charge on all the fixed assets of the
Company ranking pari passu with other lenders. The loan is repayable
within one year carrying interest rate of bank's base rate (9.75%) plus
3.25% per annum.
(c) Cash credit from banks of Rs. 47,410.06 lacs (Rs. 39,115.98 lacs) as
well as Short term loans from Banks of Rs. 5,000.00 lacs (Rs. Nil) are
further secured by the personal guarantee of one or more promoter
directors of the Company.
3.1 During the period, the Company has disposed off its entire
shareholdings in two subsidiary companies, namely "Adhunik Power and
Transmission Limited and Neepaz V Forge (India) Limited, and also sold
80,496,393 equity shares in one step down subsidiary company, namely
"Adhunik Power & Natural Resources Limited" which have resulted in net
gain of Rs. 8,408.40 lacs.
4.1 The Company has revised its profitability projections considering
the benefit of procurement of Iron ore from its captive mines which has
become operational in May 2012. Accordingly, the company is now certain
that there would be sufficient taxable income in future periods to
utilize MAT credit entitlements. Consequently, the company has
recognized during the period MAT credit entitlement of Rs. 3,174.40 lacs
(including Rs. 2,939.70 lacs paid in earlier years).
Note 5 CONTINGENT LIABILITIES
Claims & Government demands against the Company not acknowledged as
debt:
Excise demands under dispute/appeal 2,147.93 1,121.60
Sales Tax matters (under dispute/appeal) 494.30 618.27
Customers / Vendors claims 122.67 380.41
Bills discounted and Bank Guarantees
outstanding 10,354.51 2,452.00
13,119.41 4,572.28
Note 6 CAPITAL AND OTHER COMMITMENTS
a) As at 30th June 2012, the Company has commitments of Rs. 2,839.05 lacs
(Rs. 21,901.36 lacs) net of advances Rs. 2,239.84 lacs (Rs. 4,093.09 lacs)
relating to estimated amount of contracts to be executed on capital
account and not provided for.
b) The Company has given undertaking to the lenders not to dispose off
its 51% shareholding in Orissa Manganese and Minerals Limited (OMM), a
wholly owned subsidiary, till the loan taken by OMM is paid in full.
Further, the Company has also pledged 2,000,000 equity shares of OMM as
a security against the above loan.
c) Commitments for operating lease arrangements are as follows:
The Company has obtained Liquid Oxygen Plant on operating lease. The
lease rent payable per month is Rs. 26.00 Lacs (Rs. 26.00 Lacs). The lease
term is for a non-cancellable period of 10 years and the initial term
may be extended for such further period and on such terms and
conditions as the parties may mutually agree. There are no sub leases.
Future lease rentals payable under non-cancellable operating leases are
as follows:
Note 7 DISCLOSURE UNDER ACCOUNTING STANDARD-15 (REVISED) ON 'EMPLOYEE
BENEFITS'
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets Gratuity on terms not
lower than the amount payable under the Payment of Gratuity Act, 1972.
The aforesaid scheme are unfunded and as such there are no plan assets.
The following table summarizes (to the extent applicable) the
components of net benefits / expenses recognized in the financial
statements.
Note 8 SEGMENT INFORMATION
(i) Business Segment: The Company's business activity primarily falls
within a single business segment i.e. Iron & steel business and hence
there are no disclosures to be made under Accounting Standard-17, other
than those already provided in the financial statements.
(ii) Geographical Segment: The Company primarily operates in India and
therefore the analysis of geographical segment is based on the areas in
which customers of the Company are located.
(iii) Since the Company has common fixed assets for producing goods for
domestic and overseas markets and there are no overseas fixed assets,
separate figures for fixed assets / additions to fixed assets for these
two segments are not furnished.
Note 9
The Income Tax Department had conducted a Search and Seizure operation
in the Company's premises during the period, under Section 132 of the
Income Tax Act, 1961. No order/ demand, consequent to such operation,
has so far been received by the Company from the Income Tax Department
and thus liability, if any, arising out of such search and seizure is
not presently ascertainable.
Note 10
The Company has raised claims on vendors amounting to Rs. 2,450 lacs
towards supply of inferior quality of raw materials during the current
period. The claims have not been accepted by the vendors. The
management is certain about recovery of above amount.
Note 11
The Company has extended its accounting year from 31st March 2012 to
30th June 2012. Accordingly, the current year's figure being for
fifteen months period ended 30th June 2012, are not comparable with
those of the previous year.
Further, Previous year figures including those given in brackets have
been rearranged where ever neccessary to conform with the current
period classification under Revised Schedule VI as stated in note no. 2
above.
