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Notes to Accounts of Jai Balaji Industries Ltd.

Mar 31, 2015

1 General Information

Jai Balaji Industries Limited (the Company) is a public limited Company domiciled in India and is listed on the Bombay Stock Exchange[BSE], National Stock Exchange[NSE] and the Calcutta Stock Exchange[CSE]. The Company is engaged in the manufacture and sale of steel and allied products.

(b) Terms/rights attached to equity shares

The Company has only one class of ordinary shares (equity shares) having at par value of Rs. 10/- each. Each shareholder of ordinary shares (equity shareholders) is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing annual general meeting except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distributions of all preferential amounts, in the proportions to their share holdings.

(c) Lock-in- of Shares

The Equity shares are alloted pursuant to part conversion of warrants issued to promoter group companies and are under lock-in for a period of one year from the date of allotment (29th May, 2014).

1) Rupee Loan from banks and Financial Institution (except to the extent stated in point no 2 below)

a) Rupee Term Loan from banks and financial institution are secured by pari- passu 1st charge over the entire fixed assets (both present and future) and 2nd charge over the entire current assets (both present and future) of the Company's units at Ranigunge and Durgapur in the state of West Bengal and Durg in the state of Chattisgarh.

The above loan are further secured as follows.

(i) Personal Guarantees of Promoter Directors of the Company.

(ii) Pledge of equity shares of the Company held by the promoters

b) Rupee Term Loan from banks and financial institution carry interest as follows:

(i) term loan and working capital term loan aggregating Rs. 149168.22 lacs at base rate of individual lenders plus spread, where spread is computed as difference between 11.75% p.a. and base rate of the individual lenders as on 16th June, 2012.

(ii) funded interest term loan aggregating Rs. 18713.27 lacs at base rate of lead banker (UCO Bank).

(iii) Viability Gap Term Loan(VGTL) aggregating to Rs. 47318.06 lacs at 30bps over base rate of the leader bank.

2) Rupee Term Loan from a Financial Institution aggregating Rs. 2171.59 lacs carry interest in the range of 14.50% - 15% p.a. and is for repayment.The loan is secured personal gurantees of certain promoter directors and 100% shares of its subsidiary company.

3) Unsecured loan from bodies corporate has been received from a promoter group company as per the CDR scheme.

4) Interest free loan has been received from promoter group companies as per the term of sanction of corporate loan by the consortium after the CDR Scheme.

Cash Credit facilities from banks are secured by pari- passu 1st charge over the entire current assets (both present and future) and 2nd charge over the entire fixed assets (both present and future) of the Company's units at Ranigunge and Durgapur in the state of West Bengal and Durg in the state of Chattisgarh.

The above facilities are further secured as follows.

(i) Personal Guarantees of Promoter Directors of the Company.

(ii) Pledge of equity shares of the Company held by the promoters

5. Contingent liabilities not provided for: (Rs. in lacs)

As at As at March 31, 2015 March 31, 2014

a) Claims against the Company not acknowledged as debts

i) Excise and Service Tax Demands under dispute/appeal 13,833.11 11,320.16

ii) Sales Tax/VAT matters under dispute/appeal 2,129.49 13,930.47

iii) Income Tax matters under dispute/appeal 6.85 6.85

b) Letters of Credit, Bills discounted and Bank Guarantees outstanding 19,843.00 23,177.35

c) Custom Duty on Import of Equipment and spare parts 3,929.72 4,380.00 under EPCG Scheme

d) Guarantees and Counter guarantees given by the Company for 5,045.00 5,045.00 loans obtained by Subsidiary/other companies

e) Guarantees given for Joint Venture Companies 1,412.46 1,412.46

6. Estimated amount of contracts remaining to be executed on 1,245.05 1,245.05 Capital Account and not provided for

[Net of Advances Rs. 5,705.73 lacs (Rs. 5,705.73 lacs)]

Proportionate amount of pending capital commitments on account of Joint Venture Companies is Rs. Nil excluding one Joint Venture Company [(Rs.0.64 lacs (March 31, 2014)] as at March 31, 2015.

7 In respect of an electricity supply matter where the Electricity Supplier has demanded enhanced charges, the matter was challenged by the Company at the Appellate Tribunal for Electricity ("the tribunal"). The Tribunal vide its order dated May 10, 2010 dismissed the appeal of the Supplier and directed to implement the tariff as determined by the Central Electricity Regulatory Commission vide its Order dated August 6, 2009. The Supplier has preferred an appeal with Hon'ble Supreme Court, pending finalisation of the outcome of the matter, the liabilities for the electricity charges are accounted for based on provisional bills provided by the Supplier.

