SENSEX NIFTY India | Notes to Account > Aluminium > Notes to Account from Hindalco Industries - BSE: 500440, NSE: HINDALCO
Hindalco Industries
BSE: 500440|NSE: HINDALCO|ISIN: INE038A01020|SECTOR: Aluminium
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« Mar 14
Notes to Accounts Year End : Mar '15
1. Segment Reporting:
 A.  Primary Segment Reporting (by Business Segment):
 (a) The Company has two reportable segments, viz., Aluminium and
 Copper, which have been identifi ed in line with the Accounting
 Standard-17 on Segment Reporting, taking into account the
 organizational structure as well as differential risk and return of
 these segments. Details of products included in each segment are as
 (i) Aluminium: Hydrate & Alumina, Aluminium and Aluminium Products
 (ii) Copper: Continuous Cast Copper Rods, Copper Cathode, Sulphuric
 Acid, DAP & Complexes, Gold and Silver
 (b) Inter-segment transfers are based on market rates.
 (c) The details of the revenue, results, assets, liabilities and other
 information from operations by reportable business segments are as
 2. Employee Share Based Payment:
 Employee Stock Option Scheme-2006 (ESOS 2006)
 On 7th December, 2006, the Board of Directors approved the Employee
 Stock Option Scheme 2006 (ESOS 2006) for issue of 3,475,000 stock
 options to its permanent employees in the management cadre, in one or
 more tranches, whether working in India or out of India, including the
 Managing/Deputy Managing Directors of the Company. Each option when
 exercised would be converted into one fully paid-up equity share of Rs.
 1/- each of the Company. The options will vest in 4 equal annual
 instalments after one year from the date of grant.  The maximum period
 of exercise is 5 years from the date of vesting and these options do
 not carry rights to dividends or voting rights till the date of
 exercise. Further, on 23rd September, 2011, the ESOS-2006 has been
 partially modifi ed and by which the Company may issue 6,475,000
 options to its eligible employees.
 Employee Stock Option Scheme 2013 (ESOS 2013)
 During FY 2013-14, the Company has instituted Employee Stock Option
 Scheme 2013 (ESOS 2013), under which the Company may grant 5,462,000
 stock options and restricted stock units (RSU) to the permanent
 employees in the management cadre and Managing/Whole-time Directors of
 the Company and its subsidiary companies in India and abroad, in one or
 more tranches. The ESOS 2013 is administered by the Compensation
 Committee of the Board of Directors of the Company (the Committee).
 The option exercise price would be determined by the Committee whereas
 the RSU exercise price shall be the face value of the equity shares of
 the Company as on the date of grant of RSUs. Each option and each RSU
 entitles the holders to apply for and be allotted one fully paid-up
 equity share of Rs. 1/- each of the Company upon payment of exercise
 price during exercise period. The options will vest in 4 equal annual
 instalments after one year of the date of grant whereas RSU will vest
 at the end of three years from the date of grant. The maximum period of
 exercise is 5 years from the date of vesting and these option/RSU do
 not carry rights to dividends or voting rights till the date of
 exercise. Further, cancelled/lapsed options and RSU are also available
 for grant.
 3.  The Hon''ble Supreme Court of India, in its judgment dated 25th
 August, 2014, and order dated 24th September, 2014, has declared all
 allocations of the coal blocks made through Screening Committee route
 since 1993 as illegal and has quashed the allocation of coal blocks,
 which include:
 (a) Mahan, Tubed and Talabira II & III Coal Blocks allocated to joint
 venture companies Mahan Coal Limited (Mahan Coal), Tubed Coal Mines
 Limited (Tubed Coal) and MNH Shakti Limited (MNH Shakti), respectively.
 The Company holds equity of 50%, 60% and 15%, respectively, in these
 joint venture companies. In view of, said judgement, Mahan Coal and
 Tubed Coal have reported that the going concern concept has been
 vitiated and, accordingly, these companies have made necessary
 provisions in their fi nancial statements to bring down the assets and
 liabilities to their realisable value. Considering these facts, the
 Company has made appropriate provisions for diminution in the value of
 investments in these companies.
