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Notes to Accounts of Indian Metals & Ferro Alloys Ltd.

Mar 31, 2016

Term Loans from Others:

(a) Loan of Rs. 3.23 Crore (PY : Rs. 7.63 Crore) for setting up of winder at Mahagiri Mines, secured by first charge on winder at Mines. Repayment by EMIs from February’13 to November’16.

(b) Loan of Rs. 20.00 Crore (PY : Nil) for capital expenditure related to power plants and other ancillary infrastructure, secured by first charge on Aircraft and two helicopters. Subservient charge on current assets of the Company. Repayment by 54 EMIs from June ‘16.

Note: Term Loans from Banks amounting to Rs. 31.96 Crore (PY : Rs. 82.86 Crore) are further secured by personal guarantees of 2 directors of the Company.

1. DEFERRED TAX LIABILITIES (NET)

[Deferred Tax Liability - DTL ; Deferred Tax Asset - DTA]

In terms of Accounting Standard 22, the net DTA recognized during the year is Rs. 30.06 Crore (Previous Year: DTL Rs. 21.26 Crore). Consequently, the net DTL as at year-end stands at Rs. 69.59 Crore (Previous Year : Rs. 99.65 Crore), as under:

2. The Company has not received any memorandum from ‘Suppliers’(as required to be filed by the ‘Suppliers’ with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as on 31st March, 2016 as micro, small or medium enterprises. Consequently, interest paid/ payable by the Company to such ‘Suppliers’ during the year is Nil (Previous Year : Nil).

3. Indmet Mining Pte Ltd (‘Indmet’), a wholly-owned subsidiary incorporated in Singapore, has investment of USD 8.75 million ('' 57.64 Crore) [Previous year USD 8.75 million (Rs. 54.41 Crore)] in its Indonesian subsidiary PT Sumber Rahayu Indah (‘PT Sumber’). PT Sumber is holding a coal mining concession in Indonesia but due to overlapping boundary issues, the mining concession could not be operationalised till date.

Consequently, the Company has initiated arbitration proceedings against the Government of the Republic of Indonesia on 24th July, 2015 pursuant to Article 3 of the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules and Article 9 of the Agreement between the Governments of the Republic of Indonesia and the Republic of India for the Promotion and Protection of Investments (the “’’Treaty””), raising claims of breach of the protections granted under the Treaty. Hearing on the arbitration proceedings is yet to commence.

No provision is considered necessary by the Company at this stage towards any diminution in the carrying value of it’s investment in Indmet amounting to Rs. 53.13 Crore.

(c) Other money for which the Company is contingently liable :

Demand notices in respect of six mines have been raised by the respective Deputy Director of Mines and Mining Officers of Government of Odisha amounting to Rs. 225.14 Crore for the alleged excess extraction of minerals over the quantity permitted under the mining plan/scheme, environmental clearance or consent to operate and other statutory permissions during the period from 1993 to 2010 under Section 21(5) of Mines & Minerals (Development and Regulation) Act, 1957 (‘Act’). However, Section 21(5) of the Act specifies that demand can be raised only when the minerals were extracted from the land which is occupied without lawful authority i.e. outside leasehold area. The Company is of the view that Section 21(5) of the Act is not applicable as the mining is done within the leasehold area under the supervision and approval of the State and Central Govt. Hence, the Company filed Revision Applications before Mines Tribunal, New Delhi against all such demands. Stay has been granted by the Mines Tribunal against such Demand Notices and the matters are pending.

4. The Hon’ble Supreme Court of India vide judgment dated 25th August, 2014 read with its order dated 24th September, 2014 cancelled the allocation of coal blocks to various companies, including the ‘Utkal C’ coal block held by Utkal Coal Ltd (‘UCL’), an SPV in which the Company holds 79.2% equity. Subsequently, on 21st October, 2014 The Coal Mines (Special Provisions) Ordinance, 2014 was promulgated to facilitate, inter alia, auction of coal blocks and compensation to a prior allotted of a coal block. To give continuity to the provisions of the said Ordinance and save the actions taken there under, on 26th December, 2014 The Coal Mines (Special Provisions) Second Ordinance, 2014 was promulgated, which was deemed to have come into force on 21st October, 2014 and the earlier Ordinance stood repealed. Further, the Ministry of Coal issued orders dated 18th December, 2014 and 6th January, 2015 to initiate the auction process and change the end use of ‘Utkal C’ from captive use (non-regulated sector) to independent power producer(regulated sector). Aggrieved by the above actions of the government, on 13th February, 2015 UCL filed a Writ Petition before the Hon’ble High Court of Delhi challenging, inter alia, the said orders. UCL has also filed a separate Writ Petition before the Hon’ble High Court of Delhi on 23rd February, 2015 challenging the basis of valuation of compensation and the restrictive interpretation of ‘Mine Infrastructure’. The arguments in both the aforesaid writ petitions have been heard by the Hon’ble High Court of Delhi and the judgments have been reserved. Pending final orders on the aforesaid writ petitions, no accounting adjustments have been made by UCL in it’s books of account and no provision is deemed necessary in these financial statements against the Company’s exposure in UCL as at 31st March, 2016 amounting to Rs. 110.88 Crore invested as equity, Rs. 173.77 Crore given as an unsecured loan and Rs. 78.09 Crore as a guarantee to a financial institution for loan availed by UCL.

5. In view of the circumstances detailed in Note No.31 above and considering the effect of uncertainties as envisaged in paragraph 9 of Accounting Standard 9 on “Revenue Recognition”, with effect from 1st October, 2014 the Company has postponed recognition of income from interest on unsecured loan given to UCL. Due to this, profit before tax for the year ended 31st March, 2016 is lower by Rs. 21.08 Crore (Previous Year Rs. 9 Crore). The interest income would be considered as revenue of the period in which it is properly recognized.

6. As per Accounting Standard 17 on “Segment Reporting”, segment information has been provided under the Notes to Consolidated Financial Statements.

7. Managerial remuneration includes amount paid to Dr Bansidhar Panda Rs. 1.55 Crore (Previous Year : Rs. 1.44 Crore), Mr Baijayant Panda Rs. 1.62 Crore (Previous Year : Rs. 1.45 Crore), Mr Subhrakant Panda Rs. 1.84 Crore (Previous Year : Rs. 1.63 Crore), Mr Jayant Kumar Misra Rs. 0.67 Crore (Previous Year : Rs. 0.80 Crore) and Mr Chitta Ranjan Ray Rs. 0.61 Crore (Previous Year : Rs. 0.63 Crore).

8. Donations include amount given to Bansidhar & Ila Panda Foundation Rs. 0.69 Crore (Previous Year : Rs. 0.73 Crore).

9. Corporate Social Responsibility Expenses paid to Bansidhar & Ila Panda Foundation Rs. 1.36 Crore (Previous Year : Rs. 1.23 Crore) and Indian Metals Public Charitable Trust of Rs. 0.29 Crore (Previous Year : Rs. 0.34 Crore).