8 Subsequently, on 4th July, 2013 the company alloted 10,000,000 convertible warrants as per SEBI(Issue of Capital and Disclosure Requirements) Regulations, 2009 to two promoter group companies @ Rs.50 per warrant each convertible into one equity share of the company of 10 each at a price of Rs.50/- each(including premium of Rs.40/-). Out of the said 10,000,000 warrants, 3,495,000 warrants were converted into equity shares on 5th August, 2013 and balance 6,505,000 warrants were converted into equity shares on 29th May, 2014.

9 The Company had applied for restructuring of its debts, under the Corporate Debt Restructuring (CDR) mechanism. The CDR Empowered Group approved the restructuring on 24th August, 2012 and the CDR Cell issued the Letter of Approval (LOA) on 20th September,2012. The Master Restructuring Agreement (MRA) incorporating the terms of the LOA was signed with the lenders on 28th September,2012 supplementary MRA was executed on 18.01.2013. The Company has also created security as per the Master Restructuring Agreement.

10. The accumulated losses of the Company as at the end of financial year 2014-15 are in exces of the entire net worth of the Company as on that date. However in view of the ongoing restructuring by the secured lenders and other creative action plans being envisaged by the management, the management is hopeful of an early recovery. As such the accounts for the year have been prepared on a going concern basis.

11 Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than The Provisions of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Note:

i) The Company expects to contribute Rs. 459.16 lacs (Rs. 350.87 lacs) to Gratuity Fund in 2015-16.

ii) 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. The above information is certified by the Actuary.

iii) The management has relied on the overall actuarial valuation conducted by the actuary.

*Apart from the above the Company has interest in one more Joint Venture Entity, namely, M/s Andal East Coal Company Pvt Ltd, in which the Company is holding 32.79% equity shares. The same has been reported under note no. 11(Investment in Joint Venture Companies). However the Company believes that it is inappropriate to follow the principle of proportionate consolidation of assets and liabilities to the extent of Company's Interest in the said Joint Venture Company pursuant to Accounting Standard 27.

(b) Pursuant to the Order the Hon'ble Supreme Court of India dated 24th September, 2014 regarding cancellation of number of coal blocks allotted to various entities which includes two coal blocks under development allotted to the company jointly with others by the Ministry of Coal, Government of India. Subsequently the Government of India issued second ordinance on 26th December, 2014 for implementing the order of the Hon'ble Supreme Court and fixation of compensation etc. These mines will be allotted to other bidders in the e-auction by the Ministry of Coal, Government of India. Subject to the above, no adjustment have been made in the value of the investments in and Loans & Advances to the Joint Ventures and Associates for the above mentioned mining assets as the value of the compensation to be received can not be determined at this stage. The losses/gains, if any on account of it would be recognised as and when determined.

12. Figures in brackets represent previous financial year's figures, which have been rearranged / regrouped wherever necessary to conform to this year's classification.


Mar 31, 2014

General Information

Jai Balaji Industries Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India (Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange). The Company is engaged in the manufacture and sale of steel and allied products.

Terms/rights attached to equity shares

The Company has only one class of ordinary shares (equity shares) having at par value of Rs. 10/- each. Each shareholder of ordinary shares (equity shareholders) is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the share holders in the ensuing annual general meeting except in the case of interim dividend . In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distributions of all preferential amounts, in the proportions to their share holdings.

Lock - in of shares

The Equity shares are allotted pursuant to part conversion of warrants issued to promoter group companies and are under lock-in for a period of one year from the date of allotment (5th August, 2013).

Money received against share warrants:

On 4th July,2013 the company alloted 10,000,000 convertible warrants at a price of Rs. 50/- per warrant,which was a price greater than the price determined as per clause 76(1) of Chapter VII of SEBI(ICDR) Regulations,2009 to two Promoter group companies ,viz M/s Enfield Suppliers Ltd and M/s Hari Management Limited on a preferential basis on such terms and conditions as contained in Special Resolution passed by the company at its Annual General Meeting held on 18th December, 2012.Each warrant was convertible into one equity share of Rs. 10/- each within 18 months from the date of such issue at the option of the Allottees.

On 5th August,2013 the said warrants were partly converted into 3,495,000 equity shares of the Company, the balance 6,505,000 warrants shall be converted in due course subject to application for the same being received from the allotee.

Long Term Borrowings

1) Rupee Loan from banks and Financial Institution (except to the extent stated in point no 2 below)

a) Rupee Term Loan from banks and financial institution are secured by pari- passu 1st charge over the entire fixed assets (both present and future) and 2nd charge over the entire current assets ( both present and future) of the Company''s units at Ranigunge and Durgapur in the state of West Bengal and Durg in the state of Chattisgarh. The above loan are further secured as follows.

(i) Personal Guarantees of Promoter Directors of the Company.

(ii) Corporate Guarantee of M/s Shri Marutaye Balaji Steels Limited, a promoter group company.

(iii) Pledge of 100% of the promoters share of M/s. Shri Marutaye Balaji Steels Limited.

