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Notes to Accounts of Tayo Rolls Ltd.

Mar 31, 2017

Notes:

1 Term loans from IDBI Bank Limited are secured by first charge on the property, plant and equipment of the Company. (Refer notes 16 and 17)

2 Under Previous GAAP, consumption of spares parts (moulds) was charged to the Statement of Profit and Loss from inventory as and when consumed. However as per Ind AS 16 -Property, Plant and Equipment, spare parts qualify as property, plant and equipment when an entity expects to use them during more than one period and when they can be used only in connection with an item of property, plant and equipment. Under Ind AS, as these spare parts are expected to be used for more one year, and meet the definition of property, plant and equipment (PPE), these have been classified accordingly. (Refer note 35.2)

3 In accordance with Ind AS 20 "Accounting for Government Grants and Disclosure of Government Assistance" an amount of Rs. 727.07 lakhs representing the duty saved on availment of EPCG licenses towards import of Plant and Machinery has been added to the cost of Plant and machinery as on 1 April, 2015. (Refer note 35)

The Company holds a license for use of software and Technical know-how fee. The carrying amount of the Computer software of Rs. 0.49 lakh (as at 31.03.2016: Rs. 1.15 lakhs, as at 01.04.2015: Rs. 2.15 lakhs) will be fully amortized in 1 year (as at 31.03.2016: 2 years, as at 01.04.2015: 3 years). Carrying amount of the Technical knowhow fee Rs. Nil (as at 31.03.2016: Rs. 0.79 lakh, as at 01.04.2015: Rs. 180.01 lakhs) has been fully amortized (as at 31.03.2016: 1 year, as at 01.04.2015: 2 years)

The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 "Financial instruments" requires expected credit losses to be measured through a loss allowance. The Company recognizes lifetime expected credit losses for all trade receivables that do not constitute a financing transaction.

The Company has estimated the liability for the provision for doubtful debts of Rs. 521.41 lakhs as at 31.03.2017 (as at 31.03.2016 : Rs. 177.26 lakhs, as at 01.04.2015 : Rs. 125.44 lakhs) for performance of the products (mainly rolls) based on past experience and amount not likely to be received due to suspension of operation.

There were no outstanding debts due from directors or other officers of the Company.

The cost of inventories recognized as an expense during the year was Rs. 899.48 lakhs (for the year ended 31 March, 2016: Rs. 4,593.52 lakhs). (Refer note 24)

The cost of inventories recognized as an expense includes Rs. 996.83 lakhs (for the years ended 31 March, 2016 : Rs. 155.82 lakhs) in respect of write-downs of inventory to net realizable value during the year.

The mode of valuation of inventories have been stated in note 2.15

4. Disclosure of Specified Bank Notes (SBN) held and transacted during the period from 8 November, 2016 to 30 December, 2016 (As per notification no. G.S.R. 307 (e) and notification no. G.S.R. 308 (E) dated 30 March, 2017)

* For the purposes of this note, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated 8 November. 2016.

** Related to receipt of certain unutilized employee advances.

Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting. 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.

Summary of borrowings arrangements

(i) Non-cumulative redeemable preference shares

25,100,000 Non-cumulative redeemable preference shares of Rs. 100 each are entitled to a fixed rate of dividend at the rate of 8.50% p.a., 1,600,000 Non-cumulative redeemable preference shares of Rs. 100 each are entitled to a fixed rate of dividend at the rate of 8.50% p.a. and 2,905,000 Non-cumulative redeemable preference shares of Rs. 100 each are entitled to a fixed rate of dividend at the rate of 7.17% p.a. The issuer shall redeem the preference shares at face value in three equal installments at the beginning of eighth, ninth and tenth year from the due date of allotment.

(ii) Term Loan

Term loan from IDBI Bank Limited are secured by first charge on the property, plant and equipment of the Company. The borrowings carry a floating interest rate (Bank Base Rate BBR 275 bps per annum) payable monthly with remaining quarterly repayment period of one quarter.

(iii) The terms of repayment of term loan and other loans are stated below As at 31.03.2017

(a) Preference shares issued are redeemable on the following dates

Notes:

(i) Term Loans from IDBI Bank Limited are secured by first charge on the property, plant and equipment of the Company. The borrowings carry a floating interest rates (Bank Base Rate BBR 275 bps) with remaining quarterly repayment period of one quarter. Unamortized processing fees of current maturities of long term loan amounting to Rs. 2.65 lakhs (as at 31.03.2016: Rs. 10.58 lakhs, as at 31.03.2015: Rs. 10.58 lakhs) for the year ended 31.03.2017 has been adjusted against these balances

ii) The interest has been accrued on outstanding on related parties for the year ended 31.03.2017, Rs. 6,000.00 lakhs (as at 31.03.2016 : Rs. 4,363.00 lakhs, as at 31.03.2015 : Nil) at various rates. (Refer Note 19)

5. Other provisions for warranty

Notes:

(i) Provision for employee benefits include leave, early retirement and termination benefits provided by the Company as per the VSS scheme announced by the Company during the year and revised from time to time.

(ii) The provision for warranty claims includes warranty given on sale of rolls. Provision for warranty is made based on technical estimates and past experience of such costs. Actual claims may differ from estimates and the difference is recognized in the year of occurance.

6. borrowings

Notes :

(i) Amounts repayable to related parties of the Company. Interest of 7.00% - 13.07% p.a. is charged on the outstanding loan balances (as at 31.03.2016: 13.07% p.a., as at 01.04.2015 : nil p.a.)

(ii) The loan was repayable from April 2015 to September 2016 and applicable rate of interest was 0.75% to 1.41% per annum.

(iii) Loans repayable on demand from bank includes cash credit accounts with Bank of India and IDBI Bank. The cash credit facilities are secured by hypothecation of all tangible movable assets of the Company including finished and semi-finished stocks, raw materials, stores and book debts ranking pari passu. In addition they are secured by way of second charge on the immovable properties of the Company ranking pari passu. The cast credit facilities from Bank of India and IDBI bank carry a floating interest rate of Bank Base Rate & 380bps per annum and Bank Base Rate 275 bps per annum. respectively .

7. Employee benefits expense

Notes:

(i) Contribution to provident and other funds includes contribution to provident fund Rs. 91.90 lakhs (for the year ended 31.03.2016: Rs. 218.02 lakhs), contribution to superannuation fund Rs. 53.46 lakhs (for the year ended 31.03.2016: Rs. 96.77 lakhs), contribution to employees pension fund Rs. 12.76 lakhs (for the year ended 31.03.2016: Rs. 22.48 lakhs) and gratuity expense Rs. 83.87 lakhs (for the year ended 31.03.2016: Rs. 144.67 lakhs)

(ii) Actuarial loss of Rs. 65.08 lakhs for financial year ended 31 March, 2016 has been reclassified to other comprehensive income.

8. Segment information

8.1 Products and services from which reportable segments derive their revenues

Operating segments are defined as components of an enterprises for which discrete financial information is available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate resources and assessing performance. The Company''s chief operating decision maker is the Board of Directors of the Company.

