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Notes to Accounts of Steel Exchange India Ltd.

Mar 31, 2023

Provisions

All the provisions are recognized as per Ind AS 37. Provisions are recognized when the Company has a present
obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits
will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received
and the amount of the receivable can be measured reliably.

2.2.11 Revenue recognition:

The Company derives revenues primarily from business of Iron & Steel and power.

Sale of products

Revenue is recognized upon transfer of control of promised goods or services to the customer, recovery of the
consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is
no continuing management involvement with the goods, and the amount of revenue can be measured reliably.
Revenue is measured net of returns, trade discounts and volume rebates. The timing of the transfer of risks and
rewards varies depending on the individual terms of the sales agreement.

An Entity''s right to consideration in exchange for goods or services that the entity has transferred to a customer
when that right is conditioned on something other than passage of time is treated as contract asset.

An entity''s obligation to transfer goods or service to a customer for which the entity has received consideration
(or the amount is due) from the customer is treated as contract liability.

The Company accounts for volume discounts and pricing incentives to customers as a reduction of revenue
based on performance obligation that corresponds to the progress by the customer towards earning the discount
/ incentive. If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be
estimated reliably, then the discount is not recognized until the payment is probable and the amount can be
estimated reliably. The Company recognizes changes in the estimated amount of obligations for discounts in
the period in which the change occurs.

Contract modifications are accounted for when additions, deletions or changes are approved either to the
contract scope or contract price. The accounting for modifications of contracts involves assessing whether the
goods/services added to an existing contract are distinct and whether the pricing is at the standalone selling
price. Goods/ services added that are not distinct are accounted for on a cumulative catch-up basis, while
those that are distinct are accounted for prospectively, either as a separate contract, if the additional Goods/
services are priced at the standalone selling price, or as a termination of the existing contract and creation of
a new contract if not priced at the standalone selling price.

Sale of power

Revenue from sale of power is recognised when the services are provided to the customer based on approved
tariff rates established by the respective regulatory authorities. The Company doesn''t recognise revenue and
an asset for cost incurred in the past that will be recovered.

The Company presents revenues net of indirect taxes in its Statement of Profit and Loss.

Disaggregate revenue information

Revenue from Operations presents disaggregated revenues from contracts with customers for the year ended
March 31,2023 by type of goods or services. Refer table in note no.3.17

The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of
our revenues and cash flows are affected by industry, market and other economic factors.

Trade receivables and contract balances

The Company classifies the right to consideration in exchange for deliverables as a receivable.

A receivable is a right to consideration that is unconditional upon passage of time. Revenue for time-and-
material contracts are recognized as related control in goods is transferred and services are performed.

Trade receivable is presented net of impairment in the Balance Sheet.

During the year ended March 31, 2023, the Company recognized revenue of Rs.67.62 crore arising from
opening unearned revenue as of April 1,2022.

Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to
be recognized as at the end of the reporting period and an explanation as to when the Company expects to
recognize these amounts in revenue.

Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining
performance obligation related disclosures for contracts where the revenue recognized corresponds directly
with the value to the customer of the entity''s performance completed to date, typically those contracts where
invoicing is on time-and-material basis.

Remaining performance obligation estimates are subject to change and are affected by several factors, including
terminations, changes in the scope of contracts, periodic revalidations, and adjustment for revenue that has
not materialized and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31,

Company expects to recognize revenue of around 98% within the next one year and the remaining thereafter.
This includes contracts that can be terminated for convenience without a substantive penalty since, based on
current assessment; the occurrence of the same is expected to be remote.

The impact on account of applying the erstwhile Ind AS 18, Revenue instead of Ind AS 115, Revenue from
Contracts with Customers on the financials results of the Company for the year ended and as at March 31,
2023 is insignificant.

1.1.1 Finance income and expense
>

and other miscellaneous income. Interest income is recognized as it accrues in the statement of profit and
loss.

>

statement of profit and loss.

> Foreign currency gains and losses are reported on a net basis.

1.1.2 Income tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit
and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

(a) Current income tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used
to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and
applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a
legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or
to realize the asset and liability simultaneously.

Section 115 BAA of the Income Tax Act 1961, introduced by Taxation Laws (Amendment) Ordinance, 2019
gives a one-time irreversible option to Domestic Companies for payment of corporate tax at reduced rates. In
view of the unabsorbed depreciation and MAT Credits, the Company has determined that it will continue to
recognize tax expense at the existing income tax rate as applicable to the Company.

(b) Deferred income tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities
are recognized for deductible and taxable temporary differences arising between the tax base of assets and
liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the
initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profits or loss at the time of the transaction.

Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilized. Deferred income tax liabilities are recognized for all taxable temporary differences. The
carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

1.1.3 Earnings per share

Basic earnings per share are computed using the weighted average number of equity shares outstanding during
the year.

Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares
considered for deriving basic EPS and also weighted average number of equity shares that could have been
issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed
converted as of the beginning of the year, unless issued at a later date. Dilutive potential equity shares are
determined independently for each year presented. The number of equity shares and potentially dilutive equity
shares are adjusted for bonus shares, as appropriate.

1.1.4 Foreign Currency Transactions:

Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction.
Monetary foreign currency assets and liabilities are reported at the exchange rate prevailing on the balance
sheet date. Exchange differences relating to long term monetary items, arising during the year, as so far as they
relate to the acquisition of the depreciable capital asset is dealt with in the profit and loss statements.

1.1.5 Borrowing costs

Borrowings costs directly attributable to acquisition or construction of an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other
borrowing costs are expensed in the period in which it occurs.

Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of
funds.


Mar 31, 2022

Nature of Security

a) 3,828-21.5% Listed,rated, redeemable,secured Non-Convertible Debentures (NCDs) of ''.10,00,000/- each issued to Edelweiss, Mumbai and the indicative list of the security is as follows: (i) Second charge on present and future current assets of the Company (First charge being with Kotak Mahindra Bank Ltd as Working Capital Lender) (ii) Exclusive charge on all land assets, manufcturing plants and buildings and other fixed assets of the Company. (iii) Exclusive charge on any other asset currently mortgaged/hypothecated with the Existing Lenders of the Company. (iv) 100%

Pledge of promoter shared of the Company at all points in time from promoter shareholders of the Company at all points in time from promoter shareholders. (v) Personal Guarantee of Mr.Bandi Satish Kumar, Mr.Bandi Suresh Kumar and Mr. Bandi Ramesh Kumar. (vi) Corporate Guarantee of VPPL and Umashiv Garments Private Limited. (vii) Any other security as may be mutually agreed between the Investors and the company.

b) Allotment of 1,71,60,000 Unsecured 12% Compulsorily Convertible Debentures (CCDs) of ''.72.50/- each to Vizag Profiles Private Limited on 24th November, 2021. The CCDs shall be converted into 1,71,60,000 equity shares of ''.10/- each at a of ''.72.50/- per share ( inclusive of share premium of ''.62.50/- per share) on preferential basis within 18 months from the date of allotment.

