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Notes to Accounts of Deccan Gold Mines Ltd.

Mar 31, 2016

Note 19: The Company undertook activities for exploration of gold at various sites. Commercial production of gold has not commenced and therefore it is the Company''s intention to account for all the exploration expenditure of Rs.2650 Lacs as noted in Note ''2 d'' to the Balance Sheet as pre-operative expenditure which will be charged to the profit & loss account as and when the commercial activities/production commences.

Employee Stock Option Outstanding account Rs.1,165.05 Lacs (PY Rs. 912.75 Lacs & Deferred Employee Compensation account Rs. 755.52 Lacs (PY Rs. 842.12 Lacs). Employee Compensation Expenses amounting to Rs.487.10 Lacs (PY Rs.70.62 Lacs) is included under the head Salaries and other benefits. Reversal of Employee Compensation Expenses amounting to Rs.NIL (PY Rs.27.85 Lacs) is included under the head Other Income.

Disclosure in respect of Deccan Gold Mines Limited Employee Stock Option Scheme 2014 (amended 2016)

Note: It may be noted that the Board of Directors of the Company, at their meeting held on February 12, 2016 approved amendment to the Deccan Gold Mines Limited Employee Stock Option Scheme, 2014 (Scheme) on account of the Company’s rights issue during October, 2015. Under the amended Scheme, the number of stock options reserved for grant has been revised from 30,00,000 stock options to 45,00,000 stock options. Further, the Nomination & Remuneration Committee of the Board (NRC), at its meeting held on March 4, 2016 fixed the Exercise Price of the 15,00,000 new stock options as Rs. 7/- per stock option (as was the case with the original 30,00,000 stock options). The NRC also granted these 15,00,000 new stock options to the respective allottee (s) in the same proportion as they were granted the original 30,00,000 stock options. Further, it was also decided that 100% of the new stock options would be vested on the allottee (s) post the mandatory lock-in period of 1 year from the date of grant and the exercise period shall remain at 12 months from the date of vesting.

On May 11, 2016, the Company received ‘in-principle’ approval of BSE in respect of the 15,00,000 new stock options.

Note 1 : "During Financial 2013-14, Geomysore Services (India) Private Limited (GMSI), a Bangalore-based gold exploration company approached Deccan Gold Mines Limited (DGML) for being taken over as a wholly-owned subsidiary. The Board of Directors of DGML at their meeting held on 27 August, 2013 decided to consider the offer of GMSI. After completion of the necessary due diligence on GMSI, the Board of Directors of DGML, at their meeting held on 3 December, 2013 accorded their ‘in-principle’ approval to amalgamate Australian Indian Resources Limited, Australia with DGML pursuant to a Scheme of Arrangement under the provisions of Sections 391-394 of the Companies Act, 1956. It may be noted that AIR held 38.80% stake in GMSI at that point in time. Under this arrangement, DGML also proposes to acquire the balance of 61.20% stake from the other resident /non-resident shareholders of GMSI on the same terms as offered to AIR. Upon the acquisition of shares as aforesaid, GMSI would become a wholly-owned subsidiary of DGML. The Board also authorized the Managing Director of DGML to do the needful in this regard including appointment of merchant bankers and valuation experts to carry out the valuation exercise.

Accordingly, the valuation of the projects of DGML and GMSI are underway and DGML is also evaluating the proposal from an Australian perspective since the proposal involves the amalgamation of an Australian Company into DGML.

The proposal is subject to the final approval of the Boards of DGML and AIR / GMSI of the proposed terms of the amalgamation including but not limited to the relevant valuation of shares and the share exchange ratio.

Note 2 : Note on Rights Issue

During the year the company has raised Rs.50.34 crores through Rights Issue of equity shares. The shares were issued at issue price of Rs.17 per share (inclusive of premium of ''16 per share). The shares were issued at the ratio of 1:2 to the shareholders.

The paid up capital of the company prior to this Rights issue stood at 5,92,18,250 equity shares of'' 1 each. Accordingly 2,96,09,125 equity shares were offered on Rights issue basis and the scheme was kept open from 14th October 2015 to 30th October, 2015.

The Rights issue was subscribed 1.3 times of the issue size & the process of the allotment was completed by November, 2015.

The additional shares so issued were admitted for listing/trading on the Bombay Stock Exchange (BSE) with effect from 11th Nov.2015.

