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Notes to Accounts of Tata Steel BSL Ltd.

Mar 31, 2017

NOTES:

a Capitalized borrowing costs

Adjustment during the year 2017 Rs. 3,675.89 lakhs ,2016 Rs. 65,676.77 lakhs includes on account of borrowing costs/exchange fluctuation capitalized during the installation period, b Fair valuation is taken as deemed cost as on 1st April 2015 in certain items of Land, Building, Plant & Machinery and Railway Sidings.

Fair value of the properties was determined by using the market comparable method. This means that valuations performed by the valuer are based on active market prices, significantly adjusted for difference in the nature, location or condition of the properties.

As at the date of revaluation 1st April 2015, the properties fair values are based on valuations performed by Ranjan Structomech Pvt. Ltd., Gurgaon an accredited independent valuer who has relevant valuation experience, c Certain building under possession of the Company are pending registrations in the name of the Company, d For details of assets given on operating lease, refer note 42A

e "Certain property, plant and equipment are pledged against borrowings ,the details relating to which have been described in Note 14A pertaining to borrowings."

f Refer note 38 for impact of fair valuation on transition date financials and the subsequent impact on profit and loss thereon.

* Including Rs, 2,979.72 Lakhs (31st March 2016: Rs, 13,128.60 Lakhs; 1st April 2015 Rs, 980.25 Lakhs) under bank lien.

Short-term deposits are made for varying periods between 3 to 12 months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

Specified Bank Notes (SBN) disclosure

Disclosure related to details of Specified Bank Notes (SBN) held and transacted during the period 8th November 2016 to 30th December 2016:

For the purpose of this clause, the term ''Specified Bank Notes''(SBN) shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407 ( E ) dated the 8th November, 2016.

e) Rights, preferences and restrictions attached to the equity shares

The Company has only one class of Issued, subscribed and paid up equity shares having a par value of '' 2/- each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Note

1) 12.00% Redeemable Non-Convertible 250 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 2500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 250 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 2500 Lacs; Financial Year 2014-15 12.00% Redeemable Non-Convertible 250 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 2500 Lacs). Debentures are redeemable at par in one bullet payment at the end of 10th year from the date of allotment i.e 31.08.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Asset Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Sh. B.B.Singal & Sh. Neeraj Singal.

2) 12.50% Redeemable Non-Convertible 2000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 20000 Lacs (Previous Year 12.50% Redeemable Non-Convertible 2000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 20000 Lacs ; Financial Year 2014-15 12.50% Redeemable Non-Convertible 2000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 20000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 30.08.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

3) 12.00% Redeemable Non-Convertible 100 Debentures of Rs, 100 Lacs each outstanding on 31st March 2017 Rs, NIL (Previous Year 12.00% Redeemable Non-Convertible 100 Debentures of Rs, 100 Lacs each outstanding on 31st March 2016 Rs, NIL; Financial Year 2014-15 12.00% Redeemable Non-Convertible 100 Debentures of Rs, 100 Lacs each outstanding on 31st March 2015 Rs, 10000 Lacs) (Subordinate Debt).

4) 11.50% Redeemable Non-Convertible 3500 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 35000 Lacs (Previous Year

11.50% Redeemable Non-Convertible 3500 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 35000 Lacs; Financial Year 2014-15 11.50% Redeemable Non-Convertible 3500 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 35000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 04.01.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

5) 12.00% Redeemable Non-Convertible 1050 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 10327 Lacs (Previous Year 12.00% Redeemable Non-Convertible 1050 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 10500 Lacs; Financial Year 2014-15 12.00% Redeemable Non-Convertible 1050 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 10500 Lacs) are redeemable at the end of 4th,5th and 6th year in installments 35%,35% & 30% respectively commencing from the end of 4th year from the date of allotment i.e 28.03.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

6) 11.75% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 30000 Lacs (Previous Year

11.75% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 30000 Lacs; Financial Year 2014-15 11.75% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 30000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 02.02.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

7) 12.00% Redeemable Non-Convertible 4750 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 3729 Lacs (Previous Year 12.00% Redeemable Non-Convertible 4750 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 4000 Lacs; Financial Year 2014-15 12.00% Redeemable Non-Convertible 4750 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 47500 Lacs). Debentures are redeemable at the end of 4th, 5th and 6th year in installments 35%, 35% & 30% respectively commencing at the end of 4th year from the date of allotment i.e 31.08.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Asset Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Sh. B.B.Singal & Sh. Neeraj Singal. Out of the above Rs, 43500 Lacs have been paid during FY 2015-16.

8) 10.50% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 30000 Lacs (Previous Year 10.50% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 30000 Lacs; Financial Year 2014-15 10.50% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 30000 Lacs) Debentures are redeemable at par in three equal annual installments commencing from the end of 6th year from the date of allotment

i.e 13.08.2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

9) 10.90% Redeemable Non-Convertible 1630 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 12597 Lacs (Previous Year 10.90% Redeemable Non-Convertible 1630 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 12850 Lacs; Financial Year 2014-15 10.90% Redeemable Non-Convertible 1630 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 16300 Lacs) are redeemable at par in four equal annual installments commencing from the end of 5th year from the deemed date of allotment i.e 26.08.2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

10) 10.90% Redeemable Non-Convertible 120 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 1118 Lacs (Previous Year 10.90% Redeemable Non-Convertible 120 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 1200 Lacs; Financial Year 2014-15 10.90% Redeemable Non-Convertible 120 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 1200 Lacs) have been restructured during the year and are redeemable in 48 equated monthly installments commencing from 26th December 2016 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

11) Secured by first mortgage charge on all of the company''s immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created on favour of ECA Lenders), ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement, except Rs, NIL (Previous Year Rs, 26533 Lacs; Financial Year 2014-15 Rs, 25036 Lacs) secured by subsequent & subservient charge on movable assets. Out of the above, the ECA Loans of Rs, 245632 Lacs (Previous Year Rs, 265001 Lacs; Financial Year 2014-15 Rs, 239225 Lacs ) financed by ECA Lenders are secured by first exclusive charge on the assets financed & personal guarantee of two promoter directors ''Loans of Rs, 851855 Lacs (Previous Year Rs, 890522 Lacs; Financial Year 2014-15 Rs, 835469 Lacs) are guaranteed by the Personal Guarantee of two promoter directors.

12) Secured by first mortgage charge on all of the company''s immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement. Loans of Rs, 2335105 Lacs (Previous Year Rs, 2281459 lacs; Financial Year 2014-15 Rs, 1662104 Lacs) are guaranteed by the Personal Guarantee of two promoter directors & Loans of Rs, 52745 Lacs (Previous Year Rs, 53995 Lacs; Financial Year 2014-15 Rs, 410576 Lacs) are guaranteed by the Personal Guarantee of One Promoter Director. Apart from this, Loans of Rs, 429736 Lacs are secured by pledge of 26% shares of Bhushan Steel Limited and Loans of Rs, 1622045 Lacs are secured by pledge of 51% shares of Bhushan Steel Limited. Out of the above Loans sanctioned for Rs, 700000 Lacs are secured by pledge of the shares of Bowen Energy Limited held by Promoter/Promoter Group of Bhushan Steel Limited.

13) Secured by first mortgage charge on all of the company''s immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement, except Rs, 969 Lacs (Previous Year Rs, 931 Lacs; Financial Year 2014-15 Rs, 1345 Lacs) secured by subsequent

& subservient charge on movable assets. Loans of Rs, 61291 Lacs (Previous year Rs, 58722 Lacs; Financial Year 2014-15 Rs, 30000 Lacs) are guaranteed by the Personal Guarantee of Two Promoter Directors & Loans of Rs, NIL Lacs (Previous Year Rs, 1021 Lacs; Financail Year 201415 Rs, 2250 Lacs) are guaranteed by the Personal Guarantee of One Promoter Director. Apart from this,Loans of Rs, 31516 Lacs are secured by pledge of 51% shares of Bhushan Steel Limited.

14) Out of these Loans of Rs, 270 Lacs (Previous Year Rs, 293 Lacs; Financial Year 2014-15 Rs, 263 Lacs) are guaranteed by the Personal Guarantee of Two Promoter Directors.

15) Foreign Currency Loans for Phase I & II of Orissa project was sanctioned at interest rate of EURIBOR 0.45% (Presently 0.45% p.a.) repayable in 20 Half Yearly Installments commencing from six Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

16) Domestic Loans sanctioned by SBI Syndication for Phase III of Orissa project was sanctioned at rate of interest of SBI Base Rate 2.50% and repayable in 17 quarterly installments commencing from 18 months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ SBI Base Rate 2.50% p.a (presently 11.60% p.a.).

17) Foreign Currency Loans for Phase III of Orissa project was sanctioned at interest rate of EURIBOR 1.50% ( Presently 1.287% p.a.) repayable in 20 half yearly installments commencing from 6 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

18) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of USD LIBOR 3.95% . Out of this Loan of US$ 240 Million has been structured under 5/25 flexible structuring scheme of RBI upto 25 years.Remaining US$ 60 Million is repayable in 4 annual installments commencing from 36 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

19) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of Euribor 1.75% (Presently 1.529% p.a.) repayable in 15 half yearly installments commencing from HY2 of FY 2018-19 in 15 equal semi annual installments.

20) Domestic Loans sanctioned for Coke Oven 2 of Orissa project was sanctioned at rate of interest of Base Rate 2.50% and repayable in

24 quarterly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ Base Rate 1.75% p.a (presently 10.90% p.a.).

21) Foreign Currency Loans for Coke Oven 2 of Orissa Project was sanctioned at interest rate of USD LIBOR 4.50% repayable in 12 half yearly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years.

22) Domestic Loans sanctioned for CRCA & CRNGO Project of Orissa project was sanctioned at rate of interest of Base Rate 2.25% and repayable in 24 quarterly installments commencing from 12 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ Base Rate 2.00% p.a. (11.15% p.a. at present).

23) Domestic Loans sanctioned for Addition,Modification & Replacement Project at Orissa Site was sanctioned at rate of interest of Base Rate TP 1.25% and repayable in 32 quarterly installments commencing from 3 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s. Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ SBI Base Rate 2.50% p.a. (11.60% p.a. at present).

24) Domestic Loans sanctioned for shoring up of Net Working Capital/Normal Capital Expenditure was sanctioned at rate of interest of SBI Base Rate 2.50% (Presently 11.60% p.a.) and repayable in 40 quarterly installments commencing from 30th June 2016/as per terms stipulated in respective loan/facility agreement/s.

Rate of interests of other Term Loans/Foreign Currency Loans are linked with the Base Rate/LIBOR of the respective lenders

25) 10% 366667 Redeemable Cumulative Preference Shares of Rs, 100 each are allotted at a price of Rs,3000/- per share during the financial year 2011-12 on private placement basis. The preference shares are redeemable at a premium of Rs, 2900/- in two equal installments at the end of 3rd and 4th year i.e. on 4th March 2015 and 4th March 2016 respectively. However due to non submission of preference share certificate by the shareholder, M/s Robust Transportation Pvt Ltd., preference shares could not be redeemed. M/s Robust Transportation Pvt Ltd., vide their letter dated 1st March 2015 and 1st March 2016 has requested to defer the redemption of the preference shares as the same has been pledged with banker as security against the loan taken by it.

For computing deferred tax liability, the amount of business and depreciation loss as allowable in income tax returns has been considered for recognising deferred tax assets. On the basis of future projections taken on record by the management after considering improved performance of the company in last quarter, the board is confident that there is a virtual certainty that sufficient taxable income will be available in the future against which, the deferred tax assets can be realised in the normal course of business of the company.

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.

27EMPLOYEE BENEFITS

Defined Contribution Plans - General Description

Provident Fund:During the year, the company has recognized Rs, 592.53 lakhs (2015-16: Rs, 573.82 lakhs) as contribution to Employee Provident Fund in the Statment of Profit and Loss (Refer Note 24)

Defined Benefit Plans - General Description

Gratuity: Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service subject to maximum of 10 Lakhs at the time of separation from the company.

Other long-term employee benefits - General Description

Leave Encashment: Each employee is entitled to get 15 earned leaves for each completed year of service. Encashment of earned leaves is allowed during service leaving a minimum balance of 60 days subject to maximum accumulation up to 60 days. In addition, each employee is entitled to get 7 sick leaves at the end of every year.

The sensitivity analyses 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.

28 SEGMENT REPORTING

The business activity of the company falls within one broad business segment viz. "Steel" and substantially sale of the product is within the country. The Gross income and profit from the other segment is below the norms prescribed in Ind AS 108. Hence the disclosure requirement of Indian Accounting Standard 108 of "Segment Reporting" issued by the Institute of Chartered Accountants of India is not considered applicable.

29 RELATED PARTY DISCLOSURES

Names of related parties and description of relationship (A) Relationship

i) Subsidiary Companies:

Bhushan Steel (Orrisa) Ltd. Bhushan Steel (Australia) PTY Ltd.

Bhushan Steel Madhya Bharat Ltd. - Bowen Energy PTY Ltd., Australia

Bhushan Steel (South) Ltd. - Kondor Holdings PTY Ltd, (deregistered on 24.09.2015)

- Bowen Coal PTY Ltd.

- Golden Country Resources (Australia) PTY Ltd. ( deregistered on 24.09.2015)

- Bowen Consolidated PTY Ltd.

ii) Joint Venture

Andal East Coal Company Pvt Ltd.

iii) Associate Company:

Angul Sukinda Railway Ltd. (Shares forfeited, no more associate) Bhushan Capital & Credit Services Pvt. Ltd.

Bhushan Energy Ltd. Jawahar Credit & Holdings Pvt. Ltd.

iv) Key Managerial Personnel

Shri Neeraj Singal Vice Chairman and Managing Director Shri M V Suryanrayana Independent Director

Shri Nittin Johari Whole time Director Smt. Monica Aggarwal Independent Director

Shri P.K. Aggarwal Whole time Director Shri Pankaj Sharma Independent Director

Shri Rahul Sengupta Whole time Director Dr.Rajesh Yaduvanshi (PNB) Independent Director

Shri Ajoy Kumar (SBI) Independent Director Shri Pradeep Patni Independent Director

Shri Ashwani Kumar Independent Director Smt. Promila Bhardwaj Independent Director

Shri B.B.Tandon Independent Director Shri Rakesh Singhal Independent Director

Shri Kapil Vaish Independent Director Shri Sahil Goyal Independent Director

Shri Vipin Anand (L.I.C.) Independent Director Smt Sunita Sharma (L.I.C.) Independent Director

v) Relatives of Key Management Personnel

Shri B.B. Singal Non Executive Chairman & Father of Vice Chairman & Managing

Director

Smt. Ritu Singal Wife of Vice Chairman & Managing Director

vi) Enterprises over which Key Management Personnel are able to exercise significant influence Bhushan Aviation Ltd. Bhushan Infrastructre Pvt. Ltd.

vii) Enterprises over which relatives of Key Management Personnel are able to exercise significant influence

Bhushan Power & Steel Limited

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

1. Remuneration & Perks include payment to Shri Neeraj Singal Rs, 145.83 Lakhs (31st March 2016: Rs, 146.07 Lakhs), Shri P.K.Aggarwal Rs,99.62 Lakhs (31st March,2016: Rs,95.92 Lakhs), Shri Nittin Johari Rs,141.40 Lakhs (31st March 2016: Rs,138.78 Lakhs), Shri Rahul Sengupta Rs,99.40 Lakhs (31st March 2016: Rs, 95.70 Lakhs), and Smt. Ritu Singal Rs,101.46 Lakhs (31st March 2016: Rs, 95.31 Lakhs).

