Notes to Accounts of Electrotherm (India) Ltd.

Mar 31, 2025

n. PROVISIONS:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed,

the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense
relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

o. EARNINGS PER SHARE:

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the
weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders
and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares, if any.

p. CASH AND CASH EQUIVALENT:

Cash and cash equivalents in the Balance Sheet comprise cash at banks and in hand and short-term deposits with an original
maturity of three months or less, which are subject to an insignificant risk of charges in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined
above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

q. CASH DIVIDEND:

The Company recognises a liability to make cash or non-cash distributions to equity holders of the Company when the
distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Companies Act, 2013,
a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

r. CONTINGENT LIABILITIES:

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

2.2 SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company''s financial statements requires management to make judgements, estimates customer will be
entitled. The Company determined that the expected value method is the appropriate method to use in estimating the variable
consideration for revenue from contract with customer. The selected method that better predicts the amount of variable
consideration was primarily driven by the number of volume thresholds contained in the contract with the customer. Before
adjusting any amount of variable consideration in the transaction price, the Company considers whether the amount of variable
consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based
on its historical experience, business forecast and the current economic conditions.

Judgements

In the process of applying the Company''s material accounting policies, management has made the following judgement, which
have the most significant effect on the amounts recognised in the financial statements.

Determining the lease term of contracts with renewal and termination options - Company as lessee.

The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension and
termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise
the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there
is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise
the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to
the leased asset).

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. The Company based its assumptions and estimates on parameters available when the financial
statements were prepared. 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.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial
valuation. 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 is 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 India. 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 India.

Further details about gratuity obligations are given in Note 33.

Useful Life of Property Plant & Equipment and Intangible assets

Property, Plant and Equipment and Intangible Assets are depreciated/amortised over their estimated useful life, after taking
into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually
in order to determine the amount of depreciation/amortisation to be recorded during any reporting period. The useful life
and residual values are based on the Company''s historical experience with similar assets and take into account anticipated
technological changes. The depreciation/amortisation for future periods is revised if there are significant changes from
previous estimates.

2.3 RECENT ACCOUNTING PRONOUNCEMENTS:

Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. During the year ended March 31, 2025, MCA has notified Ind AS 117
-Insurance Contracts and amendments to Ind As 116 - Leases, relating to sale and lease back transactions, applicable from April 1,
2024. The Company has assessed that there is no significant impact on its financial statements.

(c) The settlement of advances to subsidiaries and related parties are not planned.

(d) The Company holds investment in equity shares of Hans Ispat Limited (Wholly Owned Subsidiary Company). Bank of Baroda
had filed Original Application against Hans Ispat Limited (Wholly Owned Subsidiary Company) & its guarantors (i.e. Mr. Shailesh
Bhandari and Mr. Mukesh Bhandari) before Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery
of Debts due to Banks and Financial Institutions Act 1993. As per judgement of the Hon''ble DRT, Ahmedabad, the recovery
proceedings had been initiated for e-auction of properties and the properties has been auctioned for the amount of Rs. 33.03
Crores in November, 2021. Based on the application of the auction purchaser, the Hon''ble Recovery Officer by order dated July
18, 2024 authorized the bank officer for execution of sale deed in favour of auction purchaser, subject to there being no stay from
any higher forum and accordingly the sale deed was presented / executed before SRO Anjar for registration on July 24, 2024.

As on March 31, 2025 the company had Advances of Rs.64.00 Crores (March 31, 2024 Rs 63.91 Crores) and investment of Rs
36.46 Crore (March 31, 2024 Rs.36.46 Crores) and considering all the facts as stated above, the company has provided expected
credit loss / Provision for doubtful amount of Rs.63.24 Crores (March 31, 2024 Rs 63.24 Crores) on advances and impariment on
investment in subsidiary of Rs 36.46 Crores (March 31, 2024 Rs.36.46 Crores)

viii) There was proceedings of Inspection & Search by the State Goods and Service tax authorities, at the various places of the
company and its subsidiary Company Hans Ispat Limited, during January 18, 2021 to February 3, 2021 and during the
course of said proceedings, as determined by the authorities on various points, the company has voluntarily paid total
amount of Rs 9.57 Crore towards tax, Interest and Penalty, on February 3, 2021. The Company has accounted Rs 6.69 Crore
as expenses and Rs 2.88 Crore has been shown as recovery from suppliers. In the opinion of the Company, there will not
be any further additional liability with regard to said proceedings. Thereafter, certain other documents as informed by GST
authorities, related to the company has been seized and verification of the same is in process by the said authorities.

ix) Claims against the Company not acknowledged as debts amounting to Rs.1.05 Crore (As at March 31, 2024: Rs.1.11 Crore),
are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc.

x) During the year ended as at March 31, 2024, the Company has received the assessment order for the Assessment Year
2016-17 from the income tax department where in addition of Rs 662.01 Crore has been made. Against the said addition,
set off of the Carried Forward unabsorbed Business Loss and Depreciation has been given. The company has filed an appeal
before the higher authority and the management is hopeful that the matter will be decided in the favour of the company.

