Description
Gujarat NRE Coke Annual Report 2011-12
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GUJARAT NRE COKE LIMITED
ANNUAL REPORT 2011-12
GUJARAT NRE COKE LIMITED
Corporate Information
BOARD OF DIRECTORS (As on 27th May, 2012) Mr. Girdharilal Jagatramka Mr. Arun Kumar Jagatramka Mrs. Mona Jagatramka Mr. Subodh Kumar Agrawal Mr. Chinubhai R Shah Dr. Basudeb Sen Dr. Mahendra Kumar Loyalka Mr. Murari Sananguly CHIEF FINANCIAL OFFICER Mr. P. R. Kannan COMPANY SECRETARY Mr. Manoj K Shah AUDITORS M/s. N. C. Banerjee & Co. Chartered Accountants, 2, Ganesh Chandra Avenue, Room No. 9, 1st Floor, Kolkata - 700 013 SOLICITORS & ADVOCATES M/s. L. P. Tiwari & Co. Emerald House, 4th Floor, 1B, Old Post Office Street, Kolkata - 700 001 BANKERS State Bank of India Bank of Baroda State Bank of Hyderabad Standard Chartered Bank Axis Bank Ltd. ICICI Bank Ltd. Tamilnad Mercantile Bank Ltd. Chairman Emeritus Chairman & Managing Director Director Director Director Director Director Director REGISTERED OFFICE 22, Camac Street, Block - C, 5th Floor, Kolkata - 700016, India Phone : +91-33-22891471 Fax : +91-33-22891470 Email : [email protected] Website : www.gujaratnre.com WORKS COKE 1) 2) 3) Village Dharampur, Khambhalia, Jamnagar, Gujarat, India Village Lunva, Bhachau, Kutch, Gujarat, India Road No. 16, 1st Cross, KIADB, Belur Industrial Area, Dharwad, Karnataka, India
STEEL Village Lunva, Bhachau, Kutch, Gujarat, India REGISTRAR & SHARE TRANSFER AGENT M/s. Niche Technologies (P) Ltd. D-511, Bagri Market, 5th Floor, 71, B. R. B. Basu Road, Kolkata - 700 001 Phone : +91-33-2235-7270 / 7271 Fax : +91-33-2215-6823
The Ministry of Corporate Affairs has taken a “Green Initiative in Corporate Governance” allowing paperless compliances by Companies and has issued circulars stating that service of notice/documents/annual reports can be sent by email to its members. To support this initiative in full measure, members who have not registered their email address so far, are requested to register their email address, in respect of electronic holdings with their concerned Depository Participants immediately. Members who hold shares in physical segment are also requested to immediately register their email address with Registrar & Share Transfer Agent of the Company.
Contents
Directors' Report 1 Annexure to the Directors' Report 4 Corporate Governance Report 9 Auditors' Certificate on Corporate Governance
18
Management Discussion and Analysis
19
Managing
Director (CEO) and Chief Financial Officer (CFO) Certification 21 Auditors' Report 22 Balance Sheet
24 Statement of Profit & Loss 25 Notes to the Financial Statements 26 Cash Flow Statement 47 Statement under Section 212 relating to Subsidiary Companies 48 Particulars of Subsidiary Companies 49 Auditors' Report on Consolidated Financial Statements 49 Consolidated Balance Sheet 50 Consolidated Statement of Profit & Loss 51 Notes to the Consolidated Financial Statements 52 Consolidated Cash Flow Statement 71
GUJARAT NRE COKE LIMITED
Directors’ Report
To The Members, Your Directors have pleasure in presenting the Twenty-Fifth Annual Report and the Audited Financial Results on the business and operations of the Company for the financial year ended on March 31, 2012. FINANCIAL RESULTS/HIGHLIGHTS Rs. in crores 2011-12 Income from Operations Less : Finance Cost Less : Depreciation Profit before Tax & Exceptional Items Less : Exceptional Items Profit before Tax Less : Provision for Taxation Profit after Tax Add : Balance brought forward Amount available for appropriation Less : Appropriations Transferred to(+)/from(-) General Reserve Dividend and Dividend Tax for earlier year Proposed dividend on equity shares Corporate Tax on Dividend Debenture Redemption Reserve Balance carried to Balance Sheet REVIEW OF OPERATIONS Indian economy during the year under review, went through one of its most challenging phases in last two decades with slow growth, runaway inflation, high interest rates, falling industrial output, depreciating rupee, adverse balance of payments position and last but not the least, global uncertainty, severely hurting economic activities. Indian steel industry after witnessing a modest recovery during the previous financial year, went into a slump during 2011-12 being confronted with a series of impediments such as iron ore mining issues and its limited availability, flat demand prevailing throughout 2011-12 on account of compounding effect of slow economic growth, etc. This had a major impact on the operations of merchant metcoke producers in India like our Company, as steel industry is the largest consumer of the coking coal and metcoke. However, it is believed that with India investing heavily in infrastructure and allied industries, the demand for steel and consequently for metcoke is bound to rise in the coming years. The Company reported income from operations amounting to Rs.331.00 Crores during the year under review as compared to Rs 336.00 Crores during the previous year as a consequence of flat demand. The net profit after tax earned during the financial 331.00 208.57 56.77 65.66 60.13 5.53 2.44 3.09 22.75 25.84 2010-11 336.00 161.12 50.44 124.44 0.00 124.44 21.79 102.65 5.95 108.60 year ended 31st March, 2012 was reported at Rs. 3.09 crores due to the adverse impact of depreciation in value of rupee as well as slow economic growth during the year under review, as compared net profit after tax of Rs. 102.65 crores reported during the previous year. DIVIDEND There being inadequacy/absence of profit for payment of dividend for the year under review, the Board unanimously decided to recommend payment of dividend considering the dividend track record of the Company by utilizing the balance lying to the credit of Profit & Loss Account and/or General Reserve in accordance with the provisions of Companies (Declaration of Dividend out of Reserves) Rules, 1975. Accordingly, the Board recommends payment of dividend of Re.0.50 per Equity Share of Rs.10 each (5%) and Re.0.50 per “B” Equity Share of Rs.10 each (5%) respectively, for the year ended 31st March 2012 subject to the approval of members of the Company and Ministry of Corporate Affairs. The total payout towards the said dividend will amount to Rs.33.55 crores (approx. with dividend tax) for the year under review as compared to Rs. 67.10 crores (with dividend tax) for the previous year. TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND In terms of Sections 205A & 205C of the Companies Act, 1956, the company since the previous Directors Report, had transferred a sum of Rs. 12,21,329.00 (Rupees Twelve lacs, twenty-one thousand three hundred twenty nine only) for 2nd interim dividend 2003-04, Rs.4,31,199.00 (Rupees Four lacs, thirty one thousand, one hundred ninety nine only) for final dividend 200304 and Rs.6,49,498.50 (Rupees Six lacs, forty-nine thousand, four hundred ninety eight & paise fifty only) for 1st interim dividend for 2004-06 to the Investor Education & Protection Fund (IEPF) created by the Central Government, since these dividend remained unclaimed for a period of 7 years. The Company had also transferred a sum of Rs.1,28,275.50 (Rupees one lac, twenty eight thousand, two hundred seventy five & paise fifty only) towards final dividend for the year 2003-04 paid by erstwhile FCGL Industries Ltd (since merged with the company) to the IEPF during the year under review. ISSUE OF EQUITY The Company allotted 1,74,07,793 Equity Shares of Rs.10 each at a premium of Rs.34.64 per share and 17,40,778 “B” Equity Shares of Rs. 10 each during the year under review consequent upon conversion of 174 (one hundred seventy-four) Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of USD 100000 each issued in 2006 and with this conversion the entire series of these FCCBs stands converted to equity shares of the company. The Company also allotted 52,280 Equity Shares of Rs.10 each at a premium of Rs. 13.86 per share and 5,228 “B” Equity Shares of Rs. 10 each as bonus shares upon conversion of Options issued under Employee Stock Option Scheme, 2005 and 21,700 Equity Shares of Rs. 10 each at a premium of Rs.8.05 per share and 2,170 “B” Equity Shares of Rs. 10 each as bonus shares upon conversion of Options issued under 2nd Tranche of GNCL Employee Stock Options Scheme 2007 during the year under review.
-10.80 0.00 28.87 4.68 3.09 0.00
0.00 0.00 57.73 9.37 18.75 22.75
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GUJARAT NRE COKE LIMITED
Directors’ Report (Contd.)
NON-CONVERTIBLE DEBENTURES During the year under review, the company redeemed NonConvertible Secured Redeemable Debentures (NCDs) amounting Rs. 25 crores which were issued to Life Insurance Corporation of India (LIC) as per the terms of issue of these debentures. The NCDs outstanding at the end of the year under review, aggregated to Rs. 375 crores comprising of Qualified Institutional Placement (QIP) issue of NCDs amounting Rs.250 crores issued during the year 2010-11 and the balance comprising of NCDs issued to LIC and nationalised banks in the years prior to 2010-11. LISTING Both the Equity Shares and “B” Equity Shares of your Company are listed at the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Nonconvertible Debentures of the company (including Debentures issued under QIP) are listed at Bombay Stock Exchange. The convertible warrants issued by the Company under QIP are also listed at both NSE and BSE. BUSINESS PLANS We believe that the current decade till 2020 would continue to be interesting and exciting, similar to the one that has gone by. Coking Coal and metcoke are going to be in huge demand with steel demand rising, as Indian economy grows with investments in infrastructure and other industries. We are in a sector which is one of the most lucrative business possible in the current times. We have everything going for us, a well developed market, and a global mismatch of demand and supply with demand outstretching supply. Our company has an irrefutable advantage of secured supply of excellent quality raw materials, a dedicated team and most importantly a supportive share holder family, making us the undisputable leader in our business with strong fundamentals. During the year under review, the company through its Australian subsidiary(ies) took an important step towards achieving its plan for ramping up coking coal production at Australian mines to above 5 MTPA (million tonnes per annum) by 2015-16 by installing longwall mining machinery at one of its mines i.e. at NRE No 1 after receiving necessary Departmental approval. Steps have also been initiated for expanding the production capacity of metcoke in India and we expect to raise the production capacity to around 4 MTPA in the next 4 years. The Company is presently generating power through non polluting method i.e. through wind turbine generators having capacity to generate 87.5 MW. Further, the projects for generation of power having an aggregate capacity of 60 MW, from waste heat emanating from the Company's coke oven plants are at various stages of completion. SUBSIDIARIES The Company has two Indian Subsidiaries and nine Australian Subsidiaries at the close of the financial year under review. The consolidated financial statements presented by the company and annexed to the Annual Report 2011-12 include the financial information of the subsidiaries prepared in accordance with the applicable accounting standard. The Ministry of Corporate Affairs vide its circular no 2/2011 dated 8th February 2011 has granted a general exemption under Section 212(8) of the Companies Act 1956, from attaching the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies to the balance sheet of any company upon compliance of certain conditions. As the company is in compliance with the said circular and as per consent of Board through a resolution, the Balance Sheet, Profit & Loss Account and other documents of the subsidiaries are not attached to this Annual Reports & Accounts. However, the annual accounts of the subsidiary companies and related detailed information shall be made available to the shareholders of the company and its subsidiaries seeking such information in writing at any point of time. The annual accounts of the subsidiary companies are available at Registered Office of the Company during the working hours and also available at the respective offices of the Subsidiary companies. FINANCIAL OBLIGATIONS The Company has been regular in the payment of interest and/or repayment of loans to financial institutions and/or banks or in meeting its other financial obligations during the year under review. CORPORATE GOVERNANCE In compliance with the requirements of clause 49 of the Listing agreement with Stock Exchanges, a Report on 'Corporate Governance' as on 31st March, 2012 and a Report on Management Discussions and Analysis are annexed to and forms a part of this Report. Chairman & Managing Director (CEO) and Chief Financial Officer (CFO) have certified to the Board with regard to the financial statements and other matters as required by the aforesaid clause of the listing agreement and the said certificate is also annexed to and forms a part of this Report. EMPLOYEE STOCK OPTION SCHEME The Company had granted 11,15,000 options under Employee Stock Option Scheme 2005 (ESOP 2005) against the authority from shareholders to grant 11,75,000 options. The employees/Directors of the company exercised 8,24,148 options during the exercise period. The validity of the said scheme expired on 12th January 2012 and accordingly, the outstanding options under the scheme have also expired. The Company had granted 60,29,000 options to its Employees/Directors through three different tranches under GNCL Employee Stock Options Scheme 2007 (ESOP 2007) till the end of previous year. A fourth tranche of options aggregating 35,60,000 were granted under ESOP 2007 to the Employees/Directors of the company during the year under review. The Company has therefore granted a total of 95,89,000 options under various tranches of ESOP 2007 Scheme till 2011-12 against the approval received from shareholders to grant upto 1,21,95,302 options under the said Scheme. As required by clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, the disclosures with regard to Stock Options in respect of GNCL Employee Stock Option Scheme 2007 as on 31st March, 2012 are given in an Annexure to this Report.
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GUJARAT NRE COKE LIMITED
Directors’ Report (Contd.)
The Company has received a certificate from the Auditors that the aforesaid Scheme has been implemented in accordance with SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be available at 25th Annual General Meeting for inspection by the shareholders. DIRECTORS Dr Mahendra Kumar Loyalka and Mr Murari Sananguly, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment in terms of the Articles of Association of the Company. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, your Directors confirm having i) Followed in the preparation of the annual accounts the applicable accounting standards with proper explanation relating to material departures, if any; ii) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year under review and of the profit of the Company for the year ended on that date; iii) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud or other irregularities; and iv) prepared the annual accounts on a 'going concern basis. AUDITORS M/s. N. C. Banerjee & Co., Chartered Accountants, the Statutory Auditors hold office upto the forthcoming Annual General Meeting of the Company and are eligible for reappointment i.e. to audit the Accounts of the Company for the financial year 2012-13. In compliance with the provisions of Section 224(1B) of the Companies Act, 1956, the Company has received written confirmation from M/s. N C Banerjee & Co., that their reappointment as Auditors, if made, would be in conformity within the limits prescribed in the said Section and that they are not disqualified from being appointed as the Auditors of the Company within the meaning of Section 226 of the said Act. AUDITORS' REPORT The observations of the Auditors in their Report read with relevant notes on the accounts, as annexed are self-explanatory and need no elaboration. COST AUDIT Cost Audit Branch of the Ministry of Corporate Affairs vide its order no 52/26/CAB-2010 dated 30th June 2011 has made it mandatory for company(ies) which is/are engaged in production of steel products to appoint a Cost Auditor to audit cost records of steel plant/unit(s) for the financial year 2011-12. Our Company has For and on behalf of the Board accordingly, appointed M/s B Mondal & Co., Practicing Cost Accountants as Cost Auditor under the provisions of Section 233B of the Companies Act, 1956, to audit the cost records of steel plant located at Bhachau in the State of Gujarat for the financial year 2011-12. PUBLIC DEPOSITS The Company has not accepted or renewed any Public Deposits, as defined under Section 58A of the Companies Act, 1956, during the year under review. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 forms a part of this Report as an Annexure. A copy of the said Annexure is annexed hereto. PARTICULARS OF EMPLOYEES The information on Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 in respect of employees of the Company forms a part of this Report as an Annexure. A copy of the said Annexure is annexed hereto. PERSONNEL / INDUSTRIAL RELATIONS The Company maintained cordial and harmonious relations with its workers/employees at all levels at the offices and plants of the Company and its subsidiaries throughout the year under review. APPRECIATION We wish to acknowledge the understanding, support and services of our workers, staff and Executives which has largely contributed to efficient operations and management of the Company during the year under review. We also take this opportunity to express our deep sense of gratitude to all our customers, dealers, suppliers, bankers, government officials and all other business associates for their continuous guidance and support to the Company and their continued confidence in its management. We also take this opportunity to express our sincere thanks to our shareholders and debenture holders for the confidence and faith in our company.
Place : Kolkata Dated : 27th May, 2012
Arun Kumar Jagatramka Chairman & Managing Director
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GUJARAT NRE COKE LIMITED
Annexure To The Directors’ Report
Information as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 A. CONSERVATION OF ENERGY (a) Energy Conservation measures taken: The Company continued to give major emphasis for conservation of energy, and the measures taken in the previous year were continued. The efficiency of Energy Utilization at each plant is monitored at the respective plant level every quarter, in order to achieve effective conservation of energy. The significant Energy conservation measures during the year were as follows l
(d) Total energy consumption and energy consumption per unit of Production: As per Form-A annexed B. TECHNOLOGY ABSORPTION (a) Efforts made in technology absorption: As per Form-B annexed. C. FOREIGN EXCHANGE EARNINGS AND OUTGO (a) Activities relating to export, initiative taken to increase exports; development of new export markets for products and services; and export plans: The exports of the Company during the year under review was Rs.347.75 crores as compared to Rs 321.58 crores amount in the previous year. Exports were made to countries such as Brazil, Malaysia etc. during the year under review and efforts are being made to explore the possibilities of increasing the volumes through penetrating new markets. (b) Total foreign exchange used and earned (Amount) : (Rs. in crores) Current Year Previous Year Total Foreign exchange earning Total Foreign exchange outgo FORM-A Disclosure of particulars with respect to Conservation of Energy for the year ended 31st March, 2012 A. POWER AND FUEL CONSUMPTION Current Year 1 Electricity a) Purchased - Units (kwh in Lacs)* - Total Amount (in crores)** - Rate (Rs./ Unit) b) Own Generation Through Diesel Generator - Units (kwh In Lacs) - Units per ltr. of Diesel Oil - Cost (Rs./ Unit) 2. Coal - Quantity (MT) - Total Cost (Rs. in crores) - Average Rate (Rs./ MT) 3. Furnace Oil - Quantity (K. Ltrs.) - Total Cost (Rs. in crores) 4. Others/Internal Generation 3858.45 14.63 Nil 4002.40 10.56 26,388.45 Nil Nil Nil Nil Nil Nil Nil 1.59 2.06 21.96 1.93 1.91 21.74 1019.69 20.21 1.98 1062.51 17.34 1.63 Previous Year 347.75 1097.16 321.58 1050.96
Use of Energy Efficient Lighting systems like low wattage sodium vapour lamps and CFL in place of high power mercury vapour lamps and fluorescent tube lights. Use of transparent roof sheets wherever possible to make use of natural lighting to avoid power lights in day time. switching off machines / equipment immediately after use and fixing of timers to avoid over usage of water pumps. Use of power capacitors to improve the Power factor . Creating awareness among employees about the necessity of energy conservation by celebrating energy conservation week.
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The Company continued to generate power through wind mills having a capacity of 87.5 MW during the year under review. The setting up of co-generation power plants at its coke plants at Bhachau and Khambhalia in the State of Gujarat and at Dharwad in the State of Karnataka for generating power using the gas emanating from its coke ovens is expected to be completed by 2012-13 at Dharwad and by 2013-14 at Bhachau and Khambhalia. (b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: The Company is setting up co-generation power plants having aggregate capacity of 60 MW at its plants in the States of Gujarat and Karnataka at an investment of around Rs. 275 crores which are expected to be commissioned during 2012-13 & 2013-14. Such captive generation of power through co-generation power plants reduces use of power acquired from external agencies. Apart from this, the Company has also installed energy efficient equipment wherever required. (c) Impact of above measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: The generation of power through alternate means such as wind mills provides power to the company at a rate lower than the market rates for purchasing power from power generating companies and thereby reducing the cost of production.
- Average Rate (Rs./ K.Ltr.) 37,919.72
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GUJARAT NRE COKE LIMITED
Annexure To The Directors’ Report (Contd.)
B. CONSUMPTION PER UNIT OF PRODUCTION (MT) Current Year Coke Electricity (Kwh) Rolled & Alloy Steel Products Electricity (kwh) Coal (MT) Furnace Oil (K. Ltrs.) * ** 25.76 904.98 NIL 0.04 Previous Year 22.09 945.47 NIL 0.04 TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. EFFORTS MADE : Efforts are being made towards improvements in the existing production process through indigenous methods. BENEFITS : a) b) 3. Improved quality and productivity. Conservation of fuel & reduced emissions.
2.
includes units through wind turbine generators. represents cost of Electricity purchased after adjusting generation through wind turbine generators.
PARTICULARS OF TECHNOLOGY IMPORTED DURING LAST 5 YEARS: (a) Technology imported (b) Year of import (c) Has technology been fully absorbed : NIL : N.A. : N.A.
FORM - B Form for disclosure of particulars with respect to technology absorption RESEARCH AND DEVELOPMENT (R&D) 1. SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE COMPANY 2. BENEFITS DERIVED 3. FUTURE PLAN OF ACTION 4. EXPENDITURE ON R&D: (Rs. in Lacs) (a) Capital (b) Recurring (c) Total (d) Total R&D Expenditure as a Percentage of total turnover
(d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action
: N.A.
: None : Not Applicable. : None : NIL : NIL : NIL : N.A. For and on behalf of the Board of Directors
Place : Kolkata Dated : 27th day of May 2012
Arun Kumar Jagatramka Chairman & ManagingDirector
PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31st MARCH' 2012 Employed throughout the year and were in receipt of remuneration in the aggregate, of not less than Rs.60 Lacs p.a. or employed for a part of the year and were in receipt of remuneration in the aggregate, of not less than Rs. 5 Lacs per month Name Mr. Arun Kumar Jagatramka Notes: 1) 2) 3) 4) Remuneration includes salary, commission, company's contribution to provident fund, gratuity and monetary value of perquisites. The appointment of Chairman & Managing Director is contractual. Terms and conditions of employees other than those aforesaid, are as per respective agreements and as per the Rules of the Company. Mr. A K Jagatramka is related to Mrs. Mona Jagatramka, Director of the Company within the meaning of Section 6 of the Companies Act, 1956. Apart from Mr A K Jagatramka, Chairman & Managing Director, no employee holds by himself or alongwith his/her spouse and dependant children, two percent or more of the equity shares of the company. For and on behalf of the Board of Directors Place : Kolkata Dated : 27th day of May 2012 Arun Kumar Jagatramka Chairman & ManagingDirector Designation & Nature of Duties Chairman & Managing Director (Managerial) Remuneration Received (Rs.) 1,63,60,121 Qualification Age & Experience (years) (years) B.Com [Hons.], FCA (Gold Medalist), 29Years 50 Date of Commencement of Employment 28.03.1997 Last Employment held with Designation None
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GUJARAT NRE COKE LIMITED
Management Discussion & Analysis
INDUSTRY STRUCTURE & DEVELOPMENTS ECONOMY As the western economies seem to submerge in another recession, led by Greece, Italy & Portugal, India has not been able to isolate itself from the European crisis, with the economy registering one of the lowest growth figures recently in the last decade. The feel good factor is fast evaporating and doubts are being raised at some quarters on the future of Indian growth story. The perception of policy paralysis and reforms stagnation has been one of the prime reasons dampening the spirits of India Inc. However, the intrinsic strength of the Indian economy, buoyed by the demographic dividend and increased domestic consumption of the rising middle class is sure to bring the Indian economy back on track. Government of India, recognising the problems being faced by the Indian economy, has decided to put the economy back on the track by taking several macroeconomic decisions and by strengthening domestic growth drivers. Though no big bang reform is expected at this juncture given the various compulsions, however the government has started taking some steps like supporting infrastructure and construction through massive investments, fast-tracking implementation of various policy decisions, encouraging exports, etc, in an effort to arrest the slide in growth. WORLD COKING COAL AND METALLURGICAL COKE INDUSTRY Currently around 70% of global steel is produced in BOF's, and approximately 600 to 750 kg of coking coal is required to produce one ton of steel. As coking coal is primarily used in the production of steel, demand comes from countries that are large steel producers. China being the largest producer of steel, much of global coking coal and met coke supply and demand dynamics depend on how Chinese demand shapes. China imported only 7 MT (million tonnes) in 2008, yet imported approximately 46 MT in 2009 and 43 MT in 2010 and 2011 (through land & sea). It is believed that as per conservative estimates of World Steel Association on China's future steel production, China would import around 45-50 MT in the next couple of years, with Macquarie Bank forecasting that Chinese imports of coking coal will rise to 57 MTPA by 2015. The ongoing shortage of coking coal, driven in particular by continued strong demand from China and increasingly India, will support prices, which will on average, remain firm or increased from its present levels. Hard coking coal, for which there are few substitutes in coke making, is the highest quality coking coal and thus commands a premium price. Following the same trend as that of coking coal, the met coke market is also characteristic with supply lagging behind demand. Though no real shortage is expected this year round due to subdued economic activity, however, the closure of units in Europe would have to be filled with supplies from Ukraine, Russia and Columbia. With China also out of global trade, Indian merchant coke producers are presented with an opportunity to tap the global demand. However, with economic activity resuming, and global demand of imported met coke rising to the pre 2009 levels of 25-30 MTPA, the supply would be severely strained in absence of Chinese coke, which would subsequently have positive impact on the prices. DOMESTIC COKING COAL & MET COKE INDUSTRY According to World Steel Association, India produced over 72 MT of steel in 2011 becoming the fourth largest producer of steel in the world. According to projections of Ministry of Steel, Government of India, we might become the second largest producer of steel by 2015-16, producing around 120 MTPA. India's coking coal import requirement might rise to over 50 MTPA from present levels of 35 MTPA by then. Securing coking coal supply has been one of the biggest challenges of Indian steel makers. The country has been experiencing a subdued economic activity and a lower industrial growth for around a year. Coupled with it the iron ore mining issues in South India has further resulted in lower steel production and consequently low demand of met coke. However domestic demand has improved since April 2012 with some huge demands from big steel producers which has resulted a near shortage in domestic market of coke and this supply constrain in domestic met coke may continue till the year end. OPPORTUNITIES & THREATS The demand supply gap across the globe for metcoke is significantly attracting more players to enter this segment to reap the benefits. However, shortage in availability of crucial raw material i.e coking coal has restricted the entry of new suppliers making the market skewed in favour of the suppliers. Therefore, organisations owning large metcoke production capacities with strong linkages for raw material sourcing can withstand the competition in the global met coke market with huge opportunities to expand their business. The future of metcoke industry is heavily reliant on the future of steel industry as steel is the major consumer of metcoke globally with majority of steel still being produced through blast furnace route. Therefore, any slump in steel industry would adversely affect metcoke industry. Metcoke industry is also impacted by availability of crucial raw material i.e coking coal with its global supply generally determining the prices of both coking coal and metcoke. The domestic metcoke industry is also heavily reliant on global supplies and generally moves in tandem with global metcoke market. The global financial and economic events also play a very crucial role in determining the future of metcoke industry as has been observed during last few years. COMPANY'S PERFORMANCE The company's performance during the year under review was affected due to prevalence of flat market conditions and substantial devaluation of rupee as compared to US dollar. The income from operations was marginally lower at Rs. 331.00 crores in the year under review as compared to Rs.336.00 crores during the previous year. However, due to the effect of devaluation of Rupee and prevalent higher interest cost, the net profit during the year under review was consequently lower at Rs. 3.09 crores as compared to Rs. 102.65 crores during the previous year. Accordingly, the Basic & Diluted earnings per share of the Company were reported at Rs.0.05 and Rs.0.05 respectively, for the year under review as compared to Rs.1.85 and Rs.1.82 during the previous year.
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GUJARAT NRE COKE LIMITED
Management Discussion & Analysis (Contd.)
SEGMENT WISE PERFORMANCE & OUTLOOK Coal & Coke Coking coal and Coke segment has been at the core of the operations of the Company contributing around 75% of the total turnover during the year under review. Net Sales/income from this segment for the year under review amounted to Rs. 1029.26 crores as compared to Rs.1296.81 crores in the previous year. Steel Steel segment contributes around 25% to the total turnover. It achieved a turnover of Rs. 342.92 crores during the year under review as compared to Rs.297.90 crores during previous year. The Company is generating power through its Wind Turbines. This helps the Company to reduce its power costs and ensures regular supply of clean power to its production facilities. Outlook The year 2011-12 began with hardening of coking coal and consequently the met coke prices due to floods in Australia and declaration of force majure by BHP Billiton for Industrial dispute which is the largest supplier of coking coal used mainly for production of met coke. As the year progressed, the global met coke market was affected by various global factors such as eurozone crisis, dampening the economic sentiments across the globe and by the end of the year, the prices had softened substantially. However, continuation of Chinese embargo on met coke exports coupled with supply constraints due to limited availability of coking coal globally and shutting down of met coke producing capacities in Europe and North America are expected to create supply constraints for met coke once the world economy recovers. RISKS & CONCERNS Our businesses and operations are subject to a variety of risks and uncertainties which are similar to any other company in general and also common to the industry to which we belong. Some of the key risks and uncertainties affecting the company are set forth below. Any of these risks has the potential of causing the actual operating results in future to vary materially from the current results or from anticipated future results. a) Commodity Price Risk : The Company is exposed to the risk of price fluctuations on raw materials and finished goods. However, considering the normal correlation in the prices of raw material i.e coking coal and finished good i.e. met coke, this risk gets reduced/adjusted over a period of time. c) Forex Risk : The company like any other company operating in global markets is subject to Forex Risk. The Company however, has a policy to hedge its foreign exchange risk within the defined parameters. As imports (raw materials etc.) exceed exports or vice versa, the Company suitably hedges the differential from time to time to appropriately manage the currency risk. However, such hedging does not assure avoidance of any losses due to sudden and/or substantial volatility in currency markets.
d) Risk from Natural Calamities: Any act of nature detrimental to the smooth functioning of the mining of Coking coal in Australia as well as production of metallurgical coke in India, can adversely affect the performance of the Company. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY Your Company has adequate internal controls for its business processes across plants and offices to ensure efficient operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions. The Company also has an internal audit system which is conducted by an independent firm of Chartered Accountants as well as a strong Inhouse Internal Audit Cell so as to cover various operations on regular basis throughout the year. Summarized Internal Audit Observations/Reports are reviewed by the Audit Committee on a regular basis. The finance and accounts functions of the Company are well staffed with qualified and experienced members. HUMAN RESOURCES Your company considers its people at its most important resource. All employees of Gujarat NRE are considered leaders and encouraged to take responsibility to do their best that they can while meeting business needs. Our strength lies in our human pool of resources and our success is largely dependent on them. The Company therefore, focuses on developing its talent pool and its employee capability through increased emphasis on learning and skill upgradation job rotation, multi skilling and inter plant sharing of experiences. Critical skills identification and ramp up planning continues at the operating level. The Company continuously reviews its policies/practices with a view to make them more contemporary and uniform in application and this is an ongoing process. To improve quality of work life, medical, transport facilities, welfare and recreational facilities have been reviewed and upgraded. All these efforts had an impact on reducing the attrition levels at our plants and offices. Cordial industrial relations prevailed across the Company and its subsidiaries during the year under review. CAUTIONARY STATEMENT The statement in this Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward-looking statement' within the meaning of applicable securities laws and regulations. These statements being based on certain assumptions and expectations of future events, actual results could differ materially from those expressed or implied. The Company assumes no responsibility whatsoever, in this regard.
b) Production Risk : Coking coal, the critical raw material required for manufacture of met coke is in short supply internationally resulting in uncertainty in its availability and consequently, its prices. Timely availability of raw material at reasonable prices is therefore, critical for survival in this industry. The Company's strategy of backward integration by acquiring coking coal mines in Australia helps in minimising the effect of volatility in prices and secures availability of premium quality hard coking coal.
