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Notes to Accounts of Jindal Stainless (Hisar) Ltd.

Mar 31, 2016

(b) TERMS/RIGHTS ATTACHED TO EQUITY SHARES

The company has only one class of equity shares having a par value of '' 2/- per share. Each shareholder is eligible for one vote per equity share held [other than the shares represented by Regulation S Global Depositary Shares (the “GDSs”) issued by the Company whose voting rights are subject to certain conditions and procedure as prescribed under the Regulation S Deposit Agreement]. The company declares and pays dividends in Indian rupees. The dividend proposed, if any, by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and also has equal right in distribution of Profit/Surplus in proportions to the number of equity shares held by the shareholders.

As on 31st March 2016, 8,802,167 GDSs (8,802,167 GDSs) with 17,604,334 underlying equity shares (17,604,334 equity shares) were outstanding. Each GDS represents 2 underlying equity shares of the Company.

* 1500 shares held by person as nominee of Jindal Stainless Limited.

(d) No bonus, buy back, issue of share other than in cash in last 5 years except about Share Capital suspense account (read with note no. 26)

(e) For details of shares reserved for issue on conversion of warrants, please refer note no. 30 regarding terms of conversion.

Secured Borrowings

(a) The Company has executed a Rupee Term Loan Agreement (“RTLA”) dated March 23, 2016 of Rs, 260,000.00 Lacs (“Term Loan Facility”) with a consortium of lenders. The said Term Loan Facility are repayable in quarterly installments of Rs130.00 Lacs each during 2016-17, Rs,4,745.00 Lacs each during 2017-18, Rs4,875.00 Lacs each during 2018-19, Rs,5,850.00 Lacs each during 2019-20, Rs, 6,500.00 Lacs each during 2020-21 and thereafter Rs, 7,150.00 Lacs each from 2021-22 to 2026-27. Out of the above, an amount of Rs.118,493.00 Lacs has been disbursed till March 31, 2016.

The Term Loan Facility is secured (charge created/to be created) by first pari-passu charge by way of mortgage of Company’s immovable properties and hypothecation of moveable fixed assets both present & future and second pari-passu charge by way of hypothecation and/ or pledge of current assets including finished goods, raw materials, work-in-progress, consumable stores and spares, book debts, bills receivable, etc both present and future. (Also read with note no. 31)

Secured Borrowings

* Working Capital Facilities of Jindal Stainless Limited continue to have security on the assets transferred in pursuant to Composite Scheme of Arrangement (Read with note no. 26).

* includes the amount of Rs, 7,063.00 Lacs ('' 48,187.97 Lacs) of working capital facilities and Rs, 23,235.21 Lacs (Rs,37,184.22 Lacs) of buyer credit has been allocated by Jindal Stainless Limited pursuant to Composite Scheme of Arrangement (read with note no. 26) pending confirmation from the respective banks.

(a) Working Capital Facilities are secured (charge created/to be created) by first pari-passu charge by way of hypothecation and/or pledge of current assets including finished goods, raw material, work in progress, consumable stores and spares, book debts, bill receivable, etc both present and future and by way of second charge in respect of other moveable and immoveable properties, both present and future, of the Company. Working Capital Facility is repayable on demand. (Also read with note no. 31)

(b) Buyer Credit Facility are secured (charge created/to be created) by first pari-passu charge by way of hypothecation and/or pledge of current assets including finished goods, raw material, work in progress, consumable stores and spares, book debts, bill receivable, etc both present and future and by way of second charge in respect of other moveable and immoveable properties, both present and future, of the Company. (Also read with note no. 31)

* Include Plant & machinery acquired on Lease amounting to Rs, Nil (Rs, 1,018.52 Lacs) and depreciation thereon during the year Rs, Nil (Rs, 79.40 Lacs); during the current year, on completion of lease terms, the ownership of underlying assets have been transferred to the company.

** Intangible Assets are amortised as under:

Software 5 Years

Goodwill 2 Years

@ Title deeds of Free Hold Land and Building amounting to Rs, 31,812.00 Lacs and Rs, 324.25 lacs respectively are pending to be transfer in the name of the company. However, mutation of whole land at Hisar (other than 97 kanal of land amounting to Rs, 998.00 Lacs) has been recorded by Land Revenue Department in the name of the Company. (Read with note no. 26)

# All assets transferred in terms of Composite Scheme of Arrangement would continue to have security in favour of lenders of Jindal Stainless Limited.

