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Notes to Accounts of Lloyds Metals & Energy Ltd.

Mar 31, 2023

The Company has determined that there is a reasonable certainty that sufficient profits will be available in future to recoup unabsorbed depreciation and carried forward losses and accordingly deferred tax has been recognised on those losses under Ind AS provisions.

28. DISCLOSURE AS REQUIRED BY THE IND AS -19 “EMPLOYEES BENEFIT” IS GIVEN BELOW:

Defined benefit plan: The Company operates one defined benefit plan, viz., gratuity & Leave Encashment benefit, for its employees. The Gratuity & Leave Encashment plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. The company does not have any fund for gratuity liability or Leave liability and the same is accounted for as provision.

Under the other long term employee benefit plan, the company extends the benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company.

The above sensitivity analysis is determined based on a method that extrapolates the impact on the net defined benefit obligations, as a result of reasonable possible changes in the significant actuarial assumptions. Further, the above sensitivity analysis is based on a reasonably possible change in a particular under-lying actuarial assumption, while assuming all other assumptions to be constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

29. FINANCIAL INSTRUMENT AND RISK MANAGEMENT Fair values

1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

2. Borrowings (non-current) consists of loans from banks and government authorities, other financial liabilities (noncurrent) consists of interest accrued but not due on deposits, other financial assets consist of employee advances where the fair value is considered based on the discounted cash flow.

3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Set out below, is a comparison by class of the carrying amounts and fair value of the Company’s financial instruments:

30. FINANCIAL RISK AND CAPITAL RISK MANAGEMENTA) Financial Risk

The business activities of the Company expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s risk management strategies focus on the unpredictability of these elements and seek to minimize the potential adverse effects on its financial performance.

The financial risk management for the Company is driven by the Company’s senior management and internal/ external experts subject to necessary supervision.

The Company does not undertake any speculative transactions either through derivatives or otherwise. The senior management is accountable to the Board of Directors and Audit Committee. They ensure that the Company’s financial risk-taking activities are governed by appropriate financial risk governance framework, policies and procedures. The Board of Directors periodically reviews the exposures to financial risks, and the measures taken for risk mitigation and the results thereof.

B) Foreign currency Risk

Foreign exchange risk arises on all recognised monetary assets and liabilities and on highly probable forecasted transactions which are denominated in a currency other than the functional currency of the Company. The Company does not have any foreign currency trade payables and receivables.

The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency.

No Forward contracts were entered into by the company either during the year or previous years since the company has very minimum exposure to foreign currency risk.

i) Price risk

The Company uses surplus funds in operations and for further growth of the company. Hence, there is no price risk associated with such activity.

ii) Credit risk

Credit risk refers to the risk of default on its obligation by the counter party the risk of deterioration of creditworthiness of the counterparty as well as concentration risks of financial assets, and thereby exposing the Company to potential financial losses. The Company is exposed to credit risk mainly with respect to trade receivables.

Trade receivables

The Trade receivables of the Company are typically non-interest bearing un-secured. As there is no independent credit rating of the customers available with the Company, the management reviews the credit-worthiness of its customers based on their financial position, past experience and other factors. The credit risk related to the trade receivables is managed / mitigated by the concerned team based on the Company’s established policy and procedures and by setting appropriate payment terms and credit period. The credit period provided by the Company to its customers depends upon the contractual terms with the customers.

The Company performs on-going credit evaluations of its customers’ financial condition and monitors the credit-worthiness of its customers to which it grants credit in its ordinary course of business. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount due or there are some disputes which in the opinion of the management is not in the Company’s favor. Where the financial asset has been written-off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit and loss.

iii) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Accordingly, as a prudent liquidity risk management measure, the Company closely monitors its liquidity position and deploys a robust cash management system.

Based on past performance and current expectations, the Company believes that the Cash and cash equivalents and cash generated from operations will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

C) Capital Risk

The Company’s objective while managing capital is to safeguard its ability to continue as a going concern (so that it is enabled to provide returns and create value for its shareholders, and benefits for other stakeholders), support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and/ or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital. However, the key objective of the Company’s capital management is to, ensure that it maintains a stable capital structure with the focus on total equity, uphold investor; creditor and customer confidence, and ensure future development of its business activities. In order to maintain or adjust the capital structure, the Company may issue new shares, declare dividends, return capital to shareholders, etc.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.

31) CAPITAL MANAGEMENT

Capital management and Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company’s capital management is to maximise shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

Terms and conditions of transactions with related parties

1. The Company has been entering into transactions with related parties for its business purposes. Related party vendors are selected competitively in line with other unrelated parties having regard to strict adherence to quality, timely servicing and cost advantage. Further related party vendors provide additional advantages in terms of:

(a) Supplying products primarily to the Company,

(b) Advanced and innovative technology.