 (b) Talabira I Coal Block held and operated by the Company stands
 cancelled with effect from 1st April, 2015, following deallocation of
 coal blocks by the Hon''ble Supreme Court. However, an additional levy
 of Rs. 295/- per MT of coal extracted since beginning till 31st March,
 2015, has been paid, as per direction of the Hon''ble Supreme Court.
 4.  The Company has been awarded four coal blocks in the auction
 conducted by the Nominated Authority of the Ministry of Coal.
 5.  Labour Commissioner of Administration of Dadra and Nagar Haveli
 has approved closure of Silvassa Foil & Packaging plant on 27th
 January, 2015. All 186 permanent workers at the plant have opted for
 voluntary retirement during the current year. Total amount incurred on
 this account is Rs. 14.37 crore which is included in Employee Benefi ts
 6.  During this year, the Company has received an amount of Rs.
 1,393.96 crore from its wholly owned subsidiary A V Minerals
 (Netherlands) N. V. towards return of capital by reducing nominal value
 of shares from EURO 643.76 to EURO 567.83 per share. The amount of Rs.
 1,032.85 core has been adjusted in carrying cost of investments, and
 the foreign exchange gain of Rs. 361.11 crore on this transaction have
 been accounted for as Exceptional Income.
 7.  The Company had formulated a scheme of fi nancial restructuring
 under Sections 391 to 394 of the Companies Act, 1956 (the Scheme),
 between the Company and its equity shareholders approved by the High
 Court of judicature of Bombay to deal with various costs associated
 with its organic and inorganic growth plan.  Pursuant to this, a
 separate reserve account titled as Business Reconstruction Reserve
 (BRR) was created during the year 2008-09 by transferring the balance
 standing to the credit of Securities Premium Account of the Company for
 adjustment of certain expenses as prescribed in the Scheme.
 Accordingly, the Company had transferred Rs. 8,647.37 crore from
 Securities Premium Account to BRR and till 31st March, 2014, Rs. 153.04
 crore have been adjusted against BRR. During the year, following
 expenses has been adjusted with BRR:
 (a) Impairment loss of Rs. 62.29 crore (Net of deferred tax Rs. 32.97
 crore) arising on deteriorating operating performance in one of its
 cash generating units of Aluminium Business. (refer Note No. 32 (a))
 (b) Provision of Rs. 35.00 crore towards diminution in the value of
 investments of Mahan Coal Limited, joint venture of the Company, and
 Tubed Coal Mines Limited, subsidiary of the Company, made following
 deallocation of coal blocks by the Hon''ble Supreme Court. (refer Note
 No. 24 (c))
 Had the Scheme not prescribed aforesaid treatment, the impact on
 results and Earnings Per Share (EPS) would have been as under:
 Profit for the year lower by Rs. 97.29 crore
 Basic EPS lower by Rs. 0.47
 Diluted EPS lower by Rs. 0.47
 B.  In respect of defi ned Contribution Schemes:
 (a) As required under Guidance Note on Implementation of Accounting
 Standard-15 (Revised) issued by the ICAI in respect of exempted
 Provident Fund, the Company has carried out actuarial valuation to
 ascertain shortfall in interest, if any, payable to the members of
 Provident Fund and has made appropriate provision in the books. The
 Company contributes 12% of salary for all eligible employees towards
 Provident Fund managed either by approved trusts or by the Central
 Government and debited to the Statement of Profi t and Loss. In view of
 typical nature of such the Provident Fund scheme involving defi ned
 benefi t underpin in respect of interest payable to members as declared
 by the Employees, Provident Fund Organisation, the defi ned benefi t
 obligation relating to interest shortfall is considered to be Other
 Long Term Employee Benefi ts. The amount debited to the Statement of
 Profi t and Loss during the year was Rs. 87.29 crore (Previous year Rs.