$ include Rs, 1,309.04 Lacs pertaining to sub grade & tailing plant for which permission to operate from odisha government is awaited.

@ Undertaking for non disposing of Investment by way of Letter of Comfort given to banks against credit facilities/financial assistance availed by subsidiaries.

* Lodged with Government Authorities as Security.

# transferred from Jindal Stainless Limited pursuant to the Scheme (note no. 26).

$ Pursuant to the Scheme of Amalgamation between JSL Architecture Limited (Transferor Company) with JSL Lifestyle Ltd. (Transferee Company) becoming effective on 2nd December 2015 w.e.f appointed date i.e. 1st April, 2014. The Transferee Company, in consideration, has issue 76 fully paid up Equity Shares of Rs. 10 each for Every 100 Equity Shares of Rs. 10 each held by the Company in Transferor Company.

* include '' Nil ('' 22,672.34 Lacs) receivable from Jindal Stainless Limited due to implementation of Composite Scheme of Arrangement. (Refer note no. 26)

1. Composite Scheme of Arrangement

1. A Composite Scheme of Arrangement (here in after referred to as ‘Scheme’) amongst Jindal Stainless Limited (JSL) and its three wholly owned subsidiaries namely Jindal Stainless (Hisar) Limited (the Company/Transferee/Resulting Company), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) under the provision of Sec 391-394 lead with 100-103 of the Companies Act, 1956 and other relevant provision of Companies Act, 1956 and / or Companies Act, 2013 has been sanctioned by the Hon’ble High Court of Punjab & Haryana, Chandigarh vide its Order dated 21st September 2015, modified by order dated 12th October, 2015.

Pursuant to the Section I and Section II of the Scheme becoming effective on 1st November, 2015 w.e.f. appointed date i.e. close of business hours before midnight of March 31, 2014:

a) On 21st November, 2015 the Company has allotted 23,11,85,445 equity shares of Rs, 2/- each (other than in cash) to the equity shareholders of Jindal Stainless Limited (JSL) in the ratio of one equity share of the company for every one equity share held in JSL.

b) The Authorized share capital of the company has been enhanced to Rs, 50,00,00,000 (Rupees Fifty Crore) divided into 24,00,00,000 (Twenty Four Crore) equity shares having face value of Rs, 2 (Two) each and 1,00,00,000 (One Crore) preference shares having face value of Rs, 2 (Rupees Two) each.

c) Out of Rs, 260,000.00 lacs payable to JSL, Rs, 235,924.00 lacs has been paid till date (including Rs, 118,493.00 lacs paid up to 31st March 2016).

d) Against amount of Rs, 36,618.67 Lacs, JSL is required to issue and allot equity shares to the company at a price to be determined in accordance with chapter VII of SEBI (ICDR) Regulations 2009, with the record date jointly decided by the board of directors of JSL and the company being considered as relevant date as specified in the scheme. As specified in the Scheme, the Board of Directors of the Company in the meeting held on 27th May, 2016 have, subject to approval by the Board of Directors of JSL, proposed to fix 8th June, 2016 as the record date for determination of price for allotment of the above said shares. Accordingly, pending allotment by JSL of the aforesaid equity shares to the company, the same has been shown as investment (pending allotment) under “Non-Current Investment”.

e) In terms of the Scheme, all the business and activities of Demerged Undertakings and Business Undertaking 1 (as referred in the Scheme) carried on by JSL on and after the appointed date, as stated above, are deemed to have been carried on behalf of the Company. Accordingly, necessary effects have been given in these accounts on the Scheme becoming effective.

f) The necessary steps and formalities in respect of transfer of and vesting in the properties, licenses, approvals and investments in favor of the Company and modification of charges etc. are under implementation.

g) The actual transfer of the leasehold rights of the company in the chromite-ore mine at Orissa (“Mining Rights”), forming a part of the Demerged Undertakings (as defined in the Scheme), to Jindal Stainless (Hisar) Limited (“JSHL”), is subject to receipt of necessary approvals from the concerned authorities and compliance with the applicable conditions as prescribed under the Mines and Minerals (Development and Regulation) Act, 1957 (as amended) and as may be prescribed under the final Mineral (Transfer of Mining Lease Granted Otherwise than through Auction for Captive Use) Rules, 2016 and/or any other applicable rules/regulations.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs, 4,061.52 Lacs (Rs, 2,391.05 Lacs).