The rights issue proceeds were sought to be utilized for financing the following objects :

- Investment in Subsidiary Company

- General Corporate Purpose ; and

- Expenses for the Issue

Post the allotment of the shares under the Rights Issue as above, the promoters i.e. Rama Mines, Mauritius Ltd. held approximately 29% stake in the company, with the balance 71% being widely held with a significant participation by FIIs and Non-resident investors.

Note 3 : Segment Reporting:

The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

Note 4 : Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortized carrying value is being depreciated / amortized over the revised/ remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted, in the opening balance of Profit and Loss Account for the year ended 31.03.2015 amounting to Rs.23 (in thousands). Had the company provided depreciation as per old companies act, 1956, the change for depreciation for the financial year 2014-15would have been lower by Rs. 0.99 Lac

Note 5 - Salaries and wages incurred during the year Rs. 1,64,56,667/- of which Rs. 66,70,215/- was recovered from subsidiary and Rs.23,16,016/-was transferred to Exploration Expenditure resulting in a net salary expense of Rs.74,70,436/-.

Note 6 : Previous year figures have been re-grouped, re-arranged wherever considered necessary.


Mar 31, 2015

Note 1: The Company undertook activities for exploration of gold at various sites. Commercial production of gold has not commenced and therefore it is the Company's intention to account for all the exploration expenditure of Rs. 1368.05 Lacs as noted in Note '2 d' to the Balance Sheet as pre-operative expenditure which will be charged to the profit & loss account as and when the commercial activities/production commences.

Note 2. Disclosure in respect of Employee Stock Option Scheme

Note 3. "During Financial 2013-14, Geomysore Services (India) Private Limited (GMSI), a Bangalore-based gold exploration company approached Deccan Gold Mines Limited (DGML) for being taken over as a wholly-owned subsidiary. The Board of Directors of DGML at their meeting held on 27 August, 2013 decided to consider the offer of GMSI. After completion of the necessary due diligence on GMSI, the Board of Directors of DGML, at their meeting held on 3 December, 2013 accorded their 'in-principle' approval to amalgamate Australian Indian Resources Limited, Australia with DGML pursuant to a Scheme of Arrangement under the provisions of Sections 391-394 of the Companies Act, 1956. It may be noted that AIR holds a 38.80% stake in GMSI. Under this arrangement, DGML also proposes to acquire the balance of 61.20% stake from the other resident /non-resident shareholders of GMSI on the same terms as offered to AIR. Upon the acquisition of shares as aforesaid, GMSI would become a wholly-owned subsidiary of DGML. The Board also authorized the Managing Director of DGML to do the needful in this regard including appointment of merchant bankers and valuation experts to carry out the valuation exercise.

Accordingly, the valuation of the projects of DGML and GMSI are underway and DGML is also evaluating the proposal from an Australian perspective since the proposal involves the amalgamation of an Australian Company into DGML. The proposal is subject to the final approval of the Boards of DGML and AIR / GMSI of the proposed terms of the amalgamation including but not limited to the relevant valuation of shares and the share exchange ratio.

Note 4 : Pursuant to the approval accorded by the Board at its meeting held on 19 November, 2014 and 30 December, 2014 the Company has announced a Rights Issue involving raising of funds to the tune of Rs. 444.14 million through the issue of 1 rights share for every 2 shares held in the Company at an Issue Price of Rs. 15/- per share (including a premium of Rs.14/- per share) to the shareholders of the Company as on the Record Date. Accordingly, the Company proposes to issue 29.61 million shares to the shareholders of the Company. The Record Date would be fixed by the Board of Directors post the receipt of all statutory / regulatory approvals including from SEBI and BSE. The Company has lodged the draft Letter of Offer for the Rights Issue with SEBI and BSE on 31 March, 2015.

Note 5. Segment Reporting:

The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

Note 6 : Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortized carrying value is being depreciated / amortized over the revised/ remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted, in the opening balance of Profit and Loss Account amounting to Rs. 23 (in thousands). Had the company provided depreciation as per old companies act, 1956, the change for depreciation for the current year would have been lower by Rs.0.99 Lac.

Note 7 : The Company has incurred substantial losses and its net worth is eroded, the accounts have been prepared on the principle of going concern with a view to revive the operations of the Company in future notwithstanding the fact that its net worth is completely eroded, and the company is a Sick Industrial Company.

