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Notes to Accounts of India Steel Works Ltd.

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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