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Golkonda Aluminium Extrusions Ltd.

BSE: 513309 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE327C01023
BSE 12:31 | 30 Nov Golkonda Aluminium Extrusions Ltd
NSE 05:30 | 01 Jan Golkonda Aluminium Extrusions Ltd
OPEN 3.24
52-Week high 4.76
52-Week low 2.09
Mkt Cap.(Rs cr) 4
Buy Price 3.24
Buy Qty 2197.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.24
CLOSE 3.24
52-Week high 4.76
52-Week low 2.09
Mkt Cap.(Rs cr) 4
Buy Price 3.24
Buy Qty 2197.00
Sell Price 0.00
Sell Qty 0.00

Golkonda Aluminium Extrusions Ltd. (GOLKONDAALUMIN) - Director Report

Company director report


Dear Members,

Your Directors' hereby present the Twenty Fourth Annual Report on the business andoperations of the Company, together with the Audited Statements of Accounts and theAuditors' Report fortheyearended 30th June, 2012.

Financial Highlights: (Rs. Million)
Particulars Current year Previous year
2011 - 2012 2010 - 2011
Revenue from Operations 795.53 858.00
Other Income 8.43 18.52
Total Revenue 803.96 876.52
Profit/ (loss) before financial (8.69) 26.39
Expenses, Depreciation
Financial Expenses 04.68 01.84
Depreciation 14.07 14.14
Profit/ (Loss) before Tax (27.44) 10.41
Profit/ (Loss) afterTaxand prior period adjustment (27.44) 10.41


In view of the accumulated losses, no dividend is being recommended for the currentyear.

Results of Operations:

The business environment still continues to be sluggish on account of weak globaleconomy. Still your Company achieved a turnover of Rs. 789.19 million for the year ascompared to Rs. 854.44 million in the previous year. The Company earned an operationalprofit of Rs. 26.39 million for the year but ended with a loss of Rs. 27.44 million mainlydue to exchange loss of Rs. 53.83 million, as the Rupee depreciated against US Dollar.

Reference to Board for Industrial and Financial Reconstruction (BIFR):

The accumulated loss being more than the net worth of the Company, it was declared sickby the BIFR in February, 2010. The BIFR has ordered for preparation of a RehabilitationScheme and has appointed IDBI Bank as the Operating Agency for this purpose. Efforts arein progress for submission of the Rehabilitation Scheme for approval to the BIFR.


Prof. Laxmi Narain and Mr. Ashish Kumar Gupta, who have been longest in the office,will retire at the ensuing Annual General Meeting and being eligible, offer themselves forreappointment. Pursuant to the provisions of Section 260 of the Companies Act, 1956 andArticle 67a of the Articles of Association of the Company, Mr. Nand Kishore Khandelwal andProf. Selvarani Balan were appointed as additional directors on 29th August 2012, and Mr.Rakesh Gupta was appointed as an alternate director to Mr. Hans Schweers on 29th August2012 and redesignated as an additional director on 7th November 2012. They hold office upto the date of the ensuing Annual General Meeting. The Company has received a notice inwriting from members proposing their candidature for the office of director, liable toretire by rotation. During the year under review, Mrs. Deepa Hingorani and Mr. M. Ratnakarresigned as Directors with effect from 2nd February 2012 and 5th July 2012, respectively.

Change of Chairman:

Prof. Laxmi Narain, who was Chairman of the Company since March 2006, expressed hisinability to continue as Chairman. The Board in its meeting held on 29th August 2012,decided to appoint Mr. Ashish Kumar Gupta as Chairman of the Company.

Directors' Responsibility Statement:

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors herebyconfirm that:

(i) in the preparation of the annual accounts, the applicable accounting standards havebeen followed and there are no material departures from the same;

(ii) such accounting policies have been selected and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at 30th June, 2012 and of the profit or loss ofthe Company forthat period:

(iii) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; and (iv)the annual accounts have been prepared on a going concern basis.


M/s BSR & Company, Chartered Accountants, Auditors of the Company, retire at theensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Auditors' Qualifications and Management's Reply:

1. Point No. 3 of the Audit Report:

As more fully explained in Note 2.24, of the financial statement, the Company hasaccumulated losses of Rs. 197,852,028 as at 30th June 2012 which have exceeded the paid upcapital and reserves (Rs. 160,522,805) of the Company at that date. Also, the Company hadmade a reference to the Board for Industrial ^Financial Reconstruction (BIFR) in terms ofSection 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 and had beendeclared sick on 9th February 2010. It is currently in the process of working out arehabilitation scheme with the BIFR.