 70.90 crore).
 (b) The Company contributes a certain percentage of salary for all
 eligible employees in managerial cadre towards Superannuation Funds
 managed by approved trusts or by Life Insurance Corporation of India.
 The amount debited to the Statement of Profi t and Loss during the year
 was Rs. 13.27 crore (previous year Rs. 13.05 crore).
 (b) In the ordinary course of business, the Company is exposed to risks
 resulting from changes in prices of commodity, exchange rate fl
 uctuation and interest rate movements. It manages its exposure to these
 risks through derivative fi nancial instruments. It uses derivative
 instruments such as forwards, futures, swaps and options to manage
 these risks. These derivative instruments reduce the impact of both
 favourable and unfavourable fl uctuations.
 The Company''s risk management activities are subject to the management,
 direction and control of Risk Management Board (RMB). The RMB is
 composed of three directors including Managing Director, Deputy
 Managing Director and at least two offi cers, one being the Chief
 Financial Offi cer. The RMB reports to the Board of Directors on the
 scope of its activities.
 The decision of whether and when to execute derivative fi nancial
 instruments along with its tenure can vary from period to period
 depending on market conditions and the relative costs of the
 instruments. The tenure is always linked to the timing of the
 underlying exposure, with the connection between the two being
 regularly monitored. The Company is exposed to losses in the event of
 non-performance by the counterparties to the derivative contracts. All
 derivative contracts are executed with counterparties that, in our
 judgment, are creditworthy. The credit levels are reviewed to ensure
 that there is no inappropriate concentration of outstanding to any
 particular counterparty.
 Commodity Price Risk
 Copper and Precious Metals
 This business is conducted under a conversion model. The prices of
 input and output are derived from the same benchmark and/or are linked
 to each other through a defi ned formula. The objective of risk
 management is to attempt to use derivatives to match the price fl
 uctuations arising out of the timing mismatch in pricing the input and
 output to make the margins immune to the fl uctuations in prices of the
 input and output.
 This business is vertically integrated. The main raw material viz.
 bauxite (mostly mined from own mines) and other purchased raw materials
 do not have any linkage with the output price which is Aluminium LME
 prices. When the prices of input(s) and output(s) do not follow the
 above condition, then the risk management attempts to use derivatives
 so as to protect the margins from adverse movements in prices on either
 side, i.e. from a rise in input cost or from a fall in output price.
 Both green fi eld and brown fi eld expansion has increased the power
 requirement mainly for smelting and other associated operations. Power
 is mostly supplied to these smelters through captive power generation
 units which are coal based. In order to meet the gap between
 requirement of coal and availability in the domestic market as also
 from own sources, at times coal is also imported . The domestic price
 are not linked to any internationally traded price whereas the imported
 coal is linked to internationally traded prices. Hence, the imported
 coal price fl uctuates in line with the international prices. To
 mitigate this risk, coal commodity derivatives are taken.
 Foreign Currency Exchange Risk
 Exchange rate movements, particularly the United States Dollar (USD)
 and Euro (EUR) against Indian Rupee (INR), have an impact on our
 operating results. In addition to the foreign exchange fl ow from
 exports, the commodity prices in the domestic market are derived based
 on the landed cost of imports in India where LME prices and USD/INR
 exchange rate are the main factors. In the case of conversion business,
 the objective is to match the exchange rate of outfl ows and related
 infl ows through derivative fi nancial instruments. With respect to
 Aluminium business where costs are predominantly in INR, the
 strengthening of INR against USD adversely affects the profi tability
 of the business and benefi ts when INR depreciates against USD. The
 Company enters into various foreign exchange contracts to protect profi
 tability. The Company also enters into various foreign exchange
 contracts to mitigate the risk arising out of foreign currency exchange
 rate movement in foreign currency contracts executed with foreign
 suppliers to procure capital items for its project activities. Also,
 certain foreign exchange future derivatives are taken for arbitrage
 between exchange and OTC.
