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Notes to Accounts of India Steel Works Ltd.

Mar 31, 2021

Nature and Purpose of the Reserves:-Capital Share Redemption Reserve

Capital redemption reserve is created due to redemption of preference share capital in earlier years as per the requirement of the Companies Act.

Securities Premium

Security premium reserve is created when shares are issue at premium.The reserve is utilised in accordance with the provisions of the companies Act, 2013.

Capital Reserve

The Capital reserve was created to recognis the gain due to CDR scheme to the extent of Rs.44.51 cr approved by Asset Reconstruction Company of India Ltd. as on 31st March 2008 and gain due to increse in the value of Tangible asstes of Rs.74.13 cr as on 31st March 2015 and same was transferred to retained earning.

General Reserve

The Company has transferred a portion of Net Profits of the Company before declaring Dividends to General Reserve pursuant to the earlier provision of The Companies Act, 1956. Mandatory transfer to General Reserve, is not required under the Companies Act, 2013.

A Term Loans Banks

1 Loans from Yes Bank @ 7.20% p.a. interest are secured against hypothecation of motor vehicles. These loans are repayable in 60 equated monthly months installment of Rs.0.41 lakhs.

2 The Company has during the year availed a loan of Rs. 80 lakhs from Kotak Mahindra Bank Ltd. under the Emergency Credit Line Guarantee Scheme (ECLGS) of National Credit Guarantee Trustee Company Ltd (NCGTC) in order to meet its working capital requirements. The tenure of the loan is 48 months (Including the 12 month moratorium period) carrying an interest rate of 8.00% p.a. repayable in 48 equated monthly installments. The said loan is secured by way of first and second charge on the entire present and future current and movable assets with DNS Bank, first and second charge moveable fixed assets Equitable/ Registered on immovable properties, i.e. Land and Building and structure and P&M located in Zenith Compound, Khopoli, District Raigad, Maharashtra - 410203 owned by the India Steel Works Limited.

B Unsecured Loan :-

1 Unsecured Loan from Related Parties does not have a definite repayment schedule and is repayable at the option of the company. Interest rate for above loans are range between 0.00% to 12.00 %

**Effect of settlement deed/ addendum to the settlement deed with a creditor resulting in reduction of liability is accounted for on a proportionate basis and the same is considered as other income. Considering the current Global Pandemic situation, negotiations are going on with the said creditor for a longer repayment schedule starting after 12 months hence the liability has been reclassified as "Non Current Financial Liability -Trade Payable" as per the Management Policy.

A Loans Repayable on Demand / Term Loan (Banks)

1 Kotak Mahindra Bank Ltd. & Dombivli Nagari Sahakari Bank Ltd. has sanctioned Cash Credit facilities against the security by way of first pari passu charge on the fixed assets of the company, hypothication of stock and book debts of the company and personal guarantees of some of the promoter directors of the Company.

2 Kotak Mahindra Bank Ltd. has sanctioned Letter of Credit facilities against the security by way of first pari passu charge on the fixed assets of the company, hypothication of stock and book debts of the company and personal guarantees of some of the promoter directors of the Company.

3 FITL Loan from Dombivli Nagari Sahakari Bank Ltd. @ 15.75% p.a. interest are secured against Stock and Books Debts, Plant & Machinery and Factory Land & Building. This loan is repayable in 7 monthly installments. Said loan was to be repaid before 31.03.2021. However the company has defaulted in repaying the same as per the agreed sanctioned terms.

4 FITL Loan from Kotak Mahindra Bank Ltd. @ 19.00% p.a. interest are secured against Stock and Books Debts, Plant & Machinery and Factory Land & Building. This loan is repayable in 7 monthly installments. Said loan was to be repaid before 31.03.2021. However the company has defaulted in repaying the same as per the agreed sanctioned terms.

B Term Loans Financial Institutions (NBFC)

1 Loans from Kotak Mahindra Prime Ltd. @ 9.75% p.a. interest are secured against hypothecation of motor vehicles. However the company has defaulted in repaying the same as per the agreed sanctioned terms.

2 Loans from Sundaram Finance Ltd. @ 7.10% p.a. interest are secured against hypothecation of komatsu hydraulic excavator machine. However the company has defaulted in repaying the same as per the agreed sanctioned terms.

C Unsecured Loan :-

1 Unsecured Loan from other corporate are repayable on demand. Interest rate @ 8.00 % p.a.

b) Terms of Issue of Preference Shares

i) 14% Cumulative Redeemable Shares are redeemable in the year 2018.

ii) 0.01% Cumulative Redeemable Shares are redeemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019.

iii) 0.01% Cumulative Redeemable Shares ( Option Series) are redeemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019.

iv) The company is in the negotiations with the preference shareholders for revised terms of redemption.

v) Interest accrued but not due includes proposed dividend payable on cumulative redeemable preference shares. As the company is in a process of negotiation with the said preference shareholder for revised terms of redemption, no provision for dividend has been made.

i. Based on the information in possession with the Company, no supplier has been identified as being covered under Micro, Small and Medium Enterprise Development Act, 2006 ("the Act"). Accordingly, no amount of dues outstanding as at 31st March 2021 have been identified as relating to Micro and Small Enterprises referred to in the said Act.

ii. The balances of trade payable for the amount due to some of them are subject to reconciliation. Necessary adjustment if any, may be made when the accounts are settled

iii. Trade Payables Includes related party refer Note No. 41.

(i) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/authorities

(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities.

(iii) Most of the issues of litigation pertaining to Central Excise/Sales Tax/Customs/Income Tax are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention.

(iv) The Company’s pending litigation comprise of proceeding pending related to Property tax. The Management has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Management does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

NOTE 37: CAPITAL MANAGEMENT

The Company''s objective for Capital Management is to maximise shareholder value, safeguard business continuity, and support the growth of the Company. Capital includes, Equity Capital, Securities Premium and other reserves and surplus attributable to the equity shareholders of the Company. The Company determines the capital requirement based on annual operating plans and long term and strategic investment and capital expenditure plans. The funding requirements are met through a mix of equity, operating cash flows generated and debt. The operating management, supervised by the Board of Directors of the Company regularly monitors its key gearing ratios and other financials parameters and takes corrective actions wherever necessary. The relevant quantitative information on the aforesaid parameters are disclosed in these financial statements.

NOTE 38: FINANCIAL RISK MANAGEMENT AND POLICIES

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the managing board. The details of different types of risk and management policy to address these risks are listed below:

(a) Market Risk:-

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings. The objective of market risk management is to avoid excessive expsoure in our foreign currency revenues and costs.

