Mar 31, 2014
I. Accounting Conventions
The financial statements are prepared under historical cost conventions
and as a going concern basis following the accrual basis of accounting
and in accordance with the Generally Accepted Accounting Principles
(GAAP) in India and in compliance with the provision of the Companies
Act, 1956.
ii. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues
& expenses for the Year under review and assets & liabilities,
disclosure of contingent liabilities, on the date of the financial
statements. Actual results could differ from these estimates. Any
revision to accounting estimates is recognized prospectively in the
current and future periods.
iii. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and revenue can be reliably
measured
a. In respect of Sales : When the significant risks and rewards of
ownership of goods have been passed
on to the buyer, which generally coincides with delivery / shipment of
goods to customers.
b. In respect of Interest Income : On time proportion basis taking
into account the amount outstanding and the rate
applicable.
c. In respect of Service Income : When the services are performed as
per contract.
d. In respect of Dividend Income : When right to receive payment is
established.
e. In respect of Insurance Claims : On Settlement of Claims
f. In respect of Guarantee Commission : When right to receive payment
is established.
Revenue from product sales is recognized inclusive of Excise duty but
exclusive of Sales Tax/Value added Tax (VAT) and net of returns, Sales
Discount etc. Sales Returns are accounted for when goods are returned.
iv. Fixed Assets
Fixed assets are stated at historical cost, which comprises cost of
purchase/construction cost, cost of borrowing and other cost directly
attributable to bring the assets at its working condition and location
for its intended use. Expenditures during construction period are
allocated to the relevant assets in the ratio of costs of respective
assets.
v. Depreciation on Fixed Assets
Depreciation on Fixed assets is provided on Straight - Line Method
(SLM) at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
vi. Inventories
1. Inventories are valued as under:
a. Raw Materials : At Cost or Net Realisable Value whichever is lower
b. Finished Products : At Cost or Net Realisable Value whichever is
lower
c. Stores, Spares and Components : At Cost or Net Realisable Value
whichever is lower
d. Stock in process : At Raw material Cost plus estimated cost of
conversion up to the stage of completion or Net Realisable Value
whichever is lower.
Cost includes all direct cost and applicable manufacturing and
administrative overheads.
2. Inventories are valued on FIFO basis.
3. Variation, if any, between books and physical stocks detected on
physical verification, obsolete & slow moving stocks are adjusted in
accounts as found appropriate.
vii. Investments
Long term investments are stated at cost. Provision is made when
diminution in the value of investments is considered permanent in
nature.
Current investments are stated at lower of cost and market value.
viii. Foreign Exchange Transactions
a. Initial Recognition
Foreign Exchange transactions are recorded normally at the exchange
rates prevailing on the date of the transactions.
b. Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of transaction and non- monetary items which are carried at
the fair value or other similar denominated in a foreign currency are
reported using the exchange rates that existed when the values were
determined.
c. Exchange differences
Exchange differences arising on settlement of transactions or on
reporting monetary items of the Company at the rate different from
those at which they were initially recorded during the year, or
reported in previous financial statement, are recognised as income or
expenses in the year in which they arise except in case where they
relate to acquisition of fixed assets.
d. Forward Exchange Contract not intended for trading or speculative
purposes
The premium or discount arising at the inception of forward exchange
contract is amortized as expenses or income over the life of the
respective contract. Exchange differences on such contracts are
considered in the statement of Profit or Loss in the Year in which
exchange rate changes. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or as
expenses for the Year.
ix. Provisions, Contingent Liabilities and Contingent Assets
The Company makes a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Contingent Assets are disclosed when
an inflow of economic benefit is probable and/or certain.
x. Borrowing Costs
Borrowing Costs that are attributable to the acquisition and
constructions of qualifying assets are capitalised as a part of the
cost of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. Other
borrowing costs of the Year are charged to revenue in the period in
which they are incurred.
xi. Taxation
Current Tax is determined as the amount of tax payable in respect of
taxable income for the Period.
Deferred Tax Liability is recognized for all timing differences between
taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred Tax Assets are recognized only if there is reasonable
certainty that the same will be realized and are reviewed for the
appropriateness of its respective carrying values at each Balance Sheet
date.
Tax on Distributed Profit Payable is in accordance with the provision
of Section 155O of the Income Tax Act, 1961 and in accordance with
guidance note on Accounting for Corporate Dividend Tax.
Wealth Tax is determined on taxable value of assets on the balance
sheet date.
xii. Employee benefits
a) Short Term & Post Employment Benefits
Employee benefits of short-term nature are recognized as expense as and
when those accrue. Post employments benefits are recognized as expenses
based on actuarial valuation at Year end which takes into account
actuarial gains and losses.
b) Employee Stock Option Scheme (ESOS)
Aggregate quantum of options granted under the schemes in monetary term
net of consideration of issue, to be paid in cash, are shown in the
Balance Sheet as Employees Stock Option outstanding under Reserves &
Surplus and as Deferred Employees Compensation (ESOS) under Unamortised
Expenditure as per guide-lines of SEBI in this respect.