 Embedded derivatives
 Copper concentrate is purchased on future pricing model based on
 month''s average LME (in case of copper)/LBMA (in case of gold and
 silver). Since the value of the concentrate changes with response to
 change in commodity pricing indices, embedded derivatives (ED) is
 identifi ed and segregated in the contract. The ED so segregated, is
 treated like commodity derivative and qualify for hedge accounting.
 These derivatives are put into a Fair Value hedge relationship with
 The objective of hedge designation of the embedded commodity derivative
 is to offset the volatility in the Statement of Profi t and Loss due to
 change in value of un-priced inventory with response to LME/LBMA.
 8. Contingent Liabilities and Commitments:
                                                            (Rs. Crore)
                                                           As at
                                                 31/03/2015   31/03/2014
 A.  Contingent Liabilities
 (a) Claims against the Company not 
 acknowledged as debt:
 Following demands are disputed by the 
 Company and are not provided for:
 (i) Demand of interest on past dues of the 
 Aluminium Regulation account up to 31st 
 December, 1987.                                      6.33         6.33
 * The demand is in dispute with Controller 
 of Aluminium Regulation Account.
 (ii) Retrospective Revision of Water Rates 
 by UP Jal Vidyut Nigam Limited (April 1989 
 to June 1993 & January 2000 to January 2001).        4.08         4.08
 * Writ petition pending with Lucknow Bench of 
 Allahabad High Court. The demand for arrears 
 stayed vide order dated 11/05/2001.
 (iii) Transit fees levied by Divisional Forest 
 Officer, Renukoot, on Coal and Bauxite.            117.63       106.65
 * Appeal pending with the Hon''ble High Court 
 of Allahabad and payment of transit fee has 
 been stayed. According to the legal opinion 
 received by the Company, the Forest Department 
 has no authority to levy such fees. The Company 
 has filed a transfer application before the 
 Hon''ble Supreme Court. The Hon''ble Supreme 
 Court of India, while issuing notice on our 
 Transfer Petition, stayed the further 
 proceedings of the Company''s Writ Petition 
 pending before the Hon''ble Allahabad High
 (iv) M. P. Transit Fee on Coal demanded by 
 Northern Coal Fields Limited.                       24.51        23.77
 * Company had challenged the demand towards 
 M. P. transit Fee on Coal and filed Writ 
 Petition before the Hon''ble Jabalpur High
 Court. The Hon''ble High Court has struck 
 down the levy and also ordered for refund
 of the amount paid under protest. The State
 government has filed an Appeal before the 
 Hon''ble Supreme Court of India against the 
 said order and the Hon''ble Supreme Court 
 has been stayed the order of Hon''ble High
 Court. The Counter affidavit in the matter
 has been filed. The rejoinder has also 
 been filed by the state. To be listed along 
 withthe similar matter before the Supreme 
 Court of India.
 (v) Imposition of Cess on Coal by 
 Shaktinagar Special Area Development Authority.      3.98        11.17
 *Writ pending before the Allahabad High Court,
 Allahabad. Demand and levy stayed. However, 
 the company has moved a transfer petition before 
 the Hon''ble Supreme Court of India for tagging
 the matter with CA No. 1883 of 06 (ORISED 
 Matter). The matter is tagged with ORISED and
 to be heard by the Nine Judges Bench of the 
 Hon''ble Supreme Court.  
 (vi) Demand of Royalty on Vanadium by
 District Mining Officer, Lohardaga.                  7.96         7.96
 * Appeal is pending with the Hon''ble High 
 Court of Allahabad. The demand has been 
 stayed on certain conditions.
 (vii) The demand of Excise Duty on gold.           155.31       155.31
 * Part of the demand was confi rmed against 
 which our ROM request is pending at CESTAT
 Department''s appeal is pending before the 
 Hon''ble Supreme Court for the part of the 
 demand and penalty that was dropped.