(a) (i) Market Risk - Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The company''s exposure to the risk of changes in market interest rates primarily to the Company''s borrowings, both short term and long term obligations with floating interest rates.

The company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and cash equivalents) since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits.

The company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and cash equivalents) since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits.

Sensitivity analysis to interest rate risk

The company doesn’t account for any fixed rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

(a)(ii) Market Risk - Price Risk

The Company has no surplus for investment in debt mutual funds, deposits etc. The Company does make deposit with the banks to provide security against gurantee issued by bank to companys trade payables. Deposit is made in fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments.

(a)(iii) Market Risk - Currency Risk

The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The company is exposed to currency risk on account of its trade payables in foreign currency. The functional currency of the company is Indian Rupees. The Company follows a natural hedge driven currency risk mitigation policy to the extent possible.

(b) Credit Risk

Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers. The carrying amount of Financial Assets represents the maximum credit exposure.

Trade Receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, industry information, business intelligence and in some cases bank references.

Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.

Expected credit loss for trade receivable:

The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impariment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts available in relation to defaults and delays in collection thereof.

Other Financial Assets

The company maintains its Cash and Cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Expected credit loss on financial assets other than trade receivable:

With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet.

The Company’s maximum exposure to credit risk as at 31st March, 2021 and 31st March, 2020 is the carrying value of each class of financial assets.

(c) Liquidity Risk

Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Any short term surplus cash generated, over and above the amount required for working capital and other operational requirements is retained as Cash and Cash Equivalents (to the extent required).

Exposure to Liquidity Risk

The following table shows the maturity analysis of the Company''s Financial Liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet Date

(d) Collateral

The Company has pledged its Non-Current as well as Current Assets to a consortium of lenders as collateral towards borrowings by the Company. Refer Note No. 16 and Refer Note No. 20 for the detailed terms and conditions of the collaterals pledged.

Retirement Benefits

As per Ind AS 19 the Company has recognized “Employees Benefits” ,in the financial statements in respect of Employee Benefits Schemes as per Actuarial Valuation as on 31st March 2021.

43 Segment Information :

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker of the Company is responsible for allocating resources and assessing performance of the operating segments.

44 Impact of COVID-19

Covid-19 virus has impacted the entire global economy severely, resulting into many restrictions, including free movement of people, thereby hampering businesses and day to day functioning of the Companies. Consequently, in compliance of the orders of the Government, the company’s manufacturing plants and corporate office had to be closed down for some time.

The Company continues to monitor any material changes to future economic/ business conditions and its consequential impact on financial results.

45 Figures in Brackets indicate previous years figures. Previous periods figure have been regrouped, rearranged, reclassified wherever necessary to correspond with those of the current period.


Mar 31, 2018

1 CORPORATE INFORMATION

India Steel Works Limited is a public limited incorporated and domiciled in India, under the Indian Companies Act, 1956. Its Equity shares are listed on BSE Limited. Its registered office is situated at India Steel Works Complex, Zenith Compound, Khopoli, Raigad 410 203, Maharashtra, India.

The Company is engaged in manufacturing and trading of steel products like hot rolled, bars and rods, bright bars, etc.

Notes :-

i. The Company has called for balance confirmation of Trade Receivables on random basis. Out of which the Company has received response from some of the parties, which are subject to reconciliation with Company''s account. The other balances of Trade Receivables are subject to confirmation

ii. Refer Note No.41 for Related party balances.

iii. Refer Note No.38 for information about impairment, credit risk and market risk of trade receivables.

iv. There are no outstanding dues from directors or other officers of the Company.

b) Rights, Preferences and restrictions attached to shares

The company has one class of equity shares having a par value Re 1/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding

Notes :-

A Term Loans :

1 Loans from Kotak Mahindra Prime Ltd. @9.75% p.a. interest are secured against hypothecation of motor vehicles. These loans are repayable in 48 equated monthly months installment of Rs.2.20 lakhs.

2 Loans from Toyota Financial Services Ltd @10.25% p.a. interest are secured against hypothecation of motor vehicles. These loans are repayable in 48 equated monthly months installment of Rs.0.54 lakhs.

3 Loans from Sundaram Finance Ltd. @7.10% p.a. interest are secured against hypothecation of komatsu hydraulic excavator machine. These loans are repayable in 36 equated monthly months installment of Rs.0.82 lakhs.

4 Loan from SREI Equipment Finance Limited @12.00% p.a. interest is solely secured against SAP License and is repayable in 12 equated monthly installments of Rs.7.91 lakhs.

5 Loans from Kotak Mahindra Bank Ltd @18% p.a. interest are secured/to be secured by first mortgage & charges on all immoveable & moveable properties both present & future & personal guarantees of some of the promoter directors of the company & are repayable in 48 equated monthly installments of Rs.34.46 lakhs.

b) Terms of Issue of Preference Shares

i) 14% Cumulative Reedemable Shares are reedemable in the year 2018.

ii) 0.01% Cumulative Reedemable Shares are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019.

iii) 0.01% Cumulative Reedemable Shares ( Option Series) are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019.

iv) The company is in the negotiations with the preference shareholders for revised terms of redemption.

v) Subject to the approval of shareholders at the Annual General Meeting, board of directors have recommended dividend of 0.01% on @ 2,00,000 14% CRPS; 5,36,71,310 @ 0.01% CRPS without option and 85,14,574 @ 0.01% CRPS with option

c) Effective interest rate for the above preference shares is in the range of 11%-14%

Notes:

i. Based on the information in possession with the Company, no supplier has been identified as being covered under Micro, Small and Medium Enterprise Development Act, 2006 ("the Act"). Accordingly, no amount of dues outstanding as at 31st March 2018 have been identified as relating to Micro and Small Enterprises referred to in the said Act.

ii. The Company has called for balance confirmation of Trade Payables on random basis. Out of which the Company has received response from some of the parties, which are subject to reconciliation. The other balances of Trade Payables are also subject to confirmation.

iii. Trade Payables includes amount due to Related Parties Rs. 3.68 lakhs as at 31st March 2018 (Previous Year as at 31st March 2017 Rs.3.68 lakhs and as 1st April 2016 Rs. 3.68 lakhs)

NOTE 2(i): FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

"These are the Company''s first financial statements prepared in accordance with Ind AS

The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31st March 2018, the comparative information presented in these financial statements for the year ended 31 March, 2017 and in the preparation of an opening Ind AS Balance Sheet at 1 April, 2016 (the Company''s date of transition).

In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and Cash Flows is set out in the following tables and notes"

Exemptions applied

Ind AS 101 "First-time adoption of Indian Accounting Standards" allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions in transition from previous GAAP to Ind AS:

Optional Exemption

(i) Deemed cost - Fair Value of Property, Plant and Equipment

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per previous GAAP and use that as its deemed cost as at the date of transition.