With the exercise of options and consequent issue of equity shares
corresponding ESOS outstanding is transferred to Securities
Premium Account.
xiii. Indirect Taxes
Excise Duty on Finished Goods Stock is accounted for at the point of
manufacture of goods and is accordingly considered for valuation of
finished goods stock as on Balance sheet date. Customs duty on imported
raw materials is accounted for on the clearance of goods from the
Customs Authorities.
xiv. Unamortised Expenditure
Unamortised expenditure, stated at cost, is amortized over period of
time as under:
(i) Deferred Revenue Expenses-5 years
(ii) Deferred Employees Compensation under ESOS- Amortised on straight
line basis over vesting period.
xv. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication of an asset being impaired. An asset is treated as impaired
when the carrying amount of assets exceeds its recoverable value, in
which case the impairment loss is charged to the Statement of Profit
and Loss of the Year in which an asset is identified as impaired. The
impairment loss, if any, recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
xvi. Research and development
Revenue expenditure on research and development is expensed as
incurred. Capital expenditures incurred on research and development are
capitalised as fixed assets and depreciated in accordance with the
depreciation policy of the Company.
xvii. Earning per share (EPS)
The basic earning per share ("EPS") is computed by dividing the net
profit after tax for the Year by the weighted average number of equity
shares outstanding during the Year. For the purpose of calculating
diluted earnings per share, net profit after tax for the Year and the
weighted average number of shares outstanding during the Year are
adjusted with the effects of all dilutive potential equity shares. The
dilutive potential equity shares are deemed converted as of the
beginning of the Year, unless they have been issued at a later date.
xviii. Prior Period Adjustments, Extra-ordinary Items and Changes in
Accounting Policies
Prior period adjustments, extraordinary items and changes in accounting
policies, if any, having material impact on the financial affairs of
the Company are disclosed.
xix. Segment Reporting
i. Identification of Segments :
The Company''s Operating Businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets.
ii. Allocation of Common Costs :
Common allocable costs are allocated to each segment according to sales
of each segment to total sales of the Company.
2.4 i) The grant of option to the employees under the stock Option
Schemes is on the basis of their performance and other eligibility
criteria .The options are vested over a period, subject to the
discretion of the Management and fulfillment of certain conditions.
(ii) The Company has calculated Employee Compensation Costs on the
basis of Intrinsic Value Method and has amortized Rs. (0.06) Crores
(Previous Year Rs. 0.67 Crores) for the Year ended 31st March, 2014.
However, had the company followed Fair Value Method for calculating
Employee Compensation Costs, such costs for the Year would have been
lower by Rs.0.11 Crores with corresponding impact on the Profit after
Tax and Basic as well as Diluted EPS for the Year.
(iv) The Company has issued 200, 5.5% Unsecured Foreign Currency
Convertible Bonds (FCCB) of US$ 100,000 each aggregating US $ 20
Millions at par on 29th October''2012. These bonds are convertible into
equity shares of the Company at the option of the bond holders at a
price of Rs. 22.50 per share. On Conversion these Bonds will result in
47,764,444 equity shares of the Company.
4 (A). For all Secured Term Loans & Non Convertible Debentures
excluding "B" & "C" i) Primary Security:
a) Pari- passu 1st charge over the entire fixed assets (both present &
future) of the company''s coke units at Khambhalia and Bhachau in the
state of Gujarat, Dharwad in the state of Karnataka, Waste Heat
Recovery Power Plant (along with land) at Dharwad in the state of
Karnataka, Steel unit at Bhachau in the state of Gujarat and Windmill
units at various locations in the state of Gujarat excluding the
movable fixed assets exclusively charged to Tata Capital Financial
Services Ltd.
b) Pari- passu 1st charge over the entire fixed assets (both present &
future) of NRE Metcoke Ltd. at Bhachau in the state of Gujarat.
c) Pari-passu 2nd charge over the entire fixed assets (both present &
future) of Bajrangbali Coke Industries Ltd. at Bhachau in the state of
Gujarat.
ii) Collateral Security:
a) Pari-passu 2nd charge over the entire current assets (both present &
future) of the company''s coke units at Khambhalia and Bhachau in the
state of Gujarat and Dharwad in the state of Karnataka and Steel unit
at Bhachau in the state of Gujarat.
b) Along with Working Capital facilities
 First Pari-passu charge on Residential Property at 1, Clyde Row,
Hastings, Kolkata in the name of Mr. Arun Kumar
Jagatramka  First Pari-passu charge on Residential-cum-office Property
at NRE House, Saru Road, Jamnagar, Gujarat in the
name of Mr. Arun Kumar Jagatramka  Pledge of 78,478,035 Equity shares
and 12,357,468 "B" Equity Shares of Gujarat NRE Coke Ltd (GNCL) held by
the promoters/ promoter Group Companies . Â Personal Guarantees of
Promoter Directors viz. Mr. Arun Kumar Jagatramka and Mrs. Mona
Jagatramka. Â Corporate Guarantee (to the extent of the value of
shares pledged) of promoter group companies namely Gujarat
NRE Mineral Resources Ltd and Mangal Crystal Coke Pvt. Ltd. Â
Corporate Guarantee of Bajrangbali Coke Industries Ltd., NRE Metcoke
Ltd. and Bharat NRE Coke Limited.
c) The Rupee Term Loan II of Rs. 54 Crores from ICICI Bank Ltd.
presently converted into FCNRB is further secured by Corporate
guarantee of Gujarat NRE Ltd.