(c) Customisation of products to suit the Company’s specific requirements, and

(d) Enhancement of the Company’s purchase cycle and assurance of just in time supply with resultant benefits-notably on working capital.

2. The purchases from and sales to related parties are made on terms equivalent to and those applicable to all unrelated parties on arm’s length transactions. Outstanding balances payable and receivable at the year-end are unsecured, interest free and will be settled in business transactions.

35) SHARE BASED PAYMENTS PLANS (ESOP)

The Company introduced “LLOYDS METALS AND ENERGY LTDESOP - 2017” which covers the eligible employees of the Company and its subsidiaries. The options granted under Plan shall vest based upon the performance of the Employee, subject to completion of minimum 1 (One) year from the date of Grant and as may be decided by the Committee subject to maximum period of 5 (Five) years.

Since equity shares are listed hence for the purpose of calculating volatility, volatility of shares based on the expected life is considered.

The monthly statement of the current assets filed by the company with Bank is in agreement with the books of accounts.

37) SEGMENT REPORTING UNDER IND AS - 108

Disclosures as required by the Ind AS - 108 on “Segment Reporting” are given below:

For management purposes, the Company is organized into business units based on its services and has three reportable segments, as follows:

i) The Sponge Iron segment which includes production and manufacturing of Sponge Iron.

ii) The Mining Segment which includes Extraction of Iron Ore from Mines.

iii) The Power segment which includes generation of power.

41) Previous year’s figures are regrouped and rearranged wherever necessary.

42) APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Board of Directors on 25thApril, 2023.


Mar 31, 2022

(B) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a face value of '' 1/- each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. In the event of liquidation of the company, the equity shareholders 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.

(C) The Company has not issued any share as fully paid up without payment being received in cash or as bonus shares nor any share has been bought back by the Company in last 5 years.

Note No. 16(a) Working Capital Loans from Banks of '' Nil (Previous Year '' 969.36 Lakhs) are primarily secured by hypothecation of present and future current assets of the company and present and future Fixed assets at plot no. A-1 and A-2 Ghugus, Dist. Chandrapur with building & structures thereon except assets/Machinery exclusively charged with other lenders.

Note No. 16(b) :The company files monthly return of current asset with bank and these are in agreement with the books of account.

Note no. 16(ii)(a): There are no amounts outstanding to Micro, Small and Medium Enterprises as at March 31, 2022 and no amount were over due during the year for which disclosure requirements under Micro, Small and Medium Enterprises Development Act, 2006 are applicable.

Note no. 16(ii)(b): Inland letter of credit limits are primarily secured by hypothecation on all current assets of the company namely , Stock of raw materials, work-in-progress, finished goods, stores and spares , Bill receivable and book debts and all other moveable assets present and future and are also secured by way of collateral security in the form of Second Charge on all fixed assets of the company -all that piece and parcel of land or ground together with all building and structure thereon and all moveable plant and machinery both present and future

28. Disclosure as required by the Ind AS -19 “Employees Benefit” is given below:

Defined benefit plan: The Company operates one defined benefit plan, viz., gratuity & Leave Encashment benefit, for its employees. The Gratuity & Leave Encashment plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. The company does not have any fund for gratuity liability or Leave liability and the same is accounted for as provision.

Under the other long term employee benefit plan, the company extends the benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company.

Fair values

1. The carrying amounts of trade payables, other financial liabilities(current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

2. Borrowings (non-current) consists of loans from banks and government authorities, other financial liabilities (noncurrent) consists of interest accrued but not due on deposits, other financial assets consist of employee advances where the fair value is considered based on the discounted cash flow.

3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a

current transaction between willing parties, other than in a forced or liquidation sale.

A) Financial Risk

The business activities of the Company expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s risk management strategies focus on the unpredictability of these elements and seek to minimize the potential adverse effects on its financial performance.

The financial risk management for the Company is driven by the Company’s senior management and internal/ external experts subject to necessary supervision.

The Company does not undertake any speculative transactions either through derivatives or otherwise. The senior management is accountable to the Board of Directors and Audit Committee. They ensure that the Company’s financial risk-taking activities are governed by appropriate financial risk governance framework, policies and procedures. The Board of Directors periodically reviews the exposures to financial risks, and the measures taken for risk mitigation and the results thereof.

B) Foreign currency Risk

Foreign exchange risk arises on all recognised monetary assets and liabilities and on highly probable forecasted transactions which are denominated in a currency other than the functional currency of the Company. The Company does not have any foreign currency trade payables and receivables.

The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency.

