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Notes to Accounts of Ramsarup Industries Ltd.

Mar 31, 2015

1. rights, preference & restriction attached To shares A Equity Shares the Company has only one class of equity Share having a par value of Rs 10/- each. each holder of equity Share 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 the 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 distribution of all preferential amounts , in proportion to their shareholding.

A Preference Shares

i. 13,00,000 5% Redeemable Cumulative preference Share of Rs 10/- each fully paid up were allotted on 31-03-2003, which was due for redemption at any time between 6th and 10th year from the date of allotment at a premium of Rs 25/- per share and the date of redemption is 31.03.2013. However the company had obtained the consent of the preference share holders to extend the period of redemption by another period of two years and will now become due for redemption on 30.03.2015 on existing terms and conditions. the company has obtained extension consent of the preference share holders to extend the period of redemption by another one year and will now become due for redemption on 29.03.2016 on existing terms and conditions.

ii. 31,60,000 4% Redeemable Cumulative preference Share of Rs 10/- each fully paid up were allotted on 24-09-2004, which was due for redemption at any time between 7th and 8th year from the date of allotment at a premium of Rs 25/- per share and was due to redeemed on 24.09.2012. the Company obtained the consent of preference share holder in their meeting held on 20.09.2012 to extend the period of redemption upto 23.03.2013. However due to continuing Financial Crunch the company had further obtained the consent of preference Share holders to extend the period of redemption by another period of two years and had become due for redemption on 22.03.2015 on existing terms and conditions. the company has obtained extension consent of the preference share holders to extend the period of redemption by another one year and will now become due for redemption on 21.03.2016 on existing terms and conditions.

iii. 2,24,99,920 5% Redeemable non Cumulative preference Share of Rs 10/- each fully paid up were allotted on 31- 03-2010, which is redeemable at a premium of Rs 90/- per share at any time within 20th year from the date of allotment.

2. Term loans and FUNDED INTEREST TERM LOANS :

a term loans from IDBI Bank limited is secured by equitable mortgage of lease hold land and First charge on certain Fixed Assets of the company's Kalyani unit on pari-passu basis with the other lenders and personal guarantee of Managing Director together with corporate guarantee of M/s. Ramsarup Investments ltd and pledge of 3507848 equity shares of Company held by other related Body Corporates. the Banker had invoked entire equity shares of the company pledged with them by some of the group companies and had adjusted the proceeds against their over dues in part by sale of only 2389034 equity shares and balance 1118814 equity shares are held by IDBI Bank limited as their holding. the term loan was repayable in quarterly installments, but the company has defaulted in payment and as such the entire loan has been included in current liability.

b Working Capital term loan (WCtl) and Funded Interest term loan (FItl) are secured by all the assets covered under the working capital facilities in short term borrowing .the loan was repayable in quarterly installments, but the company has defaulted in payment and as such the entire loan has been included in current liability.

c Rupee term loan from punjab national Bank is secured by way of hypothecation of Factory Shed & Building, plant & Machineries and other Fixed assets of Durgapur unit and also equitable mortgage of the Factory shed & land belonging to Vanguard Credit & Holding pvt ltd, a group company on pari-passu basis with other term lenders along with its corporate guarantee and personal guarantee of Managing Director of the company. the loan was repayable in 24 equal quarterly installments of Rs. 300 lacs each commencing from 1st April 2011, but the company has defaulted in payment of interest and installments, therefore loan has been recalled and accordingly the same has been included in current liability.

d Rupee term loan from Axis bank ltd. is secured by way of hypothecation of Factory Shed & building, plant & Machineries and other Fixed assets of Durgapur unit and also equitable mortgage of the Factory shed & land belonging to Vanguard Credit & Holding pvt. ltd. a group company on pari-passu basis with other term lenders along with its corporate guarantee and personal guarantee of Managing Director of the company. the loan of Rs. 4,500 lacs was repayable in 20 equal quarterly installments commencing from April 2010, Rs. 5,000 lacs in 14 equal quarterly installments commencing from April 2012 and Rs. 5,000 lacs transferred from Short term loan was repayable in one installment but due installments have not been paid till date and accordingly the same has been classified as current liability.

e term loans for various modules of Integrated Steel project at Kharagpur have been tied up under multiple banking arrangements and secured by way of equitable mortgage of entire land & Building on pari passu basis. the lender Banks are having 1st charge on movable fixed assets of the specific module of the project on pari passu basis with other term lenders of specific modules and 2nd pari passu charge on the said assets on a reciprocal basis and further secured by personal guarantee of the Managing Director of the Company and some of the body corporate. Since neither the installment due for repayment nor interest has been serviced as such all the accounts have become overdue to that extent. the term loan was repayable in quarterly installments, however the company has defaulted in payment of interest and stipulated installments, therefore the loan has been recalled and this has been included in current liability.

Working Capital term loan (WCtl) and Funded Interest term loan (FItl) were to be repaid in quarterly installments but the same have not been paid and to the said extent it has become overdue. the Working Capital term loan was repayable in quarterly installments, but the company has defaulted in payment of interest / stipulated installments, therefore the loan has been recalled and included in current liability.

f term loan from ICICI Bank ltd. was provisionally secured by way of first equitable mortgage of all immovable properties along with WBIDC ltd. and hypothecations of movable assets other than book debts, stock of raw material, finished, semi finished goods of the Shyamnagar unit & guaranteed by Managing Director of the Company. However WBIDC has not provided noC for the same. the term loan is further secured by pledge of 5,00,000 equity shares of the company held by promoters group company which has been further supplemented by another 5,37,970 equity shares of the company held by other companies/group companies for further financing credit facilities to Ramsarup Infrastructure one of the unit of the company. the term loan was repayable in 30 quarterly installments commencing from June, 2013, but the company has defaulted payment of interest and as such loan has been recalled and hence this has been included in current liability.

g the term loan from WBIDC ltd was secured by way of 1st equitable mortgage of immovable property and hypothecation of all movable fixed assets pertaining to Shyamnagar unit and personal guarantee of Managing Director of the company. the debt has been recalled by the WBIDC ltd. and the amount of Rs. 1422.46 lacs has been included under the head current liabilities. Since 30.07.2012 WBIDC has invoked the provision of section 29(1) of the State Financial Act 1951 by which they have taken possession of the Shyamnagar unit with its fixed assets including plant and machinery mortgage / hypothecated to them.

h Working capital term loan and Funded Interest term loan of Shyamnagar unit from united Bank of India was repayable in 20 quarterly installments and is secured by assets against the working capital facilities. But the due amount has not been paid till date, hence the loan has been recalled and therefore this has been included in current liability.

i term loan from IReDA is secured by way of First charge by creation of mortgage on all immovable properties & hypothecation of movable assets/ properties both existing and future pertaining to 3.75 MW Wind Farm project at Village Khori, taluka Sakri, District Dhule, in the State of Maharashtra and elsewhere excluding specified movables to be charged to bankers for Working Capital Borrowings as agreed By IReDA. the loan was Repayable in 24 equal quarterly installments of Rs. 52 lacs commencing from 31st March 2006 and finally due on 31st march 2012 but last 9 quarterly installments w.e.f. 4th quarter of 2009-10 up to 4th quarter 2011-12 have not been paid and also defaulted in payment of interest accrued thereon, hence the entire loan has been classified as Current Borrowing.

j long term loan has been classified as secured on basis of available securities and market value of Fixed Assets as estimated by the management which has been relied upon. However no current valuation report has been obtained.

k Funded Interest term loan (FItl) was on account of Cash credit facility from ICICI Bank Repayable in 30 quarterly installments from June,2013. However due to non servicing of interest the account turned overdue and the entire facility was recalled by the bank and as such the amount has been classified as current borrowings.

l the loan has been classified as secured on basis of available securities and market value of fixed assets as estimated by the valuer and that it has been shown as current borrowings as debts have been recalled and/or the company is in default in paying the installments and interest thereon. Since the terms &conditions of the term loan, Working

A From Banks :

i) Working Capital facilities from banks for Kalyani unit are secured by hypothecation of stock of raw materials, finished goods, stock in process, stores & spares etc. and book debts and personal guarantee of Managing Director of the Company and one of his relative together with corporate guarantee of Ramsarup Investments ltd and collaterally secured by way of equitable mortgage on leasehold land and Building thereon at Kalyani on pari-passu basis with the Consortium of Banks and IDBI Bank limited and 2nd Charge on Fixed Assets financed by IDBI Bank limited and accordingly taking the estimated market value of the fixed assets by the management the same has been classified as secured loan.

ii) Working Capital facilities from united Bank of India are secured by hypothecation of stock of raw materials, finished goods, stock in process, stores & spares etc. and book debts and second charge on its Fixed Assets at Shyamnagar unit and personal guarantee of Managing Director together with corporate guarantee of M/s.