(iv) Pledge of equity shares of the Company held by the promoters.

b) Rupee Term Loan from banks and financial institution carry interest as follows:

(i) term loan and working capital term loan aggregating Rs. 160704.33 lacs at base rate of individual lenders plus spread, where spread is computed as difference between 11.75% p.a. and base rate of the individual lenders as on 16th June 2012.

(ii) funded interest term loan aggregating Rs. 20022.86 lacs at base rate of lead banker (UCO Bank).

2) Rupee Term Loan from a Financial Institution aggregating Rs. 3921.58 lacs carry interest in the range of 14.50% - 15% p.a. and is repayable in 4 equal quarterly installments starting from April, 2014. The loan is secured by Bank Guarantee , pledge of certain promoter''s shareholdings in the Company and personal guarantees of certain promoter directors.

3) Rupee Term Loan from others carry interest in the range of 13.65% - 14% p.a. and is repayable in 34 monthly installments starting from August 2011. The loan is secured by exclusive charge over the assets acquired under respective loan agreements and personal guarantee of certain promoter directors of the Company.

4) Deferred Payment Liabilities carry interest rate of 9.40% to 10.43% and are repayable in 36 / 42 equal monthly installments from the date of disbursement of the loan amounts. These loans are secured by hypothecation of respective assets acquired there from.

5) Sales tax loan from Government of Chattisgarh is interest free and is repayable in 12 yearly installments starting from 31st March, 2002

6) Interest free loan has been received from a promoter group company as per the CDR scheme.

Short Term Borrowings

Cash Credit facilities from banks are secured by pari- passu 1st charge over the entire current assets (both present and future) and 2nd charge over the entire fixed assets (both present and future) of the Company''s units at Ranigunge and Durgapur in the state of West Bengal and Durg in the state of Chattisgarh.

The above facilities are further secured as follows.

(i) Personal Guarantees of Promoter Directors of the Company.

(ii) Corporate Guarantee of M/s Shri Marutaye Balaji Steels Limited, a promoter group company.

(iii) Pledge of 100% of the promoters share of M/s. Shri Marutaye Balaji Steels Limited.

(iv) Pledge of equity shares of the Company held by the promoters.

Contingent liabilities not provided for: (Rs. in lacs)

As at As at March 31, 2014 March 31, 2013

a) Claims against the Company not acknowledged as debts

i) Excise and Service Tax Demands 11,320.16 5,880.10 under dispute/appeal

ii) Sales Tax/VAT matters under 13,930.47 6,736.99 dispute/appeal

iii) Income Tax matters under 6.85 - dispute/appeal

b) Letters of Credit, Bills discounted 23,177.35 11,128.48 and Bank Guarantees outstanding

c) Custom Duty on Import of Equipment 4,380.00 2,468.83 and spare parts under EPCG Scheme

d) Guarantees and Counter guarantees given 5,045.00 7,180.00 by the Company for loans obtained by Subsidiary/other companies

e) Guarantee given for Joint Venture Companies 1,412.46 1,412.46

Estimated amount of contracts remaining to 1,245.05 1,545.89 be executed on Capital Account and not provided for

[Net of Advances Rs. 5,705.73 lacs (Rs. 5,801.19 lacs)]

Proportionate amount of pending capital commitments on account of Joint Venture Companies is Rs. 0.64 lacs excluding one Joint Venture Company [(Rs. 9.98 lacs (March 31, 2013)] as at March 31, 2014.

In respect of an electricity supply matter where the Electricity Supplier has demanded enhanced charges, the matter was challenged by the Company at the Appellate Tribunal for Electricity ("the tribunal"). The Tribunal vide its order dated May 10, 2010 dismissed the appeal of the Supplier and directed to implement the tariff as determined by the Central Electricity Regulatory Commission vide its Order dated August 6, 2009. The Supplier has preferred an appeal with Hon''ble Supreme Court, pending finalisation of the outcome of the matter, the liabilities for the electricity charges are accounted for based on provisional bills provided by the Supplier.

During the previous year the Corporate Debt Restructuring (CDR) Cell through its Empowered Group has approved a debt restructuring scheme for the Company which provides for revision in interest rates,deferment of repayment of term loans, conversion of interest into Funded Interest term loan and additional infusion of Rs. 5000.00 lacs into the Company.

Subsequently, on 4th July, 2013 the company alloted 10,000,000 convertible warrants as per SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 to two promoter group companies @ Rs. 50 per warrant each convertible into one equity share of the company of Rs. 10 each at a price of Rs. 50/- each(including premium of Rs. 40/-). Out of the said 10,000,000 warrants, 3,495,000 warrants were converted into equity shares on 5th August, 2013.

During the year the CDR Scheme was revised by the CDR cell which provides for revision in working capital limits and term loan limits and provision of additional security and additional funds from the promoter group companies.