10. Lease rentals paid to IMFA Alloys Finlease Limited Rs. 3.85 Crore (Previous Year : Rs. 3.84 Crore).

11. Interest income on loan is from Utkal Power Limited of Rs. 0.07 Crore (Previous Year : Rs. 0.10 Crore), from Utkal Green Energy Limited of Rs. 0.01 Crore (Previous Year : Rs. 0.01 Crore) and from Utkal Coal Limited Nil (Previous Year 9.45 Crore).

12. Investments made in Utkal Green Energy Limited of Rs. 0.08 Crore (Previous Year : Nil), Indian Metals and Carbide Limited Rs. 0.03 Crore (Previous Year : Nil) and Utkal Power Limited Nil (Previous Year : Rs. 0.40 Crore)

10. Loan given includes amount paid to Utkal Coal Limited Rs. 27.80 Crore (Previous Year : Rs. 27.20 Crore).

11. Loan repayment received includes amount from Utkal Power Limited Rs. 0.06 Crore (Previous Year : Rs. 0.40 Crore), Utkal Green Energy Limited to Rs. 0.06 Crore (Previous Year : Nil) and Utkal Coal Limited Rs. 0.47 Crore (Previous Year : Rs. 66.30 Crore).

12. Guarantee provided to Financial Institution for loan availed by Utkal Coal Limited Rs. 78.09 Crore (Previous Year : Rs. 91.00 Crore)

13. Guarantee received from Indmet Mining Pte Limited Nil (Previous Year : Rs. 7.06 Crore)

14. Disputes between the Company and Grid Corporation of Orissa Ltd (“GRIDCO”) relating to methodology for billing of power, wheeling of power, back-up power drawn during period of grid disturbance etc. were settled in favour of the Company vide a unanimous award of an Arbitral Tribunal dated 23rd March, 2008, by virtue of which GRIDCO was directed to pay Rs. 57.07 lakh along with interest and Rs. 30 lakh towards costs. Subsequently, GRIDCO filed a petition before the District Judge, Bhubaneswar objecting the award and obtained an interim stay on the operation of the said award. The Company filed its objection thereto on 19th February, 2009 and the matter is pending for hearing.

The Company has not given effect of the aforesaid award in it’s books of account on the principles of prudence, as the matter is sub-judice.

15. In the arbitration proceedings relating to a party''s conversion contract, an interim award was passed on 9th January, 2003 upholding issues in the Company’s favour, without quantification of the amount payable to the Company towards it’s various claims of losses/damages, which is to be determined by the appointment of a Chartered Accountant or other expert. The Party filed a petition before the Hon’ble High Court at Calcutta on 4th February, 2004 praying to set aside the interim award and the Company filed its objection thereto .The matter is pending before the Hon’ble High Court at Calcutta.

16. Pursuant to the order of Hon''ble Orissa High Court dated 21st April 2005, the Company was paying electricity duty at 6 paise per unit to the Govt. of Orissa and keeping the differential duty of 14 paise per unit in a separate ''no lien account’ till final disposal of it’s writ petition. The Hon''ble Orissa High Court disposed the said writ petition vide judgment dated 6th May, 2010 by directing the Company to deposit the differential amount of duty lying in no lien account with the State Exchequer. The Company preferred an appeal before the Hon''ble Supreme Court of India against the judgment of Orissa High Court. The Hon’ble Supreme Court vide its order dated 7th February, 2011 directed the company to continue the payment in the same manner but to deposit the differential amount of 14 paise per unit in an Escrow account instead of ‘no lien account’ till final disposal of the appeal. Accordingly, the Company paid the balance 14 paise per unit in an escrow account (noninterest bearing current account) with State Bank of India from January, 2011. Subsequently, based on a direction received on 9th January, 2015 from Govt. of Odisha, the Company kept the Escrow amount in an interest bearing fixed deposit linked to escrow current account with effect from 21st March, 2015.

On the principles of prudence, the Company fully provided for Electricity Duty @ 20 paise per unit in it’s books of account, on accrual basis till September,2015. Subsequent to the Department of Energy, Govt. of Odisha''s Notification No. 8309 dated 1st October 2015, wherein the amended rate of Electricity Duty for a Captive Power Generator was specified at par with that of a Licensee, the Company is paying the applicable duty @ 30 paise per unit to the Govt. of Odisha with effect from October, 2015.

17. With reference to a Right of Recompense (‘ROR’) dispute with Andhra Bank, the Hon’ble Orissa High Court, based on Company’s application, vide it’s Order dated 18th March, 2015, directed the Company and Andhra Bank to resolve the issues relating to the amount of recompense payable to Andhra Bank on the basis of the principles laid down in the Order, preferably within a period of two months and thereafter the bank shall consider the issue of No Objection Certificate and vacate the charge by following it’s own procedures. To give effect to the directions of the Hon’ble High Court, the Company had initiated discussions with Andhra Bank. Subsequently, Andhra Bank has filed an appeal against the aforesaid Order dated 18th March, 2015.

The Company has paid Rs. 1.35 Crore to the bank, on the basis of the earlier ord ers passed by th e H on’ble Orissa High Court from time to time, prior to the aforesaid final order dated 18th March, 2015 and is of the opinion that the final recompense amount will not exceed the amount which has been already paid to the bank.

18. The Company had filed a petition before the Hon''ble Orissa High Court under Section 392 of the Companies Act, 1956 to modify the Scheme of Arrangement & Amalgamation and confirm the reduction of share capital by cancellation of 3,49,466 equity shares of Rs. 10/- each held by erstwhile ''ICCL Shareholders Trust''. The petition was approved by the Hon''ble High Court vide its order dated 16th March, 2011 and registered with the Registrar of Companies (ROC), Orissa on 1st April, 2011. Accordingly, the paid up equity share capital reduced from Rs. 26,32,65,190/- divided into 2,63,26,519 equity shares of Rs. 10/- each to Rs. 25,97,70,530/- divided into 2,59,77,053 equity shares of Rs. 10/- each. Subsequently, several shareholders challenged the reduction of share capital before a Division Bench of the Hon''ble High Court which, vide its judgment dated 19th July 2011, directed the Company, inter-alia, to restore the aforesaid shares to the Trust and allot it to interested shareholders. The Company then moved the Hon''ble Supreme Court which issued notice in the matter and granted interim stay on the subscription or cancellation of the said 3,49,466 shares. As such, status quo is to be maintained until further orders.

19. LEASES

Operating Lease:

The Company’s significant operating lease arrangements are in respect of premises only which are renewable at the option of both the lessor & the lessee.