Ramsarup Investments limited but the cash credit facility has already been recalled .

iii) Working Capital term loan, FItl and Cash Credit facility from united Bank of India have become overdue due to non-payment of installments and/or servicing of the interest as such provision for interest has been made up to June 2014 on the basis of rates available in sanction letter at regular interval rest or as per interest debited by the bank where available.

iv) All the Bank Borrowings have become overdue, due to non-payment of installment of loan and interest thereon as per the terms of sanction.

v) Working Capital Facilities from punjab national Bank and IDBI Bank ltd are secured on pari-passu basis by hypothecation of entire stocks, stock in process, Finished goods, stores & spares, stocks-in-transit, stock lying with others for conversion and book debts of Durgapur unit and further secured by personal guarantee of Managing Director of the Company. First charge on fixed asset of Durgapur unit is already held by punjab national bank on term loan Account and therefore taking the estimated market value of the fixed asset, short term borrowings have been classified as secured.

vi) Working Capital Facility from ICICI Bank Secured against hypothecation of Stock of Raw material, Work in progress, Consumable Stores etc and book debts of Infrastructure Division and pari pasu charge on fixed assets with Development Credit Bank and further secured by 1037970 equity shares of the company held by some of the Group companies and personal guarantee of Managing director.

vii) Working Capital Facility in infrastructure Division from Development Credit Bank is secured against hypothecation of stock & book Debts and pari-pasu Charge on entire fixed assets with ICICI Bank ltd and personal guarantee of Managing director.

viii) Working Capital / Bill discounting facility from SIDBI is partly secured by First charge on the Current Assets of M/s. n.C. Das & Company which is one of the unit of Infrastructure Division of the company together with personal guarantee of Managing Director.

ix) Amount due to IDBI Bank ltd in Infrastructure division secured by pari passu first charges on its Assets of the Company with other lenders.

x) Working Capital facilities from punjab national Bank for the Mini Blast Furnace at Kharagpur is secured by Hypothecation of entire stock and book debts of the unit and personal guarantee of Managing Director and collaterally secured by 3rd charge on plant & Machinery of the unit on pari passu basis with the charges created and/or to be created by the company in favour of the other working capital lenders. this facility has become overdrawn due to non servicing of accumulated interest and some of other terms of sanction.

xi) All Secured/unsecured loan from Banks , Financial Institutions , etc. are guaranteed by Managing Director of the company.

B From Financial Institution :

Some of the loans from financial institutions are covered by pledge of certain equity shares of the company held by various group companies and Managing Director, subservient charges on Movable Fixed Assets, hypothecation of Heavy equipments and/or equitable mortgage of land held by some of the group companies along with personal guarantee of Managing Director. this facility has been recalled due to non servicing of accumulated interest and terms of sanction.

C Unsecured Loans :

loans from Related parties / Group Companies are interest free and repayable on demand. Some of the group entities had pledged the shares for credit facilities granted to the company but shares were invoked for non payment of the dues and the banks on disposal of such shares had credited the proceeds in the account of the company against their dues in part. to the said extent, the amount is further included in the loan payable to them.

D 1} Borrowing from Banks are not confirmed in absence of statements of accounts and confirmation from them.

2} to the best of our information and explanations given to us some of the lender banks have already assigned their debts together with the underline securities, right title and interest thereon to some of the Assets Re-construction Company registered with the RBI pursuant to section 3 of the SARFAeSI Act 2002. But no impact has been given in the financial statements in absence of any documentation to this effects.

E Interest on all the Borrowings from Banks and Financial Institutions has been provided up to June 2014 at the specified rates but no provision has been made in the Accounts for the period from1st July, 2014 to 31st March, 2015 amounting to Rs. 395.84 Crores and to this extent the loss in the Financial Statements and liability to the Banks for the year is understated.

3. All contracts on Capital Account has been kept in abeyance till further development.

4. Capital Work in progress includes some of the equipment relating to wire drawing machine amounting to Rs. 1661.21 lacs which were imported are lying at Durgapur Dry port pending clearance of original custom duty of Rs. 50 lacs (approx), of which actual liability can only be ascertained at the time of clearance.

NOTE: the Company has made Investment in the equity of Moira Madhujore Coal ltd. to whom the Coal Block at Moira Madhujore was allotted jointly with other beneficiaries and subsequently due to various reasons, the Coal Mine may be deal located and the rights in coal block and investment thereon is likely to be affected.

5. trade Receivables both non-Current & Current together with Advances to Suppliers & others are unconfirmed and some of them are long outstanding which may be doubtful of recovery. It is estimated that substantial debts may become doubtful of recovery for which no provision has been made as the management is of the opinion that steps will be taken to realize the money.

*1) All FDRs and Margin Money are stated to be held by the banks against letter of guarantees issued by them. 2) Balance in FDR/Margin money is as certified by the management as balances are unconfirmed by the banks.

NOTE: the Company is having its Wind Mills in the name of Ramsarup Vidyut where the energy Bills for the utilization of electric power, by the MSeDCl for 5 months could not be raised as the necessary information's were not available from Suzlon Global Services ltd. however the estimated energy Bill {revenue} could be of Rs. 17 lakhs (approx), which has not been accounted for. Similarly, due to various dispute with Suzlon Global Services ltd., the liability for maintenance of the Wind Mill amounting to Rs. 38.09 lakhs has not been provided for. Due to the above reason the revenue and related expenses thereon has not been recognized in the Accounts.

6. DISCLOSER PURSUANT TO ACCOUNTING STANDARD - 15 (REVISED) EMPLOYEES BENEFITS

a) Defined Contribution Plans

employer- established provident fund trust are treated as defined benefits plans. the company in its Shyamnagar unit has established a provident fund trust namely "nicco Steels limited Workmen's provident Fund" which is in line with provident Fund & Miscellaneous provision Act, 1952.the plan guarantees interest at the rate notified by provident Fund Authorities . the contribution by the employer & employee together with interest accumulated thereon are payable to employees at the time of separation from the company or retirement , whichever is earlier. the benefit vest immediately on rendering of the services by the employee. But for last few years the manufacturing activities were suspended and WBIDC has taken physical possession of the unit since August 2012.

the guidance on implementing AS 15, employee Benefit (Revised 2005) issued by the Accounting Standard Board (ASB) states that Benefits involving employer established provident funds, which require benefit shortfalls to be compensated are to be considered in defined benefit plans. the Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. As explained to us there is no shortfall as on 31st March 2015.

b) Gratuity

In Keeping with the company Gratuity scheme (Defined Benefit plan) eligible employees are entitled to gratuity benefits (at half months eligible salary for each completed year of service on Retirement / Death /termination). Vesting occurs upon completion of 5 years of service subject to the payment of Gratuity Act, 1972.

the principal assumptions used in the calculation are the (1) Discount Rate, (2) Salary increase. the Discount rate is based upon the market yields available on Government Bonds at the accounting date with a term that matches debt of the liabilities and the salary increase take account of inflation, seniority, promotion and other relevant factors.