(B) Term Loan from Laxmi Vilas Bank Ltd. amounting to Rs. 48.50 Crores
Primary Security:
Pari- passu 1st charge over the entire fixed assets (both present &
future) of Bajrangbali Coke Industries Ltd. at Bhachau in the state of
Gujarat. Collateral Security:
a) Pari- passu 2nd Charge over the entire fixed assets (both present &
future) of the company''s coke units at Khambhalia and Bhachau in the
state of Gujarat, Dharwad in the state of Karnataka, Waste Heat
Recovery Power Plant (along with land) at Dharwad in the state of
Karnataka, Steel unit at Bhachau in the state of Gujarat and Windmill
units at various locations in the state of Gujarat excluding the
movable fixed assets exclusively charged to Tata Capital Financial
Services Ltd.
b) Refer Note No.4(A)(ii)(b)
C) Term Loan from others are secured by Hypothecation of specified
Movable fixed assets financed.
E) The Company has issued 200, 5.5% Unsecured Foreign Currency
Convertible Bonds (FCCB) of US$ 100,000 each aggregating
US $ 20 Millions at par on 29th October''2012. These bonds are
convertible into equity shares of the Company at the option of the bond
holders at a price of Rs. 22.50 per share. On Conversion these Bonds
will result in 47,764,400 equity shares of the Company. If not
converted then they are reedemable on 30th October''2017
i Primary Security:
Pari-passu 1st charge over the entire current assets (both present &
future) of the company''s coke units at Khambhalia and Bhachau in the
state of Gujarat and Dharwad in the state of Karnataka and Steel unit
at Bhachau in the state of Gujarat.
ii Collateral Security:
a) Pari- passu 2nd charge over the entire fixed assets (both present &
future) of the company''s coke units at Khambhalia and Bhachau in the
state of Gujarat, Dharwad in the state of Karnataka, Waste Heat
Recovery Power Plant (along with land) at Dharwad in the state of
Karnataka, Steel unit at Bhachau in the state of Gujarat and Windmill
units at various locations in the state of Gujarat excluding the
movable fixed assets exclusively charged to Tata Capital Financial
Services Ltd.
b) Pari- passu 2nd charge over the entire fixed assets (both present &
future) of the company''s leased unit namely NRE Metcoke Ltd. at Bhachau
in the state of Gujarat.
c) Refer Note 4(A)(ii)(b)
iii The Working Capital Loan of Rs. 75 Crores from ICICI Bank Ltd. is
further secured by Corporate guarantee of Gujarat NRE Ltd.
The Management of the Company is reasonably certain that the Company
would be having Future Taxable Income and deferred tax assets are only
recognized to the extent that their utilization is probable, i.e. tax
benefit is expected in future periods and the same is further supported
by the Technical & Economical Valuation conducted by Mecon Ltd. as a
part of CDR Implementaion.
iv General Descriptions of defined benefit plans:
a) Gratuity Plan:
The Company operates gratuity plan wherein every employee is entitled
to the benefit equivalent to fifteen days salary last drawn for each
completed year of service. The same is payable on Termination of
service, or retirement, whichever is earlier. The benefit vests after
five years of continuous service.
b) Provident Fund Plan:
The Company contributes 12% of salary for all eligible employees
towards Provident Fund managed by the Regional Provident Fund
Authority.
25 Segment Informations:
Segment wise Revenue, Results and Capital Employed for the Year ended
31st March,2014.
The Company has two reportable segments i.e. "Coal & Coke" and "Steel"
as primary business segments.
In the above statement, paid up Equity & Earning Per Share include both
Equity Shares & "B" Equity Shares since both class of shares are
pari-passu in all respect except for voting rights.
27 a) Debt Restructuring:
During the year, the Company was referred to the Corporate Debt
Restructuring (CDR) Cell, a non statutory voluntary mechanism set up
under the aegis of Reserve Bank of India. Pursuant to that a Corporate
Debt Restructuring (CDR) Package as recommended by State Bank of India,
the lead banker has been approved by the CDR empowered Group (CDR EG)
at its meeting held on 14th March 2014 and communicated vide Letter of
Approval dated 22nd March 2014 as amended/modified vide letter dated
7th April 2014. The key features of the approved CDR Package are as
follows:
a) The Cutoff date under the CDR package is 01st August 2013.
b) The tenure of existing NCDs and Term Loans aggregating to Rs.
1020.69 Crores has been revised to 10 years from the cut - off date
with a moratorium of 2 years. The repayment shall be in 32 quarterly
installments from 1st August 2015. The revised applicable interest rate
shall be initially 10.75% p.a. and gradually being stepped upto 11.65%
p.a.
c) Conversion of various irregular/devolved portion of working capital
facilities into Working Capital Term Loan (WCTL) of 10 years repayable
after a moratorium of 2 years from the cut off date in 32 quarterly
installments from 1st August 2015. The applicable interest rate shall
be initially 10.75% p.a. and gradually being stepped upto 15.00% p.a.
d) Interest on existing Term Loan, NCDs and WCTL for the period from
1st August 2013 to 31st July 2015 and Interest on Working Capital
outstanding for the period from 1st August 2013 to 31st March 2014 will
be funded and converted into Funded Interest Term Loan (FITL) of 10
years repayable after a moratorium of 2 years from the cut off date in
32 quarterly installments from 1st August 2015. The applicable interest
rate shall be initially 11.00% p.a. gradually being stepped upto 15.00%
p.a.
e) Additional Term Loan - I of Rs. 450 Crores for meeting long term
working capital needs of the company to be provided by 3 working
capital CDR lenders and 2 working capital Non CDR lenders. The
repayment shall be in 32 quarterly installments from 1st August 2015.
