Notes to Accounts of Balasore Alloys Ltd.

Mar 31, 2018

1. General Information

Balasore Alloys Limited (the Company) is a public company domiciled in India and incorporated in 1984 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and The Calcutta Stock Exchange Limited. The Company have its registered office and manufacturing facility at Balasore and Sukinda, Odisha

The Company is primarily engaged in extraction of Chrome Ore from its captive mines located in Odisha and manufacturing and selling of Ferro Chrome of various grades.

(b) Terms/ Rights Attached to Equity Shares

(i) The company has only one class of equity shares having par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in indian rupees. The dividend proposed by the board of directors is subject to the approval of the shareholders in the ensuing annual general meeting except in case of interim dividend.

(ii) In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

2.1 Nature and Purpose of Reserve

1. Capital Reserve

Capital Reserve is created byway of capital subsidy received from Odisha State Financial Corporation and due to forfeiture of application money received on warrants and partly paid up shares. The reserve will be utilised in accordance with the provisions of the Companies Act ,2013.

2. Securities Premium Account

Securities Premium Account represents the premium received on issue of equity shares. In accordance with the provisions of Section 52 of the Companies Act, 2013 the securities premium account can only be utilised for the purpose of issuing bonus shares , repurchasing the Company''s shares , redemption of preference shares and debentures, and offsetting direct issue costs and discount allowed for the issue of shares or debentures.

3. General Reserve

General Reserve forms part of retained earnings and is permitted to be distributed to shareholders as part of dividend.

4. Debenture Redemption Reserve

The Companies Act requires companies that issue debentures to create a debenture redemption reserve from annual profits until such debentures are redeemed. Companies are required to maintain 25% as a reserve of outstanding redeemable debentures. The amounts credited to the debenture redemption reserve may not be utilised except to redeem debentures.

2.2 Money Received Against Equity Share Warrants

For the year ended 31st March, 2017

Pursuant to the consent of Board of Directors of the Company on 15th March, 2016, the special resolution passed by the members of the Company on 26th September, 2016 and other necessary approvals as required, the Committee for preferential issue of Warrants of the Board of Directors of the Company at its meeting held on 3rd November, 2016 approved the issue and allotment of 2,30,00,000 number of warrants, at the issue price of Rs. 21.50 per warrants, upon receipt of 25% of total consideration of Rs. 1,236.25 lacs, to promoter entities of the Company. Each warrants is convertible into equivalent number of equity shares of Rs. 51- each at premium of Rs. 16.50 per share, which shall be allotted within 18 months from the date of allotment of the said convertible warrants, in one or more tranches. Accordingly the Company has received Rs. 1,244.56 lacs as stated above. During the year on 31st March, 2017 the Company has allotted 1,00,00,000 equity shares of face value of Rs. 5/- each to the warrant holders on exercise of the conversion right and receipt of balance payment.

For the year ended 31st March, 2018

During the year on 30th March, 2018 the Company has allotted 44,35,000 equity shares of face value of Rs. 5/- each to the warrant holders on exercise of the conversion right and receipt of balance payment. Also, Subsequent to the year end , due to non-receipt of balance payment pertaining to 88,65,000 warrants , on 15th May, 2018 the company has forfeited the money received against equity share warrants.

2.3 Security Terms

(i) Deferred Payment Credits

Deferred Payment Credits are Secured Against Hypothecation of Assets Purchased Against Such Loans.

(ii) 11% Redeemable Non-Convertible Debentures

Redeemable Non-Convertible Debentures Referred Above are Secured by Way of Residual Charge on Assets (both movable and non-movable) of the Company and personal guarantee of Mr. Pramod Mittal & Mrs. Vartika Mittal Goenka

(iii) Loans from Body Corporate - Secured against part of promoter''s shareholding.

15.1. For the year ended 31st March, 2018 -

Working capital loan from banks referred above are secured by first charge over current assets and fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal ((ceased to be director w.e.f 22th August, 2017) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010). The above loans are further guaranteed by personal guarantee of Mr Pramod Mittal, Mrs Vartika Mittal Goenka and corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created in favour of the Banks for Working Capital loans rank pari passu interse.

For the year ended 31st March, 2017 -

Working capital loan from banks referred above are secured by first charge over current assets and fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010)] . The above loans are further guaranteed by personal guarantee of Mr Pramod Mittal ,Mrs Vartika Mittal Goenka and corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created in favour of the Banks for Working Capital loans rank pari passu interse.

For the year ended IstApril, 2016-

Working capital loan from banks referred above are secured by first charge over current assets and fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010)] . The above loans are further guaranteed by personal guarantee of Mr Pramod Mittal, Mr V K Mittal(for part of secured loan) ,Mrs Vartika Mittal Goenka (for part of secured loan) and corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created infavour of the Banks for Working Capital loans rankpari passu interse.

17.1. These does not include any amounts due and outstanding to be credited to Investor Education and Protection Fund

17.2. It includes Rs. 2,104.11 lacs (31st March, 2017- Rs. 1,103.27 lacs, Ist April, 2016- Rs. 848.80 lacs) payables against arrangement for procurement of raw materials.

3- Note :

a) CSR amount required to be spent as per section 135 of Companies Act, 2013, read with schedule-VII thereof by the company during the year is Rs. 146.08 lacs (Previous year Rs. 99.21 lacs)

b) Expenditure related to Corporate Social Responsibility Expenses is Rs. 108.46 lacs(Previous year Rs. 58.33 lacs)

4. Earnings Per Share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

(B) Defined Benefit Plan Gratuity

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity payments. The plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amounts are based on the respective employee''s last drawn salary and the years of employment with the Company.

Liabilities in respect of the gratuity plan are determined by an actuarial valuation, based upon which the Company makes annual contributions to the Group Gratuity cum Life Assurance Schemes administered by the LIC of India, a funded defined benefit plan for qualifying employees.

The most recent actuarial valuation of the defined benefit obligation along with the fair valuation of the plan assets in relation to the gratuity scheme was carried out as at 31st March, 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.

Based on the actuarial valuation obtained in this respect, the following table sets out the details of the employee benefit obligation and the plan assets as at balance sheet date:

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

These plans typically expose the Company to actuarial risks such as: Investment Risk, Interest Risk, Longevity Risk and Salary Risk.

Investment Risk - The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest Risk - Adecrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity Risk-The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.

Salary Risk - The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.

5. Operating leases

The Company''s leasing arrangements are generally from 1 month to 72 months. In respect of above arrangement, lease rentals payable are recognised in the statement of profit and loss for the year and included under Rent and Hire charges

The company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

Significant management judgement is required in determining provision for income tax, deferred income tax assets and liabilities and recoverability of deferred income tax assets. The recoverability of deferred income tax assets is based on estimates of taxable income in which the relevant entity operates and the period over which deferred income tax assets will be recovered.

6. Financial instruments - Fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

B. Measurement of fair values

Ind AS 113, ''Fair Value Measurement - Disclosure'' requires classification of the valuation method of financial instruments measured at fair value in the Balance Sheet, using a three level fair-value-hierarchy (which reflects the significance of inputs used in the measurements). The hierarchy gives the highest priority to un-adjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to un-observable inputs (Level 3 measurements). The three levels of the fair-value-hierarchy under Ind AS 113 are described below:

Level 1: Level 1 heirarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3. This is the case for unlisted equity securities included in Level 3.

Following methods and assumptions are used to estimate the fair values:

a) Fair value of cash and short-term deposits, trade and other short-term receivables, trade payables, other current liabilities and short-term borrowings carried at amortised cost is not materially different from its carrying cost largely due to short term maturities of these financial assets and liabilities.

b) Fair value of the non-current borrowing items fall within Level 2 of the fair value hierarchy and is calculated on the basis of discounted future cash flows.

Transfers between Levels

There have been no transfers between Levels during the reporting periods.

The following tables show the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used.

Sensitivity analysis

Adjusted NAV method is used for the purpose of calculating fair value of unquoted equity shares. In the adjusted NAV methodology there are no significant unobservable inputs used, hence the sensitivity analysis would not be applicable.

C. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk ; and

- Market risk

i. Counterparty and Concentration of Credit risk

Credit risk refers to the risk that 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.

The Company is exposed to credit risk for trade receivables, investments, loans, other financial assets, and derivative financial instruments.

