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Notes to Accounts of Bhuwalka Steel Industries Ltd.

Mar 31, 2015

1. Reconciliation of the number of shares and amount outstanding at the beginning and at the end of the reporting period:

2. 55,07,249 Equity Shares of Rs. 10/- each fully paid-up,issued as Bonus Shares on Capitalisation of Capital redemption reserve, Securities premium, General Reserve. Out of which total 5187249 fully paid up shares were alloted as bonus shares in FY 2011-12.

3. 21,75,000 Equity Shares of Rs.10/- each alloted otherwise than on payment of cash to the Shareholders of erstwhile M/s.Tikmani Steel Co. Ltd & M/s. A.A. Alloys Ltd.as per the Scheme of Amalgamation approved by the Karnataka High Court.

4. Company has alloted 2,000,000 warrants during March 2008 with an option to acquire 1 equity share at the option of warrant holder at a price of Rs. 100.20 per equity share by way of preferential issue as per SEBI Guidelines. The warrant-holders have paid 10% of the total issue price before the allotment in terms of SEBI Guidelines which ls liable to be forfeited if option to apply for equity shares is not exercised on or before due date. The option attached with Warrants may be exercised within a period of 18 months from the date of allotment, i.e., 11th March, 2008, Since Wanant holders have not exercised the option, the Warrants have been forfeited during FY 2009-10.

5. Related Party Disclosure

Related party disclosures have been made in accordance with the accounting Standards on related party Disclosure (AS 18) issued by The Institute of Chartered Accountants of India.

A) Following are the name of related parties with whom the transactions were carried out by the company:

Name of the Related Parties Relationship

Benaka Sponge Iron Private Limited Subsidiary Company

Bhuwalka Steel Industries FZC Parties where Control Exists

Balchand Suresh Kumar Parties where Control Exists

Bhuwalka Jewellers Limited Parties where Control Exists

Bhuwalka Metal Industries Private Limited Parties where Control Exists

Shri Durga Trade Links Private Limited Parties where Control Exists

Nava Karnataka Steels Private Limited Parties where Control Exists

Mahesh Sponge Iron and Power Limited Parties where Control Exists

Suresh Kumar Bhuwalka Key Management Personnel- Director

Ajay Kumar Bhuwalka Key Management Personnel- Managing Director

Ankit Bhuwalka Key Management Personnel- Director

6. Accounting Standard 19- Leases

Accounting Standard 19 is applicable only in the case of lease transactions entered into on or after 1st April; 2001 .The Company has taken office & residential properties for its employees under cancelable operating lease agreement after 1st April, 2001. The company intends to renew the agreements in the normal course of its business. These properties cannot be subleased to any other person.

Total lease rentals recognized in the Profit & Loss Account for the year with respect to the above is Rs. 57.45 Lacs (Previous half year Rs. 28.12Lacs).

7. Accounting standard 20- Earning Per Share

Basic earnings per share has been calculated by dividing profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. The basic earnings per share and diluted earnings per share are the same as there is no change in capital structure in the company.

8. TAXATION

During the year company has not made provision for tax in accordance with Income Tax Act, 1961.

The deferred tax Asset is recognised, subject to the consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one accounting period and are capable of reversal in one or more subsequent periods. The deferred tax is accounted for, using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax assets are recognized on unabsorbed depreciation and carry forward of losses as there is virtual certainty that such deferred tax asset can be realized against future taxable profits.

The Company has provided deferred tax asset amounting to Rs.9,31,72,740/-(Previous year deferred tax liability has reversed for Rs. 5,96,05,139/-) on account of timing difference. Refer Note 21 for computation of deferred tax liability.

9. Accounting Standard 26- Intangible Assets

"Accounting Standard 26 - Intangible assets" requires an enterprise to recognize an intangible asset if future economic benefits are expected to arise from it. It also requires that such an asset should be stated after providing depreciation / amortization over the useful life of the asset. Presently, the reporting enterprise does not own any intangible assets.

10. Accounting Standard 28- Impairment of Assets

The Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

11. Accounting standard 29- Contingent Liabilities & Contingent assets

In the opinion of the management, no provision is required against contingent liabilities referred in Note '23'.

12. Sale of raw material has been regrouped under Sales and Other Operational Income in Current Financial year as well as for previous year.

13. Sundry Creditors under Current Liabilities in Note '5' include Rs. Nil (Rs.Nil) due to Small Scale undertakings.

This amount has been determined to the extent such parties have been identified from available information.

14. Other Disclosures

i) The financial statements of the company have been prepared in accordance with Generally Accepted Accounting Principles in India to comply with the Accounting Standard specified under section 133 of the Companies Act 2013. The financial statement have been prepared on accrual basis under the historical cost convention except in case of Finance Cost including Exorbitant charges/penal charges/ penal interest to the extent of Rs. 42,24,11,280/- including accrued interest is disputed on account of unilateral withdrawal of CDR Package by the Banks.