Note:-

i. Future cash flows in respect of above, if any, is determinable only on receipt of judgement/ decisions pending with relevant
authorities.

ii. The above amounts are without the amount involved in the appeal preferred by the Department, if any, and further
applicable interest on the demand. The above amounts are after payment of tax under protest and adjustment of refund
and has been shown as advances / Balance with Revenue Authority.

iii. During the financial year ended on March 31, 2019, Goods and Service Tax Department of Maharashtra has re-determined
Value Added Tax liability (including interest and penalty) of Rs. 6.28 Crore for the financial year 2009-10 and Rs. 23.93 Crore
for the financial year 2010-11 after adjustment of Rs. 4.00 Crore paid by the Company under protest. The Company has
paid Rs 1.07 Crore during the year ended as at March 31, 2020 and have filed an appeal before the Deputy Commissioner
of State Tax, Mumbai. On account of the said order presently the liability of the Company is of Rs. 29.15 Crore (March 31,
2024: Rs. 29.15 Crore). The provision for impugned disputed tax liability has not been made for as the Company is hopeful
of matter being decided in its favor by appellate authority.

i. The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.

ii. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation
as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be
correlated.

iii. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been
calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied
in calculating the defined benefit obligation as recognised in the balance sheet.

iv. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior year.

33.2 Risks associated with defined benefit plan

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability
requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the
duration of assets.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As
such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by
reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate,
it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities,
and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101
of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality Risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have
any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will
wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

The details related to gratuity is on the basis of the certificate issued by the acturial valuer.

34 Segment Reporting

The segment report is given in consolidated financial statements.

36 Default in repayment of loans, its settlement terms and Accounting Treatment

The information / details as provided in the Financial Statements are for the disclosure purpose only as per the applicable Ind

Accounting Standards ("Ind AS") without prejudice to the rights of the Company and without any acknowledgement of the debts /

liabilities of the Company under the applicable laws.

(i) Central Bank of India

The Company has defaulted in repayment of the loan and interest thereon taken from Central Bank of India in March 2012 of
Rs. 436.13 Crore. The company on June 29, 2022 has accepted the compromise / One Time Settlement (OTS) letter of Central
Bank of India dated June 28, 2022 for their outstanding loan/credit facility. As per the settlement terms and agreement, the
company has paid the entire settlement amount along with interest there on. On compliance with the terms and conditions of
the settlement with Central Bank of India and upon issuance of the ''No Due Letter'' dated February 7, 2025, the Company has
recognized a total reduction in debt amounting to Rs 211.13 Crore. Of this amount, Rs 158.83 Crore has been credited to the
Capital Reserve and Rs 52.30 Crore has been recognized under Exceptional Items in the Statement of Profit and Loss.

(ii) Rare Asset Reconstruction Limited (being assignee of debts of Indian Overseas Bank)

(a) The Company has defaulted in repayment of loan of Rs 183.96 Crore (after adjustment of repayment of Rs 10.05 Crore
paid during the year ended as at March 31, 2020 and Rs.6 Core paid during year ended as at March 31, 2024 as upfront
payment towards commitment to settlement) (Principal of Rs. 183.95 Crore and Interest of Rs. 0.01 Crore) in August 2011.
Indian Overseas Bank has assigned its debts to Rare Asset Reconstruction Limited on September 28, 2017. The Company
is in the process of entering into a settlement agreement with Rare Asset Reconstruction Limited.

(b) The Company was informed vide letter dated October 12, 2017 of Indian Overseas Bank, that the bank has assigned debts
to Rare Asset Reconstruction Limited. However considering pending settlement, the outstanding loan amount is treated
as current maturities of long term borrowings.

(iii) Rare Asset Reconstruction Limited (being assignee of Debts of Dena Bank)

(a) The Company has defaulted in repayment of loan of Rs 51.44 Crore (Principal of Rs 51.44 Crore) in September 2011. The
bank has assigned this loan to Rare Asset Reconstruction Limited. The Company has entered into a settlement agreement
with Rare Asset Reconstruction Limited for the repayment of loan on June 28, 2018. As per the settlement agreement, the
Company has agreed to repay the loan by March 15, 2022. The Company has again defaulted in repayment of loan of the
instalment falling due from September 2021 till March 15, 2022 and interest.During the financial year ended March 31,
2025 the Company has paid the entire settled Principal amounts due to Rare Asset Reconstruction Limited. The Company
had been in negotiations with the said lender regarding the outstanding interest amounting to Rs 5.69 crore. During the
year ended March 31, 2025, the Company made a partial payment of Rs 2.50 crore towards this interest. Consequently,
there is a default in payment of the remaining interest of Rs 3.19 crore, pertaining to the period from June 2022 to June
2024 and which had been subsequently fully paid by the Company.

(b) The repayment of debt to Rare Asset Reconstruction Limited, up to the balance sheet date of Rs. 28.00 Crore (March 31,
2024 is Rs. 23.00 Crore) has been adjusted against the total outstanding loan liability.