Necessary adjustments in the books of accounts have been made to reflect the impact of the aforesaid restructuring scheme.

Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than The Provisions of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Notes:

i) The Company expects to contribute Rs. 350.87 lacs (Rs. 528.64 lacs) to Gratuity Fund in 2014-15.

ii) 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. The above information is certified by the Actuary.

iii) The management has relied on the overall actuarial valuation conducted by the actuary.

Related Party Disclosures

a. Name of Related Parties

Subsidiary Companies Nilachal Iron & Power Limited (NIPL) Jai Balaji Steels (Purulia) Limited (JBSPL) Jai Balaji Energy (Purulia) Limited (JBEPL)

Joint Venture Companies Rohne Coal Company Private Limited (RCCPL) Andal East Coal Company Private Limited (AECCPL)

Key Management Personnel Mr. Aditya Jajodia, Chairman and Managing Director

Mr. Sanjiv Jajodia, Wholetime Director

Relatives of Key Mr. Rajiv Jajodia, Brother of Wholetime Management Personnel Director

Mr. Gourav Jajodia, Nephew of Wholetime Director

Enterprises owned or Chandi Steel Industries Limited (CSIL) significantly influenced by Jai Balaji Jyoti Steels Limited (JBJSL) key management personnel Jai Salasar Balaji Industries Private or their relatives Limited (JSBIPL)

Balaji Ispat Udyog (BIU) Enfield Suppliers Limited (ESL) Hari Management Limited (HML) Jajodia Estate Private Limited (JEPL) Shri Marutaye Balaji Steels Limited (SMBSL)

The current financial year of the Company is for the year of twelve months from 1st April, 2013 to 31st March, 2014 as compared to previous financial year of nine months from 1st July, 2012 to 31st March, 2013.Hence,the current period''s figures are not comparable with previous period''s figures.

Figures in brackets represent previous financial year''s figures, which have been rearranged/regrouped wherever necessary to conform to this year''s classification.


Mar 31, 2013

1. General Information

Jai Balaji Industries Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India (Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange). The Company is engaged in the manufacture and sale of steel and allied products.

2. Contingent liabilities not provided for:

(Rs. in lacs)

As at As at March 31, 2013 June 30, 2012

a) Claims against the Company not acknowledged as debts

i) Excise and Service Tax Demands under dispute/appeal 5,880.10 3,536.93

ii) Sales Tax/VAT matters under dispute/appeal 6,736.99 11,552.59

b) Letters of Credit, Bills discounted and Bank Guarantees outstanding 11,128.48 11,533.70

c) Custom Duty on Import of Equipment and spare parts 2,468.83 2,266.13 under EPCG Scheme

d) Guarantees and Counter guarantees given by the Company for 7,180.00 7,780.00 loans obtained by Subsidiary/other companies

e) Guarantee given for Joint Venture Companies 1,412.46 1,412.46

3. Estimated amount of contracts remaining to be executed on 1,545.89 1,498.92 Capital Account and not provided for

[Net of Advances Rs. 5,801.19 lacs (Rs. 5,738.88 lacs)]

Proportionate amount of pending capital commitments on account of Joint Venture Companies is Rs. 9.98 lacs [(Rs. 10.52 lacs (March 31, 2012)] as at March 31, 2013.

4 In respect of an electricity supply matter where the Electricity Supplier has demanded enhanced charges, the matter was challenged by the Company at the Appellate Tribunal for Electricity ("the tribunal"). The Tribunal vide its order dated May 10, 2010 dismissed the appeal of the Supplier and directed to implement the tariff as determined by the Central Electricity Regulatory Commission vide its Order dated August 6, 2009. The Supplier has preferred an appeal with Hon''ble Supreme Court, pending finalisation of the outcome of the matter, the liabilities for the electricity charges are accounted for based on provisional bills provided by the Supplier.

5 On 9th June 2011, the Income Tax Department had carried out Search, Seizure and Survey at the Company''s premises. Subsequent to the aforesaid, the Company has admitted no irregularities in the books. However, to buy peace and avoid litigation with the department, surrendered an Income of Rs. 3,805.50 lacs for the previous year ended 31/3/2011.The Income Tax authorities are yet to complete assessment proceedings in respect of search and seizure operations.

6 During the financial year, the Corporate Debt Restructuring (CDR) Cell through its Empowered Group has approved a debt restructuring scheme for the Company which provides for revision in interest rates, deferment of repayment of term loans, conversion of interest into Funded Interest term loan and additional infusion of Rs. 5,000.00 lacs into the Company. In view of the above Rs. 2,509.25 lacs as Money Received against share warrants have been brought up front as stipulated in the restructuring scheme and balance to be brought within a period of one year from the date of Letter of Approval dated 20th September 2012.

Necessary adjustments in the books of accounts have been made to reflect the impact of the aforesaid restructuring scheme.