20
GUJARAT NRE COKE LIMITED
Managing Director (CEO) & Chief Financial Officer (CFO) Certification
We, Mr. Arun Kumar Jagatramka, Chairman & Managing Director and Mr. P R Kannan, Chief Financial Officer certify that: 1) We have reviewed the Financial Statements and the Cash Flow Statements for the year ended 31st March 2012 and to the best of our knowledge and belief : a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; These statements together present a true and fair view of the company's affairs and are in compliance with existing Accounting Standards, applicable laws and regulation. 4) We have disclosed based on our most recent evaluation, wherever applicable, to the Company's Auditors and the Audit Committee that a. there has not been any significant change in internal control over financial reporting during the year under reference; there has not been any significant change in the accounting policies during the year requiring disclosure in the notes to the financial statements; and we are not aware of any instance during the year of any significant fraud with involvement therein of the management or any employee having a significant role in the company's internal control system over financial reporting.
b.
b)
c.
2)
To the best of our knowledge and belief, no transactions entered into by the company during the year, which are fraudulent, illegal or violative of the company's code of conduct. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting. We have disclosed to the Auditors and the Audit Committee, any deficiencies in the design or operation of such internal controls of which we are aware and the steps that have already been taken or proposed to be taken to rectify these deficiencies.
5)
3)
We further declare that all board members and senior management personnel have affirmed compliance with the Code of Conduct during the year under review.
A K Jagatramka P R Kannan Place : Kolkata Chairman & Chief Date : 26th May, 2012 Managing Director Financial Officer
21
GUJARAT NRE COKE LIMITED
Auditors’ Report
To the members of Gujarat NRE Coke Ltd. 1. We have audited the attached Balance Sheet of Gujarat NRE Coke Limited as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of books and records of the company as we considered appropriate and according to the information and explanations given to us , we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; Place : Kolkata Dated : 27th May, 2012 A Paul (Partner) Membership No. 06490 (d) (c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956 to the extent applicable; On the basis of written representations received from the directors as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012; (ii) in the case of the Statement of Profit and Loss of the profit for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For N.C.Banerjee & Co. Chartered Accountants (Firm’s Registration No. : 302081E)
(e)
2.
(f)
3.
4.
(b)
Annexure referred to in paragraph 3 of Audit Report of even date to the members of Gujarat NRE Coke Ltd. for the year ended 31st March 2012.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. We were informed that the Company has a phased programme of physical verification of all its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets required to be verified were physically verified by management during the period under review and no material discrepancies were noticed on such verification. Fixed assets disposed off during the year under review were not substantial and therefore do not affect the going concern status of the company. During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (iii) (c) The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.
(b)
In our opinion and according to the information and explanations given to us, the company has not granted or taken loans, Secured or Unsecured, to/from the companies, firm or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 consequently clause 4 (iii) of the order is not applicable to the company. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major weakness in internal control system was observed. (a) According to the information and explanations given to us, we are of the opinion that particulars of all the transactions made in pursuance of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.
(iv)
(c)
(ii)
(a)
(v)
(b)
22
GUJARAT NRE COKE LIMITED
Annexure to Auditors’ Report (contd.)
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. maintained. We have not, however, carried out a detailed examination of such records with a view to determine whether they are accurate or complete. (ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with appropriate authorities during the year under review. The Central Government has not notified the date for collection cess under Rehabilitation & Revival fund as per Section 441 A of the Companies Act, 1956. (b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st March, 2012, for a period of more than six months from the date they became payable except Dividend Distribution Tax amounting to Rs. 9.37 Crores which has since been deposited.
(vi)
In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company. In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.
(vii)
(viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been (c)
According to the information and explanations given to us and the records of the company examined by us, there were no dues in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute other than those as mentioned here-in-below: Name of the statute Income Tax Act, 1961 Nature of Dues Regular Assessment Amount (Rs./Crores) 8.29 Period to which the amount Relates 2005-06, 2006-07, 2007-08, 2008-09 Forum where/ disputes are pending Income Tax Appellate Tribunal, Kolkata/ Commissioner of Income Tax (Appeals), Kolkata Chapter V & VA of Finance Act, 1994 (Act 32 of 1994) The Customs Act, 1962 Service Tax 0.06 Oct'07 - Mar'08 Custom, Excise and Service Tax Appellate Tribunal, Ahmedabad. Custom, Excise and Service Tax Appellate Tribunal, Ahmedabad.
Custom Duty
2.55
2004, 2005, 2008, 2010
(x)
The Company does not have accumulated losses at the year ended 31st March, 2012 and has not incurred cash losses during the year under review and in the immediately preceding financial year. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its banks or to any financial institutions or debenture holders. According to the explanation given to us and based on the information available, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of Clause (xiii) of paragraph 4 of the Order are not applicable to the Company.
account, the term loans were applied for the purpose for which such loans were obtained. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment. (xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year. (xix) The Company has not issued any debentures during the year. (xx) The company has not raised any money by public issues during the year under review.
(xi)
(xii)
(xiii)
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956 (xv) In our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the subsidiary companies from banks or financial institutions, are not as such prima facie prejudicial to the interests of the Company.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. For N.C.Banerjee & Co. Chartered Accountants (Firm’s Registration No. : 302081E)
(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of
Place : Kolkata Dated : 27th May, 2012
A Paul (Partner) Membership No. 06490
23
GUJARAT NRE COKE LIMITED
Balance Sheet As at 31st March, 2012
(Rs. in Crores) Notes EQUITY AND LIABILITIES Shareholders' Funds Share Capital Reserves & Surplus Money received against Share Warrants Foreign Currency Convertible Bonds Non-Current Liabilities Long Term Borrowings Deferred Tax Liability (net) Long Term Provisions Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions 4 5 6 2 3 577.37 910.33 104.15 1,591.85 – 756.91 160.65 7.74 925.30 7 8 9 10 TOTAL ASSETS Non-Current Assets Tangible Fixed Assets Capital Work-in-Progress Non-Current Investment Long Term Loan & Advances Current Assets Current Investment Inventories Trade Receivables Cash & Cash equivalents Short Term Loan & Advances 11 11 12 13 925.12 171.05 743.29 273.63 2,113.09 14 15 16 17 18 TOTAL 1 to 39 – 1,589.29 209.99 68.80 534.31 2,402.39 4,515.48 Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board 943.36 123.99 743.29 370.32 2,180.96 5.00 1,052.94 158.22 84.16 453.53 1,753.85 3,934.81 692.06 790.52 471.53 44.22 1,998.33 4,515.48 558.14 882.98 104.15 1,545.27 77.71 661.62 158.68 93.08 913.38 599.07 433.74 273.35 92.29 1,398.45 3,934.81 As at 31st March, 2012 As at 31st March, 2011
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
24
GUJARAT NRE COKE LIMITED
Statement of Profit & Loss For the year ended 31st March, 2012
(Rs. in Crores) Notes INCOME Revenue from Operations Other Income Total Revenue: EXPENDITURE Cost of Materials Consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Goods, Stock-in-Process and Stock in Trade Employees Benefits Expenses Finance Costs Depreciation Other Expenses Total Expenses: Profit before Exceptional Items & Tax Exceptional Items Profit before Tax Tax Expenses – Current Tax – Deferred Tax – MAT Credit Entitlement – Tax for Earlier Years Profit after Tax for the year Basic Earnings per Equity & “B” Equity Share (in Rs.) [Face Value Rs. 10 per shares] Diluted Earnings per Equity & “B” Equity Share (in Rs.) [Face Value Rs. 10 per shares] Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board 1 to 39 1.11 1.97 (1.10) 0.46 3.09 0.05 0.05 24.81 18.10 (21.19) 0.07 102.65 1.85 1.82 36 22 23 24 11 25 21 1,285.50 – (440.91) 54.58 208.57 56.77 170.10 1,334.61 65.66 60.13 5.53 1,045.90 118.87 (36.03) 44.30 161.12 50.44 166.86 1,551.46 124.44 – 124.44 19 20 1,372.18 28.09 1,400.27 1,594.71 81.19 1,675.90 For the year ended 31.03.2012 For the year ended 31.03.2011
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
25
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012
1. i. SIGNIFICANT ACCOUNTING POLICIES 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. On time proportion basis taking into account the amount outstanding and the rate applicable. When the services are performed as per contract. When right to receive payment is established. On Settlement of Claims When right to receive payment is established.
b. c. d. e. f.
In respect of Interest Income In respect of Service Income In respect of Dividend Income In respect of Insurance Claims In respect of Guarantee Commission
: : : : :
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. b. c. d. Raw Materials Finished Products Stores, Spares and Components Stock in process : : : : At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower 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. 3. vii. Inventories are valued on FIFO basis. Variation, if any, between books and physical stocks detected on physical verification, obsolete & slow moving stocks are adjusted in accounts as found appropriate.
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.
26
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
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 nonmonetary 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.
27
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
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) (ii) xv. Deferred Revenue Expenses-5 years Deferred Employees Compensation under ESOS-Amortised on straight line basis over vesting period.
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.
28
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 2 SHARE CAPITAL DESCRIPTION AUTHORISED : 1,60,00,00,000 Equity Shares (Previous Year 1,60,00,00,000) of Rs. 10/- each 10,00,00,000 “A” Equity Shares (Previous Year 10,00,00,000) of Rs.10/- each Carrying 100 Voting Rights per “A” Equity Share 30,00,00,000 “B” Equity Shares (Previous Year 30,00,00,000) of Rs.10/- each Carrying 1 Voting Right per 100 “B” Equity Shares 1,600.00 100.00 300.00 2,000.00 ISSUED,SUBSCRIBED AND PAID-UP : 52,48,80,127 Equity Shares of Rs.10/- each fully paid up, ( Previous year 50,73,98,354) 5,24,88,010 "B" Equity Shares of Rs.10/- each fully paid up, ( Previous year 5,07,39,834) 524.88 52.49 577.37 507.40 50.74 558.14 1,600.00 100.00 300.00 2,000.00 As at 31st March, 2012 As at 31st March, 2011
2.1
Of the above Shares: As at 31st March, 2012 Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued as fully paid Bonus Shares in the last five years. "B" Equity Shares out of the issued, subscribed and paid up "B" Equity Share Capital were issued as fully paid Bonus Shares in the last five years. Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued in the last five years for consideration other than Cash pursuant to a scheme of amalgamation 134,834,154 52,488,010 –
(No of Shares) As at 31st March, 2011 256,787,175 50,739,834 20,684,205
2.2
The Details of Shareholders holding more than 5% of shares: Name of the Shareholders As at 31st March, 2012 No of Shares Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund “B” Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund Arun Kumar Jagatramka Trustee, Girdharilal Arun Kumar Family Trust 16,675,913 2,731,594 2,779,125 31.77% 5.20% 5.29% 16,675,913 2,731,594 2,779,125 32.87% 5.38% 5.48% 192,578,554 32,308,462 36.69% 6.16% 191,859,138 32,308,462 37.81% 6.37% % held As at 31st March, 2011 No of Shares % held
29
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
2.3 The reconciliation of the number of shares outstanding is set out below: Particulars Equity Shares: Equity Shares at the beginning of the year Add: Shares issued on Conversion of Foreign Currency Convertible Bonds Add: Shares issued on Conversion of Share Warrant Add: Shares issued on exercise of Employees Stock Option Equity Shares at the end of the year “B” Equity Shares: Equity Shares at the beginning of the year Add: Shares issued as Bonus Shares to Equity Shareholders Add: Shares issued as Bonus Shares on Conversion of Foreign Currency Convertible Bonds Add: Shares issued as Bonus Shares on Conversion of Share Warrant Add: Shares issued as Bonus Shares on exercise of Employees Stock Option Equity Shares at the end of the year 2.4 i) As at 31st March, 2012 507,398,354 17,407,793 – 73,980 524,880,127 50,739,834 – 1,740,778 – 7,398 52,488,010 (No of Shares) As at 31st March, 2011 498,194,215 100,044 8,550,000 554,095 507,398,354 – 49,819,421 10,004 855,000 55,409 50,739,834
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. (Rs. in Crores) Basic & Diluted EPS and Proforma Basic & Diluted EPSNet Profit as reported Add/(Less): Employee Compensation Expenses [As per Para 2.5 (iii) below] Adjusted Proforma Net Profit Basic & Diluted EPS as reported – Basic (Rs.) – Diluted (Rs.) Proforma Basic & Diluted EPS – Basic (Rs.) – Diluted (Rs.) Current Year 3.09 0.15 3.24 0.05 0.05 0.06 0.06 Previous Year 102.64 0.21 102.85 1.85 1.82 1.85 1.83
ii)
2.5
(i)
Shares Reserved for issue under Employee Stock Options Plan Movement in Options granted during the Year ended March'2012 is given below: Weighted Average Exercise Price No. of Options (in Rs.) 31.03.12 31.03.12 Weighted Average Exercise Price No. of Options (in Rs.) 31.03.11 31.03.11 3,753,371 – 3,214,000 375,337 234,400 14,140 554,095 55,409 – – 18.99 – 63.05 – 35.90 – 22.53 – – –
a)
Outstanding at the beginning of the Year – Equity Shares – “B” Equity Shares Granted during the Year – Equity Shares – “B” Equity Shares (to give effect of Bonus) Forfeited during the Year – Equity Shares – “B” Equity Shares Exercised during the Year – Equity Shares – “B” Equity Shares Expired during the Year – Equity Shares – “B” Equity Shares
6,178,876 305,788 3,560,000 – 873,850 27,860 73,980 7,398 131,296 13,130
40.95 – 24.30 – 34.81 – 22.16 – 23.86 –
30
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
2.5 Shares Reserved for issue under Employee Stock Options Plan (contd.) Movement in Options granted during the Year ended March'2012 is given below (contd.): Weighted Average Exercise Price No. of Options (in Rs.) 31.03.12 31.03.12 b) Outstanding at the end of the Year - Equity Shares - “B” Equity Shares Exercisable at the end of the Year - Equity Shares - “B” Equity Shares 8,659,750 257,400 19,000 1,900 35.15 – 18.05 – Weighted Average Exercise Price No. of Options (in Rs.) 31.03.11 31.03.11 6,178,876 305,788 228,476 22,848 40.95 – 22.72 –
c)
(ii) Fair value No. of Options Granted during the Year 3,560,000 Price (in Rs.) 21.64 (Rs./Crores) 7.70
(iii) The Company has calculated Employee Compensation Costs on the basis of Intrinsic Value Method and has amortized Rs.0.51 Crores (Previous Year Rs. 1.16 Crores) for the Year ended 31st March, 2012. However, had the company followed Fair Value Method for calculating Employee Compensation Costs, such costs for the Year would have been lower by Rs.0.15 Crores (Previous Year Rs.0.21 Crores) with corresponding impact on the Profit after Tax and Basic as well as Diluted EPS for the Year. (iv) Share Reserved for issue against Share Warrants As at 31st March, 2012 No. of Warrants 80,800,000 2,080,000 As at 31st March, 2011 No. of Warrants 80,800,000 2,080,000
Equity Shares “B” Equity Shares
Out of above 60,000,000 warrants are to be issued at the exercise price of Rs.62.50 and 20,800,000 Share to be issued at exercise price of Rs. 120 each. Upon conversion of the above 20,800,000 equity shares, 20,80,000 "B" Equity Shares will be issued as bonus shares.
3 RESERVES & SURPLUS DESCRIPTION Capital Reserve: As per Last Balance Sheet Securities Premium Reserve: As per Last Balance Sheet Add: Received during the year Less: Amount capitalised for Bonus Shares Issued General Reserve: As per Last Balance Sheet Less: Transferred to Surplus from Statement of Profit & Loss Debentures Redemption Reserves As per Last Balance Sheet Add: Transfer from Surplus from Statement of Profit & Loss Employees Stock Option Outstanding As per Last Balance Sheet Less: Adjustment for Option Forfeited during the year Less: Transferred to Securities Premium Reserve Surplus from Statement of Profit & Loss As per last Balance Sheet Add: Profit for the year Less/(Add): Appropriations Transfer to/ (from) General Reserve Proposed Dividend (Dividend per share Rs.0.50 (Previous Year - Re.1 per share)) Dividend Tax Transferred to / (from) Debenture Redemption Reserve As at 31st March, 2012 51.12 387.05 60.57 1.75 251.26 (10.81) 162.50 3.09 8.30 0.84 0.16 22.75 3.09 25.84 (10.81) 28.87 4.69 3.09 388.03 49.76 50.74 251.26 – 143.75 18.75 9.90 0.57 1.03 5.95 102.65 108.60 – 57.73 9.37 18.75 (Rs. in Crores) As at 31st March, 2011 51.12
445.87
387.05
240.45
251.26
165.59
162.50
7.30
8.30
– 910.33
22.75 882.98
31
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 4 LONG TERM BORROWINGS DESCRIPTION As at 31st March, 2012 Current Secured Non Convertible Debentures External Commercial Borrowings Term Loans from Scheduled Banks Term Loans from Others 4) a) i 37.50 – 173.14 2.08 212.72 Non Current 337.50 – 414.96 4.45 756.91 As at 31st March, 2011 Current Non Current 25.00 22.57 177.04 – 224.61 375.00 – 286.62 – 661.62
4)
b)
11.90% Non-Convertible Debentures and 12.50% Non- Convertible Debentures are secured by following securities: – First pari-passu charge over entire fixed assets of the company, both present and future. – 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: – First pari-passu charge over entire fixed assets of the company, both present and future. – Second pari-passu charge over entire current assets of the company, both present and future. – 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: – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company along with Corporate Guarantee – 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: – Subservient charge on movable assets of the company – 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; – 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: – Subservient Charges on movable fixed and Current assets of the Company; – 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: – Subservient charge on movable fixed and current assets of the company,both present & future. – Exclusive Charge on Entire Fixed & current assets, both present & future, of Bharat NRE Coke Ltd., an associate Company, along with Corporate Guarantee. – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company, along with Corporate Guarantee; – 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 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 – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par in 4 equal annual installments commencing from 30th May 2012, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2015, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2014, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2013, – 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.
32
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
c) Maturity Profile of Secured Term Loans are as set below : Repayment profile 2012-13 Term Loan from Banks Term Loan from Others 5 DEFERRED TAX LIABILITIES (net) DESCRIPTION Net Deferred Tax Liabilities at beginning of the year: Deferred Tax Liabilities – Deferred Tax Liability on account of Depreciation Total Deferred Tax Liabilities
A) Deferred Tax Assets – Unabsorbed Depreciation and loss carry forward/(set off) – Capital Loss carry forward/(set off) – Employees compensation carried forward – Gratuity & Leave Encashment Total Deferred Tax AssetsB) Net Deferred Tax Liability charged to Statement of Profit & Loss (A-B) As at 31st March, 2012 158.68 (4.87) (4.87) (7.40) 0.13 0.11 0.32 (6.84) 1.97 160.65 5.32 5.32 (12.77) (0.32) 0.04 0.27 (12.79) 18.10 158.68 As at 31st March, 2011 140.58 173.14 2.08 2013-14 190.61 2.36 2014-15 135.90 2.08 (Rs. in Crores) Beyond 2014-15 88.45 –
6
LONG TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation As at 31st March, 2012 4.93 2.81 7.74 As at 31st March, 2011 3.94 89.14 93.08
7
SHORT TERM BORROWINGS DESCRIPTION Secured Term Loans from Scheduled Banks Working Capital Facilities from Scheduled Banks Unsecured Term Loans from Scheduled Banks Working Capital Facilities from Scheduled Banks Total a) As at 31st March, 2012 – 541.82 541.82 130.01 20.23 150.24 692.06 As at 31st March, 2011 125.00 294.04 419.04 180.03 – 180.03 599.07
b)
Working Capital facilities from a consortium of banks viz. State Bank of India, Bank of Baroda, ING Vysya Bank Ltd, AXIS Bank Ltd, Standard Chartered Bank, ICICI Bank Ltd and Tamilnad Mercantile Bank Ltd are secured by following securities: – First pari-passu charge over entire current assets of the company, both present and future. – Second pari-passu charge over entire fixed assets of the company, both present and future. – Equitable mortgage over residential property at Kolkata of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Personal guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Pledge of equity shares of the Company held by Gujarat NRE Mineral Resources Limited, a promoter Company along with Corporate Guarantee of the Company equivalent to the value of shares pledged. Unsecured Term Loans and unsecured working capital facilities are collaterally secured by Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company.
33
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
8 TRADE PAYABLES DESCRIPTION Micro, Small & Medium Enterprises* Others As at 31st March, 2012 – 790.52 790.52 (Rs. in Crores) As at 31st March, 2011 – 433.74 433.74
*
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: Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid on all delayed payment under the MSMED Act Payment made beyond the appointed day during the Year Interest due and payable for the Year of delay other than above Interest accrued remaining unpaid Amount of further interest remaining due and payable in succeeding Years As at 31st March, 2012 – – – – – – – As at 31st March, 2011 – – – – – – –
9
OTHER CURRENT LIABILITIES DESCRIPTION Current maturities of long term debts Interest Accrued but not due on borrowings Unclaimed Dividend Creditors for Capital Expenditure Others Payables As at 31st March, 2012 212.72 13.30 2.18 33.64 209.69 471.53 As at 31st March, 2011 224.61 13.49 2.19 19.93 13.13 273.35
10
SHORT TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation Provision for Fringe Benefit Tax Provision for Proposed Dividend Provision for Dividend Tax / Dividend Tax Payable As at 31st March, 2012 0.19 1.11 – 28.87 14.05 44.22 As at 31st March, 2011 0.20 24.81 0.18 57.73 9.37 92.29
34
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) GROSS BLOCK As on 01.04.11 Addition during the year 0.03 – 7.23 22.44 0.22 0.12 7.33 – 1.27 – 38.65 144.19 0.48 0.25 1,184.58 1,146.19 – 488.10 – 25.38 – 0.48 0.08 4.70 87.01 202.83 152.52 0.25 27.06 10.16 – 3.25 0.98 – 2.28 0.73 0.21 0.20 2.85 0.02 1.18 25.77 56.77 50.44 – 468.60 88.49 23.23 – 117.88 10.68 3.31 – 8.51 – – – – – – – 0.14 – – – 0.14 0.12 – 43.04 – – – – – 13.99 111.72 0.94 1.18 12.87 0.10 5.88 112.78 259.46 202.83 Sales / Adjustment during the year Total up to 31.03.12 As on 01.04.11 Provided during the year Adjustment for Sales Total up to 31.03.12 DEPRECIATION NET BLOCK As on 31.03.12 As on 31.03.11
NOTES-11
Description of Assets
Land - Freehold 8.51 110.65 446.16 2.06 3.13 19.98 0.48 24.11 488.10 1,146.19 1,002.48
43.01
43.04 8.51 103.89 356.88 1.34 2.07 14.19 0.38 19.50 375.32 925.12 943.36 171.05
43.01 8.51 99.97 357.67 1.33 2.15 9.82 0.40 19.41 401.09 943.36
Land -Lease Hold *
Building
35
Plant & Machineries
Office Equipment
Furniture & Fixture
Material handling Equipments/ Vehicles
Weighing Machine
Electrical Installations
Wind Mill
Total
Previous Year
Capital W I P
123.99
GUJARAT NRE COKE LIMITED
* Conveyance deed will be executed in favour of the company in due course.
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
12 NON-CURRENT INVESTMENTS DESCRIPTION Long Term Investment (At Cost) Non-Trade Investments Quoted (Equity) Indian Shah Alloys Ltd Sal Steel Ltd. Overseas Investments Gujarat NRE Coking Coal Ltd (Sub-Subsidiary) ( formerly Gujarat NRE Minerals Ltd) Aggregate Book Value of Quoted Investments (Equity) Unquoted (Equity) Indian In Indian Subsidiaries Wholly owned Hunter Valley Coal (P) Ltd Manor Dealcom (P) Ltd Others Bharat NRE Coke Ltd In Foreign Subsidiaries Wholly owned Gujarat NRE Ltd Aggregate Book Value of Unquoted Investments (Equity) Total Long Term Investment (At cost) Market value of Quoted Investments (Equity) * Previous Year figure are in bracket. **Investment in Indian company equity shares are fully paid up. *** Refer Note No. 1(vii) for mode of valuation. N.A. 87,474,689 (87,474,689) 283.32 687.63 743.29 78.86 283.32 687.63 743.29 238.10 10 10,835,000 (10,835,000) 10.84 10.84 1 20,592,850 (20,592,850) 1 19,051,150 (19,051,150) 203.95 189.52 203.95 189.52 55.66 55.66 N.A. 86,092,966 (86,092,966) 42.18 42.18 10 10 969,769 (969,769) 2,737,682 (2,737,682) 7.34 6.14 7.34 6.14 Face Value (Rs) No.of Shares* As at 31st March, 2012 (Rs. in Crores) As at 31st March, 2011
13
LONG TERM LOANS AND ADVANCES * DESCRIPTION (Unsecured,Considered Good) Capital Advance Loan & Advances Deposits With Govt. Authorities & Others Advance Tax (incl. Tax Deducted at Source) Unamortised Expenses: (To the extent not written off/or adjusted) – Deferred Employee Compensation Under ESOS Balance B/F Less – Adjusted for Employees left during the year – Amortised during the year (net) 6.31 0.84 0.51 4.96 273.63 * Refer Note 33(D) 8.04 0.57 1.16 6.31 370.32 7.83 89.15 107.42 64.27 15.30 89.15 108.87 150.69 As at 31st March, 2012 As at 31st March, 2011
36
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
14 CURRENT INVESTMENTS DESCRIPTION Investment in Mutual Funds (Unquoted) SBI Premier Liquid Fund 10 - (3,243,573) – –
* Previous Year figure are in bracket. ** Refer Note No. 1(vii) for mode of valuation.
(Rs. in Crores) Face Value (Rs) No.of Shares* As at 31st March, 2012 As at 31st March, 2011
5.00 5.00
15
INVENTORIES* DESCRIPTION Stores , Spares & Consumables Raw Materials Work in Process Finished Goods As at 31st March, 2012 9.39 582.54 9.56 987.80 1,589.29 *Refer Note No. 1(vi) for mode of valuation As at 31st March, 2011 6.57 491.02 8.90 546.45 1,052.94
16
TRADE RECEIVABLE* (Unsecured, considered good) DESCRIPTION Debts due for a period exceeding six months Other Debts As at 31st March, 2012 5.18 204.81 209.99 *Refer Note No. 33(D) As at 31st March, 2011 6.53 151.69 158.22
17
CASH & CASH EQUIVALENTS DESCRIPTION Cash in hand (as certified by the Management) Balance with Scheduled Banks - In Current Account - In Current Account for Unclaimed Dividend - In Term Deposits* (Including interest accrued) ** Balance with Non Scheduled Banks - In Current Account 0.10 68.80 * includes Term deposits held as margin on Letter of Credit and Bank Guarantee. 0.09 84.16 1.81 2.18 64.48 28.35 2.19 53.39 As at 31st March, 2012 0.23 As at 31st March, 2011 0.14
** Term Deposits with Banks includes deposits of Rs.9.80 Crores (Previous Year Rs.37.57 Crores ) with maturity of more than 12 months.