Though Management's efforts to improve the performance are ongoing, considering thefinancial position of the Company as at 30th June 2012, there exists uncertainty as towhether the Company will be able to continue as a going concern. However, the financialstatements for the year ended 30th June 2012 have been prepared on a going concern basisand do not include any adjustments relating to the recoverability and classification ofrecorded asset amounts or, to amounts or classification of liabilities that may benecessary if the Company is unable to continue as a going concern.

Management's Reply:

The accumulated loss at the year end is Rs. 197.85 million which is more than 100% ofthe net worth of the Company. On the Company's reference to BIFR, it was declared Sick bythe BIFR, which has appointed IDBI Bank as the Operating Agency. The BIFR has directed theCompany to prepare a Rehabilitation Scheme. Efforts are in progress for submission of theRehabilitation Scheme for approval to the BIFR. The Management, based on the businessplan, fully believes that the Company will continue to remain a going concern.

2. Point No. 4 of the Audit Report:

As more fully explained in Note 2.40 of the financial statements, during the year ended30th June 2012 and 30th June 2011, the Company has accrued for managerial remuneration,which exceeds of the limits specified in Schedule XIII to the Companies Act, 1956('theAct') to the extent of Rs.9,083 & 143,856 respectively. The Company has applied forCentral Government of India's approval for the same, which is pending as at the date ofour report. Pending the receipt of approval, such excess remuneration has not been paid.

Management's Reply:

The said amounts will be paid after receipt of approval from the Central Government,which is under process.

3. Point No. (ix) (a) of Annexure to the Auditors Report:

According to the information and explanations given to us, there are no undisputedamounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax,Sales-tax, Services tax, Customs duty, Excise duty and other material statutory dues thatwere in arrears as at 30th June 2012 for a period of more than six months from the datethey became payable except for income tax amounting to Rs. 3,015,288 which isoutstanding for more than six months as at 30th June 2012.

Management's Reply:

The amount of Rs. 3,015,288 is related to Minimum Alternate Tax provision for theearlier years. The Company is under BIFR. The payment is being taken up for waiver underthe Rehabilitation Scheme.

4. Point No. (x) of Annexure to the Auditors' Report:

The Company has accumulated losses amounting to Rs. 197,852,028 at the end of thefinancial year which exceeds its net worth of Rs 160,522,805.

Management's Reply:

In view of the accumulated loss exceeding the net worth, the Company was referred tothe BIFR and has been declared sick by the BIFR.

5. Point No. (xvii) of Annexure to the Auditor's Report:

According to the information and explanations given to us and on an overall examinationof the balance sheet of the Company, we report that the short term funds amounting toRs. 101,546,466 have been used for long-term purposes.

Management's Reply:

The said amount represents excess of current liabilities over the current assets. Thisis caused due to current financial situation of the Company, wherein it has carriedforward accumulated losses of Rs. 197,852,028 in its Balance Sheet.

Cost Audit:

Mr. Sandeep Zanwar, Cost Accountant, Hyderabad, was appointed Cost Auditor for the yearended 30th June 2012, with the approval of the Central Government. The Cost Audit for theyear ended 30th June 2012, is under progress and the report would be submitted to theCentral Government.

Secretarial Audit:

As prescribed by Securities and Exchange Board of India (SEBI), a Practicing CompanySecretary carries out Secretarial Audit at the end of every quarter, and the report isregularly submitted to the Bombay Stock Exchange.

Corporate Governance: Report on Corporate Governance pursuant to Clause 49 of theListing Agreement, and Certificate on Compliance of Corporate Governance form part of thisReport.

Management Discussion and Analysis Report:

Management Discussion and Analysis Report as stipulated under Clause 49 of the ListingAgreement is presented in a separate section in this Annual Report.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

Relevant information as required by Section 217(1) (e) of the Companies Act, 1956, isat Annexure-I

Managing Director and Chief Financial Officer Certification:

As required, the Managing Director and Chief Financial Officer's Certification is atAnnexure-II

Particulars of Employees Remuneration:

There being no employee, as on 30th June, 2012, drawing remuneration of more than Rs.6.00 million per annum, provisions of Section 217 (2A) of the Companies Act, 1956 are notapplicable.

Internal Audit:

M/s. Laxminiwas Neeth & Co., Chartered Accountants, Hyderabad, conduct InternalAudit on a regular basis, which is reviewed and followed up meticulously by the AuditCommittee.

Listing of Securities:

The Company is listed on the Bombay Stock Exchange and is regular in paying the annuallisting fee to the Stock Exchange.


Employee relations were cordial during the period. The directors place on record theirappreciation for the dedicated work put in by the employees at various levels.


The Directors acknowledge the contribution made by the employees towards the success ofthe Company. They thank the Company's valued customers for their continued patronage. Theyalso acknowledge the support of the shareholders.