7 Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than The Provisions of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The disclosures required under Accounting Standard 15 ''Employee Benefits'' notified in the Companies (Accounting Standards) Rules 2006 are given below:

8. Related Party Disclosures a. Name of Related Parties

Subsidiary Companies Nilachal Iron & Power Limited (NIPL)

Jai Balaji Steels (Purulia) Limited (JBSPL) Jai Balaji Energy (Purulia) Limited (JBEPL)

Joint Venture Companies Rohne Coal Company Private Limited (RCCPL)

Andal East Coal Company Private Limited (AECCPL)

Key Management Personnel Mr. Aditya Jajodia, Chairman and Managing Director

Mr. Sanjiv Jajodia, Wholetime Director

Relatives of Key Management Personnel

Mr. Rajiv Jajodia, Brother of Wholetime Director

Mr. Devendra Prasad Jajodia, Brother of Wholetime Director

Mr. Aashish Jajodia, Brother of Chairman and Managing Director

Mr. Gourav Jajodia, Nephew of Wholetime Director

Smt. Kanchan Jajodia, Sister-in-law of Wholetime Director

Smt. Rina Jajodia, Sister-in-law of Chairman and Managing Director

Smt. Sangeeta Jajodia, Wife of Wholetime Director

Smt. Shashi Devi Jajodia, Sister-in-law of Wholetime Director

Smt. Seema Jajodia, Wife of Chairman and Managing Director

Enterprises owned or significantly influenced by key management personnel or their relatives

Chandi Steel Industries Limited (CSIL)

Jai Balaji Jyoti Steels Limited (JBJSL)

Jai Salasar Balaji Industries Private Limited (JSBIPL)

Balaji Ispat Udyog (BIU)

Enfield Suppliers Limited (ESL)

Hari Management Limited (HML)

Jain Vanijya Udyog Limited (JVUL)

Jajodia Estate Private Limited (JEPL)

K.D. Jajodia Steel Industries Private Limited (KDJSIPL)

Shri Marutaye Balaji Steels Limited (SMBSL)

8. i) The current financial year of the Company is for the period of nine months from 1st July, 2012 to 31st March, 2013 as compared to previous financial year of fifteen months from 1st April, 2011 to 30th June, 2012. Hence, the current period''s figures are not comparable with previous period''s figures.

ii) Figures in brackets represent previous financial year''s figures, which have been rearranged/regrouped wherever necessary to conform to this year''s classification.


Jun 30, 2012

1. General Information

Jai Balaji Industries Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on three stock exchanges in India (Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange). The Company is engaged in the manufacture and sale of steel and allied products.

(a) Terms/rights attached to equity shares

The Company has only one class of ordinary shares (equity shares) having at par value of Rs. 10/- each. Each shareholder of ordinary shares (equity shareholders) is entitled to one vote per share .The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the share holders in the ensuing Annual General Meeting except in the case of interim dividend . In the event of liquidation, the equity shareholders are eligilble to receive the remaining assets of the Company after distributions of all preferential amounts , in the proportions to their share holdings.

(Rs.in lacs)

2. Contingent liabilities not provided for:

As at As at June 30, 2012 March 31, 2011

a) Claims against the Company not acknowledged as debts

i) Excise and Service Tax Demands under dispute/appeal 3,536.93 3,812.03

ii) Sales Tax / VAT matters under dispute /appeal 11,552.59 195.03

iii) Others - 44.74

b) Letters of Credit, Bills discounted and Bank Guarantees outstanding 11,533.70 4,435.17

c) Custom Duty on Import of Equipment and spare parts under EPCG Scheme 2,266.13 945.35

d) Guarantees and Counter guarantees given by the Company for loans obtained by subsidiary company 4,500.00 4,500.00

e) Guarantee given for Joint Venture Companies 1,412.46 1,412.46

3. Estimated amount of contracts remaining to be executed on Capital Accountand not provided for [Net of Advances Rs. 5,738.88 lacs (Rs. 4,024.57 lacs)] 1,498.92 9,695.35



Proportionate amount of pending capital commitments on account of Joint Venture Companies is Rs. 10.52 lacs (Rs. 273.23 lacs) as at March 31, 2012 (as at March 31, 2011).

4. In respect of an electricity supply matter where the Electricity Supplier has demanded enhanced charges, the matter was challenged by the Company at the Appellate Tribunal for Electricity ("the tribunal"). The Tribunal vide its order dated May 10, 2010 dismissed the appeal of the Supplier and directed to implement the tariff as determined by the Central Electricity Regulatory Commission vide its Order dated August 6, 2009. The Supplier has preferred an appeal with Humble Supreme Court, pending finalisation of the outcome of the matter, the liabilities for the electricity charges are accounted for based on provisional bills provided by the Supplier.