3. Exceptional items includes Gain/ (Loss) (net) of (Rs, 3,663.31 Lacs) {Rs, 620.35 Lacs} on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of (Rs, 316.62 Lacs) {(Rs, 22.32 Lacs)} upon marked to market of derivatives contracts, gain/(loss) of Rs, 1,323.70 Lacs {Rs, 998.75 Lacs} on forward cover cancelation and also includes amount written off/provided for of Rs, 1,839.95 Lacs (including provision of Rs, 32.91 Lacs)(Rs, Nil) being non recoverable from certain parties.

4. On 30th March, 2016, the Company has issued and allotted 12,50,00,000 number Compulsory Convertible Warrants (CCW) of Rs, 2/- each to promoter group entities on preferential basis for the purpose to infuse funds by promoters in terms of sanction letter dated 23rd November 2015 by State Bank of India. The CCW are convertible into equity shares at any time after 5 months but not later than 18 months from the date of allotment of CCW at a price to be determined in accordance with the pricing formula provided under chapter VII of the SEBI (ICDR) Regulations, 2009 and computed on the relevant date i.e. thirty days prior to the date on which the allottee(s) will become entitled to apply for equity shares.

As the conversion price for CCW is not yet ascertained and will be ascertained only when the holder of the CCW becomes entitled for conversion, it would presently not be possible to calculate the number of shares to be allotted, till the price of conversion is fixed.

5. (a) The Term Loan Facility and Working Capital Facility (including Buyers’ Credit) of the Company are/will also be secured by the following additional securities:

(i) Unconditional & irrevocable personal guarantee of Mr. Ratan Jindal;

(ii) Unconditional & irrevocable corporate guarantee of Jindal Stainless limited (JSL);

(iii) Pledge of 87.7% of Promoter’s shareholding, as determined on the basis of the filings of the Borrower with the Securities Exchange Board of India (SEBI);

(iv) Pledge of such number of shares of JSL as are held by it other than shares pledged/to be pledged by the Company in favour of lenders of JSL as required under the asset monetization plan approved by the empowered group of corporate debt restructuring lenders of JSL vide their letter dated December 26, 2014

(v) Pledge over investments of the Company in subsidiaries as listed below:

- JSL Lifestyle Limited; and

- JSL Logistics Limited

(vi) Certain conditions, modification and creation of security of the Term Loan Facility are in process of compliance.

(b) The security is to be created by the company over its immovable properties and movable fixed assets, current assets and shares of JSL Lifestyle limited in favour of SBICAP Trustee Company Limited (security Trustee) for lenders of Corporate Term Loan (CTL) of JSL of amounting to Rs,95,800.00 lacs and CDR lenders of JSL.

(c) Term Loan and Working Capital Facilities of Jindal Stainless Limited continue to have security on the assets transferred in pursuant to Composite Scheme of Arrangement (Read with note no. 26).Pending requisite no-objection certificates from the JSL lenders, the necessary steps and formalities in respect of satisfaction/modification of these charges are under implementation.

6. The operations of Ferro alloys unit of the Company situated at Kothavalasa in Vizianagaram district, Andhra Pradesh has been temporarily shut down due labour problems. Management is hopeful to resolve the issue in near future enabling it to resume operations.

* to the extent information available with the company.

7. Research and Development expenses for the year amounting to Rs, 153.74 Lacs (Rs, 157.94 Lacs) on account of revenue expenditure charged/debited to respective heads of accounts.

8. (a) Advance recoverable in cash or in kind or for value to be received includes Interest free loan to employees amounting to Rs, 0.53 Lacs Rs, 15.27 Lacs) in the ordinary course of business and as per employee service rules of the company. Maximum balance outstanding during the year is Rs, 26.08 Lacs (Rs, 24.38 Lacs).

(b) Pursuant to regulation 34 (3) of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, Loans and Advances in the nature of Loans to Subsidiaries companies:

* said regulation was not applicable.

@ transferred under the Scheme.

# for the purpose of Cash Flow Support.

9. (a) Certain balances of trade receivable, loan & advance, trade payable and other liabilities are subject to confirmation and/or reconciliation.