The applicable interest rate shall be initially 11.00% p.a. and
gradually being stepped upto 11.50% p.a.
f) Additional Term Loan - II of Rs. 50 Crores to part finance the
capital expenditure for completing the Waste Heat Recovery Based Power
plant (Phase I & II) at Dharwad, Karnataka. The repayment shall be in
32 quarterly from 1st August 2015. The applicable interest rate shall
be initially 10.75% p.a. and gradually being stepped upto 11.65% p.a.
g) Need based working capital requirement assessed for FY 2014 - 15 of
Rs. 650 Crores(Fund Based) and Non fund based limit of Rs. 425 Crore
(LC/LOU of Rs. 400 Crores and Bank Guarantee of Rs. 25 Crores). The
rate of interest on fund based limits shall be @ 11% p.a.
h) Waiver of penal interest and all other charges from the cut - off
date.
i) Non levy/waiver/refund of liquidated damages/penal interest/penal
charges for delay/ irregularities due to
lenders/creation of security from the cut off date.
j) Right of Recompense to CDR lenders for the relief and sacrifice
extended, subject to provisions of CDR guidelines.
k) Contribution of Rs. 51.50 crores in the company by promoters towards
lenders'' sacrifice. In addition Promoters will also
bring in Rs. 20 crores as their margin/ Contribution for the Waste Heat
Recovery Based Power Plant.
l) Out of Rs. 71.50 crores as mention above, the promoter has
contributed Rs. 65.26 crores as advance and the said
amount has been accounted as Advance against Share Warrants.
b) Status of Implementation of CDR Package:
Sanctions under the CDR package have been received from 13 out of 15
CDR lenders. The CDR package has partially been implemented by 12 CDR
lenders. However, as the CDR package has been approved by super
majority of the CDR lenders as per RBI guidelines, debt owing to all
the CDR lenders have been reclassified and interest has been
recalculated in accordance with the CDR package. The above
reclassifications and interest calculations are subject to
reconciliation and approval by these lenders.
In terms of the provisions of the CDR package, ICICI Bank Limited on
31/03/2014 has converted its existing Term Loan facilities of Rs. 95.67
crores to FCNRB loan of US$ 15.94 million at the interest rate of 3
months LIBOR 5.00% p.a.
In terms of the provisions of the CDR package, ICICI Bank Limited has
requested to convert a sum of Rs. 13.39 crores (part of FITL interest)
into fully paid up equity shares of Rs.10/- each. The price based on
the terms of SEBI (Issue of Capital and Disclosures requirements)
Regulations 2009 has been taken at Rs. 11.01 per share. The said amount
has been adjusted with the FITL account of ICICI Bank Ltd and
transferred to Advance against Share application money Account. The
Bank shall be issued 121.61 lacs equity shares of Rs. 10 each at a
premium of Rs. 1.01 per share.
The aggregate present value of the outstanding sacrifice made/to be
made by CDR lenders as per the approved CDR package is estimated at Rs.
342.39 Crores.
Mar 31, 2012
I. Accounting Conventions
The financial statements are prepared under historical cost conventions
and as a going concern basis following the accrual basis of accounting
and in accordance with the Generally Accepted Accounting Principles
(GAAP) in India and in compliance with the provision of the Companies
Act, 1956.
ii. Use of Estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of revenues
& expenses for the Year under review and assets & liabilities,
disclosure of contingent liabilities, on the date of the financial
statements. Actual results could differ from these estimates. Any
revision to accounting estimates is recognized prospectively in the
current and future periods.
iii. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and revenue can be reliably
measured
a. In respect of Sales
: When the significant risks and rewards of ownership of goods have
been passed on to the buyer, which generally coincides with delivery /
shipment of goods to customers.
b. In respect of Interest Income
: On time proportion basis taking into account the amount outstanding
and the rate applicable.
c. In respect of Service Income : When the services are performed as
per contract.
d. In respect of Dividend Income : When right to receive payment is
established.
e. In respect of Insurance Claims : On Settlement of Claims
f. In respect of Guarantee Commission : When right to receive payment
is established.
Revenue from product sales is recognized inclusive of Excise duty but
exclusive of Sales Tax/Value added Tax (VAT) and net of returns, Sales
Discount etc. Sales Returns are accounted for when goods are returned.
iv. Fixed Assets
Fixed assets are stated at historical cost, which comprises cost of
purchase/construction cost, cost of borrowing and other cost directly
attributable to bring the assets at its working condition and location
for its intended use. Expenditures during construction period are
allocated to the relevant assets in the ratio of costs of respective
assets.
v. Depreciation on Fixed Assets
Depreciation on Fixed assets is provided on Straight - Line Method
(SLM) at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
vi. Inventories
1. Inventories are valued as under:
a. Raw Materials : At Cost or Net Realisable Value whichever is lower
b. Finished Products : At Cost or Net Realisable Value whichever is
lower
c. Stores, Spares and Components : At Cost or Net Realisable Value
whichever is lower
d. Stock in process : At Raw material Cost plus estimated cost of
conversion up to the stage of completion or Net Realisable Value
whichever is lower.
Cost includes all direct cost and applicable manufacturing and
administrative overheads.
2. Inventories are valued on FIFO basis.
3. Variation, if any, between books and physical stocks detected on
physical verification, obsolete & slow moving stocks are adjusted in
accounts as found appropriate.
vii. Investments
Long term investments are stated at cost. Provision is made when
diminution in the value of investments is considered permanent in
nature.