5. On 9th June 2011, the Income Tax Department had carried out Search, Seizure and Survey at the Company's premises. Subsequent to the aforesaid, the Company has admitted no irregularities in the books. However, to buy peace and avoid litigation with the department, surrendered an Income of Rs. 3,805.50 lacs for the previous year ended 31/3/2011. The resultant tax liability of Rs. 1,228 lacs had been taken into account in income tax return of assessment year 2011-12. The Income Tax authorities are yet to complete assessment proceedings in respect of search and seizure operations.

6. Pursuant to the application submitted to the Corporate Debt Restructuring (CDR) Cell for restructuring of Company's Borrowings from Banks, the Final restructuring scheme has been taken up in the CDR Empowered Group (CDR EG) in its meeting held on 1st August, 2012 and was formally approved at the CDR Empowered Group (EG) meeting held on 24th August 2012. The company have received the Letter of Approval dated 20th September 2012 from the CDR cell. Pending execution of the Master Restructuring Agreement and sanction by all the lenders, no effect has been given in the financial results.

7. During the year, the Company has accounted for the following subsidies / incentives receivable from the Government of West Bengal under West Bengal Incentive Scheme aggregating to Rs. 1,921.75 lacs (Rs. 1,170.41 lacs):

8. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favorable than The Provisions of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The disclosures required under Accounting Standard 15 'Employee Benefits' notified in the Companies (Accounting Standards) Rules 2006 are given below:

Note:

i. The Company expects to contribute Rs. 340.71 lacs (Rs. 340.94 lacs) to Gratuity Fund in 2012-13.

ii. 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. The above information is certified by the Actuary.

iii. The management has relied on the overall actuarial valuation conducted by the actuary.

(ii) Forward Cover Contacts outstanding at the yearend represents the following:

Contracts of US$ 1,650,000 (US$ 3,712,500) for minimizing the risk of currency exposure on foreign currency loans from banks aggregating Rs. 929.10 lacs (Rs. 1,657.63 lacs).

7. Till the year ended March 31, 2011, the Company was preparing its accounts based on the Schedule VI to the Companies Act 1956, during the year ended June 30, 2012 the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2011

1 Nature of Operations

Jai Balaji Industries Limited is engaged in the manufacture and sale of steel and allied products.

(Rs. in lacs)

2. Contingent liabilities not provided for:

As at 31st As at 31st

March, 2011 March, 2010

a) Claims against the Company not acknowledged as debts

i) Excise and Service Tax Demands under dispute/appeal 3,812.03 1,632.88

ii) Sales Tax/VAT matters under dispute/appeal 195.03 9,579.39

iii) Others 44.74 162.61

b) Letters of Credit, Bills discounted and Bank Guarantees outstanding 4,435.17 6,974.22

c) Custom Duty on Import of Equipment and spare parts under EPCG Scheme 945.35 1,202.14

d) Guarantees and Counter guarantees given by the Company for loans obtained by subsidiary company 4,500.00 1,500.00

e) Guarantee given for Joint Venture Companies 1,412.46 1,412.46

2. In respect of an electricity supply matter where the Electricity Supplier has demanded enhanced charges, the matter was challenged by the Company at the Appellate Tribunal for Electricity ("the tribunal"). The Tribunal vide its order dated May 10, 2010 dismissed the appeal of the Supplier and directed to implement the tariff as determined by the Central Electricity Regulatory Commission vide its Order dated August 6, 2009. The Supplier has preferred an appeal with Hon'ble Supreme Court, pending finalisation of the outcome of the matter, the liabilities for the electricity charges are accounted for based on provisional bills provided by the Supplier.

4. Plant and Machinery includes certain assets taken on finance lease. At the expiry of the lease period, legal title would be passed on to the Company. There was no escalation clause in the lease agreement. There were no restrictions imposed by lease arrangements. There were no subleases.

5. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than The Provisions of Payment of Gratuity Act, 1972. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

(ii) Forward Cover Contracts outstanding at the year end represents the following:

Contracts of US$ 3,712,500 (US$ 27,939,817) for minimizing the risk of currency exposure on foreign currency loans from banks aggregating Rs 1,657.63 lacs (Rs 12,625.40 lacs)

6. Excise duty on increase/decrease in stock represents differential excise duty on opening and closing stock of Finished Goods.