Previous year figures have been re-grouped, re-arranged wherever considered necessary.


Mar 31, 2014

1. Related party disclosure

a) Name of related parties and Relationship

Name of the party Relationship

1 Deccan Exploration Services PVT LTD Wholly owned subsidiary

2 Sandeep Lakhwara Managing Director

3 Charles E.E. Devenish Chairman

4 K.R.Krishnamurthy Director

5 Dr.M.Ramakrishnan Director

6 V.K.Gaur Director

2. The Company undertook activities for exploration of gold at various sites. Commercial production of gold has not commenced and therefore it is the Company''s intention to account for all the exploration expenditure of Rs1266.95 Lacs as noted in schedule ''2 d'' to the Balance Sheet as pre-operative expenditure which will be charged to the Profit & loss account as and when the commercial activities/production commences.

3. Disclosure in respect of Employee Stock Option Scheme a. Employee Stock Option Scheme:

C. Employee Stock Option Outstanding account Rs. 47.69 Lacs & Deferred Employee Compensation account Rs. Nil. Reversal of Employee Compensation Expenses amounting to Rs.51.92 Lacs is included under the head Other Income.

The estimates of future salary increase, considered in actuarial valuation, take account of infation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

4. The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

5. Quote:

"During August, 2013, Geomysore Services (India) Private Limited (GMSI), a Bangalore-based gold exploration company approached Deccan Gold Mines Limited (DGML) for being taken over as a wholly-owned subsidiary. The Board of Directors of DGML at their meeting held on 27 August, 2013 decided to consider the offer of GMSI. After completion of the necessary due diligence on GMSI, the Board of Directors of DGML, at their meeting held on 3 December, 2013 accorded their ''in-principle'' approval to amalgamate Australian Indian Resources Limited, Australia with DGML pursuant to a Scheme of Arrangement under the provisions of Sections 391-394 of the Companies Act, 1956. It may be noted that AIR holds a 38.80% stake in GMSI.

Under this arrangement, DGML also proposes to acquire the balance of 61.20% stake from the other resident /non-resident shareholders of GMSI on the same terms as offered to AIR. Upon the acquisition of shares as aforesaid, GMSI would become a wholly-owned subsidiary of DGML. The Board also authorised the Managing Director of DGML to do the needful in this regard including appointment of merchant bankers and valuation experts to carry out the valuation exercise.

Accordingly, the valuation of the projects of DGML and GMSI are underway and DGML is also evaluating the proposal from an Australian perspective since the proposal involves the amalgamation of an Australian Company into DGML.

The proposal is subject to the final approval of the Boards of DGML and AIR / GMSI of the proposed terms of the amalgamation including but not limited to the relevant valuation of shares and the share exchange ratio.

12. Segment Reporting:

The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

13. Previous year fgures have been re-grouped, re-arranged wherever considered necessary.

rights, preferences and restrictions attached to each class of shares: Equity Share of Rs.1000/- each fully paid-up:

a Right to dividend on pari passu

b Voting rights one vote per each share

c No preferential rights are attached

d No restrictions are attached.

18. Contingent Liabilities: Nil (P.Y Nil)

Share Holders & Relatives:

a. M/s Geomysore Services India (P) Ltd.

b. M/s Deccan Gold Mines Ltd

Key Management Personnel

a. Mr. S.C.R.Peshwa-Director

b. Mr.Karunakarn-Director

6. Particulars of number of employees drawing remuneration exceeding a sum of Rs. 24,00,000 per annum or Rs. 2,00,000 per month is Nil.


Mar 31, 2013

1. The Company undertook activities for exploration of gold at various sites. Commercial production of gold has not commenced and therefore it is the Company''s intention to account for all the exploration expenditure of Rs. 1062.51 Lacs as noted in schedule ''2 d'' to the Balance Sheet as pre-operative expenditure which will be charged to the proft & loss account as and when the commercial activities/production commences.

