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Notes to Accounts of Godawari Power & Ispat Ltd.

Mar 31, 2023

b. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of H5/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. Capital Reserve

During amalgamation, the excess of net assets acquired, over the cost of consideration paid is treated as capital reserve.

b. Securities Premium

Securities Premium is used to record the premium received on issue of shares. It is to be utilised in accordance with the provisions of Companies Act, 2013.

c. General Reserve

Under the erstwhile Companies Act, 1956, a General Reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. General Reserve is available for payment of dividend to the shareholders as per the provisions of Companies Act, 2013.

d. Items of other comprehensive income

The cumulative gains and losses arising from fair value changes of equity investments measured at fair value through other comprehensive income are recognised in fair value of financial assets. The balance of the reserve represents such changes recognised net of amounts reclassified to retained earnings on disposal of such investments.

Terms & Conditions of Secured Loans

i. The working capital facilities from Banks are secured by 1^st Pari passu charge by the way of hypothecation with consortium member bank on the entire existing as well as on future current assets of the company. The facilities further secured by 1^st Pari passu charge by the way of EM of land & building along with hypothecation of plant and machineries and other movable fixed assets including entire existing as well as future fixed assets of the company including intangibles/goodwill and EM of land and building at phase-I industrial area, Siltara, Raipur, Chhattisgarh.

ii. The above credit facilities are also secured by personal guarantee of promoter directors of the Company.

iii. The working capital facilities (including cash credit) are also secured in line with rupee term loans by Pledge of 1,18,00,000 share of Godawari Energy Ltd. held by the Company (1^st pari passu charge among working capital lenders) and Corporate guarantee.

iv. The Buyer''s credit facilities from bank in respect of Solar Project - Rajnandgaon - 70 MW is secured by First and exclusive charge on the entire fixed assets both movable (excluding current assets) and immovable pertaining the solar project including land admeasuring 193.36 acres located at Rajnandgaon district in Chhattisgarh of borrower. present and future.

v. The Buyer''s credit facilities from bank in respect of Solar Project - Bemetara - 25 MW is secured by Primary charge by the way of hypothecation of movable assets including goods under LC, plant, and machinery etc. at the proposed solar power plant of 25 MW. It is further secured by Exclusive charge by way of equitable mortgage of land over which the proposed 25 MW solar power plant is being set up (Proposed at Dist. Bemetara, Chhattisgarh).

vi. All the monthly returns submitted to banks are in agreement with books of account and there is no any material differences between the books and returns submitted with bank.

Trade receivables are non-interest bearing and are generally on terms of advance or credit period ranges of 1 to 90 days. In March 2023, there was a reversal of H18.24 lacs (March 2022: H140.12 lacs) out of the provision for expected credit losses on trade receivables.

Contract liabilities include short-term advances received from customers to deliver manufacturing goods.

Amount of revenue recognised from amounts included in the contract liabilities at the beginning of the year H1830.70 lacs (previous year H949.02 lacs) and performance obligations satisfied in previous years H NIL (previous year H NIL).

32. Contingent Liabilities and capital commitments

Claims against the companies not acknowledged as debts:

i) Disputed liability of H181.06 lacs (Previous Year H181.06 lacs) on account of Service Tax against which the company has preferred an appeal.

ii) Disputed liability of H243.07 lacs (Previous Year H248.66 lacs) on account of CENVAT against which the company has preferred an appeal.

iii) Disputed liability of H286.55 lacs (Previous year H286.55 lacs) on account of Sales Tax against which the company has preferred an appeal.

iv) Disputed liability of H10 lacs (Previous Year H10 lacs) on account of Custom Duty against which the company has preferred an appeal.

v) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh H6341.95 lacs (Previous Year H5974.80 lacs). The Hon''ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20^th June,2008. The State Govt. has filed a Special Leave Petition before Hon''ble Supreme Court, which is pending for final disposal.

vi) Disputed demand of H192.66 lacs (Previous Year H192.66 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company.

vii) Disputed demand of H68.77 lacs (Previous Year H68.77 lacs) from Mining Department of Chhattisgarh against which the company has preferred an appeal.

Guarantees excluding financial guarantees:

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to H10105.42 lacs (Previous Year H10463.76 lacs.).

ii) Corporate Guarantees given to lenders of subsidiary company aggregating to H26560 lacs (Previous Year H27116 lacs).

Capital Commitments:

i) Estimated amount of contracts remaining to be executed on capital accounts H9344.94 (Previous Year H 8263.49 lacs).

33. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (Ind AS) 19 EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

The Company has certain defined contribution plans viz. provident fund . Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

An amount of H1418.06 lacs (P.Y. H938.60 lacs) is recognised as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 27).

b. Defined benefit plan:

Leave Obligations:

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number days of unutilised leave at each balance sheet date on the basis of year-end actuarial valuation using projected unit credit method. The scheme is unfunded.

Based on past experience and in keeping with Company''s practice, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months and accordingly the total year end provision determined on actuarial valuation, as aforesaid is classified between current and non current.

An amount of H119.76 lacs (P.Y. H102.70 lacs) is recognised as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 27).

Gratuity:

The Gratuity scheme is a final salary defined benefit plan that provides for a lump sum payment made on exit either by way of retirement, death, disability or voluntary withdrawal. The benefits are defined on the basis of final salary and the period of service and paid as lump sum at exit. Benefits provided under this plan is as per the requirement of the Payment of Gratuity Act, 1972. The scheme is unfunded.

(ii) Risk Exposure

Through its defined benefit plans, the Company is exposed to some risks, the most significant of which are detailed below: Interest rate risk:

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk:

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk:

This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

35. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company''s principal financial liabilities comprise of loans and borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include investments, loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also enters into derivative contracts.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Interest rate risk

- Currency risk

- Price risk

The Company''s board of directors has overall responsibility for the establishment and oversight of the company''s risk management framework. This note presents information about the risks associated with its financial instruments, the Company''s objectives, policies and processes for measuring and managing risk, and the Company''s management of capital.

Credit Risk

The Company is exposed to credit risk as a result of the risk of counterparties non performance or default on their obligations. The Company''s exposure to credit risk primarily relates to investments, accounts receivable and cash and cash equivalents. The Company monitors and limits its exposure to credit risk on a continuous basis. The Company''s credit risk associated with accounts receivable is primarily related to party not able to settle their obligation as agreed. To manage this the Company periodically reviews the financial reliability of its customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivables.

Trade receivables

Trade receivables represent the most significant exposure to credit risk and are stated after an allowance for impairment and expected credit loss.

Loans

Financial assets in the form of loans are written off when there is no reasonable expectations of recovery. Where recoveries are made, these are recognise as income in the statement of profit and loss. The company measures the expected credit loss of dues based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and passed trends. Based on historical data, loss on collection of dues is not material hence no additional provisions considered.

Bank, Cash and cash equivalents

Bank, Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to cash. These are subject to insignificant risk of change in value or credit risk.

Liquidity risk

The Company is exposed to liquidity risk related to its ability to fund its obligations as they become due. The Company monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements. The Company has access to credit facilities and debt capital markets and monitors cash balances daily. In relation to the Company''s liquidity risk, the Company''s policy is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions as they fall due while minimizing finance costs, without incurring unacceptable losses or risking damage to the Company''s reputation.

Interest rate risk

Interest rate risk is the risk that an upward movement in the interest rate would adversely effect the borrowing cost of the company. The Company is exposed to long term and short-term borrowings, Commercial Paper Program. The Company manages interest rate risk by monitoring its mix of fixed and floating rate instruments, and taking action as necessary to maintain an appropriate balance.

FOREX EXPOSURE RISK

The Company operates Internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through purchases from overseas suppliers in various foreign currencies.

Foreign currency exchange rate exposure is partly balanced by hedging of exposure by forward contract of purchasing of goods in the respective currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies to foreign currency risk.

PRICE RISK:

The entity is exposed to equity price risk, which arised out from FVTPL quoted equity shares and FVTOCI quoted and unquoted equity shares including preference instrument. The management monitors the proportion of equity securities in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the management. The primary goal of the entity''s investment strategy is to maximize investments returns.

Sensitivity Analysis for Price Risk:

Equity Investments carried at FVTOCI are not listed on the stock exchange. For preference investments and mutual funds classified as at FVTPL, the impact of a 2% in the index at the reporting date on profit & loss would have been an increase of H232.70 lacs (2021-22: H25.87 lacs); an equal change in the opposite direction would have decreased profit and loss. For equity instruments classified as at FVTOCI, the impact of a 2% in the index at the reporting date on profit & loss would have been an increase of H0.30 lacs (2021-22: H33.88 lacs); an equal change in the opposite direction would have decreased profit and loss.

36. CAPITAL MANAGEMENT

The Company''s main objectives when managing capital are to:

- ensure sufficient liquidity is available (either through cash and cash equivalents, investments or committed credit facilities) to meet the needs of the business;

Â¦ ensure compliance with covenants related to its credit facilities; and

Â¦ minimize finance costs while taking into consideration current and future industry, market and economic risks and conditions.

Â¦ safeguard its ability to continue as a going concern

Â¦ to maintain an efficient mix of debt and equity funding thus achieving an optimal capital structure and cost of capital.

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management of deployed funds and leveraging opportunities in domestic and international financial markets so as to maintain investor, creditor and market confidence and to sustain future development of the business.

For the purpose of Company''s capital management, capital includes issued capital and all other equity reserves. The Company manages its capital structure in light of changes in the economic and regulatory environment and the requirements of the financial covenants.

The Company manages its capital on the basis of net debt to equity ratio which is net debt (total borrowings net of cash and cash equivalents) divided by total equity

Proposed dividend on equity shares are subject to approval at the Annual General Meeting and are not recognized as a liability as at 31March,2023

38. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

The following methods and assumptions were used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to the shortterm maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

38. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS (Contd.)

Level 1 : The fair values of the Mutual Funds are based on NAV price quotations at the reporting date. The fair value of quoted investments (unadjusted) prices in active markets for identical assets or liabilities.

Level 2 : The fair values of the unquoted shares & securities have been estimated using a DCF model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management''s estimate of fair value for these unquoted investments. Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly of indirectly.

iv) Terms and conditions of transactions with related parties

All related party transactions entered during the year were in ordinary course of business and on arm''s length basis. Outstanding balances at the year-end are unsecured and will be settled in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2023, the company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2022: HNil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

41 . The company is in the business of manufacturing of Iron & Steel products and hence has only one reportable operating segment i.e. Iron & Steel as per Ind AS 108 - Operating Segment.

42. During the year, the company has divested its entire stake in Associate Company viz. Jagdamba Power & Alloys Limited, accordingly the net gain of H208.40 lacs on buy back has been shown under exceptional item. Similarly, during the previous year, the gain of H9874.46 lacs on disinvestment of equity shares of Godawari Green Energy Limited has been shown as exceptional items.

47. The company has not undertaken any transactions with companies struck off under section 248 of the Companies Act 2013 or section 560 of Companies Act 1956 during the current year or in previous year.

48. All the transactions are recorded in the books of accounts and there was no income that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Also there was no previously unrecorded income and related assets which has been recorded in the books of account during the year.

49. No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

50. The company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries. Further, the company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding , whether recorded in writing or otherwise, that the company shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

51 . The company has complied with the number of layers of companies prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

52. The company has neither traded nor invested in Crypto Currency or Virtual Currency during the financial year.

53. No scheme of compromise or arrangement has been proposed between the company & its members or the company & its creditors under section 230 of the Companies Act 2013 (âThe Actâ) and accordingly the disclosure as to whether the scheme of compromise or arrangement has been approved or not by the competent authority in terms of provisions of sections 230 to 237 of the Act is not applicable.

54. The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective. Based on a preliminary assessment, the entity believes the impact of the change will not be significant.