37
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
18 SHORT TERM LOANS AND ADVANCES (Unsecured,Considered Good) DESCRIPTION Advances recoverable in cash or in kind or value to be received Advance Tax (incl. Tax Deducted at Source) As at 31st March, 2012 520.93 13.38 534.31 (Rs. in Crores) As at 31st March, 2011 428.87 24.66 453.53
[Refer Note 33(D)] 19 REVENUE FROM OPERATIONS DESCRIPTION Sales Less: Excise Duty For the year ended 31.03.2012 1,437.34 65.16 1,372.18 1,372.18 For the year ended 31.03.2011 1,628.79 34.08 1,594.71 1,594.71
19.1 PARTICULARS OF SALE OF PRODUCTS DESCRIPTION Coal & Coke Rolled & Alloy Steel Products Electricity Power (Windmill) For the year ended 31.03.2012 1,029.26 326.85 16.07 1,372.18 For the year ended 31.03.2011 1,296.80 287.35 10.56 1,594.71
20
OTHER INCOME DESCRIPTION Interest Income (TDS Rs.0.59 Crores, Previous Year Rs. 0.66 Crores) Income from Long Term Investment: Non Trade - Profit on Sale of Investments Foreign Exchange Fluctuation Profit on Sale of Fixed Assets Gurantee Commission Miscellaneous Income For the year ended 31.03.2012 7.49 For the year ended 31.03.2011 7.88
– – – 19.43 1.17 28.09
70.87 1.70 0.01 – 0.73 81.19
21
COST OF MATERIAL CONSUMED DESCRIPTION Coal Iron & Steel Scrap and Sponge Iron For the year ended 31.03.2012 1,046.56 238.94 1,285.50 For the year ended 31.03.2011 839.90 206.00 1,045.90
21.1 PARTICULARS OF COST OF MATERIAL CONSUMED DESCRIPTION Imported Indigenous For the year ended 31.03.2012 1,187.15 98.36 1,285.50 For the year ended 31.03.2011 979.18 66.72 1,045.90
38
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
22 CHANGE IN INVENTORIES OF FINISHED GOODS, WORK -IN-PROCESS & STOCK IN TRADE DESCRIPTION Closing Stocks Less :Opening Stocks Less: Change in Excise Duty on Stock For the year ended 31.03.2012 997.36 555.35 442.01 (1.10) 440.91 23 EMPLOYEES BENEFITS EXPENSES DESCRIPTION Salaries, Wages, Bonus & Labour Charges Contribution to PF & Other Funds Provision/Payment of Gratuity Employee Compensation Amortisation Under ESOS Employees Welfare Expenses For the year ended 31.03.2012 44.10 2.73 1.08 0.51 6.16 54.58 23.1 Disclosure as required by Accounting Standard 15 ( Revised ) on Employee benefits :In respect of defined benefit scheme (based on Actuarial valuation) Gratuity Plan i Change in Obligation during the year ended 31.03.2012 – Present value of Defined Benefit Obligation as on 01.04.2011 – Current Service Cost – Past Service Cost – Interest Cost – Curtailment Cost / ( Credit ) – Settlement Cost / ( Credit ) – Actuarial ( gains )/ losses – Benefits paid – Present Value of defined Benefit Obligation as on 31.03.2012 Expenses recognized during the Year 2011-12 – Current Service Cost – Past Service Cost – Interest Cost – Curtailment Cost / ( Credit ) – Settlement Cost / ( Credit ) – Actuarial ( gains )/ losses – Expected return on plan assets – Total Expenses for the Year Principal Actuarial Assumptions at the balance sheet date. – Discount rate (based on the market yields available on Government Bonds at the accounting date with a term that matches that of the liabilities) – Expected rate of return on assets – Salary increase (taking into account inflation, seniority, promotion and other relevant factors) Projected Unit Credit (PUC) actuarial method has been used to assess the Plan's liabilities, including those death-in-service and in capacity benefits. 3.58 0.80 – 0.30 – – 0.05 (0.26) 4.47 0.80 – 0.30 – – 0.05 – 1.15 8.50% For the year ended 31.03.2011 35.55 2.01 0.79 1.16 4.79 44.30 (Rs. in Crores) For the year ended 31.03.2011 555.35 518.62 36.73 (0.70) 36.03
Leave Encashment 0.56 0.07 – 0.05 – – 0.04 (0.07) 0.65 0.07 – 0.05 – – 0.04 – 0.16
ii
iii
N.A 7.50%
39
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
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. 24 FINANCE COSTS DESCRIPTION Interest Expenses Other Borrowing Costs Applicable loss/(gain) on foreign currency transactions and translation For the year ended 31.03.2012 179.22 15.08 14.27 208.57 25 OTHER EXPENSES DESCRIPTION Manufacturing Expenses: Power & Fuel Stores, Spares & Consumables Repair & Maintenance: – Plant & Machinery – Building – Others Plant Hire Charges Selling & Distribution Expenses: Advertisement & Business Development Carriage & Cartage Commision on Sales Establishment Expenses: Professional & Service Charges General Expenses Rent Rates & Taxes Insurance Expenses Communication Expenses Travelling & Conveyance Auditors Remuneration – For Audit Fees Internal Audit Fees Loss on Sale of Fixed Assets Loss on Sale of Long Term Investments (Net) Deferred Revenue Expenses Written Off 4.96 39.65 1.97 46.58 12.13 2.73 0.36 0.35 6.98 0.35 4.61 0.11 0.08 0.01 0.61 – 28.32 170.10 7.33 2.26 0.36 0.36 5.98 0.40 3.81 0.12 0.09 – – 0.08 20.79 166.86 2.51 60.49 0.85 63.85 23.11 0.60 3.51 4.89 95.20 16.58 0.23 2.62 4.93 82.22 36.00 27.09 30.23 27.63 For the year ended 31.03.2012 For the year ended 31.03.2011 (Rs. in Crores) For the year ended 31.03.2011 151.08 13.49 (3.45) 161.12
40
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
26 Segment Informations: Segment wise Revenue, Results and Capital Employed for the Year ended 31st March,2012. The Company has two reportable segments i.e. “Coal & Coke” and “Steel” as primary business segments.
i Primary Segment Reporting ( by Business Segment): Particulars Coal & Coke Segment Revenue (Net Sales/Income from segment) External Sales Inter-Segment Revenue 1029.26 Less: Inter Segment Revenue Total Segment Revenue Segment Results before Tax & Interest Add:- Other Un-allocable Income Net of Expenditure Less:- Interest Expense Less:- Provision for Tax Net Profit after Tax Assets Segment Assets* Un-allocable Assets Total Assets Liabilities Segment Liablities Un-allocable Liablities Total Liablities *including captive windmills Capital Expenditure Non Cash Expenses Depreciation & Amortisation 26.66 29.69 20.71 29.32 6.84 78.88 368.47 6.74 955.16 82.55 1037.71 63.58 1101.29 7.44 132.85 393.64 5.85 397.92 71.82 469.74 198.10 667.84 2,969.66 577.59 3547.25 963.27 4510.52 2,165.86 577.94 2743.80 1190.06 3933.86 1.87 208.57 2.44 3.09 63.96 161.12 21.79 102.65 1029.26 199.06 1029.26 342.92 1.65 344.57 1.65 342.92 13.17 1372.18 1.65 1373.83 1.65 1372.18 212.23 1296.81 205.56 1296.81 1296.81 297.90 2.16 300.06 2.16 297.90 16.04 1594.71 2.16 1596.87 2.16 1594.71 221.60 2011-12 Steel Total Coal & Coke 2010-11 Steel Total
(Rs. in Crores)
ii
Secondary Segment Reporting ( by Geographical demarcation): Particulars India Segment Revenue Segment Assets Capital Expenditure 1,006.59 3,547.25 85.62 2011-12 Rest of the World 365.59 – – Total 1,372.18 3,547.25 85.62 India 1,253.69 2,743.80 138.70 2010-11 Rest of the World 341.02 – – Total 1,594.71 2,743.80 138.70
41
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
27 The Earnings Per Share as per Accounting Standard (AS- 20) are as under: Particulars At 31.03.2012 Basic & Diluted EPS 3.09 – 3.09 558,138,188 – 17,407,793 73,980 1,748,176 577,368,137 576,976,321 2,080,000 – 262,550 579,318,871 At 31.03.2011 Basic & Diluted EPS 102.65 – 102.65 498,194,215 8,550,000 100,044 554,095 50,739,834 558,138,188 554,582,402 2,080,000 5,558,439 1,275,496 563,496,337
Earnings Net Profit for the Year (Rs. / Crores) Add: Interest on FCCB (Rs. / Crores) Earnings for Diluted EPS (Rs. / Crores) Shares Number of shares at the beginning of the Year Add : Share Allotted against Share Warrants Add : Conversion of FCCB Add : Share Allotted against ESOS Add : Bonus “B” Equity Shares Issue Total number of equity shares outstanding at the end of the Year Weighted average number of shares outstanding during the Year (for Basic EPS) Add : Number of equity shares arising out of exercise of option of outstanding Share Warrants that have dilutive effect on the EPS Add : Number of equity shares arising out of conversion of outstanding FCCB that have dilutive effect on the EPS Add : Number of Equity Shares arising out of exercise of option of Employee Stock Option Scheme Weighted average number of shares outstanding during the Year (for Diluted EPS) Earning per share : – Basic (Rs.) – Diluted (Rs.) 0.05 0.05 1.85 1.82
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. 28.1 Contingent liabilities not provided for in respect of: As on 31st March 2012 i ii iii iv v vi Letter of Credits outstanding for purchase of materials. Outstanding Bank Guarantees and Counter / Corporate Guarantees given on behalf of subsidiary companies. Capital commitments Bills discounted under letter of credit with banks Duty on account of Advance Authorisation against Export obligation. On Balance Sheet date, the disputed amount involved in four income-tax demands( Previous Year - three) under appeal. 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. 18.67 2,458.56 58.73 85.04 0.73 8.29 (Rs. in Crores) As on 31st March 2011 50.92 1,550.55 137.17 32.41 1.03 4.42
vii A demand raised by the Service tax department, against which company has filed an appeal to the jurisdiction authorities. viii A demand raised by the Custom department, against which company has filed an appeal to the jurisdiction authorities.
0.06 2.55
0.06 –
42
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
28.2 Greenearth Resources & Projects Limited (formerly known as Austral Coke & Projects Limited) had filed a defamation suit in Hon'ble Bombay High Court against the Company for Rs.600 Crores. The Company had also filed Civil Suit in Hon'ble 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 suit filed by the Austral Coke & Projects Limited would be in favour of the company. 28.3 On 16 October 2007, the company and Armada Singapore Pte Ltd (“Armada”) entered into five year charter party agreement which provided, inter alia, for Armada to supply vessels to ship the company's tonnage, namely coal or coking coal from various destinations worldwide. Between late 2008 and early 2009, following the worldwide economic crisis, Armada experienced serious financial losses resulting into a large number of third party defaults under its shipping agreements. As a result, during the course of 2009 Armada entered into Judicial Management, a Singaporean insolvency regime. As a result of Armada's insolvency, the Company refused to make further nominations since there was no assurance or security for Armada's performance for the balance period under the agreement. Armada later on filed its claim submission in an arbitration proceeding against the company before Arbitration Tribunal in London. Although there was no specific clause on jurisdiction or applicable law in the agreement and also the constitution of Arbitration Tribunal was not in accordance with the agreement and even after the company's repetitive challenges to aforesaid, the Tribunal passed an order in favour of Armada assessing the liability of the company towards Armada as Rs.42.85 Crores (including interest of Rs.3.42 Crores). Aggrieved by the aforesaid order the company has filed a civil suit against Armada with the Hon'ble High Court at Calcutta claiming for damages for an amount of Rs 144 crores and cancellation of the aforesaid order being void and restraining Armada from giving any effect to the order passed by the Tribunal. Subsequently, an order was passed by the Hon'ble High Court at Calcutta restraining Armada to take any further steps to enforce the award passed by the Tribunal in India. The matter is presently sub judice before the Hon'ble High Court at Calcutta. 29 Earning in Foreign Exchange: For the year ended 31.03.2012 – FOB value of exports 30 Value of Imports on CIF basis in respect of: For the year ended 31.03.2012 Raw Materials – Coking Coal – M.S.Scrap Capital Goods 31 Expenditure in foreign currency – Travelling – Interest – Professional & Consultancy Fees 32 i For the year ended 31.03.2012 0.68 0.42 4.42 For the year ended 31.03.2011 0.63 3.73 0.01 950.71 140.77 1,091.48 0.16 956.85 87.83 1,044.68 1.91 For the year ended 31.03.2011 347.75 (Rs. in Crores) For the year ended 31.03.2011 321.58
The company uses forward contracts to hedge its risks associated with foreign currencies relating to foreign currency liabilities. The company does not use forward contracts for speculative purpose. As on 31st March 2012 a Forward Contracts outstanding for hedging currency risks - Loans - Payable Foreign Currency Exposures that have not been hedged - Loans including accrued interest - Payable – 119.04 134.00 553.04 As on 31st March 2011 – 130.41 100.28 243.06
b
ii
Exchange difference Gain/ (Loss) of Rs. (1.34) Crores [Previous Year Rs. (0.03) Crores] in respect of unexpired period of forward cover contracts will be recognised in the Statement of Profit & Loss in subsequent year.
43
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
33 Related Party Disclosures as required by Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India (ICAI), are given below: A. Particulars of the Related Parties: Subsidiary Companies i ii iii i ii iii iv v vi vii viii i ii iii iv v vi vii i ii iii iv i B. Wholly Owned Gujarat NRE Limited Huntervalley Coal (P) Ltd. Manor Dealcom (P) Ltd. Sub-Subsidiary Companies Gujarat NRE Coking Coal Ltd. Gujarat NRE Wonga Pty. Ltd. (formerly known as Gujarat NRE FCGL Pty. Ltd.) Wonga Coal Pty. Ltd. Gujarat NRE Resources NL Gujarat NRE Coal (NSW) Pty. Ltd. South Bulli Holdings Pty. Ltd. Gujarat NRE Properties Pty. Ltd. Gujarat NRE India Pty. Ltd. Associates Bharat NRE Coke Ltd. NRE Metcoke Ltd. Bajrang Bali Coke Industries Ltd. Surajbari Traders Pvt. Ltd. Dharwad Traders Pvt. Ltd. Mandvi Traders Pvt. Ltd. Lunva Traders Pvt. Ltd. Enterprises in which key management personnel have significant Influence Gujarat NRE Mineral Resources Ltd. Gujarat NRE Energy Resources Ltd. Russell Vale Traders Pvt. Ltd. Bulli Coke Ltd. Enterprise in which key management person is a trustee Girdharilal Arun Kumar Family Trust – Chairman & Managing Director – Chief Financial Officer (Rs. in Crores) Current Year 0.15 19.43 5.40 898.60 1.98 – – – Previous Year 0.24 – 4.95 789.95 2.18 96.80 85.82 8.55
Key Management Personnel i Mr. A. K. Jagatramka ii Mr. P. R. Kannan Transaction with Related Parties Particulars of Transactions
C i
Sale/(Sales Return) of Goods/Services – Associates – Sub-Subsidiaries Purchase of Goods /Services – Associates – Sub-Subsidiaries Remuneration – Key Management Persons Investments – Subsidiaries Remittance on Capital Reduction by – Subsidiaries Shares Alloted – Enterprises in which key management person has significant influence
ii
iii. iv v vi
44
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
Particulars of Transactions vii Share Warrant Deposit Received – Enterprises in which key management person has significant influence viii ix x Rent Paid – Enterprises in which key management person is a trustee Security Deposit Given – Associates Loans / Advance Given/(Refunded) – Associates – Subsidiaries xi Guarantees/Collateral Securities Outstanding as at the Year end – Given on behalf of Associates – Given on behalf of Sub-Subsidiaries – Given on behalf of Subsidiaries – Given by Associates on behalf of the Company – Given by Key Management Personnel on behalf of the Company – Given by Enterprises in which key management person has significant influence D The Company has the following amounts due from/ to related parties: As on 31st March 2012 Due from Related Parties (included in loans & advances and sundry debtors) Subsidiaries – included in Loans & Advances Associates – included in Sundry Debtors – included in Loans & Advances Sub-Subsidiaries – included in Loans & Advances Enterprises in which key managerial persons has significant influence – included in Loans & Advances Due to Related Parties (included in current liabilities) – Sub-Subsidiaries 34 Particulars of Balances with Non-Scheduled banks : In current Account* Balance as on 31st March 2012 a) b) ICICI Bank UK PLC, London Branch SBI Sydney Branch 0.04 0.06 31st March 2011 0.04 0.05 Maximum Balance Current Year 0.04 0.06 Previous Year 0.06 0.91 89.15 – 200.49 4.41 9.35 89.15 – 170.78 – 9.35 As on 31st March 2011 – 2192.32 252.80 55.00 2,078.10 94.50 2.93 1291.35 248.27 – 1062.73 170.55 30.09 – 51.42 (7.65) – 30.00 0.25 0.25 – 93.75 Current Year (Rs. in Crores) Previous Year
634.47
310.36
35
* None of the directors of the company are interested in such banks. a The indicators of impairment listed in paragraph 8 to 10 of Accounting Standard (AS)- 28 “Impairment of assets” issued by ICAI have been examined by the management and on such examination, it has been found that none of the indicators are present in the case of the Company's assets . A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss.
45
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
b In the opinion of Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.
36 37 38
Exceptional items for the year ended 31st March, 2012 represents net foreign exchange loss of Rs. 60.13 Crores due to unusual diminution in the value of Rupee as against the US Dollar during the year. There are no amounts due and outstanding to be credited to Investors Education and Protection Fund as at 31st March 2012 Remittance in Foreign Currency on account of Dividend: The Company has paid dividend in respect of shares held by Non-resident on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remitted in this respect is given herein below: (Rs. in Crores) For the year ended 31.03.2012 Number of Non-Resident Shareholders Number of Equity & “B” Equity Shares held by them (i) Amount of Dividend Paid (Gross) 2581 4,213,257 0.42 NIL 2010-11 For the year ended 31.03.2011 2583 4,394,223 0.44 NIL 2009-10
Tax deducted at Source (ii) Year to which dividend relates 39
The Revised Schedule VI has become effective from April 1, 2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figure have been regrouped/reclassified wherever necessary to correspond with the current year's classification / disclosure.
46
GUJARAT NRE COKE LIMITED
Cash Flow Statement for the year ended 31st March, 2012
(Rs. in Crores) For the Year ended 31-Mar-2012 CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax Adjustments for: Depreciation / Other non cash items Interest Paid / Payable Other Income Loss/(Profit) on Sale / Discard of Fixed Assets Loss/(Profit) on Sale of Investment Employee Stock Option - Compensation Interest Received / Receivable Operating Profit before Working Capital Changes Adjustments for: Trade & Other Receivables Inventories Trade Payables Cash Generated from Operations Direct Taxes Paid / Refunds Net Cash Generated from Operating Activities B CASH FLOW FROM INVESTING ACTIVITIES Addition to Fixed Assets Sale of Fixed Assets Addition to Investments Sale of Investments Interest Received Dividend / Misc Income Net Cash used in Investing Activities C CASH FLOW FROM FINANCING ACTIVITIES Net Proceeds to Share Capital / Reserves Deposit against Share Warrant Increase in Long / Short Term Borrowing Interest Paid Dividend & Dividend Tax Paid Net Cash Generated from Financing Activities Net Increase / (Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents (Opening Balance) Cash & Cash Equivalents (Closing Balance)* *Includes Dividend Account of Rs. 2.18 Crores (Previous year Rs. 2.19 Crores) In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board A 5.51 56.77 208.57 (20.60) 0.01 0.61 0.51 (7.49) 243.89 (142.37) (536.35) 568.02 133.19 (12.96) 120.23 (78.23) 0.10 – 4.39 7.49 20.60 (45.65) 0.16 – 176.40 (208.76) (57.74) (89.94) (15.36) 84.16 68.80 For the Year ended 31-Mar-2011 124.44 50.52 151.08 (5.89) (0.01) (70.87) 1.16 (7.88) 242.55 34.19 (221.00) (86.80) (31.06) (17.46) (48.52) (140.26) 0.30 (101.80) 157.87 7.88 5.89 (70.12) 43.42 104.15 116.00 (139.99) (64.10) 59.48 (59.16) 143.32 84.16
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
47
GUJARAT NRE COKE LIMITED
48
Particulars of Subsidiary Companies issued under section 212 (8) of the Companies Act, 1956 for the financial year 2011-12 are as followsRs. In Crores)
Manor Dealcom Pvt. Ltd. INR 1.9051 7.3041 392.3782 0.0020 0.1062 56.2240 2,996.1055 7.1903 381.8064 5.0458 267.9306 1.58 83.91 0.5005 26.58 0.0010 0.05 0.08 AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR 4.30 Gujarat NRE Ltd. Gujarat NRE Coal(NSW) Pty Ltd. Gujarat NRE Coking Coal Ltd. Wonga Coal Pty Ltd. Gujarat NRE Resources NL Gujarat NRE Wonga Pty Ltd. South Bulli. Holdings Pty Ltd. Gujarat NRE India Pty Ltd. Gujarat NRE Properties Pty Ltd.
Name of the Subsidiary Company
Hunter Valley Coal Pvt. Ltd. INR 2.0593
(a) Share Capital (Equity and Preference)
(b) Reserve & Surplus (net of debit balance of statement of profit & loss) 201.9348 248.2991 44.3050 44.8535 6.8010 364.1362 – – 36.9459 1,983.9323 – – 0.0988 5.2537 14.38 770.25 0.0035 0.19 0.0000 234.4132 11.0352 585.9454 0.0011 0.0571 91.7365 4,837.7823 7.1145 377.7792 5.3096 281.8308 21.56 1,131.64 0.5120 27.16 0.0007 187.6545 (3.0699) (170.5690) (0.0009) (0.0491) (1.4334) (142.2554) (0.0758) (4.0272) 0.1650 8.6465 5.61 277.48 0.0080 0.40 -0.0004 0.02 0.03 0.00
(0.01) (1.11) 0.98 0.91 51.49 48.30
(c) Total Assets
(d) Total Liabilities
(e) Details of Investment (excluding investments in the subsidiary companies) 248.2804 – – 0.0089 0.0027 0.0010 0.0017 – – – – – – – – – – – – – – 0.0022 (2.2649) (107.4737) (0.0000) (0.0014) (1.0670) (52.6939) (0.0238) (1.1795) (0.0227) (1.1751) 2.16 102.45 0.0011 0.2106 11.3123 – – (1.1057) (59.3990) (0.0086) (0.4502) (0.0119) (0.6373) 1.43 76.90 0.0033 (2.0543) (96.1615) (0.0000) (0.0014) (2.1727) (112.0929) (0.0324) (1.6297) (0.0345) (1.8124) 3.59 179.35 (0.0001) (0.0000) (0.0001) – 0.0093 0.0637 3.2025 0.0000 0.0000 3.7787 185.6892 – – – – 15.48 774.73 – – – – – – 0.9688 50.8452 – – – – – – – – – – – – – – – – – – – – – – – – (0.01) (0.00) (0.0039) – 234.3733 0.0500 2.8500 – – 0.4256 22.3360 – – 0.1700 9.1000 – – – – – – – – (0.0000) – (0.0000) – – – – – (0.0017) – (0.0017) – – – – – – – – – (0.00) (0.06) (0.00) (0.02) (0.00) (0.04) – –
– Equity / Preference Shares
– Government Securities
– Bonds/ Mutual Funds Units
(f)
Turnover
(g) Profit/(Loss) Before Taxation
(h) Provision for Taxation
(i)
Profit/ (Loss) after Taxation
(j)
Proposed Dividend (including Corporate Dividend Tax)
Auditors Report on Consolidated Financial Statements
Company's management in accordance with the requirements of Accounting Standard 21- “Consolidated Financial Statements” and Accounting Standard 23“Accounting for Investment in Associates in Consolidated Financial Statements ” as prescribed by the Companies (Accounting Standards) Rules, 2006. 5.
49
Based on our audit as aforesaid, and on consideration of reports of other auditors on the separate financial statements and on the other financial information of the components and to the best of our information and according to the explanation given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (i) (ii) (iii) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Gujarat NRE Group as at March 31, 2012; in the case of the Consolidated Statement of Profit and Loss, of the consolidated loss of the Gujarat NRE Group for the year ended on that date; and in the case of Consolidated Cash Flow Statement, of the Consolidated Cash Flows of the Gujarat NRE Group for the year ended on that date. For N. C. Banerjee & Co. Chartered Accountants (Firm's Registration No. 302081E)
Auditors' Report to the Board of Directors of the Gujarat NRE Coke Ltd. on the consolidated financial statement of Gujarat NRE Coke Ltd. and its subsidiaries
1.
We have audited the attached Consolidated Balance Sheet of Gujarat NRE Coke Limited ("the Company") and its eleven subsidiaries (collectively referred to as the “Gujarat NRE Group”) as at March 31, 2012, the Consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year ended on that date annexed thereto. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, in all respects, in accordance with an identified financial reporting framework. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.
GUJARAT NRE COKE LIMITED
3.
We did not audit the financial statement of certain subsidiaries whose financial statements reflect total assets of Rs.5940.26 Crores as at March 31, 2012 and total revenue of Rs. 952.04 Crores and net Cash outflows of Rs. 351.13 Crores for the year ended on that date. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amount included in respect of the subsidiaries is based on the reports of other auditors.
4.
We report that the consolidated financial statements have been prepared by the
Place: Kolkata Dated: 27/05/2012
A. Paul Partner Membership No.06490
GUJARAT NRE COKE LIMITED
Consolidated Balance Sheet As at 31st March, 2012
(Rs. in Crores) Notes EQUITY AND LIABILITIES Shareholders' Funds Share Capital Reserves & Surplus Money received against Share Warrants Minority Interest Foreign Currency Convertible Bonds Non-Current Liabilities Long Term Borrowings Deferred Tax Liability (net) Long Term Provisions Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions As at 31st March, 2012 As at 31st March, 2011
2 3
577.37 885.09 104.15 1,566.61 953.91 – 2,392.00 178.21 7.78 2,577.99 1,087.34 568.46 1,275.59 117.52 3,048.91 8,147.42
558.14 1,152.11 104.15 1,814.39 825.88 77.71 1,924.77 155.18 107.37 2,187.32 599.07 292.98 738.69 124.55 1,755.29 6,660.59
4 5 6
7 8 9 10 TOTAL
ASSETS Non-Current Assets Tangible Fixed Assets Intangible Fixed Assets Capital Work-in-Progress Non-Current Investment Long Term Loan & Advances Current Assets Current Investment Inventories Trade Receivables Cash & Cash Equivalents Short Term Loan & Advances
11 11 11 12 13
3,904.93 219.65 672.31 393.86 252.53 5,443.28 50.85 1,628.80 382.61 90.95 550.93 2,704.14 8,147.42
2,894.91 228.20 375.83 458.73 347.93 4,305.60 72.99 1,106.58 261.72 457.45 456.25 2,354.99 6,660.59
14 15 16 17 18 TOTAL
Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements
1 to 34
In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
50
GUJARAT NRE COKE LIMITED
Consolidated Statement of Profit & Loss For the year ended 31st March, 2012
(Rs. in Crores) Notes INCOME Revenue from Operations Other Income Total Revenue: EXPENDITURE Cost of Materials Consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Goods, Stock-in-Process and Stock in Trade Employees Benefits Expenses Finance Costs Depreciation Other Expenses Total Expenses: Profit/(Loss) before Exceptional Items, Extra Ordinary Items & Tax Exceptional Items Extra Ordinary Items Profit/(Loss) before Tax Tax Expenses – Current Tax – Deferred Tax – MAT credit entitlement – Tax for Earlier Years Profit/(Loss) after tax for the year Less : Minority Interest Add : Share in Profit of Associates Profit/(Loss) for the year after taxes, minority interest & share of profit of associates Basic Earnings per Equity & “B” Equity Share (in Rs.) [ Face Value Rs. 10 per share] Diluted Earnings per Equity & “B” Equity Share (in Rs.) [ Face Value Rs. 10 per share] Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board 1 to 34 28.81 1.97 (1.10) 0.45 (83.34) 14.67 (0.67) (98.68) (1.71) (1.70) 31.70 18.10 (21.20) 0.07 134.71 26.37 0.82 109.16 1.97 1.94 32 31 25 22 23 24 21 372.13 35.96 (436.37) 174.33 252.19 150.65 782.58 1,331.47 78.30 64.42 67.09 (53.21) 324.34 129.51 (48.85) 218.50 234.91 217.33 737.43 1,813.17 187.00 – 23.62 163.38 19 20 1,398.39 11.38 1,409.77 1,813.71 186.46 2,000.17 For the year ended 31.03.2012 For the year ended 31.03.2011
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
51
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012
1. i. SIGNIFICANT ACCOUNTING POLICIES 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. Principles of Consolidation The accounts of subsidiaries including foreign subsidiaries have been consolidated with the parent company’s 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 Statement of Profit & Loss 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 Statement of Profit & Loss. Resultant foreign exchange translation difference has been recognized as “Foreign Currency Translation Reserve”. 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. 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 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. 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. 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 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 by directors 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.
ii.
iii.
iv.
v.
vi.
52
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
vii. Inventories 1. Inventories are valued as under: a. b. c. d. Raw Materials Finished Products Stores, Spares and Components Stock in process : : : : At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower 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. 3. Inventories are valued on FIFO basis. 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. b. Initial Recognition: Foreign Exchange transactions are recorded normally at the exchange rates prevailing on the date of the transactions. 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 nonmonetary 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 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 local regulations & laws.
53
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
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 (ESOS) under Unamortised 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 unconditionally 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. 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. The restoration liability calculated as discounted present value in relation to restoration guarantee at the end of the lease is correspondingly represented by a Unamortised 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 cost 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 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 i. 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. ii. Allocation of Common Costs : Common allocable costs are allocated to each segment according to sales of each segment to total sales of the Group.
54
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 2 SHARE CAPITAL DESCRIPTION AUTHORISED : 1,60,00,00,000 Equity Shares (Previous Year 1,60,00,00,000) of Rs. 10/- each. 10,00,00,000 “A” Equity Shares (Previous Year 10,00,00,000) of Rs.10/- each Carrying 100 Voting Rights per “A” Equity Share. 30,00,00,000 “B” Equity Shares (Previous Year 30,00,00,000) of Rs.10/- each Carrying 1 Voting Right per 100 “B” Equity Shares. 1,600.00 100.00 300.00 2,000.00 ISSUED, SUBSCRIBED AND PAID-UP : 52,48,80,127 Equity Shares of Rs.10/- each fully paid up ( Previous year 50,73,98,354) 5,24,88,010 "B" Equity Shares of Rs.10/- each fully paid up ( Previous year 5,07,39,834) 524.88 52.49 577.37 507.40 50.74 558.14 1,600.00 100.00 300.00 2,000.00 As at 31st March, 2012 As at 31st March, 2011
2.1
Of the above Shares: As at 31st March, 2012 Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued as fully paid Bonus Shares in the last five years. "B" Equity Shares out of the issued, subscribed and paid up "B" Equity Share Capital were issued as fully paid Bonus Shares in the last five years. Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued in the last five years for consideration other than Cash pursuant to a scheme of amalgamation 134,834,154 52,488,010
(No of Shares) As at 31st March, 2011 256,787,175 50,739,834
–
20,684,205
2.2
The Details of Shareholders holding more than 5% of shares: Name of the Shareholders As at 31st March, 2012 No of Shares Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund “B” Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund Arun Kumar Jagatramka Trustee, Girdharilal Arun Kumar Family Trust 16,675,913 2,731,594 2,779,125 31.77% 5.20% 5.29% 16,675,913 2,731,594 2,779,125 32.87% 5.38% 5.48% 192,578,554 32,308,462 36.69% 6.16% 191,859,138 32,308,462 37.81% 6.37% % held As at 31st March, 2011 No of Shares % held
55
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
2.3 The reconciliation of the number of shares outstanding is set out below: Particulars As at 31st March, 2012 No of Shares Equity Shares: Equity Shares at the beginning of the year Add: Shares issued on Conversion of Foreign Currency Convertible Bonds Add: Shares issued on Conversion of Share Warrant Add: Shares issued on exercise of Employees Stock Option Equity Shares at the end of the year “B” Equity Shares: “B” Equity Shares at the beginning of the year Add: Shares issued as Bonus Shares to Equity Shareholders Add: Shares issued as Bonus Shares on Conversion of Foreign Currency Convertible Bonds Add: Shares issued as Bonus Shares on Conversion of Share Warrant Add: Shares issued as Bonus Shares on exercise of Employees Stock Option “B” Equity Shares at the end of the year 50,739,834 – 1,740,778 – 7,398 52,488,010 – 49,819,421 10,004 855,000 55,409 50,739,834 507,398,354 17,407,793 – 73,980 524,880,127 498,194,215 100,044 8,550,000 554,095 507,398,354 As at 31st March, 2011 No of Shares
2.4
Shares Reserved for issue under Employee Stock Options Plan (i) Movement in Options granted during the Year ended March'2012 is given below: No. of Options GNCL a) Outstanding at the beginning of the Year – Equity Shares – “B” Equity Shares Granted during the Year – Equity Shares – “B” Equity Shares (To give effect of Bonus) Forfeited during the Year – Equity Shares – “B” Equity Shares Exercised during the Year – Equity Shares – “B” Equity Shares Expired during the Year – Equity Shares – “B” Equity Shares 131,296 13,130 1,756,000 – 23.86 – 0.94 – 73,980 7,398 2,185,000 – 22.16 – – – 873,850 27,860 23,448,000 – 34.81 – 0.57 – 3,560,000 – 678,000 – 24.30 – – – 6,178,876 305,788 58,497,000 – 40.95 – 0.66 – GNCCL Weighted Average Exercise Price GNCL (in Rs.) GNCCL (in AUD)
Particulars
56
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
2.4 Shares Reserved for issue under Employee Stock Options Plan (contd.) (i) Movement in Options granted during the Year ended March'2012 is given below (contd.) : No. of Options GNCL b) Outstanding at the end of the Year - Equity Shares - “B” Equity Shares c) Exercisable at the end of the Year - Equity Shares - “B” Equity Shares (ii) Share Reserved for issue against Share Warrants Particulars As at 31st March, 2012 No. of Warrants 80,800,000 2,080,000 As at 31st March, 2011 No. of Warrants 80,800,000 2,080,000 19,000 1,900 5,530,000 – 18.05 – 1.05 – 8,659,750 257,400 31,786,000 – 35.15 – 0.73 – GNCCL Weighted Average Exercise Price GNCL (in Rs.) GNCCL (in AUD)
Particulars
Equity Shares “B” Equity Shares
Out of above 60,000,000 warrants are to be issued at the exercise price of Rs.62.50 and 20,800,000 Share to be issued at exercise price of Rs. 120 each. Upon conversion of the above 20,800,000 equity shares, 20,80,000 "B" Equity Shares will be issued as bonus shares.