* NOTE: For the Current financial year Gratuity liability has been been provided on estimated basis at Rs 1.50 lacs and no Actuarial valuation has been done as required by As 15 .the management is of the opinion that since all the plants are under suspension of work as such provision for gratuity / leave encashment liability will not vary substantially.

b. i) In respect of the letter of undertaking/Guarantees for Rs 2,454.61 lacs (previous Year Rs. 2,454.61 lacs) issued in favour of Dy. Commissioner of Customs, for duty saved on account of Import of plant & Machinery against the Import license issued under para 5.2/5.7 of exim policy 2004-09 for lower Custom Duty under epCG Scheme against which differential duty has been paid in the year of import. this concession has been allowed based on the obligation that the Company will export items up to eight times of duty saved and realize money in Convertible Foreign exchange out of which there is due export obligation of Rs. 20,222.17 lacs over a period of 8 years from the date of issue of such disclosure under The micro, small & medium enterprises development acT, 2006 the Company is not aware of the registration status of its suppliers registration under the MSMe Act, 2006 ('Micro Small and Medium enterprises Development Act 2006"). Accordingly no information relating to outstanding balances / and interest have been disclosed as it is not determinable. Moreover there has been no manufacturing activities in the company for about 4 years or more as such provisions are not applicable.

license for duty saved of Rs.2,527.80 lacs on physical import of plant and Machinery. this has been taken as certified by the management.

ii) Apart from the above the company had imported some of the raw material viz wire rod and Zinc valued at Rs. 42.01 crore during the year ended 31.03.2008 against which the import duty saved was Rs. 11.83 crores. An export obligation was to be completed on or before 31.03.2010, however till date export obligation to the tune of Rs 2.57 crores of duty saved could only be completed and balance export obligation to the tune of Rs 9.26 crores of such duty saved is still pending. the company has approached the Regulatory Authority for extension of time to complete the required export and if not this liability may arise in due course for which no provision has been made.

iii) Some lenders and creditors have filed cases in different Courts. the company has challenged the same. However the primary liability for the same has been provided in the books except for other claims and interest thereon.

c> liabilities that may arise due to Show cause notices received by the Company have not been considered as Contingent liability. there are some legal cases against the company before the different courts initiated by some of the lenders , suppliers & others, which have not been recognized/partly recognized in the accounts as the company has not accepted the liability.

d> the invocation of equity shares of the company, pledged by promoter, promoter group company and/or associates in favors of the Banks/Financial Institution on request of the company for additional comfort to such lenders, has resulted in an additional demand of Rs. 7,360 lacs, by the said pledgers against the company towards losses due to invocation. the company has not recognized the same and no provision has been made.

e> All contracts on capital account have been kept in abeyance by the company and therefore no capital commitment is outstanding as on balance sheet date but advances given for purpose of various projects amounting to Rs 654.18 (lacs) {previous Year Rs 654.18 (lacs)} is likely to become doubtful of recovery unless the material / services are provided to the company, upon recommencement of such capital contract. no provision for such doubtful advances have been made during the year.

7.0 i) the working of the company has been adversely affected due to paucity of fund and the company has not been able to service the interest / installments of various credit facilities provided by the lenders.

ii) As reported earlier the Company had undertaken at Kharagpur and Durgapur new / expansion/modernization project, on which substantial expenditure was incurred. However, due to stringencies of financial resources and several other reasons, the Company could not continue with those projects and the same are still pending completion. Interests on borrowed fund together with day to day administrative expenses on such projects have been capitalized up to 31st March 2011 and thereafter it is being charged to the statement of profit and loss in accordance with clause 17 of AS-16 Borrowing Cost.

iii) In its Infrastructure division also, there has been slow progress in the projects / contracts undertaken by the company from time to time which led to termination of some of the contracts resulting in imposition of liquidated damages & penalties, substantial administrative expenses, invocation of bank guarantees, etc. this has led to further loss in almost all of the contracts undertaken by the company. However a few contracts are near completion but progressing at slow pace.

8.0 a) the manufacturing activities at Ramsarup utpadak, Shyamnagar has been suspended since August 2012 and physical possession has already been taken by WBIDC as term lender.

b) one of the bankers of the Company has unlawfully taken action u/s 13(4) of SARFAeSI Act, 2002 and the balance manufacturing 3 units of the company i.e. Ramsarup Industrial Corporation, Kalyani, Ramsarup nirmaan Wires, Durgapur and Ramsarup lohh udyog, Kharagpur have been taken physical possession as on 01.08.2013. the same is claimed to have been done with the consent of some of the other bankers of the Company. the Company has already taken appropriate legal steps challenging the said unlawful action, before the ld Debts Recovery tribunal (II) Kolkata.

c) IReDA has taken action u/s 13(4) of SARFAeSI Act, 2002 on one of the units i.e., Ramsarup Vidyut ltd., Dhule and have taken physical possession on 17.03.2015. the Company has already taken appropriate legal steps challenging the said unlawful action before the ld. Debt Recovery tribunal (II) Kolkata.

9. the company has incurred substantial losses and its net worth continue to be eroded further as at the Balance sheet date. pursuant to its accumulated losses being in excess of its net worth as per the audited balance sheet as on 31.03.2012, the company had filed a statutory reference with the Board for Industrial & Financial Reconstruction (BIFR), in terms of provisions of Section 15(1) of the Sick Industrial Companies (special provisions) Act, 1985 on 7th November 2012. the reference of the company registered with the Hon'ble BIFR is case no 67/2012 as intimated by letter no 3(R-4)/BC/2012 dated 21st November 2012 by the ld. Registrar of the Board for Industrial & Financial Reconstruction. the ld BIFR had abated the application u/s 15(1) of Sick Industrial Companies Act (SICA) but the company had filed an appeal before the Appellate Authority for Industrial & Financial Reconstruction (AAIFR), new Delhi vide case no. 78/2014 dt 25.03.2014. the Hon'ble AAIFR vide its order dated 03.12.2014 set aside the impugned order and remand the matter back to BIFR with direction to consider the submission of all the parties and pass order afresh after giving specific findings through a reasoned order.

10. We have been informed by the management that some of the lender banks have assigned their debts due from the company to some Assets Reconstruction Companies. the company however is confident of raising capital and rescheduling its debts / settlement and in the light of continued group support. Although by the SA 570, on the various counts indications are there about the entity's inability to continue as a going concern but in the opinion of the management entire matter is pending before the ld. BIFR and the Company is confident of getting revived with the support of the Banks and financial Institutions, etc as such the Accounts have been prepared on a going concern basis.

11. trade Receivables of Rs 54,534.60 lacs (p.Y.Rs. 54,542.65 lacs) & some advances to suppliers under the head non Current Asset and for Capital expenditure outstanding since long which is explained due to prevailing adverse situation in the industries and the stoppage of production in all the units of the company. the suppliers to whom such advances were made are also facing financial stringency hence the delay in realization from them. Substantial debts have become doubtful of recovery, thereby necessitating adequate provision for the same. As the management is taking efforts for recovery of the debts, hence no provision for doubtful debts has been made during the year.

12. Due to suspension of manufacturing activities there are indications which suggest impairment in the value of the fixed assets together with Capital Work in progress of the company. the management is still in the process of getting an impairment study done and the financial impact of the impairment loss, if any, will be accounted for at the relevant time. However Banker's / ARC's have been getting asset valuation report done from time to time.

13. In the opinion of Board of Directors of the company the current assets, loans & advances are approximately of the value as stated, if realized in the ordinary course of business and that the provision for all known liabilities are adequate and not in excess of the amount reasonably necessary. there are no contingent liabilities other than those stated above. Certain balances of sundry debtors, loans & Advances and sundry creditors are subject toconfirmations/reconciliation.

14. the Company has opted for tax Holiday u/S 80 IA of the Income tax Act, 1961 in respect of its income from power generation by 3 nos. Wind turbine Generators (WtG) for a period of 10 years from the financial year 2005-06.