Accordingly, the Company has elected to measure continue with the carrying values under previous GAAP for carrying value

Mandatory Exemption

(i) Estimates

An entity''s estimates in accordance with Ind AS''s at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were an error.

Ind AS estimates as at 1 April 2016 and 31 March 2017 are consistent with the estimates as at the same date made in conformity with the previous GAAP

The Company made estimates for the following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP

- Impairment of financial assets based on expected credit loss model

(ii) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of Financial Assets on the basis of facts and circumstances that exist at the date of transition to Ind AS.

NOTE 3 (iv): NOTES TO RECONCILATION OF EQUITY AS AT APRIL 01, 2016 AND MARCH 31, 2017 AND PROFIT & LOSS FOR THE YEAR ENDED MARCH 31, 2017

1 Cumulative Redeemable Preference Shares

Under previous GAAP, preference shares were shown as part of equity and carried at cost. Redeemable preference shares contain a contractual obligation to deliver cash to the holders. Accordingly, under Ind AS the same is classified as financial liability and measured in accordance with the principles provided in note 2 below

2 Borrowings

i. Transaction Cost

Under previous GAAP, transaction costs incurred in connection with the borrowings were charged to profit and loss or capitalised to qualifying as the case may be. Under Ind AS, transaction costs are deducted from the initial recognition amount of financial liability and charged to statement of profit and loss over the tenure of the borrowings using effective interest rate method

ii. Initial Measurement

Under previous GAAP, borrowings and other financial liabilities were recognised at historical cost / transaction value. Under Ind AS financial liabilities are measured at fair value at the inception less any transaction costs directly attributable to the issue of the liability which is not a FVPTL. The difference in transaction value and fair value, if any, is recognised in the profit and loss account (commonly referred to as day one gain / (loss). Accoridngly the company has measured all its financial liabilities at fair value on initial recognition and day one gain / (loss) has been recognised in retained earnings

After initial measurement the company measures the financial liabilities at amortised cost or fair value based on their classification criteria. Subsequently financial expense on the financial liability measured at amortised cost is recognised by way of Effective Interest Rate method

3 Cumulative Dividend Payable

Under previous GAAP cumulative dividend on preference shares not declared by the company was reflected as contingent liability. The company has a contractual obligation to deliver the cash to the preference shares holder. Accordingly, under Ind AS same is recognised as financial expense and financial liability (classified at amortised cost) using effective interest method.

4 Remeasurement of Defined Benefit Employee Plans

Under previous GAAP company measured the defined benefit obligations internally. On adoption of Ind AS the company has obtained actuarial valuation for its defined benefit obligation. The difference defined benefit obligation as per actuarial valuation under Ind AS 19 and as measured under previous GAAP is recognised under retained earnings on transition to Ind AS. Consequently, provisions for employee benefit has been reduced with a correspoding increase in retained earnings on the date of transition and there has been further reduction in provision in the year ended 31 March, 2017

Further under previous GAAP the company actuarial gains and losses in the statement of profit and loss in the period in which they occur. Under Ind AS, the company recognised all measurement gains and losses arising from defined benefit plans in Other Comprehensive Income in the period in which they occur

5 Expected Credit Loss Allowance

Under previous GAAP, the group had recognised provision on trade receivables based on the expectation of the company. Under Ind AS, the group provides loss allowance on receivables based on Expected Credit Loss (ECL) model which is measured following the "Simplified Approach" at an amount equal to the lifetime ECL at each reporting date.

Consequently, trade receivable have been reduced with a corresponding decrease in retained earnings on the date of transition and there has been an incremental provision for the year ended 31 March, 2017

6 Loans and advances

Under previous GAAP, loans and advacnes given were recognised at transaction value. Under Ind AS loans being financial assets are measured at fair value at the inception. The difference in transaction value and fair value, if any, is recognised in the profit and loss account (commonly referred to as day one gain / (loss). Accordingly the company has measured all its financial assets at fair value on initial recognition and day one gain / (loss) has been recognised in retained earnings

7 Security Deposits

Under previous GAAP, the group accounted for deposits at transaction value. Under Ind AS, the deposits with inherent significant financing element are initially recorded at fair value with difference between transaction value and fair value being treated as prepaid expenses. The deposits are subsequently measured at amortised cost and deferred rent is amortised over contract period on a straight line basis. This has resulted to an decrease in equity on the transition date The profit before tax for the year ended March 31, 2017 has increased.

8 Deferred Tax

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. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or through other comprehensive income.

9 Excise Duty

Under previous GAAP, revenue from sale of goods was presented net of the Excise Duty. Under Ind AS, revenue from sale of goods is presented inclusive of Excise Duty. Accordingly, Excise Duty has been presented in the statement of Profit and Loss as an expense

10 Other Comprehensive Income

Under Indian GAAP, the Company has not presented Other Comprehensive Income (OCI) separately. Hence, it has reconciled Indian GAAP Profit or Loss to Ind AS Profit or Loss. Further, Indian GAAP Profit and Loss acount is reconciled to total Comprehensive Income as per Ind AS.

11 Other adjustments

Assets and Liabilities as well as items of Income and Expenses have been regrouped / re-classified wherever necessary to align with the provisions of Ind AS.

Notes :-

(i) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/authorities

(ii) The Company does not expect any reimbursements in respect of the above contingent liabilities

(iii) Most of the issues of litigation pertaining to Central Excise/Sales Tax/Customs are based on interpretation of the respective Law & Rules thereunder. Management has been opined by its counsel that many of the issues raised by revenue will not be sustainable in law as they are covered by judgments of respective judicial authorities which supports its contention.

C. CONTINGENT ASSETS

Contingent assets are not recognized in financial statements as this may result in the recognition of income that may never be realised. However, Contingent assets (if any) are disclosed in the notes to the financial statements.

The Company has lodged a claim of Rs.9836.07 lakhs against suppliers on account of Contract Cancellation, Detention & Demurrage, Low recovery of material claims, Rate Difference ,etc. but not acknowledged by parties. The company is in process taking appropriate legal steps in this regard.

NOTE 4: CAPITAL MANAGEMENT

The Company''s objective for Capital Management is to maximise shareholder value, safeguard business continuity, and support the growth of the Company. Capital includes, Equity Capital, Securities Premium and other reserves and surplus attributable to the equity shareholders of the Company. The Company determines the capital requirement based on annual operating plans and long term and strategic investment and capital expenditure plans. The funding requirements are met through a mix of equity, operating cash flows generated and debt. The operating management, supervised by the Board of Directors of the Company regularly monitors its key gearing ratios and other financials parameters and takes corrective actions wherever necessary. The relevant quantitative information on the aforesaid parameters are disclosed in these financial statements.