c) Allotment of 63,00,000 Unsecured 12% Compulsorily Convertible Debentures (CCDs) of ''.72.50/- each to Vishwa Samudra Holdings Private Limited on 24th November, 2021. The CCDs shall be converted into 63,00,000 equity shares of ''.10/- each at a of ''.72.50/- per share ( inclusive of share premium of ''.62.50/- per share) on preferential basis within 18 months from the date of allotment.

i. First Charge on all existing and future current assets of the company by way of Hypothecation (Second charge being with NCD holders) ii) Exclusive charge on landed properties by way of registered mortgage iii) Personal guarantees of Directors of the company i.e., Mr B. Satish Kumar, Mr B. Ramesh Kumar, Mr B. Suresh Kumar iv) Personal Guarantees of Mrs B. Jaya Padmavati, Mrs B Jyothikiran, Mr B. Suresh and Mr B. Rajesh to be restricted to the property value mortgaged and v) Corporate Guarantee of M/s Vizag Profiles Private Limited and M/s Umashiv Garments Private Ltd.

These redeemable cumulative preference shares do not contain any equity component and are classified as financial liabilities in their entirety. In addition, the Company has designated these preference shares as financial liabilities at FVTPL as permitted by Ind AS 109. The preference shares have fixed non-discretionay dividend payaments and mature on January 26, 2023.

In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

Disclosure of Sundry creditors under trade payables has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the Micro, Small and Medium Enterprises Development Act,2006 and relied upon by the Auditors.

Contingent liabilities and commitments to the extent not provided for

Contingent Liabilities

Amount (?) 31st March 2022

Amount (?) 31st March 2021

a) Claim against the company by GAIL not acknowledge as debt

1,84,07,569

1,84,07,569

b) Demands from Sales tax department disputed

7,78,05,792

7,78,05,792

c) Demands from Excise departments disputed

41,02,55,701

40,01,27,466

d) Demands from GST departments disputed

89,41,505

89,41,505

e) Others

10,54,89,264

8,20,27,584

Contingent liabilities represent show cause notices received or pending for final consideration and the Company has already submitted its objections in writing against the demands.

I. Narrations1. Analysis of Defined Benefit Obligation:

> The number of members under the scheme has increased by 0.18%.

> The total salary has increased by 22.33% during the accounting period.

> The resultant liability at the end of the period over the beginning of the period has increased by 16.53%.

2. Expected rate of return basis

EROA is the discount rate as at previous valuation date as per the accounting standard.

3. Description of Plan Assets and Reimbursement Conditions:

100% of the Plan Asset is entrusted to LIC of India and SBI Life under their Group Gratuity Scheme. The reimbursement is subject to insurer''s Surrender Policy.

4. Investment / Interest Risk:

The Company is exposed to Investment / Interest risk if the return on the invested fund falls below the discount rate used to arrive at present value of the benefit.

5. Longevity Risk:

The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee separating from the employer for any reason.

6. Salary Escalation Rate:

The salary escalation rate has remained unchanged and hence there is no change in liability resulting in no actuarial gain or loss due to change in salary escalation rate.

7. Discount Rate:

The discount rate has decreased from 6.74% to 7.32% and hence there is an increase in liability leading to actuarial loss due to change in discount rate.

3.36.2 Segment Reporting as per Ind-AS 108:

A) Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses and for which discrete financial information is available. All operating segments'' operating results are reviewed regularly by the Board of Directors to make decisions about resources to be allocated to the segments and assess their performance.

The Company has two reportable segments, as described below, which are the company''s strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the business units, the company''s Board reviews internal management reports on a periodic basis.

The following summary describes the operations in each of the Company''s reportable segments:

(B) Information about reportable segments

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), segment revenue and segment capital employed as included in the internal management reports that are reviewed by the board of directors. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm''s length basis.

3.36.5Accounting for Deferred Taxes as per Ind AS-12:

Necessary details have been disclosed in note no.3.3 for FY 2021-22.

3.36.6 Provisions, Contingent Liabilities and Contingent Assets as per Ind AS-37:

Necessary details in regard to provisions have been disclosed in note no.3.32 3.36.7General:

a) Expenses are accounted under prepaid expenses only where the amounts relating to unexpired period are material.

b) Some of the balances appearing under trade receivables, Trade payables, advances, security deposits and other payables are subject to confirmations.

c) Figures for the previous year have been regrouped/ rearranged wherever considered necessary so as to confirm to the classification of the current year.

3.36.8Fair Value Measurement:

Financial Instruments by category

*FVTPL-Fair Value through Profit and Loss

*FVTOCI -Fair Value through Other Comprehensive Income

> Assets that are not financial assets (such as receivables from statutory authorities, prepaid expenses, advanced paid and certain other receivables) as of 31st March 2022 and 31st March 2021 are not included.

> Other liabilities that are not financial liabilities (such as statutory dues payable, advance from customers and certain other accruals) as of 31st March 2022 and 31st March 2021 are not included.

The carrying amount of above financial assets and liabilities are considered to be same as their fair values, due to their short term nature.

3.36.9Financial Risk Management :

a) Risk Management Framework

The Company''s Board of Directors has the overall responsibility for the establishment and oversight of the Company''s risk management framework.

The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Board of Directors monitors the compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

(A) Credit risk

Credit risk is the risk that counter party will not meet its obligation under a financial instrument or customer contract leading to a financial loss. The Company''s is exposed to credit risk mainly from trade receivables and other financial assets.

(i) Trade receivables

T rade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has been managed by the Company''s through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company''s grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company''s uses expected credit loss model to assess the impairment loss or gain. The Company''s uses a provision matrix and forward-looking information and an assessment of the credit risk over the expected life of the financial asset to compute the expected credit loss allowance for trade receivables. Concentrations of credit risk with respect to trade receivables are limited.

(ii) Other Financial Assets & loans:

The company has limited credit risk arising from cash and cash equivalents as the deposits are maintained with banks and financial institutions with high credit rating. Further, other financial and current assets mainly comprise of purchase, expenses advance and balances with statutory authorities (GST input credit balances and direct tax receivable balances) which are recoverable from Government. Hence, these are low risk items and the Company''s evaluates the recoverability of these financial assets at each reporting date and wherever required, a provision is created against the same.

B. Liquidity risk

Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and requiring financing. The Company requires funds both for short term operational needs as well as for long term capital expenditure for capex. The Company generates sufficient cash flow for operations, which together with the available cash and cash equivalents provide liquidity in the short-term and long-term. The Company has established an appropriate liquidity risk management framework for the management of the Company''s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk through cash generated from operations, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. As at 31st March, 2022, the Company''s current assets exceed its current liabilities by ''.120.17 crore.

C. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company''s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(i) currency risk

Since majority of the Company''s operations are being carried out in India and since all the material balances are denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.

The Company''s exposure to foreign currencies in minimal and hence no sensitivity analysis is presented.