The Company has identified business segments (type of products) as reportable segments. The business segments comprise:

a. Roll operation

b. Pig iron operation

c. Ingot operation

d. Engg forgings operation

Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on a reasonable basis. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.

Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable.

9 Employee benefit plan

9.1 Defined contribution plan

The Company participates in a number of defined contribution plans on behalf of relevant personnel. Any expense recognized in relation to these schemes represents the value of contributions payable during the period by them at rates specified by the rules of those plans. The only amounts included in the balance sheet are those relating to the prior month''s contributions that were not due to be paid until after the end of the reporting period.

The Company has recognized, in the Statement of Profit and Loss for the year ended 31.03.2017, an amount of Rs. 158.12 lakhs (for the year ended 31.03.2016 Rs. 337.27 lakhs) as expenses under the following defined contribution plans

As at 31 March, 2017, contribution of Rs. 1.46 lakhs (as at 31 March, 2016 Rs. 14.24 lakhs) representing amount payable to the Employee Provident Fund, Rs. 0.27 lakhs (as at 31 March, 2016 Rs. 96.77 lakhs) to superannuation fund and Rs. 0.43 lakhs (as at 31 March, 2016 Rs. 3.84 lakhs) to employees pension scheme in respect of the year ended 31 March 2017 (year ended 31 March, 2016) reporting period had not been paid to the plans. The amounts were paid subsequent to the end of respective reporting periods.

9.2 Defined benefit plan :

The Company operates post retirement benefit plans as follows:

Funded

i) Post retirement gratuity

Unfunded

i) Post Retirement Medical Benefit (PRMB)

ii) Pension to Directors

i) Funded defined benefit plans- Post retirement gratuity

Notes:

1) The discount rate is based on the prevailing market yields of Indian Government bonds as at the balance sheet date for the estimated term of obligations.

2) The gratuity plan is funded.

3) The estimates of future salary increases considered taken into account the inflation, seniority, promotion and other relevant factors.

4) As the Company has prepared the financial statements for the year ended 31 March, 2017 and 31 March, 2016 on not a going concern basis, liability for post retirement gratuity is provided for on an actual basis and hence disclosures as required under Ind AS 19 "Employee Benefits" related to defined benefit plans have not been made.

ii) Unfunded defined benefit plans

The amount included in the Balance Sheet arising from the entity''s obligation in respect of its unfunded defined benefit plans is as follows:

Notes:

1) The discount rate is based on the prevailing market yields of Indian Government bonds as at the balance sheet date for the estimated term of obligations.

2) The plan is funded.

3) The estimates of future salary increases considered taken into account the inflation, seniority, promotion and other relevant factors.

4) As the Company has prepared the financial statements for the year ended 31 March, 2017 and 31 March, 2016 on not a going concern basis, liability for unfunded defined benefit plans for the year ended 31 March, 2017 is provided for on an actual basis and hence disclosures as required under Ind AS 19 "Employee Benefits" related to defined benefit plans have not been made for that period.

Actuarial assumptions for leave benefit scheme

The principal assumptions used for the purposes of the actuarial valuations were as follows:

Notes:

1) The discount rate is based on the prevailing market yields of Indian Government bonds as at the balance sheet date for the estimated term of obligations.

2) The compensated absences plan is unfunded.

3) The estimates of future salary increases considered take into account the inflation, seniority, promotion and other relevant factors.

10 Related Party Transactions

A. List of related parties : i Holding company

Tata Steel Limited

ii. Fellow Subsidiaries

a) Tata Steel Europe Limited

b) The Indian Steel & Wire Products Limited

c) The Tinplate Company of India Limited

d) Jamshedpur Continuous Annealing and Processing Company Private Limited

e) Jamshedpur Utilities & Services Company Limited

f) Tata Metaliks Limited

g) Tata Metaliks DI Pipes Limited

h) Tata Sponge Iron Limited

i) TKM Global Logistics Limited

iii. Others - Post employment benefit plan

a) Trustees of Tata Yodogawa Limited Gratuity Fund

b) Trustees of Tata Yodogawa Limited Provident Fund

c) Tata Yodogawa Limited Employees Pension Fund

d) Tata Yodogawa Limited Superannuation Fund

iv. Key Management Personnel (KMP)

Mr. K. Shankar Marar (Managing Director)

(i) Consequent to the judgment dated 2 May, 2013 of Honourable Jharkhand High Court with regard to the applicability of power tariff structure on the Company''s Induction Furnace Unit from January 2000, the Jharkhand State Electricity Board (JSEB) had raised rectified energy bill dated 10 June, 2013 for Rs. 27,203.00 lakhs (later claim revised to Rs. 26,361.00 lakhs). The rectified energy bill was challenged separately before the Honourable Jharkhand High Court. The Company has also contested the judgment dated 2 May, 2013 on the applicability of power tariff structure by way of filing an appeal before the Honourable Jharkhand High Court which has been admitted on merit on 3 July, 2013 . The demand raised by JSEB has been considered as contingent liability in the financial statements.

JSEB had also initiated Certificate proceedings for recovery of Rs. 26,361.00 lakhs against the Company and the Board of Directors, which was challenged before the Certificate Officer. The Certificate Officer in his Order dated 12 December, 2015 has absolved the directors from any liability to the extent the certificate amount is considered. He also directed JSEB to raise revised bills and the Company to pay the same within 15 days of the order. JSEB has raised the revised bill dated 24 December, 2015 for Rs. 21,803.67 lakhs. The Company has also challenged the Order dated 12 December, 2015 of the Certificate officer before the Division Bench of the Jharkhand High Court.

On 18 December, 2015, the Division Bench of Jharkhand High Court has passed its Order that "No Coercive Action" shall be initiated against the Company during pendency and final hearing of the Appeals.

On 18 December, 2015, the Division Bench of Jharkhand High Court has passed its Order that ""No Coercive Action"" shall be initiated against the Company during pendency and final hearing of the Appeals. "

(ii) During the financial year 2000-01, Bihar State Electricity Board (BSEB) had issued circulars revising the fuel surcharge rates for the period from 1996-97 to 1999-2000. Based on management estimate the Company had paid and provided the principal amount aggregating to Rs. 43.61 lakhs in the books of account and filed a Letters Patent Appeal (LPA) before the Division Bench of the Jharkhand High Court disputing payment of delayed payment surcharge (DPS) amounting to Rs. 1,232.39 lakhs. Further, the Company had also filed a Special Leave Petition (SLP) before the Hon''ble Supreme Court for seeking relief from payment of DPS. The Supreme Court granted stay on the payment of DPS till final decision by the Jharkhand High Court. The matter is still sub-judice. Pending finalization of the matter no adjustments have been made in the financial statements for the year ended 31 March, 2017.The Company had issued a bank guarantee of Rs. 372.00 lakhs relating to above.

(iii) The Company has filed a rectification application with the Director General of Foreign Trade for discharge of export obligation.

11. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. Nil (as at 31.03.2016: Rs. 318.27 lakhs, as at 01.04.2015: Rs. 829.70 lakhs) against which advances paid Rs. 8.31 lakhs (as at 31.03.2016: Rs. 84.18 lakhs, as at 01.04.2015 : Rs. 482.57 lakhs).

(a) Under Previous GAAP, consumption of spares parts (moulds) was charged to the Statement of Profit and Loss from inventory as and when consumed. However as per Ind AS 16 - Property, Plant and Equipment, spare parts qualify as property, plant and equipment when an entity expects to use them during more than one period and when they can be used only in connection with an item of property, plant and equipment.

Consequently, on the date of transition, as at 1 April, 2015 to Ind AS, moulds amounting to Rs. 1,417.41 lakhs were recognized under property, plant and equipment and amounting to Rs. 67.17 lakhs under capital work in progress.

Under Previous GAAP, financial statements for the year ended 31 March, 2016 were prepared on other than going concern basis and value of moulds were written down and Rs. 824.75 lakhs was charged to Statement of Profit and Loss as an exceptional item.

(b) Under previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expense, gains, or losses are required to be presented in other comprehensive income.

(c) As referred in note 2.22 for transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

Further, under Ind AS 20 ""Accounting for Government Grants and Disclosure of Government Assistance"", the transfer of resources from the government in the form of a waiver of expenses/duty needs to be accounted for as government grant (liability). Accordingly, the duty waived off under Export Promotion Capital Goods (EPCG) Scheme has been recognized as deferred liability by an increase in the carrying value of the property, plant and equipment.

The increase in the value of property, plant and equipment is depreciated over the balance life of the asset. Consequent to this adjustment there is an increase in property, plant and equipment as at 31 March, 2016 by Rs. 681.63 lakhs (as at 1 April, 2015: Rs 727.07 lakhs) and accordingly a depreciation charge of Rs. 45.44 lakhs has been debited to the Statement of Profit and Loss for the financial year ended 31 March, 2016 .

(d) Under previous GAAP, long term investments were measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, these financial assets have been classified as FVTOCI. On the date of transition to Ind AS, these financial assets have been measured at their fair value which is higher than the cost as per previous GAAP, resulting in an increase in the carrying amount by Rs. 27.02 lakhs as at 31 March, 2016 and by Rs. 25.52 lakhs as at 1 April, 2015. There is an increase in other comprehensive income by Rs 1.50 lakhs for the year ended 31 March, 2016 being the difference in the fair value of investments. These changes do not affect loss for the year ended 31 March, 2016 because the investments have been classified as FVTOCI.

(e) Under Previous GAAP, redeemable preference shares amounting to Rs. 25,100.00 lakhs as at 31 March, 2016 (as at 1 April, 2015: Rs. 23,500.00 lakhs) were classified as part of share capital. However, under Ind AS, financial instruments are classified either as a liability or equity according to the substance of the contractual arrangement and not its legal form. Since, these preference shares do not contain any equity component these have been classified in their entirety as a financial liability under non-current borrowings.

Consequent to this adjustment there is an increase in borrowing under non-current liabilities. Further, cost on issue of preference shares has been reclassified from retained earnings to non-current borrowings and amortized as finance cost over the remaining period. Accordingly loss for the year ended 31 March, 2016 has increased.

(f) Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the Statement of Profit and Loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.

Accordingly, borrowings as at 1 April, 2015 and 31 March, 2016 have increased with a corresponding adjustment to retained earnings. The total equity has increased by an equivalent amount. The loss for the year ended 31 March, 2016 has increased on account of change in effective interest rate.

(g) Under Previous GAAP, amortization charges on moulds usage were charged to consumption of stores. Under Ind AS, as the moulds have been classified under property, plant and equipment, amortization charges of moulds have been reclassified from ""consumption of stores"" under other expenses to ""depreciation and amortization expense"". (also refer note (a) above).

(h) Under previous GAAP, revenue from sale of products was presented net of excise duty under revenue from operations, whereas, under Ind AS, revenue from sale of products includes excise duty. The corresponding excise duty expense is presented separately on the face of the Statement of Profit and Loss. The change does not affect total equity as at 1 April, 2015 and 31 March, 2016 and loss for the year ended 31 March, 2016.

(i) Under previous GAAP, actuarial gains and losses were recognized in profit or loss. Under Ind AS, the actuarial gains and losses form part of measurement of the net defined benefit liability / asset which is recognized in other comprehensive income. The actuarial losses for the year ended 31 March, 2016 were Rs. 65.08 lakhs. This change does not affect total equity, but there is a decrease in loss before tax of Rs. 65.08 lakhs and decrease in other comprehensive income of Rs.

65.08 lakhs for the year ended 31 March, 2016.

(j) Previous GAAP figures have been reclassified to conform to the Ind AS presentation requirements for the purpose of this note.

12. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

13. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

14. The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

Notes:

(i) @ includes excise duty recovered from customers and excludes other operating revenues

(ii) * after adjustment for stocks value written down and transferred to semi-finished stock

(iii) ** Value of closing stocks includes excise duty.

(iv) Figures in brackets are in respect of the previous year.

15. Consumption of imported and indigenous materials

Value of consumption of imported and indigenously obtained raw materials, components, stores and spare parts and the percentage of each to the total consumption:

16. Financial instruments Capital management

The Company has incurred a loss of Rs. 8,294.88 lakhs during the year ended 31 March, 2017 (incurred a loss of Rs. 15,683.99 lakhs during the year ended 31 March, 2016) and the accumulated losses as at 31 March, 2017 amounting to Rs. 48,797.91 lakhs (as at 31 March, 2016 amounting to Rs. 40,503.03 lakhs) have eroded the net worth of the Company. The Company''s operating results continue to be materially affected by various factors, particularly high pricing pressures due to overcapacity in roll industry, general economic slowdown and unavailability of future financing.

The Board of Directors at their meeting held on 5 September, 2016 have decided to close the operations of the Company. Accordingly, on 6 September, 2016 the Company has filed closure application u/s 25-O of the Industrial Disputes Act, 1947 with the State Government Authorities. The application was rejected on 27 October, 2016. The Company has filed a writ petition in the Honourable Jharkhand High Court against the rejection order. The matter is sub judice.

The short term funding requirements are met primarily through issue of non-cumulative redeemable preference shares to the holding company and loans from the holding company.

B. The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1):

This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) inactive markets for identical assets or liabilities. This category consists quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2):

This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company''s over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3):

This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The main items in this category are unquoted available-for-sale financial assets, measured at fair value.

Investments of the Company are measured at fair value at the end of each reporting period. The following table gives information on determination of its fair value, the valuation technique and inputs used.

Notes:

(i) Includes certain investments whose fair values are Nil.

(i) Cost of these investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.