20. Previous year’s figures have been rearranged/ regrouped to conform to the classification of the current year, wherever considered necessary.


Mar 31, 2015

1. Rights, preferences and restrictions in respect of each class of shares

The Company''s authorised share capital consists of two classes of shares, referred to as Equity Shares and Preference Shares, having par value of Rs. 10/- and Rs. 100/- each respectively.

Each holder of Equity Shares is entitled to one vote, when present in person on a show of hands, in case of poll, each holder of Equity Shares shall be entitled to vote in proportion to his paid up Equity Share Capital. The preferential shareholders have preferential right over equity shareholders in respect of repayment of capital and payment of dividend.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

In the event of liquidation of the Company, the holders of Equity Shares are eligible to receive the remaining assets of the Company after distribution of all the preferential amounts, in proportion to their shareholding.

2. Details of securities provided for Term-Loans (including current maturities as stated under "Other Current Liabilities") and their repayment terms :

(EMI - Equated Monthly Instalment; EQI - Equated Quarterly Instalment; UQI : Unequated Quarterly Instalment)

Term Loans from Banks :

(a) Loan of Rs. 41.10 Crore (Previous Year : Rs. 47.94 Crore) for setting up of Coal Handling Plant (CHP) at Choudwar, secured by first charge on the movable assets to be acquired out of the loan for CHP and first charge by way of mortgage on pari-passu basis on immovable properties of the Company situated at Choudwar excluding assets exclusively charged to other lenders. Repayment by 28 EQI of Rs. 2.29 Crore from October''12.

(b) Loan of Rs.12.50 Crore (PY : Rs. 37.50 Crore) for general capital expenditure, secured by first pari-passu charge on the immovable & movable assets of the Company''s Therubali & Choudwar units (excluding the fixed assets exclusively charged), both present & future. Repayment by 24 EMI of Rs. 2.08 Crore from October''13.

(c) Loan of Rs. 50.00 Crore (PY : Rs. 37.50 Crore) for general capital expenditure, secured by first pari-passu charge on fixed assets at Choudwar excluding those which are exclusively charged to other project lenders. Repayment by 35 EMIs of Rs. 1.39 Crore from April''17 and last instalment of Rs.1.35 Crore.

(d) Loan of Rs. 81.00 Crore (PY : Rs. 90.00 Crore) for general capital expenditure, secured by first pari-passu charge on fixed assets (both moveable & immovable) of the Company (both present & future) situated at Therubali other than assets exclusively charged to other lenders. Subservient charge on the current assets of the Company. Repayment by 20 EQIs from December''14.

(e) Loan of Rs. 41.76 Crore (PY : Rs. 54.38 Crore) for setting up of 30 MW Captive Power Plant (CPP) at Choudwar, secured by exclusive charge over the assets of CPP & first pari-passu charge on plot no. 43 on which CPP has been erected at Choudwar, with other term lenders. The loan is collaterally secured by second pari- passu charge on entire current assets of the Company. Repayment by 16 EQI of Rs. 2.175 Crore from June''10 and 20 EQI of Rs. 2.61 Crore from June ''14.

(f) Loan of Rs. 28.00 Crore (PY : Rs. 40.00 Crore) for general capital expenditure, secured by extension of charge over the assets of 30MW Captive Power Plant (CPP) and pari-passu charge on plot no. 43 on which CPP is erected at Choudwar, Cuttack with other term lenders. Repayment by 8 EQI of Rs. 3 Crore from June''14 and 4 EQI of Rs. 4.00 Crore from June''16.

(g) Loan of Rs. 110.00 Crore (PY : Rs. Nil) for 120 MW Power Plant at Choudwar, secured by first charge ranking pari- passu with other term lenders on the Company''s movable & immovable properties, present & future, relating to the 120 MW power plant. Repayment by 38 UQI from June''15.

(h) Loan of Rs. 100.00 Crore (PY : Rs. Nil) for 120 MW Power Plant at Choudwar, secured by first charge ranking pari-passu with other term lenders on the Company''s movable & immovable properties, present & future, relating to the 120 MW power plant. Repayment by 38 UQI from June''15.

(i) Loan of Rs. 70.00 Crore (PY : Rs. Nil) for 120 MW Power Plant at Choudwar, secured by first charge ranking pari-passu with other term lenders on the Company''s movable & immovable properties, present & future, relating to the 120 MW power plant. Repayment by 38 UQI from June''15.

(j) Loan of Rs. 100.00 Crore (PY : Rs. Nil) for 120 MW Power Plant at Choudwar, secured by first charge ranking pari-passu with other term lenders on the Company''s movable & immovable properties, present & future, relating to the 120 MW power plant. Repayment by 38 UQI from June''15.

(k) Loan of Rs. 50.00 Crore (PY : Rs. Nil) for 120 MW Power Plant at Choudwar, secured by first charge ranking pari-passu with other term lenders on the Company''s movable & immovable properties, present & future, relating to the 120 MW power plant. Repayment by 38 UQI from June''15.

(l) Loan of Rs. 1.64 Crore (PY : Rs. Nil) for setting up of Industrial Training Centre (ITC) at Sukinda, secured by mortgage of lease hold right of property situated at Khata No 100, Plot No 238(P), Mauza- Dudhjhari, Sukinda Dist- Jajpur, admeasuring 5 acres and building to be constructed thereon along with the Furniture & Fixtures, Computers and equipments to be purchased out of the loan. Repayment by 24 EQI from September''16.

(m) Loan of Rs. 9.54 Crore (PY : Rs. Nil) for Housing Project at Choudwar, secured by mortgage of residential land admeasuring 10 acres 920 decimal (475675.20 sq fts) situated at Plot No.34/78 & 34/82, Tahsil- TangiChoudwar, PS-Choudwar, Mouza-Chhatisa No.2,Cuttack, Odisha and the proposed building to be constructed. Repayment by 24 UQI from June''16.

(n) Vehicle Loan of Rs. 0.24 Crore (PY : Rs. 0.40 Crore) secured by charge on the Vehicle. Repayment by 60 EMI @ Rs. 65232/- from January''14 to December''18.

(o) Loan of Rs. 7.06 Crore (PY : Rs.15.74 Crore) for acquisition of mining assets, secured by first exclusive charge by way of hypothecation over plant & machinery of 27 MVA furnace at Choudwar. Charge on all the present and future moveable fixed assets of gas cleaning plant & briquetting plant at Therubali, low density aggregate plant and fly ash brick plant I and II at Choudwar. Repayment by 17 EQI from October''11.

(p) Loan of Rs. 54.45 Crore (PY : Rs. 74.25 Crore) for setting up of Briquetting Plant, Gas Cleaning Plant, Fly ash Brick Plant and Low Density Aggregate Plant, secured by first exclusive charge by way of hypothecation over plant & machinery of 27 MVA furnace at Choudwar and charge on all the present and future movable fixed assets of gas cleaning plant & briquetting plant at Therubali, low density aggregate plant and fly ash brick plant I and II at Choudwar. Repayment by 16 EQI from January''14.