No Forward contracts were entered into by the company either during the year or previous years since the company has very minimum exposure to foreign currency risk.

i) Price risk

The Company uses surplus funds in operations and for further growth of the company. Hence, there is no price risk associated with such activity.

ii) Credit risk

Credit risk refers to the risk of default on its obligation by the counter party the risk of deterioration of creditworthiness of the counterparty as well as concentration risks of financial assets, and thereby exposing the Company to potential financial losses. The Company is exposed to credit risk mainly with respect to trade receivables.

Trade receivables

The Trade receivables of the Company are typically non-interest bearing un-secured. As there is no independent credit rating of the customers available with the Company, the management reviews the credit-worthiness of its customers based on their financial position, past experience and other factors. The credit risk related to the trade receivables is managed / mitigated by the concerned team based on the Company’s established policy and procedures and by setting appropriate payment terms and credit period. The credit period provided by the Company to its customers depends upon the contractual terms with the customers.

The Company performs on-going credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit in its ordinary course of business. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount due or there are some disputes which in the opinion of the management is not in the Company’s favour. Where the financial asset has been written-off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit and loss.

iii) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Accordingly, as a prudent liquidity risk management measure, the Company closely monitors its liquidity position and deploys a robust cash management system.

Based on past performance and current expectations, the Company believes that the Cash and cash equivalents and cash generated from operations will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

C) Capital Risk

The Company’s objective while managing capital is to safeguard its ability to continue as a going concern (so that it is enabled to provide returns and create value for its shareholders, and benefits for other stakeholders), support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and/ or relevant laws and

regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital. However, the key objective of the Company’s capital management is to, ensure that it maintains a stable capital structure with the focus on total equity, uphold investor; creditor and customer confidence, and ensure future development of its business activities. In order to maintain or adjust the capital structure, the Company may issue new shares, declare dividends, return capital to shareholders, etc.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.

31. Capital Management

Capital management and Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company’s capital management is to maximise shareholder value.

A. Key Managerial Personnel are under the employment of Company are entitled to post employment benefits and other long term employee benefits recognized as per Ind AS 19 -“Employee Benefits” in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. Further reimbursement of expenses to KMP are not included above.

B. Director’s remuneration for the year 2021-2022 is as per limits prescribed under Section 197 read with Schedule V of the Companies Act,2013.

C. All related party contracts/arrangements have been entered in ordinary course of business and are approved by the Board of Directors.

35. Share Based Payments Plans (ESOP)

The Company introduced “LLOYDS METALS AND ENERGY LTDESOP - 2017” which covers the eligible employees of the Company and its subsidiaries. The options granted under Plan shall vest based upon the performance of the Employee, subject to completion of minimum 1 (One) year from the date of Grant and as may be decided by the Committee subject to maximum period of 5 (Five) years.

Security

A. The loans mentioned in A(a)(i) of '' 4900.00 Lakhs is secured with Promoter property to the extent of the repayments of loans (Principal Interest) and is shared on pari-passu basis between the lenders.

B. Of the loans mentioned in A(a)(ii)of '' 1856.09 Lakhs is secured with exclusive charge over the financed assets,pari-passu charge on all present and future fixed assets (except assets exclusively charged with other lenders) and second pari-passu charge on all present and future current assets and loan of '' 186.22 Lakhs is secured with exclusive charge over the financed assets.

A. The Loans from NBFC’s is to be repaid in 20 quarterly instalments from the date of disbursement. 4% of the principal amount to be paid in the first 2quarterly instalment and remaining 96% of principal amount to be paid in the next 18 quarterly instalment. Interest to be paid on monthly basis.

B. Term Loan from Banks with balance outstanding of '' 1,856.09 Lakhs is to be repaid in 66 equal monthly instalments.

C. The rate of interest for term loans from NBFC’s and Banks range from 8% to10.50 % and the rate of interest for other loans range from 7% to 8%.

37. Segment reporting under Ind AS - 108

Disclosures as required by the Ind AS - 108 on “Segment Reporting” are given below:

For management purposes, the Company is organized into business units based on its services and has two reportable segments, as follows:

i) The Sponge Iron segment which includes production and manufacturing of Sponge Iron.

ii) The Mining Segment which includes production and manufacturing of Iron Ore

43. Previous year’s figures are regrouped and rearranged wherever necessary.


Mar 31, 2019

1. Background

Lloyds Metals and Energy Limited was incorporated in 1977 having it’s registered office at Plot No A 1-2, MIDC Area Ghugus Chandrapur - 442505, Maharashtra State. The Company is into the business of manufacturing Sponge Iron, Power generation and mining activities.

(B) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs. 1/- each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. In the event of liquidation of the company, the equity shareholders 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.