Fair value of the Company''s financial assets and financial liabilities that are not measured at fair value on a recurring basis :

The directors consider that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

C. Financial risk management

The Company''s activities expose it to a variety of financial risks which includes market risk (including foreign currency exchange rate risk and interest rate risk ), credit risk and liquidity risk.

The Company''s focus is to ensure liquidity which is sufficient to meet the Company''s operational requirements. The Company monitors and manages key financial risks so as to minimize potential adverse effects on its financial performance. The Company has a risk management policy which covers the risks associated with the financial assets and liabilities. The details for managing each of these risks are summarized ahead.

Market risk

Market risk is the risk that the expected cash flows or fair value of a financial instrument could change owing to changes in market prices. The Company''s activities expose it primarily to the financial risks of changes in Foreign currency exchange rate and interest.

Foreign currency exchange rate risk:

Foreign exchange risk comprises of risk that may arise to the Company because of fluctuations in foreign currency exchange rates. Fluctuations in foreign currency exchange rates may have an impact on the Statements of Profit and Loss. At the year end, the Company was exposed to foreign exchange risk arising from the foreign currency payables of the Company.

The carrying amounts of the Company foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:

The following table details the Company''s sensitivity to 10% increase or decrease in the rupee against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management''s assessment of the reasonably possible change in the foreign exchange rate. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.

Interest rate risk management

The Company is exposed to interest rate risk on current and non-current borrowings outstanding as at the year end which include both fixed and floating interest rate borrowings.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company''s loss for the year ended 31.03.2017 would increase/decrease by Rs. 61.27 lakhs (for the year ended 31.03.2016 Rs. 31.42 lakhs).

Credit risk management

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Credit exposure is controlled by counterparty limits that are reviewed and approved by the management regularly.

Trade receivables consist of few major customers for sale of product and services. Ongoing credit evaluation is performed based on the financial condition of accounts receivables.

Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or other financial assets.

The Company has obtained fund and non-fund based working capital lines from various banks. The Company invests its surplus funds in bank fixed deposits and liquid plus schemes of mutual funds, which carry mark to market risk.

17. Exceptional items

(i) Voluntary separation scheme

The Board of Directors in the meeting held on 26 May, 2016 had approved a Voluntary Separation Scheme (the Scheme) for employees and a phase wise suspension of operations. The Company issued a VSS circular on 31 May, 2016 to all on roll employees and having evaluated the response from employees subsequently revised the scheme on 5 September, 2016 and 9 March, 2017. The Company, post expiry of the revised VSS scheme on 15 March, 2017 has reviewed the remaining provision against the expenditure, and has considered the balance amount to be adequate to meet the present obligation and probable outflow to settle the current obligation. The provision of Rs. 2,870.37 lakhs pursuant to the VSS scheme has been recognized as an exceptional item during the year ended 31 March, 2017.

(ii) Write back of liabilities

During the year ended 31 March, 2017, the Company has undertaken negotiations for one time full and final settlement of vendor liabilities. Consequent to such settlement, a write back of excess liabilities over the settled amount aggregates to Rs. 351.48 lakhs and has been recognized as an exceptional item.

(iii) Write down of property, plant and equipment

During the previous year ended 31 March, 2016, the financial statements were prepared on other than going concern basis. The assets were stated at the lower of their historic cost and estimated net realizable value and the liabilities were stated at the values at which they are expected to be discharged. A loss of Rs. 8,913.51 lakhs, classified as exceptional item, was recognized as the difference between the realizable values and the historical carrying amounts of assets and liabilities.

Note:

(i) The Company has carried out it''s tax computation in accordance with Ind AS 12 ''Income Taxes''. In view of low probability that future taxable profit will be available against which temporary difference can be utilized and on account of preparation of Ind AS financial statements on not a going concern basis, no deferred tax assets have been recognized on unused tax losses.

ii) Detail of temporary differences, unused tax losses and unused tax credits for which no deferred tax asset is recognized in the balance sheet:

18. Approval of financial statements

The Ind AS financial statements were approved for issue by the Board of Directors on 22 May, 2017.


Mar 31, 2016

* During the previous year, pursuant to Section 13(1) read with Section 55, 61, 64 and other applicable provision of the Companies Act, 2013, the Company had increased its authorized share capital from Rs. 2,000,000,000 divided into 15,000,000 Equity Shares of Rs. 10 each and 8.50% Non-Cumulative 18,500,000 Preference Shares of Rs. 100 each to Rs. 3,500,000,000 divided into

15,000,000 Equity Shares of Rs. 10 each and 8.50% Non-Cumulative 33,500,000 Preference Shares of Rs. 100 each. The Shareholders approval of such increase was obtained at the Extra-ordinary General Meeting held on 12 May, 2014.

** In accordance with the approval of shareholders at the Extra-ordinary general meeting held on 12 May 2014, 1,600,000, 8.50% Non-cumulative redeemable preference shares were allotted on preferential basis to Tata Steel Limited, the promoters of the Company.

1. Share capital :

Rights, preferences and restrictions attached to shares Equity shares:

The Company has one class of equity shares having a par value of Rs 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting 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 the proportion to their shareholding.

Preference shares :

Non-cumulative redeemable preference shares of Rs. 100 each are entitled to a fixed rate of dividend at the rate of 8.50% per annum. The issuer shall redeem the preference shares together with all arrears of dividend, if any, in three equal installments at the beginning of eighth year, ninth year and tenth year from the deemed date of allotment.

Preference shares issued are redeemable on the following dates:

Nature of Security

2. Term loans from IDBI Bank Limited are secured by first charge on the fixed assets of the Company.

3. Cash credit accounts with Bank of India and IDBI Bank Limited are secured by hypothecation of all tangible movable assets of the Company including finished and semi-finished stocks, raw materials, stores and book debts ranking pari passu. In addition they are secured by way of second charge on the immovable properties of the Company ranking pari passu.

4.. Consequent to the judgment dated 2 May, 2013 of Honourable Jharkhand High Court with regard to the applicability of power tariff structure on the Company’s Induction Furnace Unit from January 2000, the Jharkhand State Electricity Board (JseB) had raised rectified energy bill dated 10 June, 2013 for Rs. 27,203.00 lakhs (later claim revised to Rs. 26,361.00 lakhs). The rectified energy bill was challenged separately before the Honourable Jharkhand High Court. The Company has also contested the judgment dated 2 May, 2013 on the applicability of power tariff structure by way of filing an appeal (Letters Patent Appeal) before the Honourable Jharkhand High Court which has been admitted on merit on 3 July, 2013 . The demand raised by JSEB has been considered as contingent liability in the financial statements.

JSEB had also initiated Certificate proceedings for recovery of Rs. 26,361.00 lakhs against the Company and Board of Directors, which was challenged before the Certificate Officer. The Certificate Officer in his Order dated 12 December, 2015 has absolved the directors from any liability to the extent the certificate amount is considered. He also directed JSEB to raise revised bills and the Company to pay the same within 15 days of the Order. JSEB has raised the revised bill dated 24 December, 2015 for Rs. 21,804.00 lakhs. The Company has also challenged the Order dated 12 December 2015 of the Certificate officer before the Division Bench of the Jharkhand High Court. On 18

December, 2015, the Division Bench of Jharkhand High Court has passed its Order that "No Coercive Action" shall be initiated against the Company during pendency and final hearing of the Appeals.