(q) Loan of Rs. 59.07 Crore (PY : Rs. Nil) for general capital expenditure, secured by first and exclusive charge by way of hypothecation over plant & machinery of 27 MVA furnace at Choudwar. First and exclusive charge on all the present and future moveable fixed assets of gas cleaning plant & briquetting plant at Therubali, low density aggregate plant and fly ash brick plant I and II at Choudwar. Repayment by 16 EQI from February''16.

Term Loans From Others:

Loan of Rs. 7.63 Crore (PY : Rs. 11.45 Crore) for setting up of winder at Mahagiri Mines, secured by first charge on winder at Mines. Repayment by EMIs from February''13 to November''16.

Note: Term Loans from Banks amounting to Rs. 82.86 Crore (PY : Rs. 127.31 Crore) and Term Loans from Others amounting to Rs. Nil (PY: Rs. 405.77 Crore) are further secured by personal guarantees of 2 directors of the Company.

3. Working Capital Loans from banks are secured by charge over stocks, receivables & current assets. Moreover, loans amounting to Rs. 126.87 Crore (Previous Year : Rs. 73.51 Crore) are further secured by personal guarantees of 2 directors of the Company.

4. The Company has not received any memorandum from ''Suppliers''(as required to be filed by the ''Suppliers'' with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as on 31st March, 2015 as micro, small or medium enterprises. Consequently, interest paid/ payable by the Company to such ''Suppliers'' during the year is Rs. NIL (Previous Year : Rs. NIL).

5. The Company has equity investment amounting to Rs. 53.13 Crore (Previous Year Rs. 53.13 Crore) in Indmet Mining Pte Ltd (''Indmet''), a wholly-owned subsidiary incorporated in Singapore. Indmet has investment of USD 8.75 million (Rs. 54.41 Crore)[ Previous year USD 8.75 million (Rs. 52.15 Crore)] in its Indonesian subsidiary PT Sumber Rahayu Indah (''PT Sumber''). PT Sumber is holding a coal mining concession in Indonesia but due to overlapping boundary issues, the mining concession could not be operationalised till now. Indmet''s auditors in their Independent Auditors'' Report dated 14th May, 2015 for the year ended 31st March, 2015 have qualified their audit opinion by stating the following in the ''Basis of Qualified Opinion'' paragraph in their report:

"As disclosed in Note 8 to the financial statements, the subsidiary is currently inactive and awaiting for certain regulatory approval before it can commence coal mining activities. As the discussion with the relevant Indonesian Government

Authorities is ongoing, the management is of the opinion that recoverable amount cannot be ascertained with accuracy. Accordingly, the impairment assessment through value in use has not been prepared. However the management is of the opinion that the cost of the investment would be recovered once the subsidiary starts its mining operations. Accordingly, we are unable to conclude whether there is any impairment loss to the carrying value of the investment in subsidiary".

No provision is considered necessary by the Company at this stage towards any diminution in the aforesaid carrying value of it''s investment in Indmet, as the Company has invoked an agreement between the Indian and Indonesian governments for the promotion and protection of investments.

6. CONTINGENT LIABILITIES AND COMMITMENTS

(Rs. in Crore)

As at As at 31st March 31st March 2015 2014

A. Contingent Liabilities

(a) Claims against the Company not acknowledged as debts:

Government Claims (i) Income Tax (deposits made under 24.74 109.78 protest Rs. 16.47 Crore ; Previous Year Rs. 54.29 Crore [Demands in respect of the Assessement Years 2009- 10 and 2012-13 aggregating to Rs. 181.30 Crore (Previous Year Rs. Nil) pursuant to disallowances under Section 40 (a)(i) of the Income Tax Act, 1961 in respect of the import of the raw materials and spares etc. has not been considered as ''contingent liability'' as the CIT (Appeals) has granted relief to the Company on similar issue while disposing appeals for Assessement Years 2007-08, 2008-09 and 2011-12]

(ii) Customs & Central Excise 0.84 0.76 (deposits made under protest Rs. 0.19 Crore ; Previous Year Rs. 0.18 Crore)

(iii) Provisional duty bonds to customs Amount not Amount not authority pending final debonding of quantifiable quantifiable 100% EOU

(iv) Sales tax & Entry tax (deposits made under protest Rs. 6.38 Crore; 15.56 14.77 Previous Year Rs. 6.00 Crore)

(v) State Govt./Local Authority duties, levies & cess etc. disputed by the 28.49 231.31 Company

Other Claims

Legal suits filed against the Company 0.74 1.53

b) Guarantees :

Guarantee given by the Company to a 91.00 27.50 corporate on behalf of Utkal Coal Ltd, a subsidiary

(c) Other money For which the Company is contingently liable :

(i) Under the provisions of the Electricity Act, 2003, the Odisha Electricity Regulatory Commission (''OERC'') notified on 30.09.2010 the OERC (Renewable and Co-generation Purchase Obligation and its Compliance) Regulations, 2010 (''RCPO''), imposing obligation for purchase of energy from renewal sources and co-generation on, inter alia, any person consuming electricity from it''s Captive Power Plant. A few companies filed writ petitions in Orissa High Court against RCPO on the ground, inter alia, that RCPO cannot be made applicable to captive users and as an interim measure, the Hon''ble High Court granted them stay on the proceedings under RCPO. The Company was, thus, under the impression that RCPO was kept in abeyance as the same was subjudice before the jurisdictional High Court. However, a notice dated 11th November, 2014 was issued by OERC to many entities, including the Company, asking to show cause as to why penal proceedings under Section 142 of the Electricity Act, 2003 should not be initiated against the Company for ''lapses'' in complying with RCPO. On 1st March, 2015, the Company filed a Writ Petition before the Hon''ble Orissa High Court challenging, inter alia, the validity of RCPO and it''s applicability to captive users. The Hon''ble High Court passed an interim order dated 4th March, 2015 staying further proceedings pursuant to RCPO and the said interim order continues. In view of the pending writ petition, no provision has been considered necessary at this stage.

(ii) Demand notices in respect of six mines have been raised by respective Deputy Director of Mines and Mining Officers of Government of Odisha amounting to Rs. 225.14 Crore for the alleged excess extraction of minerals over the quantity permitted under the mining plan/scheme, environmental clearance or consent to operate and other statutory permissions during the period from 1993 to 2010 under Section 21(5) of Mines & Minerals (Development and Regulation) Act, 1957 (''Act''). However, Section 21(5) of the Act specifies that demand can be raised only when the minerals were extracted from the land which is occupied without lawful authority i.e. outside leasehold area. The Company is of the view that Section 21(5) of the Act is not applicable as the mining is done within the leasehold area under the supervision and approval of the State and Central Govt. Hence, the Company filed Revision Applications before Mines Tribunal, New Delhi against all such demands. Stay has been granted by the Mines Tribunal against four (out of six) of such Demand Notices, directing the State Government not to take any coercive action pursuant to the impugned demands. Hearing of the Stay Application for the remaining two notices are yet to take place before the Mines Tribunal.