Note No. 15(i)(a): Working Capital Loans from Banks of Rs. 267.09 Lakhs (Previous Year Rs. 1,914.79 Lakhs) are primarily secured by hypothecation of present and future stock of raw materials, work-in-progress, finished goods, stores and spares (not relating to plant and machinery), book debts, outstanding monies, receivables, claims, bills, materials in transit, etc. and are also secured by way of collateral security in the form of mortgage of plot no. A-1 and A-2 admeasuring 40,000 sq.mtr. and 8,95,200 sq.mtr. respectively situated at Ghugus Industrial Area, village Ghugus, Dist. Chandrapur together with all building and structure thereon & all plant and machinery both present and future.

Note no. 15(ii)(a): There are no amounts outstanding to Micro, Small and Medium Enterprises as at March 31, 2019 and no amount were over due during the year for which disclosure requirements under Micro, Small and Medium Enterprises Development Act, 2006 are applicable.

Note no. 15(ii)(b): Inland letter of credit limits are primarily secured by hypothecation on all current assets of the company namely, Stock of raw materials, work-in-progress, finished goods, stores and spares, Bill receivable and book debts and all other moveable assets present and future and are also secured by way of collateral security in the form of Second Charge on all fixed assets of the company -all that piece & parcel of land or ground together with all building and structure thereon and all moveable plant and machinery both present and future.

2. Disclosure as required by the Ind AS -19 “Employees Benefit” is given below:

Defined benefit plan: The Company operates one defined benefit plan, viz., gratuity benefit, for its employees. The Gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. The company does not have any fund for gratuity liability and the same is accounted for as provision.

Under the other long term employee benefit plan, the company extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company.

Salary risk - The present value of the defined benefit plans liability is calculated by reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The above sensitivity analysis is determined based on a method that extrapolates the impact on the net defined benefit obligations, as a result of reasonable possible changes in the significant actuarial assumptions. Further, the above sensitivity analysis is based on a reasonably possible change in a particular under-lying actuarial assumption, while assuming all other assumptions to be constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

3. Financial instrument and risk management Fair values

1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

2. Borrowings (non-current) consists of loans from banks and government authorities, other financial liabilities (noncurrent) consists of interest accrued but not due on deposits other financial assets consists of employee advances where the fair value is considered based on the discounted cash flow.

3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

4. Financial risk and capital risk management

1) Financial Risk

The business activities of the Company expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s risk management strategies focus on the un-predictability of these elements and seek to minimize the potential adverse effects on its financial performance.

The financial risk management for the Company is driven by the Company’s senior management and internal/ external experts subject to necessary supervision.

The Company does not undertake any speculative transactions either through derivatives or otherwise. The senior management is accountable to the Board of Directors and Audit Committee. They ensure that the Company’s financial risk-taking activities are governed by appropriate financial risk governance frame work, policies and procedures. The Board of Directors periodically reviews the exposures to financial risks, and the measures taken for risk mitigation and the results thereof.

2) Foreign currency Risk

Foreign exchange risk arises on all recognised monetary assets and liabilities and on highly probable forecasted transactions which are denominated in a currency other than the functional currency of the Company. The Company does not have any foreign currency trade payables and receivables.

The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency.

No Forward contracts were entered into by the company either during the year or previous years since the company has very minimum exposure to foreign currency risk.

i. Price risk

The company uses surplus fund in operations and for further growth of the company. Hence, there is no price risk associated with such activity.

ii. Credit risk

Credit risk refers to the risk of default on its obligation by the counter-party the risk of deterioration of creditworthiness of the counterparty as well as concentration risks of financial assets, and thereby exposing the Company to potential financial losses. The Company is exposed to credit risk mainly with respect to trade receivables.

Trade receivables

The Trade receivables of the Company are typically non interest bearing un-secured. As there is no independent credit rating of the customers available with the Company, the management reviews the credit-worthiness of its customers based on their financial position, past experience and other factors. The credit risk related to the trade receivables is managed / mitigated by concerned team based on the Company’s established policy and procedures and by setting appropriate payment terms and credit period. The credit period provided by the Company to its customers depend upon the contractual terms with the customers.

The Company performs on-going credit evaluations of its customers’ financial condition and monitors the credit-worthiness of its customers to which it grants credit in its ordinary course of business. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount due or there are some disputes which in the opinion of the management is not in the Company’s favour. Where the financial asset has been written-off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit and loss.

iii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Accordingly, as a prudent liquidity risk management measure, the Company closely monitors its liquidity position and deploys a robust cash management system.

Based on past performance and current expectations, the Company believes that the Cash and cash equivalents and cash generated from operations will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

3) Capital Risk

The Company’s objective while managing capital is to safeguard its ability to continue as a going concern (so that it is enabled to provide returns and create value for its shareholders, and benefits for other stakeholders), support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and/ or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital. However, the key objective of the Company’s capital management is to, ensure that it maintains a stable capital structure with the focus on total equity, uphold investor; creditor and customer confidence, and ensure future development of its business activities. In order to maintain or adjust the capital structure, the Company may issue new shares, declare dividends, return capital to shareholders, etc.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.