 (viii) Demand raised on assessment under 
 CST Act and UP Sales Tax Act.                           -         6.39
 * Demand has been quashed at fi rst appeal
 and second appeal stage. Department has gone 
 in the revision before the Hon''ble High Court,
 Allahabad which has rejected the Department 
 (ix) Revision of surface rent on land by 
 Government of Jharkhand w.e.f. 16th June, 2005.     29.97        26.18
 * Matter is in dispute at Hon''ble High Court 
 of Jharkhand.
 (x) Demand made by Nayab Tehsildar Kusmi/
 Collector under Chhattisgarh as per Adhosanrachna 
 Vikas evam Parayavaran Upkar Adhiniyam, 2005 @ 5%
 as environment tax on royalty plus 5% as 
 development tax.                                     7.37         6.60
 * The Writ petition fi led by the Company 
 before Hon''ble High Court of Chhattisgarh at 
 Bilaspur has been transferred to the Hon''ble 
 Supreme Court and tagged with other Civil Appeals.
 (xi) Service tax paid on Goods Transport Agency 
 and Business Auxiliary Services.                    11.27        11.27
 * Commissioner has confi rmed the demand. Appeal 
 is being filed at CESTAT New Delhi.
 (xii) M.P. Transit Fee on Bauxite.                   1.30         1.30
 * Company has fi led Writ Petition before the 
 Hon''ble Jabalpur High Court. The Hon''ble High 
 Court has struck down the levy and also ordered
 for refund of the amount paid under protest.  
 The State government has filed an appeal against 
 the order of the Hon''ble High Court.
 (xiii) Demand for Entry Tax relating to valuation 
 dispute of 2004-05 to 2005-06, for which appeals
 have been filed.                                     1.18         1.18
 * Appeal has been fi led with Additional CCT, 
 (xiv) CST demand on reopening of assessments 
 for 1999-00 to 2003-04.                              5.01         8.81
 * Appeals have been filed.
 (xv) Demand of penalty on excess CENVAT 
 Credit taken.                                        0.10         1.09
 * Appeal pending with CESTAT, Mumbai.
 (xvi) Demand for Sales Tax u/s 15B for 
 A.Y. 2001-02 & 2002-03.                              7.96         7.96
 * Appeal is pending with J. C. Appellate 
 Authority, Baroda.
 (xvii) Service Tax on insurance policy 
 attributable to Renusagar.                           3.97         3.97
 * Commissioner has confi rmed the demand. 
 Appeal is pending before the CESTAT, New Delhi.
 (xviii) Disallowance of CENVAT credit.               5.29         5.29
 * The matter is pending with CESTAT, Ahmedabad.
 (xix) Demand raised on assessment under 
 CST Act and APGST Act for various years.             5.89         5.77
 * Appeals have been fi led with appropriate 
 (xx) Demand for Service Tax on Consulting 
 Engineer Services and Scientifi c & Tech Service.    3.84         3.84
 * Appeal pending with Commissioner (Appeals),
 (xxi) Excise Duty on Dross.                             -        19.78
 * Favourable order of Hon''ble Bombay High Court
 received during the year, quashing circulars 
 issued by CBEC regarding Excise Duty on Dross.
 (xxii) Alleged Cenvat taken without receipt of 
 Alumina Hydrate inside the factory.                  3.46         3.46
 * Appeal filed with CESTAT.
 (xxiii) Alleged CENVAT availed on the Input 
 services at captive Mines.                          36.05        36.05
 * Appeal pending with CESTAT
 (xxiv) CENVAT of Service Tax Credit availed 
 on Supplementary Invoices.                          11.05         3.12
 * Pending with appropriate Authority
 (xxv) Clearence of Silver at Nil Rate of 
 Duty under Notification No.5/2006.                      -         8.96
 * CESTAT has given favorable judgement.