15. RELATED PARTY DISCLOSURES

Related party Disclosure in accordance with Accounting Standard 18 issued by the Institute of Chartered Accountants of India where transaction exists: -

A . Joint Venture Company : Moira Madhujore Coal limited

name of Related parties and Description of Relationship :

B. Key Management Personnel {KMP} :

i Sri Aashish Jhunjhunwala {Managing Director}

C. Enterprises where KMP/relatives of KMP have significant influence or control :

i Ramsarup Investments limited

ii Ramsarup Vyapaar limited

iii Madhumalati Merchandise private limited

iv Imtihan Commercial private limited

v n.R.Mercantile private ltd.

vi Vanguard Credit & Holding private limited

16. SEGMENT REPORTING

the company operates in three segments: (i) Wire & Steel products, (ii) power Generation, (iii) Infrastructure. the company has chosen as it primary segments considering the dominant source and nature of risks and returns and the internal organizations and management structure. A description of the types of products by each reportable segment is as follows:

a. Wire & Steel products: the segment is engaged in the business of manufacturing various kinds of wires and steel products represented by its four units but all the manufacturing units are under suspension of work.

B. GEOGRAPHICAL SEGMENT

the company caters mainly to the needs of Indian markets and no export has been done during last 3 years as such there are no reportable Geographical segments. the company has all revenues, debtors and fixed assets in India.

17. previous Years Figures have been regrouped/reclassified wherever consider necessary to conform to the current year's presentation.


Mar 31, 2014

1. CORPORATE INFORMATION :

The company is primarily engaged in production and distribution of Iron & Steel, Wire Products, Pig Iron, Sponge Iron, TMT Bar, Galvanised & Black Wires, Power Generation & Turnkey Projects contracts for various infrastructure projects. The company presently has manufacturing facilities at Kalyani, Shyamnagar, Durgapur & Kharagpur all in West Bengal, of which due to unfavourable financial position is presently not in operations except some of the contracts in Infrastructure projects and Power generation.

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS :

The financial statements have been prepared to comply in all material respects with the Accounting Standard notified under Companies, 1956 read with General Circular 15/2013 dated 13th September 2013, issued by the Ministry of Corporate Affairs, in respect of section 133 of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistent applied by the Company and are consistent with those used in the previous year

All Assets and liabilities have been classified as current or non current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current & non-current classification of Assets and liabilities.

3.1 All contracts on Capital Account has been kept in abeyance till further development.

3.2 Capital Work in Progress includes some of the Equipment relating to wire drawing machine amounting to Rs.1661.21 lacs which were imported are lying at Durgapur Dry Port pending clearance of Original custom duty of Rs.50 lacs (approx), of which actual Liability can only be ascertained at the time of clearance.

4.1 Trade Receivables both Non-Current & Current together with Advances to Suppliers & others are unconfirmed and some of them are long outstanding which may be doubtful of recovery. It is estimated that substantial debts may become doubtful of recovery for which no provision has been made as the management is of the opinion that steps will be taken to realize

1) All FDRs and Margin Money are stated to be held by the banks against letter of guarantees issued by them.

2) Balance in FDR/Margin money is as certified by the management as balances are unconfirmed by the banks.

3) Unpaid Dividend A/c includes Rs 3,31,038/- is due to be transferred to Investor Education & Protection fund.

5.1 DISCLOSER PURSUANT TO ACCOUNTING STANDARD - 15 (REVISED) EMPLOYEESW BENEFITS a Defined Contribution Plans

Employer- established provident fund trust are treated as defined benefits plans. The company in its Shyamnagar unit has established a provident fund trust namely "Nicco Steels Limited Workmen''s Provident Fund" which is in line with Provident Fund & Miscellaneous Provision Act, 1952.The Plan guarantees interest at the rate notified by Provident Fund Authorities. The contribution by the Employer & Employee together with interest accumulated thereon are payable to employees at the time of separation from the company or retirement , whichever is earlier. The benefit vest immediately on rendering of the services by the employee. But for last few years the manufacturing activities were suspended and WBIDC has taken physical possession of the unit since August 2012.

The guidance on implementing AS 15, Employee Benefit (Revised 2005) issued by the Accounting Standard Board (ASB) states that Benefits involving employer established provident funds, which require benefit shortfalls to be compensated are to be considered in defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of Provided fund liabilities. As explained to us there is no shortfall as on 31st March 2014.

During the year where PF has been deducted the company accordingly contributes to the Regional Provided Fund Commissioner (RPFC) and the same is recognized as expense during the year as under :

Employer''s contribution to provident fund (to the Defined Benefits Plan) NIL NIL

Employer''s contribution to provident fund (to RPFC) 83573 NIL

b Gratuity

In Keeping with the company Gratuity scheme (Defined Benefit plan) eligible employees are entitled to gratuity benefits (at half months eligible salary for each completed year of service on Retirement / Death /Termination). Vesting occurs upon completion of 5 years of service subject to the payment of Gratuity Act, 1972. The present value of obligation is determined based on actuarial valuation using the projected unit credit method. Obligation for the leave encashment is recognized in the same manner as Gratuity. Following are the further particulars with respect to Gratuity for the year- ended 31.03.2014:

The Principal assumptions used in the calculation are the (1) Discount Rate, (2) Salary increase. The Discount rate is based upon the market yields available on Government Bonds at the accounting date with a term that matches debt of the liabilities and the salary increase take account of inflation, seniority, promotion and other relevant factors.

* During the year no Managerial remuneration has been paid to the Managing Director. However during the previous year remuneration to Whole time Director was paid Rs. 600,000/- within the limits prescribed under Schedule XIII of the Companies Act, 1956.

6.0 DISCLOSURE UNDER THE MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

The Company were not aware of the registration status of its suppliers registration under the MSME Act, 2006 (''Micro Small and Medium Enterprises Development Act 2006"). Accordingly no information relating to outstanding balances / and inter- est have been disclosed as it is not determinable. Moreover there has been no manufacturing activities in the company for about 2 years or more as such provisions are not applicable.

7.0 CONTINGENT LIABILITIES NOT PROVIDED FOR

As at As at 31.03.2014 31.03.2013

a. i) Sales Tax Liabilities (Under Appeal) (Net of payments) 15,814.60 11,524.06

ii) Central Excise Liabilities (Under Appeal) 1,557.56 1,557.62

iii) Service Tax Liabilities 4,519.87 4,519.87

iv) Guarantees given by the bank & counter Guarantee of the company 368.27 2,172.89

Note : Margin held by banks by way of pledge of FDRs & on margin account 188.73 362.41

b. i) In respect of the Letter of Undertaking/Guarantees for Rs 2,454.61 Lacs (Previous Year Rs. 2,454.61 Lacs) issued in favour of Dy. Commissioner of Customs, for duty saved on account of Import of Plant & Machinery against the Import License issued under Para 5.2/5.7 of Exim Policy 2004-09 for lower Custom Duty under EPCG Scheme against which differential duty has been paid in the year of import. This concession has been allowed based on the obligation that the Company will export items upto eight times of duty saved and realize money in Convertible Foreign Exchange out of which there is due export obligation of Rs. 20,222.17 Lacs over a period of 8 years from the date of issue of such license for duty saved of Rs.2,527.80 lacs on physical import of Plant and Machinery. This has been taken as certified by the management.

ii) Apart from the above the company had imported some of the raw material viz wire rod and Zinc valued at Rs. 42.01 crore during the year ended 31.03.2008 against which the import duty saved was Rs. 11.83 crores. An ex- port obligation was to be completed on or before 31.03.2010, however till date export obligation to the tune of Rs 2.57 crores of duty saved could only be completed and balance export obligation to the tune of Rs 9.26 crores of such duty saved is still pending. The company has approached the Regulatory Authority for extension of time to complete the required export and if not this liability may arise in due course for which no provision has been made.

c. Liabilities that may arise due to Show cause notices received by the Company have not been considered as Contingent Liability. There are some legal cases pending against the company, even for liquidations for claiming their dues before the Hon''ble Calcutta High Court initiated by some of the lenders, suppliers & others, which have not been recognised/ partly recognised in the accounts as the company has not accepted the liability. However the entire matter is pending before the Hon''ble BIFR/AAIFR.

d. The invocation of equity shares of the company, pledged by promoter, promoter group company and/or associates in favour of the Banks/Financial Institution on request of the company for additional comfort to such lenders, has resulted in an additional demand of Rs. 7,360 lacs, by the said pledgers against the company towards losses due to invocation. The company has not recogonised the same and no provision has been made.

e. All contracts on capital account have been kept in abeyance by the company and therefore no capital commitment is outstanding as on balance sheet date but advances given for purpose of various projects amounting to Rs 654.18 (Lacs) {Previous Year Rs 654.23 (Lacs)} is likely to become doubtful of recovery unless the material / services are provided to the company, upon recommencement of such capital contract. No provision for such doubtful advances have been made during the year.