Credit risk on receivables is limited as almost all credit sales are against letters of credit.

Moreover, given the diverse nature of the Company''s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. The history of trade receivables shows a negligible provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of non-performance by any of the Company''s counterparties.

The Company has clearly defined policies to mitigate counterparty risks. For short-term investments, counterparty limits are in place to limit the amount of credit exposure to any one counterparty. This, therefore, results in diversification of credit risk for our mutual fund investments. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions.

The carrying value of the financial assets represents the maximum credit exposure. The Company''s maximum exposure to credit risk is Rs. 17,007.04 lacs and Rs. 16,886.77 lacs as at 31st March, 2018 and 31st March, 2017 respectively.

None of the Company''s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables, loans and other financial assets (both current and non-current), there were no indications as at 31st March, 2018, that defaults in payment obligations will occur.

Of the year end trade receivable balance the following, though overdue, are expected to be realised in the normal course of business and hence, are not considered impaired as at 31st March, 2018 and 31st March, 2017:

Receivables are deemed to be past due or impaired with reference to the Company''s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer''s credit quality and prevailing market conditions. Receivables that are classified as ''past due'' in the above tables are those that have not been settled within the terms and conditions that have been agreed with that customer. The Company based on past experience does not expect any material loss on its receivables and hence no provision is deemed necessary on account of ECL.

The credit quality of the Company''s customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The Company uses simplified approach for impairment of financial assets. If credit risk has not increased significantly, 12-month expected credit loss is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime expected credit loss is used. The solvency of the debtor and their ability to repay the receivable is considered in assessing receivables for impairment. Where receivables have been impaired, the Company actively seeks to recover the amounts in question and enforce compliance with credit terms.

ii. Liquidity risk

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

iii. Market risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. We are exposed to market risk primarily related to foreign exchange rate risk and interest rate risk.Thus, our exposure to market risk is a function of borrowing activities, and revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

Currency risk

The Company is exposed to currency risk on account of its Trade receivables, Trade & other payables in foreign currency. The functional currency of the Company is Indian Rupee. The Company uses forward exchange contracts and options to hedge its currency risk, most with a maturity of less than one year from the reporting date.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the Indian Rupee against the foreign currencies at 31st March would have affected the measurement of financial instruments denominated in foreign currencies and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases.

Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing borowings because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing borrowings will fluctuate because of fluctuations in the interest rates.

Fair value sensitivity analysis for fixed-rate instruments

The company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flow will fluctuate because of a change in market interest rates.

Cash flow sensitivity analysis for variable-rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency exchange rates, remain constant.

7. Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''adjusted equity''. For this purpose, adjusted net debt is defined as total liabilities, comprising interest-bearing loans and borrowings, less cash and cash equivalents. Adjusted equity comprises all components of equity other than amounts accumulated in the hedging reserve (if any)

8. Segment Reporting

A. General Information

Factors used to identify the entity''s reportable segments including the basis of organisation

For management purposes the Company has only one reportable segment as follows:

- Manufacturing/Minning of Ferro Alloys

The Executive Committee of the Company acts as the Chief Operating Decision Maker ("CODM").

The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by operating segments.

C. Information about major customers

Revenue from major customers of the Company was Rs. 22,476.11 lacs is 18.29% of total sales (Rs. 22,999.97 lacs is 22.08 %of total sales)

D. Broad Category of Sales

Company deals mainly in Ferro Chrome.

9 The Income-Tax Assessments of the Company have been completed up to Assessment Year 2014-15. The disputed demand up to the said assessment years is Rs. 400.34 lacs. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the demand raised is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

10 A revised demand notice dated 11th April, 2018 has been issued by Deputy Director of Mines, Jajpur Road, Odisha amounting to Rs. 32,803.28 Lacs for the production in excess of the approved limit under, environment clearance during the period 2001-02 to 2007-08. The demand notices has been issued under Section 21(5) of the Mines & Minerals (Development and Regulations) Act,1957 (MMDRAct).

The company filed a Revision Application before the Mines Tribunal, Delhi on 2nd May, 2018 in regard to the above revised demand notice praying for stay of the operation and/or execution of the notice and not to take any coercive action as the demand is without any basis and there is no legislative and/or statutory sanction for the same as the Section 21(5) of the MMDRAct is applicable only in respect of unauthorised raising and disposal of minerals, which is not the case of the Company.

The Revision application was heared on 10th May, 2018 and the Tribunal passed an order Staying the Demand Notice.

Based on the opinion of external legal counsel, the company believes that, the demand is legally unjustifiable and does not expect any liability in above matter.

11 The State Trading Corporation of India on 13th May, 2015 through the Ministry of Commerce and Industry has recorded a statement on the floor of the Rajya Sabha that a sum of Rs. 5,855 Lacs is recoverable from the Company as on 31st March, 2015. The alleged demand is very much disputed by the Company and is the subject matter for ascertainment by the Hon''ble Arbitral Tribunal consisting of two Hon''ble Retired Judges of Hon''ble Supreme Court and one Hon''ble Retired Judge of Hon''ble Calcutta High Court. Pursuant to order dated 23rd March, 2017 by Hon''ble Arbitral Tribunal which is passed without prejudice to the rights and contentions of the parties and subject to further adjustment about the final amount to be paid , if any, the Company by way of abundant caution and prudence, has accounted for such alleged diputed amount without admitting the same in the financial year 2016-17. Pending final adjudication the company has paid Rs. 5,855 lacs towards such diputed dues as at 31st March, 2018

12 The Enforcement Directorate (ED) on 15th December, 2017 had passed a Provisional Attachment Order against M/s Balasore Alloys Ltd. (BAL) for the value ofRs. 24,489.07 lacs on the alleged ground that Sri Pramod Kumar Mittal and Global Steel Holdings Ltd. (GSHL) allegedly holds 30.35% of the shares of BAL through various Indian / Foreign promoter and investment companies.

On 5th of February, 2018 the Adjudicating Authority issued a show cause to BAL as to why the aforesaid Provisional Attachment Order should not be confirmed.

The Company filed an Appeal before the Appellate Tribunal on 17th May, 2018 challenging the said Show Cause Notice dated 5th February, 2018.

The Hon’ble Appellate Tribunal after hearing the matter on merits on 23rd May, 2018 delivered an Order/Judgment inter-alia recording that BAL is an independent publicly quoted company and is not an accused and there is no complaint against BAL under the Prevention of Money Laundering Act, 2002 (PMLA) and the alleged proceedings of Provisional Attachment are contrary to the earlier Order of the Hon’ble Tribunal. It also recorded that BAL is not involved in any schedule offence under the PMLA and inter-alia duly recorded that the purported notice under Section 8(1) of the PMLA has been wrongly issued to BAL and that the Hon’bleAppellate Tribunal had fixed the Appeal for final hearing on 17th of July, 2018 and directed the Adjudicating Authority to adjourn the proceedings before it until thereafter.

The Directors would like to inform that, the company has no business relationship with GSHL and Global Steel Phillippines Inc. (GSPI) in any manner. Further, company had nothing to do with the alleged transactions between M/s State Trading Corporations (STC), GSHL & GSPI which is the basis of the cause of action of ED.

The action on the part of ED in relation to the Company is arbitrary and contrary to the well-established principle of the law as pronounced by Hon’ble Supreme Court as the Company is a separate legal entity independent from its shareholders as advised by the legal counsels and therefore, the company believe that, the above proceedings will not affect its operations of the company and would not impact it as a going concern. The purported Order of ED involving BAL is wholly without any jurisdiction, illegal and void abinitio.

13 North Eastern Electricity Supply Company of Orissa Limited (NESCO) had raised total claim of approximately Rs. 20,155.96 Lacs (including delayed payment surcharge) against the company as on 30th June, 2017. The company had paid Rs. 3,400 Lacs to NESCO in the past which was debited as power cost. As per the order of Hon''ble Supreme Court the matter was referred to Grievance Redressal Forum (GRF) of NESCO. GRF passed an order dated October 12, 2017 vide which it inter alia directed NESCO to recalculate its claim in the mode and manner as specified in the said order within a period of one month from the date of such order. NESCO has not yet intimated the Company of any recalculation.

Following the guidelines laid down in the aforesaid order passed by the GRF, the Company has made a calculation and a sum of Rs. 2,743.90 lacs is recoverable by the Company from NESCO and the same has been accounted for in other income.

