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Notes to Accounts of Uttam Value Steels Ltd.

Mar 31, 2017

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Charge : The Term Loan facilities are secured by way of 1st charge on all fixed assets of the company both present & future at pari passu basis with all lenders and 2nd pari passu charge on entire current assets of the company and also personal guarantee of Mr. Rajendra Miglani, Mr. Anuj R. Miglani, & Mr. Ankit Miglani.

Charge : Working Capital Non-fund based limits are secured by way of 1st hypothecation charge on entire current assets of the company on pari passu basis with all the lenders and 2nd pari passu charge on all fixed assets of the company both present & future.

Working Capital Loan from Bank is net of Rs.45.07 Crs. Penal Interest.

* The company has initiated the process of identification of suppliers registered under Micro and small enterprise development Act, 2006, by obtaining confirmations from all suppliers. The above information has been determined on the basis of information available with the company. This has been relied upon by the auditors.

1. Employee Benefits

The Company operates one defined benefit plan, viz., gratuity benefit, for its employees. The Gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to I5 days salary payable for each completed year of service. The company does not have any fund for gratuity liability and the same is accounted for as provision.

Under the other long term employee benefit plan, the company extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company.

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss account for the respective plans.

2. Related Party Disclosures

A. Parties with whom the Company has entered into transactions during the year where control exists:

i) Key Management Personnel :

Mr. Rajiv Munjal Mr. Ram Gaud Mr. R. P. Gupta

ii) Enterprise over which key management personnel /relatives have significant influence

Uttam Galva Metallics Limited.

Uttam Galva Steels Limited.

Sainath Trading Company Private Limited. Kredence Multi Trading Limited.

Grow well Mercantile Private Limited. Lloyds Steel Industries Ltd.

iii) Associate

Indrajit Power Private Limited.


Mar 31, 2016

Notes to Financial Statements for the year ended 31st March 2016.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Preparation of Accounts

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material aspects with the Accounting Standards notified under section 133 of the Companies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared under the historical cost convention on an accrual basis . Further, insurance & other claims, on the ground of prudence or uncertainty in realization, are accounted for as and when accepted / received. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current - noncurrent classification of assets and liabilities.

Significant accounting policies

a) System of Accounting

The financial statements are prepared under the historical cost convention and comply in all material aspects with the applicable accounting principles in India, accounting standards notified under Section 133 of the Companies Act, 201 3 and the relevant provisions of the Companies Act, 2013. The Company accrues individual items of Income/Expenses above '' 5000/- per item.

b) Fixed assets

(i) Fixed Assets are valued at cost, net of CENVAT, unless revalued, for which proper disclosure is made.

(ii) All expenditure and interest cost during the project construction period, are accumulated and shown as Capital Work-in- Progress until the project/assets commences commercial production. Assets under construction are not depreciated. Expenditure/Income arising out of trial run is part of pre-operative expenses included in Capital Work-in-Progress.

c) Depreciation

Depreciation on fixed assets is provided on depreciable value of assets using straight-line method on the basis of useful life specified in Schedule II to the Companies Act, 201 3.

d) Revenue Recognition

Sales/Income in case of contracts/orders spreading over more than one financial year are booked to the extent of work billed. Sales include export benefits & net of sales return & trade discounts. Export benefits accrue on the date of export, which are utilized for custom duty free import of material / transferred for consideration.

e) Excise duty

Excise duty is accrued for at the point of manufacture of goods and accordingly is considered for valuation of finished goods stock lying in the factory as on the balance sheet date.

f) Custom duty

Customs Duty payable on imported raw materials, components and stores and spares is recognized to the extent assessed by the customs department.

g) Custom duty benefit

Customs duty entitlement eligible under pass book scheme / DEPB is accounted on accrual basis. Accordingly, import duty benefits against exports effected during the year are accounted on estimate basis as incentive till the end of the year in respect of duty free imports of raw material yet to be made.

h) Lease Rentals

Lease rentals are expensed with reference to lease terms.

i) Inventories

The general practice adopted by the company for valuation of inventory is as under:-

i) Raw Materials : *At lower of cost and net realizable value.

ii) Stores and spares : At cost

iii) Work-in-process/semi-finished goods : At cost.

iv) Finished Goods/Traded Goods : At lower of cost and market value.

v) Finished Goods at the end of trial run : At net realizable value.

vi) Scrap material : At net realizable value.

vii) Tools and equipments : At lower of cost and disposable value.