5. Capital Management

Capital management and Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

1. Key Managerial Personnel are under the employment of Company are entitled to post employment benefits and other long term employee benefits recognized as per Ind AS 19 - ‘Employee Benefits’ in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not included above. Further re-imbursement of expenses to KMP are not included above.

2. Director’s remuneration for the year 2018-2019 is as per limits prescribed under Section 197 read with Schedule V of the Companies Act, 2013.

3. All related party contracts / arrangements have been entered in ordinary course of business and are approved by the board of directors.

6. Share Based Payments Plans (ESOP)

The Company introduced “LLOYDS METALS AND ENERGY LIMITED ESOP - 2017” which covers the eligible employees of the Company and its subsidiaries. The options granted under Plan shall vest based upon the performance of the Employee, subject to completion of minimum 1 (One) year from the date of Grant and as may be decided by the Committee subject to maximum period of 5 (Five) years.

Security

1. The loans mentioned in (i)(a) is subservient charge after existing charge of Punjab & Maharashtra Co-operative Bank Ltd and Citizencredit Co-operative Bank Ltd. on immoveable & moveable assets of the company excluding assets under exclusive charge.

2. The loans mentioned in (i)(b) have been Exclusive charge on moveable assets finance for mining project and pari passu charge on the existing moveable assets.

Notes:-

1. Kotak Mahindra Bank Ltd. is repaid in 48 months installments which is starting from month of first disbursement of Term Loan. Principal repayment pattern is 1st Year-15%, 2nd Year -25%, 3rd Year-30% & 4th Year-30%.

2. Citizen credit Co-operative Bank Ltd. has sanctioned amount of Rs. 2,920.00 Lakhs, out of which Rs. 2,010.40 Lakhs disbursed as on 31.03.2019. Repayment of the loan is in 96 equal months installments to commence after a moratorium period of 24 months from the date of first disbursements. Total tenure will be 120 months. Year wise repayment considered on full sanctioned amount.

3. The rate of interest for vehicles loan from banks range from 7% to 8% and rate of interest for term loans from others is 8.50% & 10.50%

4. The rate of interest from corporate party range between 12% to 14%.

5. Sales Tax Deferral is repayable from April-2016 and repayable in full by April-2021.

7. Segment reporting under Ind AS - 108

Disclosures as required by the Ind AS - 108 on “Segment Reporting” are given below:

For management purposes, the Company is organized into business units based on its services and has two reportable segments, as follows:

1. The Sponge Iron segment which includes production and manufacturing of Sponge Iron.

2. The Power segment which includes generation of power.

8. a) The Company does not envisage any liability for income tax for the current year in absences of any taxable income.

b) Disclosure as required by Ind AS-12 “accounting for taxes on income” are given below:-

In the event of carry forward losses and unabsorbed deprecation no Deferred Tax liability has been created for the financial year ending 31.03.2019. The deferred tax asset has not been recognized as there is no probable certainty of sufficient future taxable income available against which this deferred tax assets can be realized.

9. Approval of Financial Statements

The financial statements were approved by the board of directors on April 25th 2019.


Mar 31, 2018

1. Background

Lloyds Metals and Energy Limited was incorporated in 1977 having it’s registered office in Plot No A 1-2, MIDC Area Ghugus Chandrapur - 442505, Maharashtra State. The Company is into the business of manufacture of Sponge Irion and Steel, Power Generation and Mining activities.

(B) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs. 1/- each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. In the event of liquidation of the company, the equity shareholders 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.

(C) The Company has not issued any share as fully paid up without payment being received in cash or as bonus shares nor any share has been bought back by the Company in last 5 years.

Note No. 15(i)(a) Working Capital Loans from Banks of Rs. 1,914.79 Lakhs (Previous Year Rs. 1,653.35 Lakhs) are primarily secured by hypothecation of present and future stock of raw materials, work-in-progress, finished goods, stores and spares (not relating to plant and machinery), book debts, outstanding monies, receivables, claims, bills, materials in transit, etc. and are also secured by way of collateral security in the form of mortgage of plot no. A-1 and A-2 admeasuring 40,000 sq.mtr. and 8,95,200 sq.mtr. respectively situated at Ghugus Industrial Area, village Ghugus, Dist. Chandrapur together with all building and structure thereon & all plant and machinery both present and future.

Note no. 15(ii)(a): There are no amounts outstanding to Micro, Small and Medium Enterprises as at March 31, 2018 and no amount were over due during the year for which disclosure requirements under Micro, Small and Medium Enterprises Development Act, 2006 are applicable.