(b) The company has given inter corporate deposit to its subsidiary companies amounting to Rs, 3,286.56 Lacs (Rs, 4,498.66 Lacs) (also investment of Rs, 10.10 Lacs (Rs, 420.11 Lacs)) where the subsidiary companies has accumulated losses\negative net worth. In view of the long term involvement of the company and future prospectus, in the opinion of the management, these are good and realizable hence no provision has been considered necessary.

Note: INR equivalent values have been calculated at the yearend exchange rates in INR to give an indicative value of the contracts in rupees. Actual hedges however may be in different currency denominations.

b) Foreign Currency exposure that are not hedged by derivative instruments or otherwise outstanding as on 31st March, 2016 is as under:

10. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the Manufacturing units in the State of Haryana on the entry of goods for use and consumption which has been challenged in the Hon’ble Punjab and Haryana High Court. The Hon’ble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Petition challenged the Order of High Court in the Hon’ble Supreme Court. The Hon’ble Supreme Court referred the matter to a ‘five judges’ Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Hon’ble High Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Hon’ble Supreme Court gave an Interim Order that those states where the High Courts have given judgment in favour of the petitioner, no tax would be collected. In the mean time the Haryana Government has repealed the LADT Act and introduced another Act by the name of ‘Entry Tax’ on the same lines. That Act was also been held ultra vires by the High Court. The order of Punjab and Haryana High Court and other judgments of all the Courts of India have been long pending. The State Governments have requested the Hon’ble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Hon’ble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued. On 30th October, 2009, the Hon’ble Supreme Court have directed that 1/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Tax prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability had been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9-Judges Constitutional Bench of the Supreme Court, where the judgment of 7-Judges Constitutional Bench past 49 years ago would be revisited. Constitution Bench has not been constituted as yet and the status of the case is as it is and at present no tax is being collected/paid in Haryana.

The expected return on the plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of assets management, historical results of returns on the plan assets and the policy for the management of plan assets management.

The estimates of future salary increase, considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

f) The company makes monthly contributions to Provident Fund managed by Trust for qualifying employees. Under the scheme, the company is required to contribute a specified percentage of the payroll costs to fund the benefits.

In keeping with the Guidance on Implementing Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by the companies (Accounting Standards) Rules, 2006, employer established provident fund trusts are treated as Defined Benefit Plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. Accounting to the actuarial Valuation, the Defined Benefit Obligation of Interest Rate Guarantee on exempted Provident Fund in respect of employees of the company as on 31st March, 2016 works out of '' Nil ('' Nil)and hence no provision is required to be provided for in the books of account towards the guarantee for notified interest rates.

11. Finance Lease

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such assets are capitalized at inception of the lease at the lower of the fair value or net present value if minimum lease payments and a liability is created for an equivalent amount.

Lease interest charged to profit & loss for right to use of CTL Machine (Cut to length) for the services regarding cutting of Stainless Steel sheets.

The agreements are executed for a period of 60 months with the clause that the ownership of the CTL shall be automatically transferred to lessee on the zero value.

12 Previous years’ figures have been re-arranged and regrouped wherever considered necessary .

13 Figures in bracket indicate previous year figures.

14 Note 1 to 49 are annexed to and from integral part of the Balance Sheet and Statement of Profit & Loss.


Mar 31, 2015

1. Composite Scheme of Arrangement

1. A Composite Scheme of Arrangement (here in after referred to as 'Scheme') amongst Jindal Stainless Limited (JSL) and its three wholly owned subsidiaries namely Jindal Stainless (Hisar) Limited (the Company/Transferee/Resulting Company), Jindal United Steel Limited (JUSL) and Jindal Coke Limited (JCL) under the provision of Sec 391-394 lead with 100-103 of the Companies Act, 1956 and other relevant provision of Companies Act, 1956 and / or Companies Act, 2013 has been sanctioned by the Hon'ble High Court of Punjab & Haryana, Chandigarh vide its Order dated 21st September 2015, modified by order dated 12th October, 2015. The Schemes inter-alia includes:-

a) Demerger of the Demerged Undertakings (as defined in the scheme) of JSL comprising of the Ferro Alloys Division located at Jindal Nagar, Kothavalasa (AP) and the Mining Division of JSL and vesting of the same in the Company w.e.f. appointed date i.e. close of business hours before midnight of March 31,2014. (Section I of the Scheme)