Further the company has approached Debt Recovery Tribunal for resolving above dispute by filing application on 18.02.2015 Respondents Canara Bank and IDBI Bank And on 16.02.2015 Respondent Indian Overseas Bank. The matter is still pending on 31.03.2015

ii) The Banks have served Notice under section 13(2) of the SARFAESI Act by Canara Bank on 02.12.2014 IDBI Bank on 21.11.2014 And IOB on 10.05.2014. In view of this company filed an application before Debt Recovery Tribunal on 18.02.2015 Respondent Canara Bank and IDBI Bank And on 16.02.2015 Respondent Indian Overseas Bank to resolve the said issue. The matter is still pending on 31.03.2015. The company has defaulted in repayment of Due of Rs.220.75Crores to the Banks mentioned above. The matter is still pending on 31.03.2015

15. Balance of Sundry Debtors, Sundry Creditors and Bank Balances are subject to confirmation by the respective parties.

16. The previous year's figures are regrouped/re-arranged wherever found necessary

PREVIOUS YEAR'S FIGURES ARE SHOWN IN THE BRACKETS


Mar 31, 2014

01. Contingent Liabilities not provided for:- Rs. in lakhs

Particulars FY 2013-14 FY 2012-13

I) Letter of Credits/ Bank Guarantees 129.86 157.59

II) Corporate Guarantees given to Banks and Financial Institutions on behalf of Group Companies(Liabilities as on 31.03.2014): 4339.96* 4616.11

III) Other statutory liabilities disputed by the company : 918.81 903.90

IV) Claims against the Company not Acknowledged as debt : 34.61 34.61

02. Sale of raw material has been regrouped under Sales and Other Operational Income in Current Financial year as well as for previous year.

03. Sundry Creditors under Current Liabilities in Note ''5'' include Rs. Nil (Rs.Nil) due to Small Scale undertakings. This amount has been determined to the extent such parties have been identified from available information.

04. Other Disclosures

The Company has prepared the annual accounts as per revised schedule VI of Companies Act 1956. Last year figures have been regrouped accordingly.

05. Additional information pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act, 1956.

06. The previous year''s figures are regrouped/re-arranged wherever found necessary.


Sep 30, 2013

1. Sundry debtors includes Rs. 14,37,328/-(Rs. 92,43,432 /-) due from the companies under the same management within the meaning of sub-section (1 -B) of section 370 of the Companies Act. The particulars of the same are furnished hereunder:

2. Sale of raw material has been regrouped under Sales and Other Operational Income in Current Financial year as well as for previous year.

3. Sundry Creditors under Current Liabilities in Note ''5'' include Rs. Nil (Rs. Nil) due to Small Scale undertakings. This amount has been determined to the extent such parties have been identified from available information.

4. Other Disclosures

The Company has prepared the annual accounts as per revised schedule VI of Companies Act 1956. Last year figures have been regrouped accordingly.

5. The previous year''s figures are regrouped/re-arranged wherever found necessary.

NOTE: PREVIOUS YEAR''S FIGURES ARE SHOWN IN THE BRACKETS


Mar 31, 2012

I) 55,07,249 Equity Shares of Rs. 10/- each fully paid-up,issued as Bonus Shares on Capitalisation of Capital redemption reserve, Securities premium, General Reserve. Out of which total 5187249 fully paid up shares were alloted as bonus shares in FY 2011-12.

ii) 21,75,000 Equity Shares of Rs. 10/-each alloted otherwise than on payment of cash to the Shareholders of erstwhile M/s. Tikmani Steel Co. Ltd & M/s. A.A. Alloys Ltd.as per the Scheme of Amalgamation approved by the Karnataka High Court.

iii) Company has alloted 2,000,000 warrants during March 2008 with an option to acquire 1 equity share at the option of warrant holder at a price of Rs. 100.20 per equity share by way of preferential issue as per SEBI Guidelines. The warrant-holders have paid 10% of the total issue price before the allotment in terms of SEBI Guidelines which Is liable to be forfeited if option to apply for equity shares is not exercised on or before due date. The option attached with Warrants may be exercised within a period of 18 months from the date of allotment, i.e., 11th March, 2008, Since Wanant holders have not exercised the option, the Warrants have been forfeited during FY 2009-10.

The Company has recognised deferred tax asset on unabsorbed depreciation to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax and also the Company has recognised deferred tax asset on unabsorbed depreciation and brought forward business losses based on the Management's estimates of future profits considering the non-cancellable customer orders received by the Company.

Note 1: FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012

01. Contingent Liabilities not provided for:- Rs in |akhs

Particulars FY 2011-12 FY 2010-11

I) Letter of Credits/ Bank Guarantees 2596.72 2662.56

II) Corporate Guarantees given to Banks and Financial Institutions on behalf of Group Companies (Liabilities as on 31.03.2011): 3749.86 5054.00

III) Other statutory liabilities disputed by the company : 980.69 921.94

IV) Claims against the Company not Acknowledged as debt: 34.61 34.61

02. Sundry debtors includes Rs. 90,88,025.34 (Rs. 1,84,98,035.34/-) and loans.and advances includes Rs. 1,55,407.50/- (Previous year Rs. 1,80,046/-) due from the companies under the same management within the meaning of sub-section (1-B) of section 370 of the Companies Act. The particulars of the same are furnished hereunder:

03. Sale of raw material has been regrouped under Sales and Other Operational Income in Current Financial year as well as for Previous year. Total sales of raw material is Rs.55,27,38,000 /- for FV 2011-12. (Previous Year Rs 28,55,91,792.)