‘Material and other supplies held for use in the production of the inventories are not written down below cost if the finished goods in which they will be incorporated are expected to be sold at or above cost.

j) Research and development expenses

Research and Development costs (other than cost of fixed assets acquired) are expensed in the year in which they are incurred.

k) Provision for Gratuity

Provision for Gratuity is made on the basis of actuarial valuation based on the provisions of the Payment of Gratuity Act, 1972.

l) Provision for Leave encashment

Provision for Leave encashment is made on the basis of actuarial valuation at the end of the year. m) Investments

Long term investments are carried at cost less provision for permanent diminution in value. Current investments are carried at lower of cost or fair value. n) Amortization of expenses

i) Equity Issue expenses : Expenditure incurred in equity issue is being treated as Deferred Revenue

Expenditure to be amortized over a period of 10 years

ii) Debenture Issue Expenses : Debenture Issue expenditure is amortized over the period of 10 years.

iii) Deferred Revenue Expenses : Deferred Revenue expenses are amortized over a period of 5 years.

o) Foreign currency transactions

Foreign currency transactions during the accounting year are translated at the rates prevalent on the transaction date. Exchange differences arising from foreign currency fluctuations are dealt with on the date of payment/receipt. Assets and Liabilities related to foreign currency transactions remaining unsettled at the end of the period/year are translated at the period/ year end rate. The exchange difference is credited / charged to Profit & Loss Account in case of revenue items and capital items Forward exchange contracts entered into, to hedge foreign currency risk of an existing asset/ liability.

The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the period.

p) Impairment of assets

The carrying amount of assets is reviewed at each balance sheet date to determine if there is any indication of impairment thereof based on external/ internal factors. An impairment loss in accordance with Accounting Standard-28 "Impairment of Assets " is recognized wherever the carrying amount of an assets exceeds its recoverable amount, which represent the greater of the net selling price of assets and their value in use. q) Provision for doubtful debts

The management reviews on a periodical basis the outstanding debtors with a view to determine as to whether the debtors are good, bad or doubtful after taking into consideration all the relevant aspects. On the basis of such review and in pursuance of other prudent financial considerations the management determines the extent of provision to be made in the accounts.

r) Cash and Cash Equivalents

Cash and cash equivalents for the purposes of Cash Flow Statement comprises cash at bank and in hand and fixed deposits with an original maturity of three months or less. s) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that any outflow of resources will be required to settle the obligation. A contingent liability also arises in an extremely rare case where there is a liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the Financial statements.

t) Earnings per Share

The company reports basic and diluted earnings per share in accordance with AS - 20 ''Earning per share'' issued by the ICAI. Basic earnings per share is computed by dividing the net profit after tax by the weighted average number of shares outstanding for the year.

The Company approved the reduction of Equity Share Capital in the Court Convened Meeting of Members held on 22nd January, 2015. In terms of order dated 30th October, 2015 and 30th November, 2015 of the High Court of Judicature at Bombay, the Share Capital of the Company has been reduced from Rs,1321.62 Crs. to Rs, 660.81 Crs. The accumulated losses to the tune of Rs, 660.81 Crs. has been set off against the reduction in Share Capital.

Subsequent to reduction of Share Capital the face value of Equity Shares has been further sub divided from Rs, 5/- to Rs, 1/-

(b) Terms and Rights attached to equity shares

The company has only one class of shares having a par value at Rs, 1/- per share. Each holder of equity shares is entitled to one vote per share.

(c) Terms and Rights attached to redeemable preference shares

The Redeemable preference shares will be redeemed with a premium of 11.50 % in 6(six) annual installments commencing from financial year 2016. No such shares shall be redeemed except out of the profits of the company which would otherwise be available for dividend or out of the proceeds of the fresh issue of shares made for the purpose of the redemption.

i) Term Loan from IDBI :Repayment in 56 monthly installments commencing from Sept 1,2011 to April 1, 2016, in a manner such that 20 % of the outstanding dues to be paid in first 24 installments and remaining 80 % in balance 32 installments.

ii) ZCL : Repayment in 36 monthly installment commencing from April 1, 2017 carrying 5% interest rate.

Charge : The loan is secured by way of first pari-passu charge on company’s immovable properties both present and future and by way of second pari-passu charge on company''s movable properties both present and future.

Charge : The Term Loan facilities are secured by way of 1 st charge on all fixed assets of the company both present & future at pari passu basis with all lenders and 2nd pari passu charge on entire current assets of the company and also personal guarantee of Mr. Rajinder Miglani, Mr. Anuj R. Miglani, & Mr. Ankit Miglani.

Charge : The Term Loan facilities are secured by way of 1 st charge on all fixed assets of the company both present & future at pari passu basis with all lenders and 2nd pari passu charge on entire current assets of the company and also personal guarantee of Mr. Rajinder Miglani, Mr. Anuj R. Miglani, & Mr. Ankit Miglani.

The company has entered into Long term Utility and Facility service agreement dated 31st March 2016, with Uttam Galva Metallics Ltd. and has received interest free security deposit of Rs, 312.00 Crores.

Charge : Working Capital Non-fund based limits are secured by way of 1st hypothecation charge on entire current assets of the company on pari passu basis with all the lenders and 2nd pari passu charge on all fixed assets of the company both present & future.

*The company has initiated the process of identification of suppliers registered under Micro and small enterprise development Act,2006 , by obtaining confirmations from all suppliers. The above information has been determined on the basis of information available with the company. This has been relied upon by the auditors.