(ii) Interest rate risk

a) Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s is exposed to interest rate risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate.

The borrowings of the Companies are principally denominated in rupees with a mix of fixed and floating rates of interest. The Company''s has exposure to interest rate risk, arising principally on changes in base lending rate. The Company''s uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.

(iii) Commodity price risk

Commodity price risk arises due to fluctuation in prices of raw materials like iron ore, coal and scrap etc. The Company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs. The Company''s commodity risk is managed centrally through well-established trading operations and control processes.

3.36.10 Capital Management

(a) Risk management:

The primary objective of the Company''s capital management is to maximise the shareholder value. The Company''s objectives when managing the capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.

The Board''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors and senior management monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders'' equity.

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders the Company has no external borrowings as on 31st March 2022.


Mar 31, 2018

1. Corporate information

Steel Exchange India Limited was incorporated on 24th February 1999. The activities of the company are manufacture of steel products, trading of related products and generation and sale of Power.

The Company is a Public Limited Company incorporated and domiciled in India and has its registered office at Hyderabad, Telangana, India. The company has its listing on the BSE and NSE Limited.

2. Application of new Indian Accounting Standards

2.1 All the Indian Accounting Standards issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorized have been considered in preparing these financial statements.

2.2 The Company’s standalone financial statements for the quarter ended June 30, 2017 are the first interim financial statements prepared in accordance with Ind AS.

The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards and interpretations that are effective for the first Ind AS financial statements for the quarter ended June 30, 2017 be applied consistently and retrospectively for all fiscal years presented.

Rights, Preferences and restrictions attached to Equity Shares:

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in 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 of their shareholding.

In the period of five years immediately preceding March 31, 2018:

1,80,52,092 Equity Shares are pending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh and allotted on 27.01.2016.

1,86,08,750 10.5% Non Convertible Redeemable Preference Share Capital pending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh and allotted on 27.01.2016.

Details of terms of repayment for long-term borrowings and security provided in respect there of:

Nature of Security

Secured Corporate Loans availed from State Bank of India and Consortium of Banks led by State Bank of India, Commercial Branch, Visakhapatnam are secured by first charge on fixed assets of the company (other than fixed assets secured in favour of Term Loan lenders) and specific fixed assets of the company created out of Corporate Loan III and second pari-passu charge on entire current assets of the company both present and future and personal guarantees of promoter directors of the company.

Secured Term Loans from Consortium of banks led by State Bank of India, Commercial Branch, Visakhapatnam are secured by first charge on entire fixed assets i.e., Plant & Machinery, Spares, Tools and accessories created out of bank finance both present and future including mortgage of factory land and buildings on which assets were created and second pari-passu charge on entire current assets of the company both present and future and personal guarantees of promoter directors of the company.

The terms of repayment of term loans are stated below

Installments falling due in respect of all the above Loans for a period of 12 months have been grouped under “Current maturities of long-term debt” (Refer Note 4.14)

The majority of the lenders have stopped charging interest on debts since the dues from the Company have been categorized as Non-performing Asset. The Company is in active discussion /negotiation with the Lenders for a suitable debt resolution by way of debt restructuring at a sustainable level. Pending finalization of a suitable debt resolution, the Company has stopped providing for accrued Interest and unpaid effective from 1st January 2018, in its books of accounts, as the same is under discussion with the Lenders. The amount of such accrued and unpaid interest (including penal interest and other charges) not provided for is estimated at Rs. 36,82,14,336 for the year ended 31st March 2018 and the same has not been considered for preparation of the financial statements for the year ended 31st March 2018.

Disclosures:

1,86,08,750 10.5% Non Convertible Redeemable Preference Share Capital pending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh and allotted on January 27, 2016. The shares are redeemable on January 26, 2023 at Rs. 10 per share. The shares are unsecured borrowings of the Company and are designated as at Fair Value through Profit or Loss (FVTPL).

These redeemable cumulative preference shares do not contain any equity component and are classified as financial liabilities in their entirety. In addition, the Company has designated these preference shares as financial liabilities at FVTPL as permitted by Ind AS 109. The preference shares have fixed non-discretionay dividend payaments and mature on January 26, 2023.

As at March 31, 2018, March 31, 2017 and March 31, 2016, there are no outstandind dues to micro and small enterprises. There are no interests due or outstanding on the same (Note: 4.31)

The Company has no information as to whether any of its vendors constitute as Supplier within the meaning of Section 2(n) of the Micro, Small and Medium Enterprises Development Act,2006 as no delcartions were received under the said Act from them.

3.1 In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

3.2 Disclosure of Sundry creditors under trade payables has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the Micro, Small and Medium Enterprises Development Act,2006 and relied upon by the Auditors.

Details of total outstanding dues to Micro, Small and Medium Enterprises Development Act, 2006 Disclosure relating to Micro and Small Enterprises:

Contingent liabilities represent show cause notices received or pending for final consideration and the Company has already submitted its objections in writing against the demands.

3.4 The majority of the lenders have stopped charging interest on debts since the dues from the Company have been categorized as Non-performing Asset. The Company is in active discussion /negotiation with the Lenders for a suitable debt resolution by way of debt restructuring at a sustainable level. Pending finalization of a suitable debt resolution, the Company has stopped providing for accrued Interest and unpaid effective from 1st January 2018, in its books of accounts, as the same is under discussion with the Lenders. The amount of such accrued and unpaid interest (including penal interest and other charges) not provided for is estimated at Rs.36,82,14,336 for the year ended 31st March 2018 and the same has not been considered for preparation of the financial statements for the year ended 31st March 2018.

I. Narrations

1. Analysis of Defined Benefit Obligation:

Since this being the first year of valuation, no comparative analysis can be made.

2. Expected rate of return basis

Since the scheme funds are invested with SBI Life Insurance Co. Ltd EROA is based on rate of return declared by fund managers

3. Description of Plan Assets and Reimbursement Conditions:

100% of the Plan Asset is entrusted to SBI Life Insurance Co. Ltd under their Group Gratuity Scheme. The is subject to LIC’s Surrender Policy

4. Investment / Interest Risk:

The Company is exposed to Investment / Interest risk if the return on the invested fund falls below the discount rate used to arrive at present value of the benefit.

5. Longevity Risk:

The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee rating from the employer for any reason.

6. Risk of Salary Increase:

The Company is exposed to higher liability if the future salaries rise more than assumption of salary escalation.

7. Discount Rate:

The discount rate has remained unchanged and hence there is no change in liability resulting in no actuarial gain or loss due to change in discount rate.

3.5.1. Segment Reporting as per Ind-AS 108

(A) Basis for segmentation

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses and for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the Board of Directors to make decisions about resources to be allocated to the segments and assess their performance.

The Company has two reportable segments, as described below, which are the company’s strategic business units. These business units offer different products and services, and are managed separately because they require different technology and marketing strategies. For each of the business units, the company’s Board reviews internal management reports on a periodic basis.