2. Directors sitting fees is paid to Shri B.B.Singal Rs, 6.25 Lakhs (31st March 2016: Rs, 8.82 Lakhs ), Shri Ajoy Kumar (SBI) Rs, 1.01 Lakhs (31st March 2016: Rs, 1.00 Lakhs), Shri Ashwani Kumar Rs, 2.22 Lakhs (31st March 2016: Rs, 1.80 Laks ), Shri B. B. Tondon Rs, 2.82 Lakhs (31st March 2016: Rs, 2.00 Laks), Shri Kapil Vaish Rs, 0.81 Lakhs (31st March 2016: Rs, 1.0 Lakhs), Shri Vipin Anand(LIC) Rs, 0.61 Lakhs (31st March 2016: Rs, 0.60 Lakhs), Shri M V Suryanarayana Rs,2.62 Lakhs (31st March 2016: Rs, 2.40 Lakhs), Smt. Monica Aggarwal Rs, 0.40 Lakhs (31st March 2016: Rs, Nil), Shri Pankaj Sharma Rs, 0.81 Lakhs (31st March 2016: Rs, 1.0 Lakh),i Dr. Rajesh Yaduvanshi (PNB) Rs, 0.61Lakhs (31st March 2016: Rs, 0.80 Lakhs), Shri Pradeep Patni Rs, 0.40 Lakhs (31st March 2016: Rs, 0.20 Lakhs), Smt. Promila Bhardwaj Rs, 0.20 Lakhs (31st March 2016: Rs, Nil), Shri Rakesh Singhal Rs, 1.21 Lakhs (31st March 2016: Rs, 1.0 Lakh) and Shri Sahil Goyal Rs, 1.21 Lakhs (31st March 2016: Rs, 0.80 Lakh).

3. Investment in Share Application Money include Andal East Coal Company Pvt. Ltd. Rs, Nil (31st March 2016: Rs, 3.25 Lakhs ).

4. Redemption of Preference Share Capital includes Bhushan Infrastructure Private Limited Rs, 2133.00 Lakhs (31st March 2016: Rs, 2088.00 Lakhs), Shri Neeraj Singal Rs, Nil (31st March 2016: Rs, 11022.03 Lakhs) and Shri Brij Bhushan Singal Rs, Nil (31st March 2016 Rs, 6654.00 Lakhs)

5. Purchase of Goods/Services is from Bhushan Energy Ltd. Rs, 60435.38 Lakhs (31st March 2016: Rs, 62172.38 Lakhs ), Bhushan Aviation Ltd. Rs, 1470.00 Lakhs (31st March 2016: Rs, 1512.00 Lakhs ) and Bhushan Power & Steel Limited Rs, Nil (31st March 2016: Rs, 341.00 Lakhs).

6. Sale of Goods/Services to Bhushan Energy Ltd. Rs, Nil (31st March 2016: Rs,7031.28 Lakhs) and Bhushan Power & Steel Limited Rs, 1.12 Lakhs (31st March 2016: Rs, 3918.62 Lakhs).

7. Provision for dimunition of investment / advance made in case of Andal East Coal company Private Limited of Rs, 669.25 Lakhs (31st March 2016: : Nil)

8 . Investment written off in case of Angul Sukinda Railway Ltd. Amounting of Rs, Nil (31st March 2016: Rs, 1000.00 Lakhs).

9. Payment made by Bhushan Steel Australia Pty Ltd. amounting of Rs, Nil (31st March 2016: Rs, 1321.97 Lakhs) on behalf of co.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March 2016: Nil, 1st April 2015: Nil). This assessment is undertaken in each financial year through examining the financial position of the related party and the market in which the related party operates.

30 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

JUDGEMENTS

In the process of applying the company''s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.

ESTIMATES AND ASSUMPTIONS

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial asset

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (DCF) model.

Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Defined benefit plans and other long term benefit plan (gratuity benefits and leave encashment)

The cost and present value of the defined benefit gratuity plan and leave encashment (other long term benefit plan) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation and other long term benefits are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

Further details about gratuity obligations and leave encashment are given in Note 32.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 38 and 39 for further disclosures.

The management assessed that cash and cash equivalents, other bank balances, trade receivables and trade payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

- Long-term fixed-rate and variable-rate receivables/Borrowings are evaluated by the company based on parameters such as interest Rates, specific country risk factors, individual credit worthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

- The fair values of the Company''s interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuer''s borrowing rate as at the end of the reporting period.

31 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial Risk Management Framework

The Company''s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A. Credit Risk

Credit risk is the risk or potential of loss that may occur due to failure of borrower/counterparty to meet the obligation on agreed terms and conditions of the financial contract. Credit risk arises from financial assets such as cash and cash equivalents, loans, trade receivables, derivative financial instruments and financial guarantees. The company have a credit risk management policy in place to limit credit losses due to non-performance of financial counterparties and customers. We monitor our exposure to credit risk on an ongoing basis at various levels. We only deal with financial counterparties that have a sufficiently high credit rating.

Trade receivables:

The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade receivable credit risk exposure is limited. The management of the company regularly evaluate the individual customer receivables. This evaluation takes into consideration a customer''s financial condition and credit history, as well as current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Further the company also mitigate the risk of trade receivables by taking letter of credit and bank guarantees from the banks. The company regularly track the outstanding trade receivables and proper action is taken by the company for collection of overdue trade receivables.

Cash and cash equivalents, derivatives and financial guarantees

All of our cash equivalents and short-term available-for-sale investments are carried at fair value. Cash and cash equivalents are deposited with financial institutions that management believes are of high credit quality and accordingly, minimal credit risk exists. The company mitigates the credit risk of its derivative and financial instruments by dealing with nationalized banks and reputed private banks with high credit rating.

B. Liquidity Risk

Liquidity risk refers to the probability of loss arising from a situation where there will not be enough cash and/or cash equivalents to meet the needs of depositors and borrowers, sale of illiquid assets will yield less than their fair value and illiquid assets will not be sold at the desired time due to lack of buyers. The primary objective of liquidity management is to provide for sufficient cash and cash equivalents at all times and any place in the world to enable us to meet our payment obligations. Currently the company is facing liquidity crises due to huge interest cost.

C. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at 31st March 2017 and 31st March 2016.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at 31st March 2017.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets.

The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March 2017 and 31st March 2016: including the effect of hedge accounting

Interest rate risk

The company is financed by both the fixed and floating interest rate debt in order to obtain more efficient leverage. Fixed rate debt results in fair value interest rate risk. Floating rate debt results in cash flow interest rate risk. The company has open to interest rate risk with changes in LIBOR and lending base rate of the banks. The company has taken both interest rate risk debts for managing its liquidity and day to day requirement of the funds.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency). The exposure of entity to foreign currency risk is very limited on account of limited transactions in foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EURO, GBP and JPY exchange rates, with all other variables held constant. The impact on the Company''s profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The impact on the Company''s pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges and net investment hedges. The Company''s exposure to foreign currency changes for all other currencies is not material.

Commodity price risk

Commodity price risk is the threat that a change in the price of a production input will adversely impact a producer who uses that input. Factors that can affect commodity prices include political and regulatory changes, seasonal variations, weather, technology and market conditions.

Our company is basically engaged in primary and secondary steel market and the company''s turnover depends on the market risk of price volatility of the steel products. The prices of the steel are determined by the market factors. The revenue/price of the steel products of the company are basically impacted by the cost of raw material inputs, production cost, demand & supply of the steel products and international and regional markets conditions. Any positive and negative changes in any of the above factors can increase and reduce the revenue of the company generating from the steel products

Further all the raw material inputs like coking coal, iron ore etc. are subject to fluctuations in prices because majority of the raw materials are procured from the third party in the open markets.

The company sell its steel products at the current market prices and the prices can be up and down depends on the market scenario and demand and supply of the steel products. The prices of the raw material also depend on the market forces. Mostly the sale prices of the steel and cost of raw material moves in the same direction.

The below table represents the sensitivity to 5% movement in the prices of iron ore and coking coal. The sensitivity analysis includes 5% change in input prices for raw material consumed during the years when all other variable factors remain constant. In the below table negative number shows decrease in cost and positive number shows increase in cost.

32 CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2017 and 31st March 2016.

33 In compliance of amended clause 32 of the Listing Agreement with the Stock Exchanges, the required information is given as under:

34 COMMITMENTS AND CONTINGENCIES A. Leases

Operating lease- As a less or

The Company has entered into lease agreements, for renting:

- Roof area at Khopoli plant for Cellphone rooftop tower. Rent received wrt same amounts to '' 4.14 Lakhs for the year ended 31st March 2017 ( 31st March 2016: Rs, 3.81 Lakhs)

- Others (including factory premises let for ATM, convinience store) amounts to Rs, 10.61 Lakhs for the year ended 31st March 2017 (31st March 2016: Rs, 7.90 Lakhs)

35FIRST TIME ADOPTION OF IND AS

With effect from April 1, 2016, the Company is required to prepare its financial statements under the Indian Accounting Standards (''Ind AS") prescribed under section 133 of the Companies Act, 2013 read together with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.

These financial statements, for the year ended 31st March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March 2016:, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016:, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1st April 2015, the Company''s date of transition to Ind AS. This note explains exemptions availed by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

Exemptions applied:

Ind AS 101 allows first-time adopters certain mandatory and voluntary exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1. Mandatory exemptions;

a) Estimates

The estimates at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- FVTOCI - Quoted and unquoted equity shares.

- Impairment of financial assets based on expected credit loss model.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1st April 2016, the date of transition to Ind AS and as of 31st March 2017.

b) Derecognition of financial assets:

The company has applied the de-recognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c) Classification and measurement of financial assets:

1. Financial Instruments: (Loan to employees, Security deposits received and security deposits paid) : Financial assets like loan to employees, security deposits received and security deposits paid, has been classified and measured at amortized cost on the basis of the facts and circumstances that exist at the date of transition to Ind ASs. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind As by applying amortized cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

ii. Financial Instruments: (Equity shares (other than investment in subsidiary, associates and JVs): The Company has designated unquoted and quoted equity instruments held at 1st April 2015 as fair value through OCI investments

d) Impairment of financial assets: (Trade receivables and other financial assets)

At the date of transition to Ind ASs, the Company has determined that assessing whether there has been a significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, hence the Company has recognized a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognized (unless that financial instrument is low credit risk at a reporting date).

2. Optional exemptions;

a) Deemed cost-Previous GAAP carrying amount: (PPE and Intangible Assets)

The Company has elected to measure items of property, plant and equipment and intangible assets on its fair value as carrying value at the transition date except for certain class of assets which are measured at carrying value as deemed cost.

b) Arrangements containing a lease:-

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS

17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

c) Investment in subsidiaries and Joint Associates:

The Company has elected this exemption and opted to continue with the carrying value of investment in subsidiaries and associates, as recognized in its Indian GAAP financials, as deemed cost at the date of transition.

d) Designate of previously recognized financial instrument:

The Company has elected this exemption and opted to:

- Designate an investment in equity shares as FVOCI, as per Ind AS 109, based on facts and circumstances exist on transition date.

Footnotes to the reconciliation of equity and profit and loss: 1. Effect of change in operating assets and liabilities due to Ind AS 101

In accordance with Ind AS 101 "First Time Adoption of Indian Accounting Standards", the Company has elected to treat fair value as deemed cost for items of its property, plant and equipment and investments held in a subsidiary as at April 01, 2015 except certain items which are valued as carrying value as deemed cost. The Company has made a provision as per the expected credit model (ECL) for debtors and investment in a subsidiary and certain other items.

2. Reclassification of financial liabilities (preference share capital)

Under the previous GAAP, the preference share capital was classified as equity. However, as per Indian AS 32, on the basis of the terms and conditions of the preference shares, they qualify as debt. The impact of the same has been considered in equity as per Ind AS equity reconciliation.

3. Sales tax deferral

The Company has fair valued the grant received from government under the Sales tax deferral scheme and the same has been measured as the difference between proceeds received and the fair value of the loan based on the prevailing market interest rates.

4. Others

Other adjustments primarily comprise of:

a. Amortization of security deposits

b. De-capitalization of indirect expenses from capital work in progress.

5. Deferred tax

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

Deferred tax liability has not been provided on fair valuation of land as it is impracticable to determine the amount of income tax that would be payable when the temporary difference would be reversed.

6. Excise duty:

Under previous GAAP, revenue from sale of goods was presented net of excise duty whereas under IND AS the revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the Statement of Profit and Loss as part of expenses.

7. Defined benefit liabilities

Under IND AS, Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability, are recognized in other comprehensive income instead of statement of profit & loss in previous GAAP.

36 The Company, as per road map of the Ministry of Corporate Affairs, adopted Indian Accounting Standards (Ind AS) w.e.f. 1st April, 2016. In compliance of Ind AS, the preference share capital has been classified from share holders capital to borrowings. As a result of the same and due to high finance cost, the net worth as on 31.03.2017 has become negative as per these financial statements.

The company was under the process of discussing various resolution options including S4A / deep restructuring schemes of RBI with Joint Lenders Forum (JLF) of lender banks / institutions since June, 2016. In JLF meeting held in April 2017, lenders agreed to discuss restructuring option under S4A scheme of RBI. However, now as per circular dated 13.06.2017 issued by RBI, 12 companies including Bhushan Steel Ltd were identified by RBI for reference to National Company Law Tribunal (NCLT) for working out the resolutions plan for the company. The company has earned EBITDA about Rs,3,000 crores in Financial Year FY 16-17 and a long term resolution plan needs to be made.

Based on the above, management is quite confident to reach at some workable resolution to resolve financial position with the lenders within the prescribed time limit and to continue its business as a going concern. Accordingly, these financial statements have been prepared on that basis.

37 As per Companies (Share Capital and Debentures) Rules 2014, where in terms of Clause 18(7)(c ) of the rules, it is required by the company to create a fund before 30th April of each financial year, which shall not be less than 15% of the debentures maturing during the respective financial year ending on 31st March, by way of one or more methods i.e. through deposits with scheduled banks / investments in specified securities or bonds as indicated in the Clause 18(7) (c). However, the company could not create required fund due to losses incurred and financial constraints to the company.

38 The Supreme Court of India, vide its order dated 24/09/2014, cancelled number of coal blocks allocated to various entities which includes one coal block allocated to the company, which was under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act 2015, which inter-alia deal with the payment of compensation to the effected parties in regard to investment in coal blocks.