# Includes '' 15.23 Crores installments due but not paid as on 31st March 2016.

30. As per the scheme of Arrangement between Uttam Value Steels Limited (UVSL) (Demerged Company) and Lloyds Steels Industries Limited (LSIL) (Resulting Company). Approved by the Hon''ble High Court of Bombay by order dated 30th October, 2015 and 30th November, 2015 which became effective from 15th January, 2016 and some have been implemented at Board Meeting held on 31st March, 2016. The appointed date was 1st April, 2014 Following Asset and Liabilities have been transferred to LSIL from UVSL :-"


Mar 31, 2015

Basis of Preparation of Accounts

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material aspects with the Accounting Standards notified under section 133 of the Companies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared under the historical cost convention on an accrual basis. Further, insurance & other claims, on the ground of prudence or uncertainty in realisation, are accounted for as and when accepted / received. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current - non current classification of assets and liabilities.

2 Terms and Rights attached to equity shares

The company has only one class of shares having a par value at Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.

Terms and Rights attached to redeemable preference shares

The Redeemable preference shares will be redeemed with a premium of 11.50 % in 6(six) annual installments commencing from financial year 2016. No such shares shall be redeemed except out of the profits of the company which would otherwise be available for dividend or out of the proceeds of the fresh issue of shares made for the purpose of the redemption.

3. Contingent Liabilities and Commitments

(Rs. in Crores)

As at As at 31st March 31st March 2015 2014 CONTINGENT LIABILITIES

A) Claims against the company / disputed liabilities not acknowledged as Debts

- Show cause notices under hearing in respect of excise duty which is 2.84 3.76 disputed by the company

- Income tax demand, disputed by the company 215.46 -

- Others claims not acknowledged as debts 8.68 8.68

B) Guarantees

- Guarantees issued by the Company's banker on behalf of the company. 43.44 45.06

This includes expired Bank guarantees of Rs. 0.94 Crore (Rs. 0.57 Crore)

- Corporate Guarantee issued by the Company 1.05 1.43

C) Other money for which the company is contingently liable

- Bills Discounted 103.48 174.85

- Letter of credits opened by Banks. 26.00 58.97

COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account 1545 476 and not provided for (net of advances)

4. Employee Benefits

The Company operates one defined benefit plan , viz., gratuity benefit, for its employees . The Gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. The company does not have any fund for gratuity liability and the same is accounted for as provision.

Under the other long term employee benefit plan, the company extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement / separation or during tenure of service. The Plan is not funded by the company .

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss amounts recognised in the Balance sheet for the respective plans.

5. Forward Contracts and Unhedged Foreign Currency Exposure

a) The quantum of mark to market losses on all outstanding derivatives contracts amounts to Nil ( Rs. 6.30 Crores ) as at the balance sheet date, which has been duly provided for in the accounts in line with principle of prudence.

b) Derivative instruments outstanding at the Balance sheet date : The company uses foreign currency forward contracts to hedge its risk associated with foreign currency fluctuations relating to trade payable commitments. It has taken forward contracts Nil (USD 333,64,652.69).

6. Segment Information

The business segment has been considered as the primary segment. The company has identified business segments such as Steel products & Engineering products.

The above business segments have been identified considering :

* The customers

* The differing risks and returns

* The organization structure

* The internal financial reporting system

7. There is a carried forward unabsorbed depreciation and business losses as at the Balance sheet date. As a matter of prudence , the company has not recognized net deferred tax assets in term of Accounting Standard -22.

8. The company has claimed the Mega benefit based on increased capacity @ 40 % on HR products , 50 % on Galvanized products and Mega subsidy based on the ratio of new investments to old investments.

9. There are 27,14,451 ( previous year 27,14,451 ) forfeited Equity shares pending reissue at year end .

10. Previous year figures have been regrouped and recast wherever necessary.


Mar 31, 2013

Basis of Preparation of Accounts

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, I956. The financial statements have been prepared under the historical cost convention on an accrual basis. Further, insurance & other claims, on the ground of prudence or uncertainty in realisation, are accounted for as and when accepted / received. The accounting policies adopted in the preparation of financial statements are consistent with those used in the previous year.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI to the Companies Act, I956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle for the purpose of current - non current classification of assets and liabilities.

1. Contingent liabilities & commitments

(Rs. in lacs)

As at As at 31st March 2013 31st March 2012

(a) In respect of guarantees issued by Banks :

This includes expired Bank guarantees of Rs. 31.82 Lacs.(Rs. 392.54 Lacs) 1,268.72 1,730.64

(b) Corporate Guarantee issued by the Company 70.85 62.18

(c) i) Claims against the Company not acknowledged as Debts 867.50 866.19

ii) Show cause notices under hearing in respect of excise duty which is 428.73 447.84 disputed by the company

iii) Sales Tax - 28.65

Total 2,635.80 3,135.50

2. Employee benefits

The group operates one defined benefit plan , viz., gratuity benefit, for its employees . The Gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. The company does not have any fund for gratuity liability and the same is accounted for as provision.