Mar 31, 2011
1. NATURE OF OPERATIONS :
Adhunik Metaliks Limited having manufacturing facility at Sundargarh
District, Rourkela, Orissa is primarily engaged in the manufacture and
sale of steel, both alloy & non alloy.
( Rs. in Lacs)
31.03.2011 31.03.2010
2. Contingent liabilities not provided
for in respect of:
a) Claims & Government demands against
the Company not acknowledged as debt:
i) Excise* 1,121.60 1,109.88
ii) Sales Tax* 618.27 596.29
iii) Others 380.41 -
* Against the above claims/demands, payments have been made under
protest to the extent of Rs. 187.12 lacs (^203.09 lacs)
b) Bills discounted and Bank Guarantees outstanding 2,452.00 I 1,362.06
3. a) The Rupee Term Loans of Rs. 86,404.74 lacs (Rs. 62,671.01 lacs)
from banks are secured by way of equitable mortgage by deposit of title
deeds of the Company's immovable properties both owned and leasehold
and building at Chadrihariharpur Kuarmunda, Sundargarh, Orissa and a
first charge by way of hypothecation of the Company's moveable assets
including machinery, machinery spares, tools, furniture's fixtures,
Carnes etc. (both present and future).
b) Cash credit and working capital facilities of Rs. 40,013.43 lacs
(Rs. 33,481.79 lacs) from banks are secured by first charge by way of
hypothecation of consumable stores, raw materials, finished goods,
process stock and book debts (both present and future).
c) Loan facility of Rs. 15,000.00 lacs from ICICI Bank is secured by a
second charge on all movable and immovable fixed assets and pledge of
300,000 shares of its subsidiary company, Orissa Manganese and Minerals
Limited.
The charge referred to in 5(a), (b) & (c) above rank parri passu
amongst various banks.
d) Rupee Term Loans and working capital facilities from banks (as
specified in 5 (a), (b) & (c) above) as well as short term loans from
Banks are further secured by personal guarantee of one or more promoter
directors of the Company.
e) Deferred Payment Credits are secured by hypothecation of the
respective equipments/vehicles.
f) Term loans aggregating to Rs. 11,095.27 lacs (Rs. 11,853.84 lacs)
are repayable within one year.
4. The Company has given undertaking to the lenders not to dispose off
its 51% shareholding in Orissa Manganese and Minerals Limited (OMM), a
wholly owned subsidiary till the loan taken by OMM is paid in full.
Further, the Company has also placed 200,000 shares held by it as
investment in OMM as a security against the above loan.
5. a) In terms of Section 115JB of the Income Tax Act, 1961, Minimum
Alternate Tax (MAT) amounting to Rs. 974.52 lacs (Rs. 1,125.84 lacs)
for the year ended 31st March 2011 have been provided in the books of
account. Further, in terms of Accounting Policy 2(XVI)(d) above and
because of the fact that the Company is not likely to have taxable
income in the relevant period, MAT credit of Rs. 2,947.39 lacs (Rs.
1,972.87 lacs) has not been recognized in the books of accounts.
b) The Hon'ble High Court at Calcutta vide its Order dated March 29,
2010 has allowed the Company to utilize the Securities Premium Account
shown under the head 'Reserves and Surplus' towards meeting the Net
Deferred Tax liability upto Rs. 15,794.88 lacs. Accordingly, the
Securities Premium Account has been utilized towards meeting the net
deferred tax liability arisen during the year amounting to Rs. 1,289.03
lacs (Rs. 3,545.74 lacs) instead of charging it off to profit and loss
account. The above accounting treatment is not in line with Accounting
Standard 22 "Accounting for Taxes on Income" (AS-22) notified by the
Companies (Accounting Standards) Rules 2006 (as amended).
6. Derivative Instruments and Unhedged Foreign Currency Exposure as on
the Balance Sheet date are as under :
a) Forward Contract
For minimizing the risk of currency exposure, the Forward Cover
Contracts are of USD 1,500,000 (Nil) for trade receivables, USD
25,192,798 (Nil) for trade payables and Nil (USD 27,593,802) for long
term loans.
b) Defined Benefit Plan
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets Gratuity on terms not
lower than the amount payable under the Payment of Gratuity Act, 1972.
The aforesaid scheme is unfunded and as such there are no plan assets.
The following table summarizes (to the extent applicable) the
components of net benefits / expenses recognized in Profit & Loss
account and amount recognized in the balance sheet.