No effect has been taken on the value of investment made by the company in the de-allocated coal blocks amounting to Rs,562.90 crores (including Expenditure incurred of Rs, 135.46 crores and Advances given Rs, 427.44 crores) . In the opinion of the management, the company will receive back the payments/ expenditure paid/ made, including borrowing cost and other incidental expenditure, relating to de-allocated coal blocks. The Company has filed its claim for compensation with Govt. of India, Ministry of Coal. Subsiquently, the Company has filed a petition for recovery of the amount before the HonRs,ble Delhi High Court in which notice has been issued to Union of India and others.

39 The Nine Judges Bench of Hon''ble Supreme Court, vide its judgment dated 11.11.2016, has upheld the constitutional validity of levy of Entry Tax by the States and has laid down principles/tests on levy of Entry Tax in various States. The respective regular benches of the Court would hear the matters as per laid down principles. Pending decision by the regular benches of the Court on levy of entry tax in the States, the disputed entry tax demand has been treated as contingent liabilities.

40 Due to the loss incurred, the Company applied to the Central Government for the approval of managerial remuneration. The approval from Central Government has been received but clarification regarding Leave Encashment, PF and taxable Car perquisite has been sought by the Company. Hence, the payment of Leave Encashment, PF and taxable Car perquisite are subject to approval of Central Government.

41 Figures for the previous years have been reclassified to conform to current year''s classifications.

Mar 31, 2016

The Company made investment of Rs.1000.00 Lacs in Equity Shares of Angul Sukinda Railway Limited for the construction of Rail line between Talcher Road in Angul District to Bhaguapal in Jajpur along with other parties. As the project did not made any headway, the Company refused to pay the call money of Rs.1540.00 Lacs plus interest. Angul Sukinda Railway Limited issued final call notice for payment of unpaid call money failing which the shares were liable to be forfeited. The Company disputed the call money which in its opinion was premature, illegal and arbitrary and advised Angul Sukinda Railway Limited to withdraw said notice. Provision for diminution in the value of Investment was made in last year for Rs.1000.00 Lacs. As the shares have been forfeited, the investment has been written off during the year.

NOTE - 1

As per Accounting Standard (AS)-18, the disclosure of transaction with related parties as defined in the Accounting Standard are given below :

(I) List of related parties where control exists and related parties with whom transactions have taken place and relationships: a) Subsidiary companies

Bhushan Steel (Orissa) Ltd.

Bhushan Steel Madhya Bharat Ltd.

Bhushan Steel (South) Ltd.

Bhushan Steel (Australia) PTY Ltd.

-Bowen Energy PTY Ltd., Australia -Kondor Holdings PTY Ltd. (deregistered on 24.09.2015) -Bowen Coal PTY Ltd.

-Bowen Consolidated PTY Ltd.

-Golden Country Resources (Australia) PTY Ltd. (deregistered on 24.09.2015)

b) Joint Venture

Andal East Coal Company Pvt. Ltd.

c) Associates

Angul Sukinda Railway Ltd. (Shares forfeited, no more associate) Bhushan Energy Ltd.

Bhushan Capital & Credit Services Pvt. Ltd.

Jawahar Credit & Holdings Pvt. Ltd.

d) Key Management Personnel

Shri Neeraj Singal (Vice Chairman & Managing Director)

Shri Nittin Johari (Whole time Director)

Shri P.K. Aggarwal (Whole time Director)

Shri Rahul Sengupta (Whole time Director)

e) Relatives of Key Management Personnel

Shri B.B. Singal (Non-Executive Chairman & Father of Vice Chairman & Managing Director)

Smt. Ritu Singal (Wife of Vice Chairman & Managing Director)

f) Enterprises over which Key Management Personnel are able to exercise significant influence

Bhushan Aviation Ltd.

Bhushan Infrastructure Pvt. Ltd.

g) Enterprise over which relatives of Key Management Personnel are able to exercise significant influence

Bhushan Power & Steel Limited

4. Preference Share Capital received from Shri Brij Bhushan Singal Rs.Nil (Pre. Year Rs.1329.00 Lacs), Shri Neeraj Singal Rs.Nil (Pre. Year Rs.5542.02 Lacs) and Bhushan Infrastructure Pvt. Limited Rs.Nil (Pre. Year Rs.2133.00 Lacs).

5. Redemption of Preference Share Capital includes Shri Neeraj Singal Rs.11022.03 Lacs (Pre. Year Rs.Nil), Shri Brij Bhushan Singal Rs.6654.00 Lacs (Pre. Year Rs.Nil) and Bhushan Infrastructure Private Limited Rs.2088.00 Lacs (Pre. Year Rs.Nil).

6. Purchase of Goods/Services from Bhushan Energy Ltd. Rs.62172.38 Lacs (Pre. Year Rs.36115.80 Lacs ), Bhushan Aviation Ltd. Rs.1512.00 Lacs (Pre.Year Rs.1512.00 Lacs ) and Bhushan Power & Steel Limited Rs.341.00 Lacs (Pre. Year Rs.Nil).

7. Sale of Goods/Services to Bhushan Energy Ltd. Rs.7031.28 Lacs (Pre. Year Rs.17400.09 Lacs) and Bhushan Power & Steel Limited Rs.3918.62 Lacs (Pre. Year Rs.Nil).

8. Security Deposit paid to Bhushan Energy Limited of Rs.Nil (Pre. Year Rs.9000.00 Lacs).

9. Provision for diminution of investment made in case of Angul Sukinda Railway Limited amounting of Rs.Nil (Prev. Year Rs.1000.00 Lacs).

10. Investment written off in case of Angul Sukinda Railway Ltd. amounting of Rs.1000.00 Lacs (Pre. Year Rs.Nil).

11. Payment made by Bhushan Steel Australia Pty Ltd. amounting of Rs.1321.97 Lacs (Pre. Year Rs.Nil) on behalf of company.

NOTE - 2

The Company has an Indian Joint Venture with Andal East Coal Company Pvt. Ltd. having sharing of 33.33 %. Its proportionate share in the Assets, Liabilities, Income and Expenditure of the Joint Venture as per unaudited financial statement is as under :-

The Company hold 90.97% (Previous Year 90.97%) share in Bhushan Steel (Australia) Pty Ltd. Bhushan Steel (Australia) Pty Ltd. hold 100.00 % (Previous Year 100.00%) share in Bowen Energy Ltd. Bhushan Steel (Australia) Pty Ltd. has invested the amount in Bowen Energy Ltd. out of the proceeds received from its Holding Company (i.e. Bhushan Steel Limited) which are being utilized by Bowen Energy Ltd. in exploration of mines.

Audited financial statement of Bhushan Steel Australia Pty Ltd. and Bowen Energy Ltd. are not available after June''13.

In Notes to Accounts on the Consolidated Financial Statements of subsidiary M/s Bowen Energy Ltd.(Australia) in the Audited Financial Statement for the year ended June''13, following notes have been given involving material items:

"The Consolidated entity has recorded a loss of $ 3,245,854 for the year ended 30 June 2013 (2012: $1,687,619) has cash outflows from operations of $1,389,919 (2012: $399,999), current liabilities of the Consolidated entity exceeded current assets by $8,350,357 (2012:$ 6,197,029) and the Consolidated entity is also in a net liability position of $4,423,581 (2012:$ 1,165,594).

To ensure the ongoing viability of the consolidated entity the directors have negotiated a $10m loan facility with Bhushan Steel (Australia) Pty Limited, a wholly owned subsidiary of Bhushan Steel Limited, the parent entity of Bowen Energy Limited. At the reporting date the consolidated entity had drawn down $6.9m of this loan. The Directors believe that taking into consideration the minimum required expenditure to maintain title to existing exploration licenses, current levels of administrative expenditure, the available loan facility, assuming funding is made available under the terms and conditions of the loan, will be sufficient to ensure that the Consolidated entity is able to settle its liabilities as they fall due in the ordinary course of business. Bhushan Steel (Australia) Pty Limited has also agreed not to recall payment of the loan payable by the consolidated entity until such time the consolidated entity has surplus cash. On this basis the financial report has been prepared on the going concern basis".

The loss, including impairment loss, shown in Balance Sheet of the Bowen Energy Ltd., Australia as mentioned in the above note, consist mainly expenditure incurred by the Company on exploration activity of its various mines which are still not operational, however, in accordance with generally accepted accounting principles in India, the same has been treated as Capital work in progress.

In the opinion of the company''s management, the note given by the auditors of Bowen Energy Ltd., Australia is not applicable as loss, other than tenements written off, has been capitalized to CWIP in the consolidated Balance Sheet of Bhushan Steel Ltd as per generally accepted accounting principles in India.

Fixed Assets include one cold rolling mill established in 1992 damaged in fire accident in the year 1998-99. The amount received from Insurance Company for reinstatement /repair of the mill was included in other liabilities till previous year. However, during the current year company has adjusted the amount received in the books of account.

NOTE - 3

The Company in respect of Khopoli unit has received a sum of Rs.538.43 Lacs (Previous Year Rs.270.10 Lacs) as industrial promotion subsidy under Package Scheme of Incentive-2007 announced by Government of Maharashtra for manufacturing of Large Dia Pipe, being capital receipt, has been credited to Capital Reserve.

NOTE - 4

The Company has elected to account for exchange differences arising on reporting of long-term foreign currency monetary item in accordance with Companies (Accounting Standards) Amendment Rules 2009 pertaining to Accounting Standard (AS)-11 notified by Government of India on 31st March, 2009 (As amended on 29th December, 2011) which allows foreign exchange differences on long-term monetary items arising on or after 1st April, 2011 to be capitalized to the extent they relate to acquisition of depreciable assets and in other cases to amortize over the balance period of the respective monetary items.

Though there was no profit for distribution of dividend, the Company during the financial year 2014-15 redeemed 4,00,000 25% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each and 3,36,751 4% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each issued to banks and as per terms of issue of Preference Shares and paid dividend of Rs.5.13 Lacs out of general reserve as approved by Board of Directors.

NOTE -5

Pursuant to Companies Act 2013 (the Act), becoming effective from 1 April 2014, the company has re-worked depreciation with reference to the estimated useful lives of fixed assets prescribed under Schedule II to the Act or useful life of fixed assets as per technical evaluation done during FY 2014-15.

Subsequent to Notification GSR627 (E)dated 29th August, 2014 amending para 7 (b) under schedule II of the Company''s Act 2013, Company has charged off transitional provision amounting to Rs.250.34 Lacs during F.Y. 2014-15, net of depreciation capitalized, to Statement of Profit and Loss.

NOTE -6

The Supreme Court of India, vide its order dated 24/09/2014, cancelled number of coal blocks allocated to various entities which includes one coal block allocated to the company and one of its associate company which were under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act 2015, which inter-alia deal with the payment of compensation to the effected parties in regard to investment in coal blocks.

No effect has been taken on the value of investment made by the company in the de-allocated coal blocks amounting to Rs.56289.96 Lacs (including Expenditure incurred of Rs.13546.46 Lacs and Advances given Rs.42743.50 Lacs) and Rs.669.25 Lacs in Equity Shares/ advance for share capital in the associate company whose coal blocks have been de-allocated. In the opinion of the management the Company/ associate company will receive back the payments/ expenditure paid/ made, including borrowing cost and other incidental expenditure, relating to de-allocated coal blocks. The Company has filed its claim for compensation during the year with Govt. of India Ministry of coal and accordingly the investment made by the company of Rs.56289.96 Lacs has been reclassified to Non-current assets in the current year from Capital Work in Progress and Capital Advances.

NOTE - 7

(a) In accordance with Reserve Bank of India (RBI) Circular No2014-15/354 Dt. 15th December 2014 allowing flexible structuring of existing project loans (with option of periodic refinancing) to operational infrastructure/core industries projects the consortium of banks with SBI as the lead bank has allowed flexible structuring of long term loans under "5/25" scheme by aligning their debt repayment obligations with cash flow generated during their economic life.

The steering committee and joint lenders forum have approved long term viability and have structured the debt in accordance with extant guidelines of RBI. Rupee term loans are structured into loan with twenty five years repayment tenor, subject to review after every five years. The Company has received the approval for flexible structuring and accordingly current maturity of outstanding loan of Rs.1850880.00 Lacs has been classified on that basis.

(b) The Company was unable to redeem some of the secured debentures and pay interest thereon along with other irregularities in loans given by various Banks & Institutions. The restructuring proceedings of such defaults are going on with all the lenders. In this respect, the high level Lenders'' meeting was held on 16th March, 2016 at SBI Corporate Centre, Mumbai. For debt restructuring post deliberations the JLF decided to carry out a TEV from a reputed Independent Agency to ascertain the overall viability & sustainable debt to enable the JLM to take decision on the future course after TEV/Valuation. In view of the pending restructuring plan with Lenders, the Management is of the opinion that technically the provisions of section 164(2)(b) of the Companies Act, 2013 are not attracted to any Director. In view of the above, the Company is not required to file Form No. DIR9 with the Registrar of Companies.

NOTE - 8

Due to the loss incurred, the Company applied to the Central Government for the approval of managerial remuneration. The approval from Central Government has been received during the year but further clarification regarding Leave Encashment, PF and taxable car perquisite has been sought. Hence, the payment of Leave Encashment, PF and taxable Car perquisite are subject to approval of Central Govt.

NOTE - 49

The board has given in principal approval for the demerger of the plants of the company situated at Sahibabad and Khopoli to its subsidiaries on slump sale basis through business transfer agreement based on the valuation to be carried out by approved valuer. The said transaction is subject to approval of board and shareholders.

NOTE - 9

During the current financial year the company has entered into sale and lease back transaction of Coke Oven Batteries and Oxygen equipment of 150 TPD Plant, however, the same has been cancelled due to regulatory constraints. The net amount of Rs.22840.50 Lacs received under this transaction has been disclosed under other current liabilities as other payables.

NOTE - 10

For computing deferred tax liability, the amount of business and depreciation loss as allowable in income tax returns has been considered for recognizing deferred tax assets. On the basis of future projections taken on record by the management after considering improved performance of the company in last quarter, the board is confident that there is a virtual certainty that sufficient taxable income will be available in the future against which, the deferred tax assets can be realized in the normal course of business of the company.

NOTE - 11

The Company during the financial year 2014-2015 had sold assigned and transferred to the purchaser in perpetuity, all rights, titles and interest in the equipments of Oxygen Plant, free and clear of encumbrances, on an itemized asset sale basis, for a consideration of Rs.100012.50 Lacs including sales tax.

The said equipments are taken by the Company under operating lease for a period of ten years from 26th February 2015.

Lease Payment made on operating lease has been recognized as an expense in the statement of Profit & Loss on straight line basis with reference to lease term and other consideration. The terms of Operating Lease are as follows:

Notes:

(a) Upon expiry of Lease Term, the Lessee shall have the option to renew the lease term of the Equipments for subsequent periods of 5 years each (Renewal Term). The lease rent for Renewal Term shall be as agreed between the Lessor and Lessee but shall not be higher than the last Rent paid under this Lease Agreement. The Lessee shall intimate any revision in the rent for the Renewal Term to its lenders.