2. The Company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

3. Segment Reporting: The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and fnancial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

4. Previous year fgures have been re-grouped, re-arranged wherever considered necessary.


Mar 31, 2012

31.03.2012 31.03.2011 Rs. in Lacs Rs. in Lacs

1. Capital Commitments Nil Nil

2. Claims made against the company but not acknowledged as debts Nil Nil

3. Contingent Liabilities on disputed Income Tax 2.57 20.27

4. Additional information pursuant to para 3 & 4 of para ii of schedule VI of the Companies Act, 1956.

31.03.2012 31.03.2011 Rs. in ('000) Rs. in ('000)

1. Expenditure in foreign currency Nil 22.41

2. Earning in foreign currency Nil Nil 3. Payment to Auditors :

- Audit Fees 105 105

5. The Company undertook activities for exploration of gold at various sites. Commercial production of gold has not commenced and therefore it is the Company's intention to account for all the exploration expenditure of Rs 967.65 Lacs as noted in schedule '2 c' to the Balance Sheet as pre-operative expenditure which will be charged to the profit & loss account as and when the commercial activities/production commences.

6. The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

7. Segment Reporting:

The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

8. Previous year figures have been re-grouped, re-arranged wherever considered necessary.


Mar 31, 2011

31st March 2011 31st March 2010 (Rs '000) (Rs '000)

1. Contingent Liabilities on disputed Income Tax 2027 2027

2. Related Party Disclosure :

a. Name of related parties and relationship

Sl No. Name of the Party Relationship

1 Deccan Exploration Services Private Limited Wholly owned subsidiary

2 Mr. Sandeep Lakhwara Managing Director

3 Mr. Charles E.E. Devenish Chairman

4 Mr. K.R. Krishnamurthy Director

5 Dr. M. Ramakrishnan Director

6 Prof. V. K. Gaur Director

b. The company had transactions with the following related parties :- Dr. M. Ramakrishnan, Mr. K.R. Krishnamurthy, Prof. V.K.Gaur, Mr. Sandeep Lakhwara and Deccan Exploration Services Private Limited.

3. The Company undertook activities for exploration of gold at various sites. Commercial production of gold has not commenced and therefore it is the Company's intention to account for all the exploration expenditure of Rs.7,59,76,628 as noted in schedule 'G' to the Balance Sheet as pre-operative expenditure which will be charged to the profit & loss account as and when the commercial activities/production commences.

C. Changes in the fair value of plan assets representing reconciliation of the opening and closing balances thereof are as follows:

Not Applicable as the Liability is not funded.

4. The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

5. Segment Reporting :

The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

6. Grant of Stock Options

Pursuant to the approval accorded by the shareholders at their Annual General Meeting held on 28th November 2008, the Company had introduced the Deccan Gold Mines Employees Stock Option Plan, 2008 for the benefit of the Eligible Employees of the Company and its subsidiaries providing for issue of up to a maximum of 30,00,000 Stock Options. The Bombay Stock Exchange Limited (BSE) had granted its 'in-principle' approval for listing of the 30,00,000 Equity Shares that are likely to arise out of the exercise of the Stock Options under the Plan.

The Compensation Committee of the Board, at its meeting held on 2nd June 2010 had granted 30,00,000 Options at an Exercise Price of Rs.16.95 per Option / Equity Share to certain Eligible Employees of the Company and its wholly- owned subsidiary viz, Deccan Exploration Services Private Limited. In terms of the Plan, the Options were granted at a 25% discount to the latest available closing price of Rs.22.60 at the BSE on 1 June, 2010 (a day prior to the date of the Compensation Committee meeting).

Employee Stock Option Outstanding account Rs.1.70 Crore & Deferred Employee Compensation account Rs.1.23 Crore.

Employee Compensation Expenses amounting to Rs.46,90,274/- is included under the head Salaries and other benefits.

7. Previous year figures have been re-grouped, re-arranged wherever considered necessary.


Mar 31, 2010

31st March 2010 31st March 2009

(Rs 000) (Rs 000)

1. Capital Commitments Nil Nil

2. Claims made against the company but not acknowledge as debts Nil Nil

3. Contingent Liabilities Nil Nil

on disputed Income Tax A Y 2007-08 1813.17- 1813.17

4. Figures of the previous year have been regrouped/rearranged wherever necessary to make them comparable with current years figures.

5. Additional information pursuant to para 3 & 4 of par ii of schedule VI of the Companies Act, 1956.

a) Expenditure in foreign currency 95.11 2,110.92

b) Earning in foreign currency Nil Nil

c) Payment to Auditors: - Audit Fees 115.82 115.82



2 The company has not received information from creditors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid at the end of the year under this act has not been given. There were no claims for interest on delayed payments.

3 Segment Reporting:

The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining and Exploration as reportable segment.

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