NOTE 5: FINANCIAL RISK MANAGEMENT AND POLICIES

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the managing board. The details of different types of risk and management policy to address these risks are listed below:

(a) Market Risk:-

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings. The objective of market risk management is to avoid excessive expsoure in our foreign currency revenues and costs

(a) (i) Market Risk - Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The company''s exposure to the risk of changes in market interest rates primarily to the Company''s borrowings, both short term and long term obligations with floating interest rates.

The company is also exposed to interest rate risk on its financial assets that include fixed deposits (which are part of cash and cash equivalents) since all these are generally for short durations, there is no significant interest rate risks pertaining to these deposits

Sensitivity analysis to interest rate risk

The company doesn''t account for any fixed rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.

(a) (ii) Market Risk - Price Risk

The Company has no surplus for investment in debt mutual funds, deposits etc. The Company does make deposit with the banks to provide security against gurantee issued by bank to company’s trade payables. Deposit is made in fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest rates or market yields which may impact the return and value of the investments.

(a) (iii) Market Risk - Currency Risk

The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company. The company is exposed to currency risk on account of its trade payables in foreign currency. The functional currency of the company is Indian Rupees. The Company follows a natural hedge driven currency risk mitigation policy to the extent possible

(b) Credit Risk

Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers.

The carrying amount of Financial Assets represents the maximum credit exposure

Trade Receivables

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, financial statements, industry information, business intelligence and in some cases bank references.

Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit evaluations of its customers'' financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.

Expected credit loss for trade receivable:

The allowance for impairment of Trade receivables is created to the extent and as and when required, based upon the expected collectability of accounts receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impariment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts available in relation to defaults and delays in collection thereof

The movement of the expected loss provision (allowance for bad and doubtful loans and receivables etc.) made by the company are as under:

Other Financial Assets

The company maintains its Cash and Cash equivalents and Bank deposits with banks having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.

Expected credit loss on financial assets other than trade receivable:

With regards to all financial assets with contractual cash flows other than trade receivable, management believes these to be high quality assets with negligible credit risk. The management believes that the parties from whom these financial assets are recoverable, have strong capacity to meet the obligations and where the risk of default is negligible and accordingly no provision for expected credit loss has been provided on such financial assets. Break up of financial assets other than trade receivables have been disclosed on balance sheet

The Company''s maximum exposure to credit risk as at 31st March, 2018, 2017 and 1st April, 2016 is the carrying value of each class of financial assets.

(c) Liquidity Risk

Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Any short term surplus cash generated, over and above the amount required for working capital and other operational requirements is retained as Cash and Cash Equivalents (to the extent required).

(d) Collateral

The Company has pledged its Non-Current as well as Current Assets to a consortium of lenders as collateral towards borrowings by the Company. Refer Note No. 16 and Refer Note No. 19 for the detailed terms and conditions of the collaterals pledged.

Fair valuation of financial assets and liabilities with short term maturities is considered as approximate to respective carrying amount due to the short term maturities of these instruments.

(b) Fair Value Hierarchy

Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.

Measurement of Fair Values:

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

- The fair values of loans taken from banks and other parties, and preference shares is estimated by discounting cash flows using rates currently available for debt/instruments with similar terms, credit risks and remaining maturities. Management regularly assessses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value

- The fair values of loans given to employees and other parties, and security deposit given is estimated by discounting cash flows using rates currently available for instruments with similar terms, credit risks and remaining maturities. Management regularly assessses a range of reasonably possible alternatives for those significant observable inputs and determines their impact on the total fair value

NOTE 6: EMPLOYEE BENEFITS

Retirement Benefits

As per Ind AS 19 the Company has recognized "Employees Benefits" ,in the financial statements in respect of Employee Benefits Schemes as per Actuarial Valuation as on 31st March 2018

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.

VI Major Categories of plan assets as a percentage of total plan assets

Not applicable since the company has Nil Plan assets

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.

VI Major Categories of plan assets as a percentage of total plan assets

Not applicable since the company has Nil Plan assets

(B) Defined Contribution Plans

Amount recognised as expenses on account of “Contribution / Provision to and for Provident and other Funds" of Statement of Profit and Loss - 61.33 Lakhs (Previous year 52.04 Lakhs)

Notes.

(a) Related party relationship is identified by the management and relied upon by the auditors.

(b) Amount in respect of related parties have been made provisions for doubtful debts of Rs.420.53 lakhs.

7. Loans given, Investments made and Corporate Guarantees given u/s 186(4) of the Companies Act, 2013 are disclosed under the respective notes.

8. Segment Information :

The company is exclusively in the steel business segment and as such there are no reportable segments as defined by AS-17 on segment reporting, as issued by the Institute of Chartered Accountants of India (ICAI).

9. Figures in brackets indicate previous year''s figures.


Mar 31, 2017

Of the above, 8,70,00,000 fully paid-up equity shares of Re 1/- each represent the shares which were alloted on a preferential basis to the promoters of the Company in the last 5 years

Of the above, 7,20,00,000 fully paid-up equity shares of Re 1/- each represent the shares which were alloted on a preferential basis to the Strategic Investors of the Company in the last 5 years

Of the above, 50,00,000 fully paid-up equity shares of Re 1/- each represent the shares which were alloted to on a preferential basis to the Bank in the last 5 years

Note : Terms of Repayment & Security for Secured Loan.

1) Loans from Kotak Mahindra Prime Ltd. @9.75% interest are secured against hypothecation of motor vehicles These loans are repayable in 48 equated monthly months installment of Rs.220300/2) Loans from Toyota Financial Services Ltd @10.25% interest are secured against hypothecation of motor vehicles These loans are repayable in 48 equated monthly months installment of Rs.54432/-

Note : Terms of Repayment & Security for Secured Loan.

2) Loans from Kotak Mahindra Bank Ltd.are secured/to be secured by first mortgage & charges on all immoveable & moveable properties both present & future & personal guarantees of some of the promoter directors of the company & are repayable in 48 equal monthly installments.

3) Loans from Toyota Financial Services Ltd are secured against hypothecation of respective motor vehicles. This loan is repayable in 48 months respectively.

Note 4 : Segment Information:

The company is exclusively in the steel business segment and as such there are no reportable segments as defined by AS-17 on segment reporting, as issued by the Institute of Chartered Accountants of India (ICAI)

Note 5: Previous year figures have been regrouped/rearranged wherever necessary to correspond

a) to current year figures

b) Figures are rounded off to the nearest rupees lacs


Mar 31, 2016

Of the above, 8,70,00,000 fully paid-up equity shares of Re 1/- each represent the shares which were alloted on a preferential basis to the promoters of the Company in the last 5 years.