55. Previous year figures have been regrouped or rearranged wherever necessary.

Mar 31, 2022

b. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of H 5/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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 distribtion of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

e. In the period of five years, the Company has issued bonus shares 1:2 ratio by capitalizing a part of the securities premium during the year ended March 31, 2022. Further, the company has not bought back any equity shares or has allotted any equity shares as fully paid up consideration other than cash in the period of five years.

f. There are no equity shares reserved for issue under options and there are no contracts or commitments for the sale of shares or disinvestments.

g. During the year the company has sub-divided one equity shares from H 10/- each into two equity shares of H 5/- each.

a. During amalgamation, the excess of net assets acquired, over the cost of consideration paid is treated as capital reserve.

b. Securities Premium is used to record the premium received on issue of shares. It is to be utilised in accordance with the provisions of Companies Act, 2013. During the year the company has issued and allotted 6,82,22,494 equity shares of H 5/- each as bonus equity shares in the proportion of 2 (two) equity share for every 1 (One) existing equity share held

by the members by capitalizing the securities premium account of the Company in compliance with the provisions of the Companies Act, 2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

c. Under the erstwhile Companies Act, 1956, a General Reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. General Reserve is available for payment of dividend to the shareholders as per the provisions of Companies Act, 2013.

d. Retained earnings are the profits and gains that the Company has earned till date less any transfer to General Reserve, dividends or other distributions made to shareholders.

e. The cumulative gains and losses arising from fair value changes of equity investments measured at fair value through other comprehensive income are recognised in fair value of financial assets. The balance of the reserve represents such changes recognised net of amounts reclassified to retained earnings on disposal of such investments.

Security and terms & conditions for above loans:

The rupee term loans agreegating to H Nil (Previous year H 45518.11 lacs) ( including current maturities of H Nil (Previous year H 4402.22 lacs) classified under ''short term borrowings'' in note 19) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. The rupee term loans are also secured by personal guarantee of promoter/directors of the Company & their relatives and 2nd pari passu charge on pledge of 75,01,846 equity shares of the Company held by the promoters.

Repayment terms for above loans:

Rupee term loan outstanding aggregating to H Nil (Previous year H 45518.11 lacs) are repayable in 168 monthly instalments which shall be ended on 31st March 2032.

During the year, the company has made prepayment of all term loans from banks and all the charges or satisfaction of which is required to be registered with Registrar of Companies(ROC) have been duly registered within the statutory time limit provided under the provisions of Companies Act 2013 and rules made thereunder, except in one case where no dues certificate from lender is pending for filing of satisfaction of charge with Registrar of Companies.

Terms & Conditions of Secured Loans

1. The working capital facilities from Banks are secured by 1st Pari passu charge by the way of hypothecation with consortium member bank on the entire existing as well as on future current assets of the company. The facilities further secured by 2nd Pari passu charge by the way of Equitable Mortgage (EM) of land & building along with hypothecation of plant and machineries and other movable fixed assets including entire existing as well as future fixed assets of the company including intangibles/goodwill and EM of land and building at phase-I industrial area, Siltara, Raipur, Chhattisgarh.

2. The above credit facilities are also secured by personal guarantee of promoter directors of the Company.

3. The working capital facilities (including cash credit) are also secured in line with rupee term loans by Pledge of 1,18,00,000 shared of Godawari Energy Ltd. held by the Company (1st pari passu charge among working capital lenders) and Corporate guarantee of M/s Godawari Energy Ltd.

4. The Buyer''s credit facilities from bank in respect of Solar Project - Rajnandgaon - 70 MW is secured by First and exclusive charge on the entire fixed assets both movable (excluding current assets) and immovable pertaining the solar project including land admeasuring 193.36 acres located at Rajnandgaon district in Chhattisgarh of borrower, present and future.

5. The Buyer''s credit facilities from bank in respect of Solar Project - Bemetara - 25 MW is secured by Primary charge by the way of hypothecation of movable assets including goods under LC, plant, and machinery etc. at the proposed solar power plant of 25 MW. It is further secured by Exclusive charge by way of equitable mortgage of land over which the proposed 25 MW solar power plant is being set up (Proposed at Dist. Bemetara, Chhattisgarh).

Other Notes:

1. The Company has working capital facilities from banks on the basis of security of current assets & submitting quartely Financial Follow up Report as per the terms & conditions of sanction letters.There are no material discrepancies in the amount of current assets between Financial Follow Report and books of account.

2. None of the banks, financial institutions or other lenders from whom the company has borrowed funds has declared the company as a wilful defaulter at any time during the current year or in previous year.

32. Contingent Liabilities and capital commitments :-Claims against the companies not acknowledged as debts:

i) Disputed liability of H181.06 lacs (Previous Year H144.59 lacs) on account of Service Tax against which the company has preferred an appeal.

ii) Disputed liability of H248.66 lacs (Previous Year H329.68 lacs) on account of CENVAT against which the company has preferred an appeal.

iii) Disputed liability of H286.55 lacs (Previous year H286.55 lacs) on account of Sales Tax against which the company has preferred an appeal.

iv) Disputed liability of H10 lacs (Previous Year H10 lacs) on account of Custom Duty against which the company has preferred an appeal.

v) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh H5974.80 lacs (Previous Year H5546.24 lacs). The Hon''ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt. has filed a Special Leave Petition before Hon''ble Supereme Court, which is pending for final disposal.

vii) Disputed demand of H68.77 lacs (Previous Year H68.77 lacs) from Mining Department of Chhattisgarh against which the company has preferred an appeal.

Guarantees :

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to H10463.76 lacs (Previous Year H3429.64 lacs.).

ii) Corporate Guarantee given to the lenders of subsidiary company aggregating to H27116 lacs (Previous Year H Nil).

Capital Commitments:

i) Estimated amount of contracts remaining to be executed on capital accounts H8263.49 Lacs (Previous Year H Nil).

33. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (Ind AS) 19 EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

An amount of H938.60 lacs (P.Y. H574.12 lacs) is recognised as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 27).

b. Defined benefit plan:

Leave Obligations:

An amount of H102.70 lacs (P.Y. H122.13 lacs) is recognised as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 27).

Gratuity:

(i) The actuarial valuation of the defined obligation were carried out at 31st March, 2022. The present value of the defined benefit obligation and the related current service cost and past service cost,were measured using the projected Uniit Credit Method.

(ii) Risk Exposure

Through its defined benefit plans, the Company is exposed to some risks, the most significant of which are detailed below: Interest rate risk :

The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

Salary inflation risk :

Higher than expected increases in salary will increase the defined benefit obligation.

Demographic risk :

35. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Interest rate risk

- Currency risk

- Price risk

The Company''s board of directors has overall responsibility for the establishment and oversight of the company''s risk management framework.This note presents information about the risks associated with its financial instruments, the Company''s objectives, policies and processes for measuring and managing risk, and the Company''s management of capital.

Credit Risk

The Company is exposed to credit risk as a result of the risk of counterparties non performance or default on their obligations. The Company''s exposure to credit risk primarily relates to investments, accounts receivable and cash and cash equivalents. The Company monitors and limits its exposure to credit risk on a continuous basis. The Company''s credit risk associated with accounts receivable is primarily related to party not able to settle their obloigation as agreed. To manage this the Company periodically reviews the finanial reliability of its customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivables.

Trade receivables

Trade receivables represent the most significant exposure to credit risk and are stated after an allowance for impairment and expected credit loss.

Loans and Advances

Financial assets in the form of loans and advances are written off when there is no reasonable expectations of recovery. Where recoveries are made, these are recognise as income in the statement of profit and loss. The company measures the expected credit loss of dues based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and passed trends. Based on historical data, loss on collection of dues is not material hence no additional provisions considered.

Bank, Cash and cash equivalents

Bank, Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to cash. These are subject to insignificant risk of change in value or credit risk.

Liquidity risk

Interest rate risk

Interest rate risk is the risk that an upward movement in the interest rate would adversley effect the borrowing cost of the company. The Company is exposed to long term and short-term borrowings, Commercial Paper Program. The Company manages interest rate risk by monitoring its mix of fixed and floating rate instruments, and taking action as necessary to maintain an appropriate balance.

FOREX EXPOSURE RISK

The Company operates internationally and portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk through purchases from overseas suppliers in various foreign currencies.

Foreign currency exchange rate exposure is partly balanced by hedging of exposure by forward contract of purchasing of goods in the respective currencies.

PRICE RISK:

Sensitivity Analysis for Price Risk:

Equity Investments carried at FVTOCI are not listed on the stock exchange. For equity investments classified as at FVTOCI, the impact of a 2 % in the index at the reporting date on profit & loss would have been an increase of H15.15 lacs (2020-21: H7.92 lacs); an equal change in the opposite direction would have decreased profit and loss.

36. CAPITAL MANAGEMENT

The Company''s main objectives when managing capital are to:

- ensure sufficient liquidity is available (either through cash and cash equivalents, investments or committed credit facilities) to meet the needs of the business;

- ensure compliance with covenants related to its credit facilities; and

- minimize finance costs while taking into consideration current and future industry, market and economic risks and conditions.

- safeguard its ability to continue as a going concern

- to maintain an efficient mix of debt and equity funding thus achieving an optimal capital structure and cost of capital.

38. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

The following methods and assumptions were used to estimate the fair values:

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by

valuation techniquie:

Level 1 : quoted (unadjusted)prices in active markets for identical assets or liabilities

Level 2 : other techniques for which all inputs which have a Significant effect on the recorded fair valueare observable,

either directly of indirectly

iv) Terms and conditions of transactions with related parties

All related party transactions entered during the year were in ordinary course of business and on arm''s length basis. Outstanding balances at the year-end are unsecured and will be settled in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2022, the company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021: H Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

41. The company is in the business of manufacturing of Iron & Steel products and hence has only one reportable operating segment i.e. Iron & Steel as per Ind AS 108 - Operating Segment.

42. During the year, the company has divested its entire stake in subsidiary company viz. Godawari Green Energy Limited, accordingly the net gain of H 9874.46 lacs on disposal of stake in the said subsidiary has been shown under exceptional item.Similarly, during the previous year, the gain of H 6299.76 lacs on partial disinvestment of equity shares of Ardent Steel Private Limited has been shown as exceptional items.

There was no short fall in the amount of CSR expenditure required to be spent either in current year or in earlier years. Further all the expenditure on CSR activities has been spent by the company either on its own account or by way of contribution to implementing agencies through Institutions, not being related parties, with established track record of not less than three years.

49. No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

51. The company has complied with the number of layers of companies prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

52. The company has neither traded nor invested in Crypto Currency or Virtual Currency during the financial year.

Mar 31, 2018

1. corporate information

Godawari Power & Ispat Ltd. (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act. Itâs shares are listed on two stock exchanges in India. The company is mainly engaged in Generation of Electricity, Mining of Iron Ore and Manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys.

The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report.

2. significant accounting policies

2.1 basis of preparation and presentation

i) The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules,2015 and guidelines issued by the Securities and Exchange Board of India (SEBI).

ii) The standalone financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value:

- Certain financial assets and liabilities (including derivative instruments) and

- Defined benefit plans - plan assets

iii) Companyâs financial statements are presented in Indian Rupees (â), which is also its functional currency.

2.2 KEY ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Companyâs financial statements requires management to make judgement, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Depreciation / amortisation and useful lives of property plant and equipment / intangible assets

Property, plant and equipment / intangible assets are depreciated / amortised over their estimated useful lives, after taking into account estimated residual value. The estimated useful lives and residual values of the assets are reviewed annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful lives and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated technological changes and other related matters. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.

b) recoverability of trade receivable

Judgements are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the period of overdues, the amount and timing of anticipated future payments and the probability of default.

c) provisions

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of resources resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgement to existing facts and circumstances. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances.

d) impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating Units (CGUâs) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.

e) Measurement of defined benefit obligations

The measurement of defined benefit and other post-employment benefits obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

investments given as security

* Out of 17847000 equity shares, 1 1957970 (7520970) equity shares pledged for the credit facilities sanctioned to Godawari Green Energy Limited. ** 11800000 (0) equity shares are pledged for the credit facilities availed by the company.

* Out of 8065000 equity shares, 4113150 (0) equity shares are pledged for the credit facilities sanctioned to Ardent Steel Limited.

b. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

e. Apart from authorised equity share capital, the company is also having authorised preference share capital consisting 3200000 preference shares of Rs.10/-each as on 31.03.2018 and 31.03.2017.