14 The Company being one of the Promoter of Ispat Profile India Limited (IPIL), has given an interest bearing loan of Rs. 2,267 Lacs to IPIL in Past, to facilitate the one time settlement of outstanding dues of IPIL with its some of the common lenders , so that Company can get working capital limits for its operation and financial facilities for its ongoing projects, growth and expansion plans.

IPIL has submitted revival plan to Hon''ble Kolkata High Court which is pending for approval.

Company based on conservative approach, written off the said loan along with its accumulated interest aggregating to Rs. 2,661.81 lacs and shown as an exceptional item.

15 Company started incurring cost for development of underground mines at Sukinda to secure the additional raw materials for its ferro chrome plants. As at 31st March, 2018 company has incurred cost of Rs. 8,621.20 lacs for development of underground mines which has been shown as Capital work in progress and has also advanced Rs.15,940.64 lacs to vendors which has been shown under advances to vendors for equipment''s and services for aforesaid project. A significant part of the project cost would be financed through long term borrowings. Pending financial closure, some cost has been incurred during the year. Management is confident of achieving the financial closure for the project and revitalise the project activities and therefore, no adjustments to the carrying value of capital work in progress and advances relating to project is considered. Further, vendors have confirmed outstanding advances of Rs.15,898.88 lacs and has also committed to provide the contracted equipment''s and services as and when required.

16 An advance of Rs. 3,683.57 lacs was contracted in March, 2015 to a supplier for supply of raw material at fixed price over a period of eighteen months. Due to adverse price movements, supplier was not able to meet the contractual commitments and did not supply raw material. In March, 2017 company entered into a memorandum of understanding (MOU), whereby the supplier had agreed to repay the advance, in a phased manner starting June, 2017 and ending March, 2019, without interest. Supplier has not paid any installment as per MOU. However, it has confirmed the outstanding balance of Rs. 3,683.57 lacs as at year end. Based on the negotiations with the supplier where he expressed his inability to honour the financial commitments as agreed in past has now offered to supply material which is accepted by the company and will be supplied by the supplier during contracted period.

17 Details of Loans given, Investment made and Guarantee given covered u/s 186 (4) of the Companies Act, 2013:

I) Loans given by the company to body corporate as at 31st March, 2018 (Refer Note No. 4).

II) All the said loans and advances are given for business purposes.

III) Investments made by the company as at 31st March, 2018 (Refer Note No. 3).

IV) Guarantee given by the Company as at 31st March, 2018 (Refer Note No. 36).

18 The figure for the corresponding previous year have been restated/regrouped where ever necessary to make them comparable with the current period.

19 Subsequent Events

The Board of Directors have recommended dividend of Rs. 0.75 per fully paid up equity share of Rs. 5/-each, aggregating Rs. 847.83 lacs, including Rs. 147.89 lacs dividend distribution tax for the financial year 2017-18, which is based on relevant share capital as on 31st March, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date/book closure.

20 Approval of Financial Statement

The financial statements were approved for issue by the board of directors on May 28,2018

Notes to the reconciliation:

1A Deemed Cost for Property, Plant and Equipment (PPE) and Intangible Assets

Ind AS 101 permits to consider the carrying value for all its PPE and intangible assets as recognised in the financial statements as atthe date of transition to IndAS i.e. IstApril, 2016 measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Opening values of PPE as on Ist April, 2016 were adjusted as per the transition provisions of Revised AS 10 to adjust revalued component of PPE against the revaluation reserve. The deemed cost adopted as per IndAS 101 is after considering the transition effect to opening reserves.

1B Under the previous GAAP, depreciation on the revalued portion of the mining lease was withdrawn from revaluation reserve. Under Ind AS, depreciation is charged to the Statement of Profit and Loss based on depletion using unit of production method instead of depreciation based on remaining life of the lease under IGAAP.

2 Fair valuation for financial assets

The company has valued financial assets at fair value. Impact of fair value changes as on the date of transition is recognised in opening reserve and changes there after are recognised in Profit and Loss Account.

3 Proposed dividend

Under Indian GAAP, proposed dividends are recognised as a liability in the period to which they relate, irrespective of when they are declared. Under Ind-AS, a proposed dividend is recognised as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.

In the case of the Company, the declaration of dividend occurs after transition date. Therefore, the liability recorded for this dividend has been derecognised against retained earnings.

4 Deferred Tax

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

5 Remeasurement of defined benefit liabilities:

Under previous GAAP, the Company recognised remeasurement of defined benefit plans under profit or loss. Under Ind AS, remeasurementof defined benefit plans are recognised in Other Comprehensive Income.

6 Reclassification as per Ind As Schedule III 49. (d) Reconciliation of statement of Cash Flow

There are no material adjustments to the statement of cash flow as reported under previous GAAP.

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Mar 31, 2016

1. Capital and other commitment:

Estimated amount of Capital commitments (Net of Advances) Rs. 5,430.88 lacs ( Rs. 4,431.76 lacs)

2. The Income-Tax Assessments of the Company have been completed up to Assessment Year 2013-14. The disputed demand up to the said assessment years is Rs. 137.51 lacs. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the demand raised is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

3. Demand notices has been issued by Deputy Director of Mines, Jajpur road, Odisha amounting to Rs. 35,876.97 Lacs for the excess extraction over the quantity permitted under the mining plan/ scheme, environment clearance or consent to operate from SPCB, Odisha, during the period 2000-01 to 2007-08. The demand notices has been issued under Section 21(5) of the Mines & Minerals (Development and Regulations) Act (MMDR Act). However, the MMDR Act specifies that demand can be raised only when the land is occupied without lawful authority. The Company is of the view that Section 21(5) of the MMDR Act is not applicable as the mining is done under the approval of the State Government and accordingly the Company has filed revision application and has been granted the Stay by Revisionary authority, based on the advice of external legal counsel, the Company believes that demand being legally unjustifiable; the Company does not expect any liability in above matter.

4. North Eastern Electricity Supply Company of Orissa Limited (NESCO) had entered into a settlement agreement in the year 2005 under which certain outstanding dues were settled and paid off by the Company. Subsequently, NESCO wrongfully revoked the settlement in the year 2010 after having acted upon the settlement. The alleged claims amount up to 31st March, 2016 is Rs. 20,200.34 lacs (including delayed payment surcharge). Such revocation of settlement was arbitrary and illegal. In the circumstances, the company approached various Judicial Forums including Hon''ble Supreme Court. At present the matter is pending before the Hon''ble High Court of Orissa. The Company has paid to NESCO Rs. 3,400 lacs and duly provided the same in the accounts towards such claims. The company continues to receive un-interrupted power supply from NESCO. Pending final adjudication of the court proceedings and based on the advice of the legal counsels, no further provision has been made towards aforesaid claims.

5. The State Trading Corporation of India on 13th May, 2015 through the Ministry of Commerce and Industry has recorded a statement on the floor of the Rajya Sabha that a sum of Rs. 5,855 Lacs is recoverable from the Company as on 31.03.2015. The alleged demand is very much disputed by the Company and is the subject matter for ascertainment by the Hon''ble Arbitral Tribunal consisting of two Hon''ble Retired Judges of Hon''ble Supreme Court and one Hon''ble Retired Judge of Hon''ble Calcutta High Court. The Company disputes such liability and is awaiting the adjudication by Hon''ble Arbitral Tribunal. However, by way of abundant caution and prudence, the Company has accounted for such alleged disputed amount without admitting the same. The final adjudication is subjudice and pending before the Hon''ble Arbitral Tribunal.

6. As per notification no. 7745-IV(A)SM-44/2015 (PT-IV)/SM dated 18^th August, 2015 of Government of Odhisa, miners producing major minerals in the State would be required to pay 30% of the applicable royalty to the District Mineral Foundation (DMF), which was set-up as per the provisions of section 9b of the Mines and Minerals (Development and Regulation) Act,1957. Later, Govt. of India, Ministry of Mines vide its order dated 17th September, 2015, has notified that the DMF provisions will come into force from 12th January, 2015. This retrospective applicability has been challenged in Hon''ble Delhi High Court by Federation of Indian Mineral Industries (FIMI) & others and the matter has been stayed. Being, the date from which DMF is applicable is in dispute the Company has not recognized the liability of Rs. 1091.95 lacs, calculated from 12^th January, 2015 to 16^th September, 2015.