34.0 i) During the year for, the working of the company has been adversely affected due to paucity of fund and the company

has not been able to service the interest / installments of various credit facilities provided by the lenders. Some of the guarantees in favour of the suppliers and or performance guarantees issued by the banks have been invoked which could not be serviced hence, had to be written off under the head Finance Cost by creating the liability in favour of the bank.

ii) As reported earlier the Company had undertaken at Kharagpur and Durgapur new / expansion/modernization project, on which substantial expenditure was incurred. However, due to stringencies of financial resources and several other reasons, the Company could not continue with those projects and the same are still pending completion. Interests on borrowed fund together with day to day administrative expenses on such projects have been capitalized upto 31st March 2011 and thereafter it is being charged to the statement of Profit and Loss in accordance with clause 17 of AS-16 Borrowing Cost.

iii) In its Infrastructure division also, there has been slow progress in the projects / contracts undertaken by the company from time to time which led to termination of some of the contracts resulting in imposition of liquidated damages & penalties, substantial administrative expenses, invocation of bank guarantees, etc. This has led to further loss in almost all of the contracts undertaken by the company. However a few contracts are near completion but progressing at slow pace.

8.0 a) The manufacturing activities at Ramsarup Utpadak, Shyamnagar has been suspended since August 2012 and physical possession has already been taken by WBIDC as term lender.

b) One of the bankers of the Company has taken action u/s 13(4) of SARFAESI Act, 2002 and the balance manufacturing Three(3) units of the company i.e. Ramsarup Industrial Corporation, Kalyani, Ramsarup Nirmaan Wires, Durgapur and Ramsarup Lohh Udyog, Kharagpur have been taken legal possession on 01.08.2013. The same is claimed to have been done with the consent of some of the other bankers of the Company. The Company has already taken appropriate legal steps challenging the said unlawful action, before the Ld. Debts Recovery Tribunal (II) Kolkata.

8.1 The company has incurred substantial losses and its Net worth continue to be eroded further as at the Balance sheet date. Pursuant to its accumulated losses being in excess of its networth as per the audited balance sheet as on 31.03.2012, the company had filed a statutory reference with The Hon''ble Board for Industrial & Financial Reconstruction (BIFR), in terms of proviso of Section 15(1) of the Sick Industrial Companies (special provisions) Act, 1985 on 7th November 2012. The reference of the company registered with the Hon''ble BIFR is case no 67/2012 as intimated by letter No 3(R-4)/BC/2012 dated 21st November 2012 by the Ld. Registrar of the Board for Industrial & Financial Reconstruction. The Hon''ble BIFR has since abated the application u/s 15(1) of Sick Industrial Companies Act (SICA) but the company has filed an appeal before The Hon''ble Appellate Authority for Industrial & Financial Reconstruction (AAIFR), New Delhi vide case no. 78/2014 Dt 25.03.2014 which is still pending.

8.2 We have been informed by the management that some of the Lender banks that they have assigned their debts due from the company to some Assests Reconstruction Companies .The company however is confident of raising capital and resched- uling its debts/ settlement and in the light of continued group support, the Financial Statements have been prepared on a going concern basis.

9.0 Trade Receivables of Rs 54,542.65 Lacs (P.Y.Rs.53152.52 lacs) & some advances to suppliers under the head Non Current Asset outstanding for a period of more than one year is due to prevailing adverse situation and the stoppage of production in all the units of the company. The suppliers to whom such advances were made are also facing financial stringencies hence the delay in realization from them. Substantial debts have become doubtful of recovery, thereby necessitating ade- quate provision for the same. However, the management is making efforts of recovery of the debts, hence no provision for doubtful debts has been made during the year.

10.0 Due to suspension of manufacturing activities there are indications which suggest impairment in the value of the fixed assets, being plant and machinery and other fixed assets of the company. The management is still in the process of getting an impairment study done and the financial impact of the impairment loss, if any, will be accounted for at the relevant time.

11.0 In the opinion of Board of Directors of the company the current assets, Loans & advances are approximately of the value as stated, if realised in the ordinary course of business and that the provision for all known liabilities are adequate and not in excess of the amount reasonably necessary. There are no contingent liabilities other than those stated above. Certain balances of sundry debtors, Loans & Advances and sundry creditors are subject to confirmations/reconciliation.

12.0 The Company has opted for Tax Holiday U/S 80 IA of the Income Tax Act, 1961 in respect of its income from power gener- ation by 3 Nos. Wind Turbine Generators (WTG) for a period of 10 years from the financial year 2005-06.

13.0 RELATED PARTY DISCLOSURES

Related Party Disclosure in accordance with Accounting Standard 18 issued by the Institute of Chartered Accountants of India where transaction exists : -

A . Joint Venture Company : Moira Madhujore Coal Limited Name of Related Parties and Description of Relationship :

B. Key Management Personnel {KMP} :

i Sri Aashish Jhunjhunwala {Managing Director}

C. Relatives of KMP :

i Smt. Sharda Devi {Mother of M.D}

ii Smt. Neerza Jhunjhunwala {Wife of M.D}

D Enterprises where KMP/relatives of KMP have significant influence or control :

i Ramsarup Investment Limited

ii Ramsarup Vyapaar Limited

iii Madhumalati Merchandise Private Limited

iv Imtihan Commercial Private Limited

v N.R.Mercantile Private Ltd.

vi Vanguard Credit & Holding Private Limited.

E Employees'' Benefit Plans where there is control :

i Ramsarup Industrial Corporation Employee''s Gratuity Fund

ii Ramsarup Utpadak Unit II Employees Gratuity Fund

iii Nicco Steels Limited Workmens'' Provident Fund

The company operates in three segments : (i) Wire and steel products (ii) Power Generation and (III

Infrastructure. The company has chosen business segments as its primary segments considering the dominant source and nature of risks and returns and the internal organizations and management structure. A description of the types of products by each reportable segment is as follows :

a. Wire and Steel products : The segment is engaged in the business of manufacturing various kinds of wires and steel products represented by its 4 manufacturing units.

b. Power generation : The company owns Wind turbine generator at Maharashtra and the power generated is sold to MESB as per agreement.

c Infrastructure : Under this segment the company procures orders for the various infrastructure projects at different places and after completion the same is handed over.


Mar 31, 2013

1.1 DISCLOSURE PURSUANT TO ACCOUNTING STANDARD -15 (REVISED) ''EMPLOYEES BENEFITS'':

a Defined Contribution Plans

"Employer- established provident fund trust are treated as defined benefits plans. The company in its Shyamnagar unit has established a provident fund trust namely ""Nicco Steels Limited Workmen''s Provident Fund"" which is in line with Provident Fund & Miscellaneous Provision Act, 1952,The Plan guarantees interest at the rate notified by Provident Fund Authorities . The contribution by the Employer & Employee together with interest accumulated thereon are payable to employees at the time of separation from the company or retirement, whichever is earlier. The benefit vest immediately on rendering of the services by the employee.

The Guidance on Implementing AS 15 , Employee Benefit (Revised 2005) issued by the Accounting standard Board (ASB) states that benefits involving employer established provident funds, which require interest benefit shortfalls to be compensated are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. Their is no shortfall as on 31st March 2013.

b Gratuity

"In Keeping with the company Gratuity scheme (Defined Benefit plan) eligible employees are entitled to gratuity benefits (at half months eligible salary for each completed year of service on Retirement / Death /Termination). Vesting occurs upon completion of 5 years of service subject to the payment of Gratuity Act, 1972. The present value of obligation is determined based on actuarial valuation using the projected unit credit method. Obligation for the leave encashment is recognized in the same manner as Gratuity. Following are the further particulars with respect to Gratuity for the year-ended 31.03.2013 :

The Principal assumptions used in the calculation are the (1) Discount Rate, (2) Salary increase. The Discount rate is based upon the market yields available on Government Bonds at the accounting date with a term that matches debt of the liabilities and the salary increase take account of inflation, seniority, promotion and other relevant factors.