Security and terms & conditions for above loans:

a. 12% redeemable non-convertible debentures âAâ Series are secured by First Pari passu charge on the fixed assets of the Company both present & future and 2nd pari passu charge on the current assets of the Company both present & future.

b. 12.75% redeemable non-convertible debentures âBâ Series are secured by Pari passu first charge on the tangible fixed assets of the Company.

c. 12.90% redeemable non-convertible debentures âCâ Series are secured by Pari passu first charge on the fixed assets of the Company & pari passu second charge on the current assets of the Company.

d. The rupee term loans agreegating to Rs.1314.05 Cr (Previous year Rs.1231.39 Cr) (including current maturities of Rs. 80.87 Cr (Previous year Rs.16.58 Cr) classified under âother financial liabilitiesâ in note 18) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. The rupee term loans are also secured by personal guarantee of promoter directors of the Company & their relatives and by 2nd pari passu charge on pledge of 77,80,245 equity shares of the Company held by the promoters.

e. The foreign currency term loan (ECB) aggregating to Rs. Nil (Previous year Rs. 81.75 Cr) (including current maturities of Rs. Nil (Previous year Rs. 0.86 Cr) classified under âother financial liabilitiesâ in note 18) are secured by a first pari passu charge over immovable and movable fixed assets of the company, both present and future. This Loan is also secured by personal guarantee of the Managing Director of the Company.

f. Other loans from banks and financial institution are secured by hypothecation and mortgage of specific assets from various banks. Repayment terms for above loans:

a. The outstanding amount of Non Convertible Debentures are repayable in 168 monthly instalments which shall be ended on 31st March 2032.

b. Rupee term loan outstanding aggregating to Rs. 1230.92 crores are repayable in 168 monthly instalments which shall be ended on 31st March 2032.

c. Rupee term loan outstanding agreegating to Rs. 83.13 crores are repayable in 88 monthly instalments which shall be ended on 31st March 2026.

Terms & Conditions of secured Loans

1. The cash credit facilities from Banks are secured by first pari passu charge over entire current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables of the Company and second charge over the other movable assets and immovable assets of the Company.

2. The above credit facilities are also secured by personal guarantee of promoter directors of the Company.

3. The working capital facilities (including cash credit) are also secured in line with rupee term loans by pledge of 77,80,245 equity shares of the company held by the promoters.

3. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF :-

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs. 2754 lacs (Previous Year Rs. 1304 lacs.)

ii) Disputed liability of Rs. 681.59 lacs (Previous Year Rs. 302.21 lacs) on account of Service Tax against which the company has preferred an appeal.

iii) Disputed liability of Rs. 280.53 lacs (Previous Year Rs. 63.00 lacs) on account of CENVAT against which the company has preferred an appeal.

iv) Disputed liability of Rs. 413.90 lacs (Previous Year Rs. 22.87 lacs) on account of Sales Tax against which the company has preferred an appeal.

v) Disputed liability of Rs. 39.35 lacs (Previous Year Rs. 390.76) on account of Income Tax against which the company has preferred an appeal.

vi) Disputed liability of Rs.10 lacs (Previous Year Rs. 43.64 lacs) on account of Custom Duty against which the company has preferred an appeal.

vii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh Rs. 4224.19 lacs (Previous Year Rs. 3740.60 lacs). The Honâble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt. has filed a Special Leave Petition before Honâble Supereme Court, which is pending for final disposal.

viii) Disputed demand of Rs. 758 lacs (Previous Year Rs. 758 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company.

ix) Disputed demand of Rs. 522.24 lacs from Mining Department of Chhattisgarh against which the company has preferred an appeal.

x) Estimated amount of contracts remaining to be executed on capital accounts Rs. 2902 lacs (Previous Year Rs. 2095 lacs).

4. During the financial year 2015-16, a search operation was conducted in the premises of the company u/s 132 of the Income Tax Act, 1961. The settlement proceedings are pending before the competent authority. The company does not foresee any further liability on this account.

5. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS:

a. Defined Contribution plan:

Amount of Rs. 590.06 lacs (P.Y. Rs. 401.26 lacs) is recognised as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 24).

b. Defined benefit plan:

Gratuity:

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity plan provides a lumpsum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service subject to a maximum of Rs.20 Lacs. Vesting occurs upon completion of five continuous years of service in accordance with Indian law.

6. DETAILS OF LOANS GIVEN, INVESTMENTS MADE AND GUARANTEE GIVEN COVERED UNDER SECTION 186 (4) OF THE COMPANIES ACT, 2013.

Investment made are given under the respective heads. Further the company has not given any guarantee.

Loan given by the Company in respect of loans as at 31st March, 2018

7. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Companyâs principal financial liabilities comprise of loans and borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Companyâs operations. The Companyâs principal financial assets include investments, loans, trade and other receivables, and cash and short-term deposits that derive directly from its operations. The Company also enters into derivative contracts.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Interest rate risk

- Currency risk

- Price risk

The Companyâs board of directors has overall responsibility for the establishment and oversight of the companyâs risk management framework. This note presents information about the risks associated with its financial instruments, the Companyâs objectives, policies and processes for measuring and managing risk, and the Companyâs management of capital.

Credit Risk

The Company is exposed to credit risk as a result of the risk of counterparties non performance or default on their obligations. The Companyâs exposure to credit risk primarily relates to investments, accounts receivable and cash and cash equivalents. The Company monitors and limits its exposure to credit risk on a continuous basis. The Companyâs credit risk associated with accounts receivable is primarily related to party not able to settle their obligation as agreed. To manage this the Company periodically reviews the finanial reliability of its customers, taking into account the financial condition, current economic trends and analysis of historical bad debts and ageing of accounts receivables.

Trade receivables

Trade receivables represent the most significant exposure to credit risk and are stated after an allowance for impairment and expected credit loss.

Loans and Advances

Bank, Cash and cash equivalents

Bank, Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to cash. These are subject to insignificant risk of change in value or credit risk.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

Liquidity risk

The Company is exposed to liquidity risk related to its ability to fund its obligations as they become due. The Company monitors and manages its liquidity risk to ensure access to sufficient funds to meet operational and financial requirements. The Company has access to credit facilities and debt capital markets and monitors cash balances daily. In relation to the Companyâs liquidity risk, the Companyâs policy is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions as they fall due while minimizing finance costs, without incurring unacceptable losses or risking damage to the Companyâs reputation.

Financing arrangements

The Company has access to following undrawn borrowing facilities at the end of the reporting period:

Interest rate risk

The exposure of the Companyâs borrowings to interest rate changes at the end of the reporting period are as follows:

forex exposure risk

Foreign currency exchange rate exposure is partly balanced by purchasing of goods in the respective currencies.

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies to foreign currency risk.

price RISK:

The entity is exposed to equity price risk, which arised out from FVTPL quoted equity shares and FVTOCI quoted and unquoted equity shares including preference instrument. The management monitors the proportion of equity securities in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the management. The primary goal of the entityâs investment strategy is to maximize investments returns.

Sensitivity Analysis for price Risk:

Equity Investments carried at FVTOCI are not listed on the stock exchange. For equity investments classified as at FVTOCI, the impact of a 2 % in the index at the reporting date on profit & loss would have been an increase of Rs.12.86 lacs (2016-17: Rs. 10.90 lacs); an equal change in the opposite direction would have decreased profit and loss.

8. CAPITAL MANAGEMENT

The Companyâs main objectives when managing capital are to:

- ensure sufficient liquidity is available (either through cash and cash equivalents, investments or committed credit facilities) to meet the needs of the business;

- ensure compliance with covenants related to its credit facilities; and

- minimize finance costs while taking into consideration current and future industry, market and economic risks and conditions.

- safeguard its ability to continue as a going concern

- to maintain an efficient mix of debt and equity funding thus achieving an optimal capital structure and cost of capital.

For the purpose of Companyâs capital management, capital includes issued capital and all other equity reserves. The Company manages its capital structure in light of changes in the economic and regulatory environment and the requirements of the financial covenants.

The Company manages its capital on the basis of net debt to equity ratio which is net debt (total borrowings net of cash and cash equivalents) divided by total equity

During the year the company has complied with major covenants of the terms of sanction of the loan facilities throughout the year.

9. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

The following methods and assumptions were used to estimate the fair values:

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation techniquie:

Level 1 : quoted (unadjusted)prices in active markets for identical assets or liabilities

Level 2 : other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly of indirectly

Level 3 : techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

During the reporting period ending 31st March, 2018 and 31st March, 2017, there were no transfers between Level 1 and Level 2 fair value measurements.

10. The company is entitled to Renewable Energy Certificates (REC) against captive generation & consumption of Bio-Mass Power. The floor price for trading of RECâs was earlier determined by Central Electricity Regulatory Commission (CERC) @ Rs. 1500 per REC, However, CERC has revised the floor price of REC @ Rs. 1000/- per REC w.e.f.1st April, 2017, which has been subesequently challenged in a petition in the Appellate Tribunal. The Honâable Supreme Court in response to the petition filed by Green Energy Association had granted stay on CERC order for revision in price till final verdict of the Appellate Tribunal. The Appellate Tribunal recently vide its order dated 12th April,2018 has upheld the earlier order of CERC with respect to revision of price from Rs.1500/- to Rs. 1000/-. However, an appeal is being preferred before Honâble Supereme Court against the order of the Appellate Tribunal. In view of recent Appellate Tribunal order and as a matter of abandon caution, the company has accounted for the difference in the value of REC to the net realizable value during the year and charged Rs. 19.08 crores as an exceptional expense related to RECs generated upto 31.03.2017 and Rs. 4.28 crores related to current financial year to the revenue account.

11. The exceptional items of Rs. 5.52 crores (net) includes income of Rs. 13.56 crores pertains to compensation received from equipment supplier under the performance contract and expense of Rs.19.08 crores on account of RECs as stated in note-36 above.

12. INFORMATION ON RELATED PARTY DISCLOSURES ARE GIVEN BELOW :

i) Related parties

a) subsidiaries

Godawari Green Energy Limited

Godawari Clinkers & Cement Limited (Wholly owned) (Closed) Krishna Global Minerals Limited (Wholly owned) (Closed)

Godawari Integrated Steels (India) Limited (Wholly owned) (Closed) Godawari Energy Limited Ardent Steel Limited

b) Associates

-- Jagdamba Power & Alloys Limited -- Chhattisgarh Ispat Bhumi Limited -- Hira Ferro Alloys Limited

c) other Related parties -- Hira Cement Limited -- Raipur Complex

d) Joint Ventures

-- Raipur Infrastructure Company Limited -- Chhattisgarh Captive Coal Mining Limited

e) Key Management personnel

-- Shri B.L. Agrawal (Managing Director)

-- Shri Abhishek Agrawal (Whole Time Director) -- Shri Dinesh Agrawal (Whole Time Director)

-- Shri Vinod Pillai (Whole Time Director)

-- Shri Sanjay Bothra (CFO)

-- Shri Y.C. Rao (Company Secretary)

-- Shri Vivek Agrawal (Chief Operational Officer)

13. SEGMENT-WISE REVENUE RESULTS :

Basis of preparation :

i) Business segments of the company have been identified as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identified as the business segments.

ii) The geographic segments identified as secondary segments are âDomestic Marketâ and âExport Marketâ. Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India.

14. UNHEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by any derivative instruments or Forward Contracts as at 31st March,2018 amount to Rs. 2598.07 lacs (Previous Year Rs. 8174.60 lacs)

15. During the year the company has incurred Rs. 291.07 lacs on account of Corporate Social Responsibility Activities. According to provisions of section 135 of the Companies Act, 2013, the company is not required to spent any amount based on the average net profits/loss of the previous three years. The break-up of amount spent during the year are as follows:

16. The Board of Directors of the company has approved the scheme of amalgamation of its associate company âJagdamba Power & Alloys Ltdâ from appointed date 01.04.2017 in the meeting held on 20.02.2018 subject to obtaining of necessary regulatory approvals. Pending such approvals no adjustment has been made in the books of account during the year.