3 RESERVES & SURPLUS DESCRIPTION Capital Reserve: Securities Premium Reserve: As per Last Balance Sheet Add: Received during the year Less: Amount capitalised for Bonus Shares Issued General Reserve: Foreign Currency Translation Reserve Debentures Redemption Reserves As per Last Balance Sheet Add: Transfer from Surplus from Statement of Profit & Loss Employees Stock Option Outstanding Equity Conversion Bond reserve Restoration Guarantee Reserve Surplus from Statement of Profit & Loss As per last Balance Sheet Add: Profit for the year Less: Appropriations Transfer to/(from) General Reserve Proposed Dividend [Dividend per share Rs.0.50 share(Previous Year Re.1 per share)] Dividend Tax Transferred to / (from) Debenture Redemption Reserve (33.58) (98.68) (132.26) (10.81) 28.87 4.69 3.09 162.50 3.09 387.05 60.57 1.75 As at 31st March, 2012 51.12 388.03 49.76 50.74 As at 31st March, 2011 51.12
(Rs. in Crores)
445.87 241.88 (0.35)
387.05 251.80 239.80
165.59 72.25 8.80 58.02
143.75 18.75
162.50 37.58 7.57 48.26
(56.90) 109.17 52.27 – 57.73 9.37 18.75
(158.09) 885.09
(33.58)
1,152.11
57
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 4 LONG TERM BORROWINGS DESCRIPTION Secured Convertible Bonds Non Convertible Debentures External Commercial Borrowings Term Loans from Banks Term Loans from Others Interest Accrued but not due on Long Term Borrowings 4) a) i) As at 31st March, 2012 Current – 37.50 – 259.21 2.08 – 298.79 Non Current 37.19 337.50 – 1,998.65 4.45 14.21 2,392.00 As at 31st March, 2011 Current Non Current – 25.00 22.57 177.04 – – 224.61 32.35 375.00 – 1,508.81 – 8.61 1,924.77
11.90% Non-Convertible Debentures and 12.50% Non- Convertible Debentures are secured by following securities: – First pari-passu charge over entire fixed assets of the company, both present and future. – 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: – First pari-passu charge over entire fixed assets of the company, both present and future. – Second pari-passu charge over entire current assets of the company, both present and future. – 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: – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company along with Corporate Guarantee – 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: – Subservient charge on movable assets of the company – 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; – 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: – Subservient Charges on movable fixed and Current assets of the Company; – 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: – Subservient charge on movable fixed and current assets of the company, both present & future. – Exclusive Charge on Entire Fixed & current assets, both present & future, of Bharat NRE Coke Ltd., an associate Company, along with Corporate Guarantee. – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company, along with Corporate Guarantee; – 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 x) Covertibles Bond are 200 nos. of 8 % 20 Year Secured Convertibles Bond issued by GNCCL. xi) During the year Gujarat NRE Coking Coal Ltd has been sanctioned additional Term Loan facilities of USD 150 million from consortium of banks (Axis Bank Ltd being the lead banker). Gujarat NRE Coking Coal Ltd has granted the following charges in favour of the security trustee for the fresh lenders in the syndication to secure the additional Term Loan of USD 150 million: l A pari-passu charge over the entire Fixed Assets of Gujarat NRE Coking Coal Ltd l A pari-passu charge over the mining leases and consolidated coal leases pertaining to 'NRE No. 1 Colliery' and 'NRE Wongawilli Colliery’ l A pari-passu charge over the entire fixed assets of the subsidiary company – Gujarat NRE Wonga Pty Ltd. but excluding in each case the Working Capital Assets being the assets of each company constituting raw materials, stocks, inventory and accounts receivable on account of sales and purchases of goods made and received in the normal course of trade or any other assets of a similar nature. Gujarat NRE Coking Coal Ltd entered into priority agreement with that security trustee on terms satisfactory to State Bank of India to regulate the priority of the above charges and the existing fixed charges which State Bank of India has over the same property so that the fixed charges will rank pari-passu to secure each lender's and State Bank of India's respective pro-rata share of the Syndicated Loan and the facilities of State Bank of India.
58
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
This is with following conditions: 1. Gujarat NRE Coking Coal Ltd has provided a Corporate Guarantee for the total facilities granted by State Bank of India to Gujarat NRE Wonga Pty Ltd (USD 50 million Term Loan and AUD50 million Bank Guarantee). 2. Gujarat NRE Wonga Pty Ltd provided a Corporate Guarantee for the total facilities granted by SBI to Gujarat NRE Coking Coal Ltd (USD 20 million Bill Discounting, AUD 5.4 million Export Packing Credit, AUD 11 million Bank Guarantee). 3. Cross-collateralisation of the existing charges is held by State Bank of India over Gujarat NRE Coking Coal Ltd and Gujarat NRE Wonga Pty Ltd in respect of the State Bank of India facilities referred to in 1 and 2 above. 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 Nil) are redeemable at par in 8 equal half yearly installments commencing from 29th April 2013. ii 12.50% Secured Redeemable Non Convertible Debentures of – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par in 4 equal annual installments commencing from 30th May 2012, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2015, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2014, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2013, – 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. (Rs. in Crores) Beyond 2014-15 2014-15 633.25 2.08 – 767.19 – 37.19 (Rs. in Crores) As at 31st March, 2012 178.21 178.21 As at 31st March, 2011 155.18 155.18
4)
b)
4)
c) Maturity Profile of Secured Term Loans are as set below: Repayment profile 2012-13 Term Loan from Banks Term Loan from Others Convertible Bonds 259.21 2.08 – 2013-14 598.21 2.36 –
5
DEFERRED TAX LIABILITIES (net) DESCRIPTION Net Deferred Tax Liabilities
6
LONG TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation As at 31st March, 2012 4.93 2.85 7.78 As at 31st March, 2011 17.47 89.90 107.37
7
SHORT TERM BORROWINGS DESCRIPTION Secured Term Loans from Banks Working Capital Facilities from Banks Unsecured Term Loans from Banks Working Capital Facilities from Banks As at 31st March, 2012 366.27 570.83 937.10 130.01 20.23 150.24 1,087.34 As at 31st March, 2011 125.00 294.04 419.04 180.03 – 180.03 599.07
i.
Working Capital facilities from a consortium of banks viz. State Bank of India, Bank of Baroda, ING Vysya Bank Ltd, AXIS Bank Ltd, Standard Chartered Bank, ICICI Bank Ltd and Tamilnad Mercantile Bank Ltd are secured by following securities: – First pari-passu charge over entire current assets of the company, both present and future.
59
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
– Second pari-passu charge over entire fixed assets of the company, both present and future. – Equitable mortgage over residential property at Kolkata of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Personal guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Pledge of equity shares of the Company held by Gujarat NRE Mineral Resources Limited, a promoter Company along with Corporate Guarantee of the Company equivalent to the value of shares pledged. Term Loan from ICICI Bank in Gujarat NRE Ltd. is secured by pledge of shares of Gujarat NRE Coking Coal Ltd. (GNCCL). Working Capital facilities from State Bank of India in Gujarat NRE Coking Coal Ltd. is secured by fixed and floating charge over assets of the Gujarat NRE Coking Coal Limited. Unsecured Term Loans are collaterally secured by Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. (Rs. in Crores) As at 31st March, 2012 – 568.46 568.46 As at 31st March, 2011 – 292.98 292.98
ii. iii iv 8
TRADE PAYABLES DESCRIPTION Micro, Small & Medium Enterprises * Others
*
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:
Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid on all delayed payment under the MSMED Act Payment made beyond the appointed day during the Year Interest due and payable for the Year of delay other then above Interest accrued remaining unpaid Amount of further interest remaining due and payable in succeeding Years As at 31st March, 2012 – – – – – – – As at 31st March, 2011 – – – – – – –
9
OTHER CURRENT LIABILITIES DESCRIPTION Current maturities of long term debts Interest Accrued but not due on borrowings Unclaimed Dividend Creditors for Capital Expenditure Others Payables Acceptances As at 31st March, 2012 298.79 13.30 2.18 33.64 344.18 583.50 1,275.59 As at 31st March, 2011 224.61 17.35 2.19 19.93 72.57 402.04 738.69
10
SHORT TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation Provision for Fringe Benefit Tax Provision for Proposed Dividend Provision for Dividend Tax/Dividend Tax Payble As at 31st March, 2012 72.95 1.65 – 28.87 14.05 117.52 As at 31st March, 2011 31.33 24.81 1.30 57.74 9.37 124.55
60
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
NOTES-11 GROSS BLOCK Addition during the year – 55.74 – 59.31 114.03 2.22 0.14 7.33 – 1.27 – 172.60 795.20 – 1,207.84 677.02 (340.78) 8.95 – 308.10 5,024.40 3,825.51 – 1,951.15 – 391.21 – 488.10 87.01 4.34 229.66 147.66 702.40 409.05 – 25.38 4.70 – 0.47 0.08 0.40 29.89 10.65 3.20 0.02 1.17 25.77 0.60 77.78 0.59 197.56 227.36 – 3.73 1.17 0.24 – 7.39 2.77 0.85 – 1,145.04 203.05 83.39 – 175.50 11.31 3.95 – – – – 0.14 – – – – – – 0.14 (65.99) – 8.51 – – – – 270.28 – – – 8.55 219.65 – – – – – – 15.26 286.44 3.62 1.41 13.71 0.10 5.88 112.78 4.94 307.44 148.25 899.82 702.40 Sales / Adjustment during the year Total up to 31.03.12 As on 01.04.2011 Provided during the year Sales / Adjustment during the year Total up to 31.03.12 As on 31.03.12 DEPRECIATION
(Rs. in Crores) NET BLOCK As on 31.03.2011
Description of Assets
As on 01.04.2011
Goodwill 214.54 8.51 116.19 1,031.01 5.17 3.59 22.96 0.47 24.11 488.10 218.61 1,155.95 308.10 3,825.51 2,807.71
228.20
219.65 270.28 8.51 160.24 858.60 3.77 2.32 16.18 0.37 19.51 375.32 386.27 1,643.71 159.85 4,124.58 3,123.11 672.31
228.20 214.54 8.51 104.88 827.96 2.40 2.42 12.31 0.39 19.41 401.09 214.27 926.29 160.44 3,123.11
Land - Freehold
Land -Lease Hold*
Building
Plant & Machineries
Office Equipment
61
Furniture & Fixture
Material handling Equipments/ Vehicles
Weighing Machine
Electrical Installations
Wind Mill
Mining Lease
Mine Development
Pre Production Expenses
Total
Previous Year
Capital Work-inprogress
375.83
GUJARAT NRE COKE LIMITED
* Conveyance deed will be executed in favour of the company in due course.
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
12 NON-CURRENT INVESTMENTS DESCRIPTION Investments in Equity Shares, Bonds & Others -Quoted -Unquoted Investments in Associates (Long Term) (Unquoted) Investments in Subsidiaries Market value of Quoted Investments (Equity) As at 31st March, 2012
(Rs. in Crores)
As at 31st March, 2011
43.84 105.63 244.39 – 393.86 32.57
108.40 105.26 245.06 – 458.72 129.32
13
LONG TERM LOANS AND ADVANCES (Unsecured, Considered Good) DESCRIPTION Capital Advance Loan & Advances Deposits With Govt. Authorities & Others Advance Tax (incl. Tax Deducted at Source) Unamortised Expenses: (To the extent not written off/or adjusted) – Deferred Employee Compensation Under ESOS Balance B/F Less – Adjusted for Employees left during the year – Amortised during the year (net) Deferred Revenue Expenses Restoration Guarantee 6.31 0.84 0.51 4.96 – 65.31 252.53 8.04 0.57 1.16 6.31 0.01 59.23 347.93 As at 31st March, 2012 7.83 2.57 107.59 64.27 As at 31st March, 2011 15.30 1.27 109.74 156.07
14
CURRENT INVESTMENTS* DESCRIPTION Other Investment (Unquoted) SBI Premier Liquid Fund Grove Street Ventures SPC As at 31st March, 2012 – 50.85 50.85 As at 31st March, 2011 5.00 67.99 72.99
* Refer Note 1(viii) for mode of valuation 15 INVENTORIES DESCRIPTION Stores , Spares & Consumables Raw Materials Stock in Process Finished Products As at 31st March, 2012 33.03 542.89 9.56 1,043.32 1,628.80 (Refer Note 1(vii) for mode of valuation As at 31st March, 2011 30.48 460.69 8.89 606.52 1,106.58
62
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
16 TRADE RECEIVABLE (Unsecured, considered good) DESCRIPTION Debts due for a period exceeding six months Other Debts As at 31st March, 2012 5.18 377.43 382.61 17 CASH & BANK BALANCES DESCRIPTION Cash in hand (as certified by the Management) Balance with Scheduled Banks - In Current Account - In Current Account for Unclaimed Dividend - In Term Deposits* (Including interest accrued) ** Balance with Non Scheduled Banks - In Current Account - In Term Deposits As at 31st March, 2012 0.25 1.85 2.18 64.48 22.19 – 90.95 As at 31st March, 2011 0.16 28.39 2.19 53.39 60.55 312.77 457.45 (Rs. in Crores) As at 31st March, 2011 6.53 255.19 261.72
* includes Term deposits held as margin on Letter of Credit and Bank Guarantee ** Term Deposits with Banks includes deposits of Rs.9.80 Crores (Previous Year Rs.37.57 Crores ) with maturity of more than 12months. 18 SHORT TERM LOANS AND ADVANCES (Unsecured,Considered Good) DESCRIPTION Advances recoverable in cash or in kind or value to be received Advance Tax (incl. Tax Deducted at Source) As at 31st March, 2012 537.55 13.38 550.93 As at 31st March, 2011 431.59 24.66 456.25
19
REVENUE FROM OPERATIONS DESCRIPTION Sales of Product Less: Excise Duty Freight Revenue For the year ended 31.03.2012 1,463.55 65.16 1,398.39 – 1,398.39 For the year ended 31.03.2011 1,846.71 34.08 1,812.63 1.08 1,813.71
19.1 PARTICULARS OF SALE OF PRODUCTS DESCRIPTION Coal & Coke Rolled & Alloy Steel Products Electricity Power (Windmill) For the year ended 31.03.2012 1,055.47 326.85 16.07 1,398.39 For the year ended 31.03.2011 1,514.73 287.34 10.56 1,812.63
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GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
20 OTHER INCOME DESCRIPTION Interest Income Income from Long Term Investment: Non Trade - Profit on Sale of Investments Foreign Exchange Fluctuation Profit on Sale of Fixed Assets Miscellaneous Income – – 0.01 2.17 11.38 68.80 107.18 0.01 1.26 186.46 For the year ended 31.03.2012 9.20 (Rs. in Crores) For the year ended 31.03.2011 9.21
21
COST OF MATERIAL CONSUMED DESCRIPTION Coal Iron & Steel Scrap and Sponge Iron For the year ended 31.03.2012 133.18 238.95 372.13 For the year ended 31.03.2011 118.34 206.00 324.34
21.1 PARTICULARS OF COST OF MATERIAL CONSUMED DESCRIPTION Imported Indigenous For the year ended 31.03.2012 273.77 98.36 372.13 22 CHANGE IN INVENTORIES OF FINISHED GOODS, WORK -IN-PROCESS & STOCK IN TRADE DESCRIPTION Closing Stocks Less :Opening Stocks Less: Change in Excise Duty on Stock For the year ended 31.03.2012 1,052.88 615.41 437.47 1.10 436.37 23 EMPLOYEES BENEFITS EXPENSES DESCRIPTION Salaries, Wages, Bonus & Labour Charges Contribution to PF & Other Funds Provision/Payment of Gratuity Employee Compensation Amortisation Under ESOS Employees Welfare Expenses For the year ended 31.03.2012 159.17 2.73 1.14 0.51 10.78 174.33 For the year ended 31.03.2011 201.73 2.01 8.06 1.16 5.54 218.50 For the year ended 31.03.2011 615.41 565.86 49.55 0.70 48.85 For the year ended 31.03.2011 257.62 66.72 324.34
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GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
24 FINANCE COSTS DESCRIPTION Interest Expenses Other Borrowing Costs Applicable loss/(gain) on foreign currency transactions and translation For the year ended 31.03.2012 234.14 18.05 – 252.19 (Rs. in Crores) For the year ended 31.03.2011 221.61 16.74 (3.44) 234.91
25
OTHER EXPENSES DESCRIPTION Manufacturing Expenses: Mine Operating Expenses Power & Fuel Stores, Spares & Consumables Repair & Maintenance: – Plant & Machinery – Building – Others Royalties Plant Hire Charges Selling & Distribution Expenses: Advertisement & Business Development Carriage & Cartage Commission on Sales Establishment Expenses: Professional & Service Charges General Expenses Rent Rates & Taxes Insurance Expenses Chartering Expenses Communication Expenses Travelling & Conveyance Auditors Remuneration – For Audit Fees Internal Audit Fees Loss on Sale of Fixed Assets Loss on Sale/Restatement of Investments (Net) Environment Expenses Deferred Revenue Expenses Written Off 1.44 0.08 – 30.11 10.24 3.08 123.69 782.58 1.29 0.09 0.17 – 13.74 1.26 78.74 737.43 33.35 7.35 0.83 7.47 8.42 14.63 1.23 5.46 30.23 7.39 0.46 4.74 12.37 – 1.31 5.69 10.07 242.75 1.97 254.79 3.89 348.56 0.85 353.30 99.75 2.70 3.82 40.96 4.89 404.10 61.45 0.82 2.92 48.85 4.93 305.39 156.40 49.89 45.69 95.33 39.65 51.44 For the year ended 31.03.2012 For the year ended 31.03.2011
65
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
26 The Earnings Per Share as per Accounting Standard (AS)- 20 are as under: Particulars At 31.03.2012 Basic & Diluted EPS (98.68) – (98.68) 558,138,188 – 17,407,793 73,980 1,748,176 577,368,137 576,976,321 2,080,000 – At 31.03.2011 Basic & Diluted EPS 109.16 – 109.16 498,194,215 8,550,000 100,044 554,095 50,739,834 558,138,188 554,582,402 2,080,000 5,558,439
Earnings Net Profit/(Loss) for the Year (Rs. / Crores) Add: Interest on FCCB (Rs. / Crores) Earnings for Diluted EPS (Rs. / Crores) Shares Number of shares at the beginning of the Year Add: Share Allotted against Share Warrants Add : Conversion of FCCB Add: Share Allotted against ESOS Add: Bonus “B” Equity Shares Issue Total number of equity shares outstanding at the end of the Year Weighted average number of shares outstanding during the Year (for Basic EPS) Add : Number of equity shares arising out of exercise of option of outstanding Share Warrants that have dilutive effect on the EPS Add : Number of equity shares arising out of conversion of outstanding FCCB that have dilutive effect on the EPS Add : Number of Equity Shares arising out of exercise of option of Employee Stock Option Scheme Weighted average number of shares outstanding during the Year (for Diluted EPS) Earning per share : – Basic (Rs.) – Diluted (Rs.) (1.71) (1.70) 1.96 1.94
262,550 579,318,871
1,275,496 563,496,337
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 Contingent liabilities not provided for in respect of: As on 31st March 2012 27.1 For Parent Company (Gujarat NRE Coke Ltd.) i ii iii iv v vi Letter of Credits outstanding for purchase of materials. Outstanding Bank Guarantees Capital commitments Bills discounted under letter of credit with banks Duty on account of Advance Authorisation against Export obligation. On Balance Sheet date, the disputed amount involved in four (previous year three) income-tax demands under appeal. 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. 18.67 13.44 58.73 85.04 0.73 50.92 10.93 137.17 32.41 1.03 (Rs. in Crores) As on 31st March 2011
8.29 0.06 2.55
4.42 0.06 –
vii A demand raised by the Service Tax Department, against which company has filed an appeal to the jurisdiction authorities. viii A demand raised by the Custom Department, against which company has filed an appeal to the jurisdiction authorities.
66
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
For Subsidiaries State Bank of India bank guarantees of Rs.3.22 Crores (Previous Year - Rs.2.80 Crores) has been provided to The Sydney Catchment Authority and Supreme Court of NSW. Bank guarantee has been provided to DPI for restoration liability for NRE No1 mine - Rs.30.39 Crores (Previous Year - Rs.26.43 Crores). Restoration liability for the said liabilities has been accounted at their present value in the group's financial statements. State Bank of India bank guarantee of Rs.1.74 Crores (Previous Year Nil) has been provided to CBA to enable them to further issue a BG favoring Port Kembla Coal Terminal (PKCT) . State Bank of India bank guarantee of Rs.5.37 Crores (Previous Year - Nil) has been provided to Port Kembla Coal Terminal. State Bank of India bank guarantee of Rs.10.74 Crores (Previous Year - Nil) has been provided to WDS in relation to secure payments State Bank of India bank guarantee of Rs.5.37 Crores (Previous Year - Rs.4.67 Crores) has been provided to National Basketball League to provide corporate support for Wollongong Hawks to participate in National Basketball League. Capital Commitment - Rs.166.59 Crores (Previous Year - Rs.458.95 Crores) 27.2 Greenearth Resources & Projects Limited (formerly known as Austral Coke & Projects Limited) had filed a defamation suit in Hon'ble Bombay High Court against the Company for Rs.600 Crores. The Company had also filed Civil Suit in Hon'ble 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 suit filed by the Austral Coke & Projects Limited would be in favour of the company. 27.3 On 16 October 2007, the company and Armada Singapore Pte Ltd (“Armada”) entered into five year charter party agreement which provided, inter alia, for Armada to supply vessels to ship the company's tonnage, namely coal or coking coal from various destinations worldwide. Between late 2008 and early 2009, following the worldwide economic crisis, Armada experienced serious financial losses resulting into a large number of third party defaults under its shipping agreements. As a result, during the course of 2009 Armada entered into Judicial Management, a Singaporean insolvency regime. As a result of Armada's insolvency, the Company refused to make further nominations since there was no assurance or security for Armada's performance for the balance period under the agreement. Armada later on filed its claim submission in an arbitration proceeding against the company before Arbitration Tribunal in London. Although there was no specific clause on jurisdiction or applicable law in the agreement and also the constitution of Arbitration Tribunal was not in accordance with the agreement and even after the company's repetitive challenges to aforesaid, the Tribunal passed an order in favour of Armada assessing the liability of the company towards Armada as Rs. 42.85 Crores (including interest of Rs. 3.42 Crores). Aggrieved by the aforesaid order, the company has filed a civil suit against Armada with the Hon'ble High Court at Calcutta claiming for damages for an amount of Rs 144 Crores and cancellation of the aforesaid order being void and restraining Armada from giving any effect to the order passed by the Tribunal. Subsequently, an order was passed by the Hon'ble High Court at Calcutta restraining Armada to take any further steps to enforce the award passed by the Tribunal in India. The matter is presently sub judice before the Hon'ble High Court at Calcutta. 28 Gujarat NRE Resources NL(GNRNL) has entered into a joint venture (30% ownership), farm-in arrangement with Pluton Resources Limited (60%) & Southern Ocean Sciences Pty Ltd and John McDougall (10 %) which is managed by Pluton through joint venture exploration program and GNRNL has commenced pro rata cost contribution to the joint venture agreement. Cethana is prospective for gold and base metals. The Exploration License is located 50km South of Devonport on the north coast of Tasmania. Joint Venture IEL 29/2006 Cethana is not impaired and directors are of the opinion that the carrying value is the reasonable fair value of the asset.
67
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
29 Segment Informations: Segment wise Revenue, Results and Capital Employed for the Year ended 31st March, 2012. The group has three reportable segments i.e. “Coal & Coke”, “Steel” and “Mining” as primary business segments. i Primary Segment Reporting ( by Business Segment): (Rs. in Crores)
Particulars Coal & Coke Segment Revenue (Net Sales/Income from segment) External Sales Inter-Segment Revenue 1029.26 Less: Inter Segment Revenue Total Segment Revenue Segment Results before Tax, Extraordinary Items & Interest Add:- Other Un-allocable Income Net of Expenditure Less:- Interest Expense Less:- Provision for Tax Net Profit/(Loss) after Tax Assets Segment Assets* Un-allocable Assets Total Assets Liabilities Segment Liablities Un-allocable Liablities Total Liablities *including captive windmills Capital Expenditure Non Cash Expenses : Depreciation & Amortisation 26.66 29.69 93.88 20.71 29.32 168.07 6.84 78.88 368.47 6.74 1,429.14 955.15 82.55 625.31 1663.01 21.77 1684.78 7.44 132.85 393.64 5.85 588.02 397.92 71.82 375.16 844.90 202.68 1047.58 2,969.64 577.59 4,024.14 7571.37 576.04 8147.41 2,185.09 577.94 2,507.60 5270.63 1063.00 6333.63 1029.26 293.44 1029.26 342.92 1.65 344.57 1.65 342.92 14.82 26.21 909.56 935.77 909.56 26.21 2.77 1398.39 911.21 2309.60 911.21 1398.39 311.03 (112.04) 252.19 30.14 (83.34) 1296.81 252.07 1296.81 1296.81 297.90 2.16 300.06 2.16 297.90 14.78 217.92 720.99 938.91 720.99 217.92 6.30 1812.63 723.15 2535.78 723.15 1812.63 273.15 111.86 221.61 28.68 134.72 2011-12 Steel Mining Total Coal & Coke 2010-11 Steel Mining Total
ii
Secondary Segment Reporting ( by Geographical demarcation): Particulars India Segment Revenue Segment Assets Capital Expenditure 1,006.59 3,547.23 85.62 2011-12 Rest of the World 391.80 4,024.14 1,429.14 Total 1,398.39 7,571.37 1,514.76 India 1,253.69 2,763.03 138.70 2010-11 Rest of the World 341.02 2,507.60 588.02
(Rs. in Crores)
Total 1,594.71 5,270.63 726.72
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GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
30 Related Party Disclosures as required by Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India (ICAI), are given below: A. 1 2 3 4 5 6 7 1 2 3 4 5 1 B. Particulars of the Related Parties: Associates Bharat NRE Coke Ltd. NRE Metcoke Ltd. Bajrangbali Coke Industries Ltd. Surajbari Traders Pvt. Ltd. Dharwad Traders Pvt. Ltd. Mandvi Traders Pvt. Ltd. Lunva Traders Pvt. Ltd. Enterprises in which key management personnel have significant Influence Gujarat NRE Mineral Resources Ltd. Gujarat NRE Energy Resources Ltd. Russel Vale Traders Pvt. Ltd. Bulli Coke Ltd. Gujarat NRE Oil Ltd. Enterprise in which key management person is a trustee Girdharilal Arun Kumar Family Trust
Key Management Personnel 1 Mr. A. K. Jagatramka – Chairman & Managing Director 2 Mr. P. R. Kannan – Chief Financial Officer Relatives of Key Management Personnel Mrs. Mona Jagatramka Ms. Tanvee Jagatramka Transaction with Related Parties Particulars of Transactions Current Year 0.15 5.40 6.07 0.94 (Rs. in Crores) Previous Year 0.24 4.95 3.20 0.59
C
i ii iii
Sale/(Sales Return) of Goods/Services – Associates Purchase of Goods /Services – Associates Remuneration – Key Management persons – Relative of Key Management Personnel Share Warrant Deposit Received – Enterprises in which key management person has significant influence
iv
– 0.25 – 30.09 0.30 – 55.00 2,078.10 94.50
93.75 0.25 30.00 51.42 – 2.93 – 1062.73 170.55
v vi vii
Rent Paid – Enterprises in which key management person is a trustee Security Deposit Given – Associates Loans / Advance Given/(Refunded) – Associates – Enterprises in which key management person has significant influence Guarantees/Collateral Securities Outstanding as at the Year end – Given on behalf of Associates – Given by Associates on behalf of the Company – Given by Key Management Personnel on behalf of the Company – Given by Enterprises in which key management person has significant influence
viii
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GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
31.1 Directors of Gujarat NRE Limited after review & assesment of investment in Pike River Coke Ltd has determined that investment in Pike River Coke Ltd. has impaired and has been accordingly charged off fully in the Statement of Profit & Loss Account as Extraordinary item. 31.2 The indicators of impairment listed in paragraph 8 to 10 of Accounting Standard (AS)- 28 “Impairment of assets” issued by ICAI have been examined by the management and on such examination, it has been found that none of the indicators are present in the case of the Company's assets . A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss. 32 33 34 Exceptional items for the year ended 31st March'2012 represents the foreign exchange losses due to unusual diminution in the value of Rupee as against the US Dollar during the year. There are no amounts due and outstanding to be credited to Investors Education and Protection Fund as at 31st March 2012. The Revised Schedule VI has become effective from April 1,2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figure have been regrouped/reclassified wherever necessary to correspond with the current year's classification / disclosure.
70
GUJARAT NRE COKE LIMITED
Consolidated Cash Flow Statement for the year ended 31st March, 2012
(Rs. in crores) For the Year ended 31-Mar-12 CASH FLOW FROM OPERATING ACTIVITIES Net Profit/(Loss) Before Tax Adjustments for: Depreciation / Other non cash items Interest Paid / Payable Net Other Income Net Loss/(Profit) on Sale / Discard of Fixed Assets Net Loss/(Profit) on Sale of Investment Employee Stock Option - Compensation debited to Profit and Loss A/c Interest Received / Receivable Extra Ordinary Items Operating Profit before Working Capital Changes Adjustments for: Trade & Other Receivables Inventories Trade Payables Cash Generated from Operations Direct Taxes Paid / Refunds Net Cash Generated from Operating Activities B CASH FLOW FROM INVESTING ACTIVITIES Addition to Fixed Assets Sale of Fixed Assets Addition to Investments Sale of Investments Interest Received Dividend / Misc Income Net Cash used in Investing Activities C CASH FLOW FROM FINANCING ACTIVITIES Net Proceeds to Share Capital / Reserves Deposit against Share Warrant Increase in Long / Short term borrowing Interest Paid Dividend & Dividend Tax Paid Unamortised Expenses Net Cash Generated From Financing Activities Net Increase / (Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents (Opening Balance) Cash & Cash Equivalents (Closing Balance) In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board A (53.21) 153.73 236.66 (2.17) (0.01) 30.11 0.51 (9.20) 67.09 423.51 (225.99) (522.22) 771.34 446.64 (15.54) 431.10 (1,441.38) 0.28 – (13.86) 9.20 2.17 (1,443.59) 0.79 – 946.38 (235.12) (57.74) (8.32) 645.99 (366.50) 457.45 90.95 For the Year ended 31-Mar-11 163.38 218.59 221.61 (111.88) 0.16 (68.80) 1.16 (9.21) 23.62 438.63 (68.38) (212.03) 45.35 203.57 (26.55) 177.02 (750.28) 0.30 (174.52) 60.88 9.21 111.88 (742.53) 274.51 104.15 753.31 (203.30) (64.10) (4.48) 860.09 294.58 162.87 457.45
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
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GUJARAT NRE COKE LIMITED
Notes
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GUJARAT NRE COKE LIMITED Registered Office
22, Camac Street, Block-C, 5th Floor, Kolkata - 700 016 Phone : +91-33-2289-1471 Fax : +91-33-2289-1470 Email : [email protected] Investor Query : [email protected]
doc_997292853.pdf
Gujarat NRE Coke Annual Report 2011-12
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GUJARAT NRE COKE LIMITED
ANNUAL REPORT 2011-12
GUJARAT NRE COKE LIMITED
Corporate Information
BOARD OF DIRECTORS (As on 27th May, 2012) Mr. Girdharilal Jagatramka Mr. Arun Kumar Jagatramka Mrs. Mona Jagatramka Mr. Subodh Kumar Agrawal Mr. Chinubhai R Shah Dr. Basudeb Sen Dr. Mahendra Kumar Loyalka Mr. Murari Sananguly CHIEF FINANCIAL OFFICER Mr. P. R. Kannan COMPANY SECRETARY Mr. Manoj K Shah AUDITORS M/s. N. C. Banerjee & Co. Chartered Accountants, 2, Ganesh Chandra Avenue, Room No. 9, 1st Floor, Kolkata - 700 013 SOLICITORS & ADVOCATES M/s. L. P. Tiwari & Co. Emerald House, 4th Floor, 1B, Old Post Office Street, Kolkata - 700 001 BANKERS State Bank of India Bank of Baroda State Bank of Hyderabad Standard Chartered Bank Axis Bank Ltd. ICICI Bank Ltd. Tamilnad Mercantile Bank Ltd. Chairman Emeritus Chairman & Managing Director Director Director Director Director Director Director REGISTERED OFFICE 22, Camac Street, Block - C, 5th Floor, Kolkata - 700016, India Phone : +91-33-22891471 Fax : +91-33-22891470 Email : [email protected] Website : www.gujaratnre.com WORKS COKE 1) 2) 3) Village Dharampur, Khambhalia, Jamnagar, Gujarat, India Village Lunva, Bhachau, Kutch, Gujarat, India Road No. 16, 1st Cross, KIADB, Belur Industrial Area, Dharwad, Karnataka, India
STEEL Village Lunva, Bhachau, Kutch, Gujarat, India REGISTRAR & SHARE TRANSFER AGENT M/s. Niche Technologies (P) Ltd. D-511, Bagri Market, 5th Floor, 71, B. R. B. Basu Road, Kolkata - 700 001 Phone : +91-33-2235-7270 / 7271 Fax : +91-33-2215-6823
The Ministry of Corporate Affairs has taken a “Green Initiative in Corporate Governance” allowing paperless compliances by Companies and has issued circulars stating that service of notice/documents/annual reports can be sent by email to its members. To support this initiative in full measure, members who have not registered their email address so far, are requested to register their email address, in respect of electronic holdings with their concerned Depository Participants immediately. Members who hold shares in physical segment are also requested to immediately register their email address with Registrar & Share Transfer Agent of the Company.