II. During the year the Company has filed a rectification application with the Director General of Foreign Trade for discharge of export obligation.

5 Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 318.27 lakhs (31.3.2015: Rs. 829.70 lakhs) against which advances paid Rs. 84.18 Lakhs (31.3.2015 : Rs. 482.57 lakhs).

6 Disclosure required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (''MSMED'')

Amounts payable to MSMED suppliers as at 31 March, 2016 are as under :

7 Exceptional item of previous year

During the previous year, the Company had carried out an impairment review of its fixed assets based on changes in circumstances indicating that their carrying amount may not be recoverable. Based on the review, the Company had made a provision in the financial statements for Rs. 794.00 lakhs towards write down of assets pertaining to integrated facilities for manufacture of Forging Quality Ingots, Engineering Forgings and Forged Rolls.

8 The Wage Agreement dated 8 April, 2009 and dated 23 March, 2010 between the Company and the Tayo Workers Union expired on 31 December, 2011 and 30 September, 2014 and fresh agreements are under negotiation. Pending finalization of these negotiations, provisions have been recorded on an estimated basis. Any adjustments necessary, consequent on final determination of the liability pertaining to the years ended 31 March, 2015 and 31 March, 2016 will be made in the year in which negotiations are concluded. (Also see note 1 (A) (b) A (1) (ii)).

9 During the previous year, the Company had revised its estimates of useful life of its fixed assets as prescribed in Part C of Schedule II of the Companies Act, 2013. Carrying amount less residual value of the assets whose remaining useful life had become Nil at the beginning of the previous year, had been adjusted with the opening balance of retained earnings. Consequent to the adoption of Schedule II as above, the loss for the year ended 31 March, 2015 was lower by Rs. 695.33 lakhs (net of amount transferred to retained earnings). The opening retained earnings as at 1 April, 2014 was lower by Rs. 43.95 lakhs.

(i) The Company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of products, the differing risks and returns, the organizational structure and internal reporting system. The company’s operations predominantly relate to manufacture of Rolls, Pig Iron, Ingots and Engineering Forgings.

(ii) Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets & Liabilities that cannot be allocated between segments are shown as unallocated assets & liabilities respectively.

(iii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

A. List of Related parties

i. Holding company

Tata Steel Limited

ii. Fellow Subsidiaries

a. Tata Steel Europe Limited

b. The Indian Steel & Wire Products Limited

c. The Tinplate Company of India Limited

d. Jamshedpur Continuous Annealing and Processing Company Private Limited

e. Jamshedpur Utilities & Services Company Limited

f. Tata Metaliks Limited

g. Tata Metaliks DI Pipes Limited

h. Tata Sponge Iron Limited

i. TKM Global Logistics Limited

iii. Key management personnel

Mr. K. S. Marar (Managing Director)

The Company has given warranty on sale of rolls. Provision for warranty is made based on technical estimates and past experience of such costs. This estimate is based on the Company''s estimate of liability towards warranty expenses. Actual claims may differ from estimates and the difference is recognized in the year of occurrence.

Note 10: The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

Note 11 There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company.

Note 12: Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2015

Note 1 (a): General Corporate Information:

Tayo Rolls Limited, formerly Tata- Yodogawa Limited was incorporated in 1968. The company was promoted by Tata Steel Limited in collaboration with Yodogawa Steel Works, Japan and Nissho Iwai Corporation of Japan for production of Cast Iron and Cast Steel Rolls for metallurgical industries. As a part of its backward integration, Tayo Rolls Limited, has set up a mini blast furnace of 40,000 tpa for the manufacture of Pig Iron. Other products include Forged Rolls, Engineering Forging and Ingots.

Tayo has a licence and know-how agreement with Sheffield Forgemasters International, UK, for the transfer of technology to manufacture forging quality ingots, forged bars, engineering forgings and forged rolls.

Rights, preferences and restrictions attached to shares Equity Shares :

The Company has one class of equity shares having a par value of Rs 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their shareholding.

Preference Shares :

8.50%, 235,00,000 Non Cumulative Redeemable Preference Shares of Rs. 100 each are entitled to a fixed rate of dividend @ 8.50% p.a. The issuer shall redeem the preference share together with all arrears of dividend, if any, in three equal installments at the beginning of eighth year, ninth year and tenth year from the deemed date of allotment.

Notes: Nature of Security

1 Term loans from IDBI Bank Ltd. are secured by first charge on the fixed assets of the Company.

2 Cash credit account with Bank of India and IDBI Bank Ltd. are secured by hypothecation of all tangible movable assets of the Company including finished and semi-finished stocks, raw materials, stores and book debts ranking paripassu. In addition they are secured by way of second charge on the immovable properties of the Company ranking paripassu.

2.1 Contingent liabilities and commitments

2.1 (a) Claims against the Company not acknowledged as debt

As at31.03.2015 As at 31.03.2014

i) Income Tax Appeals:

a) by the Company 259.09 259.09

b) by the Department 46.21 46.21

ii) Sales Tax 34.05 -

iii) Excise

a) by the Company 271.89 271.89

b) by the Department 25.92 25.92

15.1(b) Guarantees

i) Under Export Promotion Capital Goods Scheme for 177.00 177.00

concessional duty on import of machinery furnished to the Customs authorities

ii) Bills discounted with Bankers - 170.98

2.1(c) Other money for which the company is contingently liable

i) Others Matters 26,361.00 27,203.25

Consequent to the judgment dated 2nd May, 2013 of Honorable Jharkhand high Court with regard to the applicability of power tariff structure on the Company's Induction Furnace Unit from January 2000, The Jharkhand State Electricity Board (JSEB) has raised rectified energy bill dated 10th June, 2013 for Rs. 272.03 Crores (later claim revised to Rs 263.61 Crores). The Company has contested the judgment dated 2nd May, 2013 by way of filing an appeal (Later Patent Appeal) before the Honorable Jharkhand High Court which has been admitted on merit on 3rd July, 2013. The recified energy bill dated 10th June, 2013 has also been challendged separately beore the Honourable Jharkhand High Court. Meanwhile, JSEB has initiated Certificate proceedings for Rs 263. 61 Crores against the Comapny and Board of Directors, which has been challendged before the Certificate Officer. Pending the outcome, demand amount of Rs Rs. 263.61 Crores has been disclosed under Contingent liability Note [15.1(c)] above.

ii) Export Promotion Capital Goods Scheme 727.00 727.00

2.2 Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 829.70 lakhs (as at 31.3.2014: Rs. 786.08 lakhs) against which advances paid Rs. 482.57 Lakhs (as at 31.3.2014 : Rs. 92.39 lakhs).