04. Sundry Creditors under Current Liabilities in Note '5' include Rs. Nil (Rs.Nil) due to Small Scale undertakings. This amount has been determined to the extent such parties have been identified from available information.

05. Other Disclosures

The Company has prepared the annual accounts as per revised schedule VI of Companies Act 1956. Last year figures have been regrouped accordingly.

06. Additional information pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act, 1956.

Note: - * Installed capacity is as certified by the management.

** It includes total 9,682 MT on conversion for others (PY 9479.06 MT)

07. The previous year's figures are regrouped/re-arranged wherever found necessary.


Mar 31, 2010

01. Contingent Liabilities not provided for

Particulars FY 2009-10 FY 2008-09

I) Letter of Credits/ Bank Guarantees 1975.68 1893.01

II) Corporate Guarantees given to Banks and Financial Institutions on behalf of Group Companies

(Liabilities as on 31.03.2010): 1505.83 877.98

III) Other statutory liabilities disputed by the company : 1266.11 1270.97

IV) Claims against the Company not Acknowledged as debt: 34.61 34.61

A) Following are the name of related parties with whom the transactions were carried out by the company:



Name of the Related Parties Relationship

Benaka Sponge Iron Pvt Ltd. Subsidiary Company

Bhuwalka Steel Industries (UAE) FZE Subsidiary Company

Balchand Suresh Kumar Parties where Control Exists

Bhuwalka Ispat Ltd. Parties where Control Exists

Bhuwalka Metal Industries Pvt. Ltd. Parties where Control Exists

Bhuwalka Trade Links Private Limited Parties where Control Exists

Nava Karnataka Steels Private Ltd. Parties where Control Exists

Sri Suresh Kumar Bhuwalka Key Management Personnel- Managing Director



xiv) Accounting Standard 19 - Leases:

Accounting Standard 19 is applicable only in the case of lease transactions entered into on or after 15 April; 20Q1.The Company has taken office & residential properties for its employees under cancelable operating lease agreement after 1s April, 2001. The company intends to renew the agreements in the normal course of its business. These properties cannot be subleased to any other person.

Total lease rentals recognized in the Profit & Loss Account for the year with respect to the above is Rs. 35,65,706/- (Rs. 24,62,369.

xv) Accounting standard 20- Earning Per Share:

Basic earnings per share has been calculated by dividing profit for the year attributable to equity share holders by the weighted average number of equity shares outstanding during the year. The company has issued Warrants with an option attached to apply and get allotment of equity share at a price which- is not less than fair value. Hence, option attached to such warrant is not considered dilutive as per the said Accounting Standard. Therefore, the basic earnings per share and diluted earnings per share are the same :

xvi) Accounting Standard 26- Intangible Assets:

"Accounting Standard 26 - Intangible assets" requires an enterprise to recognize an intangible asset if future economic benefits are expected to arise from it. It also requires that such an asset should be stated after providing depreciation / amortization over the useful life of the asset. Presently, the reporting enter- prise does not own any intangible assets.

xviii) Accounting Standard 28- Impairment of Assets:

The Company has identified that there is no material impairment of assets and as such no provision is required as per AS-28 issued by the ICAI.

xix) Accounting standard 29- Contingent Liabilities & Contingent assets

In the opinion of the management no provision is required against contingent liabilities referred in Para 2 of Schedule 18.

05. Profit & Loss on sale of raw-material and excess/shortage on physical verification, if any, remain adjusted in the respective consumption accounts.

06. Sundry Creditors under Current Liabilities in Schedule11include Rs. NIL (Rs.16,000/-) due to Small Scale undertakings. This amount has been determined to the extent such parties have been identified from available information.

07. Other Disclosures:

a) Unsecured loans include Rs.145,041,843.00/- (Rs. 70,431,480/- in Previous Year) payable against acceptances under letter of credits. Company has opened letter of credits against these bills and the same have been discounted by Banks/ Financial Institutions.

b) During March, 2008, Company has allotted 2,000,000 nos. Warrants attached with an option to acquire 1 equity share at the option of the Warrant-holder at a price of Rs. 100.20 per equity share by way of preferential issue as per SEBI Guidelines. The warrant-holders have paid 10% of the total issue price before the allotment in terms of SEBI Guidelines which is liable to be forfeited if option to apply for equity shares is not exercised on or before due date. The option attached with Warrant may be exercised within a period of 18 months from the date of allotment, i.e., 11th March, 2008. Since Warrant holders have net exercised the option, the Warrants have been forfeited during the Year."

02. Additional information pursuant to paragraph 3 and 4 of the Part II of Schedule VI of the Companies Act, 1956.

03. The previous years figures are regrouped/re-arranged wherever found necessary.

NOTE: PREVIOUS YEARS FIGURES ARE SHOWN IN THE BRACKETS

 
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