Contents
Directors' Report 1 Annexure to the Directors' Report 4 Corporate Governance Report 9 Auditors' Certificate on Corporate Governance
18
Management Discussion and Analysis
19
Managing
Director (CEO) and Chief Financial Officer (CFO) Certification 21 Auditors' Report 22 Balance Sheet
24 Statement of Profit & Loss 25 Notes to the Financial Statements 26 Cash Flow Statement 47 Statement under Section 212 relating to Subsidiary Companies 48 Particulars of Subsidiary Companies 49 Auditors' Report on Consolidated Financial Statements 49 Consolidated Balance Sheet 50 Consolidated Statement of Profit & Loss 51 Notes to the Consolidated Financial Statements 52 Consolidated Cash Flow Statement 71
GUJARAT NRE COKE LIMITED
Directors’ Report
To The Members, Your Directors have pleasure in presenting the Twenty-Fifth Annual Report and the Audited Financial Results on the business and operations of the Company for the financial year ended on March 31, 2012. FINANCIAL RESULTS/HIGHLIGHTS Rs. in crores 2011-12 Income from Operations Less : Finance Cost Less : Depreciation Profit before Tax & Exceptional Items Less : Exceptional Items Profit before Tax Less : Provision for Taxation Profit after Tax Add : Balance brought forward Amount available for appropriation Less : Appropriations Transferred to(+)/from(-) General Reserve Dividend and Dividend Tax for earlier year Proposed dividend on equity shares Corporate Tax on Dividend Debenture Redemption Reserve Balance carried to Balance Sheet REVIEW OF OPERATIONS Indian economy during the year under review, went through one of its most challenging phases in last two decades with slow growth, runaway inflation, high interest rates, falling industrial output, depreciating rupee, adverse balance of payments position and last but not the least, global uncertainty, severely hurting economic activities. Indian steel industry after witnessing a modest recovery during the previous financial year, went into a slump during 2011-12 being confronted with a series of impediments such as iron ore mining issues and its limited availability, flat demand prevailing throughout 2011-12 on account of compounding effect of slow economic growth, etc. This had a major impact on the operations of merchant metcoke producers in India like our Company, as steel industry is the largest consumer of the coking coal and metcoke. However, it is believed that with India investing heavily in infrastructure and allied industries, the demand for steel and consequently for metcoke is bound to rise in the coming years. The Company reported income from operations amounting to Rs.331.00 Crores during the year under review as compared to Rs 336.00 Crores during the previous year as a consequence of flat demand. The net profit after tax earned during the financial 331.00 208.57 56.77 65.66 60.13 5.53 2.44 3.09 22.75 25.84 2010-11 336.00 161.12 50.44 124.44 0.00 124.44 21.79 102.65 5.95 108.60 year ended 31st March, 2012 was reported at Rs. 3.09 crores due to the adverse impact of depreciation in value of rupee as well as slow economic growth during the year under review, as compared net profit after tax of Rs. 102.65 crores reported during the previous year. DIVIDEND There being inadequacy/absence of profit for payment of dividend for the year under review, the Board unanimously decided to recommend payment of dividend considering the dividend track record of the Company by utilizing the balance lying to the credit of Profit & Loss Account and/or General Reserve in accordance with the provisions of Companies (Declaration of Dividend out of Reserves) Rules, 1975. Accordingly, the Board recommends payment of dividend of Re.0.50 per Equity Share of Rs.10 each (5%) and Re.0.50 per “B” Equity Share of Rs.10 each (5%) respectively, for the year ended 31st March 2012 subject to the approval of members of the Company and Ministry of Corporate Affairs. The total payout towards the said dividend will amount to Rs.33.55 crores (approx. with dividend tax) for the year under review as compared to Rs. 67.10 crores (with dividend tax) for the previous year. TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND In terms of Sections 205A & 205C of the Companies Act, 1956, the company since the previous Directors Report, had transferred a sum of Rs. 12,21,329.00 (Rupees Twelve lacs, twenty-one thousand three hundred twenty nine only) for 2nd interim dividend 2003-04, Rs.4,31,199.00 (Rupees Four lacs, thirty one thousand, one hundred ninety nine only) for final dividend 200304 and Rs.6,49,498.50 (Rupees Six lacs, forty-nine thousand, four hundred ninety eight & paise fifty only) for 1st interim dividend for 2004-06 to the Investor Education & Protection Fund (IEPF) created by the Central Government, since these dividend remained unclaimed for a period of 7 years. The Company had also transferred a sum of Rs.1,28,275.50 (Rupees one lac, twenty eight thousand, two hundred seventy five & paise fifty only) towards final dividend for the year 2003-04 paid by erstwhile FCGL Industries Ltd (since merged with the company) to the IEPF during the year under review. ISSUE OF EQUITY The Company allotted 1,74,07,793 Equity Shares of Rs.10 each at a premium of Rs.34.64 per share and 17,40,778 “B” Equity Shares of Rs. 10 each during the year under review consequent upon conversion of 174 (one hundred seventy-four) Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of USD 100000 each issued in 2006 and with this conversion the entire series of these FCCBs stands converted to equity shares of the company. The Company also allotted 52,280 Equity Shares of Rs.10 each at a premium of Rs. 13.86 per share and 5,228 “B” Equity Shares of Rs. 10 each as bonus shares upon conversion of Options issued under Employee Stock Option Scheme, 2005 and 21,700 Equity Shares of Rs. 10 each at a premium of Rs.8.05 per share and 2,170 “B” Equity Shares of Rs. 10 each as bonus shares upon conversion of Options issued under 2nd Tranche of GNCL Employee Stock Options Scheme 2007 during the year under review.
-10.80 0.00 28.87 4.68 3.09 0.00
0.00 0.00 57.73 9.37 18.75 22.75
1
GUJARAT NRE COKE LIMITED
Directors’ Report (Contd.)
NON-CONVERTIBLE DEBENTURES During the year under review, the company redeemed NonConvertible Secured Redeemable Debentures (NCDs) amounting Rs. 25 crores which were issued to Life Insurance Corporation of India (LIC) as per the terms of issue of these debentures. The NCDs outstanding at the end of the year under review, aggregated to Rs. 375 crores comprising of Qualified Institutional Placement (QIP) issue of NCDs amounting Rs.250 crores issued during the year 2010-11 and the balance comprising of NCDs issued to LIC and nationalised banks in the years prior to 2010-11. LISTING Both the Equity Shares and “B” Equity Shares of your Company are listed at the National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Nonconvertible Debentures of the company (including Debentures issued under QIP) are listed at Bombay Stock Exchange. The convertible warrants issued by the Company under QIP are also listed at both NSE and BSE. BUSINESS PLANS We believe that the current decade till 2020 would continue to be interesting and exciting, similar to the one that has gone by. Coking Coal and metcoke are going to be in huge demand with steel demand rising, as Indian economy grows with investments in infrastructure and other industries. We are in a sector which is one of the most lucrative business possible in the current times. We have everything going for us, a well developed market, and a global mismatch of demand and supply with demand outstretching supply. Our company has an irrefutable advantage of secured supply of excellent quality raw materials, a dedicated team and most importantly a supportive share holder family, making us the undisputable leader in our business with strong fundamentals. During the year under review, the company through its Australian subsidiary(ies) took an important step towards achieving its plan for ramping up coking coal production at Australian mines to above 5 MTPA (million tonnes per annum) by 2015-16 by installing longwall mining machinery at one of its mines i.e. at NRE No 1 after receiving necessary Departmental approval. Steps have also been initiated for expanding the production capacity of metcoke in India and we expect to raise the production capacity to around 4 MTPA in the next 4 years. The Company is presently generating power through non polluting method i.e. through wind turbine generators having capacity to generate 87.5 MW. Further, the projects for generation of power having an aggregate capacity of 60 MW, from waste heat emanating from the Company's coke oven plants are at various stages of completion. SUBSIDIARIES The Company has two Indian Subsidiaries and nine Australian Subsidiaries at the close of the financial year under review. The consolidated financial statements presented by the company and annexed to the Annual Report 2011-12 include the financial information of the subsidiaries prepared in accordance with the applicable accounting standard. The Ministry of Corporate Affairs vide its circular no 2/2011 dated 8th February 2011 has granted a general exemption under Section 212(8) of the Companies Act 1956, from attaching the Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies to the balance sheet of any company upon compliance of certain conditions. As the company is in compliance with the said circular and as per consent of Board through a resolution, the Balance Sheet, Profit & Loss Account and other documents of the subsidiaries are not attached to this Annual Reports & Accounts. However, the annual accounts of the subsidiary companies and related detailed information shall be made available to the shareholders of the company and its subsidiaries seeking such information in writing at any point of time. The annual accounts of the subsidiary companies are available at Registered Office of the Company during the working hours and also available at the respective offices of the Subsidiary companies. FINANCIAL OBLIGATIONS The Company has been regular in the payment of interest and/or repayment of loans to financial institutions and/or banks or in meeting its other financial obligations during the year under review. CORPORATE GOVERNANCE In compliance with the requirements of clause 49 of the Listing agreement with Stock Exchanges, a Report on 'Corporate Governance' as on 31st March, 2012 and a Report on Management Discussions and Analysis are annexed to and forms a part of this Report. Chairman & Managing Director (CEO) and Chief Financial Officer (CFO) have certified to the Board with regard to the financial statements and other matters as required by the aforesaid clause of the listing agreement and the said certificate is also annexed to and forms a part of this Report. EMPLOYEE STOCK OPTION SCHEME The Company had granted 11,15,000 options under Employee Stock Option Scheme 2005 (ESOP 2005) against the authority from shareholders to grant 11,75,000 options. The employees/Directors of the company exercised 8,24,148 options during the exercise period. The validity of the said scheme expired on 12th January 2012 and accordingly, the outstanding options under the scheme have also expired. The Company had granted 60,29,000 options to its Employees/Directors through three different tranches under GNCL Employee Stock Options Scheme 2007 (ESOP 2007) till the end of previous year. A fourth tranche of options aggregating 35,60,000 were granted under ESOP 2007 to the Employees/Directors of the company during the year under review. The Company has therefore granted a total of 95,89,000 options under various tranches of ESOP 2007 Scheme till 2011-12 against the approval received from shareholders to grant upto 1,21,95,302 options under the said Scheme. As required by clause 12 of the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999, the disclosures with regard to Stock Options in respect of GNCL Employee Stock Option Scheme 2007 as on 31st March, 2012 are given in an Annexure to this Report.
2
GUJARAT NRE COKE LIMITED
Directors’ Report (Contd.)
The Company has received a certificate from the Auditors that the aforesaid Scheme has been implemented in accordance with SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be available at 25th Annual General Meeting for inspection by the shareholders. DIRECTORS Dr Mahendra Kumar Loyalka and Mr Murari Sananguly, Directors of the Company retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment in terms of the Articles of Association of the Company. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements under Section 217(2AA) of the Companies Act, 1956 with respect to Directors' Responsibility Statement, your Directors confirm having i) Followed in the preparation of the annual accounts the applicable accounting standards with proper explanation relating to material departures, if any; ii) Selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the year under review and of the profit of the Company for the year ended on that date; iii) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud or other irregularities; and iv) prepared the annual accounts on a 'going concern basis. AUDITORS M/s. N. C. Banerjee & Co., Chartered Accountants, the Statutory Auditors hold office upto the forthcoming Annual General Meeting of the Company and are eligible for reappointment i.e. to audit the Accounts of the Company for the financial year 2012-13. In compliance with the provisions of Section 224(1B) of the Companies Act, 1956, the Company has received written confirmation from M/s. N C Banerjee & Co., that their reappointment as Auditors, if made, would be in conformity within the limits prescribed in the said Section and that they are not disqualified from being appointed as the Auditors of the Company within the meaning of Section 226 of the said Act. AUDITORS' REPORT The observations of the Auditors in their Report read with relevant notes on the accounts, as annexed are self-explanatory and need no elaboration. COST AUDIT Cost Audit Branch of the Ministry of Corporate Affairs vide its order no 52/26/CAB-2010 dated 30th June 2011 has made it mandatory for company(ies) which is/are engaged in production of steel products to appoint a Cost Auditor to audit cost records of steel plant/unit(s) for the financial year 2011-12. Our Company has For and on behalf of the Board accordingly, appointed M/s B Mondal & Co., Practicing Cost Accountants as Cost Auditor under the provisions of Section 233B of the Companies Act, 1956, to audit the cost records of steel plant located at Bhachau in the State of Gujarat for the financial year 2011-12. PUBLIC DEPOSITS The Company has not accepted or renewed any Public Deposits, as defined under Section 58A of the Companies Act, 1956, during the year under review. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information on Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 forms a part of this Report as an Annexure. A copy of the said Annexure is annexed hereto. PARTICULARS OF EMPLOYEES The information on Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 in respect of employees of the Company forms a part of this Report as an Annexure. A copy of the said Annexure is annexed hereto. PERSONNEL / INDUSTRIAL RELATIONS The Company maintained cordial and harmonious relations with its workers/employees at all levels at the offices and plants of the Company and its subsidiaries throughout the year under review. APPRECIATION We wish to acknowledge the understanding, support and services of our workers, staff and Executives which has largely contributed to efficient operations and management of the Company during the year under review. We also take this opportunity to express our deep sense of gratitude to all our customers, dealers, suppliers, bankers, government officials and all other business associates for their continuous guidance and support to the Company and their continued confidence in its management. We also take this opportunity to express our sincere thanks to our shareholders and debenture holders for the confidence and faith in our company.
Place : Kolkata Dated : 27th May, 2012
Arun Kumar Jagatramka Chairman & Managing Director
3
GUJARAT NRE COKE LIMITED
Annexure To The Directors’ Report
Information as required under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 A. CONSERVATION OF ENERGY (a) Energy Conservation measures taken: The Company continued to give major emphasis for conservation of energy, and the measures taken in the previous year were continued. The efficiency of Energy Utilization at each plant is monitored at the respective plant level every quarter, in order to achieve effective conservation of energy. The significant Energy conservation measures during the year were as follows l
(d) Total energy consumption and energy consumption per unit of Production: As per Form-A annexed B. TECHNOLOGY ABSORPTION (a) Efforts made in technology absorption: As per Form-B annexed. C. FOREIGN EXCHANGE EARNINGS AND OUTGO (a) Activities relating to export, initiative taken to increase exports; development of new export markets for products and services; and export plans: The exports of the Company during the year under review was Rs.347.75 crores as compared to Rs 321.58 crores amount in the previous year. Exports were made to countries such as Brazil, Malaysia etc. during the year under review and efforts are being made to explore the possibilities of increasing the volumes through penetrating new markets. (b) Total foreign exchange used and earned (Amount) : (Rs. in crores) Current Year Previous Year Total Foreign exchange earning Total Foreign exchange outgo FORM-A Disclosure of particulars with respect to Conservation of Energy for the year ended 31st March, 2012 A. POWER AND FUEL CONSUMPTION Current Year 1 Electricity a) Purchased - Units (kwh in Lacs)* - Total Amount (in crores)** - Rate (Rs./ Unit) b) Own Generation Through Diesel Generator - Units (kwh In Lacs) - Units per ltr. of Diesel Oil - Cost (Rs./ Unit) 2. Coal - Quantity (MT) - Total Cost (Rs. in crores) - Average Rate (Rs./ MT) 3. Furnace Oil - Quantity (K. Ltrs.) - Total Cost (Rs. in crores) 4. Others/Internal Generation 3858.45 14.63 Nil 4002.40 10.56 26,388.45 Nil Nil Nil Nil Nil Nil Nil 1.59 2.06 21.96 1.93 1.91 21.74 1019.69 20.21 1.98 1062.51 17.34 1.63 Previous Year 347.75 1097.16 321.58 1050.96
Use of Energy Efficient Lighting systems like low wattage sodium vapour lamps and CFL in place of high power mercury vapour lamps and fluorescent tube lights. Use of transparent roof sheets wherever possible to make use of natural lighting to avoid power lights in day time. switching off machines / equipment immediately after use and fixing of timers to avoid over usage of water pumps. Use of power capacitors to improve the Power factor . Creating awareness among employees about the necessity of energy conservation by celebrating energy conservation week.
l
l
l l
The Company continued to generate power through wind mills having a capacity of 87.5 MW during the year under review. The setting up of co-generation power plants at its coke plants at Bhachau and Khambhalia in the State of Gujarat and at Dharwad in the State of Karnataka for generating power using the gas emanating from its coke ovens is expected to be completed by 2012-13 at Dharwad and by 2013-14 at Bhachau and Khambhalia. (b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy: The Company is setting up co-generation power plants having aggregate capacity of 60 MW at its plants in the States of Gujarat and Karnataka at an investment of around Rs. 275 crores which are expected to be commissioned during 2012-13 & 2013-14. Such captive generation of power through co-generation power plants reduces use of power acquired from external agencies. Apart from this, the Company has also installed energy efficient equipment wherever required. (c) Impact of above measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods: The generation of power through alternate means such as wind mills provides power to the company at a rate lower than the market rates for purchasing power from power generating companies and thereby reducing the cost of production.
- Average Rate (Rs./ K.Ltr.) 37,919.72
4
GUJARAT NRE COKE LIMITED
Annexure To The Directors’ Report (Contd.)
B. CONSUMPTION PER UNIT OF PRODUCTION (MT) Current Year Coke Electricity (Kwh) Rolled & Alloy Steel Products Electricity (kwh) Coal (MT) Furnace Oil (K. Ltrs.) * ** 25.76 904.98 NIL 0.04 Previous Year 22.09 945.47 NIL 0.04 TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION 1. EFFORTS MADE : Efforts are being made towards improvements in the existing production process through indigenous methods. BENEFITS : a) b) 3. Improved quality and productivity. Conservation of fuel & reduced emissions.
2.
includes units through wind turbine generators. represents cost of Electricity purchased after adjusting generation through wind turbine generators.
PARTICULARS OF TECHNOLOGY IMPORTED DURING LAST 5 YEARS: (a) Technology imported (b) Year of import (c) Has technology been fully absorbed : NIL : N.A. : N.A.
FORM - B Form for disclosure of particulars with respect to technology absorption RESEARCH AND DEVELOPMENT (R&D) 1. SPECIFIC AREAS IN WHICH R&D CARRIED OUT BY THE COMPANY 2. BENEFITS DERIVED 3. FUTURE PLAN OF ACTION 4. EXPENDITURE ON R&D: (Rs. in Lacs) (a) Capital (b) Recurring (c) Total (d) Total R&D Expenditure as a Percentage of total turnover
(d) If not fully absorbed, areas where this has not taken place, reasons therefore and future plan of action
: N.A.
: None : Not Applicable. : None : NIL : NIL : NIL : N.A. For and on behalf of the Board of Directors
Place : Kolkata Dated : 27th day of May 2012
Arun Kumar Jagatramka Chairman & ManagingDirector
PARTICULARS OF EMPLOYEES AS REQUIRED UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956 AND FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED 31st MARCH' 2012 Employed throughout the year and were in receipt of remuneration in the aggregate, of not less than Rs.60 Lacs p.a. or employed for a part of the year and were in receipt of remuneration in the aggregate, of not less than Rs. 5 Lacs per month Name Mr. Arun Kumar Jagatramka Notes: 1) 2) 3) 4) Remuneration includes salary, commission, company's contribution to provident fund, gratuity and monetary value of perquisites. The appointment of Chairman & Managing Director is contractual. Terms and conditions of employees other than those aforesaid, are as per respective agreements and as per the Rules of the Company. Mr. A K Jagatramka is related to Mrs. Mona Jagatramka, Director of the Company within the meaning of Section 6 of the Companies Act, 1956. Apart from Mr A K Jagatramka, Chairman & Managing Director, no employee holds by himself or alongwith his/her spouse and dependant children, two percent or more of the equity shares of the company. For and on behalf of the Board of Directors Place : Kolkata Dated : 27th day of May 2012 Arun Kumar Jagatramka Chairman & ManagingDirector Designation & Nature of Duties Chairman & Managing Director (Managerial) Remuneration Received (Rs.) 1,63,60,121 Qualification Age & Experience (years) (years) B.Com [Hons.], FCA (Gold Medalist), 29Years 50 Date of Commencement of Employment 28.03.1997 Last Employment held with Designation None
5
GUJARAT NRE COKE LIMITED
Management Discussion & Analysis
INDUSTRY STRUCTURE & DEVELOPMENTS ECONOMY As the western economies seem to submerge in another recession, led by Greece, Italy & Portugal, India has not been able to isolate itself from the European crisis, with the economy registering one of the lowest growth figures recently in the last decade. The feel good factor is fast evaporating and doubts are being raised at some quarters on the future of Indian growth story. The perception of policy paralysis and reforms stagnation has been one of the prime reasons dampening the spirits of India Inc. However, the intrinsic strength of the Indian economy, buoyed by the demographic dividend and increased domestic consumption of the rising middle class is sure to bring the Indian economy back on track. Government of India, recognising the problems being faced by the Indian economy, has decided to put the economy back on the track by taking several macroeconomic decisions and by strengthening domestic growth drivers. Though no big bang reform is expected at this juncture given the various compulsions, however the government has started taking some steps like supporting infrastructure and construction through massive investments, fast-tracking implementation of various policy decisions, encouraging exports, etc, in an effort to arrest the slide in growth. WORLD COKING COAL AND METALLURGICAL COKE INDUSTRY Currently around 70% of global steel is produced in BOF's, and approximately 600 to 750 kg of coking coal is required to produce one ton of steel. As coking coal is primarily used in the production of steel, demand comes from countries that are large steel producers. China being the largest producer of steel, much of global coking coal and met coke supply and demand dynamics depend on how Chinese demand shapes. China imported only 7 MT (million tonnes) in 2008, yet imported approximately 46 MT in 2009 and 43 MT in 2010 and 2011 (through land & sea). It is believed that as per conservative estimates of World Steel Association on China's future steel production, China would import around 45-50 MT in the next couple of years, with Macquarie Bank forecasting that Chinese imports of coking coal will rise to 57 MTPA by 2015. The ongoing shortage of coking coal, driven in particular by continued strong demand from China and increasingly India, will support prices, which will on average, remain firm or increased from its present levels. Hard coking coal, for which there are few substitutes in coke making, is the highest quality coking coal and thus commands a premium price. Following the same trend as that of coking coal, the met coke market is also characteristic with supply lagging behind demand. Though no real shortage is expected this year round due to subdued economic activity, however, the closure of units in Europe would have to be filled with supplies from Ukraine, Russia and Columbia. With China also out of global trade, Indian merchant coke producers are presented with an opportunity to tap the global demand. However, with economic activity resuming, and global demand of imported met coke rising to the pre 2009 levels of 25-30 MTPA, the supply would be severely strained in absence of Chinese coke, which would subsequently have positive impact on the prices. DOMESTIC COKING COAL & MET COKE INDUSTRY According to World Steel Association, India produced over 72 MT of steel in 2011 becoming the fourth largest producer of steel in the world. According to projections of Ministry of Steel, Government of India, we might become the second largest producer of steel by 2015-16, producing around 120 MTPA. India's coking coal import requirement might rise to over 50 MTPA from present levels of 35 MTPA by then. Securing coking coal supply has been one of the biggest challenges of Indian steel makers. The country has been experiencing a subdued economic activity and a lower industrial growth for around a year. Coupled with it the iron ore mining issues in South India has further resulted in lower steel production and consequently low demand of met coke. However domestic demand has improved since April 2012 with some huge demands from big steel producers which has resulted a near shortage in domestic market of coke and this supply constrain in domestic met coke may continue till the year end. OPPORTUNITIES & THREATS The demand supply gap across the globe for metcoke is significantly attracting more players to enter this segment to reap the benefits. However, shortage in availability of crucial raw material i.e coking coal has restricted the entry of new suppliers making the market skewed in favour of the suppliers. Therefore, organisations owning large metcoke production capacities with strong linkages for raw material sourcing can withstand the competition in the global met coke market with huge opportunities to expand their business. The future of metcoke industry is heavily reliant on the future of steel industry as steel is the major consumer of metcoke globally with majority of steel still being produced through blast furnace route. Therefore, any slump in steel industry would adversely affect metcoke industry. Metcoke industry is also impacted by availability of crucial raw material i.e coking coal with its global supply generally determining the prices of both coking coal and metcoke. The domestic metcoke industry is also heavily reliant on global supplies and generally moves in tandem with global metcoke market. The global financial and economic events also play a very crucial role in determining the future of metcoke industry as has been observed during last few years. COMPANY'S PERFORMANCE The company's performance during the year under review was affected due to prevalence of flat market conditions and substantial devaluation of rupee as compared to US dollar. The income from operations was marginally lower at Rs. 331.00 crores in the year under review as compared to Rs.336.00 crores during the previous year. However, due to the effect of devaluation of Rupee and prevalent higher interest cost, the net profit during the year under review was consequently lower at Rs. 3.09 crores as compared to Rs. 102.65 crores during the previous year. Accordingly, the Basic & Diluted earnings per share of the Company were reported at Rs.0.05 and Rs.0.05 respectively, for the year under review as compared to Rs.1.85 and Rs.1.82 during the previous year.
19
GUJARAT NRE COKE LIMITED
Management Discussion & Analysis (Contd.)
SEGMENT WISE PERFORMANCE & OUTLOOK Coal & Coke Coking coal and Coke segment has been at the core of the operations of the Company contributing around 75% of the total turnover during the year under review. Net Sales/income from this segment for the year under review amounted to Rs. 1029.26 crores as compared to Rs.1296.81 crores in the previous year. Steel Steel segment contributes around 25% to the total turnover. It achieved a turnover of Rs. 342.92 crores during the year under review as compared to Rs.297.90 crores during previous year. The Company is generating power through its Wind Turbines. This helps the Company to reduce its power costs and ensures regular supply of clean power to its production facilities. Outlook The year 2011-12 began with hardening of coking coal and consequently the met coke prices due to floods in Australia and declaration of force majure by BHP Billiton for Industrial dispute which is the largest supplier of coking coal used mainly for production of met coke. As the year progressed, the global met coke market was affected by various global factors such as eurozone crisis, dampening the economic sentiments across the globe and by the end of the year, the prices had softened substantially. However, continuation of Chinese embargo on met coke exports coupled with supply constraints due to limited availability of coking coal globally and shutting down of met coke producing capacities in Europe and North America are expected to create supply constraints for met coke once the world economy recovers. RISKS & CONCERNS Our businesses and operations are subject to a variety of risks and uncertainties which are similar to any other company in general and also common to the industry to which we belong. Some of the key risks and uncertainties affecting the company are set forth below. Any of these risks has the potential of causing the actual operating results in future to vary materially from the current results or from anticipated future results. a) Commodity Price Risk : The Company is exposed to the risk of price fluctuations on raw materials and finished goods. However, considering the normal correlation in the prices of raw material i.e coking coal and finished good i.e. met coke, this risk gets reduced/adjusted over a period of time. c) Forex Risk : The company like any other company operating in global markets is subject to Forex Risk. The Company however, has a policy to hedge its foreign exchange risk within the defined parameters. As imports (raw materials etc.) exceed exports or vice versa, the Company suitably hedges the differential from time to time to appropriately manage the currency risk. However, such hedging does not assure avoidance of any losses due to sudden and/or substantial volatility in currency markets.
d) Risk from Natural Calamities: Any act of nature detrimental to the smooth functioning of the mining of Coking coal in Australia as well as production of metallurgical coke in India, can adversely affect the performance of the Company. INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY Your Company has adequate internal controls for its business processes across plants and offices to ensure efficient operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions. The Company also has an internal audit system which is conducted by an independent firm of Chartered Accountants as well as a strong Inhouse Internal Audit Cell so as to cover various operations on regular basis throughout the year. Summarized Internal Audit Observations/Reports are reviewed by the Audit Committee on a regular basis. The finance and accounts functions of the Company are well staffed with qualified and experienced members. HUMAN RESOURCES Your company considers its people at its most important resource. All employees of Gujarat NRE are considered leaders and encouraged to take responsibility to do their best that they can while meeting business needs. Our strength lies in our human pool of resources and our success is largely dependent on them. The Company therefore, focuses on developing its talent pool and its employee capability through increased emphasis on learning and skill upgradation job rotation, multi skilling and inter plant sharing of experiences. Critical skills identification and ramp up planning continues at the operating level. The Company continuously reviews its policies/practices with a view to make them more contemporary and uniform in application and this is an ongoing process. To improve quality of work life, medical, transport facilities, welfare and recreational facilities have been reviewed and upgraded. All these efforts had an impact on reducing the attrition levels at our plants and offices. Cordial industrial relations prevailed across the Company and its subsidiaries during the year under review. CAUTIONARY STATEMENT The statement in this Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward-looking statement' within the meaning of applicable securities laws and regulations. These statements being based on certain assumptions and expectations of future events, actual results could differ materially from those expressed or implied. The Company assumes no responsibility whatsoever, in this regard.
b) Production Risk : Coking coal, the critical raw material required for manufacture of met coke is in short supply internationally resulting in uncertainty in its availability and consequently, its prices. Timely availability of raw material at reasonable prices is therefore, critical for survival in this industry. The Company's strategy of backward integration by acquiring coking coal mines in Australia helps in minimising the effect of volatility in prices and secures availability of premium quality hard coking coal.
20
GUJARAT NRE COKE LIMITED
Managing Director (CEO) & Chief Financial Officer (CFO) Certification
We, Mr. Arun Kumar Jagatramka, Chairman & Managing Director and Mr. P R Kannan, Chief Financial Officer certify that: 1) We have reviewed the Financial Statements and the Cash Flow Statements for the year ended 31st March 2012 and to the best of our knowledge and belief : a) These statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading; These statements together present a true and fair view of the company's affairs and are in compliance with existing Accounting Standards, applicable laws and regulation. 4) We have disclosed based on our most recent evaluation, wherever applicable, to the Company's Auditors and the Audit Committee that a. there has not been any significant change in internal control over financial reporting during the year under reference; there has not been any significant change in the accounting policies during the year requiring disclosure in the notes to the financial statements; and we are not aware of any instance during the year of any significant fraud with involvement therein of the management or any employee having a significant role in the company's internal control system over financial reporting.
b.
b)
c.
2)
To the best of our knowledge and belief, no transactions entered into by the company during the year, which are fraudulent, illegal or violative of the company's code of conduct. We accept responsibility for establishing and maintaining internal controls for financial reporting and that we have evaluated the effectiveness of internal control systems of the company pertaining to financial reporting. We have disclosed to the Auditors and the Audit Committee, any deficiencies in the design or operation of such internal controls of which we are aware and the steps that have already been taken or proposed to be taken to rectify these deficiencies.