Current investments are stated at lower of cost and market value.
viii. Foreign Exchange Transactions
a. Initial Recognition:
Foreign Exchange transactions are recorded normally at the exchange
rates prevailing on the date of the transactions.
b. Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of transaction and non- monetary items which are carried at
the fair value or other similar denominated in a foreign currency are
reported using the exchange rates that existed when the values were
determined.
c. Exchange differences
Exchange differences arising on settlement of transactions or on
reporting monetary items of the Company at the rate different from
those at which they were initially recorded during the year, or
reported in previous financial statement, are recognised as income or
expenses in the year in which they arise except in case where they
relate to acquisition of fixed assets.
d. Forward Exchange Contract not intended for trading or speculative
purposes
The premium or discount arising at the inception of forward exchange
contract is amortized as expenses or income over the life of the
respective contract. Exchange differences on such contracts are
considered in the statement of Profit or Loss in the Year in which
exchange rate changes. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or as
expenses for the Year.
ix. Provisions, Contingent Liabilities and Contingent Assets
The Company makes a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Contingent Assets are disclosed when
an inflow of economic benefit is probable and/or certain.
x. Borrowing Costs
Borrowing Costs that are attributable to the acquisition and
constructions of qualifying assets are capitalised as a part of the
cost of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. Other
borrowing costs of the Year are charged to revenue in the period in
which they are incurred.
xi. Taxation
Current Tax is determined as the amount of tax payable in respect of
taxable income for the Period.
Deferred Tax Liability is recognized for all timing differences between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods.
Deferred Tax Assets are recognized only if there is reasonable
certainty that the same will be realized and are reviewed for the
appropriateness of its respective carrying values at each Balance Sheet
date.
Tax on Distributed Profit Payable is in accordance with the provision
of Section 155O of the Income Tax Act, 1961 and in accordance with
guidance note on Accounting for Corporate Dividend Tax.
Wealth Tax is determined on taxable value of assets on the balance
sheet date.
xii. Employee benefits
a) Short Term & Post Employment Benefits
Employee benefits of short-term nature are recognized as expense as and
when those accrue. Post employments benefits are recognized as expenses
based on actuarial valuation at Year end which takes into account
actuarial gains and losses.
b) Employee Stock Option Scheme (ESOS)
Aggregate quantum of options granted under the schemes in monetary term
net of consideration of issue, to be paid in cash, are shown in the
Balance Sheet as Employees Stock Option outstanding under Reserves &
Surplus and as Deferred Employees Compensation (ESOS) under Unamortised
Expenditure as per guide-lines of SEBI in this respect.
With the exercise of options and consequent issue of equity shares
corresponding ESOS outstanding is transferred to Securities Premium
Reserve.
xiii. Indirect Taxes
Excise Duty on Finished Goods Stock is accounted for at the point of
manufacture of goods and is accordingly considered for valuation of
finished goods stock as on Balance sheet date. Customs duty on imported
raw materials is accounted for on the clearance of goods from the
Customs Authorities.
xiv. Unamortised Expenditure
Unamortised expenditure, stated at cost, is amortized over period of
time as under:
(i) Deferred Revenue Expenses-5 years
(ii) Deferred Employees Compensation under ESOS-Amortised on straight
line basis over vesting period.
xv. Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication of an asset being impaired. An asset is treated as impaired
when the carrying amount of assets exceeds its recoverable value, in
which case the impairment loss is charged to the Statement of Profit &
Loss of the Year in which an asset is identified as impaired. The
impairment loss, if any, recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
xvi. Research and development
Revenue expenditure on research and development is expensed as
incurred. Capital expenditures incurred on research and development are
capitalised as fixed assets and depreciated in accordance with the
depreciation policy of the Company.
xvii. Earning per share (EPS)
The basic earning per share ("EPS") is computed by dividing the net
profit after tax for the Year by the weighted average number of equity
shares outstanding during the Year. For the purpose of calculating
diluted earnings per share, net profit after tax for the Year and the
weighted average number of shares outstanding during the Year are
adjusted with the effects of all dilutive potential equity shares. The
dilutive potential equity shares are deemed converted as of the
beginning of the Year, unless they have been issued at a later date.
xviii. Prior Period Adjustments, Extra-ordinary Items and Changes in
Accounting Policies
Prior period adjustments, extraordinary items and changes in accounting
policies, if any, having material impact on the financial affairs of
the Company are disclosed.
xix. Segment Reporting
i. Identification of Segments :
The Company's Operating Businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets.
ii. Allocation of Common Costs :
Common allocable costs are allocated to each segment according to sales
of each segment to total sales of the Company.
4) a) i 11.90% Non-Convertible Debentures and 12.50% Non- Convertible
Debentures are secured by following securities:
à First pari-passu charge over entire fixed assets of the company, both
present and future.
à Second pari-passu charge over entire current assets of the company,
both present and future.
ii 11% Non - Convertible Debentures are Secured by First pari-passu
charge over entire fixed assets of the Company, both present and
future.
iii Term Loans from State Bank of India, Axis Bank Limited, ICICI Bank
Limited, IDBI Bank Limited, State Bank of Patiala, The Lakshmi Vilas
Bank Ltd.-I and State Bank of Hyderabad-II are secured by following
securities:
à First pari-passu charge over entire fixed assets of the company, both
present and future.
à Second pari-passu charge over entire current assets of the company,
both present and future.