7. The Hon''ble Supreme Court of India vide judgment dated 25 th August, 2014 read with its order dated 24th September, 2014 cancelled the allocation of coal blocks to various companies, including the ''Utkal C'' coal block held by Utkal Coal Ltd (''UCL''), an SPV in which the Company holds 79.2% equity. Subsequently, on 21st October, 2014 The Coal Mines (Special Provisions) Ordinance, 2014 was promulgated to facilitate, inter alia, auction of coal blocks and compensation to a prior allottee of a coal block. To give continuity to the provisions of the said Ordinance and save the actions taken thereunder, on 26th December, 2014 The Coal Mines (Special Provisions) Second Ordinance, 2014 was promulgated, which was deemed to have come into force on 21st October, 2014 and the earlier Ordinance stood repealed. Further, the Ministry of Coal issued orders dated 18th December, 2014 and 6th January, 2015 to initiate the auction process and change the end use of ''Utkal C'' from captive use (non-regulated sector) to independent power producer(regulated sector). Aggrieved by the above actions of the government, on 13 th February, 2015 UCL filed a Writ Petition before the Hon''ble High Court of Delhi challenging, inter alia, the said orders. UCL has also filed a separate Writ Petition before the Hon''ble High Court of Delhi on 23rd February, 2015 challenging the basis of valuation of compensation and the restrictive interpretation of ''Mine Infrastructure''. The arguments in both the aforesaid writ petitions have been heard by the Hon''ble High Court of Delhi and the judgments have been reserved. Pending final orders on the aforesaid writ petitions, no accounting adjustments have been made by UCL in it''s books of account and no provision is deemed necessary in these financial statements against the Company''s exposure in UCL as at 31st March, 2015 amounting to Rs. 110.88 Crore invested as equity, Rs. 146.44 Crore given as an unsecured loan and Rs. 91 Crore as guarantee to a financial institution for loan availed by UCL.

8. In view of the circumstances detailed in note 31 above and considering the effect of uncertainties as envisaged in paragraph 9 of Accounting Standard 9 on "Revenue Recognition", with effect from 1st October, 2014 the Company has postponed recognition of income from interest on unsecured loan given to UCL. Due to this, profit before tax for the year ended 31st March, 2015 is lower by Rs. 9 Crores. The interest income would be considered as revenue of the period in which it is properly recognised.

(b) Defined Benefit Plan:

The following table sets out the details of amount recognised in the financial statements in respect of employee benefit schemes:

9. As per Accounting Standard 17 on "Segment Reporting", segment information has been provided under the Notes to Consolidated Financial Statements.

(c) Disclosure in respect of Material Related Party Transactions during the year (excluding reimbursements) :

1. Purchase of raw materials and stores etc from Utkal Manufacturing and Services Ltd Rs. 9.17 Crore (Previous Year: Rs. 7.07 Crore)

2. Services received includes services from Utkal Manufacturing and Services Ltd Rs. 78.89 Crore (Previous Year : Rs. 121.61 Crore)

3. Managerial remuneration paid to Dr Bansidhar Panda Rs. 1.44 Crore(Previous Year : Rs. 1.69 Crore), Mr Baijayant Panda Rs. 1.45 Crore (Previous Year : Rs. 1.70 Crore), Mr Subhrakant Panda Rs. 1.63 Crore (Previous Year : Rs. 1.89 Crore), Mr Jayant Kumar Misra Rs. 0.80 Crore (Previous Year : Rs. 0.77 Crore) and Mr Chitta Ranjan Ray Rs. 0.63 Crore (Previous Year : Rs. 0.62 Crore)

4. Donations include amount given to Bansidhar & Ila Panda Foundation Rs. 0.73 Crore (Previous Year : Rs. 2.19 Crore)

5. Corporate Social Responsibility Expenses include amount given to Bansidhar & Ila Panda Foundation Rs. 1.23 Crore (Previous Year : Nil)

6. Lease rentals paid to IMFA Alloys Finlease Ltd Rs. 3.84 Crore (Previous Year : Rs. 3.84 Crore)

7 Interest received on loan Rs. 9.45 Crore (Previous Year : Rs. 5.10 Crore) is from Utkal Coal Ltd.

8. Investments made in Utkal Power Ltd Rs. 0.40 Crore (Previous Year : Nil) and Utkal Coal Ltd Rs. Nil (Previous Year : Rs. 1.96 Crore)

9. Loan given to Utkal Coal Ltd Rs. 27.20 Crore (Previous Year : Rs. 203.05 Crore)

10 Loan repayment received from Utkal Coal Ltd Rs. 66.30 Crore (Previous Year : Rs. 17.52 Crore)

11 Guarantee provided to Financial Institution for loan availed by Utkal Coal Ltd Rs. 91.00 Crore (Previous Year : Rs. 27.50 Crore)

12 Guarantee received from Indmet Mining Pte Ltd Rs. 7.06 Crore (Previous Year : Rs. 15.74 Crore)

10. Disputes between the Company and Grid Corporation of Orissa Ltd ("GRIDCO") relating to methodology for billing of power, wheeling of power, back-up power drawn during period of grid disturbance etc. were settled in favour of the Company vide a unanimous award of an Arbitral Tribunal dated 23rd March, 2008, by virtue of which GRIDCO was directed to pay Rs. 57.07 lakh along with interest and Rs. 30 lakh towards costs. Subsequently, GRIDCO filed a petition before the District Judge, Bhubaneswar objecting the award and obtained an interim stay on the operation of the said award. The Company filed it''s objection thereto on 19 th February, 2009 and the matter is pending for hearing.

The Company has not given effect of the aforesaid award in it''s books of account on the principles of prudence, as the matter is sub-judice.

11. In the arbitration proceedings relating to a party''s conversion contract with the erstwhile Indian Charge Chrome Ltd ("ICCL", amalgamated with the Company w.e.f 1st April, 2005 pursuant to Hon''ble Orissa High Court''s order dated 13th October, 2006), an interim award was passed on 9th January, 2003 upholding issues in ICCL''s favour, without quantification of the amount payable to ICCL towards it''s various claims of losses/damages, which is to be determined by the appointment of a Chartered Accountant or other expert. The Party filed a petition before the Hon''ble High Court at Calcutta on 4th February, 2004 praying to set aside the interim award and the Company filed objection thereto The matter is pending before the Hon''ble High Court at Calcutta.