Under the other long-term employment benefit plan, the company extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation or during tenure of service the plan is not funded by the company.

3. Related party disclosures

A. Name of the related party and nature of relationship where control exists

i) Key management personnel : Shri Rajinder Miglani (w.e.f 28th December, 20I2)

Shri Ankit Miglani (w.e.f 28th December, 20I2)

Shri Rajiv Munjal (w.e.f 28th December, 20I2)

Shri Mukesh R Gupta (Ceased w.e.f 28th December, 20I2)

Shri Rajesh R Gupta (Ceased w.e.f 28th December, 20I2)

Shri B L Agarwal (Ceased w.e.f 28th December, 20I2)

Shri Ashok S Tandon (w.e.f 20th June, 20I2)

ii) Enterprise over which key management personnel /share holders /relatives have significant influence ( where transaction exists)

Uttam Galva Metallics Limited.

Uttam Galva Steels Limited.

Sainath Trading Company Private Limited.

Kredence Multi Trading Limited.

Grow well Mercantile Limited.

Shree Global Tradefin Limited. (ceased w.e.f 6th December 20I2)

iii) Associates Indrajit Power Private Limited.

4. Segment information

The business segment has been considered as the primary segment. The company has identified business segments such as Steel product , Engineering product and power .

The above business segments have been identified considering :

- The customers

- The differing risks and returns

- The organization structure

- The internal financial reporting system

5. The Committee of Board of Directors at its meeting held on 06th December, 2012 has issued 38,00,00,000 equity shares of face value of Rs. 10 each on preferential basis at a price of Rs. 10 per share higher than the price calculated in accordance with Preferential Issue Guidelines contained in SEBI (ICDR) Regulations,2009 to the existing shareholder of the Company namely Ultimate Logistics Solutions Private Limited - 31,00,00,000 Equity shares and Metallurgical Engineering and Equipments Ltd - 7,00,00,000 Equity Shares.

6. Upon Modification of restructuring package, the Company has to further pay an amount of Rs. 125 crores to M/s ARCIL in 3 installments starting from September 2013. This amount will be recorded when the liability to pay arises. This liability is secured by way of first pari passu charge on companies immovable properties both present and future.

7. The name of the Company has been changed from Lloyds Steel Industries Ltd. to Uttam Value Steels Ltd. pursuant to the Fresh certificate of incorporation received from Registrar of Companies, Maharashtra, Mumbai dated March 18, 2013.

8. The Committee of Directors of the Company at its meeting held on March 19, 2013 allotted 15,00,00,000 Equity shares of Rs. 10/- each at a price of Rs. 15.13 on Conversion of 22,69,50,000 Preference Shares of Rs. 10/- each to IDBI Bank Limited.

9. There is a carried forward unabsorbed depreciation and business losses as at the Balance Sheet date. As a matter of prudence, the company has not recognized net deferred tax assets in term of Accounting Standard -22.

10. The Company has claimed the Mega benefit based on increased capacity @ 40 % on HR products, 50 % on Galvanized products and Mega subsidy based on the ratio of new investments to old investments.

11. There are 27,14,451 forfeited Equity shares pending reissue at year end (previous period 27,14,451 shares)

12. The financial accounts for previous year was prepared for a period of 9 months ( i.e July''11 to Mar''12). Hence the figures for current accounting year are not comparable with those of previous accounting period.

13. Previous period figures have been regrouped and recast wherever necessary.


Mar 31, 2012

(1) Contingent Liabilities not provided for : (Rs in Lacs) As at As at 31.03,2012 30.06 2011 (9 Months (15 Months Period) Period) (a) In respect of guarantees ' issued by Banks . includes expired Bank guarantees of Rs 392,54 Lacs IRs 111 11 Lacs) 1730.64 1576.80

(b) Corporate Guarantee issued by the Company 62.18 55,96

(c) i) Claims against the 866.19 846.86 Company riot acknowledged as debt

ii) Show Cause notices 447.84 447.84 under nearing in respect of excise duty which is disputed by Company iii) Sales Tax 28.65 28.65

TOTAL 3135.50 2956.11

(2) Cash and Bank Balances all Details at Balance with Non-Scheduled Bank Balance w.th Non-Scheduled Bank In Current accounts NIL 0.29

a) Amount held in Margin /' Fixed Deposit accounts with banks is also having lien for Guarantees provided of Rs 2574.00 Lacs (Previous period Rs 2132 84 Lacs)

(3) (a) The computation of net profit for the purpose of calculation of managerial remuneration u/s 349 of Companies Act. 1956 has not been enumerated since minimum remuneration has been paid to the Managing Director.

(b) Managerial remuneration u/s 198 of the Companies Act. 1956 include.