à Personal guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing
Director of the company. iv Term Loan from IDBI Bank Ltd is
collaterally secured by following securities:
à Pledge of equity shares of the company held by Gujarat NRE Mineral
Resources Limited, a promoter company along with Corporate Guarantee
à Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing
Director of the company. v Term Loan from Dhanalakshmi Bank Limited is
secured by following securities:
à Subservient charge on movable assets of the company
à Pledge of equity shares of the company held by Gujarat NRE Mineral
Resources Limited, a promoter company and Mr. Arun Kumar Jagatramka,
Chairman and Managing Director of the Company;
à Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing
Director of the company and / or Corporate Guarantee by Gujarat NRE
Mineral Resources Limited, a Promoter Company. vi Term Loans from State
Bank of Hyderabad-I and State Bank of Travancore are secured by
following securities:
à Subservient Charges on movable fixed and Current assets of the
Company;
à Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing
Director of the Company. vii Term Loan from Yes Bank Ltd. is secured
by following securities:
à Subservient charge on movable fixed and current assets of the
company, both present & future.
à Exclusive Charge on Entire Fixed & current assets, both present &
future, of Bharat NRE Coke Ltd., an associate Company, along with
Corporate Guarantee.
à Pledge of equity shares of the company held by Gujarat NRE Mineral
Resources Limited, a promoter company, along with Corporate Guarantee;
à Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing
Director of the company.
viii Term Loan from others is secured by Hypothecation of specific
assets financed.
ix The aggregate amount of all the Personal Guarantee given by Mr. Arun
Kumar Jagatrmaka, Chairman & Managing Director as securities noted
above comes to Rs. 2078.10 Crores 4) b) Maturity Profile and Rate of
interest of Non-Convertible Debentures are as set below:
i 11.00% Secured Redeemable Non Convertible Debentures of Rs. 250.00
Crores (Previous Year - Rs.250.00 Crores)
are redeemable at par in 8 equal half yearly installments commencing
from 29th April 2013.
ii 12.50% Secured Redeemable Non Convertible Debentures of
à Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par
in 4 equal annual installments commencing from 30th May 2012,
à Rs. 10.00 Crores Previous Year 10.00 Crores) are redeemable at par on
30th May 2015,
à Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par
on 30th May 2014,
à Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par
on 30th May 2013,
à Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par
on 30th May 2012
iii 11.90% Secured Redeemable Non Convertible Debentures of Rs. 75.00
Crores (Previous Year Rs. 100.00 Crores) are redeemable at par in 3
equal annual installments from 7th February 2013.
iv General Descriptions of defined benefit plans:
a) Gratuity Plan:
The Company operates gratuity plan wherein every employee is entitled
to the benefit equivalent to fifteen days salary last drawn for each
completed year of service. The same is payable on Termination of
service, or retirement, whichever is earlier. The benefit vests after
five years of continuous service.
b) Provident Fund Plan:
The Company contributes 12% of salary for all eligible employees
towards Provident Fund managed by the Regional Provident Fund
Authority.
Mar 31, 2011
I) Accounting Conventions
The consolidated financial statements are prepared under historical
cost conventions and as a going concern basis following the accrual
basis of accounting and in accordance with the generally accepted
accounting principles (GAAP) in India.
ii) Principles of Consolidation
The accounts of subsidiaries including foreign subsidiaries have been
consolidated with the parent companies accounts in accordance with
Accounting Standard-21 on "Consolidated Financial Statements" and
investments in Associates have been accounted for using the equity
method as per Accounting Standard-23 on "Accounting for Associates in
Consolidated Financial Statements" as specified in the Companies
(Accounting Standard) Rules, 2006.
Consolidated Financial Statements have been made by adding together
like items of assets, liabilities, income and expenses. The
inter-company transactions and unrealized profits/(losses) thereon have
been eliminated in full.
Goodwill/Capital Reserves represent the difference between the cost of
control in the subsidiaries/associates, over the book value of net
assets at the time of acquisition of control in the
subsidiaries/associates.
Foreign subsidiaries are considered as non-integral foreign operation
as per Accounting Standard-11, on "The effect of Changes in Foreign
Exchange Rates". The financial statements of the same have been
converted using the following methods:
Components of Profit & Loss Account except opening & closing stock have
been converted using monthly average rate of the reported year.
Components of Balance Sheet have been converted using the rates at the
balance sheet date, except balance of Profit & Loss Account. Resultant
foreign exchange translation difference has been recognized as "Foreign
Currency Translation Reserve".
iii) Use of estimates
The preparation of the consolidated financial statements in conformity
with the generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities for the year under review
and disclosure of contingent liabilities on the date of the
consolidated financial statements. Actual results could differ from
these estimates. Any revision to accounting estimates is recognized
prospectively in the current and future periods.
iv) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and revenue can be reliably
measured
a. In respect of Sales : When the significant risks and rewards of
ownership of goods have been passed on to the buyer, which generally
coincides with delivery / shipment of goods to customers.
b. In respect of Interest Income : On time proportion basis taking
into account the amount outstanding and the rate applicable.
c. In respect of Service Income : When the s erv i c es are performed
as per contract.
d. In respect of Dividend Income : When right to receive payment is
established.
e. In respect of Insurance Claims : On Settlement of Claims Revenue
from product sales is recognised inclusive of Excise duty but exclusive
of Sales Tax / Value added Tax (VAT) and net of returns, Sales Discount
etc. Sales Returns are accounted for when goods are returned.
v) Fixed Assets
Fixed assets are stated at historical cost, which comprises cost of
purchase/construction cost, cost of borrowing and other cost directly
attributable to bring the assets at its working condition and location
for its intended use. Expenditures during construction period are
allocated to the relevant assets in the ratio of costs of respective
assets.
vi) Depreciation on Fixed Assets
Depreciation on Fixed Assets is provided on Straight Line Method (SLM)
at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956.