7. The Company being one of the Promoter of Ispat Profile India Limited (IPIL), has given an interest bearing loan of Rs. 2,267 Lacs to IPIL as on 31.03.2016 , to facilitate the one time settlement of outstanding dues of IPIL with its some of the common lenders , so that Company can get working capital limits for its operation and financial facilities for its ongoing projects, growth and expansion plans. Presently, IPIL winding up order has been confirmed by Hon''ble Delhi High Court. IPIL have filed an application before the Hon''ble Calcutta High Court for stay of the winding up proceedings. Based on the financial viability projections submitted by IPIL and valuation carried out by an independent valuer, no adjustment is considered in the carrying value of the loan.

Disclosure in Respect of Material Related Party Transactions during the year:

8. Loans given (Net.) to Ispat Profile India Ltd. Rs. 350.00 Lacs (Previous year Rs. 1,917.00 Lacs ) and Mr. Rajendra Kumar Parakh Rs. 10 Lacs and returned during the year Rs. 4 Lacs. ( Previous year Rs. Nil ).

9. Repayment of Advances towards Promoter Contribution include Sri Mahalaxmi Solar Energy Pvt. Limited Rs. Nil (Previous Year Rs. 10,169.00Lacs) and Jal tarang Vanijya Pvt Limited Rs. Nil (Previous Year Rs. 9,236 Lacs ).

10. Sale of Goods/Assets Include sales made to Gontermann-Peipers (India) Limited Rs. 48.29 Lacs (Previous Year Rs. 88.50 Lacs).

11. Interest received include Shakti Chrome Limited Rs. Nil (Previous Year Rs. 2.11 Lacs) & Ispat Profile India Ltd. Rs. 175.80 Lacs (Previous year Rs. 14.97 Lacs).

12. Rents include Navdisha Real Estate Private Limited Rs. 86.54 Lacs (Previous Year Rs. 86.40 Lacs).

13. Managerial Remuneration includes Mr. Anil Sureka Rs. 143.30 Lacs (Previous Year Rs. 143.89 Lacs), Mr. R K Parakh Rs. 58.64 Lacs (Previous Year Rs. 56.82 lacs), Mr G Janarthanam Rs. 24.73 Lacs ( Previous Year Rs. Nil) and Mr. Ansuman Bhanja Rs. 34.10 Lacs ( Previous Year Rs. 20.57 Lacs )

14. Advance received back from Navoday Consultant Limited Rs. Nil ( Previous year Rs. 5.00 Lacs )

15. Subscription of Share capital (Including Premium) includes subscription by Dankuni investment limited Rs. Nil Lacs (Previous Year Rs. 528.00 Lacs) , Navodya consultants Ltd Rs. Nil (Previous Year Rs. 528.00 Lacs ) & Jal Tarang Vanijya Pvt Ltd. Rs. 1,360.00 Lacs ( Previous year Rs. Nil)

16. Guarantee given includes Mr. Pramod Mittal Rs. 13,789.00 Lacs (Previous Year Rs. 9,897.64 Lacs), Mrs. Vartika Mittal Goenka Rs. 4,821.00 Lacs (Previous Year Rs. Nil) and Mr. V K Mittal Rs. 9,605.00 Lacs (Previous Year Rs. 9,605.00 Lacs).

17. Amount received against share warrants includes Global Steel Holdings Asia Pte Ltd Rs. 279.45 Lacs (Previous Year Rs. Nil), Prasan Global Ventures Singapore Pte Ltd Rs. 377.03 Lacs (Previous Year Rs. Nil), Direct Trading & Investments Singapore Pte Ltd Rs. 279.41 Lacs (Previous year Rs. Nil).

18. Loan form body corporate taken from Ispat Corp Pvt. Ltd. Rs. 1,000 Lacs ( Previous year Rs. Nil)

19. Interest Payable to Ispat Corp Pvt. Ltd Rs. 40.32 Lacs ( Previous year Rs. Nil )

20. Investments includes Milton Holdings Limited Rs. 2,194.83 Lacs ( Previous Year Rs. 2,194.83 Lacs), Balasore Energy Limited Rs. 1.70 Lacs ( Previous Year Rs. 1.70 Lacs )

21. Deposits include Navdisha Real Estate Private Limited Rs. 711.50 Lacs (Previous Year Rs. 711.50 Lacs).

22. Trade & other Payables include Navdisha Real estate Pvt. Ltd. Rs. 24.39 Lacs (Previous year Rs. 15.73 Lacs).

23. Advance from customers includes Gontermann-Peipers (India) Limited Rs. Nil (Previous Year Rs. 52.23 Lacs)

24. Money received against share warrants includes Global Steel Holdings Asia Pte Ltd Rs. 279.45 Lacs (Previous Year Rs. Nil), Prasan Global Ventures Singapore Pte Ltd Rs. 377.03 Lacs (Previous Year Rs. Nil), Direct Trading & Investments Singapore Pte Ltd Rs. 279.41 Lacs (Previous year Rs. Nil ).

25. Loans Including Interest receivable represents Ispat Profile India Ltd. Rs. 2,457.78 Lacs (Previous Year Rs. 1,931.97 Lacs ) and Mr.Rajendra Kumar Parakh Rs. 6.00 Lacs ( Previous Year Rs. Nil )

26. Loan from body corporate including interest payable represent Ispat Corp. Pvt. Ltd. Rs.1,040.32 Lacs (Previous Year Rs. Nil ).

27. Details of Loans given, Investment made and Guarantee given covered u/s 186 (4) of the Companies Act, 2013 :

I) Loans given by the company to body corporate as at 31st March 2016 (Refer Note No. 13).

II) All the said loans and advances are given for business purposes.

III) Investments made by the company as at 31st March 2016 (Refer Note No. 12)

28. There were no foreign currency remittances on account of dividend during the year.

29. Previous year''s figures including those given in brackets have been regrouped / rearranged where necessary to conform to this year''s classification.

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Mar 31, 2015

1. Corporate information

Balasore Alloys Limited (the Company) is a public company domiciled in India and incorporated in 1984 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange and The Calcutta Stock Exchange Limited. The Company have its registered office and manufacturing facility at Balasore, Odisha

The Company is primarily engaged in raising of Chrome Ore from its captive mines located in Odisha and manufacturing and selling of Ferro Chrome of various grades.

2. Terms/ rights attached to equity shares

(I) The company has only one class of equity shares having par value of Rs 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(Ii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

8.1 Working capital loans from banks refer above are secured by first charge over current assets and by second charge over fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010)]. The above loans are further guaranteed by personnel gurantees issued/ to be issued byMr Pramod Mittal and Mr V K Mittal and by corporate guarantee of Shakti Chrome Limited, Ispat Minerals Limited & Balasore Energy Limited. All the mortgages and charges created in favour of the Banks for Working Capital loans rank pari passu inter se.

3. Contingent liabilities not provided for in respect of: (Rs in Lacs)

Particulars As at 31st As at 31st March, 2015 March, 2014

a) Sales tax matters under appeal 479.76 36.86 {Amount paid under appeal Rs 65.31 lacs (Rs.21.31 lacs)}*

b) Entry tax matters 219.46 117.57 {Amount paid under appeal Rs 34.88 lacs (Rs. 18.71 lacs)}*

c) Excise / Service tax matters 1228.43 1200.79 {Amount paid under appeal Rs 23.14 lacs (Rs. 10.83 lacs)}*

d) Un-expired Bank Guarantees and Letters of Credit 863.01 636.89

e) Bills discounted with Banks 4,035.66 5,447.53

* In respect of above cases based on favorable decisions in similar cases the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

4. Capital and other commitment:

Estimated amount of Capital commitments (Net of Advances) Rs 4,431.76 lacs (Rs 1684.81 lacs)

5. The Income-Tax Assessments of the Company have been completed up to Assessment Year 2012-13. The disputed demand for the assessment year 2012-13 is Rs.31.83 lacs. Based on the decisions of the Appellate authorities and the interpretations of other relevant provisions, the demand raised is likely to be either deleted or substantially reduced and accordingly no provision is considered necessary.