Of the above, 7,70,00,000 fully paid-up equity shares of Re 1/- each represent the shares which were alloted on a preferential basis to the Strategic Investors of the Company in the last 5 years.

Of the above, 28,10,925 fully paid-up equity shares of Re 1/- each represent the shares which were alloted pursuant to cash payment of '' 1 Lac & balance against settlement of dues in the last 5 years.

Note : 1) 14% Cumulative Reedemable Shares are reedemable in the year 2018.

2) 0.01% Cumulative Reedemable Shares are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019

3) 0.01% Cumulative Reedemable Shares ( Option Series) are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019

4) Dividend on above Preference Shares for current year not provided Rs.27,98,000/- & till date amounted to Rs.5,53,08,711 /-Note 2B Preference Share capital :-

** Terms of Repayment & Security for Secured Loan.

5) Loans from Kotak Mahindra Bank Ltd @18% interest are secured/to be secured by first mortgage & charges on all immoveable & moveable properties both present & future & personal guarantees of some of the promoter directors of the company & are repayable in 48 equated monthly installments of Rs.3445823/2) Loans from Toyota Financial Services Ltd @10.25% interest are secured against hypothecation of motor vehicles These loans are repayable in 48 equated monthly months installment of Rs.54432/-

6)Loans from SREI Equipment Finance Limited are secured against sole guarantee of SAP License are repayable in 12 equated monthly installments of Rs.790992/-

Note : Terms of Repayment & Security for Secured Loan.

7) Loans from Kotak Mahindra Bank Ltd.are secured/to be secured by first mortgage & charges on all immoveable & moveable properties both present & future & personal guarantees of some of the promoter directors of the company & are repayable in 48 equal monthly installments.

8) Loans from Sundaram Finance Ltd & Toyota Financial Services Ltd are secured against hypothecation of respective motor vehicles These loans are repayable in 36 & 48 months respectively.

Note 9 : The company is exclusively in the steel business segment and as such there are no reportable segments as defined by AS-17 on segment reporting, as issued by the Institute of Chartered Accountants of India (ICAI)

10. RELATED PARTY DISCLOSURES

As per Accounting Standard 18, for the year ended 31st March 2016

Note 11: Previous year figures have been regrouped/rearranged wherever necessary to correspond to current year figures. Figures are rounded off to the nearest rupee lacs.


Mar 31, 2015

1. 2% Of the above, 8,70,00,000 fully paid-up equity shares of Rs. 1/- each represent the shares which were alloted on a preferential basis to the promoters of the Company in the last 5 years Of the above, 10,40,00,000 fully paid-up equity shares of Rs. 1/- each represent the shares which were alloted on a preferential basis to the Strategic Investors of the Company in the last 5 years Of the above, 28,10,925 fully paid-up equity shares of Rs. 1/- each represent the shares which were alloted pursuant to cash payment of Rs. 1 Lac & balance against settlement of dues in the last 5 years.

2. 14% Cumulative Reedemable Shares are reedemable in the year 2018.

3. 0.01% Cumulative Reedemable Shares are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019

4. 0.01% Cumulative Reedemable Shares ( Option Series) are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019

5. Dividend on above Preference Shares for current year not provided Rs. 28,62,186/- & till date amounted to Rs. 5,25,10,711 /-

* Above debts are secured/to be secured by first mortgage & charges on all immoveable and moveable properties, both present and future, & personal guarantees of some of the promoter directors of the company & are repayable in

6. equal monthly instalments.

** The instalment falling due within 12 months after report date is Nil as terms of repayment are not pre determined

7. Terms of Repayment & Security for Secured Loan.

1) Loans from Kotak Mahindra Bank Ltd.are secured/to be secured by first mortgage & charges on all immoveable & moveable properties both present & future & personal guarantees of some of the promoter directors of the company & are repayable in 48 equal monthly instalments.

2) Loans from Sundaram Finance Ltd & Toyota Financial Services Ltd are secured against hypothecation of respective motor vehicles

These loans are repayable in 36 & 48 months respectively.

8. In absence of certainty of sufficient future taxable income, net deferred tax liabilities /asset has not been recognised in accordance with Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

9. Kotak Mahindra Bank Ltd & DNS Bank Ltd. has sanctioned Cash Credit/WCDL facilities against the security by way of first pari passu charge on the fixed and current assets of the company & personal guarantees of some of the promoter directors of the Company.

In the absence of complete information in respect of the status of each creditor, the Company is not in a position to identify the amounts payable to small scale and ancillary undertakings under the provisions of "Interest on the delayed payment to Small Scale and Ancillary undertaking Act, 1993". Accordingly, it is not possible to quantify the extent of overdue interest payable under the said Act.

Details relating to dues to micro, small and medium enterprises as per The Micro, Small and Medium Enterprises Development Act, 2006 are yet not identified by the management.

10. The company is exclusively in the steel business segment and as such there are no reportable segments as defined by AS-17 on segment reporting, as issued by the Institute of Chartered Accountants of India (ICAI)

11. Contingent Liabilities & Commitments

31st March 31st March 2015 2014

A) Contingent Liabilities

1) Claims against the company/disputed liabilities not acknowledged as debts 165.51 206.14

2) Excise/Customs/Service Tax Matters decided in the companies favour in earlier 387.45 92.92 years, in respect of which show cause notices have been received & contested

3) Sales Tax matters in respect of which show cause notices have been received 159.52 174.52 & contested

4) Property Tax disputed 22.95 112.75

5) Preference Share Dividend 525.12 496.49

B) Commitments

Estimated amount of contracts remaining to be executed on capital account 173.58 525.00 & not provided for.

12.

a) Previous year figures have been regrouped/rearranged wherever necessary to correspond to current year figures

b) Figures are rounded off to the nearest rupees lacs


Mar 31, 2014

1) Loans from Kotak Mahindra Bank Ltd.are secured/to be secured by first mortgage & charges on all immoveable & moveable properties both present & future & personal guarantees of some of the promoter directors of the company & are repayable in 48 equal monthly instalments.

2) Loans from Sundaram Finance Ltd & Toyota Financial Services Ltd are secured against hypothecation of respective motor vehicles.

These loans are repayable in 36 & 48 months respectively.