Note no. 15(ii)(b): Inland letter of credit limits are primarily secured by hypothecation on all current assets of the company namely , Stock of raw materials, work-in-progress, finished goods, stores and spares , Bill receivable and book debts and all other moveable assets present and future and are also secured by way of collateral security in the form of Second Charge on all fixed assets of the company -all that piece parcel of land or gorund together with all building and structure thereon and all moveable plant and machinery both present and future.

2. Disclosure as required by the Ind AS -24 “Employee Benefit” is given below:

Defined benefit plan: The Company operates one defined benefit plan, viz., gratuity benefit, for its employees. The Gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. The company does not have any fund for gratuity liability and the same is accounted for as provision.

Under the other long term employee benefit plan, the company extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company.

Due to its defined benefit plans, the Company is exposed to the following significant risks:

Changes in bond yields - A decrease in bond yields will increase plan liability.

Salary risk - The present value of the defined benefit plans liability is calculated by reference to the future salaries of the plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short term nature.

2. Borrowings (non-current) consists of loans from banks and government authorities, other financial liabilities (non current) consists of interest accrued but not due on deposits other financial assets consists of employee advances where the fair value is considered based on the discounted cash flow.

3. The fair value of forward foreign exchange contracts is calculated as the present value determined using forward exchange rates, currency basis spreads between the respective currencies and interest rate curves.

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

1) Financial Risk

The business activities of the Company expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s risk management strategies focus on the un-predictability of these elements and seek to minimize the potential adverse effects on its financial performance.

The financial risk management for the Company is driven by the Company’s senior management and internal/ external experts subject to necessary supervision.

The Company does not undertake any speculative transactions either through derivatives or otherwise. The senior management is accountable to the Board of Directors and Audit Committee. They ensure that the Company’s financial risk-taking activities are governed by appropriate financial risk governance frame work, policies and procedures. The Board of Directors periodically reviews the exposures to financial risks, and the measures taken for risk mitigation and the results thereof.

2) Foreign currency Risk

Foreign exchange risk arises on all recognized monetary assets and liabilities and on highly probable forecasted transactions which are denominated in a currency other than the functional currency of the Company. The Company does not have any foreign currency trade payables and receivables.

The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency.

No Forward contracts were entered into by the company either during the year or previous years since the company has very minimum exposure to foreign currency risk as stated in above table.

The sensitivity disclosed in the above table is mainly attributable to, in case of foreign exchange gains / (losses) on trade payables and trade receivables. The above sensitivity analysis is based on a reasonably possible change in the under-lying foreign currency against the respective functional currency while assuming all other variables to be constant.

Based on the movements in the foreign exchange rates historically and the prevailing market conditions as at the reporting date, the Company’s management has concluded that the above mentioned rates used for sensitivity are reasonable benchmarks.

ii. Price risk

The company uses surplus fund in operations and for further growth of the company. Hence, there is no price risk associated with such activity.

iii. Credit risk

Credit risk refers to the risk of default on its obligation by the counter-party the risk of deterioration of creditworthiness of the counterparty as well as concentration risks of financial assets, and thereby exposing the Company to potential financial losses. The Company is exposed to credit risk mainly with respect to trade receivables.

Trade receivables

The Trade receivables of the Company are typically non interest bearing un-secured. As there is no independent credit rating of the customers available with the Company, the management reviews the credit-worthiness of its customers based on their financial position, past experience and other factors. The credit risk related to the trade receivables is managed / mitigated by concerned team based on the Company’s established policy and procedures and by setting appropriate payment terms and credit period. The credit period provided by the Company to its customers depend upon the contractual terms with the customers.

The Company performs on-going credit evaluations of its customers’ financial condition and monitors the credit-worthiness of its customers to which it grants credit in its ordinary course of business. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amount due or there are some disputes which in the opinion of the management is not in the Company’s favour. Where the financial asset has been written-off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in profit and loss.

iv. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. Accordingly, as a prudent liquidity risk management measure, the Company closely monitors its liquidity position and deploys a robust cash management system.

Based on past performance and current expectations, the Company believes that the Cash and cash equivalents and cash generated from operations will satisfy its working capital needs, capital expenditure, investment requirements, commitments and other liquidity requirements associated with its existing operations, through at least the next twelve months.

3) Capital Risk

The Company’s objective while managing capital is to safeguard its ability to continue as a going concern (so that it is enabled to provide returns and create value for its shareholders, and benefits for other stakeholders), support business stability and growth, ensure adherence to the covenants and restrictions imposed by lenders and/ or relevant laws and regulations, and maintain an optimal and efficient capital structure so as to reduce the cost of capital. However, the key objective of the Company’s capital management is to, ensure that it maintains a stable capital structure with the focus on total equity, uphold investor; creditor and customer confidence, and ensure future development of its business activities. In order to maintain or adjust the capital structure, the Company may issue new shares, declare dividends, return capital to shareholders, etc.