b) Transfer of the Business undertaking 1 (as defined in the scheme) of JSL comprising of the Stainless Steel Manufacturing Facilities of JSL located at Hisar, Haryana and vesting of the same with the Company on Going Concern basis by way of Slump Sale along with investments in the domestic subsidiaries (listed in Part B of schedule 2 of the Scheme) of JSL w.e.f. from appointed date i.e. close of business hours before midnight of 31st March, 2014. (Section II of the Scheme)

c) Transfer of the Business undertaking 2 (as defined in the scheme) of JSL comprising, inter-alia, of the Hot Strip Plant of JSL located at Odisha and vesting of the same in Jindal United Steel Limited on Going Concern basis by way of Slump Sale w.e.f. appointed date i.e. close of business hours before midnight of March 31,2015. (Section III of the Scheme)

d) Transfer of the Business Undertaking 3 (as defined in the Scheme) of JSL comprising, inter-alia ,of the Coke Oven Plant of JSL Located at Odisha and vesting of the same with Jindal Coke Limited on Going Concern basis by way of Slump Sale w.e.f. appointed date i.e. close of business hours before midnight of March 31,2015. (Section IV of the Scheme)

Section I and Section II of the Scheme became effective on 1st November, 2015, operative from the said appointed date (as stated in sub-para (a) and (b) above) and Section III and Section IV (for section III and IV appointed date as stated in sub-para (c) and (d) above) of the Scheme will become effective on receipt of necessary approvals for transfer/grant of the right to use in the land on which Hot Strip & Coke Oven Plants are located as specified in the Scheme.

2. Pursuant to the Section I and Section II of the Scheme becoming effective:

a) Demerged Undertakings and Business undertaking 1 has been transferred to and vested in the Company with effect from the said Appointed Date; accordingly the same has been given effect to in these accounts.

b) The surplus of Rs, 53,888.94 Lacs of assets over the liabilities pertaining to the Demerged Undertakings transferred to and vested in the Company and the paid up face value of the equity shares & CCCPS issued by JSL has been credited in Security Premium Account.

c) The company is to issue equity shares/CCCPS on a record date to be fixed as specified in the Scheme for allotment of (i) equity shares having face value of Rs, 21- each credited as fully paid up; and (ii) CCCPS having face value of Rs, 21- each credited as fully paid up of the Company to the equity shareholders and holders of CCCPS respectively of JSL in the ratio one equity shares/CCCPS of the company for every one equity shares/CCCPS held in JSL. Pending allotment the same has been shown as "Share Capital Suspense Account".

d) Share capital of the Company comprising of 250000 equity shares having face value of Rs, 2 each, 100% held by JSL deemed to has been cancelled and transferred to capital reserve; which will give effect immediately after issuance of the shares by the Company to the Shareholders of JSL.

e) The Authorized share capital of the company is to be enhanced to Rs, 50,00,00,000 (Rupees Fifty Crore) divided into 24,00,00,000 (Twenty Four Crore) equity shares having face value of Rs, 2 (Two) each and 1,00,00,000 (One Crore) preference shares having face value of Rs, 2 (Rupees Two) each.

f) Business Undertaking 1 (as defined in sub-para (b) of 1 above) has been transferred to and vested in the Company at a lump sum consideration of Rs, 280,979.52 Lacs; out of this Rs, 260,000.00 lacs shall be paid to JSL and Rs, 20,979.52 Lacs has been adjusted against sum of Rs, 57,598.19 lacs lying receivable from JSL in the books of the Company.

Against the balance amount of Rs, 36,618.67 Lacs, JSL is to issue equity shares to the company at a price to be determined with the record date to be fixed as specified in the Scheme. Pending allotment the same has been shown as "Equity Shares pending allotment" under Long Term Investments.

g) On transfer of Business Undertaking 1, the difference between the fair values of assets and liabilities transferred to and vested in the Company and the lump sum consideration to be paid as stated above amounting to Rs, 2,068.81 Lacs has been debited to Goodwill Account.

h) In terms of the Scheme, all the business and activities of Demerged Undertakings and Business Undertaking 1 carried on by JSL on and after the appointed date, as stated above, are deemed to have been carried on behalf of the Company. Accordingly, necessary effects have been given in these accounts on the Scheme becoming effective.

i) The necessary steps and formalities in respect of transfer of and vesting in the properties, licenses, approvals and investments in favor of the Company and modification of charges etc. are under implementation. Further transfer of and vesting in the Mining Rights to Demerged Undertakings (as referred in para 1 (a) above) is subject to necessary approvals of the concerned authorities.