In case of foreign subsidiaries, depreciation is provided on Straight
Line Method (SLM) over the useful life of the assets.
Mining lease is amortised over the life of the asset. Amortisation is
calculated in proportion of actual production when measured against the
resources available in the mine.
Mine Development is activities undertaken to gain access to mineral
reserves. Typically this includes sinking shafts, permanent
excavations, building transport infrastructure and roadways. All costs
relating to mine development are capitalised and are amortised over the
estimated reserve in that developed area of the mine. Amortisation is
calculated in proportion to actual production when measured against
mineable resources in the mine area developed on which the expenses
were incurred. The carrying value of mine development is reviewed to
ensure it is not in excess of its recoverable amount.
All costs relating to the pre-production of coal were capitalized as
Pre Production Expenses and are amortised over the estimated life of
reserves in the mine. Amortisation is calculated in proportion to
actual production when measured against mineable resources in the mine
seam for which the expenses were incurred. The carrying value of
pre-production is reviewed by directors to ensure it is not in excess
of its recoverable amount.
vii) Inventories
1. Inventories are valued as under:
a. Raw Materials : At Cost or Net Realisable Value whichever is lower
b. Finished Products : At Cost or Net Realisable Value whichever is
lower
c. Stores, Spares and Components
At Cost or Net Realisable Value whichever is lower
d. Stock in process : At Raw material Cost plus estimated cost of
conversion upto the stage of completion or Net Realisable Value
whichever is lower.
Cost includes all direct cost and applicable manufacturing and
administrative overheads.
2. Inventories are valued on FIFO basis.
3. Variation, if any, between books and physical stocks detected on
physical verification, obsolete & slow moving stocks are adjusted in
accounts as found appropriate.
viii) Investments
Long term investments are stated at cost. Provision is made when
diminution in the value of investments is considered permanent in
nature.
Current investments are stated at lower of cost and market value.
ix) Foreign Exchange Transactions
a. Initial Recognition:
Foreign Exchange transactions are recorded normally at the exchange
rates prevailing on the date of the transactions.
b. Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of transaction and non-monetary items which are carried at
the fair value or other similar denominated in a foreign currency are
reported using the exchange rates that existed when the values were
determined.
Foreign Currency Convertible Bonds (FCCBs) are treated as fully
convertible into equity shares
c. Exchange differences
Exchange differences arising on settlement of transactions or on
reporting monetary items of the Company at the rate different from
those at which they were initially recorded during the year, or
reported in previous financial statement, are recognised as income or
expenses in the year in which they arise except in case where they
relate to acquisition of fixed assets.
d. Forward Exchange Contract not intended for trading or speculative
purposes
The premium or discount arising at the inception of forward exchange
contract is amortized as expenses or income over the life of the
respective contract. Exchange differences on such contracts are
recognised in the statement of Profit or Loss in the year in which
exchange rate changes. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or as
expenses for the year.
x) Provisions, Contingent Liabilities and Contingent Assets
The Company makes a provision when there is present obligation as a
result of past event that probably requires an outflow of resources and
a reliable estimate can be made of the amount of the obligation. A
disclosure for contingent liabilities is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Contingent Assets are disclosed when
an inflow of economic benefit is probable and/or certain.
xi) Borrowing Costs
Borrowing Costs that are attributable to the acquisition and
construction of qualifying assets are capitalised as a part of the cost
of such assets. A qualifying asset is one that necessarily takes
substantial period of time to get ready for its intended use. Other
borrowing costs of the year are charged to revenue in the period in
which they are incurred.
xii) Taxation
Current Tax is determined as the amount of tax payable in respect of
taxable income for the period.
Deferred Tax Liability is recognized for all timing difference between
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods.
Deferred Tax Assets are recognized only if there is reasonable
certainty that the same will be realized and are reviewed for the
appropriateness of its respective carrying values at each Balance Sheet
date.
Tax on Distributed Profit Payable is in accordance with the provision
of Section 155O of the Income Tax Act, 1961 and in accordance with
guidance note on Accounting for Corporate Dividend Tax.
Wealth Tax is determined on taxable value of assets on the balance
sheet date.
Foreign Companies recognize tax liabilities and assets as per their
rules and regulations.
xiii) Employee Benefits
a) Short Term & Post Employment Benefits
Employee benefits of short-term nature are recognized as expense as and
when those accrue. Post employments benefits are recognized as expenses
based on actuarial valuation at year end which takes into account
actuarial gains and losses.
b) Employee Stock Option Scheme (ESOS)
Aggregate quantum of options granted under the schemes in monetary term
net of consideration of issue, to be paid in cash, are shown in the
Balance Sheet as Employees Stock Option outstanding under Reserves &
Surplus and as Deferred Employees Compensation under Miscellaneous
Expenditure as per guidelines of SEBI in this respect. With the
exercise of options and consequent issue of equity shares corresponding
ESOS outstanding is transferred to Securities Premium Account.