12. Pursuant to the order of Hon''ble Orissa High Court dated 21st April 2005, the Company was paying electricity duty at 6 paise per unit to the Govt. of Orissa and keeping the differential duty of 14 paise per unit in a separate ''no lien account'' till final disposal of it''s writ petition. The Hon''ble Orissa High Court disposed the said writ petition vide judgment dated 6 th May, 2010 by directing the Company to deposit the differential amount of duty lying in no lien account with the State Exchequer. The Company preferred an appeal before the Hon''ble Supreme Court of India against the judgment of Orissa High Court. The Hon''ble Supreme Court vide its order dated 7th February, 2011 directed the company to continue the payment in the same manner but to deposit the differential amount of 14 paise per unit in an Escrow account instead of ''no lien account'' till final disposal of the appeal. Accordingly, the Company is paying the balance 14 paise per unit in an escrow account (non-interest bearing current account) with State Bank of India from January, 2011 onwards. Subsequently, based on a direction received on 9th January 2015 from Govt. of Odisha, the Company is keeping the Escrow amount in an interest bearing fixed deposit linked to escrow current account with effect from 21st March, 2015.

However, on the principles of prudence, the Company is fully providing for Electricity Duty @ 20 paise per unit in it''s books of account, on accrual basis.

13. With reference to a Right of Recompense (''ROR'') dispute with Andhra Bank, the Hon''ble Orissa High Court, based on Company''s application, vide it''s Order dated 18th March, 2015, directed the Company and Andhra Bank to resolve the issues relating to the amount of recompense payable to Andhra Bank on the basis of the principles laid down in the Order, preferably within a period of two months and there after the bank shall consider the issue of No Objection Certificate and vacate the charge by following it''s own procedures. To give effect to the directions of the Hon''ble High Court, the Company has initiated discussions with Andhra Bank.

The Company has paid Rs. 1.35 Crore to the bank, on the basis of the earlier orders passed by the Hon''ble Orissa High Court from time to time, prior to the aforesaid final order dated 18th March, 2015 and is of the opinion that the final recompense amount will not exceed the amount which has been already paid to the bank against recompense amount.

14. The Company had filed a petition before the Hon''ble Orissa High Court under Section 392 of the Companies Act, 1956 to modify the Scheme of Arrangement & Amalgamation and confirm the reduction of share capital by cancellation of 3,49,466 equity shares of Rs. 10/- each held by erstwhile ''ICCL Shareholders Trust''. The petition was approved by the Hon''ble High Court vide its order dated 16th March, 2011 and registered with the Registrar of Companies (ROC), Orissa on 1st April, 2011. Accordingly, the paid up equity share capital reduced from Rs. 26,32,65,190/- divided into 2,63,26,519 equity shares of Rs. 10/- each to Rs. 25,97,70,530/- divided into 2,59,77,053 equity shares of Rs. 10/- each. Subsequently, several shareholders challenged the reduction of share capital before a Division Bench of the Hon''ble High Court which, vide its judgement dated 19 th July 2011, directed the Company, inter-alia, to restore the aforesaid shares to the Trust and allot it to interested shareholders. The Company then moved the Hon''ble Supreme Court which issued notice in the matter and granted interim stay on the subscription or cancellation of the said 3,49,466 shares. As such, status quo is to be maintained until further orders.

15. Prior Period Income relates to adjustment for interest on Income-Tax refunds.

16. In accordance with the requirements of Schedule II to the Companies Act, 2013, the Company reassessed the remaining useful life of tangible fixed assets with effect from 1st April, 2014. Accordingly, the carrying values as on that date (net of residual values) are depreciated over their assessed remaining useful lives. As a result of this change, the depreciation charge for the year ended 31st March, 2015 is lower by Rs. 28.67 Crore. Further, as on 1st April, 2014, the carrying amount of assets (after retaining the residual value) amounting to Rs. 5.22 Crore, where remaining useful life is nil as on that date, has been recognised in the Statement of Profit and Loss as an exceptional item.

17. Previous year''s figures have been rearranged/ regrouped to conform to the classification of the current year, wherever considered necessary.


Mar 31, 2013

1.1 Disputes with Gridco were settled in favour of the Company vide a unanimous award of the Arbitration Panel dated 23rd March 2008. Subsequently, Gridco filed a petition before the District Judge, Bhubaneswar and obtained an interim stay on the operation of the said award. The Company has filed its objection in the matter.

1.2 In the arbitration proceedings relating to Tata Steel reneging on a conversion contract with the Company, an interim order was passed in January 2003 upholding all issues in the Company''s favour without however quantifying the amount to be paid as damages by Tata Steel. The matter is now pending before the Hon''ble High Court of Kolkata.

1.3 An amount of Rs. 11.39 Crores withheld by Sundry debtors, the effect of which on the current year''s account cannot be ascertained pending settlement thereof.

1.4 Pursuant to the order of Hon''ble High Court of Orissa dated 21st April 2005 the Company was paying electricity duty at 6 paise per unit to the Govt of Orissa and keeping the differential duty of 14 paise per unit in a separate ''no lien account'' till final disposal of the writ petition. The Hon''ble High Court of Orissa disposed the said writ petition vide judgment dated 6th May 2010 by directing the Company to deposit the differential duty amount lying in no lien account with the State Exchequer. Hence the Company preferred an appeal before the Hon''ble Supreme Court of India. The Hon''ble Supreme Court vide its order dated 7th February 2011 directed the Company to continue the payment in the same manner but to deposit the differential amount of 14 paise per unit in an Escrow account instead of no lien account till final disposal of the appeal. Accordingly, the Company is paying the balance 14 paise per unit in an escrow account with State Bank of India from February 2011 onwards.

1.5 Pursuant to a Scheme of Arrangement and Amalgamation sanctioned by Hon''ble Orissa High Court vide its order dated 13th October 2006 Indian Charge Chrome Limited ("ICCL") a group Company was amalgamated with the Company and debts of erstwhile ICCL became the liability of the Company. The Company has paid the entire settlement amount by accelerating the payments to all the secured creditors. However Andhra Bank, vide its notice dated 3rd April 2010, alleged that the right of recompense payable by the Company is Rs. 58.09 Crores and called upon the Company to pay the said amount within 15 days failing which threatened to institute recovery proceedings before DRT, Cuttack. The Company thereafter filed an application under section 392 of the Companies Act before the Hon''ble Orissa High Court, in respect of the claim of Andhra Bank towards recompense amount etc. and the Hon''ble Orissa High Court vide its order dated 9th April 2010 directed that no coercive action shall be taken against the Company pursuant to the demand notice. The Company has been advised that the case of Andhra Bank has no merit.