2.0 CONTINGENT LIABILITIES NOT PROVIDED FOR:

31.03.2013 31.03.2012

(Rs in Lacs) (Rs in Lacs)

a. i) Sales Tax Liabilities (Under Appeal) (Net of payments) 11,524.06 11,423.83

ii) Central Excise Liabilities (Under Appeal) 1,557.62 1,557.62

iii) Guarantees given by the bank & counter Guarantee of the company. 2,172.89 2,327.02

Note : - Margin held by banks by way of pledge of FDRs & on margin account 362.41 409.34

b. i) In respect of the Letter of Undertaking/Guarantees for Rs 2,454.61 Lacs (Previous Year Rs. 2,454.61 Lacs) issued in favour of Dy. Commissioner of Customs, for duty saved on account of Import of Plant & Machinery against the Import License issued under Para 5.2£.7 of Exim Policy 2004-09 for lower Custom Duty under EPCG Scheme against which differential duty has been paid in the year of import. This concession has been allowed based on the obligation that the Company will export items upto eight times of duty saved and realize money in Convertible Foreign Exchange out of which there is due export obligation of Rs. 20,222.17 Lacs over a period of 8 years from the date of issue of such license for duty saved of Rs.2,527.80 lacs on physical import of Plant and Machinery. This has been taken as certified by the management.

ii) Apart from the above the company had imported some of the raw material viz wire rod and Zinc valued at Rs. 42.01 crore during the year ended 31.03.2008 against which the import duty saved was Rs. 11.83 crores. An export obligation was to be completed on or before 31.03.2010, however till date export obligation to the tune of Rs 2.57 crores of duty saved could only be completed and balance export obligation to the tune of Rs 9.26 crores of such duty saved is still pending. The company has approached the Regulatory Authority for extension of time to complete the required export and if not this liability may arise in due course for which no provision has been made. Had the impact of provision being considered, loss for the year would have increased by Rs 9.26 Crore as against the reported loss in the Statement of Profit & Loss .

c. Liabilities that may arise out of Show cause notices received by the Company have not been considered as Contingent Liability. There are some legal cases pending against the company, before the Hon''ble Calcutta High Court initiated by some of the lenders, suppliers & others, which have not been recognized/partly recognized in the accounts as the company has not accepted the liability as the same is being contested and after decision of the Hon''ble High Court the same will be accounted for in the books of account.

d. The invocation of equity shares of the company, pledged by promoter, promoter group company and/or associates in favour of the Banks/Financial Institution on request of the company for additional comfort to such lenders, has resulted in an additional demand of Rs. 7,360 lacs, by the said pledges against the company towards losses due to invocation. The company has not recognized the same and no provision has been made.

e. All contracts on capital account have presently been kept in abeyance and therefore no capital commitment is outstanding as on balance sheet date but advances given for purpose of various projects amounting to Rs 654.23 (Lacs){Previous Year Rs 903.50 (Lacs)} is likely to become doubtful of recovery unless the material / services are provided to the company, upon recommencement of such capital contract. No provision for such doubtful advances have been made during the year.

3.0 i) During the year also, the working of the company has been adversely affected due to paucity of fund and the company has not been able to service the interest / installments of various credit facilities provided by the lenders.

ii) The Company had undertaken at Kharagpur and Durgapur new / expansion/modernization project, on which substantial expenditure was incurred. However, due to stringencies of financial resources and several other reasons, the Company could not continue with those projects and the same are still pending completion. Interests on borrowed fund together with day to day administrative expenses on such projects have been capitalized up to 31st March 2011 and thereafter it has been charged to the statement of Profit and Loss for the year in accordance with clause 17 of AS-16 Borrowing Cost". Due to financial crisis, the company continued suspension of the said activity and in view of the prevailing adverse financial position of the company, the management does not for see commencement of the above activity in the immediate near future.

iii) In its Infrastructure division also, there has been slow progress in the projects / contracts undertaken by the company from time to time which led to termination of some of the contracts resulting in imposition of liquidated damages & penalties, substantial administrative expenses, invocation of bank guarantees, etc. This has led to further loss in most of the contracts undertaken by the company. However some of the contracts are near completion but progressing at slow pace.

4.0 The company has incurred substantial losses and its Net worth continues to be negative as at the Balance sheet date. Pursuant to its accumulated losses being in excess of its networth as per the audited balance sheet as on 31.03.2012, the company had filed a statutory reference with the Board for Industrial & Financial Reconstruction, in terms of provisions of Section 15(1) of the Sick Industrial Companies (special provisions) Act, 1985 on 7th November 2012. The reference of the company registered with the Hon''ble BIFR as case no 67/2012 as intimated by letter No 3(R-4)/BC/2012 dated 21st November 2012 by the Ld. Registrar of the Board for Industrial & Financial Reconstruction. Since the company is confident of raising capital and rescheduling its debts / settlement and in the light of continued group support, the financial statements have been prepared on a going concern basis.

5.0 Trade Receivables of Rs 53152.52 Lacs (P.Y. Rs. 15987 lacs) & some advances to suppliers under the head Non Current Asset outstanding for a period of more than one year is due to prevailing adverse situation and the stoppage of production in some of the units of the company. The suppliers to whom su''ch advances were made are also facing financial stringence hence the delay in realization from them. Substantial debts have become doubtful of recovery, thereby necessitating adequate provision for the same. However, the management is making efforts of recovery of the debts, hence no provision for doubtful debts has been made during the year.

6.0 Due to suspension of manufacturing activities there are indications which suggest impairment in the value of the fixed assets, being plant and machinery and other fixed assets of the company. The management is in the process of getting an impairment study done and the financial impact of the impairment loss, if any, will be accounted for at the material time, when the impairment study will be completed.

7.0 In the opinion of Board of Directors of the company the current assets. Loans & advances are approximately of the value as stated, if realised in the ordinary course of business and that the provision for all known liabilities are adequate and not in excess of the amount reasonably necessary. There are no contingent liabilities other than those stated above. Certain balances of sundry debtors, Loans & Advances and sundry creditors are subject to confirmations/ reconciliation.

8.0 The Company has opted for Tax Holiday U/S 80 IA of the Income Tax Act, 1961 in respect of its income from power generation by 3 Nos. Wind Turbine Generators (WTG) for a period of 10 years from the financial year 2005-06.

9.0 RELATED PARTY DISCLOSURES

Related Party Disclosure in accordance with Accounting Standard 18 issued by the Institute of Chartered Accountants of India where transaction exists : -

A Joint Venture Company:

Moira Madhujore Coal Limited

Name of Related Parties and Description of Relationship :

B Key Management Personnel {KMP}:

i. Sri Aashish Jhunjhunwala {Managing Director) ''

ii. Aashish Jhunjhunwala {HUF}

C Relatives of KMP :

i. Smt. Sharda Devi {Mother of M.D}

ii. Smt. Neerza Jhunjhunwala {Wife of M.D)

iii. Sri Advay Jhunjhunwala {Son of M.D)

D Enterprises where KMP/relatives of KMP have significant influence or control:

i. Ramsarup Investments Limited

ii. Ramsarup Projects Private Limited

iii. Ramsarup Vyapaar Limited

iv. Madhumalati Merchandise Private Limited

v. Imtihan Commercial Private Limited

vi. N.R.Mercantile Private Ltd.

vii. Naresh Engineers Ltd.

viii. Vanguard Credit & Holding Private Limited

ix. Amanat Merchants Private Limited

x. Greentop Realters Private Limited

xi. Laddugopal Propreties Private Limited

E Employees'' Benefit Plans where there is control:

i. Ramsarup Industrial Corporation Employee''s Gratuity Fund

ii. Ramsarup Utpadak Unit II Employees Gratuity Fund

iii. Nicco Steels Limited Worksmen Provident Fund

10.0 Previous Years Figures have been regrouped/reclassified wherever necessary to conform to the current year''s presentation.


