| Company overview
Golkonda Aluminium Extrusions Limited (Formerly known as Alumeco India
Extrusion Limited) ("the Company") manufactures aluminum extrusion in
India. The Company is a public limited company and is listed on Bombay
Stock Exchange (BSE).
1. The Company has only one class of equity shares having a par value
of Rs.10 per share. Each holder of equity share is entitled to one vote
per share. In the event of liquidation of the Company, the holders of
the equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts, if any. The
distribution will be in proportion to the number of equity shares held
by equity shareholders.
2. Terms and rights attached to the 10% cumulative redeemable
optionally convertible preference shares: 10% Cumulative Redeemable
Optionally Convertible Preference Shares (CRCPS) of Rs. 10 each had
been allotted by the Company in the year 2005. As per the terms of the
arrangement these preference shares including unpaid dividend could be
converted into ordinary equity shares of the Company of Rs 10 each at
any time after 3 years from date of allotment or could be redeemed by
the Company at par in three equal installments commencing from the end
of 5th, 6th and 7th year from the date of allotment. During the year
2009-10, the Company had obtained extension of redemption period by 3
years from the preference shareholders (i.e. redemption at end of 8th,
9th and 10th year from the date of allotment). Further extension of
redemption period by 3 years has been obtained with all other terms
remaining unaltered. Accordingly, these preference shares shall now be
redeemed by the Company at par in three equal installments commencing
from the end of 11th, 12th and 13th year from the date of allotment. No
conversion option has been exercised so far.
3. Going concern assumption
The Company has accumulated losses of Rs. 161,161,535 (30 June 2014:
Rs. 271,440,790) as on that date compared to the shareholder's funds of
Rs. 160,522,805 (30 June 2014: Rs. 160,522,805). The Company was
declared as a sick industrial company by the Board for Industrial and
Financial Reconstruction (BIFR) on 9 February 2010 and Canara Bank has
been appointed as an Operating Agency with effect from 17 December 2012
to assist in working out a rehabilitation scheme (earlier IDBI Bank).
Post year end, in July 2013, the Alumeco Group (Denmark) took a
commercial decision to stop extending the facility of supplying raw
material on credit to the Company, as was being done in the past. This
decision, coupled with the accumulated losses in the Company and the
prevailing adverse business conditions (on account of liquidity crunch,
labour problems, power cuts, poor order book position due to bad
economic scenario, credit crunch in the market, etc.), has further
strained the financial position of the Company. However, the Board of
Directors and the Management of the Company are actively pursuing
various available options to rehabilitate the Company under the aegis
of BIFR / Operating Agency and currently believe that the Company would
be in a position to continue as a going concern. Hence, these financial
statements have been prepared under the going concern assumption.
4. Capital commitments and contingent liabilities
Rs.
Particulars As at As at
30 June 2015 30 June 2014
(a) Estimated amount of contracts
remaining to be executed on
capital account (net of
advances) and
not provided for - -
(b) Preference share dividend 33,956,230 30,532,230
(c) Tax on preference dividend not
provided for 5,561,485 4,979,577
(d) Excise matters under dispute 34,029,952 34,029,952
(e) Income Tax matters under dispute:
Relevant Income under Forum where dispute is pending
Assessment Year dispute (Rs.)
1994- 95 2,03,59,259
1994 95 2,03,59,259 Honorable High Court of Andhra
Pradesh
1995- 96 51,72,082
2003- 04 2,89,37,712
2004- 05 1,82,56,357
2005- 06 1,85,46,533 ITAT has redirected the case to TPO.
2006- 07 3,51,83,477 The case is pending before TPO.
2007- 08 14,61,08,591
2008- 09 12,83,00,000
2010- 11 7,22,81,070 Income Tax Appellate Tribunal
2011- 12 1,09,90,023 Commissioner of Income-Tax(Appeal)
The consequential liability if any, in respect of taxes and penalties
for the subsequent assessment years is presently not determinable as the
appeal filed in this regard are pending before the various authorities.