The following summary describes the operations in each of the Company’s reportable segments:

(B) Information about reportable segments

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit (before tax), segment revenue and segment capital employed as included in the internal management reports that are reviewed by the board of directors. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm’s length basis.

3.5.2 Related Party Disclosures as per Ind AS 24 are as follows: a) Names of related parties and relation with the Company:

i. Key Management Personnel:

1. B. Satish Kumar- Chairman cum Managing Director

2. B. Suresh Kumar - Jt. Managing Director

3. B. Ramesh Kumar - Jt. Managing Director cum Chief Financial Officer

4. B. Suresh - Director

ii. Relatives of key management personnel:

1. B. Rajesh- Vice President Finance

iii. Enterprise over which key management personnel/their relatives exercise significant influence:

1. Vizag Profiles Private Limited

2. Umashiv Garments Private Limited

3. Simhadri Wires Private Limited

4. Simhadri Pellets India limited

5. Satyatej Vyaapar Private Limited

6. VPL Integral CFS Private Limited

7. Sri Ananda Subbaraya Wire Products Limited(SASWPPL)

3.5.3 Accounting For Deferred Taxes on Income as per Ind AS-12 :

Necessary details have been disclosed in note no.4.13.

3.5.4. Provisions, Contingent Liabilities and Contingent Assets as per Ind AS-37:

Necessary details in regard to provisions have been disclosed in note no.4.32

3.5.6. General:

a. Expenses are accounted under prepaid expenses only where the amounts relating to unexpired period are material.

b. Some of the balances appearing under trade receivables, Trade payables, advances, security deposits and other payables are subject to confirmations.

c. Figures for the previous year have been regrouped/ rearranged wherever considered necessary so as to confirm to the classification of the current year.

d. The Company has incurred net loss during the year ended 31st March 2018 and the year-end current liabilities exceeded the current assets as at 31st March 2018 which has adversely effected the operations of the company. The Company’s financial performance has been effected mainly due to adverse steel markets, weak demand and prices, non-offtake of power, introduction of GST and non-availability of working capital and other factors beyond the control of the Company. With a suitable debt resolution which is in discussion with the Lenders and keeping in view the improvement in demand for steel, the Company expects considerable improvement in its financial performance. The impact of these developments is expected to be favorable on the Company’s operations and financials and the company has therefore prepared these financial statements on the basis of going concern concept.

*FVTPL -Fair Value through Profit and Loss

*FVTOCI -Fair Value through Other Comprehensive Income

- Assets that are not financial assets (such as receivables from statutory authorities, prepaid expenses, advanced paid and certain other receivables) as of 31st March 2018, 31st March 2017 and 1st April 2016 respectively, are not included.

- Other liabilities that are not financial liabilities (such as statutory dues payable, advance from customers and certain other accruals) as of 31st March 2018, 31st March 2017 and 1st April 2016 respectively, are not included.

The carrying amount of above financial assets and liabilities are considered to be same as their fair values, due to their short term nature.

3.5.7 Financial Risk Management:

a) Risk Management Framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Board of Directors monitors the compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.The Company has exposure to the following risks arising from financial instruments:

A) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).

(a) Trade receivables

“The Company sales are generally based on credit period and advance payments. The trade receivables in the books are mainly on account of credit sales to various parties.”

Expected credit loss for trade receivables under simplified approach is detailed as per the below tables:

Year ended 31 March 2018

B. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

(i) Financing Arrangements

C. Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

(i) Foreign currency risk

Since majority of the Company’s operations are being carried out in India and since all the material balances are denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.

The Company’s exposure to foreign currencies in minimal and hence no sensitivity analysis is presented.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company’s exposure to interest rate risk in minimal and hence no sensitivity analysis is presented.

3.5.8 Capital Management (a) Risk management:

The primary objective of the Company’s capital management is to maximise the shareholder value. The Company’s objectives when managing the capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors and senior management monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders’ equity.

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders the Company has no external borrowings as on 31st March 2018.

3.5.9 First Time Adoption of Ind AS

Explanation of Transition to Ind AS

These are the Company’s first standalone financial statements prepared in accordance with Ind AS. The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of the opening Ind AS balance sheet as at 1 April 2015 (the Company’s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Indian GAAP or previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows is set out in the following tables and the notes that accompany the tables.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A.1 Ind AS optional exemptions A.1.1 Deemed Cost

Ind AS 101 permits a first-time adopter to continue with the carrying value for all its property, plant and equipment except Land and Building which are measured at fair value as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making the necessary adjustments for the decommissioning liabilities. Accordingly, the Company has elected to measure all of its property, plant and equipment except Land and Building which are measured at fair value at their previous GAAP carrying value.

A.2 Ind AS mandatory exemptions A.2.1 Estimates

An entity’s estimates in accordance with Ind AS’ at the date of transition to Ind AS shall be consistant with the estimates made for the same date in accordance with the previous GAAP (after adjustments to reflect any difference in accounting policies) unless there is an objective evidence that those estimates were in error.

“Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with the previous GAAP. The Company made estimates for the following items in accordance with Ind AS at the date of transition as there were not required under previous GAAP. Impairment of financial assets (Trade Receivables) based on the expected credit loss model.

A.2.2 Classification and measurement of financial assets (other than equity instruments)

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exists at the date of transition to Ind AS.

A.2.3 De-recognition of financial assets and financial liabilities Ind AS 101 requires a first time adopter to apply the de-recognition provisions for Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows first time adopter to apply the derecognition requirements provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past Ind AS 101 retrospectively from the date of entity’s choosing, transactions was obtained at the time of initially accounting for the transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind-AS. Reconciliation between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

C. Notes to first-time adoption

Note 1 : Fair valuation as deemed cost for Property, Plant and Equipment:

The Company have considered fair value of property, viz land admeasuring over 433.95 acres and buildings situated in Andhra Pradesh, in India, with impact of Rs.59.84 crore and Rs.68.98 crore respectively in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves.

Note 2 : Fair valuation for Financial Assets:

The Company has valued financial assets at fair value. Impact of fair value changes as on the date of transition, is recognised in opening reserves and changes thereafter are recognised in Profit and Loss Account or Other Comprehensive Income, as the case may be.

Note 3 : Deferred Tax:

The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the statement of Profit and Loss for the subsequent periods.

Note 4 : Impairment of Financial Assets - Trade Receivables

As per Ind AS 109, the company is required to apply expected credit loss model for recognising the allowance for doubtful debts. As a result, the allowance for doubtful debts decreased by Rs.62,56,617 as at 31 March 2017 (1 April 2016 - Rs.2,52,58,022). Consequently, the total equity as at 31 March 2017 increased by Rs.62,56,617 (1 April 2016 - Rs.2,52,58,022) and profit for the year ended 31 March 2017 increased by Rs.62,56,617.

Note 5: Excise Duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty as the excise duty is collected by the company as a principal unlike other indirect taxes. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2017 by Rs.59,46,42,053. There is no impact on the total equity and profit.