6. Deputy Director of Mines (DDM), Jajpur, Odisha issued a demand notice for Rs. 487.80 lacs towards payment of additional Royalty, as pointed out by Accountant General, for adopting wrong method of calculation of royalty by DDM for period December, 2009 to January, 2011. The company holds the view that the payment of royalty is correctly calculated and made. The Company has filed revision petition before revisional authority under section 30 of the MMDR Act, Challenging demand and the demand has been stayed by the authority. Based on the advise of external legal counsel, the company believes that demand being legally unjustifiable, company does not expect any liability in above matter.

7. Demand notices has been issued by Deputy Director of Mines, Jajpur road, Odisha amounting to Rs. 35,876.97 Lacs for the excess extraction over the quantity permitted under the mining plan/ scheme, environment clearance or consent to operate from SPCB, Odisha, during the period 2000-01 to 2007-08. The demand notices has been issued under Section 21(5) of the Mines & Minerals (Development and Regulations) Act (MMDR Act). However, the MMDR Act specifies that demand can be raised only when the land is occupied without lawful authority. The Company is of the view that Section 21(5) of the MMDR Act is not applicable as the mining is done under the approval of the State Government and accordingly the Company has filed revision application and has been granted the Stay by Revisionary authority, based on the advice of external legal counsel, the Company believes that demand being legally unjustifiable; the Company does not expect any liability in above matter.

8. Demand notice has been issued by State Trading Corporation of India (STC) amounting to Rs. 9,277 lacs towards the recovery of its alleged dues from the Company. The Company has not accepted the above liability and challenged the demand notice in the court. Further the Company has invoked the Arbitration clause mentioned in the agreement entered with STC. Presently, the matter is subjudice and pending before the court for final disposal. Out of abundant caution and prudence Company has accounted for but without admitting an amount of Rs.5,855 lacs towards the disputed liability as on 31st March 2015, based on the information provided for STC in public domain. Pending outcome of the court decision and based on discussion with external legal counsel, no further provision has been made towards above demand.

9. North Eastern Electricity Supply Company of Orissa Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and raised total claim for Rs 20,099.05 lacs (including delayed payment surcharge). The matter of revocation of settlement is pending with Honourable High Court of Orissa. The Company has paid & provided Rs 3,400 lacs in earlier years towards such claims and also continues to receive un-interrupted power supply from NESCO. Pending outcome of the court decision and based on discussion with Company's legal counsel, no further provision has been made towards above demand.

10. Related Party Disclosures

As per accounting standard 18, the disclosures of transactions with the related parties are given below:

List of related parties where control exists and related parties with whom transactions have taken place and relationships:

Subsidiary Company

Milton Holdings Limited Balasore Metals Pte. Limited

Associate Company

Balasore Energy Limited

Key Management Personnel and their relative

Mr. Pramod Mittal (Chairman) Mr. V K Mittal (Brother of Chairman) Mr. Anil Sureka (Managing Director) Mr R K Parakh (Whole-time Director) Mr Anshuman Bhanja ( Whole-time Director wef 7th Nov'14)

Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence*

Navoday Consultant Limited Navdisha Real Estate Private Limited Shakti Chrome Limited Gontermann-Peipers (India) Limited Dankuni Investment Limited Sri Mahalaxmi Solar Energy Pvt. Ltd Jaltarang Vanijya Pvt Ltd Ispat Profiles India Ltd

Disclosure in Respect of Material Related Party Transactions during the year:

1. Loan given to Ispat Profiles India Ltd. Rs: 1,917.00 lacs (Previous year Rs: Nil )

2. Repayment of Advances towards Promoter Contribution include Sri Mahalaxmi Solar Energy Pvt. Limited Rs:10,169.00 Lacs (Previous Year Rs: Nil) and Jal tarang Vanijya Pvt Limited Rs:9,236 Lacs (Previous Year Rs: Nil).

3. Sale of Finished Goods Include sales made to Gontermann-Peipers (India) Limited Rs: 88.50 lacs (Previous Year Rs: 140.85 Lacs).

4. Interest received on Investments in debentures & interest bearing advances & loans include Shakti Chrome Limited Rs: 2.11 Lacs (Previous Year Rs: 82.80 lacs) & Ispat profiles India limited Rs 14.97 Lacs (Previous year Rs: Nil).

5. Rent includes Navdisha Real Estate Private Limited Rs: 86.40 lacs (Previous Year Rs: 76.80 lacs).

6. Managerial Remuneration includes Mr. Anil Sureka Rs: 143.89 lacs (Previous Year Rs: 132.65 lacs), Mr. R K Parakh Rs. 56.82 lacs (Previous Year Rs. 40.09 lacs) and Mr.Ansuman Bhanja Rs:20.57 Lacs ( Previous Year Rs: Nil )

7. Advance received back from Navoday Consultant Limited Rs: 5.00 Lacs ( Previous year Rs :Nil )

8. Subscription of Share capital (Including Premium) includes subscription by Dankuni investment limited Rs: 528 lacs (Previous Year Nil) & Navodya consultants Ltd Rs: 528 Lacs (Previous Year Nil) .

9. Guarantees to be obtained include Mr. Pramod Mittal Rs: 9,897.64 lacs (Previous Year Rs: 12,263.28 lacs) and Mr. V K Mittal Rs: 9,897.64 (Previous Year Rs: 12,263.28 lacs).

10. Investments includes Milton Holdings Limited - Rs 2,194.83 lacs ( Previous Year Rs. 2,194.83 lacs),Balasore Energy Limited -Rs.1.70 lacs ( Previous Year Rs. 1.70 lacs ) and Shakti Chrome Limited Rs. Nil ( Previous Year Rs. 690 lacs)

11. Advance including (Interest Receivable) Shakti Chrome Limited Rs: Nil (Previous Year Rs: 24.37 lacs), Navoday Consultants Limited Rs: Nil (Previous Year Rs: 5.00 Lacs)

12. Long Term Borrowings- Advances towards Promoter Contribution include Sri Mahalaxmi Solar Energy Pvt. Limited Rs. Nil (PreviousYear Rs: 10,169 lacs) and Jaltarang Vanijya Pvt Limited Rs: Nil (Previous Year Rs: 9,236 lacs).

13. Deposits include Navdisha Real Estate Private Limited Rs.711.50 lacs (Previous Year Rs. 711.50 lacs).

14. Trade & other Payables include Mr.Anil Sureka Rs. Nil (Previous Year Rs 0.15 lacs) and Navdisha Real estate Pvt. Ltd. 15.73 Lacs (Previous year Rs. 7.36 lacs).

15. Advance from customers includes Gontermann-Peipers (India) Limited Rs. 52.23 Lacs (Previous year Rs. 141.65 Lacs)

16. Money received against share warrants includes Dankuni Investment Ltd Rs. Nil ( Previous Year Rs. 132 Lacs ) & Navoday Consultants Limited Rs Nil ( Previous Year Rs . 132 Lacs )

17. Loans Including Interest receivable represents Ispat Profiles India Limited Rs . 1,931.97 Lacs (Previous Year Rs. Nil )

11. Details of Loans given, Investment made and Guarantee given covered u/s 186 (4) of the Companies Act, 2013:

I) Loans given by the company to body corporate as at 31st March, 2015 (Refer Note No. 13). All the said loans and advances are given for business purposes.

12. Investments made by the company as at 31st March, 2015 (Refer Note No. 12)

13. During the current period, lenders have computed the recompense liability of Rs. 6,275.72 Lacs for the period from 1st April, 2004 till 30th Nov, 2014, as approved by Corporate Debt restructuring (CDR) Empowered Group (EG).Based on such approvals, during the year ended, provision of Rs. 4,367.31 Lacs has been made towards the balance recompense payable for the period upto 31st March, 2014 which has been shown as exceptional item. Subsequently, company has issued Redeemable Non-Convertible debentures against the recompense payable to its lenders aggregating to Rs. 4,685.72 Lacs and balance amount of Rs. 1,590 Lacs was paid provided from time to time.

Further CDR EG in its meeting dated 26th, March 2015 has given direction that company stands exited from CDR system.

14. There were no foreign currency remittances on account of dividend during the year.

15. Previous year's figures including those given in brackets have been regrouped / rearranged where necessary to conform to this year's classification.

---

Mar 31, 2014

1. Corporate information

Balasore Alloys Limited (the Company) is a public company domiciled in India and incorporated in 1984 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange of India and The Calcutta Stock Exchange Limited. The Company have its registered office and manufacturing facility at Balasore, Odisha

The Company is primarily engaged in raising of Chrome Ore and Manganese Ore from its captive mines located in Odisha and Madhya Pradesh and manufacturing and selling of Ferro Alloys of various grades.