(c) Directors' remuneration aggregating to Rs 1.5 lacs ( Nil) tor the period paid to the Managing Director, is in excess of the approval received from the Ministry of Corporate Affairs during the period The above excess remuneration is liable to be recovered from the Managing director. However, no accounting adjustment has been made in the accounts for the amount recoverable from the Managing Director, as the company has made a representation to the Ministry of Corporate Affairs for reconsideration of its approval, which is pending as on date

(4) Disclosure as required by the Accounting Standard-15 "Employee Benefit" are giver) below:

a) General Description of Plan : Defined Gratuity Benefit obligation (Unfunded)

b) Method of Valuation of Gratuity : Projected Unit Credit Method.

(5) Disclosure as required by the Accounting Standard - 22 "Accounting for Taxes on Income" is given below.:

There is carried forward unabsorbed depreciation and business losses as at the Balance Sheet date. As a meteor of prudence, the Company has not recognized net deferred tax assets (DTA) in terms of Accounting Standard-22

(a) Sales include :

a) Engineering Division sales to Steel Division is at cost and net of Excise Duty amounting to Rs 496.24 Lacs (Previous period 6869.46 Lacs) out of which t 86 68 Lacs (Previous period Rs 6409.78 Lacs) are capitalized

b) Steel Division sales to Engineering Division is at selling price amounting to Rs 1563381 Lacs (Previous period 930122 Lacs)

c) Sales to Steel Division is at selling price amounting to Nil (Previous period Rs 3577 48 Lacs)

d) Steel Division sales includes at cost. Repairs & Maintenance Expenses of Rs 406 56 Lacs (Previous period Rs 231.83 Lacs) and CVIP of Rs 55 52 Lacs (Previous period Rs 116.74 Lacs)

(6) Balances of Debtors. Loans & Advances. Creditors and Bank dries are subject to Confirmation by the parties Differences, (if any), shall be accounted on such reconciliation.

(7) The Company has no information as to whether any all its suppliers constitute micro, small & medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, tire amount due to such suppliers has not been identified.

(8) Disclosure as required by Accounting Standard-11 "Effect Of Changes in Foreign Exchange Rates'1 Credited to Profit and Loss Account is Rs 37 98 Lacs (net) (Previous period Debited Rs 72.21 Lacs)

(9) There are 27,14,451 forfeited Equity Shares pending reissue at The a period end (Previous period 27,14.451 shares)

(10) As part of restructuring process of debt with some of the lenders, the total outstanding amount (Principal Plus Interest) as per books of 7 39511 38 Lacs (Previous period 447.89 Lacs) has been restructured and settled for 32551.50 Lacs (Previous period 52 75 Lacs) Principal amount at 11977.01 Lacs (Previous period 7 158 25 Lacs) written back has been credited to Capital Reserve and the amount of 7 5017.13 Lacs (Previous period 236.89 Lacs credited) has been debited to profit & loss account as an Exceptional item.

(11) During the period, certain tenders, in terms of loan / facility agreements entered into with the Company, have opted for conversion into equity shares of their outstanding dues to the extent of 7 10739 Lacs. Accordingly, the committee of Board of Directors at its meeting held on 2nd November. 2011 issued 28918450 Equity Shares of face value of 710/'- each on preferential basis at a price of 717.29 per share to ARCIL & at its meeting held on 17th March, 2012 issued 4,92,61,802 Equity Shares of face value of 710/- each on preferential basis at a price of 711.65 per share to state Bank of India Further in terms of the special resolution passed at the Extra Ordinary General meeting of the Company held on 1st March, 2012 , the Company in its committee meeting of Board of Directors field on 17th March , 2012, has allotted 32000000 Equity Shares to Promoters' and 16,30,00.000 Equity Shares to Investors, Equity Shares of face value of 710 each at a price of 711 65 per share as per SEBI (ICDR) Regulations and Listing Agreement.

(12) The Company has filed a reference before the Hon'ble BIFR on 29th June 2001. The reference came to be registered as Case Number 27/8/2001 as per their communication No.3(L-7)BC/2001 dated 11th July 2001. The Hon'ble BIFR after hearing the matter on 1st March 2006 has declared the Company as sick industrial company in terms of Section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and appointed ICICI Bank Limited as the Operating Agency (OA).

The company submitted a revised (DRS) to OA and the copy of the same was forwarded to Hon'ble BIFR As per the direction of Hon'ble BIFR at its hearing on 23 09.2010, OA convened a joint meeting of all concerned on 21.10 2010 whereat except one tender other creditors agreed to the DRS. It was also decided that the lenders should provide their comments to OA on future course of action.

The company submitted a revised Draft Rehabilitation Scheme (DRS) on January 9th 2012 to the ICICI Bank Ltd , OA and the copy of which was sent to the BIFR

(13) (a) Deposited with Government Department Includes Custom duty 711.55 Lacs (Previous period 7 72 16 Lacs) deposited for clearance of import consignment under Project import is recoverable from the Custom Department.

(b) Special Additional Duty of 7 Nil (Previous period 7111.66 Lacs) Refund from Custom Department.