Note 6: Remeasurement of post-employment benefit obligations (Gratuity Fund):

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended March 31, 2017 decreased by Rs.9,61,412 There is no impact on the total equity as at 31 March 2017.


Mar 31, 2016

Rights, Preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of ''.10 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in 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 of their shareholding.

59,82,720 Equity Shares pending for allotment to shareholders of GSAL (India) Limited as per the Draft Rehabilitation Scheme (DRS) approved by the Hon''ble Board of Industrial and Financial Reconstruction and (BIFR) vide order dated 06th August'' 2012 were allotted on 09.05.2015.

1,80,52,092 Equity Shares are pending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh and allotted on 27.01.2016.

1,86,08,750 10.5% Non Convertible Redeemable Preference Share Capital spending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh and allotted on 27.01.2016.

Nature of Security

Secured Corporate Term Loans availed from Banks are secured by exclusive first charge on specific fixed asset of the company and in other cases on first pari passsu charge on the remaining fixed assets of the company ( excluding the fixed assets secured in favour of Term Loan lenders) and second pari passu charge on the current assets of the company and personal guarantee of promoter directors of the company.

Secured Term Loans from consortium of banks lead by State Bank of India, Commercial Br., Visakhapatnam are secured by first charge on lease hold rights on the factory land, and assets created out of the funds raised plant and machinery, spares, tools and accessories both present and future and personal guarantee of promoter directors of the company.

1. In the opinion of the management, the Current Assets, Loans and Advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

2. The balance shown in Sundry Debtors, Sundry Creditors, advances are subject to confirmation from the respective parties.

3. Director Remuneration Rs. 1,86,33,940 (Previous Year Rs. 1,86,41,983)

4. Previous year figures have been regrouped / re arranged / re-classified wherever considered necessary to conform to the classification of the current year.


Mar 31, 2015

1. Nature of business:

Steel Exchange India Limited was incorporated on 24th February 1999. The activities of the company are manufacture of steel products, trading of related products and generation and sale of Power.

The Company is a Public Limited Company incorporated and domiciled in India and has its registered office at Hyderabad, Telangana, India. The company has its listing on the BSE Limited.

2. Rights, Preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in 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 of their shareholding.

3. EQUITY SHARE CAPITAL SUSPENSE

59,82,720 Equity Shares are pending for allotment to shareholders of GSAL (India) Limited as per the Draft Rehabilitation Scheme (DRS) approved by the Hon'ble Board of Industrial and Financial Reconstruction and (BIFR) vide order dated 06th August' 2012 and 1,80,52,092 Equity Shares are pending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh.

4. 10.5% NON CONVERTIBLE REDEEMABLE PREFERENCE SHARE CAPITAL SUSPENSE

1,86,08,750 10.5% Non Convertible Redeemable Preference Share Capital pending for allotment to shareholders of Simhadri Power Limited consequent to the approval of amalgamation of Simhadri Power Limited with Steel Exchange India Limited effective from 1.4.2013 by the Honourable High Court of Judicature at Hyderabad for the state of Telagana and for the state of Andhra Pradesh.

5. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

6. Contingent liabilities and commitments to the extent not provided for

Amount Rs. Amount Rs. Contingent Liabilities 31st March 31st March 2015 2014

a. Claim against the company by GAIL 1,84,07,569 1,84,07,569 not acknowledged as debt

b. Claim of APEDCL not acknowledged 9,48,98,100 9,48,98,100 as debt

c. Demands from Sales tax department 1,55,50,782 1.48,28,125 disputed

d. Demands from Excise departments 4,84,45,419 4,99,75,117 disputed

e. Others 2,73,89,984 2,02,40,093

f. Letters of credit and bank 1,30,00,000 1,30,00,000 guarantees

g. Corporate Guarantee given to - 288,00,00,000 the Term Loan and Working Capital lenders of M/s Simhadri Power Ltd

Contingent liabilities represents show cause notices received or pending for final consideration and the Company has already submitted its objections in writing against the demands.

7. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows:

Names of Related Parties And Description of Relationship:

A Associate Concerns

1) VPL Projects Private Limited

2) Vizag Profile Constructions India Private Limited

3) Vizag Profiles Private Limited

4) Umashiv Garments Private Limited

5) World Future League Private Limited

6) Simhadri Wires Private Limited

7) Simhadri Pellets India limited

8) Satyatej Vyaapar Private Limited

9) VPL Integral CFS Private Limited.

B Key Management Personnel

1) B. Satish Kumar- Chairman and Managing Director

2) B. Suresh Kumar - Joint Managing Director

3) B. Suresh - Director 4) B. Ramesh Kumar - Joint Managing Director

C Relatives of Key Management Personnel

1) B. Rajesh - Vice President Finance

2) B. Mohit Sai Kumar - Manager Marketing

8. The Financial Statements of current period include Financial Statements of SIMHADRI POWER LIMITED, the merger of which has been approved by the Honourable High Court of Judicature at Hyderabad for the state of Telangana and for the state of Andhra Pradesh vide order dated 18th November'2014. The merger has been approved with effect from 01-04-2013 and the effect has been incorporated during the current financial year. As such the financial statements of 2014-15 are not comparable with that of previous year figures.

9. The balance shown in Sundry Debtors, Sundry Creditors, advances are subject to confirmation from the respective parties.

10. Director Remuneration: Rs. 2,28,41,983 (Previous Year Rs. 1,26,98,110)

11. Previous year figures have been regrouped / re arranged / re-classified wherever considered necessary to conform to the classification of the current year.


Mar 31, 2014

1. Steel Exchange India Limited was incorporated on 24th February 1999. The activities of the company are manufacture of steel products, trading of related products and generation and sale of power.

2. Rights, Preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in 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 of their shareholding.

3. EQUITY SHARE CAPITAL SUSPENSE

59,82,720 Equity Shares are pending for allotment to sharholders of GSAL (INDIA) Limited as per the Draft rehabilitation Scheme (DRS) approved by the Hon''ble Board of Industrial and Finanacial Reconstruction and (BIFR) vide order dated 06th August'' 2012.

Nature of Security

Secured Corporate Term Loans availed from Banks are secured by exclusive first charge on specific fixed asset of the company and in other cases on first pari passsu charge on the remaining fixed assets of the company ( excluding the fixed assets secured in favour of Term Loan lenders) and second pari passu charge on the current assets of the company and personal guarantee of promoter directors of the company.

Secured Term Loans from consortium of banks lead by State Bank of India, Commercial Br., Visakhapatnam are secured by first charge on lease hold rights on the factory land, and assets created out of the funds raised plant and machinery, spares, tools and accessories both present and future and personal guarantee of promoter directors of the company.

* Disclosures : The company has no information as to weather any of its vendors constitute as supplier with in the meaning of section 2(n) of the Micro, Small and Medium Enterprises Development Act, 2006 as no declaration were received under the said act from them.