Note 3 : The company is exclusively in the steel business segment and as such there are no reportable segments as Defined by AS-17 on segment reporting, as issued by the Institute of Chartered Accountants of India (ICAI)

Note 4 RELATED PARTY DISCLOSURES

As per Accounting Standard 18, for the year ended 31st March 2014 (as identified & certified by the management)

Name of the Related Party Relationship

Isinox Steels Limited

Indiasteel International P.Ltd.

Inoxware P.Ltd.

Isiworld Steel (I) P.Ltd.

Isicom Traders P.Ltd.

Isistar Exports P.Ltd. Associates

Isimetal (I) P.Ltd.

Yeotmal Land Development & Trading Co.P.Ltd.

Emgee Homes P.Ltd.

Gupta Housing P.Ltd.

Titan Steel P.Ltd.

Note 5 : Contingent Liabilities & Commitments

Rs. in Lacs

31st March, 2014 31st March, 2013

A) Contingent Liabilities

1) Claims against the company/ disputed liabilities not acknowledged as debts 206.14 190.06

2) Excise/Customs/Service Tax Matters decided in the companies favour in 92.92 134.31 earlier years, in respect of which show cause notices have been received & contested

3) Sales Tax matters in respect of which show cause notices have been 174.52 30.08 received & contested

4) Property Tax disputed 112.75 77.33

5) Preference Share Dividend 496.49 467.86

B) Commitments Estimated amount of contracts remaining to be executed on Capital accounts and not provided for 525.00 750.00

Note 6 :

a) Previous year fgures have been regrouped/rearranged wherever necessary to correspond to current year fgures

b) Figures are rounded off to the nearest rupees lacs

Mr.Ashwin H. Gupta

Mr.Sudhir H Gupta

Key Managerial Personnel Mr.Varun S.Gupta

Mr. Rahul Madhukar Yenurkar

India Steel Industries Enterprises over which Key Mangerial Personnel

Indiasteel International are able to exercise significant infuence


Mar 31, 2013

Company Overview

The Company was incorporated on April 15, 1987 as Khanna & Roy Heavy Engineering Private Limited, under the Companies Act,1956.

The name was changed to Isibars Private Limited on May 9, 1991.Further Isibars Private Limited changed to Isibars Limited on November 29, 1991.Fresh Certificate of Incorporation upon change of name from Isibars Limited to India Steel Works Limited was issued on October 22, 2007.The Company is involved in the business of steel.

Note 1 : The company is exclusively in the steel business segment and as such there are no reportable segments as defined by AS-17 on segment reporting, as issued by the Institute of Accountants of India (ICAI)

Note 2 : Contingent Liabilities & Commitments

31st March 2013 31st March 2012 Amt Rs in Lac Amt Rs in Lac

A) Contingent Liabilities

1) Claims against the company/ disputed liabilities not acknowledged as debts 190.06 127.75

2) Excise/Customs/Service Tax Matters decided in the companies favour in earlier years, 134.31 124.67 in respect of which show cause notices have been received & contested

) Sales Tax matters in respect of which show cause notices have been received & contested 30.08 11.24

4) Property Tax disputed 77.33 77.33

5) Preference Share Dividend 467.86 439.24

B) Commitments

Estimated amount of contracts remaining to be executed on capital account & not provided for. 750.00 500.00

Note 3 : a) Previous year figures have been regrouped/rearranged wherever necessary to correspond to current year figures

b) Figures are rounded off to the nearest rupees lacs


Mar 31, 2012

Company Overview

The Company was incorporated on April 15,1987 as Khanna & Roy Heavy Engineering Private Limited, under the Companies Act, 1956. The name was changed to Isibars Private Limited on May 9, 1991. Further Isibars Private Limited changed to Isibars Limited on November 29, 1991 .Fresh Certificate of Incorporation upon change of name from Isibars Limited to India Steel Works Limited was issued on October 22, 2007. The Company is involved in the business of steel.

1A(1)

Of the above, 2,42,70,000 fully paid-up equity shares of Rs. 1/- each represent the shares which were reduced from a face Value of Rs. 10/- each to Rs. 1 /- each pursuant to the Bombay High Court Order in the last 5 years

Of the above, 10,00,00,000 fully paid-up equity shares of Rs. 1 /- each represent the shares which were alloted on a preferential basis to the promoters of the Company in the last 5 years

Of the above, 8,70,00,000 fully paid-up equity shares of Rs. 1 /- each represent the shares which were alloted on a preferential basis to the Strategic Investors of the Company in the last 5 years

Of the above, 2,00,00,000 fully paid-up equity shares of Rs. 1/- each represent the shares which were alloted pursuant to the CDR Scheme without payments being received in cash, in the last 5 years.

Of the above, 28,10,925 fully paid-up equity shares of Rs. 1/- each represent the shares which were alloted pursuant to cash payment of Rs 1 Lac & balance against settlement of dues in the last 5 years

Out of the above, 23,70,80,925 issued equity shares, 30,00,000 equity shares of Rs. 1/- each issued against ESOS were cancelled during the year resulting in 23,40,80,925 issued equity shares as at the end of the year

Note:

1) 14% Cumulative Reedemable Shares are redeemable in the year 2018.

2) 0.01% Cumulative Reedemable Shares are reedemable 25% in the year 2017, 25% in the year 2018, & 50% in the year 2019

3) 0.01% Cumulative Reedemable Shares ( Option Series) are reedemable 25% in the year 2017, 2.5% in the year 2018, & 50% in the year 2019

4) Dividend on above Preference Shares tor current year not provided Rs. 28.60/- Lac & till date amounted to Rs. 439.24 Lacs

Note: Terms of Repayment & Security for Secured Loan.

1) Commerzbank: As per the One Time Settlement a sum of Rs. 350 Lacs is to be paid to Commerzbank Singapore on receipt of permission from RBI for repatriation of the amount. The security is by way of first part passu charge on the fixed & current assets of 'he company

2) Approval of National Insurance Co.Ltd. & United India insurance Co.Ltd. is awaited as per the CDR oroposal & payments will be made In accordance with the approvals.The security is by way of first pari passu charge on the fixed & current assets of the company

3) The term Loan from Kotak Mahindra Bank Ltd. on assignment of debts of New India Assurance Co.Ltd. & General Insurance Co.Ltd. are repayable in 36 monthly instalments of Rs. 5.11 Lac at an interest rate of 18%. The security is to be by way of first pari passu charge on the fixed & current assets of the company

4) Vehicle Loans from Sundaram Finance Ltd are repayable In 36 monthly instalments of Rs. 1.00 Lac at an interest rate of 16% &. have been Secured by hypothecation of Vehicles owned by the company.

5) Full & Final Settlement letters from 0BC, PSB, OIC Ltd have been received & the same are awaited from IARC & ARCL.