17. DISCLOSURE PURSUANT TO REGULATION 34 (3) AND 53(F) AND PARA A OF SCHEDULE-V OF SEBI (LODR) REGULATION, 2015:

Loans and Advances in the nature of loans given

18. PREVIOUS YEAR FIGURES HAVE BEEN REGROUPPED OR REARRANGED WHEREVER NECESSARY.

Mar 31, 2017

1. KEY ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of the Company''s financial statements requires management to make judgment, estimates and assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods,

a) Depreciation / amortization and useful lives of property plant and equipment / intangible assets

Property, plant and equipment / intangible assets are depreciated / amortized over their estimated useful lives, after taking into account estimated residual value. The estimated useful lives and residual values of the assets are reviewed annually in order to determine the amount of depreciation / amortization to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes and other related matters, The depreciation / amortization for future periods is revised if there are significant changes from previous estimates,

b) Recoverability of trade receivable

Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the period of overdoes, the amount and timing of anticipated future payments and the probability of default,

c) Provisions

Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of resources resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability requires the application of judgment to existing facts and circumstances. The carrying amounts of provisions and liabilities are reviewed regularly and revised to take account of changing facts and circumstances,

d) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Units (CGU''s) fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or a groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount,

e) Measurement of defined benefit obligations

2.FIRST TIME ADOPTION OF IND AS

The Company has adopted Ind AS with effect from 1st April, 2016 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April, 2015. The figures for the previous period have been restated, regrouped and reclassified wherever required to comply with the requirement of Ind AS and Schedule III,

a) Exemptions from retrospective application

i) Business combination exemption

The Company has applied the exemption as provided in Ind AS 101 on non-application of Ind AS 103, "Business Combinations" to business combinations consummated prior to April 1, 2015 (the "Transition Date"), pursuant to which goodwill/capital reserve arising from a business combination has been stated at the carrying amount prior to the date of transition under Indian GAAP

ii) Deemed cost for property, plant and equipment and intangible assets

The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS,

iii) Investments in subsidiaries, joint ventures and associates

The Company has elected to measure investment in subsidiaries, joint venture and associate at cost,

iv) Long Term Foreign Currency Monetary Items

The Company continues the policy of capitalizing exchange differences arising on translation of long term foreign currency monetary items.

b) Transition to Ind AS - Reconciliations

The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:

i) Reconciliation of Equity as at 1st April, 2015 and 31st March, 2016. Refer Note-3.1.

ii) Reconciliation of Statement of Profit and Loss for the year ended 31st March, 2016. Refer Note-3.2.

Explanations for reconciliation of Balance Sheet as previously reported under IGAAP to INDAS

A) Property, Plant and Equipment (PPE)

As per Ind AS 16, PPE are defined as tangible items that are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and are expected to be used during more than one period. Certain spare parts now meets the definition of PPE and are accordingly classified as PPE,

B) Investment

Investments in Subsidiaries, Associates and Joint Ventures is accounted for at cost as per para 4 of Ind AS 27 on the date of transition and in case of other Investment in equity instruments, the same are carried at fair value through OCI in Ind AS compared to being carried at cost under IGAAP. Further, Treasury shares held in the name of the Trust, has been shown as a deduction from the equity in accordance with Para 33 and 34 of Ind AS 32.

C) Inventory

Stores and spare parts in the nature of property, plant and equipment has been reclassified,

D) Trade receivables

Under the GAAP, the company has create provision for impairment of trade receivables consist only in respect of specific amount for incurred loss,

Under the Ind AS, impairment allowance has been determined based on expected credit loss model (ECL),

E) Other Current Assets

The Unused MAT credit are reclassified to Deferred tax as on date of transition to Ind AS by reclassifying from Other current assets,

F) Other equity

a) Adjustments to retained earnings and other comprehensive income has been made in accordance with Ind AS, for the above mentioned line items.

b) In addition, as per Ind-AS 19, actuarial gains and losses are recognized in other comprehensive income as compared to being recognized in the statement of profit and loss under IGAAP.

G) Borrowings

Under Indian GAAP, transaction costs incurred in connection with borrowings are amortized upfront and charged to profit or loss for the period, Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. The unamortized transaction cost is further classified in to non-current and current.

H) Deferred Tax liabilities

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the company has to account for such differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity,

I) Other financial liabilities

Gains/ losses on derivative on interest rate swap accounted for on the basis of the bank certificate. Further it is considered as prior period error as at the date of transition period.

J) Other liabilities -

Adjustments that reflect unamortized negative past service cost arising on modification of the leave encashment in an earlier period. Ind AS 19 requires such gains and losses to be adjusted to retained earnings,

K) Provisions

Adjustments reflect dividend (including corporate dividend tax), declared and approved post reporting period,

Explanations for reconciliation of Statement of Profit and loss as previously reported under IGAAP to Ind AS

A. Employee benefit expenses

As per Ind-AS 19- Employee Benefits, actuarial gains and losses are recognized in other comprehensive income and not reclassified to profit and loss in a subsequent period,

Adjustments reflect unamortized negative past service cost arising on modification of the gratuity plan in an earlier period. Ind AS 19 requires such gains and losses to be adjusted to retained earnings.

B. Finance costs

C. Depreciation

Recognition of additional PPE from spare parts has resulted in additional depreciation charge for the year ended 31 March 2016,

D. Other expenses

Under Indian GAAP, the company has created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL). Due to ECL model,

E. Deferred Tax

Security and terms & conditions for above loans:

a. 12% redeemable non-convertible debentures ''A'' Series are secured by First Pari passu charge on the fixed assets of the Company both present & future and 2nd pari passu charge on the current assets of the Company both present & future,

b. 12.75% redeemable non-convertible debentures ''B'' Series are secured by Pari passu first charge on the tangible fixed assets of the Company.

c. 12.90% redeemable non-convertible debentures ''C'' Series are secured by Pari passu first charge on the fixed assets of the Company & pari passu second charge on the current assets of the Company.

d. The rupee term loans aggregating to Rs, 1231.39 Cr (Previous year Rs, 599.50 Cr) (including current maturities of Rs, 16.58 Cr (Previous year Rs, 101.86 Cr) classified under ''other current liabilities'' in note 15) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e, stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. The rupee term loans are also secured by personal guarantee of promoter directors of the Company & their relatives and by 2nd pari passu charge on pledge of 77,80,245 equity shares of the Company held by the promoters,

e. The foreign currency term loan (ECB) aggregating to Rs, 81.75 Cr (Previous year Rs, 344.21 Cr) (including current maturities of Rs, 0.86 Cr (Previous year Rs, 54.12 Cr) classified under ''other current liabilities'' in note 15) are secured by a first pari passu charge over immovable and movable fixed assets of the company, both present and future. This Loan is also secured by personal guarantee of the Managing Director of the Company,

f. Other loans from banks and financial institution are secured by hypothecation and mortgage of specific assets from various banks,

g. Other loans bearing interest @12% from body corporate are repayable after more than one year,

h. During the year the company has made default in repayment of borrowings to banks and debenture holders and on request of the company for simple restructuring of debt facilities, which inter-alia includes conversion of excess working capital into WCTL, Funding of Interest on term loan from 1st June, 2016 to 28th February, 2017 into FITL and elongation in repayment period of debt for ten to fifteen years, the bank has approved the restructuring proposals and accordingly the promoters contribution of '' 31 crores has been brought in by the promoters by subscribing to equity capital of the Company on Preferential allotment basis.

Terms & Conditions of Secured Loans

2. The above credit facilities are also secured by personal guarantee of promoter directors of the Company,

3. The working capital facilities (including cash credit) are also secured in line with rupee term loans by pledge of 77,80,245 equity shares of the company held by the promoters.

3. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF :-

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs,1304 lacs (Previous Year Rs,1019 lacs.)

ii) Disputed liability of Rs, 302.21 lacs (Previous Year Rs, 499.11 lacs) on account of Service Tax against which the company has preferred an appeal,

iii) Disputed liability of Rs, 63.00 lacs (Previous Year Rs, 389.34 lacs) on account of CENVAT against which the company has preferred an appeal,

iv) Disputed liability of Rs, 22.87 lacs (Previous Year Rs, 404.48 lacs) on account of Sales Tax against which the company has preferred an appeal,

v) Disputed liability of Rs, 390.76 lacs (Previous Year Rs, 390.86 lacs) on account of Income Tax against which the company has preferred an appeal,

vi) Disputed liability of Rs, 43.64 lacs (Previous Year Rs, 10 lacs) on account of Custom Duty against which the company has preferred an appeal,

vii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh Rs, 3740.6 lacs (Previous Year Rs, 3279.08 lacs). The Hon''ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June, 2008. The State Govt. has filed a Special Leave Petition before Hon''ble Supreme Court, which is pending for final disposal.

viii) Disputed demand of Rs, 758 lacs (Previous Year Rs, 758 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company,

ix) Estimated amount of contracts remaining to be executed on capital accounts Rs, 2095 lacs (Previous Year Rs, 2858 lacs),

4. During the previous year, the Income Tax Department has conducted a search operation u/s 132 of the Income Tax Act, 1961. During the course of search the various documents and records have been seized by them and physical verification of stocks was also conducted by independent agencies appointed by them. The company does not foresee any liability at this stage, however the due provision of liability, if any, shall be made after completion of the block assessment,

5. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 19 EMPLOYEE BENEFITS:

a. Defined Contribution Plan:

Amount of Rs, 401.26 lacs (PY. Rs,.359.15 lacs) is recognized as an expenses and included in employee benefit expense as under the following defined contribution plans (Refer Note no 25)

b. Defined benefit plan:

Gratuity:

The Company provides for gratuity, a defined benefit retirement plan covering eligible employees. The Gratuity plan provides a lumpsum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount equivalent to 15 days salary for each completed year of service subject to a maximum of Rs, 10 Lacs. Vesting occurs upon completion of five continuous years of service in accordance with Indian law,

6. FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Interest rate risk

- Currency risk

- Price risk

The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework, This note presents information about the risks associated with its financial instruments, the Company''s objectives, policies and processes for measuring and managing risk, and the Company''s management of capital,

Credit Risk

Trade receivables

Trade receivables represent the most significant exposure to credit risk and are stated after an allowance for impairment and expected credit loss,

Loans and Advances

Financial assets in the form of loans and advances are written off when there is no reasonable expectations of recovery. Where recoveries are made, these are recognize as income in the statement of profit and loss. The company measures the expected credit loss of dues based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and passed trends. Based on historical data, loss on collection of dues is not material hence no additional provisions considered,

Bank, Cash and cash equivalents

Bank, Cash and cash equivalents comprise cash in hand and deposits which are readily convertible to cash. These are subject to insignificant risk of change in value or credit risk,

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

No significant changes in estimation techniques or assumptions were made during the reporting period Liquidity risk

Financing arrangements

The Company has access to following undrawn borrowing facilities at the end of the reporting period:

Interest rate risk

FOREX EXPOSURE RISK

Foreign currency exchange rate exposure is partly balanced by purchasing of goods in the respective currencies,

The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows established risk management policies, including the use of derivatives like interest rate swap to hedge exposure to foreign currency risk,

PRICE RISK:

The entity is exposed to equity price risk, which raised out from FVTOCI quoted and unquoted equity shares. The management monitors the proportion of equity securities in its investment portfolio based on market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the management. The primary goal of the entity''s investment strategy is to maximize investments returns,

Sensitivity Analysis for Price Risk:

Equity Investments carried at FVTOCI are not listed on the stock exchange. For equity investments classified as at FVTOCI, the impact of a 2% in the index at the reporting date on profit & loss would have been an increase of '' 10.90 lacs (2015-16: '' 11.07 lacs); an equal change in the opposite direction would have decreased profit and loss,

7. CAPITAL MANAGEMENT

The Company''s main objectives when managing capital are to:

- ensure sufficient liquidity is available (either through cash and cash equivalents, investments or committed credit facilities) to meet the needs of the business;

- ensure compliance with covenants related to its credit facilities; and

- minimize finance costs while taking into consideration current and future industry, market and economic risks and conditions.

- safeguard its ability to continue as a going concern

- to maintain an efficient mix of debt and equity funding thus achieving an optimal capital structure and cost of capital.

The Company manages its capital on the basis of net debt to equity ratio which is net debt (total borrowings net of cash and cash equivalents) divided by total equity.

During the year the company has made default in repayment of borrowings to banks and dues to debenture holders. On request of the company for simple restructuring of debt facilities, which inter-alia includes conversion of excess working capital into WCTL, Funding of Interest on term loan from 1st June, 2016 to 28th Feb, 2017 into FITL and elongation in repayment period of borrowings and debentures for ten to fifteen years, the bank has approved the restructuring proposals and accordingly the promoters contribution of ''.31 crores has been brought in by the promoters by subscribing to equity capital of the Company on Preferential allotment basis.