(b) Rent is based on, among others, a benchmark rate (based on the cost of financing the purchase of the Equipments by the Lessor) that has been agreed between the Parties prior to the date of execution of this Lease Agreement. In the event the benchmark rate changes or the parties agree to change the benchmark rate/apply some other benchmark, the Rent payable may increase or decrease accordingly.

Due to said equipments not being fully operational, the Company has paid during the year Rs.12880.00 Lacs (Previous Year Rs.213.10 Lacs) as lease rent.

NOTE - 12

DERIVATIVES

I The company has not entered into any derivatives instruments to hedge the foreign currency contracts. There is no derivative contract outstanding as on the date of the Balance Sheet.

NOTE - 13

Previous Year Figures have been rearranged/regrouped wherever considered necessary.

Mar 31, 2015

Note 1:

(1) 12.00% Redeemable Non-Convertible 250 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 2500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 250 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 2500 Lacs). Debentures are redeemable at par in one bullet payment at the end of 10th year from the date of allotment i.e 31.08.2012 and are Secured by first charge on paripassu basis on the fixed assets of the Company offering minimum Fixed Asset Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Sh. B.B.Singal & Sh.Neeraj Singal.

(2) 12.50% Redeemable Non-Convertible 2000 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 20000 Lacs (Previous Year 12.50% Redeemable Non-Convertible 2000 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 20000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 30.08.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company. However we have considered repayment terms for the same as per the bilateral structuring proposal with the lenders.

(3) 12.00% Redeemable Non-Convertible 100 Debentures of Rs. 100 Lacs each outstanding on 31st March 2015 Rs. 10000 Lacs (Previous Year 12% Redeemable Non Convertible Debentures of Rs. 100 Lacs each outstanding on 31st March 2014 Rs. 10000 Lacs) (subordinate debt),are redeemable at par in one bullet payment at the end of 10 years and 1 Month from the date of allotment i.e 31.03.2008 and are secured by subsequent and subservient charge by way of hypothecation on the present and future assets of the Company so as to maintain minimum asset coverage of 1.25 times, throughout the currency of the Debentures. Debentures are further secured by pledge of Equity Shares of Bhushan Steel Limited, having market value not less than 1.5 times of loans, held by promoters/promoter entities, and Personal Guarantee of Shri B.B. Singal and Shri Neeraj Singal.

(4) 11.50% Redeemable Non-Convertible 3500 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 35000 Lacs (Previous Year 11.50% Redeemable Non-Convertible 3500 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 35000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 04.01.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company. However we have considered repayment terms for the same as per the bilateral structuring proposal with the lenders.

(5) 12.00% Redeemable Non-Convertible 1050 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 10500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 1050 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 10500 Lacs) are redeemable at the end of 4th,5th and 6th year in installments 35%,35% & 30% respectively commencing from the end of 4th year from the date of allotment i.e 28.03.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

(6) 11.75% Redeemable Non-Convertible 3000 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 30000 Lacs (Previous Year 11.75% Redeemable Non-Convertible 3000 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 30000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 02.02.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company. However we have considered repayment terms for the same as per the bilateral structuring proposal with the lenders.

(7) 12.00% Redeemable Non-Convertible 4750 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 47500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 4750 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 47500 Lacs). Debentures are redeemable at the end of 4th,5th and 6th year in installments 35%,35% & 30% respectively commencing from the end of 4th year from the date of allotment i.e 31.08.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Assets Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Sh. B.B.Singal and Sh. Neeraj Singal.

(8) 10.50% Redeemable Non-Convertible 3000 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 30000 Lacs (Previous Year 10.50% Redeemable Non-Convertible 3000 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 30000 Lacs). Debentures are redeemable at par in three equal anuual installments commencing from the end of 6th year from the date of allotment i.e 13.08.2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company. However we have considered repayment terms for the same as per the bilateral structuring proposal with the lenders.

(9) 10.90% Redeemable Non-Convertible 1750 Debentures of Rs. 10 Lacs each outstanding on 31st March 2015 Rs. 17500 Lacs (Previous Year 10.90% Redeemable Non-Convertible 1750 Debentures of Rs. 10 Lacs each outstanding on 31st March 2014 Rs. 17500 Lacs) are redeemable at par in four equal annual installments commencing from the end of 5th year from the deemed date of allotment i.e 26.08.2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

(10) Secured by first mortgage charge on all of the company's immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created on favour of ECA Lenders), ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement,except Rs. 25036 Lacs (Previous Year Rs. 37933 Lacs) secured by subsequent & subservient charge on movable assets. Out of the above, the ECA Loans of Rs. 239255 Lacs (Previous Year Rs. 290449 Lacs) financed by ECA Lenders are secured by first exclusive charge on the assets financed & personal guarantee of two promoter directors. Out of these,Loans of Rs. 835469 Lacs (Previous Year Rs. 874937 Lacs) are guaranteed by the Personal Guarantee of two promoter directors and Loans of Rs. NIL (Previous Year Rs. 19182 Lacs) are guaranteed by the Personal Guarantee of One Promoter Director.

(11) Secured by first mortgage charge on all of the company's immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement,except Rs. 15700 Lacs (Previous Year Rs. 4700 Lacs) secured by subsequent & subservient charge on movable assets. Loans of Rs. 1692104 Lacs (Previous Year Rs. 1305416 Lacs) are guaranteed by the Personal Guarantee of two promoter directors and Loans of Rs. 410576 Lacs (Previous Year Rs. 483398 Lacs) are guaranteed by the Personal Guarantee of One Promoter Director. Apart from this, Loans of Rs. 660106 Lacs(Previous year Rs.175662 Lacs) are also secured by pledge of 26% shares of Bhushan Steel Limited.

(12) Out of these Loans of Rs. 2250 Lacs (Previous year Rs. 3750 Lacs) are Secured by first mortgage charge on all of the company's immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement and guaranteed by the Personal Guarantee of One Promoter Director. Apart from this Loans of Rs. 1345 Lacs (Previous year Rs. 1793 Lacs) are secured by subsequent & subservient charge on movable assets.

(13) Out of these Loans of Rs. 263 Lacs (Previous Year Rs. 322 Lacs) are guaranteed by the Personal Guarantee of Two Promoter Directors.

Detail of Repayment and Rate of Interest

Rate of Interest: All Rupee Term Loans are linked to the Benchmark Rate/Base Rate of the respective lenders on floating basis. All Foreign Currency Loans are linked to the LIBOR Rates of different lenders on floating basis.

(14) Maturity Profile of Long Term Borrowing (Other than NCDs) are set out as below: (Refer Note 48)

(Rs. in Lacs)

1 year 2-3 Years Beyond 3 years

Term Loans 49414 54876 2840421

(15) Domestic Loans sanctioned by SBI Syndication for Phase I & II of Orissa project was sanctioned at rate of interest of SBI Base Rate 2.00% (presently 11.85% p.a.) and repayable in 24 quarterly installments commencing from 24 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s. Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(16) Foreign Currency Loans for Phase I & II of Orissa project was sanctioned at interest rate of EURIBOR 0.45% (Presently 0.854% p.a.) repayable in 20 Half Yearly Installments commencing from six Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.The repayment terms have been considered as per the bilateral structuring proposal with the respective lenders.

(17) Domestic Loans sanctioned by SBI Syndication for Phase III of Orissa project was sanctioned at rate of interest of SBI Base Rate 2.50% (presently 12.35% p.a.) and repayable in 17 quarterly installments commencing from 18 months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(18) Foreign Currency Loans for Phase III of Orissa project was sanctioned at interest rate of EURIBOR 1.50% (Presently 1.689% p.a.) repayable in 20 half yearly installments commencing from 6 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s. The repayment terms have been considered as per the bilateral structuring proposal with the respective lenders.

(19) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of USD LIBOR 3.95% (Presently 4.295% p.a.) repayable in 6 annual installments commencing from 36 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s. Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(20) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of EURIBOR 1.75% (Presently 2.142%p.a.) repayable in 18 half yearly installments commencing from three Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.The repayment terms have been considered as per the bilateral structuring proposal with the respective lenders.

(21) Domestic Loans sanctioned for Coke Oven 2 of Orissa project was sanctioned at rate of interest of Base Rate 2.50% (Presently 12.00% p.a.) and repayable in 24 quarterly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(22) Foreign Currency Loans for Coke Oven 2 of Orissa Project was sanctioned at interest rate of USD LIBOR 4.50% (Presently 4.9235% p.a.) repayable in 12 half yearly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(23) Domestic Loans sanctioned for CRCA & CRNGO Project of Orissa project was sanctioned at rate of interest of Base Rate 2.25% (Presently 12.25% p.a.) and repayable in 24 quarterly installments commencing from 12 Months after completion ofthe project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(24) Domestic Loans sanctioned for Addition,Modification & Replacement Project at Orissa Site was sanctioned at rate of interest of Base Rate TP 1.25% (Presently 12.00% p.a.) and repayable in 32 quarterly installments commencing from 3 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.

(25) Domestic Loans sanctioned for shoring up of Net Working Capital/ Normal Capital Expenditure was sanctioned at rate of interest of Base Rate 2.50% (Presently 12.50% p.a.) and repayable in 40 quarterly installments commencing from 30th June 2016, as per terms stipulated in respective loan/facility agreement/s.

Note 2.

(Rs. in Lacs)

Current Previous Year Year

1. Contingent Liabilities in respect of :

a) Sales Tax 36455.50 20626.34

b) ExciseDuty/Custom/ServiceTax 34455.01 33524.86

c) Entry Tax 29924.16 26506.22

d) Income Tax 17274.63 6115.58

e) Bills Discounted 10806.35 14413.38

f) Others 4577.53 4956.54

g) Undeclared Dividend including 1089.71 - Dividend Distribution Tax on Cumulative Redeemable Preference Shares

2. Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 83322.86 Lacs (Previous Year ' 188494.42 Lacs) (Net of Advances).

3. Other Commitment

a) Outstanding guarantees issued by the banks Rs. 371863.79 Lacs (Previous Year Rs. 374156.06 Lacs) counter guaranteed by the company including letter of credits issued.

b) The Company from time to time provides need based support to its subsidiary Bowen Energy PTY Limited (Australia) towards capital and other requirements.

c) Commitment for partly paid equity shares of Angul Sukinda Railway Limited, an associate company Rs. 7400.00 Lacs (Previous Year Rs. 7400.00 Lacs).

NOTE - 3

There is no present obligation arising from past events requiring provision in accordance with the guiding principle as enunciated in Accounting Standard (AS)- 29, as it is not probable that an outflow of resources embodying economic benefit will be required.

NOTE - 4

a) In terms of letter of offer dated January 9, 2013 the company had during the financial year 2012-13 allotted 14157220 Equity shares of Rs. 2/- each at a premium of Rs. 333 per share which were partly paid-up to the extent of Rs. 167.50 (comprising Rs. 1/- per Equity Share towards share capital and Rs. 166.50 per Equity Share as share premium) on Right basis in the ratio of 1 share for every 15 shares held by the shareholders.

The Company has during the financial year 2013-14 received Rs. 167.50 per Equity Share (comprising Rs. 1/- per Equity Share towards share capital and Rs. 166.50 per Equity Share as share premium) on account of first and final call money on 14156436 Equity Shares and 784 Equity Shares have been forfeited for non payment of First & Final Call Money. The new allotted shares rank pari passu in all respect with the existing Equity shares of the Company. The proceeds from Right Issue have been utilized for repayment of indebtedness and General Corporate purpose as per the object of the Right Issue.

b) 10% 133400 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- per share on the expiry of ten years from the date of allotment.

c) 10% 723400 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the financial year 2013-14 on private placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- per share on the expiry of ten years from the date of allotment.

d) 10% 1276700 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the financial year 2012-13 on private placement basis against the share application money received during the financial year 2011-12 amounting to Rs. 38301.00 Lacs. The Preference Shares are redeemable at a premium of Rs. 2900/- per share on or before the expiry of ten years from the date of allotment i.e. 1st March, 2013.

e) 10% 333400 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the financial year 2012-13 on private placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- per share on or before the expiry of ten years from the date of allotment i.e. 25th March, 2013.

f) 10% 366667 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the financial year 2011-12 on private placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- in two equal installments at the end of 3rd and 4th year i.e. on 4th March, 2015 and 4th March, 2016 respectively.

g) 10% 460000 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 2500/- per share during the financial year 2011-12 on private/preferential placement basis. The Preference Shares will be redeemed at any time within a period often years from the date of allotment i.e. 29th March, 2012.

h) 10% 1800000 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 2500/- per share during the financial year 2011-12 on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs. 2400/- before the expiry of ten years from the date of allotment i.e. 30th March, 2012. During the financial Year 2013-14, 1200000 Preference Shares have been redeemed at a premium of Rs. 2400/- per share.

i) 10% Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the financial year 2010-11 on private placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- before the expiry of ten years from the date of allotment i.e. 30th March, 2011 for 1500300 shares. During the financial Year 2013-14, 560067 Preference Shares have been redeemed at a premium of Rs. 2900/- per share.

j) 10% Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 3000/- per share during the financial year 2009- 10 on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- before the expiry of ten years from the date of allotment i.e. 29th January, 2010 and 31st March, 2010 for 1334800 and 2333500 shares respectively. During the financial Year 2013-14, 133267 Preference Shares have been redeemed at a premium of Rs. 2900/- per share.

k) 25% Non Convertible Cumulative Redeemable Preference Shares of Rs. 100/- each are allotted at a price of Rs. 2500/- per share during the financial year 2010-11 on private placement basis. The preference shares are redeemable at a price that shall give aggregate yield to the holders of 1% accrued on day to day basis on the face value together with the premium of the preference shares, within 48 Months from the date of allotment i.e 28th March, 2011 in such trenches as stipulated in the subscription agreement. During the Year 400000 Preference Shares have been redeemed at a premium of Rs. 2400/- per share.

l) 4% Non Convertible Cumulative Redeemable Preference Shares of Rs. 100/- each are allotted at a price of Rs. 2500/- per share during the financial year 2010-11 on private placement basis. The Preference Shares shall be redeemed at an amount in INR, such that the subscribers get yield of 14% per annum on the amount outstanding within 36 Months from the date of allotment, i.e 29th March, 2011 in such trenches as stipulated in the subscription agreement. The same has been further extended for three months i.e upto 29th June, 2014. During the year 336751 (Previous Year 17249) Preference Shares have been redeemed at a premium of Rs. 3508.425 (Previous Year Rs. 3374.34) per share.

m) 2% 2085000 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 600/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs. 500/- per share on the expiry often years from the date of allotment.

n) 2% 1400000 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 600/- per share during the financial year 2013-14 on private placement basis. The Preference Shares are redeemable at a premium of Rs. 500/- per share on the expiry of ten years from the date of allotment.

o) 1% 1167340 Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs. 300/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs. 200/- per share on the expiry often years from the date of allotment.