5)
3)
We further declare that all board members and senior management personnel have affirmed compliance with the Code of Conduct during the year under review.
A K Jagatramka P R Kannan Place : Kolkata Chairman & Chief Date : 26th May, 2012 Managing Director Financial Officer
21
GUJARAT NRE COKE LIMITED
Auditors’ Report
To the members of Gujarat NRE Coke Ltd. 1. We have audited the attached Balance Sheet of Gujarat NRE Coke Limited as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of books and records of the company as we considered appropriate and according to the information and explanations given to us , we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: (a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; Place : Kolkata Dated : 27th May, 2012 A Paul (Partner) Membership No. 06490 (d) (c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956 to the extent applicable; On the basis of written representations received from the directors as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as at March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant accounting policies and notes appearing thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012; (ii) in the case of the Statement of Profit and Loss of the profit for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date. For N.C.Banerjee & Co. Chartered Accountants (Firm’s Registration No. : 302081E)
(e)
2.
(f)
3.
4.
(b)
Annexure referred to in paragraph 3 of Audit Report of even date to the members of Gujarat NRE Coke Ltd. for the year ended 31st March 2012.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. We were informed that the Company has a phased programme of physical verification of all its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, fixed assets required to be verified were physically verified by management during the period under review and no material discrepancies were noticed on such verification. Fixed assets disposed off during the year under review were not substantial and therefore do not affect the going concern status of the company. During the year inventories have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (iii) (c) The Company is maintaining proper records of inventory. The discrepancies noticed during the physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.
(b)
In our opinion and according to the information and explanations given to us, the company has not granted or taken loans, Secured or Unsecured, to/from the companies, firm or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 consequently clause 4 (iii) of the order is not applicable to the company. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. No major weakness in internal control system was observed. (a) According to the information and explanations given to us, we are of the opinion that particulars of all the transactions made in pursuance of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.
(iv)
(c)
(ii)
(a)
(v)
(b)
22
GUJARAT NRE COKE LIMITED
Annexure to Auditors’ Report (contd.)
(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. maintained. We have not, however, carried out a detailed examination of such records with a view to determine whether they are accurate or complete. (ix) (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with appropriate authorities during the year under review. The Central Government has not notified the date for collection cess under Rehabilitation & Revival fund as per Section 441 A of the Companies Act, 1956. (b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty and Excise duty were in arrear as at 31st March, 2012, for a period of more than six months from the date they became payable except Dividend Distribution Tax amounting to Rs. 9.37 Crores which has since been deposited.
(vi)
In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable to the Company. In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.
(vii)
(viii) We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been (c)
According to the information and explanations given to us and the records of the company examined by us, there were no dues in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess that have not been deposited with the appropriate authorities on account of any dispute other than those as mentioned here-in-below: Name of the statute Income Tax Act, 1961 Nature of Dues Regular Assessment Amount (Rs./Crores) 8.29 Period to which the amount Relates 2005-06, 2006-07, 2007-08, 2008-09 Forum where/ disputes are pending Income Tax Appellate Tribunal, Kolkata/ Commissioner of Income Tax (Appeals), Kolkata Chapter V & VA of Finance Act, 1994 (Act 32 of 1994) The Customs Act, 1962 Service Tax 0.06 Oct'07 - Mar'08 Custom, Excise and Service Tax Appellate Tribunal, Ahmedabad. Custom, Excise and Service Tax Appellate Tribunal, Ahmedabad.
Custom Duty
2.55
2004, 2005, 2008, 2010
(x)
The Company does not have accumulated losses at the year ended 31st March, 2012 and has not incurred cash losses during the year under review and in the immediately preceding financial year. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its banks or to any financial institutions or debenture holders. According to the explanation given to us and based on the information available, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion and according to the information and explanations given to us, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of Clause (xiii) of paragraph 4 of the Order are not applicable to the Company.
account, the term loans were applied for the purpose for which such loans were obtained. (xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment. (xviii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year. (xix) The Company has not issued any debentures during the year. (xx) The company has not raised any money by public issues during the year under review.
(xi)
(xii)
(xiii)
(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments have been held by the company in its own name except to the extent of exemption granted under section 49 of the Companies Act, 1956 (xv) In our opinion and according to the information and explanations given to us, the terms and conditions, on the basis of which the Company has given guarantees for loans taken by the subsidiary companies from banks or financial institutions, are not as such prima facie prejudicial to the interests of the Company.
(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year. For N.C.Banerjee & Co. Chartered Accountants (Firm’s Registration No. : 302081E)
(xvi) In our opinion and according to the information and explanations given to us and on the basis of our examination of the books of
Place : Kolkata Dated : 27th May, 2012
A Paul (Partner) Membership No. 06490
23
GUJARAT NRE COKE LIMITED
Balance Sheet As at 31st March, 2012
(Rs. in Crores) Notes EQUITY AND LIABILITIES Shareholders' Funds Share Capital Reserves & Surplus Money received against Share Warrants Foreign Currency Convertible Bonds Non-Current Liabilities Long Term Borrowings Deferred Tax Liability (net) Long Term Provisions Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions 4 5 6 2 3 577.37 910.33 104.15 1,591.85 – 756.91 160.65 7.74 925.30 7 8 9 10 TOTAL ASSETS Non-Current Assets Tangible Fixed Assets Capital Work-in-Progress Non-Current Investment Long Term Loan & Advances Current Assets Current Investment Inventories Trade Receivables Cash & Cash equivalents Short Term Loan & Advances 11 11 12 13 925.12 171.05 743.29 273.63 2,113.09 14 15 16 17 18 TOTAL 1 to 39 – 1,589.29 209.99 68.80 534.31 2,402.39 4,515.48 Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board 943.36 123.99 743.29 370.32 2,180.96 5.00 1,052.94 158.22 84.16 453.53 1,753.85 3,934.81 692.06 790.52 471.53 44.22 1,998.33 4,515.48 558.14 882.98 104.15 1,545.27 77.71 661.62 158.68 93.08 913.38 599.07 433.74 273.35 92.29 1,398.45 3,934.81 As at 31st March, 2012 As at 31st March, 2011
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
24
GUJARAT NRE COKE LIMITED
Statement of Profit & Loss For the year ended 31st March, 2012
(Rs. in Crores) Notes INCOME Revenue from Operations Other Income Total Revenue: EXPENDITURE Cost of Materials Consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Goods, Stock-in-Process and Stock in Trade Employees Benefits Expenses Finance Costs Depreciation Other Expenses Total Expenses: Profit before Exceptional Items & Tax Exceptional Items Profit before Tax Tax Expenses – Current Tax – Deferred Tax – MAT Credit Entitlement – Tax for Earlier Years Profit after Tax for the year Basic Earnings per Equity & “B” Equity Share (in Rs.) [Face Value Rs. 10 per shares] Diluted Earnings per Equity & “B” Equity Share (in Rs.) [Face Value Rs. 10 per shares] Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board 1 to 39 1.11 1.97 (1.10) 0.46 3.09 0.05 0.05 24.81 18.10 (21.19) 0.07 102.65 1.85 1.82 36 22 23 24 11 25 21 1,285.50 – (440.91) 54.58 208.57 56.77 170.10 1,334.61 65.66 60.13 5.53 1,045.90 118.87 (36.03) 44.30 161.12 50.44 166.86 1,551.46 124.44 – 124.44 19 20 1,372.18 28.09 1,400.27 1,594.71 81.19 1,675.90 For the year ended 31.03.2012 For the year ended 31.03.2011
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
25
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012
1. i. SIGNIFICANT ACCOUNTING POLICIES 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. On time proportion basis taking into account the amount outstanding and the rate applicable. When the services are performed as per contract. When right to receive payment is established. On Settlement of Claims When right to receive payment is established.
b. c. d. e. f.
In respect of Interest Income In respect of Service Income In respect of Dividend Income In respect of Insurance Claims In respect of Guarantee Commission
: : : : :
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. b. c. d. Raw Materials Finished Products Stores, Spares and Components Stock in process : : : : At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower 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. 3. vii. Inventories are valued on FIFO basis. Variation, if any, between books and physical stocks detected on physical verification, obsolete & slow moving stocks are adjusted in accounts as found appropriate.
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.
26
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
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 nonmonetary 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.
27
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
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) (ii) xv. Deferred Revenue Expenses-5 years Deferred Employees Compensation under ESOS-Amortised on straight line basis over vesting period.
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.
28
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 2 SHARE CAPITAL DESCRIPTION AUTHORISED : 1,60,00,00,000 Equity Shares (Previous Year 1,60,00,00,000) of Rs. 10/- each 10,00,00,000 “A” Equity Shares (Previous Year 10,00,00,000) of Rs.10/- each Carrying 100 Voting Rights per “A” Equity Share 30,00,00,000 “B” Equity Shares (Previous Year 30,00,00,000) of Rs.10/- each Carrying 1 Voting Right per 100 “B” Equity Shares 1,600.00 100.00 300.00 2,000.00 ISSUED,SUBSCRIBED AND PAID-UP : 52,48,80,127 Equity Shares of Rs.10/- each fully paid up, ( Previous year 50,73,98,354) 5,24,88,010 "B" Equity Shares of Rs.10/- each fully paid up, ( Previous year 5,07,39,834) 524.88 52.49 577.37 507.40 50.74 558.14 1,600.00 100.00 300.00 2,000.00 As at 31st March, 2012 As at 31st March, 2011
2.1
Of the above Shares: As at 31st March, 2012 Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued as fully paid Bonus Shares in the last five years. "B" Equity Shares out of the issued, subscribed and paid up "B" Equity Share Capital were issued as fully paid Bonus Shares in the last five years. Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued in the last five years for consideration other than Cash pursuant to a scheme of amalgamation 134,834,154 52,488,010 –
(No of Shares) As at 31st March, 2011 256,787,175 50,739,834 20,684,205
2.2
The Details of Shareholders holding more than 5% of shares: Name of the Shareholders As at 31st March, 2012 No of Shares Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund “B” Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund Arun Kumar Jagatramka Trustee, Girdharilal Arun Kumar Family Trust 16,675,913 2,731,594 2,779,125 31.77% 5.20% 5.29% 16,675,913 2,731,594 2,779,125 32.87% 5.38% 5.48% 192,578,554 32,308,462 36.69% 6.16% 191,859,138 32,308,462 37.81% 6.37% % held As at 31st March, 2011 No of Shares % held
29
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
2.3 The reconciliation of the number of shares outstanding is set out below: Particulars Equity Shares: Equity Shares at the beginning of the year Add: Shares issued on Conversion of Foreign Currency Convertible Bonds Add: Shares issued on Conversion of Share Warrant Add: Shares issued on exercise of Employees Stock Option Equity Shares at the end of the year “B” Equity Shares: Equity Shares at the beginning of the year Add: Shares issued as Bonus Shares to Equity Shareholders Add: Shares issued as Bonus Shares on Conversion of Foreign Currency Convertible Bonds Add: Shares issued as Bonus Shares on Conversion of Share Warrant Add: Shares issued as Bonus Shares on exercise of Employees Stock Option Equity Shares at the end of the year 2.4 i) As at 31st March, 2012 507,398,354 17,407,793 – 73,980 524,880,127 50,739,834 – 1,740,778 – 7,398 52,488,010 (No of Shares) As at 31st March, 2011 498,194,215 100,044 8,550,000 554,095 507,398,354 – 49,819,421 10,004 855,000 55,409 50,739,834
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. (Rs. in Crores) Basic & Diluted EPS and Proforma Basic & Diluted EPSNet Profit as reported Add/(Less): Employee Compensation Expenses [As per Para 2.5 (iii) below] Adjusted Proforma Net Profit Basic & Diluted EPS as reported – Basic (Rs.) – Diluted (Rs.) Proforma Basic & Diluted EPS – Basic (Rs.) – Diluted (Rs.) Current Year 3.09 0.15 3.24 0.05 0.05 0.06 0.06 Previous Year 102.64 0.21 102.85 1.85 1.82 1.85 1.83
ii)
2.5
(i)
Shares Reserved for issue under Employee Stock Options Plan Movement in Options granted during the Year ended March'2012 is given below: Weighted Average Exercise Price No. of Options (in Rs.) 31.03.12 31.03.12 Weighted Average Exercise Price No. of Options (in Rs.) 31.03.11 31.03.11 3,753,371 – 3,214,000 375,337 234,400 14,140 554,095 55,409 – – 18.99 – 63.05 – 35.90 – 22.53 – – –
a)
Outstanding at the beginning of the Year – Equity Shares – “B” Equity Shares Granted during the Year – Equity Shares – “B” Equity Shares (to give effect of Bonus) Forfeited during the Year – Equity Shares – “B” Equity Shares Exercised during the Year – Equity Shares – “B” Equity Shares Expired during the Year – Equity Shares – “B” Equity Shares
6,178,876 305,788 3,560,000 – 873,850 27,860 73,980 7,398 131,296 13,130
40.95 – 24.30 – 34.81 – 22.16 – 23.86 –
30
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
2.5 Shares Reserved for issue under Employee Stock Options Plan (contd.) Movement in Options granted during the Year ended March'2012 is given below (contd.): Weighted Average Exercise Price No. of Options (in Rs.) 31.03.12 31.03.12 b) Outstanding at the end of the Year - Equity Shares - “B” Equity Shares Exercisable at the end of the Year - Equity Shares - “B” Equity Shares 8,659,750 257,400 19,000 1,900 35.15 – 18.05 – Weighted Average Exercise Price No. of Options (in Rs.) 31.03.11 31.03.11 6,178,876 305,788 228,476 22,848 40.95 – 22.72 –
c)
(ii) Fair value No. of Options Granted during the Year 3,560,000 Price (in Rs.) 21.64 (Rs./Crores) 7.70
(iii) The Company has calculated Employee Compensation Costs on the basis of Intrinsic Value Method and has amortized Rs.0.51 Crores (Previous Year Rs. 1.16 Crores) for the Year ended 31st March, 2012. However, had the company followed Fair Value Method for calculating Employee Compensation Costs, such costs for the Year would have been lower by Rs.0.15 Crores (Previous Year Rs.0.21 Crores) with corresponding impact on the Profit after Tax and Basic as well as Diluted EPS for the Year. (iv) Share Reserved for issue against Share Warrants As at 31st March, 2012 No. of Warrants 80,800,000 2,080,000 As at 31st March, 2011 No. of Warrants 80,800,000 2,080,000
Equity Shares “B” Equity Shares
Out of above 60,000,000 warrants are to be issued at the exercise price of Rs.62.50 and 20,800,000 Share to be issued at exercise price of Rs. 120 each. Upon conversion of the above 20,800,000 equity shares, 20,80,000 "B" Equity Shares will be issued as bonus shares.
3 RESERVES & SURPLUS DESCRIPTION Capital Reserve: As per Last Balance Sheet Securities Premium Reserve: As per Last Balance Sheet Add: Received during the year Less: Amount capitalised for Bonus Shares Issued General Reserve: As per Last Balance Sheet Less: Transferred to Surplus from Statement of Profit & Loss Debentures Redemption Reserves As per Last Balance Sheet Add: Transfer from Surplus from Statement of Profit & Loss Employees Stock Option Outstanding As per Last Balance Sheet Less: Adjustment for Option Forfeited during the year Less: Transferred to Securities Premium Reserve Surplus from Statement of Profit & Loss As per last Balance Sheet Add: Profit for the year Less/(Add): Appropriations Transfer to/ (from) General Reserve Proposed Dividend (Dividend per share Rs.0.50 (Previous Year - Re.1 per share)) Dividend Tax Transferred to / (from) Debenture Redemption Reserve As at 31st March, 2012 51.12 387.05 60.57 1.75 251.26 (10.81) 162.50 3.09 8.30 0.84 0.16 22.75 3.09 25.84 (10.81) 28.87 4.69 3.09 388.03 49.76 50.74 251.26 – 143.75 18.75 9.90 0.57 1.03 5.95 102.65 108.60 – 57.73 9.37 18.75 (Rs. in Crores) As at 31st March, 2011 51.12
445.87
387.05
240.45
251.26
165.59
162.50
7.30
8.30
– 910.33
22.75 882.98
31
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 4 LONG TERM BORROWINGS DESCRIPTION As at 31st March, 2012 Current Secured Non Convertible Debentures External Commercial Borrowings Term Loans from Scheduled Banks Term Loans from Others 4) a) i 37.50 – 173.14 2.08 212.72 Non Current 337.50 – 414.96 4.45 756.91 As at 31st March, 2011 Current Non Current 25.00 22.57 177.04 – 224.61 375.00 – 286.62 – 661.62
4)
b)
11.90% Non-Convertible Debentures and 12.50% Non- Convertible Debentures are secured by following securities: – First pari-passu charge over entire fixed assets of the company, both present and future. – 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: – First pari-passu charge over entire fixed assets of the company, both present and future. – Second pari-passu charge over entire current assets of the company, both present and future. – 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: – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company along with Corporate Guarantee – 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: – Subservient charge on movable assets of the company – 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; – 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: – Subservient Charges on movable fixed and Current assets of the Company; – 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: – Subservient charge on movable fixed and current assets of the company,both present & future. – Exclusive Charge on Entire Fixed & current assets, both present & future, of Bharat NRE Coke Ltd., an associate Company, along with Corporate Guarantee. – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company, along with Corporate Guarantee; – 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 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 – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par in 4 equal annual installments commencing from 30th May 2012, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2015, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2014, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2013, – 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.
32
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
c) Maturity Profile of Secured Term Loans are as set below : Repayment profile 2012-13 Term Loan from Banks Term Loan from Others 5 DEFERRED TAX LIABILITIES (net) DESCRIPTION Net Deferred Tax Liabilities at beginning of the year: Deferred Tax Liabilities – Deferred Tax Liability on account of Depreciation Total Deferred Tax Liabilities
A) Deferred Tax Assets – Unabsorbed Depreciation and loss carry forward/(set off) – Capital Loss carry forward/(set off) – Employees compensation carried forward – Gratuity & Leave Encashment Total Deferred Tax AssetsB) Net Deferred Tax Liability charged to Statement of Profit & Loss (A-B) As at 31st March, 2012 158.68 (4.87) (4.87) (7.40) 0.13 0.11 0.32 (6.84) 1.97 160.65 5.32 5.32 (12.77) (0.32) 0.04 0.27 (12.79) 18.10 158.68 As at 31st March, 2011 140.58 173.14 2.08 2013-14 190.61 2.36 2014-15 135.90 2.08 (Rs. in Crores) Beyond 2014-15 88.45 –6
LONG TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation As at 31st March, 2012 4.93 2.81 7.74 As at 31st March, 2011 3.94 89.14 93.08
7
SHORT TERM BORROWINGS DESCRIPTION Secured Term Loans from Scheduled Banks Working Capital Facilities from Scheduled Banks Unsecured Term Loans from Scheduled Banks Working Capital Facilities from Scheduled Banks Total a) As at 31st March, 2012 – 541.82 541.82 130.01 20.23 150.24 692.06 As at 31st March, 2011 125.00 294.04 419.04 180.03 – 180.03 599.07
b)
Working Capital facilities from a consortium of banks viz. State Bank of India, Bank of Baroda, ING Vysya Bank Ltd, AXIS Bank Ltd, Standard Chartered Bank, ICICI Bank Ltd and Tamilnad Mercantile Bank Ltd are secured by following securities: – First pari-passu charge over entire current assets of the company, both present and future. – Second pari-passu charge over entire fixed assets of the company, both present and future. – Equitable mortgage over residential property at Kolkata of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Personal guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Pledge of equity shares of the Company held by Gujarat NRE Mineral Resources Limited, a promoter Company along with Corporate Guarantee of the Company equivalent to the value of shares pledged. Unsecured Term Loans and unsecured working capital facilities are collaterally secured by Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company.
33
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
8 TRADE PAYABLES DESCRIPTION Micro, Small & Medium Enterprises* Others As at 31st March, 2012 – 790.52 790.52 (Rs. in Crores) As at 31st March, 2011 – 433.74 433.74
*
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: Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid on all delayed payment under the MSMED Act Payment made beyond the appointed day during the Year Interest due and payable for the Year of delay other than above Interest accrued remaining unpaid Amount of further interest remaining due and payable in succeeding Years As at 31st March, 2012 – – – – – – – As at 31st March, 2011 – – – – – – –
9
OTHER CURRENT LIABILITIES DESCRIPTION Current maturities of long term debts Interest Accrued but not due on borrowings Unclaimed Dividend Creditors for Capital Expenditure Others Payables As at 31st March, 2012 212.72 13.30 2.18 33.64 209.69 471.53 As at 31st March, 2011 224.61 13.49 2.19 19.93 13.13 273.35
10
SHORT TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation Provision for Fringe Benefit Tax Provision for Proposed Dividend Provision for Dividend Tax / Dividend Tax Payable As at 31st March, 2012 0.19 1.11 – 28.87 14.05 44.22 As at 31st March, 2011 0.20 24.81 0.18 57.73 9.37 92.29
34
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) GROSS BLOCK As on 01.04.11 Addition during the year 0.03 – 7.23 22.44 0.22 0.12 7.33 – 1.27 – 38.65 144.19 0.48 0.25 1,184.58 1,146.19 – 488.10 – 25.38 – 0.48 0.08 4.70 87.01 202.83 152.52 0.25 27.06 10.16 – 3.25 0.98 – 2.28 0.73 0.21 0.20 2.85 0.02 1.18 25.77 56.77 50.44 – 468.60 88.49 23.23 – 117.88 10.68 3.31 – 8.51 – – – – – – – 0.14 – – – 0.14 0.12 – 43.04 – – – – – 13.99 111.72 0.94 1.18 12.87 0.10 5.88 112.78 259.46 202.83 Sales / Adjustment during the year Total up to 31.03.12 As on 01.04.11 Provided during the year Adjustment for Sales Total up to 31.03.12 DEPRECIATION NET BLOCK As on 31.03.12 As on 31.03.11
NOTES-11
Description of Assets
Land - Freehold 8.51 110.65 446.16 2.06 3.13 19.98 0.48 24.11 488.10 1,146.19 1,002.48
43.01
43.04 8.51 103.89 356.88 1.34 2.07 14.19 0.38 19.50 375.32 925.12 943.36 171.05
43.01 8.51 99.97 357.67 1.33 2.15 9.82 0.40 19.41 401.09 943.36
Land -Lease Hold *
Building
35
Plant & Machineries
Office Equipment
Furniture & Fixture
Material handling Equipments/ Vehicles
Weighing Machine
Electrical Installations
Wind Mill
Total
Previous Year
Capital W I P
123.99
GUJARAT NRE COKE LIMITED
* Conveyance deed will be executed in favour of the company in due course.
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
12 NON-CURRENT INVESTMENTS DESCRIPTION Long Term Investment (At Cost) Non-Trade Investments Quoted (Equity) Indian Shah Alloys Ltd Sal Steel Ltd. Overseas Investments Gujarat NRE Coking Coal Ltd (Sub-Subsidiary) ( formerly Gujarat NRE Minerals Ltd) Aggregate Book Value of Quoted Investments (Equity) Unquoted (Equity) Indian In Indian Subsidiaries Wholly owned Hunter Valley Coal (P) Ltd Manor Dealcom (P) Ltd Others Bharat NRE Coke Ltd In Foreign Subsidiaries Wholly owned Gujarat NRE Ltd Aggregate Book Value of Unquoted Investments (Equity) Total Long Term Investment (At cost) Market value of Quoted Investments (Equity) * Previous Year figure are in bracket. **Investment in Indian company equity shares are fully paid up. *** Refer Note No. 1(vii) for mode of valuation. N.A. 87,474,689 (87,474,689) 283.32 687.63 743.29 78.86 283.32 687.63 743.29 238.10 10 10,835,000 (10,835,000) 10.84 10.84 1 20,592,850 (20,592,850) 1 19,051,150 (19,051,150) 203.95 189.52 203.95 189.52 55.66 55.66 N.A. 86,092,966 (86,092,966) 42.18 42.18 10 10 969,769 (969,769) 2,737,682 (2,737,682) 7.34 6.14 7.34 6.14 Face Value (Rs) No.of Shares* As at 31st March, 2012 (Rs. in Crores) As at 31st March, 2011
13
LONG TERM LOANS AND ADVANCES * DESCRIPTION (Unsecured,Considered Good) Capital Advance Loan & Advances Deposits With Govt. Authorities & Others Advance Tax (incl. Tax Deducted at Source) Unamortised Expenses: (To the extent not written off/or adjusted) – Deferred Employee Compensation Under ESOS Balance B/F Less – Adjusted for Employees left during the year – Amortised during the year (net) 6.31 0.84 0.51 4.96 273.63 * Refer Note 33(D) 8.04 0.57 1.16 6.31 370.32 7.83 89.15 107.42 64.27 15.30 89.15 108.87 150.69 As at 31st March, 2012 As at 31st March, 2011
36
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
14 CURRENT INVESTMENTS DESCRIPTION Investment in Mutual Funds (Unquoted) SBI Premier Liquid Fund 10 - (3,243,573) – –
* Previous Year figure are in bracket. ** Refer Note No. 1(vii) for mode of valuation.
(Rs. in Crores) Face Value (Rs) No.of Shares* As at 31st March, 2012 As at 31st March, 2011
5.00 5.00
15
INVENTORIES* DESCRIPTION Stores , Spares & Consumables Raw Materials Work in Process Finished Goods As at 31st March, 2012 9.39 582.54 9.56 987.80 1,589.29 *Refer Note No. 1(vi) for mode of valuation As at 31st March, 2011 6.57 491.02 8.90 546.45 1,052.94
16
TRADE RECEIVABLE* (Unsecured, considered good) DESCRIPTION Debts due for a period exceeding six months Other Debts As at 31st March, 2012 5.18 204.81 209.99 *Refer Note No. 33(D) As at 31st March, 2011 6.53 151.69 158.22
17
CASH & CASH EQUIVALENTS DESCRIPTION Cash in hand (as certified by the Management) Balance with Scheduled Banks - In Current Account - In Current Account for Unclaimed Dividend - In Term Deposits* (Including interest accrued) ** Balance with Non Scheduled Banks - In Current Account 0.10 68.80 * includes Term deposits held as margin on Letter of Credit and Bank Guarantee. 0.09 84.16 1.81 2.18 64.48 28.35 2.19 53.39 As at 31st March, 2012 0.23 As at 31st March, 2011 0.14
** Term Deposits with Banks includes deposits of Rs.9.80 Crores (Previous Year Rs.37.57 Crores ) with maturity of more than 12 months.
37
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
18 SHORT TERM LOANS AND ADVANCES (Unsecured,Considered Good) DESCRIPTION Advances recoverable in cash or in kind or value to be received Advance Tax (incl. Tax Deducted at Source) As at 31st March, 2012 520.93 13.38 534.31 (Rs. in Crores) As at 31st March, 2011 428.87 24.66 453.53
[Refer Note 33(D)] 19 REVENUE FROM OPERATIONS DESCRIPTION Sales Less: Excise Duty For the year ended 31.03.2012 1,437.34 65.16 1,372.18 1,372.18 For the year ended 31.03.2011 1,628.79 34.08 1,594.71 1,594.71
19.1 PARTICULARS OF SALE OF PRODUCTS DESCRIPTION Coal & Coke Rolled & Alloy Steel Products Electricity Power (Windmill) For the year ended 31.03.2012 1,029.26 326.85 16.07 1,372.18 For the year ended 31.03.2011 1,296.80 287.35 10.56 1,594.71
20
OTHER INCOME DESCRIPTION Interest Income (TDS Rs.0.59 Crores, Previous Year Rs. 0.66 Crores) Income from Long Term Investment: Non Trade - Profit on Sale of Investments Foreign Exchange Fluctuation Profit on Sale of Fixed Assets Gurantee Commission Miscellaneous Income For the year ended 31.03.2012 7.49 For the year ended 31.03.2011 7.88
– – – 19.43 1.17 28.09
70.87 1.70 0.01 – 0.73 81.19
21
COST OF MATERIAL CONSUMED DESCRIPTION Coal Iron & Steel Scrap and Sponge Iron For the year ended 31.03.2012 1,046.56 238.94 1,285.50 For the year ended 31.03.2011 839.90 206.00 1,045.90
21.1 PARTICULARS OF COST OF MATERIAL CONSUMED DESCRIPTION Imported Indigenous For the year ended 31.03.2012 1,187.15 98.36 1,285.50 For the year ended 31.03.2011 979.18 66.72 1,045.90
38
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
22 CHANGE IN INVENTORIES OF FINISHED GOODS, WORK -IN-PROCESS & STOCK IN TRADE DESCRIPTION Closing Stocks Less :Opening Stocks Less: Change in Excise Duty on Stock For the year ended 31.03.2012 997.36 555.35 442.01 (1.10) 440.91 23 EMPLOYEES BENEFITS EXPENSES DESCRIPTION Salaries, Wages, Bonus & Labour Charges Contribution to PF & Other Funds Provision/Payment of Gratuity Employee Compensation Amortisation Under ESOS Employees Welfare Expenses For the year ended 31.03.2012 44.10 2.73 1.08 0.51 6.16 54.58 23.1 Disclosure as required by Accounting Standard 15 ( Revised ) on Employee benefits :In respect of defined benefit scheme (based on Actuarial valuation) Gratuity Plan i Change in Obligation during the year ended 31.03.2012 – Present value of Defined Benefit Obligation as on 01.04.2011 – Current Service Cost – Past Service Cost – Interest Cost – Curtailment Cost / ( Credit ) – Settlement Cost / ( Credit ) – Actuarial ( gains )/ losses – Benefits paid – Present Value of defined Benefit Obligation as on 31.03.2012 Expenses recognized during the Year 2011-12 – Current Service Cost – Past Service Cost – Interest Cost – Curtailment Cost / ( Credit ) – Settlement Cost / ( Credit ) – Actuarial ( gains )/ losses – Expected return on plan assets – Total Expenses for the Year Principal Actuarial Assumptions at the balance sheet date. – Discount rate (based on the market yields available on Government Bonds at the accounting date with a term that matches that of the liabilities) – Expected rate of return on assets – Salary increase (taking into account inflation, seniority, promotion and other relevant factors) Projected Unit Credit (PUC) actuarial method has been used to assess the Plan's liabilities, including those death-in-service and in capacity benefits. 3.58 0.80 – 0.30 – – 0.05 (0.26) 4.47 0.80 – 0.30 – – 0.05 – 1.15 8.50% For the year ended 31.03.2011 35.55 2.01 0.79 1.16 4.79 44.30 (Rs. in Crores) For the year ended 31.03.2011 555.35 518.62 36.73 (0.70) 36.03
Leave Encashment 0.56 0.07 – 0.05 – – 0.04 (0.07) 0.65 0.07 – 0.05 – – 0.04 – 0.16
ii
iii
N.A 7.50%
39
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
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. 24 FINANCE COSTS DESCRIPTION Interest Expenses Other Borrowing Costs Applicable loss/(gain) on foreign currency transactions and translation For the year ended 31.03.2012 179.22 15.08 14.27 208.57 25 OTHER EXPENSES DESCRIPTION Manufacturing Expenses: Power & Fuel Stores, Spares & Consumables Repair & Maintenance: – Plant & Machinery – Building – Others Plant Hire Charges Selling & Distribution Expenses: Advertisement & Business Development Carriage & Cartage Commision on Sales Establishment Expenses: Professional & Service Charges General Expenses Rent Rates & Taxes Insurance Expenses Communication Expenses Travelling & Conveyance Auditors Remuneration – For Audit Fees Internal Audit Fees Loss on Sale of Fixed Assets Loss on Sale of Long Term Investments (Net) Deferred Revenue Expenses Written Off 4.96 39.65 1.97 46.58 12.13 2.73 0.36 0.35 6.98 0.35 4.61 0.11 0.08 0.01 0.61 – 28.32 170.10 7.33 2.26 0.36 0.36 5.98 0.40 3.81 0.12 0.09 – – 0.08 20.79 166.86 2.51 60.49 0.85 63.85 23.11 0.60 3.51 4.89 95.20 16.58 0.23 2.62 4.93 82.22 36.00 27.09 30.23 27.63 For the year ended 31.03.2012 For the year ended 31.03.2011 (Rs. in Crores) For the year ended 31.03.2011 151.08 13.49 (3.45) 161.12
40
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
26 Segment Informations: Segment wise Revenue, Results and Capital Employed for the Year ended 31st March,2012. The Company has two reportable segments i.e. “Coal & Coke” and “Steel” as primary business segments.
