8,25,00,000 equity shares of Rs. 2 each issued as fully paid-up shares
to Indian Aluminium Company, Limited in part exercise of its option to
convert the total funds infused for effecting One Time Settlement (OTS)
in pursuance to Honb'le AAIFR Order dated 26th September, 2001
Since company is getting merged with INDAL with effect from 1st
April, 2002 in pursuance to AAIFR Order dated 8th March 2002 share
forfeiture amount of Rs. 1,10,500 has been transferred to Capital
1. Contingent Liabilities not provided for in respect of:
a) Guarantees Provided by Banks Rs. 10,22,306 (Previous year
b) Bills discounted with Banks Rs. 38,80,517 (Previous year - Nil).
c) Un-expired Letters of Credit Rs. 59,07,916(Previous year
These exclude interest on delayed payment/outstanding bills for supply
of foil stock totaling to Rs. 5,34,53,295 claimed by Indian Aluminium
Company, Limited (Previous Year Rs. 2,39,57,365) in view of merger
scheme sanctioned by AAIFR.
2. Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs. 14,69,060 (previous year Nil).
3. Amalgamation with Indian Aluminium Company, Limited (INDAL)
Pursuant to a Scheme of Rehabilitation sanctioned by the Appellate
Authority for Industrial and Financial Reconstruction (AAIFR) vide its
Order dated 26th September 2001, 14th February 2002 and 8th March,
* Indian Aluminium Company, Limited (INDAL) infused funds on 26th
September 2001 of Rs. 1238 lakhs and on 27th December 2001 of Rs.
1238.75 lakhs aggregating to Rs. 2476.75 lakhs as unsecured loans with
an option to convert into Equity. The funds were utilised to pay the
term loan dues of the Financial Institutions and Bank by way of One
Time Settlement. The dues were paid in two installments with the final
installment being paid on 27th December, 2001. The Bank and Financial
Institutions waived interest, penal interest, liquidity damages and
Zero Rate debentures totalling to Rs. 2094.02 lakhs. This amount has
been included under the head Relief and Concessions in the Profit and
* In accordance with the terms of Memorandum of Understanding (MOU)
dated 20th February 2001 (being a part of the AAIFR order) between
Indal and the Reddy's, the erstwhile promoters, the interest free
unsecured loans of Reddy's stands reduced from Rs. 720 lakhs to Rs. 190
lakhs. The reduction in the loan amount of Rs. 530 lakhs has been
included under the head Relief and Concessions in the Profit and Loss
Account. A sum of Rs. 190 lakhs infused by Indian Aluminium Company,
Limited towards final payment of unsecured loan to Reddy's. Further, in
terms of the same MOU Indal acquired in October 2001 the entire equity
stake of 47,26,400 shares of face value Rs. 10 each from the Reddy's,
the erstwhile promoters at a mutually agreed price of Rs. 2 per share.
* The existing paid up share capital of the Company of Rs. 1959.64 lacs
was written down by 80% (i.e. the face value of the shares were reduced
from Rs. 10 to Rs. 2). The reduction in the share capital of Rs.
1567.71 lakhs has been set-off against the accumulated losses. To bring
about a consistency in the face value of shares, the Company at its
Extra-Ordinary General Meeting held on 2nd January 2002 altered the
Capital Clause of the Memorandum of Association of the Company to read
as Rs. 30 crores divided into 15,00,00,000 equity shares of Rs. 2 each.
* INDAL, in part exercise of its option to convert the total funds
converted Rs. 1038 lakhs as equity at a face value of Rs. 2 on 2nd
January, 2002 and Rs. 612 lakhs on 31st January 2002 as equity at a face
value of Rs. 2 per share fully paid up. INDAL presently holds 89.75% of
the total equity share capital of the Company.
4. AAIFR vide its order dated 8th March, 2002 sanctioned the scheme of
merger with Indian Aluminium Company, Limited with effect from 1st
April, 2002 subject to regulatory and statutory approvals as necessary.
5. Segment Reporting
The entire operations of the Company relate to only one segment viz.
Aluminium Foil including Light Gauge Strips. As such there is no
separate reportable segment under Accounting Standard 17 on Segment
6. Related Party Transactions
The company entered into related party transactions during the year
with Indian Aluminium Company, Limited (INDAL) the Holding Company and
its Holding Company Hindalco Industries Limited (HINDALCO).
The transactions with INDAL comprise of purchases of Rs. 23,15,19,846
and with HINDALCO Rs. 45,14,490 during the year ended 31st March, 2002.
The conversion job undertaken for INDAL amounting to Rs. 4,65,52,804
and for HINDALCO Rs. 34,67,155 during the year ended 31st March 2002.
An amount of Rs. 26,31,752 is incurred towards deputation of Managerial
Personnel by INDAL and Rs. 50,92,645 is provided in respect of interest
on unsecured loan payable to INDAL. The outstanding dues to INDAL as
on 31 st March, 2002 in respect of above transactions is Rs.
23,90,41,571 and are as set out in Schedule 19, Current Liabilities, to
the Financial Statements. The outstanding dues from HINDALCO as on 31st
March, 2002 is Rs. 54,028 and are as set out in Sundry Debtors,
Schedule 15 to the Financial Statements.
7. Deferred Taxation
The guidelines of Accounting Standard on Accounting for Taxes on
Income (AS-22) issued by the Institute of Chartered Accountants of
India (ICAI) are not applicable, since the company stands merged with
Indian Aluminium Company, Limited with effect from 1st April, 2002 in
pursuance to the Order of AAIFR dated 8th March, 2002.
8. The figures of the previous year have been regrouped/reclassified,
here necessary, to conform with the current year's classifications.