NOTE - 5

The Company has made investment of Rs. 1000.00 Lacs in Equity Shares of Angul Sukinda Railway Limited for the construction of Rail line between Talcher Road in Angul District to Bhaguapal in Jajpur along with other parties. As the project has not made any headway the Company refused to pay the call money of Rs. 1540.00 Lacs plus interest. Angul Sukinda Railway Limited has issued final call notice for payment of unpaid call money failing which the shares are liable to be forfeited. The Company has disputed the call money which in its opinion is premature, illegal and arbitrary and has advised to withdraw said notice. Provision for diminution in the value of Investment has been made for Rs. 1000.00 Lacs (Previous Year Rs. Nil) during the year.

NOTE - 6

The Company has during the year commissioned Basic Oxygen Furnaces, Blast Furnace-II, Sinter Plant-II & III, Coke Oven-II, DRI Klins-IX &X, Lime Plants, Slab Caster-II & III and other ancillary equipments.

NOTE - 7

As per Accounting Standard (AS)-18, the disclosure of transaction with related parties as defined in the Accounting Standard are given below:

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

a) Subsidiary companies

Bhushan Steel (Orissa) Ltd.

Bhushan Steel Madhya Bharat Ltd.

Bhushan Steel (South) Ltd.

Bhushan Steel Bengal Ltd. (upto 29.09.2013)

Parakeet Finvest Pvt. Ltd. (upto 29.09.2013)

Marsh Capital Services Pvt. Ltd. (upto 29.09.2013)

Paragon Securities Pvt. Ltd. (upto 29.09.2013)

Perpetual Securities Pvt. Ltd. (upto 29.09.2013)

Jawahar Credit & Holdings Pvt. Ltd. (upto 29.09.2013)

Bhushan Capital & Credit Services Pvt. Ltd. (upto 29.09.2013)

Bhushan Steel (Australia) PTY Ltd.

- Bowen Energy PTY Ltd., Australia

- Golden Country Resources (Australia) PTY Ltd.

- Kondor Holdings PTY Ltd.

- Bowen Coal PTY Ltd.

- Bowen Consolidated PTY Ltd.

b) Joint Venture

Andal East Coal Company Pvt. Ltd.

c) Associates

Angul Sukinda Railway Ltd.

Bhushan Energy Ltd.

Bhushan Capital & Credit Services Pvt. Ltd. (from 30.09.2013)

Jawahar Credit & Holdings Pvt. Ltd. (from 30.09.2013)

d) Key Management Personnel

Shri Neeraj Singal (Vice Chairman & Managing Director)

Shri Nittin Johari (Whole time Director)

Shri P.K. Aggarwal (Whole time Director)

Shri Rahul Sengupta (Whole time Director)

e) Relatives of Key Management Personnel

Shri B.B. Singal (Non-Executive Chairman & Father of Vice Chairman & Managing Director)

Smt. Ritu Singal (Wife of Vice Chairman & Managing Director) Brij Bhushan Singal (HUF)

f) Enterprises over which Key Management Personnel are able to exercise significant influence

Bhushan Aviation Ltd.

Bhushan Infrastructure Pvt. Ltd.

g) Enterprises over which relatives of Key Management Personnel are able to exercise significant influence

Arshiya International Ltd.

NOTE - 8

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

1. Remuneration & Perks include payment to Shri Neeraj Singal Rs. 144.66 Lacs (Pre. Year Rs. 143.25 Lacs), Shri P.K.Aggarwal Rs. 75.56 Lacs (Pre.Year Rs.59.07 Lacs), Shri Nittin Johari Rs.114.40 Lacs (Pre. Year Rs. 97.16 Lacs), Shri Rahul Sengupta Rs. 75.40 Lacs (Pre. Year Rs. 59.15 Lacs), and Smt. Ritu Singal Rs. 68.60 Lacs (Pre. Year Rs. 42.96 Lacs).

2. Directors sitting fees is paid to Shri B.B.Singal Rs. 8.60 Lacs (Pre. Year Rs. 7.25 Lacs ) .

3. Investment in Share Capital/ Share Application Money include Bhushan Steel (Australia) PTY Ltd. Rs. 223.36 Lacs (Pre. Year Rs. 2088.10 Lacs), Andal East Coal Company Pvt. Ltd. Rs. 25.00 Lacs (Pre. Year Rs. 46.50 Lacs ) and Bhushan Energy Ltd. Rs. Nil (Pre. Year Rs. 24500.00 Lacs).

4. Redemption of Preference Shares under Investment include Bhushan Steel Bengal Ltd. Rs. Nil (Pre. Year Rs. 2150.00 Lacs) and Bhushan Steel (South) Ltd. Rs. Nil (Pre. Year Rs. 3000.00 Lacs).

5. Equity Share Capital received from Shri Neeraj Singal Rs. Nil (Pre. Year. Rs. 11921.47 Lacs), Shri Brij Bhushan Singal Rs. Nil (Pre. Year Rs. 6818.16 Lacs), Smt. Ritu Singal Rs. Nil (Pre. Year Rs. 734.94 Lacs), Brij Bhushan Singal (HUF) Rs. Nil (Pre. Year Rs. 1.11 Lacs) and Bhushan Infrastructure Pvt. Limited Rs. Nil (Pre Year Rs. 3086.87 Lacs) & Preference Share Capital received from Shri Brij Bhushan Singal Rs. 1329.00Lacs (Pre. Year Rs. 13200.00 Lacs), Shri Neeraj Singal Rs. 5542.02 Lacs (Pre. Year Rs. 16902.00 Lacs) and Bhushan Infrastructure Pvt. Limited Rs. 2133.00 Lacs (Pre. Year Rs. Nil).

6. Redemption of Preference Share Capital includes Bhushan Energy Limited Rs. Nil (Pre. Year Rs. 30000.00 Lacs), Shri Neeraj Singal Rs. Nil (pre. Year Rs. 11900.01 Lacs), Shri Brij Bhushan Singal Rs. Nil (Pre. Year Rs. 6800.01 Lacs) and Bhushan Infrastructure Private Limited Rs. Nil (Pre. Year Rs. 2100.00 Lacs).

7. Purchase of Goods/Services is from Arshiya International Ltd. Rs. Nil (Pre. Year Rs. 3528.12 Lacs), Bhushan Energy Ltd. Rs. 36115.80 Lacs (Pre. Year Rs. 35149.73 Lacs ) and Bhushan Aviation Ltd. Rs. 1512.00 Lacs (Pre.Year Rs. 1512.00 Lacs ).

8. Sale of Goods/Services to Bhushan Energy Ltd. Rs. 17400.09 Lacs (Pre. Year Rs. 2650.28 Lacs).

9. Security Deposit paid to Bhushan Energy Limited of Rs. 9000.00 Lacs (Pre. Year Rs. Nil).

10. Provision for diminution of investment made in case of Angul Sukinda Railway Limited amounting of of Rs. 1000.00 Lacs (Pre. Year Rs. Nil).

11. Rent Received is from Bhushan Aviation Ltd. Rs. Nil (Pre. Year Rs. 0.70 Lacs).

NOTE - 9

The Company hold 90.97% (Previous Year 90.90%) share in Bhushan Steel (Australia) Pty Ltd. Bhushan Steel (Australia) Pty Ltd. hold 100.00 % (Previous Year 100.00%) share in Bowen Energy Ltd. Bhushan Steel (Australia) Pty Ltd. has invested the amount in Bowen Energy Ltd. out of the proceeds received from its Holding Company (i.e. Bhushan Steel Limited) which are being utilized by Bowen Energy Ltd. in exploration of mines.

In Notes to Accounts on the Consolidated Financial Statements of subsidiary M/s Bowen Energy Ltd. (Australia) in the Audited Financial Statement for the year ended June'13, following notes have been given involving material items:

"The Consolidated entity has recorded a loss of $ 3,245,854 for the year ended 30 June 2013 (2012: $1,687,619) has cash outflows from operations of $1,389,919 (2012: $399,999), current liabilities of the Consolidated entity exceeded current assets by $8,350,357 (2012:$ 6,197,029) and the Consolidated entity is also in a net liability position of $4,423,581 (2012:$ 1,165,594).

To ensure the ongoing viability of the consolidated entity the directors have negotiated a $10m loan facility with Bhushan Steel (Australia) Pty Limited a wholly owned subsidiary of Bhushan Steel Limited, the parent entity of Bowen Energy Limited. At the reporting date the consolidated entity had drawn down $6.9m of this loan. The Directors believe that taking into consideration the minimum required expenditure to maintain title to existing exploration licences, current levels of administrative expenditure, the available loan facility, assuming funding is made available under the terms and conditions of the loan, will be sufficient to ensure that the Consolidated entity is able to settle its liabilities as they fall due in the ordinary course of business. Bhushan Steel (Australia) Pty Limited has also agreed not to recall payment of the loan payable by the consolidated entity until such time the consolidated entity has surplus cash. On this basis the financial report has been prepared on the going concern basis".

The loss, including impairment loss, shown in Balance Sheet of the Bowen Energy Ltd., Australia as mentioned in the above note, consist mainly expenditure incurred by the Company on exploration activity of its various mines which are still not operational, however, in accordance with generally accepted accounting principles in India, the same has been treated as Capital work in progress.

In the opinion of the company's management, the note given by the auditors of Bowen Energy Ltd., Australia is not applicable as loss, other than tenements written off, has been capitalized to CWIP in the consolidated Balance Sheet of Bhushan Steel Ltd as per generally accepted accounting principles in India.

The Company in respect of Khopoli unit has opted "Deferral Scheme" of sales tax and paid VAT on the basis of Net Present Value (NPV).

Tax difference between the amount payable and amount paid under NPV, amounting to Rs. 270.10 Lacs (Previous Year Rs. 4390.27 Lacs), being capital receipt, has been credited to Capital reserve.

NOTE - 10

The Company has elected to account for exchange differences arising on reporting of long-term foreign currency monetary item in accordance with Companies (Accounting Standards) Amendment Rules 2009 pertaining to Accounting Standard (AS)-ll notified by Government of India on 31st March, 2009 (As amended on 29th December, 2011) which allows foreign exchange differences on long-term monetary items arising on or after 1st April, 2011 to be capitalized to the extent they relate to acquisition of depreciable assets and in other cases to amortise over the balance period of the respective monetary items.

NOTE - 11

Though there is no profit for distribution of dividend, the Company has during the year redeemed 4,00,000 25% Non Convertible Cumulative Redeemable Preference Shares of Rs. 100/- each and 3,36,751 4% Non Convertible Cumulative Redeemable Preference Shares of Rs. 100/- each issued to banks and as per terms of issue of Preference Shares and paid dividend of Rs. 5.13 Lacs as approved by Board of Directors.

NOTE - 12

Pursuant to Companies Act 2013 (the Act), becoming effective from 1 April, 2014, the company has re-worked depreciation with reference to the estimated useful lives of fixed assets prescribed under Schedule II to the Act or Useful life of fixed assets as per technical evaluation. As a result the charge for depreciation is lower by Rs. 35627.18 Lacs for the year ended 31 March, 2015.

Subsequent to Notification GSR627 (E) dated 29th August, 2014 amending para 7 (b) under schedule II of the Company's Act 2013, Company has charged off transitional provision amounting to Rs. 250.34 Lacs, net of depreciation capitalized, to Statement of Profit and Loss.

NOTE - 13

The Supreme Court of India, vide its order dated 24/09/2014, cancelled number of coal blocks allocated to various entities which includes one coal block allocated to the company and one of its associated company which were under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act, 2015, which inter-alia deal with the payment of compensation to the effected parties in regard to investment in coal blocks.

No effect has been taken on the value of investment made by the company in the de-allocated coal blocks amounting to Rs. 56289.96 Lacs (including Expenditure incurred of Rs. 13546.46 Lacs and Advances given Rs. 42743.50 Lacs) and Rs. 666 Lacs in Equity Shares/ advance for share capital in the associated company whose coal blocks have been de-allocated. In the opinion of the management the Company/ associated company will receive back the payments/ expenditure paid/ made, including borrowing cost and other incidental expenditure, relating to de-allocated coal blocks.

NOTE - 14

In accordance with Reserve Bank of India (RBI) Circular No. 2014-15/354 Dt. 15th December, 2014 allowing flexible structuring of existing project loans (with option of periodic refinancing) to operational infrastructure/core industries projects the consortium of banks with SBI as the lead bank has allowed flexible structuring of long term loans under "5/25" scheme by aligning their debt repayment obligations with cash flow generated during their economic life.

The steering committee and joint lenders forum have approved long term viability and have structured the debt in accordance with extant guidelines of RBI. Rupee term loans are structured into loans with twenty five year tenor. Lenders are in the process of obtaining sanctions for the implementation of the long term viability plan from their respective authorities. The proposed long term viability plan has also been approved by the independent evaluation committee (IEC) constituted under RBI Guideline, held on 20/03/2015. In view of the approval of the scheme, but pending sanctions by the lender banks, the company has classified long term borrowings maturity period in accordance with the scheme considered and approved by Joint Lenders Forum (JLF).

NOTE - 15

M/s Mehrotra & Mehrotra, Chartered Accountants, New Delhi were appointed as joint statutory auditors by the shareholders through postal ballot and e-voting as per notice dated 14.02.2015 on the recommendation of Audit Committee and the Board of Directors. They have audited the Standalone and Consolidated Financial Statements comprising Balance Sheet as at 31st March, 2015 and Statement of Profit and Loss and Cash Flow Statement for the year then ended and summary of significant accounting policies and other explanatory information.

NOTE - 16

Due to the loss incurred during the year, the Company has applied to the Central Government for the approval of managerial remuneration paid during the year. The approval from Central Government is still awaited. Hence, remuneration paid is subject to approval of Central Government.

NOTE - 17

The Company has sold assigned and transferred to the purchaser in perpetuity, all rights, titles and interest in the equipments of Oxygen Plant, free and clear of encumbrances, on an itemized asset sale basis, for a consideration of Rs. 100012.50 Lacs including sales tax.

The said equipments are taken by the Company under operating lease for a period of ten years from 26th February, 2015.

NOTE - 18

Remittance in foreign currency on account of Dividend

The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The total amount remittable in this respect is given herein below :

NOTE - 19

Previous Year Figures have been rearranged/regrouped wherever considered necessary.

Mar 31, 2014

(Rs in Lacs) Current Previous Year Year

NOTE - 1

1. Contingent Liabilities in respect of :

a) Sales Tax 20626.34 3629.42

b) excise Duty/Custom/Service Tax 33524.86 26114.04

c) entry tax 26506.22 17285.93

d) income tax 6115.58 40.90

e) Bills Discounted 14413.38 18225.71

f) Others 4956.54 2917.44

2. Capital Commitment

estimated amount of contracts remaining to be executed on capital account and not provided for Rs.188494.42 Lacs (Previous Year Rs.308977.52 Lacs) (Net of Advances).

3. Other Commitment

a) Outstanding guarantees issued by the banks Rs.374156.06 Lacs (Previous Year Rs.69200.64 Lacs) counter guaranteed by the company including letter of credits issued.

b) The Company from time to time provides need based support to its subsidiary Bowen energy PTY Limited (Australia) towards capital and other requirements.

c) Commitment for partly paid equity shares of Angul Sukinda Railway Limited, an associate company Rs.7400.00 Lacs (Previous Year Rs.7400.00 Lacs).