7. Operating Lease
The Company has obtained Liquid Oxygen Plant on operating lease. The
lease rent payable per annum is Rs.312 Lacs (Rs. 312 Lacs). The lease
term is for a period of 10 years and the initial term may be extended
for such further period and on such terms and conditions as the parties
may mutually agree. There is no escalation clause in the lease
agreement. There are no restrictions imposed by lease arrangements.
There are no sub leases.
8. Stores & Spares amounting to Rs. 2,842.78 Lacs (Rs. 1,360.56 Lacs)
are included under other heads in the Profit & Loss Account.
9. Excise duty on sales amounting to Rs. 12,488.45 lacs (Rs. 8,691.17
Lacs) has been reduced from sales in Profit and Loss Account and excise
duty on stocks amounting to Rs. 316.84 lacs (Rs. 1,204.22 Lacs)
represents differential excise duty on opening & closing stock of
finished goods.
10. Interest in Partnership Firm
The Company has entered into a Partnership Agreement with United
Minerals (jointly controlled entity), a firm registered under The
Indian Partnership Act, 1932, which is engaged in mining of limestone
and dolomite.
11. Segment Information
a. Business Segment: The Company's business activity primarily falls
within a single business segment i.e. Iron & steel business and hence
there are no disclosures to be made under Accounting Standard-17, other
than those already provided in the financial statements.
b. Geographical Segments: The Company primarily operates in India and
therefore the analysis of geographical segment is based on the areas in
which customers of the Company are located.
c. Since the Company has common fixed assets for producing goods for
domestic and overseas markets, separate figures for fixed assets /
additions to fixed assets for these two segments are not furnished
12. Related Party Disclosures :
a) Name of the related parties :
Subsidiary Companies Adhunik Power Transmission Ltd.
(Formely Unistar Galvanisers & Fabricators Ltd)
Adhunik Power & Natural Resources Ltd.
Neepaz V Forge (India) Ltd
Orissa Manganese & Minerals Ltd.
Partnership Firm (Joint Venture)
United Minerals
Key Management Personnel
Mr. Ghanshyam Das Agarwal (Chairman)
Mr. Manoj Kumar Agarwal (Managing Director)
Mr. Jugal Kishore Agarwal (Director)
Mr. Nirmal Kumar Agarwal (Director)
Relatives of Key Management personnel
Mr. Mohan Lal Agarwal (Brother of Mr Manoj Kumar Agarwal)
Mr. Mahesh Kumar Agarwal (Brother of Mr Manoj Kumar Agarwal)
Mrs. Sonika Agarwal (Wife of Mr. Manoj Kumar Agarwal)
Mrs. Pramila Agarwal (Wife of Mr. Jugal Kishore Agarwal)
Mrs. Anita Agarwal (Wife of Mr. Nirmal Kumar Agarwal)
Mrs. Meena Agarwal (Wife of Mr. G. D. Agarwal)
Mrs. Rita Agarwal (Wife of Mr. Mohan Lal Agarwal)
Mrs. Chandrakanta Agarwal (Wife of Mr. Mahesh Agarwal)
Mr. Naveen Agarwal (Son of Mr. Jugal Kishore Agarwal)
Mrs. Ekta Agarwal (Wife of Mr. Naveen Agarwal)
Mr. Sachin Agarwal (Son of Mr. Jugal Kishore Agarwal)
Enterprises over which Key Management Personnel / Relatives have
significant influence
Adhunik Alloys & Power Ltd.
Adhunik Corporation Ltd.
Adhunik Infotech Ltd.
Adhunik Industries Ltd. (w.e.f. 05.01.2010)
Adhunik Meghalaya Steels (Private) Ltd.
Adhunik Steels Ltd.
Futuristic Steels Ltd.
Mahananda Suppliers Ltd.
Neepaz B.C. Dagara Steels Pvt Ltd.
Sungrowth Shares & Stock Limited
Swarnarekha Steel Industries Ltd
Zion Steel Ltd.
13. For valuation of finished goods and work in progress inventory, the
cost computation basis during the year has been changed from "annual
weighted average" to "quarterly weighted average" basis. The prices of
major raw materials are now normally determined globally on quarterly
basis and hence, the management believes that such change will reflect
the fairest possible approximation to the cost incurred in bringing the
items of inventory to their present location and condition as required
under Accounting Standard -2 "Valuation of Inventories". As a result of
such change, the inventory valuation of finished goods and work in
progress is higher by Rs. 1,239.95 lacs, with consequential impact on
profit thereof.
14. Previous year figures including those given in the brackets have
been regrouped / rearranged wherever considered necessary.
Mar 31, 2010
1 NATURE OF OPERATIONS :
Adhunik Metaliks Ltd. having manufacturing facility at Sundargarh
District, Rourkela, Orissa is primarily engaged in the manufacture and
sale of steel, both alloy & non alloy.