Mar 31, 2011

1. PREFERENCE SHARE CAPITAL :

a. 13,00,000 5% Redeemable Cumulative Preference Share of Rs.10/- each fully paid up were allotted on 3 I -03-2003. which is due for redemption at any time between 6th and 10th year from the date of allotment at a premium of Rs.25/-per share.

b. 3 1,60,000 4% Redeemable Cumulative Preference Share of Rs.10/- each fully paid up were allotted on 24-09-2004. which is due for redemption at any time between 7th and 8th year from the date of allotment at a premium of Rs.25/- per share.

c. 2,24,99,920 5% Redeemable Non Cumulative Preference Share of Rs 10/- each fully paid up were allotted on 3 I - 03-20 10, which is redeemable at a premium of Rs.90/- per share at any time with in 20th year from the date of allotment.

The Preference shares as stated in (a) & (b) above is due for redemption on or before 3 1.03.2013 and 30.09.2012 respectively but in view of the unfavorable financial position, the company has not been able to plan source of redemption and also has not provided for the premium on redemption in the financial statements.

2. SECURED LOANS :

i) Term Loans and Funded Interest Term Loans :

a. Term Loans from IDBI Bank Limited is secured by equitable mortgage of lease hold land and First charge on certain Fixed Assets of the company's Kalyani unit on pari-passu basis with the other lenders and personal guarantee of Managing Director together with corporate guarantee of M/s.Ramsarup Investments Ltd and Pledge 3507848 equity shares of Company held by related Body Corporate. The Banker has invoked entire equity shares of the company pledged with them during the year and has adjusted the money against their overdoes in part.

b. Term Loan from ICICI Bank Ltd. is secured by way of first equitable mortgage of all immovable properties and hypothecations of moveable assets other than book debts, stock of raw material, finished, semi finished goods of the Shyamnagar unit ranking Pari-Passu with other term lenders & guaranteed by Managing Director of the Company. The term loan is further secured by pledge of 5,00,000 equity shares of the company held by promoters which has been further supplemented by another 5,37,970 equity shares of the company for further financing creed* facilities. The Term Loan is repayable in 30 quarterly installments commencing from June, 2013.

c. Term Loan from WBIDC Ltd is secured by way of 1st equitable mortgage of immoveable property and hypothecation of all movable assets pertaining to Shyamnagar unit ranking Pari-Passu with other term lenders and personal guarantee of the Managing Director of the company. Repayable with one year Rs.375 lacs (previous year Rs.1 50 lacs).

d. Rupee Term Loan from Punjab National Bank is secured by way of hypothecation of factory shed & building, Plant & Machineries and other fixed assets of Durgapur Unit and also equitable mortgage of the land and factory shed belonging to Vanguard Credit & Holding Pvt Ltd on pari-passu basis with other term lenders along with its corporate guarantee and personal guarantee of Managing Director of the company. The loan is repayable in 24 equal quarterly installments of Rs.300 Lacs each commencing from 1st April 201 I, Repayable within next one year Rs 1200 Lacs (Previous year.NIL).

e. Rupee term loan from Axis bank Ltd. is secured by way of hypothecation of factory shed & building, Plant & Machineries and other fixed assets of Durgapur Unit and also equitable mortgage of the factory shed & land belonging to Vanguard Credit & Holding Pvt. Ltd. on pari-passu basis with other term lenders along with its corporate guarantee and personal guarantee of Managing Director of the company. The loan of Rs.4,500 Lacs is repayable in 20 equal quarterly installments commencing from April 2010 and Rs.5,000 Lacs in 14 equal quarterly installments commencing from April 2012 but due installments could not be paid and the loan has become overdue for payment.

f Loan from Axis Bank of Rs.5000 lacs is repayable in full (pervious year Rs.5000/-) and has become overdue.

g. Term loans for various modules of Integrated Steel project at Kharagpur have been tied up under multiple banking arrangements and secured by way of equitable mortgage of entire land including Building thereon on pari passu basis. The Lender Banks are having 1st charge on movable fixed assets of the specific module of the project on pari passu basis with other term lenders of specific modules and 2nd pari passu charge on the said assets on a reciprocal basis and further secured by personal guarantee of the Managing Director of the Company and some of the body corporate. Since neither installment due for repayment nor interest has been serviced as such all the accounts have become overdue to that extent. However interest due thereon has been provided at the specified rates of interest as per available terms / sanctions.

h. Rupee Term Loan of Rs.35 185 Lacs are secured by subservient charge on fixed assets of Kharagpur unit and were due for payment but the same has become overdue.

g) Term Loan from IREDA is secured by First charge by way of the mortgage on all immovable properties & hypothecation of movable assets/ properties both existing and future pertaining to 3.75 MW Wind Farm Project at Village Khori, Taluka Sakri, District Dhule, in the State of Maharastra (Project No. 1726) and elsewhere excluding specified movables to be charged to bankers for Working Capital Borrowings as agreed by IREDA. The Loan was Repayable in 24 equal quarterly installments of Rs.52 Lacs commenced from 3 1st March 2006 but last 6 quarterly installments w.e.f. 3rd quarter 2009 up to 4th quarter 2010-1 I have become overdue together with interest & liquidated damages. Repayable in next one year entire amount of Rs.468 lacs (pervious year Rs.3 12 lacs)

j. Working Capital Term Loan (WCTL) and Funded Interest Term Loan (FITL) were to be repaid in quarterly installments but the same have not been paid and became overdue.

k. Buyers Credit from Bank are secured by earmarking term loan facilities from banks.

ii) Short Term / Working Capital Facilities :

a. Working Capital facilities from banks for Kalyani unit are secured by hypothecation of stock of raw materials. finished goods, stock in process, stores & spares etc. and book debts and personal guarantee of Managing Director of the Company and a corporate guarantee of Ramsarup Investments Ltd and collaterally secured byway of equitable mortgage on leasehold Land and Building thereon at Kalyani on Pari-Passu basis with the Consortium of Banks and IDBI Bank Limited and 2nd Charge on Fixed Assets financed by IDBI Bank Limited.

b. Working Capital facilities from United Bank of India are secured by hypothecation of stock of raw materials. finished goods, stock in process, stores & spares etc. and book debts and second charge on its Fixed Assets at Shyamnagar and personal guarantee of Managing Director of the Company together with corporate guarantee of M/s. Ramsarup Investments Limited.

c. Working Capital Facilities from Punjab National Bank and IDBI Bank Ltd are secured on pari-passu basis by hypothecation of entire stocks, stock in process, finished goods, stores & spares, stocks-in-transit, stock lying with others for conversion and book debts of Durgapur Unit of the company.

d. Working Capital facilities from Punjab National Bank for the Mini Blast Furnace at Kharagpur is secured by Hypothecation of entire stock and book debts of the unit and personal guarantee of the Managing Director and corporate Guarantee of Four other promoter group companies and collaterally secured by way of 3rc charge on Plant & Machinery of the unit on pari passu basis with the charges created and/or to be create by the company in favor of the other working capital lenders.

e. Working capital facility from Banks for some of its Turnkey Projects are secured by Hypothecation of stock. book debts & other current assets and personal guarantee of the Managing Director of the company, and second charge on the Fixed assets of Infrastructure Unit on Pari-Passu basis. Cash Credit facilities provided by Development Credit Bank Ltd has become overdue due to non servicing of monthly interest payable to them.

f Letter of Guarantee issued by certain banks are secured by way of first pari-passu charge as applicable on inventories, book debts and other movable assets.

g. Various Term Loans and Cash Credit facilities granted by bankers as per Secured Loan (schedule 2) and referred to above has become overdue and are presently inoperative. However interest have been provided on all these accounts at the respective rates of sanction.

3. UNSECURED LOAN :

Some of the Unsecured Loans from Body Corporate/s are not bearing interest.