2. The financial statements of the Company for the year ended 31st March, 2015 were earlier approved by the Board of Directors at their meeting held on 25th May, 2015 on which the Statutory Auditors of the Company had issued their report dated 25th May, 2015. These financial statements have been reopened and revised to give effect to the Scheme as stated in note 1 & 2 herein above.

3. Current year's figures are not comparable with those of the previous year for the reasons as stated in note 1 & 2 herein above.

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) is Rs, 2,391.05 Lacs (Rs, NIL).

5. Exceptional items includes Gain/(Loss) (net) of Rs, 620.35 Lacs {Rs, NIL} on translation/settlement of foreign currency monetary items (including borrowing), gain / (loss) of (Rs, 22.32 Lacs) {Rs,' NIL} upon marked to market of derivatives contracts, gain/(loss) of Rs, 998.75 Lacs {Rs, NIL} on forward cover cancelation.

6. A Scheme of Amalgamation between JSL Architecture Limited (Transferor Company) with JSL Lifestyle Ltd. (Transferee Company) was filed with the Hon'ble High Court of Punjab and Haryana at Chandigarh entailing transfer of all the assets and liabilities including reserves of the Transferor Company at existing carrying amount w.e.f. appointed date i.e. 1st April, 2014. The Transferee Company, in consideration, would issue 76 fully paid up Equity Shares of Rs, 10 each for Every 100 Equity Shares of Rs, 10 each held by the shareholders of Transferor Company. The Scheme is has been approved by the Hon'ble High Court vide its moral judgment dated 30th October, 2015. Upon receipt of the certified true copy of the order, both the Companies shall file the same with the office of the Registrar of Companies, NCT of Delhi and Haryana and the Scheme shall become effective from the date of such filing.

7. The company had received a notice during the year 2012-2013 from office of the Dy. Director of Mines, Jajpur Road Circle, Odisha (the Office) asking company to deposit Rs, 8,540.27 Lacs with the department on account of cost price on mining of excess quantity of Chrome Ore over and above the approved quantity of mining plan/scheme. The company has disputed and challenged the same as demand made by the Office is incorrect, unjustified, baseless and was without furnishing any supporting documents and/or providing any basis/reason for such demand. The case is pending before Provisional Authority of Mining tribunal, Govt, of India.

8. Pursuant to the requirements of Schedule II of the Companies Act, 2013, the Company has, effective April 1,2014, reviewed and revised the estimated useful lives of its fixed assets related to Vizag and Mine Divisions. Consequent thereto, the depreciation charge for the year ended on 31st March, 2015 is lower by Rs, 147.59 Lacs. Further based on transitional provision of Schedule II, an amount of f 13.84 Lacs has been adjusted against the retained earnings.

9. Based on the intimation received from supplier regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006, the required disclosure is given below *:

10. (A) Certain balances of trade receivable, loan & advance, trade payable and other liabilities are subject to confirmation and/or reconciliation.

(B) Although the book value fair value of certain unquoted investments amounting to Rs, 420.11 Lacs (Rs, NIL), as reflected in Note no 11, is lower than the cost or companies are having negative net worth, considering the strategic and long term nature of the investment, future prospectus and assets base of the investee company, such decline, in the opinion of the management, has been considered to be of temporary nature and hence no provision for the same at this stage is considered necessary.

The company has also given inter corporate deposit to its subsidiary companies amounting to Rs,4,498.66 Lacs (Rs, NIL) where the subsidiary companies has accumulated losses egative net worth. In view of the long term involvement of the company (read with note (B) above) in the said companies no provision has been considered necessary.

11. Advance recoverable in cash or in kind or for value to be received includes Interest free loan to employees amounting to Rs, 15.27 Lacs (Rs, NIL) in the ordinary course of business and as per employee service rules of the company. Maximum balance outstanding during the year is Rs, 24.38 Lacs (Rs, NIL).

12. Research and Development expenses for the year amounting to Rs, 157.94 Lacs (Rs, NIL) on account of revenue expenditure charged/debited to respective heads of accounts.