Rs.in Lacs
31.03.2010 31.03.2009
2 Estimated amount of contracts
remaining to be executed on capital
account and not provided for
(Net of advances) 2,931.90 6,336.78
3 Contingent Liabilities not
provided for in respect of:
a) Claims & Government demands against
the Company not acknowledged as debt
Excise 1,109.88 38.71
Sales Tax 596.29 511.24
Income Tax - 61.95
The company does not expect any major
impact to arise out of the above
claims/demands Against the above claims/
demand, payments have been made
under protest to the extent of Rs, 203.09
lacs
b) Outstanding Bank Guarantees 1,362.06 1,280.83
c) Regional PF Commissioner, Rourkela has initiated proceedings u/s 7
of Employees Provident Fund & Miscellaneous Provisions Act,1952,
against the management of the company for determination and recovery of
PF contribution from the employer in respect of contractors
establishment since F.Y 2003-04 to February 2008. An amount of Rs,
29.57 Lacs was demanded by the PF authorities on PF dues for Mar03 to
Feb08 in respect of 24 Contractors which had been paid by the Company
in May 2009 and adjusted against the retention money of the respective
Contractors. As no demand has been raised by the PF authorities for
penalty and/or charges for damage u/s 7(q) and 14 (b) of PF Act which
remains not quantified, no provision thereof has been made in the
books. Further, the management intends to recover from the contractors
any demand made by the PF authorities in this regard in future.
4 a) The Rupee Term Loans from banks are secured by way of equitable
mortgage by deposit of title deeds of the Companys immovable
properties both owned and leasehold and building at Chadrihariharpur
Kuarmunda, Sundargarh, Orissa and a first charge by way of
hypothecation of the Companys moveable assets (save and except book
debts) including machinery, machinery spares, tools and accessories,
present and future subject to prior charges created and/or to be
created in favour of the Companys bankers for securing working capital
facilities except loan facility of Rs, 150 crores under Structured
Mezzanine Credit Facility, which is secured by second charge on all
movable and immovable fixed assets and pledge of 300,000 shares of its
subsidiary Orissa Manganese and Minerals Limited.
b) The working capital facility from banks are secured by first charge
by way of hypothecation of consumable stores, raw materials, finished
goods, process stock , book debts (both present and future).
The charge referred to in 5(a) & (b) above rank parri passu amongst
various banks.
c) Both Rupee Term Loans and working capital facility from banks (as
specified in 5 (a) & (b) above) are further secured by personal
guarantee of all the promoter directors of the Company.
d) Finance against equipments/vehicles are secured by hypothecation of
the respective equipments/vehicles.
e) Term loans & Equipment/Vehicle Finance loans aggregating to Rs,
11,853.84 lacs (Rs, 9,006.76 lacs) are payable within one year.
f) Short term loans from Banks are secured by personal guarantees of
one or more promoter Directors of the Company.
5 The Company has given undertakings to Banks not to dispose off its
50% shareholding in Orissa Manganese and Minerals Ltd, a 100%
subsidiary, till its loan is repaid in full.
6 The 17 MW Captive Power Plant, 9 MVA Ferro Alloy Plant, 1 Kiln of 100
TPD, 2 Kilns of 150 TPD, 20 Ton Induction Furnace, two sets of Coke
Oven Batteries, Railway Siding, Water Distribution System and Rolling
Mill extension having achieved the technical parameters of operation
and stabilization of production efficiency, have commenced commercial
operations. Accordingly, assets aggregating to Rs, 47,495.36 lacs
(including proportionate allocation of preoperative and trial run
expenditure of Rs, 17,310.83 lacs) have been capitalized during the
year.
7 a) In terms of Section 115JB of the Income Tax Act, 1961, Minimum
Alternate Tax (MAT) amounting to Rs, 1,125.84 lacs for the year ended
March 31, 2010 have been provided in the accounts. Further, in terms of
accounting policy 2(XVI)(c) above and because of the fact that
the Company is not likely to have taxable income in the relevant
period, MAT credit of Rs, 1,972.87 lacs (Rs, 646.03 lacs) has not been
recognized in the books of accounts.
b) The Honble Kolkata High Court vide its Order dated March 29, 2010
has allowed the Company to utilize the Securities Premium Account shown
under the head Reserves and Surplus towards meeting the Net Deferred
Tax liability. Accordingly, the Securities Premium Account has been
utilized towards meeting the net deferred tax liability arisen during
the year amounting to Rs, 3,545.74 lacs (Rs, 3,586.02 lacs). The above
accounting treatment is not in line with Accounting Standard 22
"Accounting for Taxes on Income" (AS-22) notified by the Companies
(Accounting Standards) Rules 2006 (as amended).