1.6 The Company had filed a petition before the Hon''ble Orissa High Court under Section 392 of the Companies Act, 1956 to modify the Scheme of Arrangement & Amalgamation and confirm the reduction of share capital by cancellation of 3,49,466 equity shares of Rs. 10/- each held by ''Erstwhile ICCL Shareholders Trust''. The petition was approved by the Hon''ble High Court vide its order dated 16th March 2011 and registered with the Registrar of Companies (ROC), Orissa on 1st April 2011. Accordingly, the paid up equity share capital reduced from Rs. 26,32,65,190/- divided into 2,63,26,519 equity shares of Rs. 10/- each to Rs. 25,97,70,530/- divided into 2,59,77,053 equity shares of Rs. 10/- each. Subsequently, several shareholders challenged the reduction of share capital before a Division Bench of the Hon''ble High Court which vide its judgement dated 19th July 2011 directed the Company inter-alia to restore the aforesaid shares to the Trust and allot it to interested shareholders. The Company then moved to the Hon''ble Supreme Court which issued notice in the matter and granted interim stay on the subscription or cancellation of the said 3,49,466 shares. As such, status quo is to be maintained until further orders.

1.7 All the formalities regarding voluntary winding up of Indmet Mauritius Limited has been completed under the Law of Mauritius including no objection from all the regulatory authorities and the swearing in of the affidavit by the official liquidator for the same at Supreme court was made on 30th January 2013 . Consequently all the shares of Indmet Mining (Pte) Ltd. held by Indmet Mauritius Ltd. has been trasferred to the Company at par value during the year. Accordingly Indmet Mining (Pte) Ltd. (earlier 100% step down subsidiary) has become wholly owned subsidiary of the Company. Hence we have not considered it as subsidiary for the consolidated accounts as on 31st March 2013.

1.8 Provision for Income Tax for the current year and for the assessments completed but pending under appeals have been made to the extent considered necessary by the management.

1.9 The Company has been providing employee benefits as per Accounting Standard - 15 based on the actuarial valuation under the projected unit credit method.

1.10 Segment Reporting

Segments are being identified on the basis of dominant source and nature of risks and returns. Industry segments at the Company are primarily Ferro Alloys, Power & Chrome Ore Mining. The segments which are not required to be reported are grouped under ''Others''. Income, direct expenses and fixed assets in relation to segments are categorised based on items that are individually identifiable to that segment. The remainder are separately grouped as "Unallocated".

1.11 Related Party Disclosures

Disclosures as required by the Accounting Standard - 18 "Related Party Disclosures" are given below:

(a) List of related parties:

Subsidiaries:

1 Indian Metals & Carbide Ltd.

2 Utkal Power Ltd.

3 Utkal Coal Ltd.

4 IMFA Alloys Finlease Ltd.

5 Utkal Green Energy Ltd.

6 Indmet Mining ( Pte ) Ltd. , Singapore

7 PT. Sumber Rahayu Indah,Indonesia Associates:

1 B Panda & Company Pvt. Ltd.

2 Madhuban Investment Pvt. Ltd.

3 Barabati Investment & Trading Company Pvt. Ltd.

4 K B Investment Pvt. Ltd.

5 Paramita Investment & Trading Company Pvt. Ltd.

6 Panda Investment Pvt. Ltd.

7 Utkal Charitable Trust

8 Indian Metals Public Charitable Trust

9 Utkal Manufacturing & Services Ltd.

10 Utkal Housing and Infrastructure Development Ltd.

11 B Panda Trust

12 Utkal Real Estate Pvt. Ltd.

13 B.P.Solar Pvt. Ltd.

14 Esquire Realtors Pvt. Ltd.

15 Bansidhar & Ila Panda Foundation

16 Kishangarh Enviromental Development Action Pvt. Ltd.

17 BP Developers Pvt. Ltd.

18 Barabati Realtors Pvt. Ltd.

19 KEDA Enterprise Pvt. Ltd.

20 Ortel communications Ltd.

21 Metro Skynet Ltd.

22 Rutayan Ila Trust

23 Shaisah Foundation

24 Goal Oriented Advisory & Legal Services Pvt. Ltd.

25 Paramita Realtors Pvt. Ltd.

26 Odisha Television Ltd.

27 Barunei Farm & Nature Resorts Pvt. Ltd.

28 Starone Projects Pvt. Ltd.

29 Orissa Coal & Services Pvt. Ltd.

30 INDMET Commodities Pvt. Ltd.

31 Palios Corporation

32 Commercial City Centre Pvt. Ltd.

33 Carolina Consulting Pvt. Ltd.

34 Kalinga Airways Pvt. Ltd.

35 Rairae Realtors Pvt. Ltd.

36 Odisha Infratech (P) Ltd.

37 Orissa Telefilms (P) Ltd.

38 TarangBroadcastingCompanyLtd.

39 Ortel Dayitwa CharitableTrust

40 Raila Enterprises Pvt. Ltd.

41 M S Realtors Pvt. Ltd.

42 Awaaz Foundation

43 Span Resources India (P) Ltd.

44 Nilanchal Aqua Farms Pvt. Ltd.

45 RoumayneFoundation

46 Reva Foundation

47 Spark Mineral & Services LLP

Key Management Personnel and Relatives:

- DrB Panda

- Mr Baijayant Panda

- Mrs Jagi Mangat Panda

- Mr Subhrakant Panda

- Mrs Shaifalika Panda

- Mrs Paramita Mahapatra

- Mr Rajen Mahapatra

- Mrs Nivedita Ganapathi

- Mr S K Ganapathi

- Mr J K Misra

- Mr C R Ray

1.12 Lease

Operating Lease:

The Company''s significant operating leasing arrangements are in respect of premises only which are renewable at the option of both the lessor & the lessee. The aggregate lease rentals payable are charged as ''rent'' and the aggregate lease rentals receivable are credited as ''rent realised'' in the financial statements.

1.13 Previous year''s figures have been regrouped/recast wherever considered necessary.

1.14 The Company has sold its 30 MVA Furnace and other related assets to its wholly owned subsidiary IMFA Alloys Finlease Limited (IAFL) at fair value. Thereafter IAFL transferred the same assets back to the Company under a Finance Lease . The difference between the book value and the fair value including the sales tax impact amounting to Rs. 11.99 Crores has been shown as exceptional items. Subsequently in pursuance to a Joint venture & shareholders agreement between the Company and Posco,South Korea ,Posco acquired 24% of Shares of IAFL and balance 76% shares remained with the Company.


Mar 31, 2010

1. Demerger of Ferro Alloys Division (FAD) of Utkal Manufacturing & Services Ltd (UMSL)

In accordance with the terms of the Scheme of Arrangement as sanctioned by the Honble High Court of Orissa, Cuttack and the Honble High Court of Andhra Pradesh vide their orders dated 24.11.2009 and 06.11.2009 respectively, the entire Ferro Alloys Division of Utkal Manufacturing & Services Limited have been transferred to and vested in the Company with effect from 1st April 2009, which is the Appointed Date under the Scheme.