(c) The arty dumping duty of 7 21.31 Lacs (Previous period 723.82 Lacs) deposited under protest with the Custom department

(14) The company has claimed the Mega benefit based on increased capacity & 40% on H R, Products, 50% on Galvanized Products and 7% on R Products in accordance with Section 93 and 93A of MVAT Act. 2005 However the Director of Industries has permitted the Mega subsidy based on ratio of new investment to old investment

(15) Exceptional items includes advances written back 7 3694 73 lacs and interest expenses payable to financial institutions 75017.13 lacs upon settlement

(16) The Company has closed its current financial year 2011-12 as on 31st March '12 Accordingly the financial accounts are prepared for a period of 9 Months i.e. from July '11 to 31st March 12 . Hence the figures for current accounting period are not comparable with those of previous accounting year

(17) Previous period's figures including those in brackets have been rearranged / regrouped as per The revised Schedule VI of the Companies Act, 1956.

(18) Previous period's figures have been regrouped and recast wherever necessary.

Notes

1) Business Segment : The business operations of the Company comprise Steel Product & Engineering Product. The business segments have been identified and reported taking into account, the nature of products and services, the differing risks and returns and the internal financial reporting systems.

2) Segment information has been prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the enterprise as a whole.


Jun 30, 2011

1. a. Long Term Loans referred to in 1(a) and 1(b) above, are secured by way of hypothecation of all the movables except book debts, including movable machinery, machinery spares, tools and accessories, present and future, subject to prior charges created and/or to be created in favour of the Company's Bankers for Working Capital facilities.

b. (i) Long Term Loans referred to in 1 (a) and 1 (b) above, to the extent of Rs 46760.89 lacs, are also secured by way of first mortgage and charge on Company's immovable properties, both present and future ranking pari passu with other First Charge holders, subject to prior charge of SBI for housing colony for the employees at Wardha and specified movables, both present and future, hypothecated to Banks for Working Capital.

(ii) Long Term Loans referred to in 1 (a) and 1 (b) above, to the extent of Rs 2837.01 lacs, are also secured by way of first mortgage and charge on Company's immovable properties situated at Wardha, both present and future , ranking pari passu with other First Charge holders, subject to prior charge of SBI for housing colony for the employees at Wardha and specified movables, both present and future, hypothecated to Banks for Working Capital.

c. Long Term Loans referred to in 1(a) and 1(b) above, to the extent of Rs 16500.00 lacs, are to be secured by way of first mortgage and charge on Company's immovable properties, both present and future ranking pari passu with other First Charge holders, subject to prior charge of SBI for housing colony for the employees at Wardha and specified movables, both present and future, hypothecated to Banks for Working Capital.

d. The Term Loans of Rs 353.97 lacs from SBI are secured by exclusive mortgage of the housing colony situated at Wardha.

e. Long Term Loan referred to in 1 (b) above, to the extent of Rs 1924.67 lacs, cash credit facilities assigned by banks, is secured against hypothecation of Raw Materials, Work-in-process, Finished Goods, Stores & Spares, Book Debts etc., and by way of Second Charge on company's immovable properties, and also guaranteed by some of the directors of the Company.

2. Cash Credit from Bank is secured against hypothecation of Raw Materials, Work-in-process, Finished Goods, Stores & Spares, Book Debts etc., and by way of Second Charge on Company's immovable properties, and also guaranteed by some of the Directors of the Company.

3. a. The loans mentioned above includes non interest bearing loans of Rs 52540.57 lacs as per the loan restructuring terms.

b. The loans mentioned above includes loan of Rs 5000.00 lacs convertible into Equity Shares on September 15, 2011 at a price to be determined in accordance with SEBI (ICDR) Regulations and in Compliance with all the statutory provisions in this regard.

(2) Contingent Liabilities not provided for:

As at As at 30.06.2011 31.03.2010 (15mnts Period) (12Mnts Period) (Rs in Lacs) (Rs in Lacs)

(a) In respect of guarantees issued by Banks: 1576.80 1201.43 This includes expired Bank guarantees ofRs 111.11 Lacs.

(b) Corporate Guarantee issued by the Company 55.96 66.95

(c) i) Claims against the Company not 846.86 870.18 acknowledged as debt.

ii) Show cause notices under hearing in 447.84 447.84 respect of excise duty which is disputed by the Company

iii) Sales Tax 28.65 28.65

TOTAL 2956.111 2615.05

(4) (a) The computation of net profit for the purpose of calculation of managerial remuneration u/s 349 of Companies Act, 1956 has not been enumerated since minimum remuneration has been paid to the Managing Director.