The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.

3. Cpital Management

Capital management and Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

4. Segment reporting under Ind AS - 108

Disclosures as required by the Ind AS - 108 on “Segment Reporting” are given below:

For management purposes, the Company is organized into business units based on its services and has two reportable segments, as follows:

1. The Sponge Iron & Steel segment which including production and manufacturing of Sponge Iron and Steels.

2. The Power segment which including generation of power.

5) a) The Company does not envisage any liability for Income tax for the Current Year in absence of any taxable income

b) Disclosure as required by Ind AS -12 “accounting for taxes on income” are given below:

In the event of carry forward losses and unabsorbed depreciation no Deferred Tax liability has been created for the financial ending 31.03.2018. The deferred tax asset has not been recognized as there is no probable certainty of sufficient future taxable income available against which this deferred tax assets can be realized.

6. Approval of Financial Statements

The financial statements were approved for issue by the Board of Directors on April 16, 2018.

See accompanying notes 1 to 37 are integral part of these Financial Statements


Mar 31, 2015

1 Contingent liabilities not provided for - (Rs. in Lacs) As at As at 31/03/2015 31/03/2014

a) Letter of Credit/Guarantees 556.70 524.75 issued by Banks

b) Disputed claims of Excise/ 20.72 28.18

Service Tax and CST Authorities

c) Claims against 145.50 118.90 the Company not acknowledged as Debts

2 Amount held in Margin / Fixed deposit accounts with banks having lien for facilities given by Banks Rs.726.67 Lacs (Previous year Rs.726.73 Lacs).

3 The computation of net profit for the purpose of calculation of managerial remuneration u/s 198 of Companies Act, 2013 has not been enumerated since minimum remuneration has been paid to the Managing Director.

4 a) The Company does not envisage any liability for Income

Tax for the current year in absence of taxable income.

b) Disclosure as required by the Accounting Standard - 22 "Accounting for Taxes on Income" are given below:

In the event of carry forward losses and unabsorbed depreciation no Deferred Tax Liability has been created for the financial year ending 31s1 March, 2015. The deferred tax asset has not been recognized as there is no virtual certainty of sufficient future taxable income available against which this deferred tax asset can be realized.

5 Disclosure as required by the Accounting Standard-15 "Employee Benefit" are given below:

a) General Description of Plan : Defined Gratuity Benefit obligation (Unfunded)

b) Method of Valuation of Gratuity: Projected Unit Credit Method.

e) Actuarial Assumptions.

(i) Rate of Interest : 7.75% per annum

(ii) Salary Growth : 8.00% per annum

(iii) Withdrawal Rate : 1%

(iv) Mortality Rate : Indian Assured Lives (2006-08)

ultimate Mortality Rates.

(v) Retirement Age : 60 years

6 Debtors, Creditors and Loans & Advances are subject to confirmation by the parties. Difference (if any), shall be accounted on such reconciliation.

7 During the year power division sales includes sale of power amounting to Rs. 773.57 lacs at selling price to sponge iron division (Previous year Rs. 1016.32 Lacs).

8 The Company has no information as to whether any of its suppliers constitute micro, small & medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

9 Previous year figures have been regrouped and recast wherever necessary to confirm to the classification of the current year as per the Schedule III of the Companies Act, 2013.


Mar 31, 2013

1 Contingent liabilities not provided for

(Rs. in Lacs)

As at 31/03/13 As at 31/03/12

a) Letter of Credit/Guarantees issued by Banks 478.00 456.16

b) Disputed claims of Excise/Service Tax Authorities 27.20 12.50

c) Claims against the Company not 118.90 237.25 acknowledged as Debts

2 Amount held in Margin / Fixed deposit accounts with banks having lien for facilities given by Banks Rs. 669.30 Lacs (Previous year Rs. 631.65 Lacs)

3 The computation of net profit for the purpose of calculation of managerial remuneration u/s 349 of Companies Act, 1956 has not been enumerated since minimum remuneration has been paid to the Managing Director.

4 a) The company does not envisage any liability for Income Tax for the current year in absence of taxable income.

b) Disclosure as required by the Accounting Standard - 22 "Accounting for Taxes on Income" are given below.:

In the event of carry forward losses and unabsorbed depreciation no Deferred Tax Liability has been created for the financial year ending 31.03.2013. The deferred tax asset has not been recognized as there is no virtual certainty of sufficient future taxable income available against which this deferred tax asset can be realized.

5 Short term loans & advances includes loans and advances given to subsidiary Gadchiroli Metals & Minerals Ltd. of Rs. 37.50 Lacs (Previous year Rs. 37.35 Lacs)

6 Disclosure as required by the Accounting Standard-15 "Employee Benefit" are given below:

a) General Description of Plan : Defined Gratuity Benefit obligation (Unfunded)

b) Method of Valuation of Gratuity: Projected Unit Credit Method.