8. FINANCIAL INSTRUMENTS - ACCOUNTING CLASSIFICATIONS AND FAIR VALUE MEASUREMENTS

The following methods and assumptions were used to estimate the fair values:

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 : quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2 : other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly OR indirectly

Level 3 : techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data

9. The mining department has levied royalty on Iron Ore mining on the basis of rates applicable for the highest grades of Iron Ore. The Company has, however provided royalty on the basis of rates applicable to different grades of Iron Ore produced and dispatched. Pursuant to a writ petition filed by the company, the honorable high court of Chhattisgarh has upheld the company''s contention of charging royalty and directed mining department to make fresh assessment of royalty payable. However the mining department has filed review appeal before the double bench of honorable high court of Chhattisgarh against the order. After assessment by mining department, cumulative amount of excess royalty of Rs, 34.79 Crores as on 31.03.17 (Rs, 43.25 Crores as on 31.03.16) is shown as advance royalty and carried to Balance Sheet,

10. INFORMATION ON RELATED PARTY DISCLOSURES ARE GIVEN BELOW :

i) Related Parties

a) Subsidiaries d) Joint Ventures

Godawari Green Energy Limited -- Raipur Infrastructure Company Ltd.

Godawari Clinkers & Cement Limited (Wholly owned) -- Chhattisgarh Captive Coal Mining Ltd.

Krishna Global Minerals Limited (Wholly owned) -- Godawari Natural Resources Ltd.

Godawari Integrated Steels (India) Limited (Wholly owned)

Godawari Energy Limited Ardent Steel Limited

b) Associates e) Key Management Personnel

-- Jagdamba Power & Alloys Ltd. -- Shri B.L. Agrawal (Managing Director)

-- Chhattisgarh Ispat Bhumi Limited -- Shri Abhishek Agrawal (Whole Time Director)

-- Hira Ferro Alloys Limited -- Shri Dinesh Agrawal (Whole Time Director)

c) Other Related Parties -- Shri Vinod Pillai (Whole Time Director)

-- Hira Cement Ltd. -- Shri Sanjay Bothra (CFO)

-- Raipur Complex -- Shri Y.C. Rao (Company Secretary)

11. UNHEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by any derivative instruments or Forward Contracts as at 31st March, 2017 amount to Rs, 8174.60 lacs (Previous Year Rs, 38763.60 lacs)

12. The Company has identified the amount due to Micro, Small and Medium Enterprises under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31st March, 2017

Note : The information has been given in respect of such suppliers to the extent they could be identified as "Micro, Small and Medium" enterprises on the basis of information available with the Company,

13. PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED OR REARRANGED WHEREVER NECESSARY.

Mar 31, 2016

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares, c. 12.90% redeemable non-convertible debentures ''C'' Series are redeemable in 8 quarterly installments of Rs. 3.75 crores starting from 5th July 2015. The ''C'' Series Debentures are secured by Pari passu first charge on the fixed assets of the Company & pari passu second charge on the current assets of the Company,

d. The rupee term loans aggregating to Rs. 602.00 Cr (Previous year Rs. 455.38 Cr ) ( including current maturities of Rs. 103.42 Cr (Previous year Rs. 90.94 Cr) classified under ''current liabilities'' in note 10) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. The rupee term loans are also secured by personal guarantee of promoter directors of the Company & their relatives and by 2nd pari passu charge on pledge of 77,80,245 equity shares of the Company held by the promoters,

e. The foreign currency term loan (ECB) of USD 10.00 Million sanctioned by Bank of Baroda aggregating to Rs. Nil (Previous year Rs.15.62 Cr) (including current maturities of Rs. Nil (Previous year Rs. 15.62 Cr) classified under ''current liabilities'' in note 10) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. This Loan is also secured by personal guarantee of promoter directors of the Company & their relatives,

f. The foreign currency term loan (ECB) of USD 60.00 Million sanctioned by Axis Bank Limited aggregating to Rs. 344.21 Cr (Previous year Rs. 357.63 Cr ) ( including current maturities of Rs.54.12 Cr (Previous year Rs. 31.66 Cr) classified under ''current liabilities'' in note 10) are secured by a first pari passu charge over immovable and movable fixed assets of the company, both present and future. This Loan is also secured by personal guarantee of the Managing Director of the Company,

1. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF :-

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to ''1019 lacs (Previous Year Rs.1282 lacs.)

ii) Disputed liability of Rs.499.11 lacs (Previous Year Rs.429.62 lacs) on account of Service Tax against which the company has preferred an appeal,

iii) Disputed liability of Rs.389.34 lacs (Previous Year Rs.408.38 lacs) on account of CENVAT against which the company has preferred an appeal,

iv) Disputed liability of Rs.404.48 lacs (Previous Rs.401.43 lacs) on account of Sales Tax against which the company has preferred an appeal,

v) Disputed liability of Rs. 390.86 lacs (Previous Year Rs.394.20 lacs) on account of Income Tax against which the company has preferred an appeal,

vi) Disputed liability of Rs.10 lacs (Previous Year Rs.10 lacs) on account of Custom Duty against which the company has preferred an appeal,

vii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh Rs.3279.08 lacs (Previous Year Rs.2804.79 lacs). The Hon''ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June, 2008. The State Govt. has filed a Special Leave Petition before Hon''ble Supreme Court, which is pending for final disposal.

viii) Disputed demand of Rs.758 lacs (Previous Year Rs.758 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company,

ix) Estimated amount of contracts remaining to be executed on capital accounts Rs.2858 lacs (Previous Year Rs.3361 lacs),

2. During the year, the Income Tax Department has conducted a search operation U/s 132 of the Income Tax Act, 1961. During the course of search the various documents and records have been seized by them and physical verification of stocks was also conducted by independent agencies appointed by them. The company does not foresee any liability at this stage, however the due provision of liability, if any, shall be made after completion of the block assessment.

3. In the opinion of the Board, the value of realization of long term and short term loans & advances and non-current and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet,

4. The mining department has levied royalty on Iron Ore mining on the basis of rates applicable for the highest grades of Iron Ore. The Company has, however provided royalty on the basis of rates applicable to different grades of Iron Ore produced and dispatched. Pursuant to a writ petition filed by the company, the honorable high court of Chhattisgarh has upheld the companyâs contention of charging royalty and directed mining department to make fresh assessment of royalty payable. However the mining department has filed review appeal before the double bench of honorable high court of Chhattisgarh against the order. After assessment by mining department, cumulative amount of excess royalty of Rs.43.25 Crores as on 31.03.16 (Rs. 44.05 Crores as on 31.03.15) is shown as advance royalty and carried to Balance Sheet.

5. SEGMENT-WISE REVENUE RESULTS :

Basis of preparation :

ii) The geographic segments identified as secondary segments are "Domestic Market" and "Export Market". Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India,

6. The Company was allotted three Coal Blocks i.e. Nakia, Madanpur (North) & Madanpur (South) in the State of Chhattisgarh in consortium with other companies through JV Company, namely Chhattisgarh Captive Coal Mining Ltd. However, the said Coal Blocks could not start operations in view of pendency of certain administrative approvals and these Coal Blocks were de-allocated by the Ministry of Coal, which was, however, stayed by the Hon''ble High Court of Delhi and the matter has been sub-judice. The allocation of said Coal Blocks stands cancelled by virtue of the Order dated September 24, 2014 passed by the Hon''ble Supreme Court. The Company is having investment of Rs.4.74 crores (Rs.6.31 crores) in the equity capital of JV Company which has been utilized by JV Company for development of said coal blocks. No provision for impairment in value of Investments in JV Company has been made in view of likely realization of amount invested upon reimbursement of cost incurred by the Company from the future allocates of the said coal blocks. The JV Company is also in process of realization of current assets held by it and the amount is expected to be refunded to the shareholders in due course. Accordingly the provision for impairment in value of investment, if any, shall be made as and when the amount of actual loss is determined.

7. DERIVATIVE AND UN HEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March, 2016 amount to Rs.38763.60 lacs (Previous Year Rs.51 139.08 lacs)

8. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS :

The Company has a defined gratuity benefit plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method, The following tables summaries the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity,

9. Previous year figures have been regrouped or rearranged wherever necessary.

Mar 31, 2015

1. Corporate information

Godawari Power & Ispat Ltd. (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act. It's shares are listed on two stock exchanges in India. The company is mainly engaged in generation of electricity, Iron ore mining and manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys.

2. Basis of preparation

i) The financial statements are prepared in accordance with the generally accepted accounting principles under the historical cost convention, on going concern concept and in compliance with the accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and guidelines issued by the Securities and Exchange Board of India (SEBI).

ii) The Company follows mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainities.

iii) The accounting policies have been consistently applied by the Company are consistent with those used in the previous year.

b.Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March,2015, the amount of per share dividend recognized as distributions to equity shareholders was Rs. Nil as Interim dividend (31st March,2014 : Rs. 1.50) and Rs. 1.00 as proposed final equity dividend (31st March,2014 : Rs. 1.00 as proposed final equity dividend).

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 distribtion of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

a. 12% redeemable non-convertible debentures 'A' Series are redeemable in 3 half yearly installments commencing from 31st Dec 2015. The 'A' Series Debentures are secured by First Pari passu charge on the fixed assets of the Company both present & future and 2nd pari passu charge on the current assets of the Company both present & future.

b. 12.75% redeemable non-convertible debentures 'B' Series are redeemable in a single Bullet repayment at the end of 7 years i.e. 29th Sept, 2018 with a put & call option at the end of 5th year i.e. on 29th October,2016. The 'B' Series Debentures are secured by Pari passu first charge on the tangible fixed assets of the Company.

c. 12.90% redeemable non-convertible debentures 'C' Series are redeemable in 8 quarterly installments of Rs. 3.75 crores starting from 5th July 2015. The 'C' Series Debentures are secured by Pari passu first charge on the fixed assets of the Company & pari passu second charge on the current assets of the Company.

d. The rupee term loans agreegating to Rs. 455.38 Cr (Previous year Rs. 351.84 Cr ) ( including current maturities of Rs. 90.94 Cr (Previous year Rs. 92.82 Cr) classified under 'current liabilities' in note 10) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. The rupee term loans are also secured by personal guarantee of promoter directors of the Company & their relatives and by 2nd pari passu charge on pledge of 25,00,000 equity shares of the Company held by the promoters.

e. The foreign currency term loan (ECB) of USD 10.00 Million sanctioned by Bank of Baroda aggregating to Rs. 15.62 Cr (Previous year Rs. 29.88 Cr ) ( including current maturities of Rs. 15.62 Cr (Previous year Rs. 14.26 Cr) classified under 'current liabilities' in note 10) are secured by a first pari passu charge over immovable and movable assets of the company, both present and future, subject to prior charge in favour of working capital bankers of the Company over the current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables for securing working capital facilities availed from the banks. This Loan is also secured by personal guarantee of promoter directors of the Company & their relatives.

The foreign currency term loan (ECB) of USD 60.00 Million sanctioned by Axis Bank Limited aggregating to Rs. 357.63 Cr (Previous year Rs. 350.41 Cr ) ( including current maturities of Rs. 31.66 Cr (Previous year Rs. 7.04 Cr) classified under 'current liabilities' in note 10) are secured by a first pari passu charge over immovable and movable fixed assets of the company, both present and future. This Loan is also secured by personal

1. The cash credit facilities from Banks are secured by first pari passu charge over entire current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables of the Company and second charge over the other movable assets and immovable assets of the Company.

2. The above credit facilities are also secured by personal guarantee of promoter directors of the Company.

The working capital facilities (including cash credit) are also secured in line with rupee term loans by pledge of 25,00,000 equity shares of the company held by the promoters.

Capitalized borrowing costs

The borrowing cost capitalized during the year ended 31st March, 2015 was Rs. 361.76 lacs (31st March, 2014: Rs. 1200.95 lacs). The company capitalized the borrowing cost in the capital work-in-progress (CWIP) Rs. 636.15 lacs (31st March,2014: Rs. 126.35 Lacs). The amount of borrowing cost shown as other adjustments in the above note reflects the amount of borrowing cost transferred from Capital Work In Progress.

Exchange differences on long term foreign currency monetary items

Pursuant to the option granted by Caluse 46A of the AS-11 (as amended vide notifiation dt.29.12.2011), the Company during the year added Rs. 1583.09 lacs (31st March, 2014: Rs. 3583.85 lacs) to the cost of assets, being the exchange differences of long term foreign currency monetary items relating to acquisition of assets. This amount is to be depreciated over the balance life of the assets.

3. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs. 1282 (Previous Year Rs. 1249 lacs.)

ii) Corporate Guarantees issued in favour of bank aggregating to Rs. Nil (Previous Year Rs. 4647 lacs) in respect of financing facilities granted to other body corporate.

iii) Disputed liability of Rs. 429.62 lacs (Previous Year Rs. 278.24 lacs) on account of Service Tax against which the company has preferred an appeal.

iv) Disputed liability of Rs. 408.38 lacs (Previous Year Rs. 396.27 lacs) on account of CENVAT against which the company has preferred an appeal.

v) Disputed liability of Rs. 401.43 lacs (Previous Rs. 335.84 lacs) on account of Sales Tax against which the company has preferred an appeal.

vi) Disputed liability of Rs. 394.20 lacs (Previous Year Rs. 64.64) on account of Income Tax against which the company has preferred an appeal.

vii) Disputed liability of Rs. 10 lacs (Previous Year Rs. 10 lacs) on account of Custom Duty against which the company has preferred an appeal.

viii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh Rs. 2804.79 lacs (Previous Year Rs. 2458.46lacs). The Hon'ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt. has filed a Special Leave Petition before Hon'ble Supereme Court, which is pending for final disposal.

ix) Disputed demand of Rs. 758 lacs (Previous Year Rs. 758 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company.

x) Estimated amount of contracts remaining to be executed on capital accounts Rs. 3361 lacs (Previous Year Rs. 4137 lacs).

4. In the opinion of the Board, the value of realisation of long term and short term loans & advances and non-current and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet.

5. The company has charged depreciation on remaining life of the fixed assets based on the remaining life of the fixed assets based on Schedule- II of the Companies Act,2013 which have made effective from 01.04.2014. Consequently the depreciation for the year is lower by Rs. 20.90 crores. Further Rs. 2.35 crores (net of taxes) has been debited to retained earnings related to those assets whose reamining life were nil as on 01.04.2014 as per the transitional provision of Schedule-II.

6. The mining department has levied royalty on Iron Ore mining on the basis of rates applicable for the highest grades of Iron Ore. The Company has, however provided royalty on the basis of rates applicable to different grades of Iron Ore produced and dispatched. Pursuant to a writ petition filed by the company, the honorable high court of Chhattisgarh has upheld the company's contention of charging royalty and directed mining department to make fresh assessment of royalty payable. However the mining department has filed review appeal before the double bench of honorable high court of Chhattisgarh against the order. After assessment by mining department, cumulative amount of excess royalty of Rs. 44.05 Crores as on 31.03.15 (Rs. 42.04 Crores as on 31.03.14) is shown as advance royalty and carried to Balance Sheet.

7. Information on Related Party as required by Accounting Standard-18, "Related Party Disclosures" issued by The Institute of Chartered Accountants of India, are given below :

i) Related Parties

a) Subsidiaries

Godawari Green Energy Limited (Wholly owned)

Godawari Clinkers & Cement Limited (Wholly owned)

Krishna Global Minerals Limited (Wholly owned)

Godawari Integrated Steels (India) Limited (Wholly owned)

Godawari Energy Limited Ardent Steel Limited Hira Ferro Alloys Limited

b) Associates

- Jagdamba Power & Alloys Ltd.

- Chhattisgarh Ispat Bhumi Limited

c) Other Related Enterprises where control exist

- Hira Cement Ltd.

- Raipur Complex

d) Joint Ventures

- Raipur Infrastructure Company Ltd.

- Chhattisgarh Captive Coal Mining Ltd

- Godawari Natural Resources Ltd.

e) Key Management Personnel

- Shri B.L.Agrawal (Managing Director)

- Shri Abhishek Agrawal (Whole Time Director)

- Shri Dinesh Agrawal (Whole Time Director)

- Shri Vinod Pillai (Whole Time Director)

- Shri Sanjay Bothra (CFO)

- Shri Y.C. Rao (Company Secretary)

8. SEGMENT-WISE REVENUE RESULTS :

Basis of preparation :

i) Business segments of the company have been identified as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identified as the business segments.

ii) The geographic segments identified as secondary segments are "Domestic Market" and "Export Market". Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India.

9. The Company was allotted three Coal Blocks i.e. Nakia, Madanpur (North) & Madanpur (South) in the State of Chhattisgarh in consortium with other companies through JV Company, namely Chhattisgarh Captive Coal Mining Ltd. However, the said Coal Blocks could not start operations in view of pendency of certain administrative approvals and these Coal Blocks were de-allocated by the Ministry of Coal, which was, however, stayed by the Hon'ble High Court of Delhi and the matter has been sub-judice. The allocation of said Coal Blocks stands cancelled by virtue of the Order dated September 24, 2014 passed by the Hon'ble Supreme Court. The Company has invested Rs. 6.31 crores in the equity capital of JV Company which has been utilised by JV Company for development of said coal blocks. No provision for impairment in value of Investments in JV Company has been made in view of likely realization of amount invested upon reimbursement of cost incurred by the Company from the future allocates of the said coal blocks. The JV Company is also in process of realization of current assets held by it and the amount is expected to be refunded to the shareholders in due course. Accordingly the provision for impairment in value of investment, if any, shall be made as and when the amount of actual loss is determined.

10. DERIVATIVE AND UN HEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March,2015 amount to Rs. 51139.08 lacs (Previous Year Rs. 44360.67 lacs)

11. The Company has identified the amount due to Micro, Small and Medium Enterprises under The Micro, Small and Medium Enterprises Development Act,2006 (MSMED Act) as at 31st March,2015

12. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS :

The Company has a defined gratuity benefit plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity. Profit and Loss account

13. Previous year figures have been regroupped or rearranged wherever necessary.

Mar 31, 2014

1. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF :-

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs 1249 lacs (Previous Year Rs 1259 lacs)

i) Corporate Guarantees issued in favour of bank aggregating to Rs 4647 lacs (Previous Year Rs 4813 lacs) in respect of financing facilities granted to other body corporate

iii) Disputed liability of Rs 278.24 lacs (Previous YearRs 18.80 lacs) on account of Service Tax against which the company has preferred an appeal

iv) Disputed liability of Rs 396.27 lacs (Previous YearRs 405.78 lacs) on account of CENVAT against which the company has preferred an appeal

v) Disputed liability of Rs 335.84 lacs (Previous Rs 359.02 lacs) on account of Sales Tax against which the company has preferred an appeal

vi) Disputed liability of Rs 64.64 lacs (Previous Year Rs 46.55) on account of Income Tax against which the company has preferred an appeal

vii) Disputed liability of Rs 10 lacs (Previous Year Nil) on account of Custom Duty against which the company has preferred an appeal

viii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt, of Chhattisgarh Rs 2458.46 lacs (Previous Year Rs 2393.88 lacs). The Hon''ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008 The State Govt, has filed a Special Leave Petition before Hon''ble Supereme Court, which is pending for final disposal

ix) Disputed demand of Rs 758 lacs (Previous Year Rs 758 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company

x) The mining department has levied royalty on Iron Ore mining on the basis of rates applicable for the highest grades of Iron Ore. The Company has, however provided royalty on the basis of rates applicable to different grades of Iron Ore. Pursuant to a writ petition filed by the company, the honorable high court of Chhattisgarh has upheld the company''s contention and directed mining department to make fresh assessment of liability. However the mining department has filed review appeal before the double bench of honorable high court of Chhattisgarh against the order. Pending assessment, company has reversed excess royalty provision made in earlier years amounting to Rs 971.52 lacs. Cumulative amount of excess royalty of Rs 4204.77 lacs is shown as advance royalty and carried to Balance Sheet

xi) Estimated amount of contracts remaining to be executed on capital accounts Rs 4137 lacs (Previous Year Rs 5959 lacs).

2. In the opinion of the Board, the value of realisation of long term and short term loans & advances and non-current and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet

3. During the previous year the company has recognized Deferred tax in accordance with the provisions of AS-22 and accordingly Rs 5292.76 lacs adjusted with revenue reserves as per the transitional provisions of the accounting standard

4. During the year the company has forefeited Rs 1300 lacs on account of share warrants issued on 7th July,2012 for non exercising of right attached to the warrant by the warrant holders with in the stipulated time of 18 months. The forefeited amount has been transferred to capita reserve account

5. No adjustment has been made by the company for the MAT Credit entitlement reduced by the Assessing Officer upto the completed Assessment year 2011-12, due to the major disallowances were related to the transfer price of Power to other units, as the basis of transfer pricing adopted by the company has already been accepted by the Hon''ble High Court of Chhattisgarh in Company''s own cases of earlier years

6. Information on Related Party as required by Accounting Standard-18, "Related Party Disclosures" issued by The Institute of Chartered Accountants of India, are given below

i) Related Parties

a) Subsidiaries

Godawari Green Energy Limited (Wholly owned) Godawari Clinkers & Cement Limited (Wholly owned) Krishna Global Minerals Limited (Wholly owned) Godawari Integrated Steels (India) Limited (Wholly owned) Godawari Energy Limited Ardent Steel Limited Hira Ferro Alloys Limited

b) Associates

- Jagdamba Power & Alloys Ltd.

c) Other Related Enterprises where control exist

- Hira Cement Ltd.

- Raipur Complex

d) Joint Ventures

- Raipur Infrastructure Company Ltd

- Chhattisgarh Captive Coal Mining Ltd

e) Key Management Personnel

- Shri B.L.Agrawa

- Shri Dinesh Agrawa

- Shri Abhishek Agrawa

- Shri Dinesh Gandhi (Till 9th November''2013) -ShriVinod Pillai

7. SEGMENT-WISE REVENUE RESULTS :

Basis of preparation :

i) Business segments of the company have been identified as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identified as the business segments

i) The geographic segments identified as secondary segments are "Domestic Market" and "Export Market". Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India

The Company''s interests in these joint ventures are reported as Non-current Investments (Note-13) and stated at cost. However, the company''s share of each of the assets, liabilities, income & expenses etc. (each without elimination of, the effect of the transactions between the company and the joint venture) related to its interests in these joint ventures, based on the unaudited financial information as certified by the directors of the joint ventures, are

The captive coal blocks allocated to the company along with other partners through a Joint Venture company namely, Chhattisgarh Captive Coa Mining Company Ltd. (CCCML) has been de-allocated by Ministry of Coal vide their letter dated 17.02.2014. The company has contested the de- allocation of the coal block before the honorable High Court of Delhi. The High Court has ordered maintaining status quo till further directives

8. DERIVATIVE AND UN HEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March,2014 amount to Rs 38028.50 lacs (Previous Year Rs 44360.67 lacs)

The 1.2 MTPA Iron Ore Pellet Plant set up by the company has started Commercial Operations w.e.f. 01.09.2013. The expenditure incurred during trail production including the cost of material, net of realizable value of pellets produced during trial period has been considered as preoperative expenses and capitalized in the respective heads of Fixed Assets

9. The Company has identified the amount due to Micro, Small and Medium Enterprises under The Micro, Small and Medium Enterprises Development Act,2006 (MSMED Act) as at 31 st March, 2014.

10. GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS :

The Company has a defined gratuity benefit plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/ resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets are not given. Further the entire amount of plan obligation is unfunded therefore categories of plan assets as a percentage of the fair value of total plan assets and Company''s expected contribution to the plan assets in the next year is not given

Mar 31, 2013

1. Corporate information

Godawari Power & Ispat Ltd. (the company) is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on two stock exchanges in India. The company is mainly engaged in generation of electricity, Iron ore mining and manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys.

2. Basis of preparation

i) The fnancial statements are prepared under the historical cost convention, on going concern concept and in compliance with the accounting standards as notifed by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act,1956.

ii) The Company follows mercantile system of accounting and recognises income and expenditure on an accrual basis except those with signifcant uncertainities.

iii) The accounting policies have been consistently applied by the Company and except for the changes in accounting policies discussed below, are consistent with those used in the previous year.