Trade Payables includes an amount of Rs. 10,14,10,306 (Previous Year Rs. 7,63,00,997) due to companies in which Directors are interested.

# There are no amount due for payment to the Investor Education Protection Fund(IEPF) U/s. 205 C of the companies Act,1956 as on reporting date ** Payble for expenses includes an amount of Rs. 75,346,618(Previous yegx-2.94,933,808) due to Companies in which Directors are interested.

* Disclosures:

The Trade Receivables includes an amount of Rs. 30,13,370 (Previous Year Rs. Nil) due from Companies in which Directors are interested.

Periodically, the Company evaluates all customer dues to the Company for collectibility. The need for provisions is assessed based on various factors including collectibility of specific dues, risk perceptions of the industry in which the customer operates, general economic factors, which could effect the Customer''s ability to settle. The Company normally provides for debtors dues outstanding for six months or longer from the invoice date, as at the Balance Sheet date if any. the Company pursues the recovery of the dues, in part or full.

Disclosures:

Cash and Cash equivalents as of March 31,2014 and March 31,2013 includes restricted cash balances of Rs. 45,56,28,563 and Rs. 33,51,09,206 respectively. The restriction is primarily on account of Cash and Bank balances held as margin money deposits against Letter of Credits sanctioned by banks.

Disclosures:

The Company has made provision for tax in the earlier years on basis of provision U/s. 115JB of the Income Tax Act, 1961. The same is taken into books as it can be adjusted against tax normal tax liability during the specified period. In accordance with the guidance note issued by ICAI, the company will review the same at each balance sheet date and write down the carrying amount of MAT Credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income tax during the speciied period.

5. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

6. Disclosure of Sundry creditors under trade payables has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the Micro, Small and Medium Enterprises Development Act,2006 and relied upon by the Auditors.

7. Contingent liabilities and commitments to the extent not provided for

Amount (Rs.) Amount (Rs.) i) Contingent Liabilities 31st March 2014 31st March 2013

a. Claim against the company by GAIL not acknowledged as debt 1,84,07,569 1,84,07,569

b. Claim of APEDCL not acknowledged as debt 9,48,98,100 34,50,846

c. Demands from Sales tax department disputed 1.48,28,125 4,82,93,992

d. Demands from Excise departments disputed 4,99,75,117 1,88,75,244

e. Others 2,02,40,093 1,76,33,964

f. Letters of credit and bank guarantees 1,30,00,000 1,56,24,944

g. Corporate Guarantee given to the Term Loan and Working 288,00,00,000 288,00,00,000 Capital lenders of M/s Simhadri Power Ltd

Contingent liabilities represents show cause notices received or pending for final consideration and the Company has already submitted its objections in writing against the demands.

8. Due to change of the accounting year by the company, current period''s figures for 12 months are not comparable with the previous period figures for 9 months.

9. The balance shown in Sundry Debtors, Sundry Creditors, advances are subject to confirmation from the respective parties.

10. Director Remuneration: Rs. 1,26,98,110 (Previous Year Rs. 83,41,628)

11. Previous period figures have been regrouped / re arranged / re-classified wherever considered necessary to conform to the classification of the current year.


Mar 31, 2013

Nature of business:

Steel Exchange India Limited was incorporated on 24th February 1999. The activities of the company are manufacture of steel products, trading of related products and generation and sale of power.

1.1 In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

1.2 Disclosure of Sundry creditors under trade payables has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the Micro, Small and Medium Enterprises Development Act,2006 and relied upon by the Auditors.

1.3 Contingent liabilities and commitments to the extent not provided for

Amount Rs.. Amount Rs.. 31st March 2013 30th June 2012

a. Claim against the company by GAIL not acknowledged as debt 1,84,07,569 1,84,07,569

b. Claim of APEDCL not acknowledged as debt 34,50,846 34,50,846

c. Demands from Sales tax department disputed 4,82,93,992 64,65,925

d. Demands from Excise departments disputed 1,88,75,244 1,58,15,848

e. Others 1,76,33,964 1,72,97,900

f. Letters of credit and bank guarantees 1,56,24,944 62,00,000

g. In the event of non payment of dues of PARAS as per DRS, amounts claimable against the company as per the debts of IDBI and ICICI of GSAL (India) limited assigned in favour of PARAS along with interest there on as per the assignment Deed. Amount not ascertained. Contingent liabilities represents show cause notices received or pending for final consideration and the Company has already submitted its objections in writing against the demands.

1.4 The details of related party transactions in terms of Accounting Standard (AS 18) are as follows: Names of Related Parties And Description of Relationship:

A Associate Concerns

1) VPL Projects Private Limited 2) Vizag Profile Constructions India Private Limited

3) Vizag Profiles Private Limited 4) Umashiv Garments Private Limited

5) World Future League Private Limited 6) Simhadri Power Limited

7) Simhadri Wires Private Limited 8) Simhadri Pellets India limited

9) Satyatej Vyaapar Private Limited 10) Simhadri Infrastructure Developers Private Limited

B Key Management Personnel

1) B. Satish Kumar- Chairman cum Managing Director

2) B. Suresh Kumar - Jt. Managing Director

3) B. Suresh - Director

C Relatives of Key Management Personnel

1) B. Rajesh - Vice President (Finance)

1.5 Due to change of the accounting year by the company, current period''s figures being for 9 months are not comparable with the previous period figures of 15 months.

1.6 Directors Remuneration: Rs..86,41,628 (Previous Period : Rs..92,46,022) And Perquisites

1.7 In the opinion of the Board of Directors the Current Assets, Loans & Advances are approximately of the value stated in the accounts, if realized in the ordinary course of business.

1.8 The balance shown in Sundry Debtors, Sundry Creditors, advances are subject to confirmation from the respective parties


Jun 30, 2012

Nature of business:

Steel Exchange India Limited was incorporated on 24th February 1999. The activities of the company are manufacturing of steel products and trading of steel and steel related products.

Rights, Preferences and restrictions attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each Shareholder is eligible for one vote per share. The dividend proposed by the Board of Directors is subject to the approval of shareholders, except in 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 of their shareholding.

* The Authorised equity share capital of the company was increased by Rs.60,00,00,000 on amalgamation of GSAL (India) Limited as per the Draft Rehabilitation Scheme (DRS) approved by the Hon'ble Board of Industrial and Financial Reconstruction and (BIFR) vide order dated 06th August' 2012.

$ The Authorised preference share capital of the company was increased by Rs.73,00,00,000 on amalgamation of GSAL (India) Limited as per the Draft Rehabilitation Scheme (DRS) approved by the Hon'ble Board of Industrial and Financial Reconstruction and (BIFR) vide order dated 06th August' 2012.

# 40,00,000 Equity shares of face value of Rs. 10 per share were allotted on 08.04.2011 to Umashiv Garments Private Limited on preferential basis on conversion of warrants at a price of Rs.38 per share.