Note

In absence of certainty of sufficient future taxable income, net deferred tax liabilities /asset has not been recognised in accordance with Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

In the absence of complete information in respect of the status of each creditor, the Company is not in a position to identify the amounts payable to small scale and ancillary undertakings under the provisions of "Interest on the delayed payment to Small Scale and Ancillary undertaking Act, 1993". Accordingly, if is not possible to quantity the extent of overdue interest payable under the said Act.

Details relating to dues to micro, small and medium enterprises as per The Micro, Small and Medium Enterprises Development Act, 2006 are yet not identified by the management.

Note 1. Contingent liabilities & Commitments

31st March 2012 31st March 2011 Amount Amount Rs. In Lac Rs. In Lac

A) Contingent Liabilities

1) Claims against the company/disputed liabilities not acknowledged as debts 127.75 215.54

2) Excise/Customs/Service Tax matters decided in the Company's favour in earlier year. 124.67 141.02 in respect of which show cause notices have been received & contested:

3) Sales Tax matter in respect of which show cause notices have been received & contested 11.24 11.24

4) Property Tax disputed 77.33 -

5) Preference Share Dividend 439.24 410.64

B) Commitments

1) Estimated amount of contracts remaining to be executed on capital account and not provided for 500.00 150.00

Note 2.

(a) Previous years figures have been regrouped /rearranged where ever necessary to correspond to current year figures. (b) Figures are rounded off to nearest rupees lacs.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs.1,50,00,000- (Previous year: Rs. 15,00,000/-).

2. Contingent Liabilities not provided for:

2010-11 2009-10

i) Guarantees given by the Banks/Institution (Rs. in Lacs) Nil 334.83

ii) Claims against company not acknowledged as debt: Rs 2,15,54,133/-

a. Excise/Customs matters decided in the Company's favour in earlier years, in respect of which show cause notices have been received & contested: Rs.1,41,01,979/- (previous year: Rs.1,77,61,819/).

b. Sales Tax matter in respect of which show cause notices have been received & contested Rs 11,24,091/- (Previous Year Rs 11,24,091/-)

Property Tax Rs Nil (Previous Year Rs 12,16,640)

Preference Share Dividend Rs. 4,10,64,409/- (Previous year Rs. 3,82,04,684/-)

The Management periodically assesses, using external and internal sources whether there is an indication that an asset may be impaired. If an asset is impaired, the company recognizes an impairment loss as the excess of the carrying amount of the asset over the recoverable.

3. Financial Restructuring:

i. The company has made full & final payment to IDBI of all its dues & accordingly has got a no dues certificate & security charged have been released.

ii. Sanction letters to the 2nd CDR rescheduled package were received from 5 lenders & are awaited from the 3 CDR Lenders of the Company. In accordance with the 2nd reworked package of CDR , the Company had provided for interest for delayed period of payment from October 1, 2009 to February 28, 2010 @ 8% p.a. on the outstanding & which are converted into 0.01% Cumulative Redeemable Preference Shares.

iii. ICICI Bank has been allotted 28,10,925 Equity Shares of face value of Re.1/- each, fully paid-up shares at a premium of Rs.9 per share against a cash payment of Rs.1 Lac & against settlement of its claim on account of crystallization of certain Bank Guarantees.

iv. During the year the company allotted 2,70,00,000 equity shares of Re 1/- each at a premium of Rs 6/- per share to TB Investments Ltd. on preferential basis.

4. The insurance surveyor has submitted his final report to the insurance company recommending claim payout of Rs 41.65 Crores against our revised claim of Rs 77.26 Crores . We had already received on account payment of Rs 25 Crores against this claim. The final claim settlement is expected to take place shortly. The shortfall in respect of the final claim shall be written off in the profit and loss account in the current year 2011-2012.

5. Balances in the accounts of loans and advances, various lenders, sundry debtors and sundry creditors, are as per the books of accounts. Scrutiny/ reconciliations have been carried out and confirmations have been obtained in some cases.

6. In the absence of complete information in respect of the status of each creditor, the Company is not in a position to identify the amounts payable to small scale and ancillary undertakings under the provisions of "Interest on the delayed payment to Small Scale and Ancillary undertaking Act, 1993". Accordingly, it is not possible to quantify the extent of overdue interest payable under the said Act. Details relating to dues to micro, small and medium enterprises as per The Micro, Small and Medium Enterprises Development Act, 2006 are yet not identified by the management.

7. The Company has not provided for current tax, in view of the carried forward losses and unabsorbed depreciation.

8. The Company has accumulated unabsorbed depreciation and business losses under the tax laws. In absence of certainty of sufficient future taxable income, net deferred tax liabilities /asset has not been recognised in accordance with Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

9. In the opinion of the Board, current assets and loans and advances are approximately of the value stated, if realised in the ordinary course of business. Provisions for all known liabilities other than retirement benefits to employees are made and the same are adequate and not in excess of the amount reasonably necessary.

10. The Company is in the business of dealing and manufacture of steel products. All other activities of the Company revolve around the main business. As such, there are no reportable segments as defined by Accounting Standard 17 on segment reporting as issued by the Institute of Chartered Accountants of India.

11. Loans & Advances include amount due from officers of the company Rs. 23,05,504/- (previous year Rs. 14,95,504/-) due from officers of the Company. Maximum balance outstanding from employees during the year - Rs.23.95.504/- (previous year Rs. Rs.19,07,504/-).

12. Prior Period adjustment includes a sum of Rs 84,34,217/ - [Previous Year Rs 74,73,055/-] being quality claims of earlier years settled. It also includes a sum of Rs 1,46,77,637/- being value of scrap to be returned to job work customers as on 1-4-2010.

13. Voluntary Retirement Scheme : The company offered a Voluntary Retirement Scheme for the workmen at the Turbhe Plant in the second quarter of the financial year 2010-2011 & a sum of Rs 2,84,96,591/- was paid out under this scheme. The same is proposed to be written off in 12 quarters & accordingly a sum of Rs 71,24,147/- has been written off & included under the head Salaries, Wages, Bonus & Allowances for the 3 quarters in this financial year.

14. Managerial Remuneration

a) In view of the loss incurred, no commission is payable to the Executive Chairman and the Managing Director for the current year. Computation of Net Profit in accordance with section 349 of the Companies Act, 1956 pursuant to clause 4A of part II in Schedule VI to the said Act is not considered necessary, and hence not given.