7. Related Party Disclosures

a. Name of Related Parties Subsidiary Companies

Nilachal Iron & Power Limited (NIPL)

Jai Balaji Steels (Purulia) Limited (JBSPL)

Jai Balaji Energy (Purulia) Limited (JBEPL)

Joint Venture Companies

Rohne Coal Company Private Limited (RCCPL)

Andal East Coal Company Private Limited (AECCPL)

Joint Venture Partner/ Co-Venturers

Bhushan Power & Steel Limited (BPSL)

Key Management Personnel

Mr. Aditya Jajodia, Chairman and Managing Director

Mr. Sanjiv Jajodia, Wholetime Director

Relatives of Key Management Personnel

Mr. Rajiv Jajodia, Brother of Wholetime Director

Mr. Devendra Prasad Jajodia, Brother of Wholetime Director

Mr. Aashish Jajodia, Brother of Chairman and Managing Director

Mr. Gaurav Jajodia, Nephew of Wholetime Director

Smt. Kanchan Jajodia, Sister-in-law of Wholetime Director

Smt. Rina Jajodia, Sister-in-law of Chairman and Managing Director

Smt. Sangeeta Jajodia, Wife of Wholetime Director

Smt. Shashi Devi Jajodia, Sister-in-law of Wholetime Director

Smt. Seema Jajodia, Wife of Chairman and Managing Director

Enterprises owned or significantly influenced by key management personnel or their relatives

Chandi Steel Industries Limited (CSIL)

Jai Balaji Jyoti Steels Limited (JBJSL)

Jai Salasar Balaji Industries Private Limited (JSBIPL)

Balaji Ispat Udyog (BIU)

Enfield Suppliers Limited (ESL)

Hari Management Limited (HML)

Jain Vanijya Udyog Limited (JVUL)

Jajodia Estate Private Limited (JEPL)

K.D. Jajodia Steel Industries Private Limited (KDJSIPL)

8. Interest in Joint Venture :

The Company has interest in following Joint Venture Companies which are in the process of setting up coal mining facilities at respective Coal blocks which they have been allotted.

9. Additional Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act 1956

10. Figures in brackets represent previous year's figures, which have been rearranged/regrouped wherever necessary to conform to this year's classification.


Mar 31, 2010

(Rs. in lacs)

1. Contingent liabilities not provided for :

As at 31st March, 2010 As at 31st March, 2009

a) Claims against the Company not acknowledged as debts

i) Excise and Service Tax Demands under dispute / appeal 1,632.88 1,183.08

ii) Sales Tax / VAT matters under dispute/appeal 9,579.39 10,727.92

iii) Others 162.61 -

b) Letters of Credit, Bills discounted and Bank Guarantees outstanding 6,974.22 5,959.98

c) Customs Duty on Import of Equipment and spare parts under EPCG Scheme 1,202.14 1,727.97

d) Guarantees and Counter guarantees given by the Company for loans obtained by subsidiary company 1,500.00 1,500.00

e) Guarantee given for Joint Venture Companies in terms of the joint venture agreements. 1,412.46 900.00

2. Estimated amount of contracts remaining to be executed on Capital Account and not provided for [Net of Advances Rs.10,553.91 lacs (Rs. 7,741.14 lacs)] 11,832.51 3,568.97

Proportionate amount of pending capital commitments on account of M/s Rohne Coal Company Private Limited, a Joint Venture Company is Rs. 2.96 lacs (Rs. 1.52 lacs).

3. In respect of an electricity supply matter where the Electricity Supply Company ("the Supplier") has demanded enhanced charges, the matter was challenged by the Company at the Appellate Tribunal for Electricity ("the Tribunal"). The Tribunal vide its order dated May 10, 2010 dismissed the appeal of the Supplier and directed to implement the tariff as determined by the Central Electricity Regulatory Commission vide its Order dated August 6, 2009. The Tribunal has also directed to the supplier to revise the bills raised by it for electricity consumption by the Company since April, 2006 onwards and refund / adjust the excess amount billed and collected along with interest.

Pending receipt of the revised bill from the supplier and the Companys inability to estimate such revised amount, refund/ adjustments, which are presently unascertainable, would be considered on receipt of revised bills from the supplier.

4. During the year, the Company has accounted for the following subsidies /incentives receivable from the Government of West Bengal under West Bengal Incentive Scheme aggregating to Rs.2,974.87 lacs (Rs. 2,533.35 lacs) including Rs. Nil (Rs. 328.05 lacs) for earlier years:

*includes Rs. 5.30 lacs (Rs. 164.70 lacs) on account of sale of Finished goods under trial run 6. Plant and Machinery and Vehicles includes certain assets taken on finance lease. At the expiry of the lease period, legal title would be passed on to the Company. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

Future obligations towards lease rentals (inclusive of finance charges) Rs. 116.86 lacs (Rs. 467.63 lacs) under the respective finance lease agreements as on the date of balance sheet are as per details given below:

5. Gratuity and Leave

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on terms not less favourable than The Provisions of Payment of Gratuity Act, 1972. The Scheme is funded with an insurance company in the form of a qualifying insurance policy.