i Primary Segment Reporting ( by Business Segment): Particulars Coal & Coke Segment Revenue (Net Sales/Income from segment) External Sales Inter-Segment Revenue 1029.26 Less: Inter Segment Revenue Total Segment Revenue Segment Results before Tax & Interest Add:- Other Un-allocable Income Net of Expenditure Less:- Interest Expense Less:- Provision for Tax Net Profit after Tax Assets Segment Assets* Un-allocable Assets Total Assets Liabilities Segment Liablities Un-allocable Liablities Total Liablities *including captive windmills Capital Expenditure Non Cash Expenses Depreciation & Amortisation 26.66 29.69 20.71 29.32 6.84 78.88 368.47 6.74 955.16 82.55 1037.71 63.58 1101.29 7.44 132.85 393.64 5.85 397.92 71.82 469.74 198.10 667.84 2,969.66 577.59 3547.25 963.27 4510.52 2,165.86 577.94 2743.80 1190.06 3933.86 1.87 208.57 2.44 3.09 63.96 161.12 21.79 102.65 1029.26 199.06 1029.26 342.92 1.65 344.57 1.65 342.92 13.17 1372.18 1.65 1373.83 1.65 1372.18 212.23 1296.81 205.56 1296.81 1296.81 297.90 2.16 300.06 2.16 297.90 16.04 1594.71 2.16 1596.87 2.16 1594.71 221.60 2011-12 Steel Total Coal & Coke 2010-11 Steel Total
(Rs. in Crores)
ii
Secondary Segment Reporting ( by Geographical demarcation): Particulars India Segment Revenue Segment Assets Capital Expenditure 1,006.59 3,547.25 85.62 2011-12 Rest of the World 365.59 – – Total 1,372.18 3,547.25 85.62 India 1,253.69 2,743.80 138.70 2010-11 Rest of the World 341.02 – – Total 1,594.71 2,743.80 138.70
41
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
27 The Earnings Per Share as per Accounting Standard (AS- 20) are as under: Particulars At 31.03.2012 Basic & Diluted EPS 3.09 – 3.09 558,138,188 – 17,407,793 73,980 1,748,176 577,368,137 576,976,321 2,080,000 – 262,550 579,318,871 At 31.03.2011 Basic & Diluted EPS 102.65 – 102.65 498,194,215 8,550,000 100,044 554,095 50,739,834 558,138,188 554,582,402 2,080,000 5,558,439 1,275,496 563,496,337
Earnings Net Profit for the Year (Rs. / Crores) Add: Interest on FCCB (Rs. / Crores) Earnings for Diluted EPS (Rs. / Crores) Shares Number of shares at the beginning of the Year Add : Share Allotted against Share Warrants Add : Conversion of FCCB Add : Share Allotted against ESOS Add : Bonus “B” Equity Shares Issue Total number of equity shares outstanding at the end of the Year Weighted average number of shares outstanding during the Year (for Basic EPS) Add : Number of equity shares arising out of exercise of option of outstanding Share Warrants that have dilutive effect on the EPS Add : Number of equity shares arising out of conversion of outstanding FCCB that have dilutive effect on the EPS Add : Number of Equity Shares arising out of exercise of option of Employee Stock Option Scheme Weighted average number of shares outstanding during the Year (for Diluted EPS) Earning per share : – Basic (Rs.) – Diluted (Rs.) 0.05 0.05 1.85 1.82
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. 28.1 Contingent liabilities not provided for in respect of: As on 31st March 2012 i ii iii iv v vi Letter of Credits outstanding for purchase of materials. Outstanding Bank Guarantees and Counter / Corporate Guarantees given on behalf of subsidiary companies. Capital commitments Bills discounted under letter of credit with banks Duty on account of Advance Authorisation against Export obligation. On Balance Sheet date, the disputed amount involved in four income-tax demands( Previous Year - three) under appeal. 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. 18.67 2,458.56 58.73 85.04 0.73 8.29 (Rs. in Crores) As on 31st March 2011 50.92 1,550.55 137.17 32.41 1.03 4.42
vii A demand raised by the Service tax department, against which company has filed an appeal to the jurisdiction authorities. viii A demand raised by the Custom department, against which company has filed an appeal to the jurisdiction authorities.
0.06 2.55
0.06 –
42
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
28.2 Greenearth Resources & Projects Limited (formerly known as Austral Coke & Projects Limited) had filed a defamation suit in Hon'ble Bombay High Court against the Company for Rs.600 Crores. The Company had also filed Civil Suit in Hon'ble 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 suit filed by the Austral Coke & Projects Limited would be in favour of the company. 28.3 On 16 October 2007, the company and Armada Singapore Pte Ltd (“Armada”) entered into five year charter party agreement which provided, inter alia, for Armada to supply vessels to ship the company's tonnage, namely coal or coking coal from various destinations worldwide. Between late 2008 and early 2009, following the worldwide economic crisis, Armada experienced serious financial losses resulting into a large number of third party defaults under its shipping agreements. As a result, during the course of 2009 Armada entered into Judicial Management, a Singaporean insolvency regime. As a result of Armada's insolvency, the Company refused to make further nominations since there was no assurance or security for Armada's performance for the balance period under the agreement. Armada later on filed its claim submission in an arbitration proceeding against the company before Arbitration Tribunal in London. Although there was no specific clause on jurisdiction or applicable law in the agreement and also the constitution of Arbitration Tribunal was not in accordance with the agreement and even after the company's repetitive challenges to aforesaid, the Tribunal passed an order in favour of Armada assessing the liability of the company towards Armada as Rs.42.85 Crores (including interest of Rs.3.42 Crores). Aggrieved by the aforesaid order the company has filed a civil suit against Armada with the Hon'ble High Court at Calcutta claiming for damages for an amount of Rs 144 crores and cancellation of the aforesaid order being void and restraining Armada from giving any effect to the order passed by the Tribunal. Subsequently, an order was passed by the Hon'ble High Court at Calcutta restraining Armada to take any further steps to enforce the award passed by the Tribunal in India. The matter is presently sub judice before the Hon'ble High Court at Calcutta. 29 Earning in Foreign Exchange: For the year ended 31.03.2012 – FOB value of exports 30 Value of Imports on CIF basis in respect of: For the year ended 31.03.2012 Raw Materials – Coking Coal – M.S.Scrap Capital Goods 31 Expenditure in foreign currency – Travelling – Interest – Professional & Consultancy Fees 32 i For the year ended 31.03.2012 0.68 0.42 4.42 For the year ended 31.03.2011 0.63 3.73 0.01 950.71 140.77 1,091.48 0.16 956.85 87.83 1,044.68 1.91 For the year ended 31.03.2011 347.75 (Rs. in Crores) For the year ended 31.03.2011 321.58
The company uses forward contracts to hedge its risks associated with foreign currencies relating to foreign currency liabilities. The company does not use forward contracts for speculative purpose. As on 31st March 2012 a Forward Contracts outstanding for hedging currency risks - Loans - Payable Foreign Currency Exposures that have not been hedged - Loans including accrued interest - Payable – 119.04 134.00 553.04 As on 31st March 2011 – 130.41 100.28 243.06
b
ii
Exchange difference Gain/ (Loss) of Rs. (1.34) Crores [Previous Year Rs. (0.03) Crores] in respect of unexpired period of forward cover contracts will be recognised in the Statement of Profit & Loss in subsequent year.
43
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
33 Related Party Disclosures as required by Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India (ICAI), are given below: A. Particulars of the Related Parties: Subsidiary Companies i ii iii i ii iii iv v vi vii viii i ii iii iv v vi vii i ii iii iv i B. Wholly Owned Gujarat NRE Limited Huntervalley Coal (P) Ltd. Manor Dealcom (P) Ltd. Sub-Subsidiary Companies Gujarat NRE Coking Coal Ltd. Gujarat NRE Wonga Pty. Ltd. (formerly known as Gujarat NRE FCGL Pty. Ltd.) Wonga Coal Pty. Ltd. Gujarat NRE Resources NL Gujarat NRE Coal (NSW) Pty. Ltd. South Bulli Holdings Pty. Ltd. Gujarat NRE Properties Pty. Ltd. Gujarat NRE India Pty. Ltd. Associates Bharat NRE Coke Ltd. NRE Metcoke Ltd. Bajrang Bali Coke Industries Ltd. Surajbari Traders Pvt. Ltd. Dharwad Traders Pvt. Ltd. Mandvi Traders Pvt. Ltd. Lunva Traders Pvt. Ltd. Enterprises in which key management personnel have significant Influence Gujarat NRE Mineral Resources Ltd. Gujarat NRE Energy Resources Ltd. Russell Vale Traders Pvt. Ltd. Bulli Coke Ltd. Enterprise in which key management person is a trustee Girdharilal Arun Kumar Family Trust – Chairman & Managing Director – Chief Financial Officer (Rs. in Crores) Current Year 0.15 19.43 5.40 898.60 1.98 – – – Previous Year 0.24 – 4.95 789.95 2.18 96.80 85.82 8.55
Key Management Personnel i Mr. A. K. Jagatramka ii Mr. P. R. Kannan Transaction with Related Parties Particulars of Transactions
C i
Sale/(Sales Return) of Goods/Services – Associates – Sub-Subsidiaries Purchase of Goods /Services – Associates – Sub-Subsidiaries Remuneration – Key Management Persons Investments – Subsidiaries Remittance on Capital Reduction by – Subsidiaries Shares Alloted – Enterprises in which key management person has significant influence
ii
iii. iv v vi
44
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
Particulars of Transactions vii Share Warrant Deposit Received – Enterprises in which key management person has significant influence viii ix x Rent Paid – Enterprises in which key management person is a trustee Security Deposit Given – Associates Loans / Advance Given/(Refunded) – Associates – Subsidiaries xi Guarantees/Collateral Securities Outstanding as at the Year end – Given on behalf of Associates – Given on behalf of Sub-Subsidiaries – Given on behalf of Subsidiaries – Given by Associates on behalf of the Company – Given by Key Management Personnel on behalf of the Company – Given by Enterprises in which key management person has significant influence D The Company has the following amounts due from/ to related parties: As on 31st March 2012 Due from Related Parties (included in loans & advances and sundry debtors) Subsidiaries – included in Loans & Advances Associates – included in Sundry Debtors – included in Loans & Advances Sub-Subsidiaries – included in Loans & Advances Enterprises in which key managerial persons has significant influence – included in Loans & Advances Due to Related Parties (included in current liabilities) – Sub-Subsidiaries 34 Particulars of Balances with Non-Scheduled banks : In current Account* Balance as on 31st March 2012 a) b) ICICI Bank UK PLC, London Branch SBI Sydney Branch 0.04 0.06 31st March 2011 0.04 0.05 Maximum Balance Current Year 0.04 0.06 Previous Year 0.06 0.91 89.15 – 200.49 4.41 9.35 89.15 – 170.78 – 9.35 As on 31st March 2011 – 2192.32 252.80 55.00 2,078.10 94.50 2.93 1291.35 248.27 – 1062.73 170.55 30.09 – 51.42 (7.65) – 30.00 0.25 0.25 – 93.75 Current Year (Rs. in Crores) Previous Year
634.47
310.36
35
* None of the directors of the company are interested in such banks. a The indicators of impairment listed in paragraph 8 to 10 of Accounting Standard (AS)- 28 “Impairment of assets” issued by ICAI have been examined by the management and on such examination, it has been found that none of the indicators are present in the case of the Company's assets . A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss.
45
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
b In the opinion of Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.
36 37 38
Exceptional items for the year ended 31st March, 2012 represents net foreign exchange loss of Rs. 60.13 Crores due to unusual diminution in the value of Rupee as against the US Dollar during the year. There are no amounts due and outstanding to be credited to Investors Education and Protection Fund as at 31st March 2012 Remittance in Foreign Currency on account of Dividend: The Company has paid dividend in respect of shares held by Non-resident on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remitted in this respect is given herein below: (Rs. in Crores) For the year ended 31.03.2012 Number of Non-Resident Shareholders Number of Equity & “B” Equity Shares held by them (i) Amount of Dividend Paid (Gross) 2581 4,213,257 0.42 NIL 2010-11 For the year ended 31.03.2011 2583 4,394,223 0.44 NIL 2009-10
Tax deducted at Source (ii) Year to which dividend relates 39
The Revised Schedule VI has become effective from April 1, 2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figure have been regrouped/reclassified wherever necessary to correspond with the current year's classification / disclosure.
46
GUJARAT NRE COKE LIMITED
Cash Flow Statement for the year ended 31st March, 2012
(Rs. in Crores) For the Year ended 31-Mar-2012 CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax Adjustments for: Depreciation / Other non cash items Interest Paid / Payable Other Income Loss/(Profit) on Sale / Discard of Fixed Assets Loss/(Profit) on Sale of Investment Employee Stock Option - Compensation Interest Received / Receivable Operating Profit before Working Capital Changes Adjustments for: Trade & Other Receivables Inventories Trade Payables Cash Generated from Operations Direct Taxes Paid / Refunds Net Cash Generated from Operating Activities B CASH FLOW FROM INVESTING ACTIVITIES Addition to Fixed Assets Sale of Fixed Assets Addition to Investments Sale of Investments Interest Received Dividend / Misc Income Net Cash used in Investing Activities C CASH FLOW FROM FINANCING ACTIVITIES Net Proceeds to Share Capital / Reserves Deposit against Share Warrant Increase in Long / Short Term Borrowing Interest Paid Dividend & Dividend Tax Paid Net Cash Generated from Financing Activities Net Increase / (Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents (Opening Balance) Cash & Cash Equivalents (Closing Balance)* *Includes Dividend Account of Rs. 2.18 Crores (Previous year Rs. 2.19 Crores) In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board A 5.51 56.77 208.57 (20.60) 0.01 0.61 0.51 (7.49) 243.89 (142.37) (536.35) 568.02 133.19 (12.96) 120.23 (78.23) 0.10 – 4.39 7.49 20.60 (45.65) 0.16 – 176.40 (208.76) (57.74) (89.94) (15.36) 84.16 68.80 For the Year ended 31-Mar-2011 124.44 50.52 151.08 (5.89) (0.01) (70.87) 1.16 (7.88) 242.55 34.19 (221.00) (86.80) (31.06) (17.46) (48.52) (140.26) 0.30 (101.80) 157.87 7.88 5.89 (70.12) 43.42 104.15 116.00 (139.99) (64.10) 59.48 (59.16) 143.32 84.16
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
47
GUJARAT NRE COKE LIMITED
48
Particulars of Subsidiary Companies issued under section 212 (8) of the Companies Act, 1956 for the financial year 2011-12 are as follows
Rs. In Crores)Manor Dealcom Pvt. Ltd. INR 1.9051 7.3041 392.3782 0.0020 0.1062 56.2240 2,996.1055 7.1903 381.8064 5.0458 267.9306 1.58 83.91 0.5005 26.58 0.0010 0.05 0.08 AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR AU$ INR 4.30 Gujarat NRE Ltd. Gujarat NRE Coal(NSW) Pty Ltd. Gujarat NRE Coking Coal Ltd. Wonga Coal Pty Ltd. Gujarat NRE Resources NL Gujarat NRE Wonga Pty Ltd. South Bulli. Holdings Pty Ltd. Gujarat NRE India Pty Ltd. Gujarat NRE Properties Pty Ltd.
Name of the Subsidiary Company
Hunter Valley Coal Pvt. Ltd. INR 2.0593
(a) Share Capital (Equity and Preference)
(b) Reserve & Surplus (net of debit balance of statement of profit & loss) 201.9348 248.2991 44.3050 44.8535 6.8010 364.1362 – – 36.9459 1,983.9323 – – 0.0988 5.2537 14.38 770.25 0.0035 0.19 0.0000 234.4132 11.0352 585.9454 0.0011 0.0571 91.7365 4,837.7823 7.1145 377.7792 5.3096 281.8308 21.56 1,131.64 0.5120 27.16 0.0007 187.6545 (3.0699) (170.5690) (0.0009) (0.0491) (1.4334) (142.2554) (0.0758) (4.0272) 0.1650 8.6465 5.61 277.48 0.0080 0.40 -0.0004 0.02 0.03 0.00
(0.01) (1.11) 0.98 0.91 51.49 48.30
(c) Total Assets
(d) Total Liabilities
(e) Details of Investment (excluding investments in the subsidiary companies) 248.2804 – – 0.0089 0.0027 0.0010 0.0017 – – – – – – – – – – – – – – 0.0022 (2.2649) (107.4737) (0.0000) (0.0014) (1.0670) (52.6939) (0.0238) (1.1795) (0.0227) (1.1751) 2.16 102.45 0.0011 0.2106 11.3123 – – (1.1057) (59.3990) (0.0086) (0.4502) (0.0119) (0.6373) 1.43 76.90 0.0033 (2.0543) (96.1615) (0.0000) (0.0014) (2.1727) (112.0929) (0.0324) (1.6297) (0.0345) (1.8124) 3.59 179.35 (0.0001) (0.0000) (0.0001) – 0.0093 0.0637 3.2025 0.0000 0.0000 3.7787 185.6892 – – – – 15.48 774.73 – – – – – – 0.9688 50.8452 – – – – – – – – – – – – – – – – – – – – – – – – (0.01) (0.00) (0.0039) – 234.3733 0.0500 2.8500 – – 0.4256 22.3360 – – 0.1700 9.1000 – – – – – – – – (0.0000) – (0.0000) – – – – – (0.0017) – (0.0017) – – – – – – – – – (0.00) (0.06) (0.00) (0.02) (0.00) (0.04) – –
– Equity / Preference Shares
– Government Securities
– Bonds/ Mutual Funds Units
(f)
Turnover
(g) Profit/(Loss) Before Taxation
(h) Provision for Taxation
(i)
Profit/ (Loss) after Taxation
(j)
Proposed Dividend (including Corporate Dividend Tax)
Auditors Report on Consolidated Financial Statements
Company's management in accordance with the requirements of Accounting Standard 21- “Consolidated Financial Statements” and Accounting Standard 23“Accounting for Investment in Associates in Consolidated Financial Statements ” as prescribed by the Companies (Accounting Standards) Rules, 2006. 5.
49
Based on our audit as aforesaid, and on consideration of reports of other auditors on the separate financial statements and on the other financial information of the components and to the best of our information and according to the explanation given to us, we are of the opinion that the attached consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India: (i) (ii) (iii) in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Gujarat NRE Group as at March 31, 2012; in the case of the Consolidated Statement of Profit and Loss, of the consolidated loss of the Gujarat NRE Group for the year ended on that date; and in the case of Consolidated Cash Flow Statement, of the Consolidated Cash Flows of the Gujarat NRE Group for the year ended on that date. For N. C. Banerjee & Co. Chartered Accountants (Firm's Registration No. 302081E)
Auditors' Report to the Board of Directors of the Gujarat NRE Coke Ltd. on the consolidated financial statement of Gujarat NRE Coke Ltd. and its subsidiaries
1.
We have audited the attached Consolidated Balance Sheet of Gujarat NRE Coke Limited ("the Company") and its eleven subsidiaries (collectively referred to as the “Gujarat NRE Group”) as at March 31, 2012, the Consolidated Statement of Profit and Loss and the consolidated Cash Flow Statement for the year ended on that date annexed thereto. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
2.
We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, in all respects, in accordance with an identified financial reporting framework. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements. We believe that our audit provides a reasonable basis for our opinion.
GUJARAT NRE COKE LIMITED
3.
We did not audit the financial statement of certain subsidiaries whose financial statements reflect total assets of Rs.5940.26 Crores as at March 31, 2012 and total revenue of Rs. 952.04 Crores and net Cash outflows of Rs. 351.13 Crores for the year ended on that date. These financial statements have been audited by other auditors whose reports have been furnished to us, and our opinion, in so far as it relates to the amount included in respect of the subsidiaries is based on the reports of other auditors.
4.
We report that the consolidated financial statements have been prepared by the
Place: Kolkata Dated: 27/05/2012
A. Paul Partner Membership No.06490
GUJARAT NRE COKE LIMITED
Consolidated Balance Sheet As at 31st March, 2012
(Rs. in Crores) Notes EQUITY AND LIABILITIES Shareholders' Funds Share Capital Reserves & Surplus Money received against Share Warrants Minority Interest Foreign Currency Convertible Bonds Non-Current Liabilities Long Term Borrowings Deferred Tax Liability (net) Long Term Provisions Current Liabilities Short Term Borrowings Trade Payables Other Current Liabilities Short Term Provisions As at 31st March, 2012 As at 31st March, 2011
2 3
577.37 885.09 104.15 1,566.61 953.91 – 2,392.00 178.21 7.78 2,577.99 1,087.34 568.46 1,275.59 117.52 3,048.91 8,147.42
558.14 1,152.11 104.15 1,814.39 825.88 77.71 1,924.77 155.18 107.37 2,187.32 599.07 292.98 738.69 124.55 1,755.29 6,660.59
4 5 6
7 8 9 10 TOTAL
ASSETS Non-Current Assets Tangible Fixed Assets Intangible Fixed Assets Capital Work-in-Progress Non-Current Investment Long Term Loan & Advances Current Assets Current Investment Inventories Trade Receivables Cash & Cash Equivalents Short Term Loan & Advances
11 11 11 12 13
3,904.93 219.65 672.31 393.86 252.53 5,443.28 50.85 1,628.80 382.61 90.95 550.93 2,704.14 8,147.42
2,894.91 228.20 375.83 458.73 347.93 4,305.60 72.99 1,106.58 261.72 457.45 456.25 2,354.99 6,660.59
14 15 16 17 18 TOTAL
Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements
1 to 34
In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
50
GUJARAT NRE COKE LIMITED
Consolidated Statement of Profit & Loss For the year ended 31st March, 2012
(Rs. in Crores) Notes INCOME Revenue from Operations Other Income Total Revenue: EXPENDITURE Cost of Materials Consumed Purchase of Stock-in-Trade Changes in Inventories of Finished Goods, Stock-in-Process and Stock in Trade Employees Benefits Expenses Finance Costs Depreciation Other Expenses Total Expenses: Profit/(Loss) before Exceptional Items, Extra Ordinary Items & Tax Exceptional Items Extra Ordinary Items Profit/(Loss) before Tax Tax Expenses – Current Tax – Deferred Tax – MAT credit entitlement – Tax for Earlier Years Profit/(Loss) after tax for the year Less : Minority Interest Add : Share in Profit of Associates Profit/(Loss) for the year after taxes, minority interest & share of profit of associates Basic Earnings per Equity & “B” Equity Share (in Rs.) [ Face Value Rs. 10 per share] Diluted Earnings per Equity & “B” Equity Share (in Rs.) [ Face Value Rs. 10 per share] Significant Accounting Policies & Notes on Financial Statements forming part of the financial statements In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board 1 to 34 28.81 1.97 (1.10) 0.45 (83.34) 14.67 (0.67) (98.68) (1.71) (1.70) 31.70 18.10 (21.20) 0.07 134.71 26.37 0.82 109.16 1.97 1.94 32 31 25 22 23 24 21 372.13 35.96 (436.37) 174.33 252.19 150.65 782.58 1,331.47 78.30 64.42 67.09 (53.21) 324.34 129.51 (48.85) 218.50 234.91 217.33 737.43 1,813.17 187.00 – 23.62 163.38 19 20 1,398.39 11.38 1,409.77 1,813.71 186.46 2,000.17 For the year ended 31.03.2012 For the year ended 31.03.2011
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
51
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012
1. i. SIGNIFICANT ACCOUNTING POLICIES 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. Principles of Consolidation The accounts of subsidiaries including foreign subsidiaries have been consolidated with the parent company’s 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 Statement of Profit & Loss 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 Statement of Profit & Loss. Resultant foreign exchange translation difference has been recognized as “Foreign Currency Translation Reserve”. 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. 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 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. 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. 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 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 by directors 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.
ii.
iii.
iv.
v.
vi.
52
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
vii. Inventories 1. Inventories are valued as under: a. b. c. d. Raw Materials Finished Products Stores, Spares and Components Stock in process : : : : At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower At Cost or Net Realisable Value whichever is lower 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. 3. Inventories are valued on FIFO basis. 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. b. Initial Recognition: Foreign Exchange transactions are recorded normally at the exchange rates prevailing on the date of the transactions. 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 nonmonetary 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 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 local regulations & laws.
53
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
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 (ESOS) under Unamortised 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 unconditionally 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. 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. The restoration liability calculated as discounted present value in relation to restoration guarantee at the end of the lease is correspondingly represented by a Unamortised 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 cost 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 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 i. 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. ii. Allocation of Common Costs : Common allocable costs are allocated to each segment according to sales of each segment to total sales of the Group.
54
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 2 SHARE CAPITAL DESCRIPTION AUTHORISED : 1,60,00,00,000 Equity Shares (Previous Year 1,60,00,00,000) of Rs. 10/- each. 10,00,00,000 “A” Equity Shares (Previous Year 10,00,00,000) of Rs.10/- each Carrying 100 Voting Rights per “A” Equity Share. 30,00,00,000 “B” Equity Shares (Previous Year 30,00,00,000) of Rs.10/- each Carrying 1 Voting Right per 100 “B” Equity Shares. 1,600.00 100.00 300.00 2,000.00 ISSUED, SUBSCRIBED AND PAID-UP : 52,48,80,127 Equity Shares of Rs.10/- each fully paid up ( Previous year 50,73,98,354) 5,24,88,010 "B" Equity Shares of Rs.10/- each fully paid up ( Previous year 5,07,39,834) 524.88 52.49 577.37 507.40 50.74 558.14 1,600.00 100.00 300.00 2,000.00 As at 31st March, 2012 As at 31st March, 2011
2.1
Of the above Shares: As at 31st March, 2012 Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued as fully paid Bonus Shares in the last five years. "B" Equity Shares out of the issued, subscribed and paid up "B" Equity Share Capital were issued as fully paid Bonus Shares in the last five years. Equity Shares out of the issued, subscribed and paid up Equity Share Capital were issued in the last five years for consideration other than Cash pursuant to a scheme of amalgamation 134,834,154 52,488,010
(No of Shares) As at 31st March, 2011 256,787,175 50,739,834
–
20,684,205
2.2
The Details of Shareholders holding more than 5% of shares: Name of the Shareholders As at 31st March, 2012 No of Shares Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund “B” Equity Shares: Gujarat NRE Mineral Resources Ltd. HSBC Global Investment Funds A/c HSBC Global Fund Arun Kumar Jagatramka Trustee, Girdharilal Arun Kumar Family Trust 16,675,913 2,731,594 2,779,125 31.77% 5.20% 5.29% 16,675,913 2,731,594 2,779,125 32.87% 5.38% 5.48% 192,578,554 32,308,462 36.69% 6.16% 191,859,138 32,308,462 37.81% 6.37% % held As at 31st March, 2011 No of Shares % held
55
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
2.3 The reconciliation of the number of shares outstanding is set out below: Particulars As at 31st March, 2012 No of Shares Equity Shares: Equity Shares at the beginning of the year Add: Shares issued on Conversion of Foreign Currency Convertible Bonds Add: Shares issued on Conversion of Share Warrant Add: Shares issued on exercise of Employees Stock Option Equity Shares at the end of the year “B” Equity Shares: “B” Equity Shares at the beginning of the year Add: Shares issued as Bonus Shares to Equity Shareholders Add: Shares issued as Bonus Shares on Conversion of Foreign Currency Convertible Bonds Add: Shares issued as Bonus Shares on Conversion of Share Warrant Add: Shares issued as Bonus Shares on exercise of Employees Stock Option “B” Equity Shares at the end of the year 50,739,834 – 1,740,778 – 7,398 52,488,010 – 49,819,421 10,004 855,000 55,409 50,739,834 507,398,354 17,407,793 – 73,980 524,880,127 498,194,215 100,044 8,550,000 554,095 507,398,354 As at 31st March, 2011 No of Shares
2.4
Shares Reserved for issue under Employee Stock Options Plan (i) Movement in Options granted during the Year ended March'2012 is given below: No. of Options GNCL a) Outstanding at the beginning of the Year – Equity Shares – “B” Equity Shares Granted during the Year – Equity Shares – “B” Equity Shares (To give effect of Bonus) Forfeited during the Year – Equity Shares – “B” Equity Shares Exercised during the Year – Equity Shares – “B” Equity Shares Expired during the Year – Equity Shares – “B” Equity Shares 131,296 13,130 1,756,000 – 23.86 – 0.94 – 73,980 7,398 2,185,000 – 22.16 – – – 873,850 27,860 23,448,000 – 34.81 – 0.57 – 3,560,000 – 678,000 – 24.30 – – – 6,178,876 305,788 58,497,000 – 40.95 – 0.66 – GNCCL Weighted Average Exercise Price GNCL (in Rs.) GNCCL (in AUD)
Particulars
56
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
2.4 Shares Reserved for issue under Employee Stock Options Plan (contd.) (i) Movement in Options granted during the Year ended March'2012 is given below (contd.) : No. of Options GNCL b) Outstanding at the end of the Year - Equity Shares - “B” Equity Shares c) Exercisable at the end of the Year - Equity Shares - “B” Equity Shares (ii) Share Reserved for issue against Share Warrants Particulars As at 31st March, 2012 No. of Warrants 80,800,000 2,080,000 As at 31st March, 2011 No. of Warrants 80,800,000 2,080,000 19,000 1,900 5,530,000 – 18.05 – 1.05 – 8,659,750 257,400 31,786,000 – 35.15 – 0.73 – GNCCL Weighted Average Exercise Price GNCL (in Rs.) GNCCL (in AUD)
Particulars
Equity Shares “B” Equity Shares
Out of above 60,000,000 warrants are to be issued at the exercise price of Rs.62.50 and 20,800,000 Share to be issued at exercise price of Rs. 120 each. Upon conversion of the above 20,800,000 equity shares, 20,80,000 "B" Equity Shares will be issued as bonus shares.