NOTE Â 2

There is no present obligation arising from past events requiring provision in accordance with the guiding principle as enunciated in Accounting Standard (AS)- 29, as it is not probable that an outflow of resources embodying economic benefit will be required.

NOTE Â 3

a) In terms of letter of offer dated January 9, 2013 the company had during the financial year 2012-13 allotted 14157220 equity shares of Rs.2/- each at a premium of Rs.333/- per share which were partly paid-up to the extent of Rs.167.50 (comprising Rs.1/- per equity Share towards share capital and Rs.166.50 per equity Share as share premium) on Right basis in the ratio of 1 share for every 15 shares held by the shareholders.

The Company has during the year received Rs.167.50 per equity Share (comprising Rs.1/- per equity Share towards share capital and Rs.166.50 per equity Share as share premium) on account of frst and final call money on 14156436 equity Shares and 784 equity Shares have been forfeited for non payment of First & Final Call Money. The new allotted shares rank pari passu in all respect with the existing equity shares of the Company. The proceeds from Right Issue have been utilized for repayment of indebtedness and General Corporate purpose as per the object of the Right Issue.

b) 10% 723400 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- per share on the expiry of ten years from the date of allotment.

c) 10% 1276700 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2012-13 on private placement basis against the share application money received during the financial year 2011-12 amounting to Rs.38301.00 Lacs. The Preference Shares are redeemable at a premium of Rs.2900/- per share on or before the expiry of ten years from the date of allotment i.e. 1st March, 2013.

d) 10% 333400 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2012-13 on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- per share on or before the expiry of ten years from the date of allotment i.e. 25th March, 2013.

e) 10% 366667 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2011-12 on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- in two equal instalments at the end of 3rd and 4th year i.e. on 4th March, 2015 and 4th March, 2016 respectively.

f) 10% 460000 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2011-12 on private/preferential placement basis. The Preference Shares will be redeemed at any time within a period of ten years from the date of allotment i.e. 29th March, 2012.

g) 10% 1800000 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2011-12 on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2400/- before the expiry of ten years from the date of allotment i.e. 30th March, 2012. During the Year 1200000 Preference Shares have been redeemed at a premium of Rs.2400/- per share.

h) 10% Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2010- 11 on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- before the expiry of ten years from the date of allotment i.e. 30th March, 2011 for 1500300 shares. During the Year 560067 Preference Shares have been redeemed at a premium of Rs.2900/- per share.

i) 10% Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2009- 10 on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- before the expiry of ten years from the date of allotment i.e. 29th January, 2010 and 31st March, 2010 for 1334800 and 2333500 shares respectively. During the Year 133267 Preference Shares have been redeemed at a premium of Rs.2900/- per share.

j) 25% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2010-11 on private placement basis. The preference shares are redeemable at a price that shall give aggregate yield to the holders of 1% accrued on day to day basis on the face value together with the premium of the preference shares, within 48 Months from the date of allotment i.e 28th March, 2011 in such trenches as stipulated in the subscription agreement .

k) 4% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2010-11 on private placement basis. The Preference Shares shall be redeemed at an amount in INR, such that the subscribers get yield of 14% per annum on the amount outstanding within 36 Months from the date of allotment, i.e 29th March, 2011 in such trenches as stipulated in the subscription agreement. The same has been further extended for three months i.e upto 29th June, 2014. During the year 17249 (Previous Year 45000) Preference Shares have been redeemed at a premium of Rs.3374.34 (Previous Year Rs.2986.825) per share.

l) 2% 1400000 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.600/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs.500/- per share on the expiry of ten years from the date of allotment.

NOTE Â 4

The Company has made investment of Rs.1000.00 Lacs in equity Shares of Angul Sukinda Railway Limited for the construction of Rail line between Talcher Road in Angul District to Bhaguapal in Jajpur along with other parties. As the project has not made any headway the Company refused to pay the call money of Rs.1540.00 Lacs plus interest. Angul Sukinda Railway Limited has issued final call notice for payment of unpaid call money failing which the shares are liable to be forfeited. The Company has disputed the call money which in its opinion is premature, illegal and arbitrary and has advised to withdraw said notice. Hence, no effect of the same has been

taken into books of account. The company however proposes to go for arbitration and hopes to recover back the amount, hence no impairment in the value of shares has been considered.

NOTE Â 5

a) The Company has during the year commissioned Narrow Cold Rolling Mill, Mill two of API Plant, 32 MW Power Plant and other ancillary equipments and discarded the Wire Rod Mill.

b) On November 13, 2013 an explosion occurred in the slag pit during trial run of the 2nd Blast Furnace in the plant situated at Meramandali, Orissa. Due to which the operation of the Blast Furnace remain suspended resulting in loss of production and consequential loss to the Company. The Blast Furnace, Sinter Plant, Oxygen Plant, Caster, Basic Oxygen Furnace and other ancillary equipments has been put to use on 5th May, 2014.

NOTE Â 6

As per Accounting Standard (AS)-18, the disclosure of transaction with related parties as Defined in the Accounting Standard are given below :

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

a) Subsidiary companies

Bhushan Steel (Orissa) Ltd. Bhushan Steel Madhya Bharat Ltd. Bhushan Steel (South) Ltd. Bhushan Steel Bengal Ltd. (upto 29.09.2013) Parakeet Finvest Pvt. Ltd. (upto 29.09.2013) Marsh Capital Services Pvt. Ltd. (upto 29.09.2013) Paragon Securities Pvt. Ltd. (upto 29.09.2013) Perpetual Securities Pvt. Ltd. (upto 29.09.2013) Jawahar Credit & Holdings Pvt. Ltd. (upto 29.09.2013) Bhushan Capital & Credit Services Pvt. Ltd. (upto 29.09.2013) Bhushan Steel (Australia) PTY Ltd. - Bowen energy PTY Ltd., Australia

- Kondor Holdings PTY Ltd.

- Bowen Coal PTY Ltd.

- Bowen Consolidated PTY Ltd.

- Golden Country Resources (Australia) PTY Ltd.

b) Joint Venture

Andal east Coal Company Pvt. Ltd.

c) Associates

Angul Sukinda Railway Ltd.

Bhushan energy Ltd.

Bhushan Capital & Credit Services Pvt. Ltd. (from 30.09.2013)

Jawahar Credit & Holdings Pvt. Ltd. (from 30.09.2013)

d) Key Management Personnel

Shri Neeraj Singal (Vice Chairman & Managing Director) Shri Nittin Johari (Whole time Director) Shri P.K. Aggarwal (Whole time Director) Shri Rahul Sengupta (Whole time Director)

e) Relatives of Key Management Personnel

Shri B.B. Singal (Chairman & Father of Vice Chairman & Managing Director)

Smt. Ritu Singal (Wife of Vice Chairman & Managing Director)

Brij Bhushan Singal (HuF)

f) Enterprises over which Key Management Personnel and their relatives are able to exercise significant infuence

Arshiya International Ltd.

Bhushan Aviation Ltd.

Bhushan Infrastructure Pvt. Ltd.

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

1. Remuneration & Perks include payment to Shri Neeraj Singal Rs.143.25 Lacs (Pre. Year Rs.140.56 Lacs), Shri P.K.Aggarwal Rs.59.07 Lacs (Pre.Year Rs.50.49 Lacs), Shri Nittin Johari Rs.97.16 Lacs (Pre. Year Rs.86.40 Lacs), Shri Rahul Sengupta Rs.59.15 Lacs (Pre. Year Rs.50.40 Lacs) and Smt. Ritu Singal Rs.42.96 Lacs (Pre. Year Rs.36.07 Lacs).

2. Directors sitting fees is paid to Shri B.B.Singal Rs.7.25 Lacs (Pre. Year Rs.7.65 Lacs).

3. Investment in Share Capital/ Share Application Money include Bhushan Steel (Australia) PTY Ltd. Rs.2088.10 Lacs (Pre. Year Rs.9496.86 Lacs), Andal east Coal Company Pvt. Ltd. Rs.46.50 Lacs (Pre. Year Rs.37.00 Lacs ) and Bhushan energy Ltd. Rs.24500.00 Lacs (Pre. Year Rs.Nil).

4. Redemption of Preference Shares under Investment include Bhushan Steel Bengal Ltd. Rs.2150.00 Lacs (Pre. Year Rs.Nil) and Bhushan Steel (South) Ltd. Rs.3000.00 Lacs (Pre. Year Rs.Nil).

5. equity Share Capital received from Shri Neeraj Singal Rs.11921.47 Lacs (Pre. Year. Rs.11921.47 Lacs), Shri Brij Bhushan Singal Rs.6818.16 Lacs (Pre. Year Rs.6818.16 Lacs), Smt. Ritu Singal Rs.734.94 Lacs (Pre. Year Rs.734.94 Lacs), Brij Bhushan Singal (HuF) Rs.1.11 Lacs (Pre. Year Rs.1.11 Lacs) and Bhushan Infrastructure Pvt. Limited Rs.3086.87 Lacs (Pre Year Rs.3086.87 Lacs) & Preference Share Capital received from Shri Brij Bhushan Singal Rs.13200.00 Lacs (Pre. Year Rs.Nil) and Shri Neeraj Singal Rs.16902.00 Lacs (Pre. Year Rs.Nil).

6. Redemption of Preference Share Capital includes Bhushan energy Limited Rs.30000.00 Lacs (Pre. Year Rs.Nil), Shri Neeraj Singal Rs.11900.01 Lacs (pre. Year Rs.Nil), Shri Brij Bhushan Singal Rs.6800.01 Lacs (Pre. Year Rs.Nil) and Bhushan Infrastructure Private Limited Rs.2100.00 Lacs (Pre. Year Rs.Nil).

7. Purchase of Goods/Services is from Arshiya International Ltd. Rs.3528.12 Lacs (Pre. Year Rs.8535.75 Lacs), Bhushan energy Ltd. Rs.35149.73 Lacs (Pre. Year Rs.62308.32 Lacs ) and Bhushan Aviation Ltd. Rs.1512.00 Lacs (Pre.Year Rs.1425.85 Lacs ).

8. Sale of Goods/Services to Bhushan energy Ltd. Rs.2650.28 Lacs (Pre. Year Rs.9859.45 Lacs).

9. Rent Received is from Bhushan Aviation Ltd. Rs.0.70 Lacs (Pre. Year Rs.1.20 Lacs).

NOTE Â 6

The Company has an Indian Joint Venture with Andal east Coal Company Pvt. Ltd. having sharing of 33.33%. Its proportionate share in the Assets, Liabilities, Income and expenditure of the Joint Venture as per unaudited financial statement is as under :-

NOTE Â 7

The Company hold 90.90% (Previous Year 89.95%) share in Bhushan Steel (Australia) Pty Ltd. Bhushan Steel (Australia) Pty Ltd. hold 100.00 % (Previous Year 100.00%) share in Bowen energy Ltd. Bhushan Steel (Australia) Pty Ltd. has invested the amount in Bowen energy Ltd. out of the proceeds received from its Holding Company (i.e. Bhushan Steel Limited) which are being utilized by Bowen energy Ltd. in exploration of mines.

In Notes to Accounts on the Consolidated Financial Statements of subsidiary M/s Bowen Energy Ltd.(Australia), following notes have been given involving material items:

"The Consolidated entity has recorded a loss of $ 3,245,854 for the year ended 30 June 2013 (2012: $1,687,619) has cash outflows from operations of $1,389,919 (2012: $399,999), current liabilities of the Consolidated entity exceeded current assets by $8,350,357 (2012:$ 6,197,029) and the Consolidated entity is also in a net liability position of $4,423,581 (2012:$ 1,165,594).

To ensure the ongoing viability of the consolidated entity the directors have negotiated a $10m loan facility with Bhushan Steel (Australia) Pty Limited a wholly owned subsidiary of Bhushan Steel Limited, the parent entity of Bowen energy Limited. At the reporting date the consolidated entity had drawn down $6.9m of this loan. The Directors believe that taking into consideration the minimum required expenditure to maintain title to existing exploration licences, current levels of administrative expenditure, the available loan facility, assuming funding is made available under the terms and conditions of the loan, will be suffcient to ensure that the Consolidated entity is able to settle its liabilities as they fall due in the ordinary course of business. Bhushan Steel (Australia) Pty Limited has also agreed not to recall payment of the loan payable by the consolidated entity until such time the consolidated entity has surplus cash. On this basis the financial report has been prepared on the going concern basis".

The loss, including impairment loss, shown in Balance Sheet of the Bowen energy Ltd., Australia as mentioned in the above note, consist mainly expenditure incurred by the Company on exploration activity of its various mines which are still not operational, however, in accordance with generally accepted accounting principles in India, the same has been treated as Capital work in progress.

In the opinion of the company''s management, the note given by the auditors of Bowen energy Ltd., Australia is not applicable as loss, other than tenements written off, has been capitalized to CWIP in the consolidated Balance Sheet of Bhushan Steel Ltd as per generally accepted accounting principles in India.

NOTE Â 8

The Company is engaged in the steel business, which in the context of Accounting Standard (AS)-17 is considered the only primary business segment.

Gross Revenue excluding export incentives of the company as per Geographical Segment is as follows:

NOTE Â 9

The Company in respect of Khopoli unit has opted "Deferral Scheme" of sales tax and paid VAT on the basis of Net Present Value (NPV).

Tax difference between the amount payable and amount paid under NPV, amounting to Rs.4390.27 Lacs (Previous Year Rs.6036.54 Lacs), being capital receipt, has been credited to Capital reserve.

NOTE Â 10

The Company has elected to account for exchange differences arising on reporting of long-term foreign currency monetary item in accordance with Companies (Accounting Standards) Amendment Rules 2009 pertaining to Accounting Standard (AS)-11 notifed by Government of India on 31st March, 2009 (As amended on 29th December, 2011) which allows foreign exchange differences on long-term monetary items arising on or after 1st April, 2011 to be capitalized to the extent they relate to acquisition of depreciable assets and in other cases to amortise over the balance period of the respective monetary items.

As on 31st March, 2014, a debit of Rs.Nil (Pre. Year Rs.Nil) remains to be amortised in the "Foreign Currency Monetary Item Translation Difference Account".

NOTE Â 11

The company has not entered into any finance / operating lease during the year.

NOTE Â 12 DERIVATIVES

I The company has not entered into any derivatives instruments to hedge the foreign currency contracts. There is no derivative contract outstanding as on the date of the Balance Sheet.

II The year end foreign currency exposure that have not been hedged by a derivative instrument or otherwise are given below :-

NOTE Â 13

As per Accounting Standard (AS) -15 "employee benefits", the disclosure of employee benefits as Defined in the Accounting Standards are given below:-

A. Defined Contribution Plans:

Contribution to Defined contribution plan, recognized as expenses / pre-operative expenses is as under:

B. Defined benefit Plans:

a) Leave encashment/ Compensated Absence.

b) Contribution to Gratuity Funds - employee''s Gratuity Fund.