 (xxvi) Excess rebate has been sanctioned to 
 the extent duty paid by supplementary invoices       5.08         5.08
 * Appeal pending with Commissioner of Customs
 (xxvii) Disallowance of CENVAT on input services.    7.74         6.79
 * Pending with appropriate Authority.
 (xxviii) Parallel operation charges on capacity 
 of Captive Power Plant by Madhya Pradesh 
 Electricity Regulatory Commission.                      -         7.05
 * Matter is pending before Hon''ble High court 
 of Madhya Pradesh at Jabalpur. The Hon''ble
 High Court passed an order on 20.9.2013 and
 stayed the operation of order passed by MPERC 
 subject to deposit of 50% of the amount 
 since provided.
 (xxix) Water Tariff revision demand for 
 previous years.                                     10.86            -
 * Matter is pending in Hon''ble High Court
 of Karnataka.
 (xxx) Demand for Sales Tax under KVAT Act 
 2003 for Tax period 2011-2012 & 2012-13.            16.46            -
 * Appeal pending with Commissioner, 
 Appellate Authority, Bengaluru.
 (xxxi) Demand for Sales Tax under MPVAT 
 Act, 2002, for Tax period 2010-11.                   7.64            -
 * Appeal pending with Commissioner, 
 Appellate Authority, Indore
 (xxxii) Demand for Sales Tax under CST 
 Act, 1969, for Tax Period 2009-10                    1.21            -
 * Appeal pending with Commissioner, 
 Appellate Authority, Bengaluru.
 (xxxiii) Other Contingent Liabilities in 
 respect of Excise, Customs, Sales
 Tax, etc., each being for less than Rs. 1 Crore.    17.72        15.51
 * The demands are in dispute at various 
 legal forums.                                      520.22       510.72
 (b) Corporate Guarantees Outstandings            5,270.76     5,287.03 
 (Rs. 5,229.70 crore* (previous year 
 Rs. 5246.47 crore) given on behalf of
 subsidiary companies)
 * Includes Rs. 5,181.28 crore (Previous 
 year Rs. 5,198.05 crore) given to
 lenders against loan provided to various 
 subsidiaries , amount of loan outstanding 
 as on 31st March 2015 is Rs. 4,887.43 
 crore (Previous Year Rs. 4,950.00 crore).
 (c) Other money for which the Company is 
 contingently liable:
 (i).  Bills discounted with Banks                    0.87         3.53
 (ii). Customs duty on Capital Goods and
 Raw Materials imported under EPCG Scheme/
 Advance License, against which export 
 obligation is to be fulfi lled (excluding 
 cenvatable portion).                               328.03       368.51
 (iii). The Company has received a notice dated 24th March, 2007, from
 Collector (Stamp), Kanpur, Uttar Pradesh, alleging that stamp duty of
 Rs. 252.96 crore is payable in view of the order dated 18th November,
 2002, of the Hon''ble High Court of Allahabad approving the scheme of
 arrangement for merger of Copper business of Indo Gulf Corporation
 Limited with the Company. The Company is of the opinion that it has a
 very strong case as there is no substantive/computation provision for
 levy/ calculation of stamp duty on court order approving the scheme of
 arrangement under Companies Act, 1956, within the provisions of Uttar
 Pradesh Stamp Act, moreover, the properties in question are located in
 the State of Gujarat and thus the Collector (Stamp), Kanpur, has no
 territorial jurisdiction to make such a demand. It is pertinent to note
 that the Company in 2003-04 has already paid stamp duty which has been
 accepted as per the provisions of the Bombay Stamp Act, 1958, with
 regard to transfer of shareholding of Indo Gulf Corporation Limited as
 per the Scheme of Arrangement.  Furthermore, the demand made, is on an
 incorrect assumption. The Company''s contention, amongst the various
 other grounds made is that the demand is illegal, against the
 principles of natural justice, incorrect, bad in law and malafi de. The
 Company has fi led a writ petition before the Hon''ble High Court of
 Allahabad, inter alia, on the above said grounds, which is pending
 (iv). The assessing offi cer, while framing the assessment for AY
 2008-09, made adjustment, inter alia, amounting to Rs. 270.32 crore, to
 total income on account of purported arm''s length fee for corporate
 guarantee provided to foreign banks for granting loan to a wholly owned
 subsidiary of the Company, viz., AV Minerals (Netherlands) N.V. The
 Company has fi led appeal before the Income Tax Tribunal.
