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Notes to Accounts of Godawari Power & Ispat Ltd.

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 :¦

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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