3 RESERVES & SURPLUS DESCRIPTION Capital Reserve: Securities Premium Reserve: As per Last Balance Sheet Add: Received during the year Less: Amount capitalised for Bonus Shares Issued General Reserve: Foreign Currency Translation Reserve Debentures Redemption Reserves As per Last Balance Sheet Add: Transfer from Surplus from Statement of Profit & Loss Employees Stock Option Outstanding Equity Conversion Bond reserve Restoration Guarantee Reserve Surplus from Statement of Profit & Loss As per last Balance Sheet Add: Profit for the year Less: Appropriations Transfer to/(from) General Reserve Proposed Dividend [Dividend per share Rs.0.50 share(Previous Year Re.1 per share)] Dividend Tax Transferred to / (from) Debenture Redemption Reserve (33.58) (98.68) (132.26) (10.81) 28.87 4.69 3.09 162.50 3.09 387.05 60.57 1.75 As at 31st March, 2012 51.12 388.03 49.76 50.74 As at 31st March, 2011 51.12
(Rs. in Crores)
445.87 241.88 (0.35)
387.05 251.80 239.80
165.59 72.25 8.80 58.02
143.75 18.75
162.50 37.58 7.57 48.26
(56.90) 109.17 52.27 – 57.73 9.37 18.75
(158.09) 885.09
(33.58)
1,152.11
57
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
(Rs. in Crores) 4 LONG TERM BORROWINGS DESCRIPTION Secured Convertible Bonds Non Convertible Debentures External Commercial Borrowings Term Loans from Banks Term Loans from Others Interest Accrued but not due on Long Term Borrowings 4) a) i) As at 31st March, 2012 Current – 37.50 – 259.21 2.08 – 298.79 Non Current 37.19 337.50 – 1,998.65 4.45 14.21 2,392.00 As at 31st March, 2011 Current Non Current – 25.00 22.57 177.04 – – 224.61 32.35 375.00 – 1,508.81 – 8.61 1,924.77
11.90% Non-Convertible Debentures and 12.50% Non- Convertible Debentures are secured by following securities: – First pari-passu charge over entire fixed assets of the company, both present and future. – 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: – First pari-passu charge over entire fixed assets of the company, both present and future. – Second pari-passu charge over entire current assets of the company, both present and future. – 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: – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company along with Corporate Guarantee – 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: – Subservient charge on movable assets of the company – 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; – 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: – Subservient Charges on movable fixed and Current assets of the Company; – 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: – Subservient charge on movable fixed and current assets of the company, both present & future. – Exclusive Charge on Entire Fixed & current assets, both present & future, of Bharat NRE Coke Ltd., an associate Company, along with Corporate Guarantee. – Pledge of equity shares of the company held by Gujarat NRE Mineral Resources Limited, a promoter company, along with Corporate Guarantee; – 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 x) Covertibles Bond are 200 nos. of 8 % 20 Year Secured Convertibles Bond issued by GNCCL. xi) During the year Gujarat NRE Coking Coal Ltd has been sanctioned additional Term Loan facilities of USD 150 million from consortium of banks (Axis Bank Ltd being the lead banker). Gujarat NRE Coking Coal Ltd has granted the following charges in favour of the security trustee for the fresh lenders in the syndication to secure the additional Term Loan of USD 150 million: l A pari-passu charge over the entire Fixed Assets of Gujarat NRE Coking Coal Ltd l A pari-passu charge over the mining leases and consolidated coal leases pertaining to 'NRE No. 1 Colliery' and 'NRE Wongawilli Colliery’ l A pari-passu charge over the entire fixed assets of the subsidiary company – Gujarat NRE Wonga Pty Ltd. but excluding in each case the Working Capital Assets being the assets of each company constituting raw materials, stocks, inventory and accounts receivable on account of sales and purchases of goods made and received in the normal course of trade or any other assets of a similar nature. Gujarat NRE Coking Coal Ltd entered into priority agreement with that security trustee on terms satisfactory to State Bank of India to regulate the priority of the above charges and the existing fixed charges which State Bank of India has over the same property so that the fixed charges will rank pari-passu to secure each lender's and State Bank of India's respective pro-rata share of the Syndicated Loan and the facilities of State Bank of India.
58
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
This is with following conditions: 1. Gujarat NRE Coking Coal Ltd has provided a Corporate Guarantee for the total facilities granted by State Bank of India to Gujarat NRE Wonga Pty Ltd (USD 50 million Term Loan and AUD50 million Bank Guarantee). 2. Gujarat NRE Wonga Pty Ltd provided a Corporate Guarantee for the total facilities granted by SBI to Gujarat NRE Coking Coal Ltd (USD 20 million Bill Discounting, AUD 5.4 million Export Packing Credit, AUD 11 million Bank Guarantee). 3. Cross-collateralisation of the existing charges is held by State Bank of India over Gujarat NRE Coking Coal Ltd and Gujarat NRE Wonga Pty Ltd in respect of the State Bank of India facilities referred to in 1 and 2 above. 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 Nil) are redeemable at par in 8 equal half yearly installments commencing from 29th April 2013. ii 12.50% Secured Redeemable Non Convertible Debentures of – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par in 4 equal annual installments commencing from 30th May 2012, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2015, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2014, – Rs. 10.00 Crores (Previous Year 10.00 Crores) are redeemable at par on 30th May 2013, – 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. (Rs. in Crores) Beyond 2014-15 2014-15 633.25 2.08 – 767.19 – 37.19 (Rs. in Crores) As at 31st March, 2012 178.21 178.21 As at 31st March, 2011 155.18 155.18
4)
b)
4)
c) Maturity Profile of Secured Term Loans are as set below: Repayment profile 2012-13 Term Loan from Banks Term Loan from Others Convertible Bonds 259.21 2.08 – 2013-14 598.21 2.36 –
5
DEFERRED TAX LIABILITIES (net) DESCRIPTION Net Deferred Tax Liabilities
6
LONG TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation As at 31st March, 2012 4.93 2.85 7.78 As at 31st March, 2011 17.47 89.90 107.37
7
SHORT TERM BORROWINGS DESCRIPTION Secured Term Loans from Banks Working Capital Facilities from Banks Unsecured Term Loans from Banks Working Capital Facilities from Banks As at 31st March, 2012 366.27 570.83 937.10 130.01 20.23 150.24 1,087.34 As at 31st March, 2011 125.00 294.04 419.04 180.03 – 180.03 599.07
i.
Working Capital facilities from a consortium of banks viz. State Bank of India, Bank of Baroda, ING Vysya Bank Ltd, AXIS Bank Ltd, Standard Chartered Bank, ICICI Bank Ltd and Tamilnad Mercantile Bank Ltd are secured by following securities: – First pari-passu charge over entire current assets of the company, both present and future.
59
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
– Second pari-passu charge over entire fixed assets of the company, both present and future. – Equitable mortgage over residential property at Kolkata of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Personal guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. – Pledge of equity shares of the Company held by Gujarat NRE Mineral Resources Limited, a promoter Company along with Corporate Guarantee of the Company equivalent to the value of shares pledged. Term Loan from ICICI Bank in Gujarat NRE Ltd. is secured by pledge of shares of Gujarat NRE Coking Coal Ltd. (GNCCL). Working Capital facilities from State Bank of India in Gujarat NRE Coking Coal Ltd. is secured by fixed and floating charge over assets of the Gujarat NRE Coking Coal Limited. Unsecured Term Loans are collaterally secured by Personal Guarantee of Mr. Arun Kumar Jagatramka, Chairman & Managing Director of the company. (Rs. in Crores) As at 31st March, 2012 – 568.46 568.46 As at 31st March, 2011 – 292.98 292.98
ii. iii iv 8
TRADE PAYABLES DESCRIPTION Micro, Small & Medium Enterprises * Others
*
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:
Particulars Principal amount due and remaining unpaid Interest due on above and the unpaid interest Interest paid on all delayed payment under the MSMED Act Payment made beyond the appointed day during the Year Interest due and payable for the Year of delay other then above Interest accrued remaining unpaid Amount of further interest remaining due and payable in succeeding Years As at 31st March, 2012 – – – – – – – As at 31st March, 2011 – – – – – – –
9
OTHER CURRENT LIABILITIES DESCRIPTION Current maturities of long term debts Interest Accrued but not due on borrowings Unclaimed Dividend Creditors for Capital Expenditure Others Payables Acceptances As at 31st March, 2012 298.79 13.30 2.18 33.64 344.18 583.50 1,275.59 As at 31st March, 2011 224.61 17.35 2.19 19.93 72.57 402.04 738.69
10
SHORT TERM PROVISIONS DESCRIPTION Provision for Gratuity & Leave Encashment Provision for Taxation Provision for Fringe Benefit Tax Provision for Proposed Dividend Provision for Dividend Tax/Dividend Tax Payble As at 31st March, 2012 72.95 1.65 – 28.87 14.05 117.52 As at 31st March, 2011 31.33 24.81 1.30 57.74 9.37 124.55
60
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
NOTES-11 GROSS BLOCK Addition during the year – 55.74 – 59.31 114.03 2.22 0.14 7.33 – 1.27 – 172.60 795.20 – 1,207.84 677.02 (340.78) 8.95 – 308.10 5,024.40 3,825.51 – 1,951.15 – 391.21 – 488.10 87.01 4.34 229.66 147.66 702.40 409.05 – 25.38 4.70 – 0.47 0.08 0.40 29.89 10.65 3.20 0.02 1.17 25.77 0.60 77.78 0.59 197.56 227.36 – 3.73 1.17 0.24 – 7.39 2.77 0.85 – 1,145.04 203.05 83.39 – 175.50 11.31 3.95 – – – – 0.14 – – – – – – 0.14 (65.99) – 8.51 – – – – 270.28 – – – 8.55 219.65 – – – – – – 15.26 286.44 3.62 1.41 13.71 0.10 5.88 112.78 4.94 307.44 148.25 899.82 702.40 Sales / Adjustment during the year Total up to 31.03.12 As on 01.04.2011 Provided during the year Sales / Adjustment during the year Total up to 31.03.12 As on 31.03.12 DEPRECIATION
(Rs. in Crores) NET BLOCK As on 31.03.2011
Description of Assets
As on 01.04.2011
Goodwill 214.54 8.51 116.19 1,031.01 5.17 3.59 22.96 0.47 24.11 488.10 218.61 1,155.95 308.10 3,825.51 2,807.71
228.20
219.65 270.28 8.51 160.24 858.60 3.77 2.32 16.18 0.37 19.51 375.32 386.27 1,643.71 159.85 4,124.58 3,123.11 672.31
228.20 214.54 8.51 104.88 827.96 2.40 2.42 12.31 0.39 19.41 401.09 214.27 926.29 160.44 3,123.11
Land - Freehold
Land -Lease Hold*
Building
Plant & Machineries
Office Equipment
61
Furniture & Fixture
Material handling Equipments/ Vehicles
Weighing Machine
Electrical Installations
Wind Mill
Mining Lease
Mine Development
Pre Production Expenses
Total
Previous Year
Capital Work-inprogress
375.83
GUJARAT NRE COKE LIMITED
* Conveyance deed will be executed in favour of the company in due course.
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
12 NON-CURRENT INVESTMENTS DESCRIPTION Investments in Equity Shares, Bonds & Others -Quoted -Unquoted Investments in Associates (Long Term) (Unquoted) Investments in Subsidiaries Market value of Quoted Investments (Equity) As at 31st March, 2012
(Rs. in Crores)
As at 31st March, 2011
43.84 105.63 244.39 – 393.86 32.57
108.40 105.26 245.06 – 458.72 129.32
13
LONG TERM LOANS AND ADVANCES (Unsecured, Considered Good) DESCRIPTION Capital Advance Loan & Advances Deposits With Govt. Authorities & Others Advance Tax (incl. Tax Deducted at Source) Unamortised Expenses: (To the extent not written off/or adjusted) – Deferred Employee Compensation Under ESOS Balance B/F Less – Adjusted for Employees left during the year – Amortised during the year (net) Deferred Revenue Expenses Restoration Guarantee 6.31 0.84 0.51 4.96 – 65.31 252.53 8.04 0.57 1.16 6.31 0.01 59.23 347.93 As at 31st March, 2012 7.83 2.57 107.59 64.27 As at 31st March, 2011 15.30 1.27 109.74 156.07
14
CURRENT INVESTMENTS* DESCRIPTION Other Investment (Unquoted) SBI Premier Liquid Fund Grove Street Ventures SPC As at 31st March, 2012 – 50.85 50.85 As at 31st March, 2011 5.00 67.99 72.99
* Refer Note 1(viii) for mode of valuation 15 INVENTORIES DESCRIPTION Stores , Spares & Consumables Raw Materials Stock in Process Finished Products As at 31st March, 2012 33.03 542.89 9.56 1,043.32 1,628.80 (Refer Note 1(vii) for mode of valuation As at 31st March, 2011 30.48 460.69 8.89 606.52 1,106.58
62
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
16 TRADE RECEIVABLE (Unsecured, considered good) DESCRIPTION Debts due for a period exceeding six months Other Debts As at 31st March, 2012 5.18 377.43 382.61 17 CASH & BANK BALANCES DESCRIPTION Cash in hand (as certified by the Management) Balance with Scheduled Banks - In Current Account - In Current Account for Unclaimed Dividend - In Term Deposits* (Including interest accrued) ** Balance with Non Scheduled Banks - In Current Account - In Term Deposits As at 31st March, 2012 0.25 1.85 2.18 64.48 22.19 – 90.95 As at 31st March, 2011 0.16 28.39 2.19 53.39 60.55 312.77 457.45 (Rs. in Crores) As at 31st March, 2011 6.53 255.19 261.72
* includes Term deposits held as margin on Letter of Credit and Bank Guarantee ** Term Deposits with Banks includes deposits of Rs.9.80 Crores (Previous Year Rs.37.57 Crores ) with maturity of more than 12months. 18 SHORT TERM LOANS AND ADVANCES (Unsecured,Considered Good) DESCRIPTION Advances recoverable in cash or in kind or value to be received Advance Tax (incl. Tax Deducted at Source) As at 31st March, 2012 537.55 13.38 550.93 As at 31st March, 2011 431.59 24.66 456.25
19
REVENUE FROM OPERATIONS DESCRIPTION Sales of Product Less: Excise Duty Freight Revenue For the year ended 31.03.2012 1,463.55 65.16 1,398.39 – 1,398.39 For the year ended 31.03.2011 1,846.71 34.08 1,812.63 1.08 1,813.71
19.1 PARTICULARS OF SALE OF PRODUCTS DESCRIPTION Coal & Coke Rolled & Alloy Steel Products Electricity Power (Windmill) For the year ended 31.03.2012 1,055.47 326.85 16.07 1,398.39 For the year ended 31.03.2011 1,514.73 287.34 10.56 1,812.63
63
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
20 OTHER INCOME DESCRIPTION Interest Income Income from Long Term Investment: Non Trade - Profit on Sale of Investments Foreign Exchange Fluctuation Profit on Sale of Fixed Assets Miscellaneous Income – – 0.01 2.17 11.38 68.80 107.18 0.01 1.26 186.46 For the year ended 31.03.2012 9.20 (Rs. in Crores) For the year ended 31.03.2011 9.21
21
COST OF MATERIAL CONSUMED DESCRIPTION Coal Iron & Steel Scrap and Sponge Iron For the year ended 31.03.2012 133.18 238.95 372.13 For the year ended 31.03.2011 118.34 206.00 324.34
21.1 PARTICULARS OF COST OF MATERIAL CONSUMED DESCRIPTION Imported Indigenous For the year ended 31.03.2012 273.77 98.36 372.13 22 CHANGE IN INVENTORIES OF FINISHED GOODS, WORK -IN-PROCESS & STOCK IN TRADE DESCRIPTION Closing Stocks Less :Opening Stocks Less: Change in Excise Duty on Stock For the year ended 31.03.2012 1,052.88 615.41 437.47 1.10 436.37 23 EMPLOYEES BENEFITS EXPENSES DESCRIPTION Salaries, Wages, Bonus & Labour Charges Contribution to PF & Other Funds Provision/Payment of Gratuity Employee Compensation Amortisation Under ESOS Employees Welfare Expenses For the year ended 31.03.2012 159.17 2.73 1.14 0.51 10.78 174.33 For the year ended 31.03.2011 201.73 2.01 8.06 1.16 5.54 218.50 For the year ended 31.03.2011 615.41 565.86 49.55 0.70 48.85 For the year ended 31.03.2011 257.62 66.72 324.34
64
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
24 FINANCE COSTS DESCRIPTION Interest Expenses Other Borrowing Costs Applicable loss/(gain) on foreign currency transactions and translation For the year ended 31.03.2012 234.14 18.05 – 252.19 (Rs. in Crores) For the year ended 31.03.2011 221.61 16.74 (3.44) 234.91
25
OTHER EXPENSES DESCRIPTION Manufacturing Expenses: Mine Operating Expenses Power & Fuel Stores, Spares & Consumables Repair & Maintenance: – Plant & Machinery – Building – Others Royalties Plant Hire Charges Selling & Distribution Expenses: Advertisement & Business Development Carriage & Cartage Commission on Sales Establishment Expenses: Professional & Service Charges General Expenses Rent Rates & Taxes Insurance Expenses Chartering Expenses Communication Expenses Travelling & Conveyance Auditors Remuneration – For Audit Fees Internal Audit Fees Loss on Sale of Fixed Assets Loss on Sale/Restatement of Investments (Net) Environment Expenses Deferred Revenue Expenses Written Off 1.44 0.08 – 30.11 10.24 3.08 123.69 782.58 1.29 0.09 0.17 – 13.74 1.26 78.74 737.43 33.35 7.35 0.83 7.47 8.42 14.63 1.23 5.46 30.23 7.39 0.46 4.74 12.37 – 1.31 5.69 10.07 242.75 1.97 254.79 3.89 348.56 0.85 353.30 99.75 2.70 3.82 40.96 4.89 404.10 61.45 0.82 2.92 48.85 4.93 305.39 156.40 49.89 45.69 95.33 39.65 51.44 For the year ended 31.03.2012 For the year ended 31.03.2011
65
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
26 The Earnings Per Share as per Accounting Standard (AS)- 20 are as under: Particulars At 31.03.2012 Basic & Diluted EPS (98.68) – (98.68) 558,138,188 – 17,407,793 73,980 1,748,176 577,368,137 576,976,321 2,080,000 – At 31.03.2011 Basic & Diluted EPS 109.16 – 109.16 498,194,215 8,550,000 100,044 554,095 50,739,834 558,138,188 554,582,402 2,080,000 5,558,439
Earnings Net Profit/(Loss) for the Year (Rs. / Crores) Add: Interest on FCCB (Rs. / Crores) Earnings for Diluted EPS (Rs. / Crores) Shares Number of shares at the beginning of the Year Add: Share Allotted against Share Warrants Add : Conversion of FCCB Add: Share Allotted against ESOS Add: Bonus “B” Equity Shares Issue Total number of equity shares outstanding at the end of the Year Weighted average number of shares outstanding during the Year (for Basic EPS) Add : Number of equity shares arising out of exercise of option of outstanding Share Warrants that have dilutive effect on the EPS Add : Number of equity shares arising out of conversion of outstanding FCCB that have dilutive effect on the EPS Add : Number of Equity Shares arising out of exercise of option of Employee Stock Option Scheme Weighted average number of shares outstanding during the Year (for Diluted EPS) Earning per share : – Basic (Rs.) – Diluted (Rs.) (1.71) (1.70) 1.96 1.94
262,550 579,318,871
1,275,496 563,496,337
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 Contingent liabilities not provided for in respect of: As on 31st March 2012 27.1 For Parent Company (Gujarat NRE Coke Ltd.) i ii iii iv v vi Letter of Credits outstanding for purchase of materials. Outstanding Bank Guarantees Capital commitments Bills discounted under letter of credit with banks Duty on account of Advance Authorisation against Export obligation. On Balance Sheet date, the disputed amount involved in four (previous year three) income-tax demands under appeal. 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. 18.67 13.44 58.73 85.04 0.73 50.92 10.93 137.17 32.41 1.03 (Rs. in Crores) As on 31st March 2011
8.29 0.06 2.55
4.42 0.06 –
vii A demand raised by the Service Tax Department, against which company has filed an appeal to the jurisdiction authorities. viii A demand raised by the Custom Department, against which company has filed an appeal to the jurisdiction authorities.
66
GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
For Subsidiaries State Bank of India bank guarantees of Rs.3.22 Crores (Previous Year - Rs.2.80 Crores) has been provided to The Sydney Catchment Authority and Supreme Court of NSW. Bank guarantee has been provided to DPI for restoration liability for NRE No1 mine - Rs.30.39 Crores (Previous Year - Rs.26.43 Crores). Restoration liability for the said liabilities has been accounted at their present value in the group's financial statements. State Bank of India bank guarantee of Rs.1.74 Crores (Previous Year Nil) has been provided to CBA to enable them to further issue a BG favoring Port Kembla Coal Terminal (PKCT) . State Bank of India bank guarantee of Rs.5.37 Crores (Previous Year - Nil) has been provided to Port Kembla Coal Terminal. State Bank of India bank guarantee of Rs.10.74 Crores (Previous Year - Nil) has been provided to WDS in relation to secure payments State Bank of India bank guarantee of Rs.5.37 Crores (Previous Year - Rs.4.67 Crores) has been provided to National Basketball League to provide corporate support for Wollongong Hawks to participate in National Basketball League. Capital Commitment - Rs.166.59 Crores (Previous Year - Rs.458.95 Crores) 27.2 Greenearth Resources & Projects Limited (formerly known as Austral Coke & Projects Limited) had filed a defamation suit in Hon'ble Bombay High Court against the Company for Rs.600 Crores. The Company had also filed Civil Suit in Hon'ble 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 suit filed by the Austral Coke & Projects Limited would be in favour of the company. 27.3 On 16 October 2007, the company and Armada Singapore Pte Ltd (“Armada”) entered into five year charter party agreement which provided, inter alia, for Armada to supply vessels to ship the company's tonnage, namely coal or coking coal from various destinations worldwide. Between late 2008 and early 2009, following the worldwide economic crisis, Armada experienced serious financial losses resulting into a large number of third party defaults under its shipping agreements. As a result, during the course of 2009 Armada entered into Judicial Management, a Singaporean insolvency regime. As a result of Armada's insolvency, the Company refused to make further nominations since there was no assurance or security for Armada's performance for the balance period under the agreement. Armada later on filed its claim submission in an arbitration proceeding against the company before Arbitration Tribunal in London. Although there was no specific clause on jurisdiction or applicable law in the agreement and also the constitution of Arbitration Tribunal was not in accordance with the agreement and even after the company's repetitive challenges to aforesaid, the Tribunal passed an order in favour of Armada assessing the liability of the company towards Armada as Rs. 42.85 Crores (including interest of Rs. 3.42 Crores). Aggrieved by the aforesaid order, the company has filed a civil suit against Armada with the Hon'ble High Court at Calcutta claiming for damages for an amount of Rs 144 Crores and cancellation of the aforesaid order being void and restraining Armada from giving any effect to the order passed by the Tribunal. Subsequently, an order was passed by the Hon'ble High Court at Calcutta restraining Armada to take any further steps to enforce the award passed by the Tribunal in India. The matter is presently sub judice before the Hon'ble High Court at Calcutta. 28 Gujarat NRE Resources NL(GNRNL) has entered into a joint venture (30% ownership), farm-in arrangement with Pluton Resources Limited (60%) & Southern Ocean Sciences Pty Ltd and John McDougall (10 %) which is managed by Pluton through joint venture exploration program and GNRNL has commenced pro rata cost contribution to the joint venture agreement. Cethana is prospective for gold and base metals. The Exploration License is located 50km South of Devonport on the north coast of Tasmania. Joint Venture IEL 29/2006 Cethana is not impaired and directors are of the opinion that the carrying value is the reasonable fair value of the asset.
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GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
29 Segment Informations: Segment wise Revenue, Results and Capital Employed for the Year ended 31st March, 2012. The group has three reportable segments i.e. “Coal & Coke”, “Steel” and “Mining” as primary business segments. i Primary Segment Reporting ( by Business Segment): (Rs. in Crores)
Particulars Coal & Coke Segment Revenue (Net Sales/Income from segment) External Sales Inter-Segment Revenue 1029.26 Less: Inter Segment Revenue Total Segment Revenue Segment Results before Tax, Extraordinary Items & Interest Add:- Other Un-allocable Income Net of Expenditure Less:- Interest Expense Less:- Provision for Tax Net Profit/(Loss) after Tax Assets Segment Assets* Un-allocable Assets Total Assets Liabilities Segment Liablities Un-allocable Liablities Total Liablities *including captive windmills Capital Expenditure Non Cash Expenses : Depreciation & Amortisation 26.66 29.69 93.88 20.71 29.32 168.07 6.84 78.88 368.47 6.74 1,429.14 955.15 82.55 625.31 1663.01 21.77 1684.78 7.44 132.85 393.64 5.85 588.02 397.92 71.82 375.16 844.90 202.68 1047.58 2,969.64 577.59 4,024.14 7571.37 576.04 8147.41 2,185.09 577.94 2,507.60 5270.63 1063.00 6333.63 1029.26 293.44 1029.26 342.92 1.65 344.57 1.65 342.92 14.82 26.21 909.56 935.77 909.56 26.21 2.77 1398.39 911.21 2309.60 911.21 1398.39 311.03 (112.04) 252.19 30.14 (83.34) 1296.81 252.07 1296.81 1296.81 297.90 2.16 300.06 2.16 297.90 14.78 217.92 720.99 938.91 720.99 217.92 6.30 1812.63 723.15 2535.78 723.15 1812.63 273.15 111.86 221.61 28.68 134.72 2011-12 Steel Mining Total Coal & Coke 2010-11 Steel Mining Total
ii
Secondary Segment Reporting ( by Geographical demarcation): Particulars India Segment Revenue Segment Assets Capital Expenditure 1,006.59 3,547.23 85.62 2011-12 Rest of the World 391.80 4,024.14 1,429.14 Total 1,398.39 7,571.37 1,514.76 India 1,253.69 2,763.03 138.70 2010-11 Rest of the World 341.02 2,507.60 588.02
(Rs. in Crores)
Total 1,594.71 5,270.63 726.72
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GUJARAT NRE COKE LIMITED
Notes on Consolidated Financial Statement for the year ended 31st March, 2012 (contd.)
30 Related Party Disclosures as required by Accounting Standard (AS-18) issued by the Institute of Chartered Accountants of India (ICAI), are given below: A. 1 2 3 4 5 6 7 1 2 3 4 5 1 B. Particulars of the Related Parties: Associates Bharat NRE Coke Ltd. NRE Metcoke Ltd. Bajrangbali Coke Industries Ltd. Surajbari Traders Pvt. Ltd. Dharwad Traders Pvt. Ltd. Mandvi Traders Pvt. Ltd. Lunva Traders Pvt. Ltd. Enterprises in which key management personnel have significant Influence Gujarat NRE Mineral Resources Ltd. Gujarat NRE Energy Resources Ltd. Russel Vale Traders Pvt. Ltd. Bulli Coke Ltd. Gujarat NRE Oil Ltd. Enterprise in which key management person is a trustee Girdharilal Arun Kumar Family Trust
Key Management Personnel 1 Mr. A. K. Jagatramka – Chairman & Managing Director 2 Mr. P. R. Kannan – Chief Financial Officer Relatives of Key Management Personnel Mrs. Mona Jagatramka Ms. Tanvee Jagatramka Transaction with Related Parties Particulars of Transactions Current Year 0.15 5.40 6.07 0.94 (Rs. in Crores) Previous Year 0.24 4.95 3.20 0.59
C
i ii iii
Sale/(Sales Return) of Goods/Services – Associates Purchase of Goods /Services – Associates Remuneration – Key Management persons – Relative of Key Management Personnel Share Warrant Deposit Received – Enterprises in which key management person has significant influence
iv
– 0.25 – 30.09 0.30 – 55.00 2,078.10 94.50
93.75 0.25 30.00 51.42 – 2.93 – 1062.73 170.55
v vi vii
Rent Paid – Enterprises in which key management person is a trustee Security Deposit Given – Associates Loans / Advance Given/(Refunded) – Associates – Enterprises in which key management person has significant influence Guarantees/Collateral Securities Outstanding as at the Year end – Given on behalf of Associates – Given by Associates on behalf of the Company – Given by Key Management Personnel on behalf of the Company – Given by Enterprises in which key management person has significant influence
viii
69
GUJARAT NRE COKE LIMITED
Notes on Financial Statement for the year ended 31st March, 2012 (contd.)
31.1 Directors of Gujarat NRE Limited after review & assesment of investment in Pike River Coke Ltd has determined that investment in Pike River Coke Ltd. has impaired and has been accordingly charged off fully in the Statement of Profit & Loss Account as Extraordinary item. 31.2 The indicators of impairment listed in paragraph 8 to 10 of Accounting Standard (AS)- 28 “Impairment of assets” issued by ICAI have been examined by the management and on such examination, it has been found that none of the indicators are present in the case of the Company's assets . A formal estimate of the recoverable amount has not been made, as there is no indication of a potential impairment loss. 32 33 34 Exceptional items for the year ended 31st March'2012 represents the foreign exchange losses due to unusual diminution in the value of Rupee as against the US Dollar during the year. There are no amounts due and outstanding to be credited to Investors Education and Protection Fund as at 31st March 2012. The Revised Schedule VI has become effective from April 1,2011 for the presentation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figure have been regrouped/reclassified wherever necessary to correspond with the current year's classification / disclosure.
70
GUJARAT NRE COKE LIMITED
Consolidated Cash Flow Statement for the year ended 31st March, 2012
(Rs. in crores) For the Year ended 31-Mar-12 CASH FLOW FROM OPERATING ACTIVITIES Net Profit/(Loss) Before Tax Adjustments for: Depreciation / Other non cash items Interest Paid / Payable Net Other Income Net Loss/(Profit) on Sale / Discard of Fixed Assets Net Loss/(Profit) on Sale of Investment Employee Stock Option - Compensation debited to Profit and Loss A/c Interest Received / Receivable Extra Ordinary Items Operating Profit before Working Capital Changes Adjustments for: Trade & Other Receivables Inventories Trade Payables Cash Generated from Operations Direct Taxes Paid / Refunds Net Cash Generated from Operating Activities B CASH FLOW FROM INVESTING ACTIVITIES Addition to Fixed Assets Sale of Fixed Assets Addition to Investments Sale of Investments Interest Received Dividend / Misc Income Net Cash used in Investing Activities C CASH FLOW FROM FINANCING ACTIVITIES Net Proceeds to Share Capital / Reserves Deposit against Share Warrant Increase in Long / Short term borrowing Interest Paid Dividend & Dividend Tax Paid Unamortised Expenses Net Cash Generated From Financing Activities Net Increase / (Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents (Opening Balance) Cash & Cash Equivalents (Closing Balance) In terms of our report of even date annexed hereto For N. C. BANERJEE & CO. Chartered Accountants (Firm Registration No. 302081E) A. Paul Partner Membership No. 06490 Place : Kolkata Dated : 27th May' 2012. For and on behalf of the Board A (53.21) 153.73 236.66 (2.17) (0.01) 30.11 0.51 (9.20) 67.09 423.51 (225.99) (522.22) 771.34 446.64 (15.54) 431.10 (1,441.38) 0.28 – (13.86) 9.20 2.17 (1,443.59) 0.79 – 946.38 (235.12) (57.74) (8.32) 645.99 (366.50) 457.45 90.95 For the Year ended 31-Mar-11 163.38 218.59 221.61 (111.88) 0.16 (68.80) 1.16 (9.21) 23.62 438.63 (68.38) (212.03) 45.35 203.57 (26.55) 177.02 (750.28) 0.30 (174.52) 60.88 9.21 111.88 (742.53) 274.51 104.15 753.31 (203.30) (64.10) (4.48) 860.09 294.58 162.87 457.45
A K Jagatramka Chairman & Managing Director Place : Kolkata
M Jagatramka Director Place : Kolkata
P R Kannan Chief Financial Officer Place : London
Manoj K Shah Company Secretary Place : Kolkata
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GUJARAT NRE COKE LIMITED
Notes
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GUJARAT NRE COKE LIMITED Registered Office
22, Camac Street, Block-C, 5th Floor, Kolkata - 700 016 Phone : +91-33-2289-1471 Fax : +91-33-2289-1470 Email : [email protected] Investor Query : [email protected]
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