(f) For the fiscal year 2012-2013 to 2013-2014, the Company has paid
sales tax at a concessional rate against 'C' Form in respect of its
interstate sales for which it is required to obtain 'C' forms from its
customers and submit to the sales tax department. In the event, the
Company is unable to collect and submit such 'C' forms it will be
required to pay the sales tax at the higher rate together with interest
and penalties as applicable. As on the balance sheet signing date, the
aggregate amount of 'C' forms to be collected is Rs. 25,117,522. Whilst
management is confident that it will be able to collect all outstanding
'C' forms before the completion of relevant assessment and that no
liability in this respect will devolve upon the Company, the aggregate
additional tax in the event that none of the 'C' forms are collected
would be approximately Rs. 753,526.
(g) The Company has received a letter from BSE dated 12th January, 2015
for non submission of Financial Results for two consecutive quarters
i.e., June 2014 and September 2014 and BSE has also levied a penalty of
Rs. 1,206,713. However, the Company has requested for waiver of penalty
vide letter dated 15th January, 2015.
(h) As per Accounting Standard, 15 Employee Benefits, estimated
liability for 58 retrenched workers on account of retrenchment
compensation and VRS compensation is amounting to Rs. 6,490,142/- and
Rs. 4,326,761/- respectively based on previous settlements.
However, the case relating to closure of unit is pending before Hon'ble
High Court of Andhra Pradesh and the case filed by the workers before
the Labour Court for payment of wages. The outcome of these cases
cannot be determined at this stage of time.
5. (A) Related party transactions
Name of the related party Country Nature of relationship
OSI India Holding A/S ('OSI') Denmark Immediate holding company
Alumeco A/S Denmark Holding Company of OSI
H S Metalservice nr 2 ApS (HSM) Denmark Holding Company of Alumeco A/S
H S Metalservice ApS Denmark Holding Company of HSM
Alumeco Handlerservices GmbH Germany Subsidiary of Alumeco A/S
Mr. Anand Parkash India Key Management Personnel
6. Employee benefit plans
The Company had filed an application for closure of unit before the
Government of Andhra Pradesh which has been rejected and subsequently
the Company has filed appeal before the Hon'ble High Court of Andhra
Pradesh which is pending for hearing. The workmen have been paid wages
till 17-10- 2013 including the statutory 90 day notice period.
No actuarial valuation is being done, as at the end of the year, there
is no employee on whom gratuity liability is to be accrued. Hence, the
provision for gratuity (Rs. 4,945,334) and compensated absences (Rs.
988,708) for retrenched employees is being made on actual basis.
During the previous year, the Company has retrenched 97 workers out of
which retrenchment compensation and VRS compensation was paid to 39
workers with mutual agreement on individual basis. For the balance 58
workers, the amount of retrenchment compensation and VRS compensation
has been shown as contingent liability.
7. Transfer pricing
The Company has established a comprehensive system of maintenance of
information and documents as required by the transfer pricing
legislation under Sections 92-92F of the Income-tax Act, 1961.
However, during the year, there is no international transaction.
8. Segment reporting
Segments are identified in line with AS-17 "Segment Reporting". The
Company is in the business of manufacturing of aluminum profiles and in
view of Company's internal organisation, management structure, internal
financial reporting system it has identified manufacturing of aluminum
profiles as its only primary business segment. The analysis of
geographical segments is based on location of major customers of the
Company.
Geographical segment:
The Company sells aluminium extrusions in both, overseas and India,
geographical segments. However, during the year ended June 2015, there
is no revenue, since the production is closed. The following table
shows revenue of the segments for the year ended 30 June 2015 and for
the year ended 30 June 2014 and assets of the segments as at 30 June
2015 and as at 30 June 2014.
9. Remuneration to key managerial personnel for the year ended 30
June 2015 includes Rs. Nil (30 June 2014: Rs. Nil) representing
remuneration beyond the limits specified in Schedule XIII to the
Companies Act, 1956.
10. Operating leases
The Company has taken guest house under cancellable operating lease
agreement. The Company intends to renew such leases in normal course of
business. Total rental expense under cancellable operating leases for
the current year amounts to Rs. 396,000 (30 June 2014: Rs.396,000).
11. Extraordinary Items consist of Rs. 96.46 million (excluding
exchange effect) due to write back of amount payable to creditors with
mutual consent.
12. Previous year comparatives
Previous year figures have been regrouped / reclassified / rearranged,
wherever necessary, to conform to those of the current year.
As per our report of even date attached
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