In accordance with Accounting Standard (AS) - 15 (Revised 2005), the actuarial valuation carried out in respect of the aforesaid Defined benefit plans is based on the following assumptions:

NOTE Â 14

Remittance in foreign currency on account of Dividend

The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident external Account (NRe A/c). The total amount remittable in this respect is given herein below.

Mar 31, 2013

(Rs. in Lacs)

Current Previous Year Year

NOTE - 1

1. Contingent Liabilities in respect of:

a) Sales Tax 3629.42 3405.26

b) Excise Duty/Custom/Service Tax 26114.04 25400.98

c) Entry Tax 17285.93 10858.85

d) Income Tax 40.90 804.21

e) Bills Discounted 18225.71 12508.43

f) Others 2917.44 1867.85

2. Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for: Rs.308977.52 Lacs (Previous Year Rs.591617.15 Lacs) (Net of Advances).

3. Other Commitment

a) Outstanding guarantees issued by the banks Rs.69200.64 Lacs (Previous Year Rs.21036.75 Lacs) counter guaranteed by the company including letter of credits issued.

b) The Company from time to time provides need based support to its subsidiary Bowen Energy Limited (Australia) towards capital and other requirements.

c) The Company has given undertaking to Bhushan Energy Limited, associate company, to provide the necessary fund required to acquire Equity Shares of Orissa Sponge Iron and Steel Limited on open offer upto the limit of Rs. Nil (Previous Year Rs.21960.00 Lacs), by subscribing to the share capital of the company.

d) Commitment for partly paid equity shares of Angul Sukinda Railway Limited, an associate company Rs.7400.00 Lacs (Previous Year Rs. Nil).

NOTE - 2

There is no present obligation arising from past events requiring provision in accordance with the guiding principle as enunciated in Accounting Standard (AS)- 29, as it is not probable that an outflow of resources embodying economic benefit will be required.

NOTE - 3

a) In terms of letter of offer dated January 9, 2013 the Company has during the year allotted 14157220 Equity shares of Rs.2/- each at a premium of Rs.333/- per share which are partly paid-up to the extent of Rs.167.50 (comprising Rs.1/- per Equity Share towards share capital and Rs.166.50/- per Equity Share as share premium) on Right basis in the ratio of 1 share for every 15 shares held by the shareholders. The new allotted shares rank pari passu in all respect with the existing Equity shares of the Company. The proceeds from Right issue have been utilized for repayment of indebtedness and General Corporate purpose and pending utilization, the balance have been temporarily used to reduce the exposure of working capital borrowing from banks, which will be redrawn as and when necessary to meet the obligation as per the object of the Right Issue.

b) 10% 1276700 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the year on private placement basis against the share application money received during the previous year amounting to Rs.38301.00 Lacs. The Preference Shares are redeemable at a premium of Rs.2900/- per share on or before the expiry of ten years from the date of allotment i.e. 1st March, 2013.

c) 10% 333400 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- per share on or before the expiry of ten years from the date of allotment i.e. 25th March, 2013.

d) 10% 366667 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2011-12 on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- in two equal instalments at the end of 3rd and 4th year i.e. on 4th March, 2015 and 4th March, 2016 respectively.

e) 10% 460000 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2011-12 on private/preferential placement basis. The Preference Shares will be redeemed at any time within a period of ten years from the date ofallotment i.e. 29th March, 2012.

f) 10% 1800000 Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2011-12 on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2400/- before the expiry often years from the date ofallotment i.e. 30th March, 2012.

g) 10% Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2010-11 on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- before the expiry of ten years from the date of allotment i.e. 30th March, 2011 for 1500300 shares.

h) 10% Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the financial year 2009-10 on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- before the expiry of ten years from the date of allotment i.e. 29th January, 2010 and 31st March, 2010 for 1334800 and 2333500 shares respectively.

i) 25% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2010-11 on private placement basis. The preference shares are redeemable at a price that shall give aggregate yield to the holders of 1% accrued on day to day basis on the face value together with the premium of the preference shares, within 48 Months from the date of allotment i.e 28th March, 2011 in such trenches as stipulated in the subscription agreement.

j) 4% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the financial year 2010-11 on private placement basis. The Preference Shares shall be redeemed at an amount in INR, such that the subscribers get yield of 11.7% per annum on the amount outstanding within 36 Months from the date of allotment, i.e 29th March, 2011 in such trenches as stipulated in the subscription agreement. During the year 45000 Preference Shares have been redeemed at a premium of Rs.2986.825/- per share.

NOTE - 4

The Company has made investment of Rs.1000.00 Lacs in Equity Shares of Angul Sukinda Railway Limited for the construction of Rail line between Talcher Road in Angul District to Bhaguapal in Jajpur along with other parties. As the project is not made any headway the Company refused to pay the call money of Rs.1540.00 Lacs plus interest. Angul Sukinda Railway Limited has issued final call notice for payment of unpaid call money failing which the shares are liable to be forfeited. The Company has disputed the call money which in its opinion is premature, illegal and arbitrary and has advised to withdraw said notice. Hence, no effect of the same has been taken into books of account.

NOTE - 5

The Company has during the year commissioned Cold Rolling & Galvanized Plane Mill and other ancillary equipments.

NOTE - 6

As per Accounting Standard (AS)-18, the disclosure of transaction with related parties as defined in the Accounting Standard are given below:

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

a) Subsidiary companies

Bhushan Steel (Orissa) Ltd.

Bhushan Steel Madhya Bharat Ltd.

Bhushan Steel (South) Ltd.

Bhushan Steel Bengal Ltd.

Parakeet Finvest Pvt. Ltd. (from 25th January, 2012)

Marsh Capital Services Pvt. Ltd. (from 25th January, 2012) Paragon Securities Pvt. Ltd. (from 25th January, 2012) Perpetual Securities Pvt. Ltd. (from 25th January, 2012) Jawahar Credit & Holdings Pvt. Ltd. (from 29th February, 2012)

Bhushan Capital & Credit Services Pvt. Ltd. (from 29th February, 2012)

Bhushan Steel Global FZE (Upto 7th May, 2011)

Bhushan Steel (Australia) PTY Ltd.

- Bowen Energy Ltd., Australia

- Kondor Holdings PTY Ltd.

- Bowen Coal PTY Ltd.

- Bowen Consolidated PTY Ltd.

- Capricorn Metals Ltd. (Deregistered w.e.f. 4th April, 2011)

- Capricorn Resources (Australia) Ltd. (Deregistered w.e.f. 4th April, 2011)

- Golden Country Resources (Australia) PTY Ltd.

b) Joint Venture

Andal East Coal Company Pvt. Ltd.

c) Associates

Bhushan Energy Ltd.

Angul Sukinda Railway Ltd.

d) Key Management Personnel

Shri Neeraj Singal (Vice Chairman & Managing Director)

Shri Nittin Johari (Whole time Director)

Shri P.K. Aggarwal (Whole time Director)

Shri Rahul Sengupta (Whole time Director)

e) Relatives of Key Management Personnel

Shri B.B. Singal (Chairman & Father of Vice Chairman & Managing Director)

Smt. Ritu Singal (Wife of Vice Chairman & Managing Director)

Smt. Pushpa Garg

Brij Bhushan Singal (HUF)

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

Arshiya International Ltd.

Bhushan Aviation Ltd.

Bhushan Infrastructure Pvt. Ltd.

NOTE - 7

The Company is engaged in the steel business, which in the context of Accounting Standard (AS)-17 is considered the only primary business segment.

NOTE - 8

Fixed Assets include one cold rolling mill established in 1992 damaged in fire accident in the year 1998-99. The amount received from Insurance Company for reinstatement / repair of the mill is included in other liabilities as the matter is still sub-judice. The amount received shall be adjusted on final disposal ofthe pending suit.

NOTE - 9

The Company in respect of Khopoli unit has opted "Deferral Scheme" of sales tax and paid VAT on the basis of Net Present Value (NPV).

Tax difference between the amount payable and amount paid under NPV, amounting to Rs.6036.54 Lacs (Previous Year Rs.6030.15 Lacs), being capital receipt, has been credited to Capital reserve.

NOTE - 10

The Company has elected to account for exchange differences arising on reporting of long-term foreign currency monetary item in accordance with Companies (Accounting Standards) Amendment Rules 2009 pertaining to Accounting Standard (AS)-ll notified by Government of India on 31st March, 2009 (As amended on 29th December, 2011) which allows foreign exchange differences on long-term monetary items arising on or after 1st April, 2011 to be capitalized to the extent they relate to acquisition of depreciable assets and in other cases to amortise over the balance period ofthe respective monetary items.

As on 31st March, 2013, a debit of Rs. Nil (Pre. Year Rs. Nil) remains to be amortised in the "Foreign Currency Monetary Item Translation Difference Account".

NOTE - 11

The company has not entered into any finance / operating lease during the year.

NOTE - 12 DERIVATIVES

I The company has not entered into any derivatives instruments to hedge the foreign currency contracts. There is no derivative contract outstanding as on the date ofthe Balance Sheet.

II The year end foreign currency exposure that have not been hedged by a derivative instrument or otherwise are given below

NOTE - 13

As per Accounting Standard (AS) -15 "Employee Benefits", the disclosure of employee benefits as defined in the Accounting Standards are given below:-

A. Defined Contribution Plans:

Contribution to defined contribution plan, recognized as expenses / pre-operative expenses is as under:

B. Defined Benefit Plans:

a) Leave Encashment / Compensated Absence.

b) Contribution to Gratuity Funds - Employee''s Gratuity Fund.

In accordance with Accounting Standard (AS) -15 (Revised 2005), the actuarial valuation carried out in respect ofthe aforesaid defined benefit plans is based on the following assumptions:

NOTE - 14

Remittance in foreign currency on account of Dividend

The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter-alia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The total amount remittable in this respect is given herein below :

NOTE - 15

Previous Year Figures have been rearranged / regrouped wherever considered necessary.

Mar 31, 2012

Current Previous Year Year NOTE 27

1. Contingent Liabilities in respect of:

a) Sales Tax 3405.26 0.75

b) Excise Duty/Custom/Service Tax 25400.98 17573.31

c) Entry Tax 10858.85 5654.41

d) Income Tax 804.21

e) Bills Discounted 12508.43 18647.66

f) Others 1867.85

2. Capital Commitment

Estimated amount of contracts remaining to be executed on capital account and not provided for : Rs.591617.15 Lacs (Previous Year Rs.572893.35 Lacs) (Net of Advances).

3. Other Commitment

a) Outstanding guarantees issued by the banks Rs.21036.75 Lacs (Previous Year Rs.78354.15 Lacs) counter guaranteed by the company including letter of credits issued.

b) The Company from time to time provides need based support to its subsidiary M/s Bowen Energy Ltd (Australia) towards capital and other requirements.

c) The Company has given undertaking to M/s Bhushan Energy Limited, associate company, to provide the necessary fund required to acquire Equity Shares of M/s Orissa Sponge Iron and Steel Limited on open offer upto the limit of Rs.21960 Lacs, by subscribing to the share capital of the company.

NOTE 28

There is no present obligation arising from past events requiring provision in accordance with the guiding principle as enunciated in Accounting Standard (AS) 29, as it is not probable that an outflow of resources embodying economic benefit will be required.

NOTE 29

a) 10% 366667 Redeemable Cumulative Preference Shares of Rs.100/ each are allotted at a price of Rs.3000/ per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/ in two equal instalments at the end of 3rd and 4th year i.e. on 04/03/2015 and 04/03/2016 respectively.

b) 10% 460000 Redeemable Cumulative Preference Shares of Rs.100/ each are allotted at a price of Rs.2500/ per share during the current year on private / preferential placement basis. The Preference Shares will be redeemed at any time within a period of ten years from the date of allotment i.e. 29th March, 2012.

c) 10% 1800000 Redeemable Cumulative Preference Shares of Rs.100/ each are allotted at a price of Rs.2500/ per share during the current year on private / preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2400/ before the expiry of ten years from the date of allotment i.e. 30th March, 2012.

d) 10% Redeemable Cumulative Preference Shares of Rs.100/ each are allotted at a price of Rs.3000/ per share during the financial year 201011 on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/ before the expiry of ten years from the date of allotment i.e. 30th March, 2011 for 15,00,300 shares.

e) 10% Redeemable Cumulative Preference Shares of Rs.100/ each are allotted at a price of Rs.3000/ per share during the financial year 200910 on private / preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2900/ before the expiry of ten years from the date of allotment i.e. 29th January, 2010 and 31st March, 2010 for 13,34,800 and 23,33,500 shares respectively.

f) 25% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/ each are allotted at a price of Rs.2500/ per share during the previous year on private placement basis. The preference shares are redeemable at a price that shall give aggregate yield to the holders of 1% accrued on day to day basis on the face value together with the premium of the preference shares, within 48 Months from the date of allotment i.e 28th March, 2011 in such trenches as stipulated in the subscription agreement.

g) 4% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/ each are allotted at a price of Rs.2500/ per share during the previous year on private placement basis. The Preference Shares shall be redeemed at an amount in INR , such that the subscribers get yield of 11.7% per annum on the amount outstanding within 36 Months from the date of allotment, i.e 29th March, 2011 in such trenches as stipulated in the subscription agreement.

NOTE 30

12767000 10% Non Convertible Preference Shares of Rs.100/ each at a Premium of Rs.2900 per share will be allotted in financial year 201213 against share application money pending allotment as on 31st March 2012 amounting to Rs.38301 Lacs.

NOTE 31

The Company has during the year commissioned coke oven plant and Large Dia Pipe plant and other ancillary equipments.

NOTE 33

As per Accounting Standard (AS)18, the disclosure of transaction with related parties as defined in the Accounting Standard are given below:

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

a) Subsidiary companies

Bhushan Steel (Orissa) Ltd. (Incorporated on 27th April, 2010) Bhushan Steel Madhya Bharat Ltd. (Incorporated on 27th April, 2010) Bhushan Steel (South) Ltd. (Incorporated on 27th April, 2010) Bhushan Steel Bengal Ltd. (Incorporated on 27th April, 2010) Parakeet Finvest Pvt Ltd. (from 25th January, 2012) Marsh Capital Services Pvt Ltd. (from 25th January, 2012) Paragon Securities Pvt Ltd. (from 25th January, 2012) Perpetual Securities Pvt Ltd. (from 25th January, 2012) Jawahar Credit & Holdings Pvt Ltd. (from 29th February, 2012) Bhushan Capital & Credit Services Pvt Ltd. (from 29th February, 2012) Bhushan Steel Global FZE (Upto 7th May, 2011) Bhushan Steel (Australia) PTY Ltd. Bowen Energy Ltd., Australia

Kondor Holdings PTY Ltd.

Bowen Coal PTY Ltd.

Bowen Consolidated PTY Ltd.

Capricorn Metals Ltd. (Deregistered w.e.f. 04th April, 2011)

Capricorn Resources (Australia) Ltd. (Deregistered w.e.f. 04th April, 2011)

Golden Country Resources (Australia) PTY Ltd.