@ 51,00,000 Equity shares of face value of Rs. 10 per share were allotted on 02.04.2012 to Umashiv Garments Private Limited on preferential basis on conversion of warrants at a price of Rs.45 per share.

5,50,400 10.25% Redeemable Preference Shares Rs.10 /- each were redeemed during the accounting period.

Details of terms of repayment for long-term borrowings and security provided in respect there of:

Nature of Security

Secured Corporate Term Loans are secured by first pari passsu charge on all stocks, book debts and other current assets of the company along with other working capital lendors under consortium, second charge on company's fixed assets both present and future on pari passu basis, and personal guarantee of promotar directors of the company.

Secured Term Loans from consortium of banks lead by State Bank of India, Commercial Br., Visakhapatnam are secured by first charge on lease hold rights on the factory land, and assets created out of the funds raised plant and machinery, spares, tools and accessories both present and future and personal guarantee of promotar directors of the company.

Term Loan from Pridhvi Asset Reconstruction and Securitisation Company Limited (PARAS) was secured by first charge on fixed assets of Sponge iron division.

1.1. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated, if realised in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

1.2 Disclosure of Sundry creditors under trade payables has been determined to the extent such parties could be identified on the basis of the information available with the Company regarding the status of suppliers under the Micro, Small and Medium Enterprises Development Act, 2006 and relied upon by the Auditors.

1.3 Contingent liabilities to the extent not provided for

15 Months Ended Year Ended 30.06.2012 31.03.2011 Amount Rs. Amount Rs.

a. Claim against the company by GAIL not acknowledged as debt 1,84,07,569 -

b. Claim of APEDCL not acknowledged as debt 34,50,846 -

c. Demands from Sales tax department disputed 64,65,925 50,71,067

d. Demands from Excise departments disputed 1,58,15,848 54,35,648

e. Others 1,72,97,900 -

f. Letters of credit 62,00,000 -

g. In the event of non payment of dues of PARAS as per DRS, amounts claimable against the company as per the debts of IDBI and ICICI of GSAL (India) limited assigned in favour of PARAS along with interest there on as per the assignment Deed amount not ascertained.

h. Corporate Guarantee given to the term Loan lenders of M/s Simhadri Power Ltd 230,00,00,000 -

Contingent liabilities represents show cause notices received or pending for final consideration and the Company has already submitted its objections in writing against the demands.

1.4 The financial Statements of 2011-12 include the financial statements of GSAL (India) Limited the merger of which has been approved by BIFR vide its order dated 6th August 2012.

The merger has been approved w.e.f 1.4.2010 and the effect has been incorporated during the financial period of 2011-12. As such the statements of 2011-12 are not comparable with that of previous year figures.

1.5 The financial statements for the period ended 31st March, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification under the Companies Act, 1956, the financial statements for the period ended 30th June, 2012 are prepared under revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this period's classification.

1.6 Due to change of the accounting year by the company, current period's figures being for 15 months are not comparable with the previous year figures of 12 months.

1.7 Directors Remuneration and Perquisites : Rs.92,46,022 (Previous Year: Rs.72,61,998)

1.8 In the opinion of the Board of Directors the Current Assets, Loans & Advances are approximately of the value stated in the accounts, if realized in the ordinary course of business.

1.9 The balance shown in Sundry Debtors, Sundry Creditors, advances are subject to confirmation from the respective parties.


Mar 31, 2011

1. During the year the company has allotted 35,50,000 Equity shares of Rs.10/- each at a premium of Rs.27/- per share resulting in increase in paid up equity share capital of the company.

2. During the year the company allotted 40,00,000 convertible share warrants of Rs. 10/- each at a premium of Rs. 28/- per share warrant and issued 51,00,000 share warrants of Rs. 10 each at a premium of Rs. 35/- per share warrant.

3. SECURED LOANS:

The term loans, Corporate Loans and working capital loans availed are secured by mortgage / hypothecation of all fixed assets both present and future including land, building, plant and machinery, other equipments, stocks and book debts and personal guarantees of the Directors, B. Suresh Kumar, V.V. Krishna Rao, B. Suresh and B. Satish Kumar in their personal capacities.

4. During the year, the company has subscribed to 1,66,87,066 Equity shares of Rs.10 each fully paid of M/s. Simbadri Power Limited, a company promoted by the company as a special purpose vehicle (SPV) to setup the 60MW power plant at GSAL premises. The same has been reflected under Investments.

5. DEFERRED REVENUE EXPENDITURE

a. During the financial year 2009-2010, the company incurred an expenditure of Rs.1,40,00,000 towards brand promotion of Simhadri TMT by way of sponsorship of the sports event (Afro Asia T20 cup) conducted by World Future League Private limited. The same has been shown under deferred revenue expenditure to be written off over a period of five years.

b. During the year the company incurred an expenditure of Rs.1,92,50,000 towards processing fee and professional charges for availing Corporate term loans from State Bank of India and State bank of Hyderabad. The same has been shown under deferred revenue expenditure to be written off over a period of five years.

6. During the year the company incurred expenditure of Rs. 30,30,000 towards increase in authorised capital. The same has been shown under deferred revenue expenditure to be written off over a period of five years.

7. The details of related party transactions in terms of Accounting Standard (AS 18) are as follows:

a. Names Of Related Parties And Description of Relationship:

i. Associate Concerns 1. VPL Projects Pvt. Ltd

2. Vizag Profile Constructions India Pvt. Ltd.

3. Vizag Profiles Pvt. Ltd

4. Umashiv Garments Pvt Ltd

5. World Future League Pvt Ltd.

6. Simhadri Power Ltd

ii. Key Management Personnel 1. B. Satish Kumar-Managing Director

2. B. Suresh Kumar-Jt. Managing Director

3. B. Suresh - Director (Finance)

i i i. Relatives of key Management Personnel

1. B. Ramesh Kumar

2. B. Rajesh

8. Employee benefits as per AS-15 (Revised): Gratuity

As per the accounting policy on retirement benefits(AS-15) the Gratuity liability is provided for the employees covering upto Rs. 10,00,000 ( Previous year Rs. 3,50,000) as per actuarial valuation.

9. Contingent Liability not provided for:

a. Demand by Sales Tax Authority for the FY 2002-03 amounting to Rs. 22,43,895/-(previous year 22,43,895) towards CST is pending in appeal. A sum of Rs. 2,80,487/- was deposited and is included in Loans and Advances.

b. Demand by Central Excise and Customs Authorities towards customs duty amount refunded in respect of exports amounting to Rs.54,35,648. The Company has filed an appeal with the Hon'ble High Court against the demand.

c. A case has been filed against the Company by Rashtriya Ispat Nigam Limited (RINL) for infringement of Trade Mark and the final orders were passed by the trail Court at Vishakapatnam not granting any damages to RINL. However the Company appealed before the Hon'ble High Court of Andhra Pradesh and a cross appeal was also filed by RINL. The Hon'ble High Court of Andhra Pradesh had suspended the orders of the trail Court and aggrieved by the same, RINL preferred a special leave petition before the Hon'ble Supreme Court of India and the SLP was dismissed by the Hon'ble Supreme Court of India.

d. Demand by Sales Tax Authority for the F.Y 2004-05 amounting to Rs.28,27,172/- (previous year Rs. 28,27,172/-) pending in appeal. A sum of Rs. 3,53,397/- has been paid under protest during the year 2008-09 and is included in Loans and Advances.

e. Letters of credit for purchases ~ Nil (previous year Rs. nil lakhs)

f. The company has given guarantee of Rs.25.00 crores to Pridhvi Asset Reconstruction and Securitisation Company Limited

10. Previous year figures have been regrouped/or rearranged wherever necessary. Amounts have been rounded off to nearest rupee.