For and on behalf of the Board of Directors

Place: Hyderabad Ashish Kumar Gupta
Dated: 7th November 2012 Chairman

Annexures to the Directors' Report

Annexure I

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo.

A. Conservation of Energy:

(i) Energy Conservation measures taken: Periodical reviews and studies areundertaken and implemented for Energy Saving, (ii) Additional investments and proposals,if any, being implemented for reduction of consumption of energy: Presently, no investmentis planned in this regard, (iii) Impact of the measures at (a) and (b) above for reductionof energy consumption and consequent impact on the cost of production of goods: Theimpact of regular implementation of improvements for energy conservation can be noted inpart (a) (B) of the table below.

a) Form - 'A'

(A) Power and Fuel Consumption:

Particulars Year ended 30th June,2012 Year ended 30th June,2011
1 Electricity
a) Purchased Units 4,318,604 4,876,610
Total Amount (Rs.) 20,264,817 22,750,485
Avg. Cost/KWH (Rs.) 4.69 4.67
Own Generation
b) i) Through Diesel Generator
Units (generated) 27,454 54,874
Units/Liters of Diesel Oil 2.72 2.45
Avg. Cost/Liters (Rs.) 42.94 38.68
ii) Through Steam Turbine Generator Nil Nil
Coal Consumption Nil Nil
2 Furnace oil (Liters) 312,421 378,751
Total Amount (Rs.) 12,840,152 12,485,656
Avg. Cost/Liters (Rs.) 41.10 32.97
3 Others/Internal Generation Nil Nil

(B) Consumption per unit of Production:

Particulars Year ended 30th June,2012 Year ended 30th June,2011
Products: Aluminum Alloy Extrusions (M.T.) 5,146 5,700
Electricity (KWH/M.T.) 839 856
Furnace Oil (Liters/ M.T. melted) 93.40 87.31

b) Form-'B'

(a) Specific areas in which R&D carried out by the Company, (b) Benefits derivedas a result of the above R&D. (c) Future of plan action (d) Expenditure on R&D.

The Company is getting full R&D support from its group company in Denmark, whosetechnical experts visits the plant and provides the necessary support from time to time.

B. Technology Absorption, Adaptation and Innovation

(a) Efforts, in brief, made toward technologyabsorption, adaptation and innovation: Allefforts are being made in this regard with the help of experts who visit the plantregularly, (b) Benefit derived as a result of the above effort, e.g., productimprovements, cost reduction, product development, import substitution etc.: It is acontinuous process, (c) In case of imported technology (imported during the last fiveyears reckoned from the beginning of the financial year), following information may befurnished, (i) Technology, (ii) Year of import, (iii) Has technology been fullyabsorbedRs (iv) If not fully absorbed, areas where this has not taken place, reasonstherefore and future plans of action: Not applicable in the absence of importedtechnology.

C. Foreign Exchange Earnings and Outgo

Foreign Exchange: 2011-2012 2010-2011
Outgo 332,051,201 352,137,518
Earned 156,751,799 346,309,207

Annexure II

Certificate from the Managing Director & Chief Financial Officer

We, Wolfgang Ormeloh, Managing Director and Nand Kishore Khandelwal, Deputy ManagingDirector &Chief Financial Officer of Alumeco India Extrusion Limited, certifythat:

(a) We have reviewed financial statements and the cash flow statement for the periodand that to the best of our knowledge and belief: (i) these statements do not contain anymaterially untrue statement or omit any material fact or contain statements that might bemisleading (ii) these statements give a true and fair view of the Company's affairs and ofthe results of operations and cash flow. The financial statements have been prepared inconformity, in all material respects, with the existing generally accepted accountingprinciples including accounting standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions were entered into by theCompany during the year that is fraudulent, illegal or violates the Company's code ofconduct.

(c) We accept overall responsibility for the Company's internal control system forfinancial reporting. This is monitored by the internal audit function, which encompassesthe examination and evaluation of its adequacy and effectiveness. Internal audit interactswith all levels of Management and statutory auditors, and reports significant issues tothe Audit Committee of the Board. The Auditors' and the Audit Committee are apprised ofany corrective action taken with regard to significant deficiencies and materialweaknesses.

(d) We have indicated to the Auditors'and Audit Committee: (i) significant changes ininternal control and overall financial reporting during the period;(ii) significantchanges in accounting policies during the period ;(iii) instances of significant fraud ofwhich we have become aware of and which involve Management or employees, who havesignificant role in the Company's internal control system over financial reporting.However, during the period there were no such changes or instances.

Date: 7th November 2012 Nand Kishore Khandelwal Wolfgang Ormeloh
Place: Hyderabad Deputy Managing Director &Chief Financial Officer Managing Director