Notes:

(i) @ includes excise duty recovered from customers

(ii) * after adjustment for stocks value written down and transferred to Semi-finished Stock

(iii) ** Value of closing stocks excludes the amount of Excise Duty loaded on stocks

(iv) Figures in brackets are in respect of the previous year.

2.3 CONSUMPTION OF IMPORTED AND INDIGENOUS MATERIALS

Value of consumption of imported and indigenously obtained raw materials, components, stores and spare parts and the percentage of each to the total consumption:

2.4 EXCEPTIONAL ITEMS:

(a) Denotes Retiral Benefit to Ex - Director

a) Pension nil (2013-14 : Rs 92.76 lakhs),

b) Post Retirement Medical Benefits nil (2013-14 : Rs 14.95 lakhs) and

c) Ex-Gratia nil (2013-14 : Rs 8.40 lakhs).

(b) The Company has carried an impairment review of its fixed assets based on changes in circumstances indicating that their carrying amount may not be recoverable. Based on the review, the Company has made a provision in the financial statements for Rs 794.00 lakhs (2013-14: Rs 1,797.89 lakhs) towards write down of assets pertaining to integrated facilities for manufacture of Forging Quality Ingots, Engineering Forgings and Forged Rolls.

15.13 The Wage Agreement dated 08.04.2009 and dated 23.03.2010 between the Company and the Tayo Workers Union expired on 31.12.2011 & 30.09.2014 and fresh agreements are under negotiation. Pending finalisation of these negotiations, provisions on an estimated basis has been made and included in Salaries and Wages, under the head "Employees Benefit Expense" Item 1 (i) of Note 13 (A). No separate allocation has been made towards the Company's contribution to provident and other funds included therein. Any adjustments necessary, consequent on final determination of the liability pertaining to the period ended 31st March, 2015 will be made in the year in which negotiations are concluded.

The expenses in relation to (a) Medical - Rs 117.13 lakhs (2013-14 Rs 69.10 lakhs), (b) Pension to Directors Rs 57.28 lakhs (2013-14 Rs 56.36 lakhs) and (c) Leave Rs 188.79 lakhs (2013-14 Rs 104.92 lakhs) are included in item 1 (i) Salaries and wages including bonus of Note 13 (A) Employee Benefit Expense of the Statement of Profit and Loss.

(i) The company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of products, the differing risks and returns, the organizational structure and internal reporting system. The company's operations predominantly relate to manufacture of Rolls, Pig Iron, Ingots and Engineering Forgings.

(ii) Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets & Liabilities that cannot be allocated between segments are shown as unallocated assets & liabilities respectively.

(iii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

Note 3: Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2014

Note 1 (a): General Corporate Information

Tayo Rolls Limited, formerly Tata- Yodogawa Limited was incorporated in 1968. The company was promoted by Tata Steel Limited in collaboration with Yodogawa Steel Works, Japan and Nissho Iwai Corporation of Japan for production of Cast Iron and Cast Steel Rolls for metallurgical industries. As a part of its backward integration, Tayo Rolls Limited, has set up a mini blast furnace of 40,000 tpa for the manufacture of Pig Iron. Other products include Forged Rolls, Engineering Forging and Ingots.

Tayo has a licence and know-how agreement with Sheffield Forgemasters International, UK, for the transfer of technology to manufacture forging quality Ingots, Forged bars, Engineering Forgings and Forged Rolls.

2 Share Capital :

Rights, preferences and restrictions attached to shares Equity Shares

The Company has one class of equity shares having a par value of Rs 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in the proportion to their shareholding.

Preference Shares :

8.50%, 8,500,000 Non Cumulative Redeemable Preference Shares of Rs. 100 each issued during the F.y. 2011-12. The shareholders are entitled to a fixed rate of dividend @ 8.50% p.a. The issuer shall redeem the preference share together with all arrears of dividend, if any, in three equal installments at the beginning of eighth year, ninth year and tenth year from the deemed date of allotment.

8.50%, 8,700,000 Non Cumulative Redeemable Preference Shares of Rs. 100 each issued during the F.y. 2013-14. The shareholders are entitled to a fixed rate of dividend @ 8.50% p.a. The issuer shall redeem the preference share together with all arrears of dividend, if any, in three equal installments at the beginning of eighth year, ninth year and tenth year from the deemed date of allotment.

Notes: Nature of Security

1 Term loans from IDBI Bank Ltd. are secured by first charge on the fixed assets of the Company.

2 Cash credit account with Bank of India IDBI Bank Ltd. are secured by hypothecation of all tangible movable assets of the Company including finished and semi-finished stocks, raw materials, stores and book debts ranking paripassu. In addition they are secured by way of second charge on the immovable properties of the Company ranking paripassu.

3 Contingent liabilities and commitments

4 (a) Claims against the Company not acknowledged as debt As at As at i) Income Tax Appeals: 31.03.2014 31.03.2013

a) by the Company 305.30 251.38

b) by the Department - 79.51

ii) Sales Tax - 336.46

iii) Excise 297.81 297.81

(b) Guarantees

i) Under Export Promotion Capital Goods Scheme for concessional

duty on import of machinery furnished 177.00 177.00 to the Customs authorities

ii) On other account 791.37 1,124.23

iii) Bills discounted with Bankers 170.98 298.29

(c) Other money for which the company is contingently liable

d) Others Matters 27,203.25 48.02

Consequent to the judgment dated 2nd May, 2013 of Honorable Jharkhand high Court with regard to the applicability of power tariff structure on the Company''s Induction Furnace Unit from January 2000, The Jharkhand State Electricity Board (JSEB) has raised rectified energy bill dated 10th June, 2013 for Rs. 272.03 Crores. The Company has contested the judgment dated 2nd May, 2013 by way of filing an appeal before the Honorable Jharkhand high Court which has been admitted on merit on 3rd July, 2013. The demand dated 10th June, 2013 has also been challenged before the Honorable Jharkhand high Court.

Pending the outcome of the appeal the demand amount of Rs. 272.03 Crores has been disclosed under Contingent liability Note [15.1(c)] above.

5 Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 786.08 lakhs (as at 31.3.2013: Rs. 828.24 lakhs) against which advances paid Rs. 92.39 Lakhs (as at 31.3.2013 : Rs. 181.34 lakhs).

The above disclosures have been made consequent to the announcement by The Institute of Chartered Accountants of India on 2nd December, 2005, which is applicable to the financial periods ending on or after 31st March, 2006.

Notes:

(i) @ includes excise duty recovered from customers

(ii) * after adjustment for stocks value written down and transferred to Semi-finished Stock

(iii) ** Value of closing stocks excludes the amount of Excise Duty loaded on stocks

(iv) Figures in brackets are in respect of the previous year.

(b) The Company has carried an impairment review of its fixed assets based on changes in circumstances indicating that their carrying amount may not be recoverable. Based on the review, the Company has made a provision in the financial statements for Rs 1,797.89 lakhs towards write down of assets pertaining to integrated facilities for manufacture of Forging Quality Ingots, Engineering Forgings and Forged Rolls.