4. DEFERRED TAX:

The break up of major components of net Deferred Tax Liabilities /(Assets) as on 3 I -03-201 I is as under :

During the year Deferred Tax liability has been converted into Deferred Tax Assets as above , mainly due to accumulated business loss and unabsorbed depreciation and other items as computed in accordance with the provisions of Income Tax Act 196 I but in absence of convincing evidence and virtual certainty for realisation of such "deferred tax assets", against future taxable income and in view of the prudent accounting policies , deferred tax asset has not been recognised.

5. The Company had promoted a Subsidiary Company in the name of Ramsarup Energy Limited (REL) by agreeing to subscribe 49,000 Equity Shares of Rs.10/- each equivalent to 98% of Equity Share Capital of REL REL was incorporated on 09-02-2010 with one of its main object of carrying on the business of generation and distribution of electricity. A, the object envisaged was not pursued the company applied for cancellation of its registration as permitted by Companies Act, 1956 In view of this provision of various disclosures for subsidiary company is not applicable.

6. DISCLOSURE UNDER THE MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 :

There are no Micro, Small and Medium Enterprises as defined in Micro, Small & Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of Principle amount together with Interest and accordingly no addition or disclosure has been made.

The above information regarding Micro, Medium and Small Enterprises has been determined to the extent such party have been identified on the basis of information available with the company and has been relied upon by the Auditors'.

7. Inventories include stock lying with outsiders : Rs.2,04,345/- (As certified by the Management) (NIL)

8. CAPITAL COMMITMENTS :

All contracts on capital account has presently been kept in abeyance till further development.

Carried over to Capital Work-in-Progress (Schedule-6) | 262,314,584.84 1220,178,096.62

9. Interest on borrowed fund on the incomplete project for the period beyond stipulated date of commissioning of the project has been included in Capful Work in Progress.

10. CONTINGENT LIABILITIES NOT PROVIDED FOR :

Sales Tax Liableness (Under Appeal) Rs.9,671.83 Lacs

(Net of payments) (Rs.5,955.10 Lacs)

b. Bank Guarantees Rs.3,064.23 Lacs (Rs.6,173.19 Lacs)

Note : Margin held by banks by way of pledge of Rs.3 19.76 Lacs

FDRs for L/C&L/G (Rs.2,344.87 Lacs)

c. In respect of the Letter of Undertaking/Guarantees for Rs2454.6 I Lacs (Previous Year Rs.2454.61 Lacs) issued is favor of Dee. Commissioner of Customs, for duty saved on account of Import of Plant & Machinery against the Import License issued under Para 5.2/5.7 of Exam Policy 2004-09 for lower Custom Duty under EPCG Scheme against which differential duty has been paid in the year of import. This concession has been allowed based on the obligation that the Company will export items up to eight times of duty saved and realize money in Convertible Foreign Exchange out of which there is due export obligation of Rs. 20222.17 Lacs over a period of 8 years from the date of issue of such license for duty saved of Rs.2527.80 lacs on physical import of Plant and Machinery. This has been taken as certified by the management.

Apart from the above the company had imported some of the raw material viz wire rod and Zinc valued at Rs.42.01 crore during the year ended 3 1.03.2008 against which the import duty saved was Rs.11.83 crores. An export obligation was to be completed on or before 3 1.03.2010, however till date export obligation to the tune of Rs.2.57 crores of duty saved could only be completed and balance export obligation to the tune of Rs 9.26 corers of such duty saved is still pending. The company has approached the regulatory authentic for extension of time to complete the required export and if not this liability may arise in due course for which no provision has been made. Had the impact of provision been considered, the loss before tax for the year would have increased by Rs.9.26 crores as against the reported loss as per profits loss account.

d. Show cause notices received by the Company has not been considered as Contingent Liability

e. The invocation of equity shares of the company pledged by promoter / promoter company / associates and others on request of the company for additional comfort to the banks and / or other lenders has resulted in a demand of Rs.7360 lacs by the said pledges during the year on the company for which no provision has been made.

11. Dividend on Cumulative Preference Shares amounting to Rs 57.42 Lacs for three years ended 31st March 201 I has not been provided for.

12. In the opinion of Board of Directors of the company the current assets, Loans & advances are approximately of the value as stated, if realised in the ordinary course of business.

13. The provision for all known liabilities are adequate and not in excess of the amount reasonably necessary. There are no contingent liabilities other than those stated above. Certain balances of sundry debtors, advances and sundry creditors are subject to confirmations/reconciliation.

14. Construction Expenses include transfer of material from / to other units Rs.1 6.99 lacs (Rs.443. lacs) and Nil (Rs.1,10.29 lacs) respectively.

15. The Company has opted for Tax Holiday U/S 80 IA of the Income Tax Act, 196 I in respect of its income from power generation by 3 Nos. Wind Turbine Generators (WTG) for a period of 10 years from the financial year 2005-06.

16. The company is following the system of recognising CENVAT Service Tax, Education Cess, Service Tax Receivable, VAT etc through receivable / payable in Balance Sheet.

17. Excise Duty on increase / decrease in stock represents differential Excise Duty on Opening and Closing stock of Finishes Goods.

18. A sum of Rs.36.1 6 lakhs have been determined payable for maintenance of WTG for earlier years after deducting claim for low generation of power etc. and has been provided in full during the year in addition to maintenance charges for the year.

19. MANAGERIAL REMUNERATION :

Remuneration paid to the Managing Director and Whole time Director amounts to Rs.18,00,000/- and Rs.6,00,000/- respectively which is well within the limits prescribed under Schedule XIII of the Companies Act, 1956. Hence computation of net profit for the purpose of Directors remuneration under section 349 of the Companies Act 1956 has not been enumerated.

20. DISCLOSURE PURSUANT TO ACCOUNTING STANDARD- 15 (REVISED)'EMPLOYEES BENEFITS' :

a. Defined Contribution Plans

In accordance with the Accounting Standard I 5 on employee benefits issued by the Institute Chartered Accountants of India, employer- established provident fund trust are treated as defined benefits plans. The company in its Shyamnagar unit has established a provident fund trust which is exempted U/S 17 of Employees Provident Fund Act, 1952 which stipulates that the employer shall make good deficiency if any, in the interest rate declared by trust vis-a-vis statutory rate. For all other units the company contributes to the Regional Provident Fund Commissioner (RPFC) and recognizee as expense for the year as under:

b. Defined Benefit Plans

In Keeping with the company Gratify scheme (Defined Benefit plan) eligible employee are entitled to gratuity benefits (at half months eligible salary for each completed year of service on Retirement / Death Termination). Vesting occurs upon competition of 5 years of service subject to the payment of Gratuity Act, 1972. The present value of obligation,s determined based on actuarial valuation using the projected un* creed* method. Obligation for the leave encashment ,s recognized in the same manner as Gratuity. Following are the further particulars with respect to Gratuity for the year- ended 3 1.03.2011:

The Principal assumptions used in the calculation are the (I) Discount Rate, (2) Salary increase. The Discount rate is based upon the market yields available on Government Bonds at the accounting date with a term that matches debt of the liabilities and the salary increase take account of inflation, seniority, promotion and other relevant factors.

21. RELATED PARTY DISCLOSURES :

Related Party Disclosure in accordance wit Accounting Standard I 8 issued by the Institute of Chartered Accountants of India

a. Joint Venture Company:

Moira Madhujore Coal Limited

22. ADDITIONAL INFORMATION PURSUANT TO THE PROVISIONS OF PARAGRAPH 3, 4C AND 4D OF PART II OF THE SCHEDULE VI OF THE COMPANIES ACT, 1956 :

Geographical Segment

The Company caters mainly to the needs of Indian Market and the export Turnover being 0.8 I % (Previous Year 5.88 %) of the total turnover of the company there are no reportable geographical segments.

The Accounting policies adopted for segment reporting are in line with the accounting policies of the company Revenue & Expense have been identified to segment on the basis of the relationship to the operating activities of the segment but Revenue & Expense which relate to the interpose as a whole , and not allocable to segments on a reasonable basis, have been shown under the head "Unallowable"

23. The previous year figures had been regrouped, rearranged and reclassified wherever considered necessary Signatures to Schedule 1 to 22 to Balance Sheet as at 31st March, 2011 and Profit & Loss Account for the year ended on that date

 
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