11. The balance shown in Sundry Debtors, Sundry Creditors, advances are subject to confirmation from the respective parties.

12. In the opinion of the management, the Current Assets, Loans and Advances are expected to realise at least the amount at which they are stated in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.


Mar 31, 2010

1. During the Year the company has allotted 34,89,090 shares of Rs. 10/- each at a premium of Rs. 19/- per share against the convertible share warrants issued in the previous year resulting in increase in paid up equity share capital of the company. Further the company has allotted 29,00,000 shares of Rs. 10/ each fully paid up at a premium of Rs. 25/ per share resulting in increase in paid up equity share capital of the company.

2. DEFERRED TAX:

The company has adopted Accounting Standard -22 "Accounting for Taxes on Income "issued by the Institute of Chartered Accountants of India, mandatory with effect from accounting period commencing from 1 st April 2002. During the year Rs.5,04,50,845/- arising deferred tax liability has been shown in the current years Profit & Loss Account

3. SECURED LOANS:

The term loans (including those availed during the year) and working capital loans availed from State Bank of India, Overseas branch, State Bank of Travancore, State Bank of Bikaner & Jaipur, State Bank of Mysore, The Lakshmi Vilas Bank Gajuwaka Branch, Visakhapatnam, Bank of India Suryabagh Branch Visakhapatnam, State Bank of Hyderabad Steel Plant Branch Visakhapatnam, IDBI Bank Ltd Visakhapatnam, Karur Vysya Bank Ltd, Dabagarden Branch, Visakhapatnam and Working Capital term Loan and corporate Loan from State Bank of Hyderabad Steel Plant Branch are secured by mortgage / hypothecation of all fixed assets both present and future including land, building, plant and machinery, other equipments, stocks and book debts and personal guarantees of the Directors, B. Suresh Kumar, V.V. Krishna Rao, B. Suresh and B. Satish Kumar in their personal capacities.

4. DEFERRED REVENUE EXPENDITURE

During the year the company incurred an expenditure of Rs.1,40,00,000 towards brand promotion of Simhadri TMT by way of sponsorship of the sports event (Afro Asia T20 cup) conducted by World Future League Private limited. The same has been booked under deferred revenue expenditure to be written off over a period of five years.

5. NAMES OF RELATED PARTIES AND DESCRIPTION OF RELATIONSHIP:

i. Associate Concerns 1. VPL Projects Pvt. Ltd

2. Vizag Profile Constructions India Pvt. Ltd.

3. Vizag Profiles Ltd

4. Uma Shiv Garments Pvt Ltd

5. World Future League Pvt Ltd.

6. Vizag Steel Profiles (Hyd) Pvt Ltd

7. Simhadri Power Pvt Ltd

8. Gulmohar Advisors Pvt Ltd

9. Maa Gayatri Lohh Products Ltd 10.Brahma Chemicals Ltd

ii. Key Management Personnel 1. B. Satish Kumar- Chairman & Managing Director

2. B. Suresh Kumar-Jt. Managing Director

3. B. Suresh - Director (Finance)

6. Sundry Debtors includes Rs.79.15 lakhs (previous year Rs. 84.65 lakhs), the recovery of which is doubtful. However the management is of the opinion that no provision is required during the year as the Company is pursuing the matter and the amount may be recovered.

7. GRATUITY

As per the accounting policy on retirement benefits(AS-15) the Gratuity liability is provided for the employees covering upto Rs.3,50,000 (Previous year Rs. 3,50,000) amounts to Rs.9,75,962 (previous Year Rs 9,38,564) As per the accounting policy on retirement benefits(AS-15) the Gratuity liability is provided for the employees covering upto Rs.3,50,000 (Previous year Rs.3,50,000) based on the actuarial valuation to the extent of total accrued Gratuity amounts to Rs.41,74,681 (previous Year Rs.31,98,719)

8. Contingent Liability not provided for:

a. Claims from Sales Tax Authorities contested by the company for the F.Ys 1999-2000 and 2000-01 amounting to Rs.115,32,692/-(previousyear Rs. 11,532,692/-)

b. Demand by Sales Tax Authority for the F.Y 2001-02 amounting to Rs.28,48,015/-(previous year Rs. 28,48,015/-) pending in appeal. A sum of Rs. 14,24,007/- has been paid under protest during the year 2005-06 and is included in Loans and Advances.

c. Demand by Sales Tax Authority for the F.Y 2002-03 amounting to Rs. 22,43,895/-(previous year 22,43,895) towards CST is pending in appeal. A sum of Rs. 2,80,487/- was deposited towards admit charges and is included in Loans and Advances.

d. Demand by Central Excise and Customs Authorities towards customs duty amount refunded in respect of exports amounting to Rs.54,35,648. The Company has filed an appeal with the Honorable High Court against the demand.

e. A case has been filed against the Company by Rashtriya Ispat Nigam Limited (RINL) for infringement of Trade Mark and the final orders were passed by the trail Court at Vishakapatnam not granting any damages to RINL. However the Company appealed before the Honble High Court of Andhra Pradesh and a cross appeal was also filed by RINL. The Honble High Court of Andhra Pradesh had suspended the orders of the trail Court and aggrieved by the same, RINL preferred an appeal before the Honble Supreme Court of India and no orders are passed in favour of RINL and the case is pending for adjudication.

f. Demand by Sales Tax Authority for the F.Y 2004-05 amounting to Rs.28,27,172/- (previous year Rs. 28,27,172/-) pending in appeal. A sum of Rs. 3,53,397/- has been paid under protest during the year 2008-09 and is included in Loans and Advances.

g. Letters of credit for purchases - Nil (previous year Rs. nil lakhs)

h. Export obligation under EPCG Scheme amounting to USD 36,00,964.40 to be fulfilled before 2012-13. However the company has fulfilled the Export obligation by making deemed exports to SEZ units.

i. The company has given guarantee of Rs.25.00 Crores to Pridhvi Asset Reconstruction and Securitisation Company Limited, Hyderabad for the debt of GSAL (India) Limited, a BIFR referred company in which the company has invested as a strategic investor cum new promoter for revival.

9. Previous Years figures have been regrouped or re arranged wherever necessary.

10.Debit and credit balances are subject to confirmation

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