2. Contingent liabilities not provided for in respect of: (Rs in Lacs)

Particulars As at 31st As at 31st March, 2014 March, 2013

a) Sales tax matters under appeal 36.86 108.94 {Amount paid under appeal Rs 21.31 lacs (Rs. 106.71 lacs)}*

b) Entry tax matters 117.57 200.68 {Amount paid under appeal Rs 18.71 lacs (Rs. 23.98 lacs)}*

c) Excise / Service tax matters 1200.79 1384.42 {Amount paid under appeal Rs 10.83 lacs (Rs. 2.30 lacs)}*

d) Un-expired Bank Guarantees and Letters of Credit 636.89 968.59

e) Bills discounted with Banks 5,447.53 5,049.71

* In respect of above cases based on favorable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

3. Capital and other commitment:

Estimated amount of Capital commitments (net of advances) Rs 1684.81 lacs (Rs 1573.46 lacs)

4. The income tax assessment of the company have been completed up to Assessment year 2011-12. The disputed demand up to the said Assessment year is Rs. 2,586.25 lacs (Amount Paid under appeal Rs. 225 Lacs). Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the company has been advised that the demand is likely to be either quashed or substantially reduced and accordingly no provision has been made.

5. The Company had filed petitions against the orders of Dy. Director Mines, Jajpur demanding Rs. 487.80 lacs towards payment of additional Royalty pointed out by Accountant General (A.G) audit for adopting wrong method of calculation of royalty by them for period December, 2009 to January, 2011. The company holds the view that the payment of royalty is correctly made based on the actual quantity of chrome Ore extracted from the mining area. In view of above demand being legally unjustifiable, the Company does not expect any liability in above matter and hence not provided for.

6. Gratuity and other post retirement benefit plans The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India in form of qualifying insurance policy.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is an unfunded plan.

The following tables summaries the components of net expense recognised in the statement of profit and loss and balance sheet for the respective plans.

7. North Eastern Electricity Supply Company of Orissa Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and disputed on take or pay benefit claimed in year 2012-13 and raised total claim for Rs 20,843.14 lacs (including delayed payment surcharge). The matter of revocation of settlement is pending with Honourable High Court of Orissa and that of demand towards take or pay benefit before Electricity Appellate Tribunal, New Delhi. The Company has paid & provided Rs 3,400 lacs towards such claims and also continues to receive un-interrupted power supply from NESCO. Pending outcome of the court/tribunal decision and based on discussion with Company''s legal counsel, no further provision has been made towards above demand.

8. During the year 2011-12, the lender''s have exercised their right to recompense under CDR Scheme sanctioned in earlier years and demanded Rs 3,219.95 lacs for the sacrifice made up to 31st March, 2007 towards which Rs 536 lacs was paid & provided as on 31st March, 2014. Further, the recompense amount for the period from 1st April, 2007 to till date has not been worked out. The management has approached its lenders to determine the final liability towards such recompense amount including liabilities pending which no liability has been provided for.

9. Segment Information

(a) Primary Segments:

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is mainly engaged in the Manufacturing/Mining of Ferro alloys. All activity of the company revolves around this main business. As such, there are no separate reportable segments as per the Accounting Standard 17 (Segment Reporting) notified by Companies (Accounting Standard) Rules, 2006.

10. Derivative Instruments & Un hedged foreign currency Exposure :

(i) For Hedging of Foreign Trade Receivable :

Nominal amounts of Forward contract entered into by the company and outstanding as on 31st March 2014 amounting to Rs. 8987.25 lacs (Rs. 14176.01 Lacs)

(ii) Foreign currency exposure that are not hedged by derivative instruments are as under : -

11. Related Party Disclosures

As per accounting standard 18, the disclosures of transactions with the related parties are given below:

List of related parties where control exists and related parties with whom transactions have taken place and relationships:

Subsidiary Company : Milton Holdings Limited

Balasore Metals Pte. Limited Associate Company : Balasore Energy Limited

Key Management Personnel : Mr. Pramod Kumar Mittal (Chairman)

and their relative Mr. V K Mittal (Brother of Chairman)

Mr. Anil Sureka (Managing Director) Mr R K Parakh (Whole-time Director) Mr. B. N. Panda (Whole-time Director) (ceased w.e.f. 06.04.2013)

Enterprises over which Key : Navoday Consultants Limited

Management Personnel Navdisha Real Estate Private Limited and their relatives are able to Shakti Chrome Limited exercise significant influence* Gontermann-Peipers (India) Limited

Dankuni Investment Limited

Sri Mahalaxmi Solar Energy Pvt. Ltd

Jaltarang Vanijya Pvt Ltd

Disclosure in Respect of Material Related Party Transactions during the year:

1. Purchase of Fixed Assets include from Shakti Chrome Limited - Rs. Nil (Previous year Rs. 800.5 lacs)

2. Money Received against Share Warrants include Dankuni Investment Limited Rs. Nil (Previous Year Rs. 132 lacs) and Navodya Consultants Limited Rs. Nil (Previous Year Rs. 132 lacs).

3. Long Term Borrowings- Advances towards Promoter Contribution include Sri Mahalaxmi Solar Energy Pvt. Limited Rs .Nil (Previous Year Rs. 10,169 lacs) and Jal tarang Vanijya Pvt Limited Rs. Nil (Previous Year Rs. 9,236 lacs).

4. Sale of Finished Goods Include sales made to Gontermann-Peipers (India) Limited Rs. 140.85 lacs (Previous Year Rs. 84.96 Lacs).

5. Interest received on Investments in debentures & interest bearing advances include Shakti Chrome Limited Rs. 82.80 lacs (Previous Year Rs.82.80 lacs).

6. Raw Material purchased includes Shakti Chrome Limited Rs. Nil (Previous Year Rs. 405.61 lacs).

7. Inventory purchased include Shakti Chrome Limited Rs. Nil (Previous Year Rs. 102.15 Lacs).

8. Processing Charges paid include Shakti Chrome Limited Rs. Nil (Previous Year Rs.33.17 lacs).

9. Lease Rent Paid includes Shakti Chrome Limited Rs. Nil (Previous Year Rs. 8.20 Lacs).

10. Rent includes Navdisha Real Estate Private Limited Rs. 76.80 lacs (Previous Year Rs. 80.90 lacs).

11 . Managerial Remuneration includes Mr. Anil Sureka Rs. 132.65 lacs (Previous Year Rs. 163.35 lacs), Mr. B N Panda Rs. 8.73 lacs (Previous Year Rs. 57.01 lacs) and Mr. R K Parakh Rs. 40.09 lacs (Previous Year Rs. 40.20 lacs).

12. Guarantees Obtained/ to be obtained include Mr. Pramod Mittal Rs. 7,917.20 lacs (Previous Year Rs. 9,500.04 lacs) and Mr. V K Mittal Rs. 7,917.20 (Previous Year Rs. 9,500.04 lacs).

13. Investments includes Milton Holdings Limited - Rs 2,194.83 lacs ( Previous Year 2194.83 lacs), and Shakti Chrome Limited Rs. 690 lacs( Previous Year Rs. 690 lacs)

14. Trade Receivables include Gontermann-Peipers (India) Limited Rs. Nil (Previous Year Rs. 18.85 lacs).

15. Advance including (Interest Receivable) Shakti Chrome Limited Rs. 29.37 lacs (Previous Year Rs. 99.65 lacs), Navoday Consultants Limited Rs. 5.00 lacs (Previous Year Rs. Nil) and Gontermann-Peipers (India) Limited Rs. Nil (Previous Year Rs. 6.25 lacs).

16. Long Term Borrowings- Advances towards Promoter Contribution include Sri Mahalaxmi Solar Energy Pvt. Limited Rs. 10,169 lacs (Previous Year Rs. 10,169 lacs) and Jaltarang Vanijya Pvt Limited Rs. 9,236 lacs (Previous Year Rs. 9,236 lacs).