(2012-13: Denotes sale of shares held under long term investments of Tata International Limited. 2,000 Equity shares of Rs 1000 each sold @ Rs 17,000 each)

6 The Wage Agreement dated 08.04.2009 between the Company and the Tayo Workers Union expired on 31.12.2011 and fresh agreements are under negotiation. Pending finalisation of these negotiations, provisions on an estimated basis has been made and included in Salaries and Wages, under the head "Employees Benefit Expense" Item 1 (i) of Note 13 (A). No separate allocation has been made towards the Company''s contribution to provident and other funds included therein. Any adjustments necessary, consequent on final determination of the liability pertaining to the period ended 31st March, 2014 will be made in the year in which negotiations are concluded.

The expenses in relation to (a) Medical - Rs 69.10 lakhs (2012-13 Rs 28.62 lakhs), (b) Pension to Directors Rs 56.36 lakhs (2012-13 Rs 58.05 lakhs) and (c) Leave Rs 104.92 lakhs (2012-13 Rs 69.38 lakhs) are included in item 1 (i) Salaries and wages including bonus of Note 13 (A) Employee Benefit Expense of the Statement of Profit and Loss.

Notes:

(i) The company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of products, the differing risks and returns, the organizational structure and internal reporting system. The company''s operations predominantly relate to manufacture of Rolls, Pig Iron, Ingots and Engineering Forgings.

(ii) Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets & Liabilities that cannot be allocated between segments are shown as unallocated assets & liabilities respectively.

(iii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

Note 7:

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

Note 1 (a): General Corporate Information

Tayo Rolls Limited, formerly Tata-Yodogawa Limited was incorporated in 1968. The company was promoted by Tata Steel Limited in collaboration with Yodogawa Steel Works, Japan and Nissho Iwai Corporation of Japan for production of Cast Iron and Cast Steel Rolls for metallurgical industries. As a part of its backward integration, Tayo Rolls Limited has set up a mini blast furnace of 40,000 tpa for the manufacture of Pig Iron. Other products include Forged Rolls, Engineering Forgings and Ingots.

Tayo has a licence and know-how agreement with Sheffield Forgemasters International, UK, for the transfer of technology to manufacture forging quality ingots, including round ingots, forged bars, engineering forgings and forged rolls.

''During the previous year, pursuant to Section 16(1) and Section 94(2) of the Companies Act, 1956, the Company has increased its authorized share capital from Rs 15,00,00,000 divided into 1,50,00,000 Equity Shares of Rs 10/- each to Rs 100,00,00,000 divided into 1,50,00,000 Equity Shares of Rs 10/- each and 8.50% Non-Cumulative 85,00,000 Preference Shares of Rs 100/- each. The Shareholders approval of such increase was obtained by way of an ordinary resolution in the Extraordinary General Meeting of the Company held on 9th March, 2012.

**During the previous year, 65,00,000 Preference Shares were allotted to Tata Steel Limited, India and 20,00,000 Preference Shares were allotted to Yodogawa Steel Works Limited, Japan, Promoters of the Company, under the provisions of Section 81(1A), 85 and 86 of the Companies Act, 1956. Shareholders approval of such allotment was obtained by way of a special resolution in the Extraordinary General Meeting of the Company held on 9th March, 2012.

2) Share Capital :

Rights, preferences and restrictions attached to shares Equity Shares

The Company has one class of equity shares having a par value of Rs 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting 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 the proportion to their shareholding.

Preference Shares :

8.50%, 8,500,000 Non Cumulative Redeemable Preference Shares of Rs. 100 each. The shareholders are entitled to a fixed rate of dividend @ 8.50% p.a. The issuer shall redeem the preference share together with all arrears of dividend, if any, in three equal installments at the beginning of eighth year, ninth year and tenth year from the deemed date of allot- ment.

3.1 Contingent liabilities and commitments Rupees in lakhs

3.1 (a) Claims against the Company not acknowledged as debt

As at As at i) Income Tax Appeals: 31.03.2013 31.03.2012

a) by the Company 251.38 256.41

b) by the Department 79.51 89.25

ii) Sales Tax 336.46 197.48

iii) Excise 297.81 32.79

3.2 Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 828.24 lakhs (as at 31.3.2012: Rs.1183.61 lakhs) against which advances paid Rs. 181.34 Lakhs (as at 31.3.2012 : Rs. 27.71 lakhs).

3.3 Exceptional items:

Denotes sale of shares held under long term investments of Tata International Limited. 2,000 Equity shares of Rs 1000 each sold @ Rs 17,000 each. (2011-12 : Denotes sale of shares held under long term investments of Jamipol Limited. 200,000 Equity shares of Rs 10 each sold @ Rs 134 each.)

3.4 The Wage Agreement dated 08.04.2009 between the Company and the Tayo Workers Union expired on 31.12.2011 and fresh agreements are under negotiation. Pending finalisation of these negotiations, provisions on an estimated basis has been made and included in Salaries and Wages, under the head "Employees Benefit Expense" Item 1 (i) of Note 13 (A). No separate allocation has been made towards the Company''s contribution to provident and other funds included therein. Any adjustments necessary, consequent on final determination of the liability pertaining to the period ended 31st March, 2013 will be made in the year in which negotiations are concluded.

Notes :

(i) The company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of products, the differing risks and returns, the organizational structure and internal reporting system. The company''s operations predominantly relate to manufacture of Rolls, Pig Iron, Ingots and Engineering Forgings.

(ii) Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets & Liabilities that cannot be allocated between segments are shown as unallocated assets & liabilities respectively.

(iii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

Note 4: Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

During the year, pursuant to Section 16(1) and Section 94(2) of the Companies Act, 1956, the Company has increased its authorized share capital from Rs 15,00,00,000 divided into 1,50,00,000 Equity Shares of Rs 10/- each to Rs 100,00,00,000 divided into 1,50,00,000 Equity Shares of Rs 10/- each and 8.5% Non-Cumulative 85,00,000 Preference Shares of Rs 100/- each. The Shareholders approval of such increase was obtained by way of an ordinary resolution in the Extraordinary General Meeting of the Company held on 9th March, 2012.

During the year, 65,00,000 Preference Shares were allotted to Tata Steel Limited, India and 20,00,000 Preference Shares were allotted to Yodogawa Steel Works Limited, Japan, Promoters of the Company, under the provisions of Section 81(1A), 85 and 86 of the Companies Act, 1956. Shareholders approval of such allotment was obtained by way of a special resolution in the Extraordinary General Meeting of the Company held on 9th March, 2012.