7 Debtors, Creditors and Loans & Advances are subject to confirmation by the parties. Difference (if any), shall be accounted on such reconciliation.

8 During the year power division sales to sponge iron division is Rs. 939.24 Lacs (Previous year Rs. 958.87 Lacs)

9 The Company has no information as to whether any of its suppliers constitute micro, small & medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

10 Previous year figures have been regrouped and recast wherever necessary to confirm to the classification of the current year as per the revised Schedule VI of the Companies Act 1956.


Mar 31, 2010

1. Contingent liabilities not provided for —

(Rs. in lacs) As at As at 31/03/10 31/03/09 a) Letter of Credit/Guarantees 419.73 377.35 issued by Banks b) Disputed claim of Excise Authorities 12.50 14.12 c) Claims against the Company not 25.72 25.72 acknowledged as Debts d) Bills Receivable (Foreign LC) 668.44 Nil

2. Amount held in Margin / Fixed deposit accounts with banks having lien for facilities given by Banks Rs. 420.23 Lacs (Previous year Rs. 476.83 Lacs)

3. a) The computation of net profit for the purpose of calculation of managerial remuneration u/s 349 of Companies Act, 1956 has not been enumerated since minimum remuneration has been paid to the Managing Director.

4. a) The Income tax assessment have been completed upto

Assessment Year 2007-08

b) The company does not envisage any liability for Income Tax for the current year in absence of taxable income.

c) Disclosure as required by the Accounting Standard - 22 "Accounting for Taxes on Income" are given below.:

In the event of carry forward losses and unabsorbed depreciation no Deferred Tax Liability has been created for the financial year ending 31.03.2010. The deferred tax asset has not been recognized as there is no virtual certainty of sufficient future taxable income available against which this deferred tax asset can be realized.

5. Advance recoverable in cash or kind or for a value tobe received includes loans and advances given to subsidiary Gadchiroli Metals & Minerals Ltd. of Rs.37.21 Lacs.

6. Disclosure as required by the Accounting Standard-15 "Employee Benefit" are given below:

a) General Description of Plan : Defined Gratuity Benefit obligation (Unfunded)

b) Method of Valuation of Gratuity: Projected Unit Credit Method.

c) Reconciliation of opening and closing balance of defined benefit obligation

(i) Obligation as at the beginning : Rs.78.77 Lacs of the year (ii) Current Services Cost : Rs.13.07 Lacs (iii) Interest Cost : Rs.6.30 Lacs (iv) Actuarial (Gain)/Loss : Rs.(5.50) Lacs (v) Benefits paid : Rs.(7.11) Lacs (vi) Obligation as at the end of the year : Rs.85.53 Lacs d) Expenses recognized during the year. (i) Current Services Cost : Rs. 13.07 Lacs (ii) Interest Cost : Rs.6.30 Lacs (iii) Actuarial (Gain)/Loss : Rs.(5.50) Lacs (iv) Expenses recognized during the year : Rs.13.87 Lacs e) Actuarial Assumptions. (i) Rate of Interest : 8.25% per annum (ii) Salary Growth : 6.50% per annum (iii) Withdrawal Rate : 1% (iv) Mortality Rate : LIC (1994-96) ultimate Mortality Rates. (v) Retirement Age : 60 years

7. Debtors, Creditors and Loans & Advances are subject to confirmation by the parties. Difference (if arjy), shall be accounted on such reconciliation.

8. Disclosure as required by the Accounting Standard - 5 "Net Profit or Loss for the period, Prior Period items and changes in Accounting Policies" are given below.

Prior period expenses is Rs. 2.10 Lacs (Previous year 2.26 Lacs). Prior period income is Nil (Previous year Rs. 7.71 Lacs).

9. The Company has no information as to whether any of its suppliers constitute micro, small .& medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

10. Disclosure as required by the Accounting Standard -17 "Segment Reporting" are given below.

The Company is operating on only one broad segment - Iron & Steel and hence no separate Segmental results have been given.

11. Additional information pursuant to the provisions of paragraph 3 and 4 of Part II of Schedule VI to the Companies Act, 1956.

NOTES:

1. Company is not required to obtain any License under Industrial Regulation Act. therefore the details of licensed capacity is not applicable.

2. Production of Tubes & Pipes during the current year is from conversion work at job work site.

12. In view of the Scheme of Arrangement for transfer of Assets & Liabilities of Steel Tubes & Pipes undertaking w.e.f. 1sl November, 2008, the previous year's figures are not comparable.

13. Previous year figures have been regrouped and recast wherever necessary to conform to the classification of the current year.

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