17. Deposits include Navdisha Real Estate Private Limited Rs.711.50 lacs (Previous Year Rs. 285 lacs).

18. Trade & other Payables include Mr. Anil Sureka Rs. 0.15 lacs (Previous Year Rs.5.07 lacs), Mr. B N Panda Rs. Nil (Previous Year Rs. 0.27 lacs) Navdisha Real Estate Pvt. Ltd. 7.36 Lacs (Previous year Rs. Nil) and Mr. R K Parakh Rs. Nil (Previous Year Rs. 2.97 lacs).

19. Advance from customers includes Gontermann-Peipers (India) Limited Rs. 141.65 Lacs (Previous year Rs. Nil )

20. Money Received against Share Warrants include Dankuni Investment Limited Rs.132 lacs (Previous Year Rs. 132 lacs) and Navodya Consultants Limited Rs. 132 Lacs (Previous Year Rs. 132 lacs).

21. Creditors for Fixed Assets include Shakti Chrome Limited Rs. Nil (Previous Year Rs. 215.20 lacs ).

22. There were no foreign currency remittances on account of dividend during the year.

23. Previous year''s figures including those given in brackets have been regrouped / rearranged where necessary to conform to this year''s classification. Expenses incurred in respect of Mines, Briquetting & Chrome Ore Beneficiation (COB) operations amounting to Rs. 684.97 lacs during the previous financial year 2012-13 have been regrouped from raw material consumption and included in respective head of expenses in accordance with current year presentation.

---

Mar 31, 2013

1. Corporate information

Balasore Alloys Limited (the Company) is a public company domiciled in India and incorporated in 1984 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange of India and The Calcutta Stock Exchange Limited. The Company have its registered office and manufacturing facility at Balasore, Odisha

The Company is primarily engaged in raising of Chrome Ore and Manganese Ore from its captive mines located in Odisha and Madhya Pradesh and manufacturing and selling of Ferro Alloys of various grades.

2. Capital and other commitment:

Estimated amount of Capital commitments (net of advances) Rs 1573.46 lacs (Rs 4,598.79 lacs).

3. The income tax assessment of the company have been completed up to Assessment year 2011-12. The disputed demand outstanding up to the said Assessment year is Rs. 3,498.78 lacs. Based on the decisions of the appellate authorities and the interpretations of other relevant provisions, the company has been advised that the demand is likely to be either quashed or substantially reduced and accordingly no provision has been made.

4. Gratuity and other post retirement benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with Life

Insurance Corporation of India in form of qualifying insurance policy. The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is an unfunded plan. The following tables summaries the components of net expense recognised in the statement of profit and loss and balance sheet for the respective plans.

5. North Eastern Electricity Supply Company of Orissa Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and disputed on take or pay benefit claimed during the year and raised total claim for Rs 18,927.66 lacs (including delayed payment surcharge). The Company is under discussion with NESCO and has also referred the matter to Honourable High Court of Orissa & Appellate Tribunal, New Delhi. The Company has paid & provided Rs 3,400 lacs towards such claims and also continues to receive un-interrupted power supply from NESCO. Pending outcome of the court case/discussion and based on discussion with Company''s legal counsel, no provision has been made towards above demand.

6. During the previous year 2011-12, the lender''s have exercised their right to recompense under CDR Scheme sanctioned in earlier years and demanded Rs 3,219.95 lacs for the sacrifice made up to 31st March, 2007 towards which Rs 452 lacs was paid & provided. Further, the recompense amount for the period from 1st April, 2007 to till date has not been worked out and presently it is unascertainable. The management has approached its lenders to determine the final liability towards such recompense amount including liabilities for the period from 1st April, 2007 to till date, which is unascertainable, pending which no liability has been provided for.

7. Segment Information

(a) Primary Segments:

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is mainly engaged in the Manufacturing/Mining of Ferro alloys. All activity of the company revolves around this main business. As such, there are no separate reportable segments as per the Accounting Standard 17 (Segment Reporting) notified by Companies (Accounting Standard) Rules, 2006.

The Company has common fixed assets in India for producing goods for domestic and overseas markets. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished. The year-end balance of overseas trade receivables is Rs 242.35 lacs (Rs 77.09 lacs).

8. Confirmation certificates in respect of loans given aggregating to Rs 500 Lacs (Rs. 962.00 Lacs) to certain parties as well as interest receivable thereon amounting to Rs 366.98 Lacs (Rs. 543.13 Lacs) are still awaited from the respective parties. Based on present status of negotiation, all these loans and interest receivable are considered good of recovery by the management.

9. During the year, the company has migrated to new ERP system i.e SAP, for which the Company has changed the method of valuation of inventory from Weighted Average to Real time Moving weighted average. Had such change not been made the value of the inventory as at the year end and the profit for the year would be higher by Rs. 77.74 Lacs.

10. Previous year''s figures including those given in brackets have been regrouped / rearranged where necessary to conform to this year''s classification.

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Mar 31, 2012

1. Corporate information

Balasore Alloys Limited (the Company) is a public company domiciled in India and incorporated in 1984 under the provisions of the Companies Act, 1956. Its shares are listed on Bombay Stock Exchange of India and The Calcutta Stock Exchange Limited. The Company have its registered office and manufacturing facility at Balasore, Odisha

The Company is primarily engaged in raising of Chrome Ore and Manganese Ore from its captive mines located in Odisha and Madhya Pradesh and manufacturing and selling of Ferro Alloys of various grades. The Company is also engaged in trading business of various allied products like Coke, Chrome Ore Lumpy etc.

(a) Terms/ rights attached to equity shares

(i) The company has only one class of equity shares having par value of Rs 5 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(ii) The amount of per share dividend recognized as distribution to equity shareholders is Rs 0.50 per share (Rs 0.50 per share).

(iii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

(i) Term loans and Funded interest term loans are secured by a first charge over Plant & Machinery and other fixed assets (including factory land and building) and by way of second charge over current assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Kumar Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010)]. The above loans are further guaranteed by Mr Pramod Kumar Mittal and Mr V K Mittal (ceased to be director w.e.f 28th July, 2010) and by corporate guarantee of Shakti Chrome Limited & Ispat Minerals Limited. All the mortgages and charges created in favour of the Banks for Term Loan and Working Capital Facilities rank pari passu inter se.

(ii) Deferred Payment Credits are secured against hypothecation of Vehicles purchased against such loans.

As per the requirement of Accounting Standard - 29, the management has estimated future expenses on site restoration at mines on best judgment basis and due provision thereof has been made in the accounts. There is no movement in the aforesaid provision in current year and previous year as compared to corresponding previous year.

Working capital facilities are secured by first charge over current assets and by second charge over fixed assets of the Company. The loans are also secured by pledge of a part of shareholding of the promoter group [including shares held by Mr Pramod Kumar Mittal (a director) and Mr V K Mittal (ceased to be director w.e.f. 28th July, 2010)]. The above loans are further guaranteed by Mr Pramod Kumar Mittal and Mr V K Mittal and by corporate guarantee of Shakti Chrome Limited & Ispat Minerals Limited. All the mortgages and charges created in favour of the Banks for Term Loan and Working Capital Facilities rank pari passu inter se.

2. Contingent liabilities not provided for in respect of :

(Rs.in Lacs)

Particulars As at 31st As at 31st March 2012 March 2011

a) Sales tax matters under appeal 98.06 169.41 {Amount paid under appeal Rs 103.94 Lacs (Rs. 204.15 Lacs)}*

b) Entry tax matters 114.11 - {Amount paid under appeal Rs 14.67 Lacs (Rs. Nil)}*

c) Excise / Service tax matters 1,221.31 - {Amount paid under appeal Rs 2.30 Lacs (Rs. Nil)}

d) Un-expired Bank Guarantees and Letters of Credit 751.97 606.67

e) Bills discounted with Banks 5,523.54 6,769.52

f) Guarantee given by way of pledge of certain Investments as security. [Refer Note No. 12(d)] 57.03 101.47

g) Liabilities on account of dues under Orissa Rural Infrastructure and Socio Economic Development Act, 2004 Amount Unascertainable

* In respect of above cases based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

3. Capital and other commitment:

Estimated amount of Capital commitments (net of advances) Rs 4,598.79 Lacs (Rs 4,735.03 Lacs)

4. Gratuity and other post retirement benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India in form of qualifying insurance policy.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is an unfunded plan.

The following tables summaries the components of net expense recognised in the statement of profit and loss and balance sheet for the respective plans.

(h) The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.