15. Related Party Disclosure as required by Accounting Standard 18 for the year ended 31.03.2011 (as identified and certified by the management)

Name of the related Party Nature of Relationship

India Steel Industries Associated

Isinox Steel Limited Associated

India Steel International Limited Associated

India Steel International Associated

ISIWorld Steel India Private Limited Associated

Titan Bulkers P.Ltd. Associated

Khamgaon Land Dev. & Trdg Co P.Ltd. Associated

Yeotmal Land Dev & Trdg. Co.P.Ltd. Associated

ISICom Traders Private Limited Associated

ISIStar Exports Private Limited Associated

Emgee Homes P.Ltd. Associated

Shri Harbanslal B. Gupta Late Chairman

Shri Ashwin H. Gupta Chairman

Shri Sudhir H. Gupta Managing Director

Shri Bimal Desai Independent Director

Shri S.P. Khosla Director

Shri Neeraj Agarwal Director

Shri Varun S Gupta Director

16. Additional information required under Paras 3, 4C and 4D, Part II of Schedule VI of the Companies Act, 1956, is given in Annexure I.

17. Previous year's figures are re-grouped, re-arranged and re-cast wherever necessary.


Mar 31, 2010

1. Financial Restructuring:

i. The entire cash payment settled with IDBI in accordance with the CDR Scherile was made, though it was slightly delayed. IDBI had raised a claim for interest for the delayed period which-was-paid partially and requested to be condoned and waived for the balance, The Company; hgdrhQweyer-/ provided for necessary provisions in this respect.

ii. Following the natural catastrophe at the Khopoli Plant on August 10. 2006, and-consequent shut down of operations at the Plant, a proposal for rescheduling of the payments to all, the CDR Lenders was made by the Company. This rescheduling proposal was approved by the CDR EG at its meetings held on December 18, 2009 and December 30, 2009.

iii. Sanction letters to the rescheduled CDR terms were received from 5 CDR Lenders out of the remaining 8 CDR Lenders and are expected from the balance 3 CDR Lenders of the Company. The Company has recast the outstandings inaccordance with the sanction letters and excess provisions for interest have been written off. The Company has made payments in the rescheduled terms of the CDR sanctions for the year, except for some short payment to ARCIL.

iv. For the Negotiated Settlement option, in accordance with the rescheduled CDR Scheme, the Company has provided for interest for delayed period of payment from October 1, 2009 to February 28, 2010 @ 8% p.a. on the outstanding, to be converted into 0.01% Cumulative Redeemable Preference Shares.

v. Bank of Baroda, had assigned its debt to a non-CDR Lender, International Asset Reconstruction Company Ltd. (IARC). IARC did not agree to be bound by the CDR, despite such direction from the CDR Cell. Ultimately, the Company and IARC agreed to settle the outstanding with a payment of Rs.625 Lacs over a 24 month period and balance has been accounted for as waivers and remissions to the tune of Rs.731 lacs. Accordingly, Consent Terms have also been filed with the DRT.

vi. Subsequent to the settlements, title of leased assets under financial assistance from both IDBI and Oriental Bank of Commerce (erstwhile Global Trust Bank) is to be transferred to the Company.

vii. ICICI Bank Ltd. had made a claim against the Company of Rs.281 Lacs on account of crystalisation of certain Bank Guarantees. Under direction of the CDR, EG, the Company agreed to settle this claim. ICICI Bank agreed to convert its Claimed outstanding to 28,10,925 Equity Shares of face value of Re.1/- each, fully paid-up shares at a premium of Rs.9 per share and a cash payment of Rs.l Lac.

viii. The Company had executed a settlement agreement with Commerz Bank requiring a payment of Rs.360 Lacs, subject to approval of the repayment terms from the Reserve Bank of India(RBI). While the other debts of the Company are recast as per the Settlement Terms, the outstanding of Commerz Bank has also been written down to the settlement amount of Rs.350 Lacs and balance is accounted as waivers and remissions. It is agreed that upon receipt of the approval from the RBI, necessary consent terms will be filed in the winding-up proceedings pending against the Company in the Bombay High Court.

ix. On settlement of debts with banks a sum of Rs 183 Lacs being interest provided in earlier years was waived .

2. During August 2008, consequent to heavy rainfall, storm and severe flooding in the Companys Plant at Khopoli, plant and machinery, stocks and parts of factorys shed suffered damages of more than Rs.57 crores. Provisional claim was lodged and interim assessment was made by the Insurance Company on the basis of which an on-account payment of Rs.20 Crores is received till date. The final claim has been submitted, however, certain issues are yet to be resolved with the Insurance Company and accordingly accounted in the books of accounts. In case reinstatement of assets involves expenditure over and above the claim allowed by the surveyor the same shall be written off in the profit and loss account of the year in which claim is finally settled.

3. Balances in the accounts of loans and advances, various lenders, sundry debtors and sundry creditors, are as per the books of accounts. Scrutiny/ reconciliations have been carried out and confirmations have been obtained in some cases.

4. In the absence of complete information in respect of the status of each creditor,the Company is not in a position to identify the amounts payable to small scale and ancillary undertakings under the provisions of "Interest on the delayed payment to Small Scale and Ancillary undertaking Act, 1993". Accordingly, it is not possible to quantify the extent of overdue interest payable under the said Act.

Details relating to dues to micro, small and medium enterprises as per The Micro, Small and Medium Enterprises Development Act, 2006 are yet not identified by the management.

5. The Company has not provided for current tax, in view of the carried forward losses and unabsorbed depreciation.

6. The Company has accumulated unabsorbed depreciation and business losses under the tax laws. In absence of certainty of sufficient future taxable income, net deferred tax liabilities /asset has not been recognised in accordance with Accounting Standard 22 issued by the Institute of Chartered Accountants of India.

7. In the opinion of the Board, current assets and loans and advances are approximately of the value stated, if realised in the ordinary course of business. Provisions for all known liabilities other than retirement benefits to employees are made and the same are adequate and not in excess of the amount reasonably necessary.

8. The Company Is in the business of dealing and manufacture of steel products. All other activities of the Company revolve around the main business. As such, there are no reportable segments as defined by Accounting Standard 17 on segment reporting as issued by the institute of (Chartered Accountants of India.

9. Loans & Advances include amount due from-officers of the companyRs. 14,95, 504/- (previous year Rs. 18,07,504/-) due from officers of the Company. Maximum balance outstanding from employees during the year - Rs. 19,07,504/- (previous year Rs. Rs.31,13.504/-).

10. Prior Period adjustment includes a sum of Rs 74,73,055/-(Previous Year Rs 6,87,32,814/-] being quality claims of earlier years settled.

11. Additional information required under Paras 3, 4C and 4D, Part II of Schedule VI of the Companies Act, 1956, is given in Annexure I.

12. Previous Years figure have been regrouped or rearranged, wherever necessary, in order to conform to current years classification.

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