NOTE 3 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs.1,259 lacs (Previous Year Rs.1,126 lacs.)

ii) Corporate Guarantees issued in favour of bank aggregating to Rs.4,813 lacs (Previous Year Rs.4,535 lacs) in respect of fnancing facilities granted to other body corporate.

iii) Disputed liability of Rs.18.80 lacs (Previous Year Rs.27.32 lacs) on account of Service Tax against which the company has preferred an appeal.

iv) Disputed liability of Rs.405.78 lacs (Previous Year Rs.374.81 lacs) on account of CENVAT against which the company has preferred an appeal.

v) Disputed liability of Rs.359.02 lacs (Previous Rs.287.57 lacs) on account of Sales Tax against which the company has preferred an appeal.

vi) Disputed liability of Rs.46.55 lacs (Previous Year Rs.3.34) on account of Income Tax against which the company has preferred an appeal.

vii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh Rs.2,393.88 lacs (Previous Year Rs.1,596 lacs). The Hon''ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt. has fled a Special Leave Petition before Hon''ble Supereme Court, which is pending for fnal disposal.

viii) Disputed demand of Rs.758 lacs (Previous Year Rs.758 lacs) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the fnancial year 2009-10. The company has contested the demand and obtained stay from CSERC and expect a favourable decision in favour of company.

ix) The company has provided royalty on captive iron ore mining on the basis of rates applicable to different grades of iron ore mined based on the rates published by Indian Bureau of Mines periodically. However, the mining department is collecting advance royalty on the basis of rate applicable to the highest grade of iron ore, as mentioned in the mining plan of the company, irrespective of the actual grade of material mined. The company has contested the above arbitrary levy of royalty before the Hon''ble High Court of Chhattisgarh and accordingly excess amount of royalty so deposited Rs.2,650 lacs shown as an advance royalty.

x) Estimated amount of contracts remaining to be executed on capital accounts Rs.5,959 lacs (Previous Year Rs.16,995 lacs).

NOTE 4

In the opinion of the Board, the value of realisation of long term and short term loans & advances and non-current and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet.

NOTE 5

During the year company has recognised Deferred tax in accordance with the provisions of AS-22 and accordingly Rs.5292.76 lacs adjusted with revenue reserves as per the transitional provisions of the accounting standard.

NOTE 6

Information on Related Party as required by Accounting Standard-18, "Related Party Disclosures" issued by The Institute of Chartered Accountants of India, are given below :

i) Related Parties

a) Subsidiaries

Godawari Green Energy Limited (Wholly owned) Godawari Clinkers & Cement Limited (Wholly owned) Krishna Global & Mineral Limited (Wholly owned) Godawari Integrated Steel (India) Limited (Wholly owned) Godawari Energy Limited Ardent Steels Limited Hira Ferro Alloys Limited

b) Other Related Enterprises where control exist

Hira Cement Ltd. Raipur Complex

c) Joint Ventures

Raipur Infrastructure Company Ltd. Chhattisgarh Captive Coal Mining Ltd.

d) Key Management Personnel

Shri B.L.Agrawal Shri Dinesh Agrawal Shri Abhishek Agrawal Shri Dinesh Gandhi Shri Vinod Pillai

NOTE 7 SEGMENT-WISE REVENUE RESULTS Basis of preparation :

i) Business segments of the company have been identifed as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identifed as the business segments.

ii) The geographic segments identifed as secondary segments are "Domestic Market" and "Export Market". Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India.

NOTE 8 DERIVATIVE AND UN HEDGED FOREIGN CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March,2013 amount to Rs.44,360.67 lacs (Previous Year Rs.1,3561.42 lacs)

NOTE 9 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS :

The Company has a defned gratuity beneft plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The beneft vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method.

The following tables summarise the components of net beneft expense recognised in the proft and loss account and the unfunded status and amounts recognised in the balance sheet for the Gratuity.

NOTE 10 PREVIOUS YEAR FIGURES HAVE BEEN REGROUPED OR REARRANGED WHEREVER NECESSARY.

Mar 31, 2012

Notes :

1. Interest charges excludes interest capitalized Rs. 6113414/- (previous year Rs. 37830918/-).

2. *The Company can utilize these balances only toward settlement of the respective unpaid dividend and unpaid public issue amount.

1. CORPORATE INFORMATION

Godawari Power & Ispat Ltd. (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on two stock exchanges in India. The Company is mainly engaged in generation of electricity, Iron ore mining and manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys.

2. BASIS OF PREPARATION

i) The financial statements are prepared under the historical cost convention, ongoing concern concept and in compliance with the accounting standards as notified by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act,1956.

ii) the Company follows mercantile system of accounting and recognizes income and expenditure on an accrual basis except those with significant uncertainties.

iii) The accounting policies have been consistently applied by the Company and except for the changes in accounting policies discussed below, are consistent with those used in the previous year.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. the Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March,2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 2.50 (31st March,2011 : Rs. 2.50)

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. The distribution will be in proportion to the number of equity shares held by the shareholders.

Security and terms & conditions for above loans:

a. 12% redeemable non-convertible debentures 'A' Series are redeemable in 8 equal half yearly installments commencing from 31st July,2014. The 'A' Series Debentures are secured by First Pari passu charge on the fixed assets of the Company both present & future and 2nd pari passu charge on the current assets of the Company both present & future.

b. 12.75% redeemable non-convertible debentures 'B' Series are redeemable in a single Bullet repayment at the end of 7 years i.e.31st October,2018 with a put & call option at the end of 5th year i.e. on 31st October,2016. The 'B' Series Debentures are secured by Pari passu first charge on the tangible fixed assets of the Company.

c. Out of Indian rupee term loans of Rs. 215.02 Cr ( including current maturities of Rs. 89.68 Cr classified as 'current liabilities' in note 9), Rs. 193.33 Crs are secured by a first pari passu charge over immovable and movable assets of the Company, both present and future, subject to prior charge over the current assets of the Company i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables in favour of the bankers of the Company or securing working capital facilities from banks and rupee term loan of Rs. 21.69 Crs from Vijaya Bank is secured by residual charge over immovable and movable assets of the Company. Maturity profile of rupee term loans of Rs. 215.02 Cr are as set out below :-

d. Further the rupee term loans and working capital loan are also secured by pledge of 16,00,000 equity shares of Hira Steels Ltd. held as investments by the Company and pledge of 25,00,000 equity shares of the Company held by the promoters.

e. Foreign Currency term loan from Bank of Baroda is repayable in 8 half yearly installments started from 31.08.2012. The total outstanding as on 31.03.2012 was Rs.51.85 crores. The loan is secured by a first pari passu charge on the immovable and movable assets of the Company and second pari passu charge on the current assets of the Company. The loan is further secured by personal guarantee of promoter directors of the Company.

f. Foreign Currency term loan from Axis Bank is partially disbursed and the repayment shall be started from 31.01.2015. The total outstanding as on 31.03.2012 was Rs. 64.82 crores. The loan is secured by a first pari passu charge on the immovable and movable assets of the Company and second pari passu charge on the current assets of the Company. The loan is further secured by personal guarantee of promoter directors of the Company.

g. The credit facilities mentioned in point c, e & f are also secured by personal guarantee of promoter directors of the Company & their relatives.

Terms & Conditions of Secured Loans

1. The working capital facilities including buyers credit/FCLR facility from Banks are secured by first pari passu charge over entire current assets i.e. stocks of raw materials, finished goods, stock in process, stores & consumables, trade receivables of the Company and second charge over the other movable assets and immovable assets of the Company.

2. The above credit facilities are also secured by personal guarantee of promoter directors of the Company & their relatives.

Capitalized borrowing costs

The borrowing cost capitalized during the year ended 31st March, 2012 was Rs. 6,113,414/- (31st March, 2011: Rs. 37,830,918/-). the Company capitalized this borrowing cost in the capital work-in-progress (CWIP). The amount of borrowing cost shown as other adjustments in the above note reflects the amount of borrowing cost transferred from CWIP.

Exchange differences on long term foreign currency monetary items

Pursuant to the option granted by Clause 46A of the AS-11 (as amended vide notification dt. 29th December, 2011) w.e.f. 1st April, 2011, the Company during the year added Rs. 568.71 lacs to the cost of assets, being the exchange differences of long term foreign currency monetary items relating to acquisition of assets. This is to be depreciated over the balance life of the assets.

* Out of 2240100 equity shares, 1600000 equity shares pledged with Bankers as security for credit facilities sanctioned to the Company.

Out of total Deposits, Rs. 3,771.82 lacs (previous year Rs. 729.61 lacs) are pledged with various banks for availing LC, Bank Guarantee, OD facilities, margin money and pledged with other Govt. Departments.

# Excise duty on sales amounting to Rs. 1,734,998,935/- (31st March, 2011: Rs. 896,135,591/- ) has been reduced from sale in profit & loss account and excise duty on increase/decresae in stock amounting to Rs. 53858725/- (31st March, 2011: Rs. 14,239,099/-) has been considered as (income)/expense in note 22 of financial statements.

3. CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS ARE NOT PROVIDED FOR IN RESPECT OF :-

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs. 1,126 lacs (Previous Year Rs. 763 lacs.)

ii) Corporate Guarantees issued in favour of bank aggregating to Rs. 4535 lacs (Previous Year Rs. 4535 lacs) in respect of financing facilities granted to other body corporate.

iii) Disputed liability of Rs. 27.32 lacs (Previous Year Rs. 68.27 lacs) on account of Service Tax against which the Company has preferred an appeal.

iv) Disputed liability of Rs. 374.81 lacs (Previous Year Rs. 348.43 lacs) on account of CENVAT against which the Company has preferred an appeal.

v) Disputed liability of Rs. 287.57 lacs (Previous Rs. 24.64 lacs) on account of Sales Tax against which the Company has preferred an appeal.

vi) Disputed liability of Rs. 3.24 lacs (Previous Year Rs. 29.26) on account of Income Tax against which the Company has preferred an appeal.

vii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt. of Chhattisgarh Rs. 1,596 lacs (Previous Year Rs. 1,212 lacs). The Hon'ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt. has filed a Special Leave Petition before Hon'ble Supereme Court, which is pending for final disposal.

viii)Disputed demand of Rs. 758 lacs (Previous Year Rs. NIL) from Chhattisgarh State Power Distribution Company Limited relating to cross subsidy on power sold under open access during the financial year 2009-10. the Company has contested the demand and obtained stay from CSERC and expect a favorable decision in favour of company.

ix) Estimated amount of contracts remaining to be executed on capital accounts Rs. 16,995 lacs (Previous Year Rs. NIL).

4. In the opinion of the Board, the value of realization of long term loans & advances and non-current and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet.

5. No deferred tax liability/assets is provided for timing differences in view of the benefits available u/s 80IA of the Income-tax Act for power division of the Company and overall minimum alternative tax payable.

Basis of preparation:

i) Business segments of the Company have been identified as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identified as the business segments.

ii) The geographic segments identified as secondary segments are 'Domestic Market' and 'Export Market'. Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India.

The Company's interests in these joint ventures are reported as Non-current Investments (Note-12) and stated at cost. However, the Company's share of each of the assets, liabilities, income & expenses etc. (each without elimination of, the effect of the transactions between the Company and the joint venture) related to its interests in these joint ventures, based on the unaudited financial information as certified by the directors of the joint ventures, are :

6. DERIVATIVE INSTRUMENTS AND UN Hedged Foreign CURRENCY EXPOSURE

Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March, 2012 amount to Rs. 13,561.42 lacs (Previous Year Rs. 5,390.43 lacs the Company has identified the amount due to Micro, Small and Medium Enterprises under The Micro, Small and Medium Enterprises Development Act,2006 (MSMED Act) as at 31st March, 2012

7.GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT

plans the Company has a defined gratuity benefit plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method.

The following tables summaries the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets are not given. Further the entire amount of plan obligation is unfunded therefore categories of plan assets as a percentage of the fair value of total plan assets and Company's expected contribution to the plan assets in the next year is not given.

The principal assumptions used in determining gratuity benefit obligations for the Company's plans are shown below :

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

8. Till the year end 31st March, 2011, the Company was using pre-revised Schedule-VI to the Companies Act,1956, for preparation and presentation of its financial statements. During the year ended 31st March, 2012, the revised Schedule-VI notified under the Companies Act,1956, has become applicable to the Company. the Company has reclassified previous year figures to confirm to this year's classification. The adoption of revised Schedule-VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.