In case of foreign subsidiaries the fair value of options granted is
recognised as an employee benefit expense with a corresponding increase
in equity. The fair value is measured at grant date and recognized over
the period during which the employee become unconditionaly entitled to
the options. Fair value at grant date is independently determined using
binomial method for option pricing.
xiv) Indirect Taxes
Excise Duty on Finished Goods Stock is accounted for at the point of
manufacture of goods and is accordingly considered for valuation of
finished goods stock as on Balance sheet date. Customs duty on
imported raw materials is accounted for on the clearance of goods from
the Customs Authorities.
In Foreign Subsidiaries
Revenues, expenses and assets are recognised net of the amount of GST,
except where the amount of GST incurred is not recoverable from the
Australian Taxation Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part
of an item of the expense. Receivables and payables in the balance
sheet are shown inclusive of GST.
xv) Miscellaneous Expenditures
Miscellaneous expenditure, stated at cost, is amortized over period of
time as under:
(i) Deferred Revenue Expenses - 5 years
(ii) Deferred Employees Compensation under ESOS- Amortised on straight
line basis over vesting period.
The restoration liability calculated as discounted present value in
relation to restoration guarantee at the end of the lease is
correspondingly represented by a Miscellaneous Expenditures as Deferred
restoration Guarantee.
The Deferred Restoration Guarantee, after deducting the change in
liability, is amortised on a straight line basis over the life of the
mine lease.
xvi) Impairment of Assets
The Company assesses at each Balance Sheet date whether there is any
indication of an asset being impaired. An asset is treated as impaired
when the carrying amount of assets exceeds its recoverable value, in
which case the impairment loss is charged to the Profit and Loss
Account of the year in which an assets is identified as impaired. The
impairment loss, if any recognised in prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
xvii) Research and development
Revenue expenditure on research and development is expensed as
incurred. Capital expenditures incurred on research and development
having alternate uses are capitalised as fixed assets and depreciated
in accordance with the depreciation policy of the Company.
xviii) Earning per share (EPS)
The basic earning per share ("EPS") is computed by dividing the net
profit after tax for the year by the weighted average number of equity
shares outstanding during the year. For the purpose of calculating
diluted earnings per share, net profit after tax for the year and the
weighted average number of shares outstanding during the year are
adjusted with the effects of all dilutive potential equity shares. The
dilutive potential equity shares are deemed converted as of the
beginning of the period, unless they have been issued at a later date.
xix) Prior Period Adjustments, Extra-ordinary Items and Changes in
Accounting Policies
Prior period adjustments, extraordinary items and changes in accounting
policies having material impact on the financial affairs of the Company
are disclosed.
xx) Minority Interest
Minority Interest as shown in the consolidated balance sheet comprises
of share in equity and reserves and surplus/losses of the subsidiaries.
xxi) Segment Reporting
a) Identification of Segments :
The Group's Operating Businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets.
b) Allocation of Common Costs:
Common allocable costs are allocated to each segment according to sales
of each segment to total sales of the Group.
Mar 31, 2010
1. All amounts in the financial statements are presented in Rupees
Crores, unless otherwise stated. The note numbers appeared in the Ã[ ]Ã
are as they appear in the complete set of Financial Statements. These
abridged financial statements have been prepared in accordance with the
requirements of Rule 7A of the Companies (Central GovernmentÃs) General
Rules & Forms, 1956 and clause 32 of the Listing Agreement. These
abridged financial statements have been prepared on the basis of the
complete set of financial statements for the year ended March 31, 2010.
2. [B3] Contingent liabilities not provided for in respect of :
a. Letter of Credits outstanding for purchase of materials as on the
Balance Sheet date aggregating to Rs. 162.75 crores (Previous Year Rs.
84.46 crores).
b. Outstanding Bank Guarantees and Counter / Corporate Guarantees
given on behalf of sub subsidiaries/associates companies as on Balance
Sheet date aggregating to Rs. 886.06 crores (Previous Year Rs. 550.02
crores)
c. Capital commitments as on Balance Sheet date - Rs. 164.64 crores
(Previous Year- Rs. 189.53 crores)
d. On Balance Sheet date, the disputed amount involved in two
income-tax demands under appeal - Rs.4.09 crores (Previous Year - Rs.
3.55 crores). The management is of view that the outcome of the appeal
would be favourable to the company, hence no provision has been made
against these income-tax demands.
e. A demand raised by the Service tax department of Rs. 0.06 crores,
against which company has filed an appeal to the jurisdiction
authorities.
f. Duty on account of Advance Authorisation against Export obligation
is 1.61 crores. (Previous Year - Nil.)
g. Bills discounted under letter of credit with banks aggregating to
Rs. 40.62 crores (Previous Year à Rs. 50.32 crores)
3. [B6] Austral Coke & Projects Limited has filed a defamation suit in
HonÃble Bombay High Court against the Company for Rs.600 Crores. The
Company has also filed Civil Suit in HonÃble Calcutta High Court
against Austral Coke & Projects Limited, all its Directors, its
merchant bankers and Auditors and others claiming for loss of damages
worth Rs.4761 crores. Management is confident that outcome of the
defamation filed by the Austral Coke & Projects Limited would be in
favour of the company.
4. [B7] Particulars of Managerial remuneration:
The remuneration paid to the Chairman & Managing Director and Executive
Director of the company during the year is Rs. 2.05 crores (Previous
Year-Rs. 3.52 crores), detailed as under:
5. [B8] Besides Sales of Coke, Coal, Power and Steel, Sales include
the followings :
6. [B9] The details of amounts outstanding to Micro, Small and Medium
Enterprise Development Act, 2006 (MSMED Act), based on the available
information with the company are as under:
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