Bowen Energy (Asia) PTE Ltd. (Has been struck off).

b) Joint Venture

Andal East Coal Company Pvt. Ltd.

c) Associates

Angul Sukinda Railway Ltd. Bhushan Energy Ltd.

d) Key Management Personnel

Shri Neeraj Singal (Vice Chairman & Managing Director) Shri Nittin Johari (Whole time Director) Shri P.K. Aggarwal (Whole time Director) Shri Rahul Sengupta (Whole time Director)

e) Relatives of Key Management Personnel

Shri B.B. Singal (Chairman & Father of Vice Chairman & Managing Director) Smt. Ritu Singal (Wife of Vice Chairman & Managing Director)

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

Arshiya International Ltd. Bhushan Aviation Ltd.

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

1. Remuneration & Perks include payment to Shri Neeraj Singal Rs.106.93 Lacs (Pre. Year Rs.90.95 Lacs), Shri P.K.Aggarwal Rs.35.17 Lacs (Pre. Year Rs.45.14 Lacs), Shri Nittin Johari Rs.61.25 Lacs (Pre. Year Rs.55.77 Lacs), Shri Rahul Sengupta Rs.42.70 Lacs (Pre. Year Rs.41.98 Lacs) and Smt Ritu Singal Rs.32.87 Lacs (Pre. Year Rs.27.17 Lacs).

2. Directors sitting fees is paid to Shri B.B.Singal Rs.7.65 Lacs (Pre. Year Rs.5.45 Lacs)

3. Investment in Share Capital/ Share Application Money include Bhushan Steel (Australia) PTY Ltd. Rs.4133.76 Lacs (Pre. Year Rs.2026.51 Lacs), Bhushan Steel (South) Ltd Rs. Nil (Pre. Year Rs. 3005.00 Lacs), Bhushan Steel Madhya Bharat Ltd Rs. Nil (Pre. Year Rs.5.00 Lacs), Bhushan Steel (Orissa) Ltd Rs. Nil (Pre. Year Rs. 5.00 Lacs),, Bhushan Steel Bengal Ltd Rs. 2150.00 Lacs (Pre. Year Rs.5.00 Lacs) Andal East Coal Company Pvt. Ltd. Rs.412.00 Lacs (Pre. Year Rs.125.00 Lacs) and Angul Sukinda Railway Ltd. Rs. Nil (Pre. Year Rs.600.00 Lacs).

4. 10% Non Redeemable Preference Shares have been allotted to M/s Bhushan Energy Limited Rs.30000.00 Lacs (Pre. Year Rs. Nil) and Share Application Pending Allotment is received from Shri Neeraj Singal Rs.23100.00 Lacs (Pre. Year Rs. Nil) and from Sh. B.B.Singal Rs.10200.00 Lacs (Pre. Year Rs. Nil).

5. Purchase of Goods/Services is from Arshiya International Ltd. Rs.5500.16 Lacs (Pre. Year Rs.5217.80 Lacs), Bhushan Energy Ltd. Rs.62914.19 Lacs (Pre. Year Rs.40752.46 Lacs) and Bhushan Aviation Ltd. Rs.1578.39 Lacs (Pre.Year Rs.1853.04 Lacs).

6. Sale of Goods/ Services to Bhushan Steel Global FZE Rs.1650.45 Lacs (Pre. Year Rs.19703.41 Lacs) and Bhushan Energy Ltd. Rs.3973.42 Lacs (Pre. Year Rs.2166.57 Lacs).

7. Rent Received is from Bhushan Aviation Ltd. Rs.1.20 Lacs (Pre. Year Rs.1.20 Lacs).

8. Advance received for Sale of Investment is from Bhushan Energy Ltd Rs. Nil (Pre. Year Rs.1500.00 Lacs).

NOTE 35

The Company is engaged in the steel business, which in the context of Accounting Standard (AS)17 is considered the only primary business segment.

NOTE 36

Fixed Assets include one cold rolling mill established in 1992 damaged in fire accident in the year 199899. The amount received from Insurance Company for reinstatement /repair of the mill is included in other liabilities as the matter is still subjudice. The amount received shall be adjusted on final disposal of the pending suit.

NOTE 40

The Company in respect of Khopoli unit has opted "Deferral Scheme" of sales tax and paid VAT on the basis of Net Present Value (NPV).

Tax difference between the amount payable and amount paid under NPV, amounting to Rs.6030.15 Lacs (Previous Year Rs.4120.46 Lacs), being capital receipt, has been credited to Capital reserve.

NOTE 41

The Company has elected to account for exchange differences arising on reporting of longterm foreign currency monetary item in accordance with Companies (Accounting Standards) Amendment Rules 2009 pertaining to Accounting Standard (AS)ll notified by Government of India on 31st March, 2009 (As amended on 29th December, 2011) which allows foreign exchange differences on longterm monetary items arising on or after 1st April, 2011 to be capitalized to the extent they relate to acquisition of depreciable assets and in other cases to amortise over the balance period of the respective monetary items.

As on 31st March, 2012, a debit of Rs. NIL (Pre. Year Rs. Nil) remains to be amortised in the "Foreign Currency Monetary Item Translation Difference Account".

NOTE 42

The company has not entered into any finance / operating lease during the year.

NOTE 43 DERIVATIVES

I The company has not entered into any derivatives instruments to hedge the foreign currency contracts. There is no derivative contract outstanding as on the date of the Balance Sheet.

NOTE 50

Previous Year Figures have been rearranged/regrouped wherever considered necessary.

Mar 31, 2011

(Rs. in Lacs)

Current Year Previous Year

1. Contingent Liabilities in respect of:

a) Sales Tax 0.75 0.75

b) Excise Duty/Service Tax 17573.31 4.95

c) Entry Tax 5654.41 -

d) Outstanding guarantees issued by the banks counter guaranteed by the company including letter of credits 78354.15 79395.10

e) Bills Discounted 18647.66 11524.91

2. Estimated amount of contracts remaining to be executed on capital account and not provided for :Rs.572893.35 Lacs ( Previous Year Rs.393176.57 Lacs) (Net of Advances).

3 There is no present obligation arising from past events requiring provision in accordance with the guiding principle as enunciated in Accounting Standard (AS)- 29, as it is not probable that an outflow of resources embodying economic benefit will be required.

4. a) 25% Non Convertible Cumulative Redeemable Preference Shares of X100/- each are allotted at a price of Rs.2500/- per share during the year on private placement basis. The preference shares are redeemable at a price that shall give aggregate yield to the holders of 1 % accrued on day to day basis on the face value together with the premium of the preference shares, within 48 Months from the date of allotment i.e 28th March, 2011 in such trenches as stipulated in the subscription agreement.

b) 4% Non Convertible Cumulative Redeemable Preference Shares of Rs.100/- each are allotted at a price of Rs.2500/- per share during the year on private placement basis. The Preference Shares shall be redeemed at an amount in INR , such that the subscribers get yield of 11.7% per annum on the amount outstanding within 36 Months from the date of allotment, i.e 29th March, 2011 in such trenches as stipulated in the subscription agreement.

c) 10% Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the year on private placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- before the expiry of ten years from the date of allotment i.e. 30th March, 2011 for 15,00,300 shares .

d) 10% Redeemable Cumulative Preference Shares of Rs.100/- each are allotted at a price of Rs.3000/- per share during the previous year on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs.2900/- before the expiry of ten years from the date of allotment i.e. 29th January, 2010 and 31 st March, 2010 for 13,34,800 and 23,33,500 shares respectively.

2 The Company has during the year commissioned 4 Kilns, Blast Furnace, Conarc Furnace, Slab Caster, Hot Rolled Mill, Railway Siding and other ancillary equipments.

3. As per Accounting Standard (AS)-l 8, the disclosure of transaction with related parties as defined in the Accounting Standard are given below : (I) List of related parties where control exists and related parties with whom transactions have taken place and relationships:

a) Subsidiary companies

Bhushan Steel (Orissa) Ltd (Incorporated on 24th May, 2010] Bhushan Steel Madhya Bharat Ltd (Incorporated on 24th May, 2010 ] Bhushan Steel (South) Ltd (Incorporated on 27th April, 2010] Bhushan Steel Bengal Ltd (Incorporated on 24th May, 2010] Bhushan Steel Global FZE Bhushan Steel (Australia) PTY Ltd.

- Bowen Energy Ltd, Australia (from 28th July, 2009) - Kondor Holdings PTY Ltd.

- Bowen Coal PTY Ltd. - Bowen Consolidated PTY Ltd.

- Capricorn Metals Ltd. - Capricorn Resources (Australia) Ltd.

- Golden Country Resources (Australia) PTY Ltd. - Bowen Energy (Asia) PTE Ltd. has been struck off.

b) Joint Venture

Andal East Coal Company Pvt. Ltd. (Incorporated on 22nd September, 2009]

c) Associates

AngulSukinda Railway Ltd. (from 27th May, 2009) Bhushan Energy Ltd. (from 2nd December, 2009]

d) Key Management Personnel

Sh. Neeraj Singal (Vice Chairman & Managing Director) Sh. P.K. Aggarwal (Whole time Director]

Sh. Nittinjohari (Whole time Director) Sh. Rahul Sen Gupta (Whole time Director]

e) Relatives of Key Management Personnel

Smt. Ritu Singal (Wife of Vice Chairman & Managing Director]

Shri B.B. Singal (Chairman & Father of Vice Chairman & Managing Director]

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

Bhushan Energy Ltd. (up to 1st December, 2009) Arshiya International Ltd.

Bhushan Aviation Ltd.

4. Fixed Assets include one cold rolling mill established in 1992 damaged in fire accident in the year 1998-99. The amount received from Insurance Company for reinstatement /repair of the mill is included in other liabilities as the matter is still sub-judice. The amount received shall be adjusted on final disposal of the pending suit.

5. The Company in respect of Khopoli unit has opted "Deferral Scheme" of sales tax and paid VAT on the basis of Net Present Value (NPV).

Tax difference between the amount payable and amount paid under NPV, amounting to Rs.4120.46 Lacs (Previous Year Rs.2383.82 Lacs), being capital receipt, has been credited to Capital Reserve.

6. DERIVATIVES

I The company has not entered into any derivatives instruments to hedge the foreign currency contracts. There is no derivative contract outstanding as on the date of the Balance Sheet.

7. The company has not entered intoany finance/operating lease during the year.

8. Previous Year Figures have been regrouped wherever considered necessary.

Mar 31, 2010

(Rs. in Lacs)

Current Year Previous Year

1. Contingent Liabilities in respect of :

a) Sales Tax 0.75 0.75

b) Excise Duty 4.95 4.95

c) Outstanding guarantees issued by the banks

counter guaranteed by the Company including letter of credits 79395.10 45422.28

d) Bills Discounted 11524.91 4763.89

2. Estimated amount of contracts remaining to be executed on capital account and not provided for : Rs.393176.57 Lacs ( Previous Year Rs. 237664.08 Lacs) (Net of Advances).

3 There is no present obligation arising from past events requiring provision in accordance with the guiding principle as enunciated in Accounting Standard (AS)-29, as it is not probable that an outflow of resources embodying economic benefit will be required.

4. 10% Redeemable Cumulative Preference Shares of Rs. 100/- each are allotted at a price of Rs.3000/- per share during the year on private/preferential placement basis. The Preference Shares are redeemable at a premium of Rs. 2900/- before the expiry of ten years from the date of allotment i.e. 29th January, 2010 and 31st March, 2010 for 13,34,800 and 23,33,500 shares respectively.

5. In some cases, the Company has received intimation from Micro & Small Enterprises under ÃThe Micro, Small and Medium Enterprises Development Act, 2006Ã. Based on the information received, the amount remaining unpaid as at 31st March, 2010 was Rs.85.30 Lacs (Previous Year Rs. 112.47 Lacs). No payments beyond the appointed date were noticed to such vendors. No interest is paid or payable under the Act.

Note: Provisions for contribution to employee retirement / post retirement and other employee benefits which are based on actuarial valuations, done on an overall company basis, hence, amount pertaining to the Directors is not ascertainable and, therefore, not included in the above figures.

5. As per Accounting Standard (AS)-18, the disclosure of transaction with related parties as defined in the Accounting Standard are given below :

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

a) Subsidiary companies

Bhushan Steel Global FZE Bhushan Steel (Australia) PTY Ltd.

- Bowen Energy Ltd, Australia (from 28th July, 2009)

- Kondor Holdings PTY Ltd.

- Bowen Coal PTY Ltd.

- Bowen Consolidated PTY Ltd.

- Capricorn Metals Ltd.

- Capricorn Resources (Australia) Ltd.

- Golden Country Resources (Australia) PTY Ltd.

- Bowen Energy (Asia) PTE Ltd.

b) Joint Venture

Andal East Coal Company Pvt. Ltd (Incorporated on 22nd September, 2009)

c) Associates

Angul Sukinda Railway Ltd. (from 27th May, 2009) Bhushan Energy Ltd. (from 2nd December, 2009)

d) Key Management Personnel

Sh. Neeraj Singal (Vice Chairman & Managing Director) Sh. P.K. Aggarwal (Whole time Director) Sh. Nittin Johari (Whole time Director) Sh. Rahul Sen Gupta (Whole time Director)

e) Relatives of Key Management Personnel

Smt. Ritu Singal (Wife of Vice Chairman & Managing Director)

f) Enterprises over which Key Management Personnel and their relatives are able to exercise significant influence Bhushan Energy Ltd. (up to 1st December, 2009) Arshiya International Ltd. Bhushan Aviation Ltd.

6. Fixed Assets include one cold rolling mill established in 1992 damaged in fire accident in the year 1998-99. The amount received from Insurance Company for reinstatement /repair of the mill is included in other liabilities as the matter is still sub-judice. The amount received shall be adjusted on final disposal of the pending suit.

7. The Company in respect of Khopoli unit was availing sales tax exemption scheme. However during the year, the Company has opted "deferral scheme" of sales tax and paid VAT on the basis of Net Present Value (NPV).

Tax difference between the amount payable and amount paid under NPV, amounting to Rs. 2383.82 Lacs (Previous Year Nil), being capital receipt, has been credited to Capital reserve.

8. DERIVATIVES

I The Company has not entered into any derivatives instruments to hedge the foreign currency contracts. There is no derivative contract outstanding as on the date of the Balance Sheet.

B. Defined Benefit Plans :

a) Leave Encashment/ Compensated Absence.

b) Contribution to Gratuity Funds - Employees Gratuity Fund.

In accordance with Accounting Standard (AS) - 15 (Revised 2005), the actuarial valuation carried out in respect of the aforesaid defined benefit plans is based on the following assumptions:

9. The Company has not entered into any finance / operating lease during the year.

10. Previous Year Figures have been regrouped wherever considered necessary.

(VIII) Remittance in foreign currency on account of Dividend :

The Company has paid dividend in respect of shares held by Non-Residents on repatriation basis. This inter-allia includes portfolio investment and direct investment, where the amount is also credited to Non-Resident External Account (NRE A/c). The exact amount of dividend remitted in foreign currency cannot be ascertained. The total amount remittable in this respect is given herein below :

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