13. a) Derivative contracts entered into by the company and outstanding as on 31st March, 2015 for hedging currency risks:

Note: INR equivalent values have been calculated at the yearend exchange rates in INR to give an indicative value of the contracts in rupees. Actual hedges however may be in different currency denominations.

14. The Haryana Government levied w.e.f. 05.05.2000 a Local Area Development Tax (the LADT Act) on the Manufacturing units in the State of Haryana on the entry of goods for use and consumption which has been challenged in the Hon'ble Punjab and Haryana High Court. The Hon'ble Punjab and Haryana High Court disallowed the petition in December, 2001 and the company had by a Special Leave Petition challenged the Order of High Court in the Hon'ble Supreme Court. The Hon'ble Supreme Court referred the matter to a 'five judges' Constitutional Bench, which laid certain parameters to examine the Act on those lines. On the basis of these parameters the Hon'ble High Court have declared the Act to be ultra virus on 14th March, 2007. Since, this issue was being canvassed by various High Courts, the Hon'ble Supreme Court gave an Interim Order that those states where the High Courts have given judgment in favor of the petitioner, no tax would be collected. In the mean time the Haryana Government has repealed the LADT Act and introduced another Act by the name of 'Entry Tax' on the same lines. That Act was also been held ultra vires by the High Court. However, on prudence basis, the liability has been fully provided for. The order of Punjab and Haryana High Court and other judgments of all the Courts of India have been long pending. The State Governments have requested the Hon'ble Supreme Court that it is very difficult for them to run the Government. So at least till the pendency of the cases in the Hon'ble Supreme Court they may be allowed to charge from past liability and also from the future liability to be accrued. On 30th October, 2009, the Hon'ble Supreme Court have directed that 1/3rd of the liability is to be paid by all the assesses whose cases are pending in the High Courts. As, at present, there is no Act either LADT/Entry Tax prevalent in Haryana State, no tax is being collected from the assesses however undertaking have given by assesses that in case they lose they will make the payment. As such on prudence basis, full liability has been provided for. In the meantime, i.e. on 16.04.2010 the Entry Tax matters of the states have been referred to a larger 9- Judges Constitutional Bench of the Supreme Court, where the judgment of 7-Judges Constitutional Bench past 49 years ago would be revisited. Constitution Bench has not been constituted as yet and the status of the case is as it is and at present no tax is being collected/paid in Haryana.

The expected return on the plan assets is determined considering several applicable factors mainly the composition of plan assets held, assessed risk of assets management, historical results of returns on the plan assets and the policy for the management of plan assets management.

The estimates of future salary increase, considered in actuarial valuation, taking into account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

(a) The company makes monthly contributions to Provident Fund managed by Trust for qualifying employees. Under the scheme, the company is required to contribute a specified percentage of the payroll costs to fund the benefits.

In keeping with the Guidance on Implementing Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by the companies (Accounting Standards) Rules, 2006, employer established provident fund trusts are treated as Defined Benefit Plans, since the Company is obliged to meet interest shortfall, if any, with respect to covered employees. Accounting to the actuarial Valuation, the Defined Benefit Obligation of Interest Rate Guarantee on exempted Provident Fund in respect of employees of the company as on 31 st March, 2015 works out of Rs, Nil (Rs, Nil) and hence no provision is required to be provided for in the books of account towards the guarantee for notified interest rates.

15. Finance Lease

Assets acquired under leases where the company has substantially all the risks and rewards of ownership are classified as finance lease. Such assets are capitalized at inception of the lease at the lower of the fair value or net present value if minimum lease payments and a liability is created for an equivalent amount.

Lease interest charged to profit & loss for right to use of CTL Machine (Cut to length) for the services regarding cutting of Stainless Steel sheets.

# does not include Rs, 37.48 Lacs allocated from Jindal Stainless Limited pursuant to Composite Scheme of Arrangement (refer note no 26)

45 Capital work-in-progress (CWIP) includes technical know-how and supervision fees, taxes, machinery under installation/in transit, pre-operative expenses and other assets under erection. Details of same areas under:-

16 Previous years' figures have been re-arranged and regrouped wherever considered necessary.

17 Figures in bracket indicate previous year figures.

18. Note 1 to 49 are annexed to and from integral part of the Balance Sheet and Statement of Profit & Loss.

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