The disclosures required under Accounting Standard 15 Employee Benefits notified in the Companies (Accounting Standards) Rules 2006 are given below:

I. Expenses recognized in the statement of Profit & Loss Account for the year ended 31st March, 2010:

II. Net Liability/(Assets) recognized in the Balance Sheet as at 31st March, 2010

III. Change in the present value of the defined benefit obligation during the year ended 31st March, 2010 :

IV. Change in the Fair Value of Plan Assets during the year ended 31st March, 2010 :

V. The major categories of plan assets as a percentage of the fair value of the total plan assets

VI. The Principal assumptions used in determining gratuity and leave obligations for the Companys plans are shown below

VII. Amounts for the current and previous year are as follows :

*AS(15) Revised on Employee Benefits was adopted by the Company from 1st April, 2007 and hence, the above disclosures have been made accordingly.

Notes:

i. The Company expects to contribute Rs. 179.30 lacs (Rs. 93.00 lacs) to Gratuity Fund in 2010-11.

ii. 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. The above information is certified by the Actuary.

iii. The management has relied on the overall actuarial valuation conducted by the actuary.

6. a) During the year ended March 31, 2008, the Company had issued 9,600,000 Warrants to the Promoters and others carrying a right to convert each warrant into an equity share of Rs. 10 each at a premium of Rs. 316.90 per warrant within a period of 18 months from the date of allotment i.e. February 7, 2008. The warrant holders had paid Rs. 6178.41 lacs as application money against the above equity share warrants. However, due to non payment of the balance money, the Company has forfeited the above application money in terms of a resolution passed at its board meeting held on August 11, 2009 and credited the same to Capital Reserve Account.

b) The Company had also issued 8,359,000 Zero Coupon Compulsorily Convertible Debentures (CCDs) at a price of Rs. 326.90 each to Foreign Equity Investors in 2007-08. The debenture holders had the option to convert each debenture at any time into an equity share of Rs.10 each at a premium of Rs. 316.90 per debenture within 18 months from the date of allotment i.e. February 7, 2008. Accordingly, on July 31, 2009 the CCDs holders have exercised their option to convert the CCD into equal number of equity shares of Rs. 10 each.

c) During the year, the Company has issued 8,295,586 Equity Shares of Rs. 10 each to Qualified Institutional Buyers at a premium of Rs. 229.30 per share on October 28, 2009, as per chapter VIII of the Securities Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. The proceeds received from the same aggregating to Rs. 19,851.34 lacs has been fully utilized for purchase of fixed assets, general business purpose and meeting out the issue expenses.

7. Based on the information available with the Company, the amounts due to Micro and Small Enterprises as per MSMED Act , 2006 are as follows :

8. Unhedged Foreign Currency Exposures outstanding at the year end are as follows

9. Loans and Advances and accrued interest thereon include the following balances

*Ceased to be a company under the same management in terms of Section 370 (1B) since March 31, 2009.

10. Basic and diluted earnings per share

11. The break-up of major components of Net Deferred Tax Liabilities as on 31st March, 2010 is as under

12. Excise duty on increase/decrease in stock represents differential excise duty on opening and closing stock of Finished Goods.

13. Related Party Disclosures

14. Managerial Remuneration

Notes :

1. As the liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the directors is not included above.

2. Includes Rs. 56.52 lacs (Nil) transferred to Preoperative Expenses.

15. Auditors Remuneration

Out of above Rs. 49.66 lacs (Rs.51.02 lacs) included in Legal and Professional Charges and Rs. 15.59 lacs (Nil) adjusted under Securities Premium Account.

16. Interest in Joint Venture :

The Company has interest in following Joint Venture Companies which are in the process of setting up coal mining facilities at respective Coal blocks which they have been allotted.

Capital expenditure commitments and contingent liabilities of the joint venture are disclosed in Note 2 and Note 3 respectively.

* As the Joint Venture Company is formed during the year, therefore no information is available for the previous year.

17. Details of the Equity Shares pledged by the promoter or persons forming part of the promoter group (Promoter Group) of the Comapny as on the balance sheet date :

18. Additional Information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956

19. Installed Capacity and Actual Production

Note : Licensed Capacity is not applicable as the industry is delicensed.

# Includes production for third party conversion 11,500 Mt (10,905 Mt) and 9,606.40 Mt (23,430 Mt) in respect of Ferro Alloys and Steel Bars/Rods Respectively.

#Includes Trial Run Sales of 1,846 MT (35,850 MT) valuing Rs. 640.85 lacs (Rs. 7,239.73 lacs) *excluding goods transferred for further processing as follows :

20. Value of Consumption of Imported and Indigenous raw materials, stores and spare parts.

21. Value of Imports (Calculated on CIF basis)

22. Expenditure in Foreign Currency (on accrual basis)

23. Earnings in Foreign Currency (on accrual basis)

24. Amount remitted in foreign currency on account of dividends :

*Excludes dividend paid to non-resident shareholders in Indian Rupees aggregating to Rs. 24.37 lacs (Rs. 0.31 lacs)

25. Figures in brackets represent previous years figures, which have been rearranged/regrouped wherever necessary to conform to this years classification. As per our attached report of even date

 
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