Gujarat NRE Coke

1.  Of the equity shares of Rs. 10/- each comprised in the subscribed &
 paid up capital of the company:- a) 68,208 (Previous Year 4,98,15,134 )
 equity shares were allotted as fully paid up shares pursuant to
 exercise of options by bond holders of 1% Foreign Currency Convertible
 Bonds (FCCB) of USD 55 Million.
 
 b) Nil (Previous Year 2,67,96,000 ) equity shares were allotted as
 fully paid up shares pursuant to exercise of options by bond holders of
 Zero Coupon Foreign Currency Convertible Bonds (FCCB) of USD 60 Million
 
 c) Nil (Previous Year 1,65,00,000) equity shares were allotted as fully
 paid up shares pursuant to exercise of options by holders of share
 warrants.
 
 2.  Stock Option Schemes
 
 i) The grant of option to the employees under the stock Option Schemes
 is on the basis of their performance and other eligibility criteria The
 options are vested over a period, subject to the discretion of the
 Management and fulfillment of certain conditions.
 
 v) The Company has calculated Employee Compensation Costs on the basis
 of Intrinsic Value Method and has amortized Rs. 9, 38,468 for the year
 ended 31st March, 2009. However, had the company followed Fair Value
 Method for calculating Employee Compensation Costs, such costs for the
 year would have been higher by Rs. 10, 63,875 with corresponding impact
 on the Profit after Tax and Basic as well as Diluted EPS for the year.
 
 3.  Contingent liabilities not provided for in respect of:
 
 a ) Letter of Credits outstanding for purchase of raw materials pending
 shipments as on the Balance Sheet date aggregating to Rs. 84.46 crores
 (Previous Year Rs. 66.17 crores).
 
 b) Outstanding Bank Guarantees and Counter/Corporate Guarantees given
 on behalf of subsidiary companies as on Balance Sheet date aggregating
 to Rs. 550.02 crores (Previous Year Rs. 1197.64 crores)
 
 c) Capital commitments (net of advances) as on Balance Sheet date - Rs.
 156.58 crores (Previous Year - Rs. 293.03 crores)
 
 d) On Balance Sheet date, the disputed amount involved in two
 income-tax demands under appeal - Rs. 3.55 crores (Previous Year - Rs.
 3.56 crores). The management is of view that the outcome of the appeal
 would be favourable to the company, hence no provision has been made
 against these income-tax demands.
 
 e) Duty on account of Advance Authorisation against Export obligation
 is Nil. (Previous Year - Rs. 0.17 crores.)
 
 f) Bills discounted under letter of credit with banks aggregating to
 Rs. 50.32 crores (Previous Year – Rs. 12.78 crores)
 
 4.  a) Term Loan from State Bank of India, State Bank of Hyderabad, YES
 Bank Ltd. , State Bank of Mysore and State Bank of Patiala; and
 
 Non-Convertible Debentures subscribed by AXIS Bank Ltd. and Life
 Insurance Corporation of India; and External Commercial Borrowing from
 HSBC Bank Plc. 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, Vice-Chairman &
 Managing Director of the company.
 
 b) Working Capital facilities from a consortium of banks viz. State
 Bank of India, Bank of Baroda, ING Vysya Bank Ltd., The Hongkong and
 Shanghai Banking Corporation Ltd., AXIS Bank Ltd, and Standard
 Chartered Bank 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, Vice-Chairman & Managing Director of the company.
 
 - Personal guarantee of Mr. Arun Kumar Jagatramka, Vice-Chairman &
 Managing Director of the company.
 
 Pledge of 39,87,410 equity shares of the Company held by a promoter
 company along with Corporate Guarantee of the promoter company.
 
 c) Loans from State Bank of Bikaner & Jaipur, Industrial Development
 Bank of India Ltd., Tamilnad Mercantile Bank Ltd., Indusind Bank Ltd.
 and Development Credit Bank Ltd are secured by followings
 
 - Pledge of equity shares of the company held by Mr. Arun Kumar
 Jagatramka, Vice-Chairman & Managing Director of the company and/or
 promoter company;
 
 - Personal Guarantee of Mr. Arun Kumar Jagatramka, Vice-Chairman &
 Managing Director of the company and /or Corporate Guarantee by
 Promoter Company.
 
 d) Loans from Dena Bank are secured by subservient charge on assets of
 the company and Personal Guarantee of Mr. Arun Kumar Jagatramka, Vice
 -Chairman & Managing Director of the company.
 
 5. Austral Coke & Projects Limited has filed a defamation suit in
 Hon’ble Bombay High Court against the Company for Rs.600 Crores. The
 Company has 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 filed by the Austral Coke & Projects Limited would be in
 favour of the company.
 
 6.  None of the Creditors have informed us as to their status of being
 micro, small and medium enterprise as per Micro, Small and Medium
 Enterprise Development Act, 2006 (MSMED).
 