 (v). The Company has an agreement with Uttar Pradesh Power Corporation
 Limited (UPPCL), under which banking of surplus energy with UPPCL is
 permitted and such banked energy may be drawn as and when required at
 free of cost. However, UPPCL has raised demand of Rs. 55.42 crore with
 retrospective effect from 1.4.2009 on the alleged ground that drawal of
 energy against the banked energy is not permissible during peak hours.
 The Company has challenged the demand by fi ling a petition on
 27.12.2013 under Section 86(i)(f) read with other relevant provisions
 of Electricity Act, 2003, seeking quashing/setting aside the demand.
 The matter has been heard on 12.2.2014 and the Hon''ble Uttar Pradesh
 Electricity Regulatory Commission (UPERC), vide its order dated
 24.2.2014, has directed the UPPCL to restrain from taking any coercive
 action till final order of UPERC. The Company believes that it has a
 strong case and no provision towards this is required.
                                                          (Rs. Crore)
                                                         As at
                                                31/03/2015   31/03/2014
 B.  Commitments
 (a) Estimated amount of contracts remaining 
 to be executed on capital account and not
 provided for net of advances                       574.76     1,181.44
 (b) The Company, along with Aditya Birla Nuvo Limited, Grasim
 Industries Limited and Birla TMT Holdings Pvt. Limited (the Sponsors),
 being promoters of Idea, Cellular Limited (Idea) has given the
 following undertakings to the Facility Agent:
 i. The Sponsors shall collectively continue to hold at least 33% of the
 equity capital of Idea till the end of FY 2015-16 and shall not,
 without prior written approval of the Facility Agent, divest, transfer,
 assign, dispose of, pledge, charge, create any lien or in any way
 encumber 33% of shareholdings in Idea. Consequent upon the infusion of
 fresh equity capital of Idea, if the Sponsors'' stake gets diluted from
 40% to 33% in the equity capital of Idea, the Sponsors agree and
 undertake to obtain the prior consent of the Rupee Facility Agent and
 in other circumstances, the Sponsors agree and undertake to obtain the
 prior consent of the secured lenders representing 51% of the aggregate
 outstanding secured loans.
 ii. The Sponsors shall collectively continue to hold 26% of the equity
 capital of Idea after FY 2015-16 and shall not, without the prior
 written approval of the Rupee Facility Agent, divest, transfer, assign,
 dispose of, pledge, charge, create any lien or in any way encumber 26%
 shareholdings in the capital of Idea.
 iii. Not without prior approval of the Facility Agent in writing divest
 shareholdings in the equity capital of Idea that may result in a single
 investor along with its affi liates holding more than 25% of the equity
 capital of Idea.
 (c) The Company, has given the following undertakings in connection
 with the loan of Utkal Aluminium International Limited (UAIL), a wholly
 owned subsidiary:
 i.  To hold minimum 51% equity shares in UAIL.
 ii. To ensure to meet the Financial Covenants, except Fixed Asset
 Coverage Ratio, as provided in the loan agreements.
 9. As per Section 135 of the Companies Act, 2013, a Corporate Social
 Responsibility committee has been formed by the Company. The Company
 has incurred expenses amounting to Rs. 32.42 crore in alignment with
 the CSR Policy of the Company, which is in confi rmity with the
 activities specified in Schedule VII to the Companies Act, 2013.
 10. Previous year figures have been reclassifi ed/regrouped to conform
 to this year''s classification.
Source : Dion Global Solutions Limited
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