1.1 Contingent liabilities and commitments Rupees in lakhs

1.1 (a) Claims against the Company not acknowledged as debt As at As at

i) Income Tax Appeals: 31.03.2012 31.03.2011

a) by the Company 256.41 53.80

b) by the Department 89.25 55.95

ii) Sales Tax 197.48 234.46

iii) Excise 32.79 31.82

1.1 (b) Guarantees

i) Under Export Promotion Capital Goods Scheme for concessional duty on import of machinery furnished to the Customs authorities 177.00 177.00

ii) On other account 1,105.81 474.46

iii) Bills discounted with Bankers 168.93 190.10

14.1 (c) Other money for which the company is contingently liable

d) Others Matters 48.02 48.02

1.2 Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 1183.61 lakhs (as at 31.3.2011: Rs. 1560.60 lakhs) against which advances paid Rs. 27.71 Lakhs (as at 31.3.2011 : Rs. 144.40 lakhs).

1.3 Exceptional items:

Denotes sale of shares held under long term investments of Jamipol Limited.

200,000 Equity shares of Rs 10 each sold @ Rs 134 each.

1.4 The Wage Agreement dated 08.04.2009 between the Company and the Tayo Workers Union expired on 31.12.2011 and fresh agreements are under negotiation. Pending finalization of these negotiations, provision on an estimated basis has been made and included in Salaries and Wages, under the head "Employees Benefit Expense " Item 1 (i) of Note 12(A). No separate allocation has been made towards the Company's contribution to provident and other funds included therein. Any adjustments necessary, consequent on final determination of the liability pertaining to the period ended 31st March, 2012 will be made in the year in which negotiations are concluded.

Notes :

(i) The company has disclosed Business Segment as the primary segment. Segments have been identified taking into account the nature of products, the differing risks and returns, the organizational structure and internal reporting system. The company's operations predominantly relate to manufacture of Rolls, Pig Iron, Ingots and Engineering Forgings.

(ii) Segment revenue, segment results, segment assets and segment liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis. The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets & Liabilities that cannot be allocated between segments are shown as unallocated assets & liabilities respectively.

(iii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

Note 2 : The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2011

As at As at

31.03.2011 31.03.2010

Rupees in lakhs

1. Contingent liabilities in respect of -

a) Income Tax Appeals :

i) by the Company : 53.80 95.56

ii) by the Department : 55.95 188.66

b) Sales Tax 234.46 476.86

c) Excise 31.82 4.91

d) Other Matters 48.02 48.02

e) Bills discounted with Bankers 190.10 340.88

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 310.55 lakhs (as at 31.3.2010: Rs. 1,418.17 lakhs) against which advances paid Rs. 114.97 lakhs (as at 31.3.2010 : Rs. 91.53 lakhs).

3. Guarantees given by Bank

i) Under Export Promotion Capital Goods Scheme for concessional duty on import of machinery furnished to the Customs authorities — Rs. 177 lakhs (as at 31.3.2010 : Rs. 177 lakhs)

ii) On other account — Rs. 474.46 lakhs (as at 31.3.2010 : Rs. 302.75 lakhs)

The above guarantees are secured by supplemental deed of hypothecation of the assets stated in Schedule C and also counter guarantees given by the Company.

4. Leasehold land (Item 1 of Schedule E) includes Rs 1,75,000 (as at 31.3.2010: Rs 175,000) for which documents are yet to be executed. The Company has applied to the Bihar Government for exemption of its lands (other than leasehold land referred to hereinbefore for which documents are pending execution) from the Urban Land (Ceiling and Regulation) Act, 1976. The decision of the Government is still awaited.

5. Consumption of Stores & Spare Parts (Item 4 (a) of Schedule 2) is inclusive of Rs 262.29 lakhs (2009-10 : Rs 169.40 lakhs) for repairs and maintenance.

6. Revenue expenditure on Research & Development ¦. Rs 6.73 lakhs (2009-2010 : Rs 12.90 lakhs)

7. Previous years figures have been regrouped, where necessary.


Mar 31, 2010

As at As at 31.03.2010 31.03.2009

Rupees in lakhs

1. Contingent liabilities in respect of -

a) Income Tax Appeals :

i) by the Company : 95.56 58.75

ii) by the Department : 188.66 188.66

b) Sales Tax 476.86 1,008.82

c) Others Matters 52.93 68.50

d) Bills discounted with Bankers 340.88 132.58

2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 1418.17 lakhs (as at 31.3.2009 : Rs. 3,629.48 lakhs) against which advances paid Rs. 91.53 lakhs (as at 31.3.2009 : Rs. 83.81 lakhs).

3. Guarantees given by Bank

i) Under Export Promotion Capital Goods Scheme for concessional duty on import of machinery furnished to the Customs Authorities - Rs. 177 lakhs (as at 31.3.2009 : Rs. 177 lakhs)

ii) On other account - Rs. 302.75 lakhs (as at 31.3.2009 : Rs. 310.19 lakhs)

The above guarantees are secured by supplemental deed of hypothecation of the assets stated in Schedule C and also counter guarantees given by the Company.

4. Leasehold land (Item 1 of Schedule E) includes Rs. 1,75,000 (as at 31.3.2009 : Rs. 1,75,000) for which documents are yet to be executed. The Company has applied to the Bihar Government for exemption of its lands (other than leasehold land referred to hereinbefore for which documents are pending execution) from the Urban Land (Ceiling and Regulation) Act, 1976. The decision of the Government is still awaited.

5. The Wage Agreement between the Company and the Tayo Workers Union expired on 30.09.2009. The Company entered into fresh agreement on 23.03.2010 which is operative for 5 years with effect from 01.10.2009. The liability for the incremental wages and various benefits payable to the employees covered under the said agreement upto 31.03.2010 has been provided for in the accounts.

* Interest is reckoned as due from the date of receipt of bill by the Company from the Vendor who has sent intimation of registration under the Act.

6. Consumption of Stores & Spare Parts (Item 4 (a) of Schedule 2) is exclusive of Rs 169.40 lakhs (2008-09: Rs 175.77 lakhs) for repairs and maintenance.

7. Consequent to the Rights Issue the Company has become a subsidiary of Tata Steel Limited with effect from 1st December, 2008.

8. Revenue expenditure on Research & Development : Rs 12.90 lakhs (2008-2009: Rs 13.46 lakhs)

9. Other expenses (Item 4 (k) of Schedule 2) include-

The basis used to determine overall expected rate of return on assets and the effect on major categories of plan assets is as follows :

The major portions of the assets are invested in PSU bonds and Special Deposits. Based on the asset allocation and prevailing yield rates on these asset classes, the long term estimate of the expected rate of return on the fund assets have been arrived at. Assumed rate of return on assets is expected to vary from year to year reflecting the returns on matching Government bonds.

Notes:

(i) Segment Revenue, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to each of the segments as also amounts allocated on a reasonable basis.The expenses, which are not directly relatable to the business segments, are shown as unallocated cost. Assets and Liabilities that cannot be allocated between segments are shown as unallocated assets and Liabilities respectively.

(ii) Transaction between segments are primarily for materials which are transferred at market determined price and common costs are apportioned on a reasonable basis.

i) Figures in bracket are for the previous year

ii) * Refer to note 9 of page no. 33.

iii) ** The previous years figures are from 01.12.2008 when the Company became the subsidiary of Tata Steel Limited.

10 Previous years figures have been regrouped, where necessary.

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