The share exchange ratio for the demerger has been determined by SSPA & Co. Chartered Accountants. Based on their recommendation 28 (Twenty eight) fully paid-up equity share of Rs.10 (Ten) each of the Company have been issued and allotted for every 9 (Nine) fully paid-up equity share of Rs.10 (Ten) each held by the equity shareholders of UMSL.

As per the Scheme the excess of Rs 31.46 crores being the aggregate value of assets over the aggregate value of liabilities taken over by the company after adjusting the face value of equity shares issued has been transferred to General Reserve.

2. The Arbitral Tribunal which went into the various disputes between the Company and Gridco unanimously decided in favour of the Company vide its award dated 23rd March 2008. However, Gridco subsequently filed a petition before the Honble District Judge, Bhubaneswar for setting aside the same and obtained an ex-parte interim order staying the operation of the award. Since the Company has filed an objection and is confident of the ultimate outcome being in its favour, no provision has been deemed necessary for the counter-claim of Rs 247.35 crores by Gridco.

3. In the arbitration proceedings relating to Tata Steel reneging on a conversion contract with the Company, an interim order was passed in January 2003 upholding all issues in the Companys favour without however quantifying the amount to be paid as damages by Tata Steel. The matter is now pending before the Honble High Court of Kolkata.

4. Sundry Debtors include withheld amount of Rs 1.50 crores by GRIDCO (formerly OSEB) and Rs 9.89 crores by Tata Steel pending settlement of their disputes.

5. The Company has been calculating and paying electricity duty on a provisional basis at the rate of 12 paise per unit. However, the Government of Orissa has been demanding such duty at the rate of 20 paise per unit. The difference up to 31st March, 2005 aggregating to Rs 26.66 crores has been fully provided for in the accounts. However, the Company received a notice dated 10th December, 2004 demanding a sum of Rs 43.59 crores up to 30th October, 2004 towards electricity duty worked out at 20 paise per unit inclusive of interest @ 18% per annum after appropriating the provisional payments made by the Company towards interest and thereafter towards principal. The Company challenged the said demand and refuted liability to pay interest and filed a petition before the Honble High Court of Orissa challenging the notice issued by the said authority. The Honble High Court directed payment of electricity duty at 6 paise per unit to the Govt of Orissa and to keep the differential duty of 14 paise per unit in a separate no lien account1 till the case is further heard and decided. Accordingly, the Company is paying electricity duty at 6 paise per unit effective 1st April, 2005 and maintaining the balance 14 paise per unit in a no lien account with State Bank of India. In as much as the Company has paid the electricity duty at higher rates on provisional basis well before the due date, the question of payment of interest does not arise and hence no additional provision is considered necessary.

6. Pursuant to a Scheme of Arrangement, Amalgamation and Reduction of Share Capital sanctioned by Honble Orissa High Court vide its order dated 13.10.2006 a group company of the Company Indian Charge Chrome Limited ("ICCL") was amalgamated with the Company. Under the said Scheme debts of all the secured creditors of erstwhile ICCL were settled and rescheduled and the Settlement Amount became the liability of the Company under the Scheme consequent upon amalgamation of ICCL into the Company. The Company has paid the entire settlement amount by accelerating the payments to all the secured creditors except Punjab National Bank. However, one of the secured creditors namely Canara Bank has filed an Recovery Petition Case No. 15 of 2007 before Debt Recover Tribunal, Cuttack ("DRT") for recovery of Rs 93.01crores being the original amount due to it alleging breach of certain terms of the settlement by the Company essentially in payment of recompense amount payable to Canara Bank under the Scheme. The Company thereafter filed an application under Section 392 of the Companies Act before the Honble Orissa High Court, inter-alia, for clarification/modification to the effect that the contention of the Canara Bank is not tenable. The Honble Orissa High Court vide its order dated 14.05.2009 restrained Canara Bank from pursuing any further its aforesaid RP Case No. 15 of 2007 before DRT. The said application was heard by the Honble Orissa High Court and its order thereon was reserved on 13.01.2010. The Company has been advised that the case of Canara Bank has no merit.

7. Provisions for Income Tax liability for the assessments completed which are pending under appeals and for the current year have been made to the extent considered necessary by the management.

8. The Company has been providing employee benefits as per Accounting Standard - 15 based on the actuarial valuation under the projected unit credit method.

9. Segment Reporting

Segments are being identified on the basis of dominant source and nature of risks and returns. Industry segments at the company are primarily Ferro Alloys, Power & Chrome Ore mining.

10. Related Party Disclosures

Disclosures as required by the Accounting Standard - 18 "Related Party Disclosures" are given below: (a) List of related parties

Subsidiaries

1. Indian Metals & Carbide Limited 2. Utkal Power Limited 3. Utkal Coal Ltd 4. IMFA Alloys Ltd

Associates

1. B Panda & Company Private Ltd 2. Madhuban Investment Private Ltd 3. Barabati Investment & Trading Company Private Ltd 4. KB Investment Private Ltd 5. Paramita Investment & Trading Company Private Ltd 6. Panda Investment Ltd 7. Utkal Charitable Trust 8. Indian Metals Public Charitable Trust 9. Utkal Manufacturing & Services Ltd 10. Utkal Housing and Infrastructure Development Ltd 11. B Panda Trust

Key Management Personnel and Relatives

1. DrB. Panda 2. Mr Baijayant Panda 3. Mrs Jagi Mangat Panda 4. Mr Subhrakant Panda 5. Mrs Shaifalika Panda 6. Mrs Paramita Mahapatra 7. Mr Rajen Mahapatra 8. Mr J. K. Misra

12. Lease

The Companys significant leasing arrangements are in respect of operating leases for premises only which are renewable at the option of both the lessor & the lessee. The aggregate lease rentals payable are charged as rent and the aggregate lease rentals receivable are credited as rent realised in the financial statements.

15. Micro, Small and Medium Enterprises Development Act

The Company has not received intimation from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006.Consequently the amount paid/payable to these parties during the year is nil.

17. The newly incorporated wholly owned Subsidiary Co. IMFA Alloys Limited has not been considered for consolidation, as the duration of its financial year ending on 31.03.2010 is less than the duration of the financial year of the company with reference to Sec 212(2)(d)of the Companies Act 1956. As such the particulars in respect of the Subsidiary Co. pursuant to Sec 212(1) of the Companies Act 1956 is not appended to the Balance Sheet.

18. Previous years figures have been regrouped/recast wherever considered necessary. 19.Schedule A to 0 form integral part of the account and have been duly authenticated.

 
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