8 Based on the breakup value as per the audited accounts for the year
ended March 31, 2010, there is a shortfall in the value of unquoted
investment in the subsidiary Neepaz V Forge (India) Limited, which
having regard to the long term strategic nature of the investments and
being temporary in nature has not been provided for.
9 a) Store & Spares amounting to Rs, 1,360.56 lacs (Rs, 802.40 lacs)
are included under other heads in the Profit & Loss Account. b)
Salaries & Wages relating to repairs have not been segregated but are
charged to the relevant account heads.
10 Excise duty on sales amounting to Rs, 8,691.17 Lacs (Rs, 11,774.79
Lacs) has been reduced from sales in Profit and Loss Account and excise
duty on stocks amounting to Rs, 1,204.22 Lacs (Rs, -127.07 Lacs)
represents differential excise duty on opening & closing stock of
finished goods.
11 Certain promoters of the Company were allotted 49,89,682 nos. of
equity warrants, on preferential basis, during the year 2007-08,
pursuant to the then applicable SEBI (Disclosure and Investor
Protection) Guidelines, 2000. The said promoters have not exercised the
right to apply for equity shares within the stipulated period of 18
months from the date of allotment of Equity Warrants. Consequently, in
accordance with the said SEBI Guidelines, the entitlement of the
warrant holders to apply for equity shares has expired on May 28, 2009
and the aggregate amount of Rs, 588.78 lacs received towards the issue
of equity warrants has been forfeited and credited to capital reserve
account.
12 a) During the year the Company has allotted to Clearwater Capital
Partners (Cyprus) Ltd (CCP) 81,54,000 nos. of fully paid equity shares
of
13 Related Party Disclosures :
a) Name of the related parties :
Subsidiary Companies
Unistar Galvanisers & Fabricators Ltd. Neepaz V Forge (India) Ltd.
Orissa Manganese & Minerals Ltd. Adhunik Power & Natural Resources
Ltd.
Partnership Firm (Joint Venture) United Minerals
Key Management Personnel Mr. Ghanshyam Das Agarwal (Chairman)
Mr. Manoj Kumar Agarwal (Managing Director) Mr. Jugal Kishore Agarwal
(Director) Mr. Nirmal Kumar Agarwal (Director)
Relatives of Key Management personnel Mr. Mohan Lal Agarwal (Brother of
Mr Manoj Kumar Agarwal)
Mr. Mahesh Kumar Agarwal (Brother of Mr Manoj Kumar Agarwal)
Mrs. Sonika Agarwal (Wife of Mr. Manoj Kumar Agarwal)
Mrs. Pramila Agarwal (Wife of Mr. Jugal Kishore Agarwal)
Mrs. Anita Agarwal (Wife of Mr. Nirmal Kumar Agarwal)
Mrs. Meena Agarwal (Wife of Mr. G. D. Agarwal)
Mrs. Rita Agarwal (Wife of Mr. Mohan Lal Agarwal)
Mrs. Chandrakanta Agarwal (Wife of Mr. Mahesh Agarwal)
Mr. Naveen Agarwal (Son of Mr. Jugal Kishore Agarwal)
Mrs. Ekta Agarwal (Wife of Mr. Naveen Agarwal)
Mr. Sachin Agarwal (Son of Mr. Jugal Kishore Agarwal)
Enterprises over which Key Management Personnel / Relatives have
significant influence
Adhunik Alloys & Power Ltd.
Adhunik Corporation Ltd.
Adhunik Cement Ltd.
Adhunik Cement (Assam) Ltd.
Adhunik Infotech Ltd.
Adhunik Industries Ltd. (w.e.f. 05.01.2010)
Adhunik Meghalaya Steels (Private) Ltd.
Adhunik Shristi Ltd
Adhunik Steels Ltd.
Futuristic Steels Ltd.
Gajeshwar Ispat Pvt. Ltd.
Ganges Enterprises
Ganga Power & Natural Resources Ltd
Mahananda Suppliers Ltd.
Neepaz Power Ltd.
Performance Marketing Limited
Pragati Ispat Udyog
Ribhoi Mining and Minerals Pvt Ltd
Shivalik Transport Co.
Sungrowth Shares & Stock Limited
Swarnarekha Steel Industries Ltd
Sonapahar Natrural Resources Pvt Ltd
Vasundhra Resources Limited
West Kashi Minerals & Mining Pvt Ltd
Zion Steel Ltd.
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