Mar 31, 2011

1. Nature of Operations

The company is mainly engaged in generation of electricity Iron ore mining and manufacturing of Iron Ore Pellets, Sponge Iron, Steel Billets, Wire Rods, H.B. Wire and Ferro Alloys.

2. Contingent Liabilities and Capital Commitments are not provided for in respect of :ÃÂ¦

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs. 763 lacs (Previous Year Rs. 468 lacs.)

ii) Corporate Guarantees issued in favour of bank aggregating to Rs. 4535 lacs (Previous Year Rs. 16675 lacs) in respect of financing facilities granted to other body corporate.

iii) Disputed liability of Rs. 68.27 lacs (Previous Year Rs. 20.74 lacs) on account of Service Tax against which the company has preferred an appeal.

iv) Disputed liability of Rs. 348.43 lacs (Previous Year 495.44 lacs) on account of CENVAT against which the company has preferred an appeal.

v) Disputed liability of Rs. 24.64 lacs (Previous Rs. 3.24 lacs) on account of Sales Tax against which the company has preferred an appeal.

vi) Disputed liability of Rs. 29.26 lacs (Previous Year Nil) on account of Income Tax against which the company has preferred an appeal.

vii) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt, of Chhattisgarh Rs. 1212 lacs (Previous Year Rs. 1212 lacs). The Hon'ble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt, has filed a Special Leave Petition before Hon'ble Supereme Court, which is pending for final disposal.

viii) Estimated amount of contracts remaining to be executed on capital accounts Rs. Nil (Previous Year Rs. 53.63 lacs).

3. In the opinion of the Board, the value of realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet.

4. Amalgamation of erstwhile R.R. Ispat Limited and Hira Industries Limited with the company.

i) Pursuant to the scheme of Amalgamation ("the scheme") as approved by the Hon'ble High Court of Chhattisgarh, by an order dated 9th March'2011 under section 394 of the Companies Act,1956, R.R. Ispat Limited ("RRIL"), a wholly owned subsidiary of the company and Hira Industries Limited ("HIL") ("the amalgamating companies"), have been amalgamated with the Company with effect from 1st April'2010.

ii) The Amalgamated Company RRIL is engaged in the manufacturing of Wire Rods (MS Rounds) from Steel Billets & then drawing the wire rods into wires and HIL is engaged in the business of Iron ore crushing.

iii) The amalgamation has been accounted for under the "pooling of interests" method as prescribed by Accounting Standard (AS-14), "Accounting for Amalgamations". Pursuant to the Scheme, all the assets, liabilities and reserves of erstwhile RRIL & HIL, the amalgamating companies as at 1st April'2010 have been transferred at their book values after making adjustments for transactions with the company.

iv) Pursuant to the Scheme, 2,332,750 number of equity shares of erstwhile RRIL owned by the company have been cancelled and 1,125,000 Equity Shares of the company held by erstwhile RRIL have been transferred to a trust namely GPIL Beneficiary Trust at their book value for the sole benefit of the company, as per the terms of the scheme.

v) As provided in the Scheme, 3,686,440 number of equity shares of Rs. 10/- each fully paid up have been issued to the equity shareholders of erstwhile HIL in the ratio of 1 fully paid up equity share of the company for every 1.18 fully paid up shares of Rs. 10/-each held in HIL.

vi) The difference between the amount of share capital of erstwhile HIL and the amount of fresh share capital issued by the company on amalgamation amounting Rs. 6636 lacs has been credited to the Capital Reserve.

vii) From the effective date the authorised share capital has been increased to Rs. 5300 lacs consisting of 49,800,000 Equity Shares of Rs. 10/-each and 3,200,000 Preference Shares of Rs. 10/- each.

viii) In view of the above current year figures are not strictly comparable to those of the previous year.

5. No deferred tax liability/assets is provided for timing differences in view of the benefits available u/s 80IA of the Income-tax Act for power division of the company and overall minimum alternative tax payable.

6. Information on Related Party as required by Accoun ting Standard-18, "Related Party Disclosures" issued by The Institute of Chartered Accountants of India, are given below:

i) Related Parties

a) Subsidiaries

Godawari Green Energy Limited (Wholly owned)

Godawari Energy Limited (Wholly owned)

Godawari Clinkers & Cement Limited (Wholly owned)

Krishna Global & Mineral Limited (Wholly owned)

Godawari Integrated Steel Co. (I) Limited (Wholly owned)

Ardent Steels Limited

Hira Ferro Alloys Limited

b) Associate

Hira Steels Limited

c) Other Related Enterprises where control exist

- Alok Ferro Alloys Ltd.

- Hira Cement Ltd.

- Jagdamba Power & Alloys Ltd.

- Chhattisgarh Power & Coal Benefication Ltd.

- Hira Global Ltd.

- Hira Power & Steel Ltd.

d) Joint Ventures

- Raipur Infrastructure Company Ltd.

- Chhattisgarh Captive Coal Mining Ltd.

e) Key Management Personnel

- Shri B.LAgrawal

- Shri Siddharth Agrawal

- Shri Dinesh Agrawal

f) Relative of key m anagem ent personnel

- Shri Abhishek Agrawal

7. Segment-wise Revenue Results:

Basis of preparation:

i) Business segments of the company have been identified as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identified as the business segments.

ii) The geographic segments identified as secondary segments are "Domestic Market" and "Export Market". Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India.

8. In accordance with the explanation to the para 10 of AS-9 (as notified), differential excise duty on opening and closing stock of finished goods amounting to (Rs. 14239 lacs) (Previous Year (Rs. 1.17 lacs)) has been adjusted from increase/(decrease) in stock in trade in Schedule-15.

9. Derivative Instruments and Un hedged Foreign Currency Exposure

a) Nominal amount of derivative contracts entered into by the Company for Hedging Currency and Interest Rate Related Risks and outstanding as at 31st March,2011, amount to Rs. Nil (Previous Year Rs. 2500.00 lacs).

b) Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March,2011 amount to Rs. 5390.43 lacs (Previous Year Rs.4490.00 lacs)

10. Gratuity and other post-employment benefit plans:

The Company has a defined gratuity benefit plan. Gratuity is computed as 15 days salary for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method.

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets are not given. Further the entire amount of plan obligation is unfunded therefore categories of plan assets as a percentage of the fair value of total plan assets and Company's expected contribution to the plan assets in the next year is not given.

11. The previous year figures have been regrouped and/or rearranged wherever necessary.

Mar 31, 2010

1. Nature of Operations

The company is mainly engaged in generation of electricity, Iron ore mining and manufacturing of Sponge Iron, Iron Ore Pellets.Steel Billets, Ferro Alloys and H.B. Wire

2. Contingent Liabilities and Capital Commitments are not provided for in respect of:

i) Counter Guarantees given to banks against Bank guarantees issued by the Company Banker aggregate to Rs.468.19 lacs (Previous Year Rs.532.92 lacs.)

ii) Corporate Guarantees issued in favour of bank aggregating to Rs.16675 lacs (Previous Year Rs. 35071 lacs) in respect of financing facilities granted to other body corporate.

iii) Disputed liability of Rs. 20.74 lacs (Previous Year Rs.20.74 lacs) on account of Service Tax against which the company has preferred an appeal.

iv) Disputed liability of Rs.495.44 lacs (Previous Year 495.44 lacs) on account of Cenvat Credit on Input against which the company has preferred an appeal.

v) Disputed liability of Rs.3.24 lacs (Previous Nil) on account of Central Sales Tax imposed on direct export against which the company has preferred an appeal.

vi) Disputed energy development cess demanded by the Chief Electrical Inspector, Govt, of Chhattisgarh Rs.1212 lacs (Previous Year Rs.880 lacs). The Honble High Court of Chhattisgarh has held the levy of cess as unconstitutional vide its order dated 20th June,2008. The State Govt, has filed a Special Leave Petition before Honble Supereme Court, which is pending for final disposal.

vii) Estimated amount of contracts remaining to be executed on capital accounts Rs.53.63 lacs (Previous Year Rs.1569 lacs).

3. In the opinion of the Board, the value of realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the balance sheet.

4. The scheme of merger of its wholly owned susidiary company R.R.Ispat Limited and Hira Industries Limited (Effective Date 01.04.2009) has been approved by Stock Exchanges (i.e. NSE & BSE) and the same has been filed with the Honble High court of chhattisgarh for approval. Pending approval of merger scheme with the Honble High court, no adjustment has been made.

5. No deferred tax liability/assets is provided for timing differences in view of the benefits available u/s 80IA of the Income-tax Act for power division of the company and overall minimum alternative tax payable.

6. During the year the company has forefeited Rs.324 lacs on account of share warrants issued on 20th December,2007 for non exercising of right attached to the warrant by the warrant holders with in the stipulated time of 18 months. The forefeited amount has been transferred to capital reserve account.

7. Information on Related Party as required by Accounting Standard-18, "Related Party Disclosures" issued by The Institute of Chartered Accountants of India, are given below :

i) Related Parties

a) Subsidiaries

R.R.Ispat Limited (Wholly owned) Godawari Energy Limited (Wholly owned) Godawari Clinkers & Cement Limited (Wholly owned) Krishna Global & Mineral Limited (Wholly owned) Ardent Steels Limited (75 % Holding)

b) Associate

Hira Steels Limited

C) Other Related Enterprises where control exist

- Hira Ferro Alloys Ltd.

- Alok Ferro Alloys Ltd.

- Hira Industries Ltd.

- Hira Cement Ltd.

- Jagdamba Power & Alloys Ltd.

- Chhattisgarh Power & Coal Benefication Ltd.

- Hira Global Ltd.

- Hira Power & Steel Ltd.

d) Joint Ventures

- Raipur Infrastructure Company Ltd.

- Chhattisgarh Captive Coal Mining Ltd.

e) Key Management Personnel

- Shri B.L.Agrawal

- Shri Siddharth Agrawal

- Shri Dinesh Agrawal

8. Segment-wise Revenue Results :

Basis of preparation :

i) Business segments of the company have been identified as distinguishable components that are engaged in a group of related product and that are subject to risks and returns different from other business segments. Accordingly Steel and Electricity have been identified as the business segments. During the year other operations segments viz. Oxygen Gas and Equipment Manufacturing has been groupped in steel segment because uses of this segment are mainly part of steel.

ii) The geographic segments identified as secondary segments are "Domestic Market" and "Export Market". Since there is no Export Market Revenue, the same has not been disclosed. The entire capital employed is within India.

The Companys interests in these joint ventures are reported as Long Term Investments (Schedule-5) and stated at cost. However, the companys share of each of the assets, liabilities, income & expenses etc. (each without elimination of, the effect of the transactions between the company and the joint venture) related to its interests in these joint ventures, based on the unaudited financial information as certified by the directors of the joint ventures, are :

9. In accordance with the explanation to the para 10 of AS-9 (as notified), differential excise duty on opening and closing stock of finished goods amounting to (Rs.1.17 lakhs) (Previous Year Rs.247.35 lakhs) has been adjusted from increase/(decrease) in stock in trade in Schedule -14.

10. Derivative Instruments and Un hedged Foreign Currency Exposure

a) Nominal amount of derivative contracts entered into by the Company for Hedging Currency and Interest Rate Related Risks and outstanding as at 31 st March,2010, amount to Rs.2500.00 lacs (Previous Year Rs.2629.79 lacs).

b) Foreign currency exposure that are not hedged by derivative instruments or Forward Contracts as at 31st March,2010 amount to Rs.4490 lacs (Previous Year Rs.4136.01 lacs)

Note : The information has been given in respect of such suppliers to the extent they could be identified as "Micro, Small and Medium" enterprises on the basis of information available with the Company.

11. Gratuity and other post-employment benefit plans :

The Company has a defined gratuity benefit plan. Gratuity is computed as days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement/termination/resignation. The benefit vests on the employees after completion of 5 years of service. The Gratuity liability has not been externally funded. Company makes provision of such gratuity liability in the books of account on the basis of actuarial valuation as per the Projected unit credit method.

The following tables summarise the components of net benefit expense recognized in the profit and loss account and the unfunded status and amounts recognized in the balance sheet for the Gratuity.

Since the entire amount of plan obligation is unfunded therefore changes in the fair value of plan assets are not given. Further the entire amount of plan obligation is unfunded therefore categories of plan assets as a percentage of the fair value of total plan assets and Companys expected contribution to the plan assets in the next year is not given.

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