 7.  Related Party Disclosuresas 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
 
 Wholly Owned
 
 1.  Gujarat NRE Ltd.
 
 2.  Hunter Valley Coal (P) Ltd.
 
 3.  Manor Dealcom (P) Ltd.  Sub-Subsidiary Companies
 
 1.  Gujarat NRE Coal (NSW) Pty Ltd.
 
 2.  Gujarat NRE FCGL Pty Ltd.
 
 3.  Wonga Coal Pty Ltd.
 
 4.  Gujarat NRE Minerals Ltd.
 
 5.  Gujarat NRE Resources NL.
 
 6.  South Bulli Holdings Pty Ltd.
 
 7.  Gujarat NRE Properties Pty Ltd.
 
 8.  Gujarat NRE India Pty Ltd.  Associates
 
 1.  Bharat NRE Coke Ltd.
 
 2.  Gujarat NRE Energy Resources Ltd.
 
 3.  Shree Salasar Coke (Gujarat) Pvt. Ltd.
 
 4.  Maa Kali Metcoke Industries Pvt. Ltd.
 
 5.  Jharia Coke Pvt. Ltd.
 
 Enterprises in which key management personnel have significant
 Influence
 
 1.  FCGL Investments Ltd.
 
 2.  Gouriputra Consultants Pvt. Ltd.
 
 3.  Gourav Vinimay Pvt. Ltd.
 
 4.  Gujarat NRE Mineral Resources Ltd.
 
 5.  Malgudi Investment Ltd.
 
 6.  Matangi Traders & Investors Pvt. Ltd.
 
 7.  Newage Vinimay Pvt. Ltd..
 
 8.  Critical Mass Multilink Pvt. Ltd.
 
 9.  Bulli Coke Pvt. Ltd.
 
 10.  Madhur Coal Mining Pvt. Ltd.
 
 11.  Mangal Crystal Coke Pvt. Ltd.
 
 B) Key Management Personnel
 
 1.  Mr. A. K. Jagatramka - Vice-Chairman & Managing Director
 
 2.  Mr. R. P. Jain - Executive Director
 
 3.  Mr. P. R. Kannan - Chief Financial Officer Enterprise in which key
 management person is a trustee
 
 1.  Girdharilal Arun Kumar Family Trust
 
 2.  Arun kumar Family Trust
 
 3.  GLJ Family Trust
 
 4.  Karmayogi Basantlal Charity Trust
 
 8 a) For the Convenience of operations, Bharat NRE Coke Limited has
 appointed the Company as ‘Operator’ to operate and manage their plant
 at Dharwad, Karnataka vide an agreement dated 6th June, 2008. Pursuant
 to the said agreement the Company has given an interest free Security
 Deposit of Rs. 30 Crores to Bharat NRE Coke Limited. Consequently,
 additional capacity of 3,24,000 MT of Low-Ash Metallurgical Coke has
 been available to the company.
 
 b) Pursuant to above agreement, all the employees of the Bharat NRE
 Coke Limited has been transferred to the Company. As such, all the
 liabilities pertaining to employees on the date of agreement have also
 been transferred to the Company.
 
 9.  Foreign Currency Convertible Bonds (FCCB)
 
 a) The Company issued 2,200, 1% Unsecured Foreign Currency Convertible
 Bonds (FCCB) of US$ 25,000 each aggregating to US$ 55 Million at par on
 14th March, 2005. These bonds are convertible into equity shares of the
 Company at the option of bondholders at a price of Rs. 34.31 per share,
 if not converted then they are Redeemable on 14th March, 2010 at
 127.25% of the face value. As on 31.03.09, 2,194 Bonds has been
 converted into 49,883,342 equity shares.
 
 b) The Company issued 600, Zero Coupon Unsecured Foreign Currency
 Convertible Bonds (FCCB) of US$ 100,000 each aggregat- ing US$ 60
 Million at par on 11th April, 2006. These bonds are convertible into
 equity shares of the Company at the option of bondholders at a price of
 Rs. 44.64 per share, If not converted then they are redeemable on 12th
 April, 2011 at 139.36% of the face value. As on 31.03.09, 375 Bonds has
 been converted into 26,796,000 equity shares.
 
 c) Out of the above FCCBs of Rs. 267.96 crores, a sum of Rs. 0.17
 crores remained unutilized at Balance Sheet date.
 
 10.  Secured Non-Convertible Debentures:
 
 10.60 % Non Convertible Debentures of Rs. 95.00 Crores (Previous Year
 Rs. 100 Crores) are redeemable at par in 19 equal Quarterly
 installments up to 27th November ’2013.
 
 12.50 % Non Convertible Debentures of Rs. 50.00 Crores are redeemable
 at par in 4 equal annual installments commenc- ing from 6th March’
 2012.
 
 11.90 % Non Convertible Debentures of Rs. 100.00 Crores are redeemable
 at par in 4 equal annual installments commenc- ing from 6th February’
 2012.
 
 D General Descriptions of defined benefit plans: i) 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.  ii) Provident Fund Plan:
 
 The Company contributes 12% of salary for all eligible employees
 towards Provident Fund managed by the Regional Provident Fund
 Authority.
 
 11.  The Company has exercised the option granted vide notification No.
 GSR 225(E) dated 31st March’2009 issued by the Ministry of Corporate
 Affairs and accordingly the exchange differences arising on revaluation
 of long term foreign currency monetary items have been recognised over
 the shorter of the maturity period or 31st March’ 2011, due to this,
 profit after tax for the current year is higher by Rs.16.41 Crores.
 
 12.  Exceptional items for the year ended 31st March’ 2009 includes
 loss of Rs.114.72 Crores on account of fluctuations on foreign currency
 assets/liabilities including Loans.
 
 13.  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.  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.
 
 14.  There are no amounts due and outstanding to be credited to
 Investors Education & Protection Fund as at 31st March, 2009.
 
 15.  The company investment in 77,136,000 shares of Gujarat NRE
 Minerals Ltd. has lock-in period upto 18th July, 2009.