(5) Disclosure as required by the Accounting Standard - 5 "Net Profit or Loss for the period, Prior Period items and changes in Accounting Policies" are given below. Prior period expenses are Rs 60.56 Lacs (Previous year Rs 56.41). Prior period incomes are Rs 72.15 Lacs (Previous year Nil)

a) The Income tax assessment have been completed upto Assessment Year 2008-09

b) The company does not envisage any liability for Income Tax for the current period in absence of taxable income.

c) Disclosure as required by the Accounting Standard -22 "Accounting for Taxes on Income" are given below.:

In the event of carry forward losses and unabsorbed depreciation no Deferred Tax Liability has been created for the period ended 30.06.2011 The deferred tax asset has not been recognized as there is no virtual certainty of sufficient future taxable income available against which this deferred tax asset can be realized

(11) Sales include :

a) Engineering Plant sales to Steel Plant at cost price amounting to Rs 6869.46 Lacs (Previous Year Rs 621.48 Lacsj.out of which Rs 6409.78 Lacs (Previous Year Rs 333.84 Lacs) are Capitalized.

b) Steel Plant sales to Engineering Plant at selling price amounting to Rs 9301,22 Lacs (Previous Year Rs 6174.53 Lacs).

c) Trading Saies to Steel Plant at selling price amounting to 13577.48 Lacs

d) Steel Plant saies includes Repairs & Maintenance Expenses of Rs 231.83 Lacs (Previous Year Rs 362.13 Lacs) and CWIP of Rs 116.74 Lacs (Previous Year Rs 492.23 Lacs).

(12) Balances of Debtors, Loans & Advances, Creditors and Bank dues are subject to Confirmation by the parties. Differences, (if any), shall be accounted on such reconciliation.

(13) The Company has no information as to whether any of its suppliers constitute micro, small S medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due. to such suppliers has not been identified.

(14) Disclosure as required by Accounting Standard-11 "Effect Of Changes in Foreign Exchange Rates" Credited to Profit and Loss Account is Rs 2.21 Lacs (net) (Previous Year Debited to Rs 145.46 Lacs)

(15) There are 27,14,451 forfeited Eauity Shares pending reissue at the period end (Previous Year 446321 shares).

(16) As part of restructuring process of debt with some of the lenders, the total outstanding amount (Principal Plus Interest) as per books of Rs 447.89 Lacs has been restructured and settled tor Rs 52.75 Lacs. Principal amount of Rs 158.25 Lacs written back has been credited to Capital Reserve and the balance amount of 1236.89 Lacs has been credited to profit & loss account as an Exceptional item.

(17) The Company has died a reference before the Hcn'ble BIFR on 29::: June 2001. The reference came to be registered as Case Number 278/2001 as per their communication No.3(L-7)BC/2001 dated 11" July 2001. The Hon'ble BIFR after hearing the matter on 1* March 2006 has declared the Company as sick industrial company in terms of Section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and appointed ICICI Bank Limited as the Operating Agency (OA).

The company submitted a revised (DRS) to OA. and the copy of the same was forwarded to Hon'ble BIFR. As per the direction of Hon'ble BIFR at its hearing on 23.09.2010, OA convened a joint meeting of all concerned on 21.10.2010 whereat except one lender other creditors agreed to the DRS. It was also decided that the lenders should provide their comments to OA on future course of action. Hon'ble BIFR vide its letter dated 04.02.2011 has appointed Shn B.L. Khanna as a special Director on the board of the Company under the provisions of SICA The developments in this regard are being informed to Operating Agency.

(18) (a) Deposited with Government Department Includes Custom duty Rs 72.16 Lacs deposited for clearance of import consignment under Project import is recoverable from the Custom Department.

(b) Special Additional Duty of 1111.66 Lacs Refund from Custom Department.

(c) The anti dumping duty of Rs 23.82 Lacs deposited under protest with the Custom department,

NOTES:

1. N.A. Not Applicable in terms of Government of India's Notification No. S.O. 477(E), dated 25th July, 1991.

2. Considering the nature of business of fabrication of Chemical, Pharmaceutical and Other Machinery and Structural, Steel Pipes and Tubes, Marine Loading Arms production details are not available in M.T.

3. Figure in the brackets pertains to previous year.

4. 'Installed capacity is taken on the basis of IEM dated 27.01.2011. The installed capacity of Hot Rolled is increased from 600000 MT to 1000000 MT, Cold Rolled, Coil/Sheets from 350000 MT to 375000 MT & GP Coil / Sheets & GC Sheets from 125000 MT to 250000 MT, with effect from 1st December, 2010.

5. Installed Capacity for the current period is on per annum basis.

(B| The Company has not made provision tot interest on various loans of institutions and banks in view of the likely restructuring of the loans, amounting to Rs 6096.44 Lacs. (Cumulative Rs 22,771.77 Lacs)

(21) The Company has extended its current financial year (2010-2011) by a period upto 3 Months i.e. upto 30th June, 2011. Accordingly the financial accounts are prepared for a period of 15 Months i.e. from April 01, 2010 to June 30, 2011. Hence the figures for current accounting period are not comparable with those of previous accounting year.

(22) Previous year's figures have been re-grouped and recast wherever necessary.