(i) The Company expects to contribute Rs. 100 Lacs (Rs 60 Lacs) to gratuity fund in the year 2012-2013.

5. North Eastern Electricity Supply Company of Orissa Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and raised claim for Rs 16,418.28 Lacs (including delayed payment surcharge). The Company is under discussion with NESCO and has also referred the matter to Hon'ble High Court of Orissa after receipt of disconnection notice from NESCO. The Company has paid Rs 1,400 Lacs towards such claims which has been shown as advance and also continues to receive un-interrupted power supply from NESCO. Pending outcome of the court case/discussion and based on discussion with Company's legal counsel, no provision has been made towards above demand.

6. The Company has incurred capital expenditure (including capital advances) on various projects and made investments, in excess of the normal capex approved under Corporate Debt Restructuring (CDR) Scheme, which are pending approval of the monitoring committee of the lenders in terms of the Financial Restructuring Scheme as approved by the CDR Empowered Group in earlier years.

7. During the year, the lender's have exercised their right to recompense under CDR Scheme sanctioned in earlier years and demanded Rs 3020 Lacs for the sacrifice made upto 31st March, 2007 towards which Rs 252 Lacs has been paid. The recompense amount for the period from 1st April, 2007 to till date has not been worked out and presently it is unascertainable. The management has approached its lenders to determine the final liability towards such recompense amount including liabilities for the period from 1st April, 2007 to till date, which is unascertainable, pending which no liability has been provided for.

8. Segment Information Business Segments:

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in following business segments:

a) Manufacturing/Mining - Consists of mining and manufacturing of Silicon & Ferro alloys.

b) Trading Consists of trading of Coke, Chrome Ore Lumpy etc.

Geographical Segments:

The Company's secondary geographical segment has been identified based on location of the customers and are demarcated into its Indian and Overseas Operations.

The Company has common fixed assets in India for producing goods for domestic and overseas markets. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished. The year-end balance of overseas trade receivables is Rs 77.09 Lacs (Rs 172.25 Lacs).

9. Confirmation certificates in respect of loans given aggregating to Rs 962.00 Lacs to certain parties as well as interest receivable thereon amounting to Rs 543.13 Lacs are still awaited from the respective parties. Based on present status of negotiation, all these loans and interest receivable are considered good of recovery by the management.

10. Previous year's figures including those given in brackets have been regrouped / rearranged where necessary to conform to this year's classification.

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Mar 31, 2011

NATURE OF OPERATIONS:

Balasore Alloys Limited ("the Company"), having its manufacturing facility at Balasore, Odisha, is primarily engaged in raising of Chrome Ore and Manganese Ore from its captive mines located in Odisha and Madhya Pradesh and manufacturing and selling of Ferro Alloys of various grades. The Company is also engaged in trading business of various allied products like Coke, Chrome Ore Lumpy etc.

1. Contingent liabilities not provided for in respect of :

(Rs.in Lacs)

Particulars As at 31st As at 31st

March, 2011 March, 2010

a) Sales Tax matters under appeal 169.41 225.14 {Amount paid under appeal Rs 169.21 lacs (Rs. 204.15 lacs)}

b) Un-expired Bank Guarantees and Letters of Credit 606.67 412.73

c) Bills discounted with Banks 6,769.52 5,189.97

d) Guarantee given by way of pledge of certain Investments as security. (Refer Note No. 10) 101.47 87.88

e) Liabilities on account of dues under Odisha Rural Amount Unascertainable Infrastructure and Socio Economic Development Act, 2004

In respect of above cases based on favourable decisions in similar cases/legal opinions taken by the Company/discussions with the solicitors etc., the management is of the opinion that it is possible, but not probable, that the action will succeed and accordingly no provision for any liability has been made in the financial statements.

2. Estimated amount of Capital commitments (net of advances) Rs 4,735.03 lacs (Rs 4,739.21 lacs).

3. Gratuity and other post retirement benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India in form of qualifying insurance policy.

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment. This is an unfunded plan.

The following tables summaries the components of net expense recognised in the profit and loss account and balance sheet for the respective plans.

(h) The estimate of future salary increase, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors such as supply and demand in the employee market.

(i) The Company expects to contribute Rs. 60.00 lacs to gratuity fund in the year 2011-2012.

4. North Eastern Electricity Supply Company of Odisha Limited (NESCO) has revoked the waiver of dues granted under a settlement in an earlier year and raised demand for Rs 9,874.34 lacs (including delayed payment surcharge). The Company has made necessary representation to NESCO and the matter is under negotiation. Pending such, no provision has been made towards above demand.

5. One of the overseas customer has filed a claim of Rs 603.03 lacs relating to price differential for non supply of materials in earlier years by the Company, which is contested at International Arbitration court. The management is hopeful to resolve the dispute with no additional liability on the Company.

6. During the year, as per mutual agreement, certain loans and its related interest receivable were converted into Unsecured Debentures of Rs 1,540 lacs bearing interest rate of 12% per annum. These debentures are redeemable at the end of 5 years.

7. a) The Company has incurred capital expenditure (including capital advances) on various projects and made investments, in excess of the normal capex approved under Corporate Debt Restructuring (CDR) Scheme, which are pending approval of the monitoring committee of the lenders in terms of the Financial Restructuring Scheme as approved by the CDR Empowered Group in earlier years.

b) In terms of CDR scheme sanctioned for the Company, the Lenders continue to have the right to recompense on the sacrifices being made over and above the amount of recompense quantified at Rs 3,020 lacs for the period upto 31st March, 2007.

8. Investments in the Equity Shares of Ispat Industries Limited (IIL) (an associate company of the Promoter Group) have been pledged with the lenders of IIL as collateral security against financial facilities provided by the lenders to IIL as a part of debt restructuring arrangement of IIL.

9. Segment Information

Business Segments:

Based on the synergies, risks and return associated with business operations and in terms of Accounting Standard-17, the Company is engaged in following business segments

a) Manufacturing/Mining - Consists of mining and manufacturing of Silicon & Ferro alloys

b) Trading - Consists of trading of Coke, Chrome Ore Lumpy etc.

Geographical Segments:

The Company's secondary geographical segment has been identified based on location of the customers and are demarcated into its Indian and Overseas Operations.

10. In terms of Accounting Standard 22, Net Deferred Tax Liability of Rs 721.52 lacs has been recognized in the accounts up to 31st March, 2011.

11. a) The supply of raw materials against advances of Rs. 500.00 lacs (Rs 500.00 lacs) to various parties is pending beyond the stipulated time as per the respective purchase orders. The management is following up the matter and expects to recover/adjust such advances in the near future.

b) Confirmation certificates in respect of loans aggregating to Rs 962.00 lacs to certain parties as well as interest receivable thereon amounting to Rs 585.79 lacs (including Rs 42.66 lacs in respect of loans where no principal amount is outstanding) are still awaited from the respective parties. All these loans and interest receivable are, however, considered good of recovery by the management.

12. Related Party Disclosures

(a) Names of the related parties :

Subsidiary Company : Milton Holdings Limited

Associate Company : Balasore Energy Limited

Key Management Personnel and their relative : Mr. Pramod Mittal (Chairman)

Mr. V K Mittal (Brother of Chairman) (ceased to be director w.e.f. 28th July, 2010)

Mr. R.K Jena (Managing Director)

Mr C.R. Pradhan (Whole-time Director)

Enterprises over which Key Management Personnel / Shareholders / Relatives have significant influence*

: Ispat Industries Limited

Navoday Consultant Limited (formerly Mudra Ispat Limited)

Denro Holdings Private Limited

Kartik Credit Private Limited

Navdisha Real Estate Private Limited (formerly Kanoria Plastokem (P) Ltd)

Shakti Chrome Limited

* The parties stated above are related parties in the broader sense of the term and are included for making the financial statements more transparent.

13. The Company has accounted for differential interest of Rs 395.74 lacs (including Rs 206.11 lacs relating to earlier years) on advances which have been converted into unsecured loan in earlier year based on the statement of accounts received from the party during the year.

14. Excise Duty & Cess on stocks represents differential excise duty and cess on opening and closing stock of Finished Goods and processable scrap.

15. The Board of Directors has recommended, dividend of Rs 0.50 per share (10%) subject to approval of CDR Empowered group and shareholders.

16. Previous year's figures including those given in brackets have been regrouped / rearranged where necessary to conform to this year's classification.