Mar 31, 2010

(1) Contingent Liabilities not provided for:

(Rs. In Lacs) As at As at 31.03.1010 31.03.2009 Contingent Liabilities not provided for: (a) In respect of guarantees issued by Banks : 1201.43 1088.33 This includes an expired bank guarantee of Rs.8.15 lacs which has been invoked, the encashment of which has been stayed by a Court of Law. (b) Corporate Guarantee issued by the Company 66.95 75.75 (c) i) Claims against the Company 870.18 70.18 not acknowledged as debt. ii) Show cause notices under hearing in respect 447.84 408.90 of excise duty which is disputed by the Company iii) Sales Tax 28.65 28.65 TOTAL 2615.05 1671.81

b) Amount held in Margin / Fixed Deposit accounts with banks having lien for Guarantees provided of Rs.1526.14 Lacs (Previous Year Rs. 1530.28 Lacs)" (4) (a) The computation of net profit for the purpose of calculation of managerial remuneration u/s 349 of Companies Act, 1956 has not been enumerated "since minimum remuneration has been paid to the Managing Director. (b) Managerial remuneration u/s 198 of the Companies Act, 1956 include:

(2) Disclosure as required by the Accounting Standard-15 "Employee Benefit" are given below: a). General Description of Plan : Defined Gratuity Benefit obligation (Unfunded) b) Method of Valuation of Gratuity: Projected Unit Credit Method. a Reconciliation of opening and closing balance of defined benefit obligation

(3) a) The Income tax assessment have been completed upto Assessment Year 2007-08

b) The company does not envisage any liability lor Income Tax lor the current year in absence of taxable income.

c) Disclosure as required by the Accounting Standard - 22 "Accounting tor Taxes on Income" are given below.:

In the event of carry forward losses and unabsorbed depreciation no Deferred Tax Liability has been created for the financial year ending 31.03.201O.Tfie deferred tax asset has not been recognized as Ihere is no virtual certainty of sufficient future taxable income available against which this deferred tax asset can be realized

(4) Sates include

a) Engineering Plant sales to Steel Plant at cost price amounting to Rs. 621.48 Lacs (Previous Year Rs.264.60 Lacs).out of which Rs. 333.84 Lacs (Previous Year Nil) are Capitalized.

b) Steel Plant sales to Engineering Plant at selling price amounting to Rs.6174.53 Lacs (Previous Year Rs.3338.15 Lacs).

c) Steel Plant sales includes Rs.362.13 Lacs (Previous Year Rs. 456.71 Lacs) of Repairs S Maintenance Expenses and Rs. 492.23 Lacs (Previous Year Nil of CY7IP.

(5) Assets aggregating Rs.2853.49 Lacs at cost (Previous year Rs.2852.32 Lacs) have been acquired on lease finance. The obligation for future lease rentals amounts to Rs 2037.61 Lacs.(PreviousyearRs.2037.61 lacs).

(6) Balances of Debtors, Loans & Advances, Creditors and Bank dues are subject to Confirmation by the parties. Differences, (if any), shall be accounted on such reconciliation.

(7) The Company has no information as to whether any of its suppliers constitute micro, small & medium enterprises as per Micro, Small & Medium Enterprises Development Act, 2006 and therefore, the amount due to such suppliers has not been identified.

(8) During the year, the Company has issued 16,85,00,000 Warrants of Rs.10/- each on preferential basis to Promoters to be converted, at the option of the allottee, into equivalent equity shares at par within 18 Months from the date of allotment.

(9) Loans from financial institution includes debentures in view of likely restructuring.

(10) Disclosure as required by Accounting Standard-11 "Effect Of Changes in Foreign Exchange Rates" Debited to Profit and Loss Account is Rs. 145.46 Lacs (net) (Previous Year Rs. 2275.01 Lacs (net))

(11) There are 446321 forfeited Equity Shares pending reissue at the year end (Previous Year 446321 shares).

(12) As part of restructuring process of debt with some of the lenders, the total outstanding amount (Principal Plus Interest) as per books of Rs.31258.22 Lacs has been restructured and settled for Rs.5270.30 Lacs. Principal amount of Rs.15732.23 Lacs written back has been credited to Capital Reserve and the balance amount of Rs.10255.69 Lacs has been credited to profit & loss account. Exceptional item is net of an amount Rs.12063.55 Lacs on account of debit balances written off during the period.

(13) The Company has filed a reference before the Honble BIFR on 29" June 2001. The reference came to be registered as Case Number 278/2001 as per their communication No.3(L-7)BC/2001 dated 11* July 2001. The Honble BIFR after hearing the matter on 1" March 2006 has declared the Company as sick industrial company in terms of Section 3(1) (o) of SICA and appointed ICICI Bank Limited as the Operating Agency (OA) to prepare a Draft Rehabilitation Scheme (DRS). The Company has submitted DRS to the OA with copy of the same to the BIFR. As per direction of Honble B
(14) (a) Deposited with Government Deposit Includes Custom duty Rs 72 16 Lacs deposited for clearance of import consignment under Project import is recoverable from the Custom Department. (b) The anti dumping duty ol Rs 27.48 Lacs deposited undei protest with the Custom department.

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