(c) If all the terms and conditions of the settlement are fully complied there will be reduction of debt by Rs. 23.44 Crore.

(iv) Edelweiss Asset Reconstruction Company Limited (being debt assignee of Bank of India, Bank of Baroda, State Bank of India,

Canara Bank and State Bank of Travancore)

(a) The Company has defaulted in repayment of the loan from Bank of India in December 2012 of Rs. 628.04 Crore (Principal
of Rs. 628.04 Crore), Bank of Baroda in September 2012 of Rs. 31.23 Crore (Principal of Rs. 31.23 Crore), Canara Bank
in September 2012 of Rs. 232.97 Crore (Principal of Rs. 190.18 Crore and Interest of Rs. 42.79 Crore), State Bank of
India in December 2011 of Rs. 323.27 Crore (Principal of Rs. 323.27 Crore) and State Bank of Travancore in September
2011 of Rs. 91.98 Crore (Principal of Rs. 85.04 Crore and Interest of Rs. 6.94 Crore). All these loans were assigned to
Edelweiss Asset Reconstruction Company Limited. The Company entered into a settlement agreement with Edelweiss
Asset Reconstruction Company Limited on March 10, 2015. As per the settlement agreement, the Company had agreed
to repay the loan by March 2023. However, the Company has again defaulted in repayment of the instalment of the
loan falling due from December 2020 till March 2023 and interest thereupon. Based on the proposal of the Company,
Edelweiss Asset Reconstruction Company Limited has approved the restructuring of the outstanding due on November
3, 2023, wherein the Company is required to pay total amount of Rs 391 Crore, through 28 installments (from August 31,
2023 to March 15, 2026) along with Interest @ 11% p.a. and default Interest @ 7% p.a and to comply with other terms
and conditions.

(b) The Management is of the opinion that Fixed Deposit of Rs. 12.45 Crore appropriated by Bank of Baroda will be
adjusted against the outstanding liability payable to Edelweiss Asset Reconstruction Company Limited, at the time of
last installment.

The Company has filed a Special Civil Application ("SCA") before the Hon''ble Gujarat High Court to return back Rs. 12.45
crore to the Company''s bank account which was adjusted against the outstanding loan. The said petition is admitted and
is pending for further hearing.

(c) The amount of repayment of debt to Edelweiss Asset Reconstruction Company Limited, up to the balance sheet date of
Rs. 672.35 Crore (March 31, 2024 is Rs. 528.34 Crore) has been adjusted against the total outstanding loan liability.

(d) If all the terms and conditions of settlement are fully complied upto March 2026, there will be reduction in debt by
Rs. 403.55 Crore.

(v) Invent Assets Securitization and Reconstruction Private Limited (being assignee of debts of Oriental Bank of Commerce,

Punjab National Bank and Allahabad Bank)

(a) The Company has defaulted in repayment of the loan from Oriental Bank of Commerce in June 2012 of Rs. 55.19 Crore,
Punjab National Bank in October 2011 of Rs. 184.69 Crore (Principal amount of Rs. 184.69 Crore) and Allahabad Bank in
July 2012 of Rs. 283.62 Crore (Principal of Rs. 278.22 Crore and interest of Rs. 5.40 Crore). All these loans were assigned to
Invent Assets Securitization and Reconstruction Private Limited ("Invent ARC"). The Company entered into a settlement
terms with Invent ARC in August 2015 for debts of Oriental Bank of Commerce and in July 2016 for debts of Allahabad
Bank and Punjab National Bank. On June 18, 2019, the settlement terms were revised where in the last date of repayment
further extended up to June 2023 / December 2023. However, the Company has again defaulted in repayment of the
instalment. Based on the request of the Company, Invent ARC has approved further revised repayment schedule on May
31, 2024 for the payment of outstanding settlement dues with interest @11% p.a.

(b) As per the terms of settlement, the Company had paid the entire settlement amount of Rs. 18.50 Crores along with
interest of Rs. 0.49 Crores for the debt originally owed to Oriental Bank of Commerce (now merged with Punjab National
Bank) assigned to Invent ARC by March 31, 2025 and Invent ARC has issued No Due Certificate dated April 7, 2025.
Upon compliance with all the terms and conditions of the settlement, a total reduction in debt amounting to Rs.36.69
Crores has been recognized. Of this, Rs 24.14 Crores has been credited to Capital Reserve, and Rs 12.55 Crores has been
recognized under Exceptional Items in the Statement of Profit and Loss.

(c) The amount of repayment of debt to Invent Assets Securitization and Reconstruction Private Limited (being assignee
of debts of Punjab National Bank and Allahabad Bank), up to the balance sheet date of Rs. 77.06 Crore (March 31, 2024
is Rs. 59.06 Crore) has been adjusted against the total outstanding loan liability. If all the terms and conditions of the
settlements are fully complied, there would be a reduction in debt by Rs. 288.32 Crore.

37 Details of cases of recovery / other proceedings by the Lenders

(a) Cases before Debts Recovery Tribunal (DRT):

(i) Central Bank of India has filed Original Application against the Company & its guarantors (Mr. Mukesh Bhandari,
Mr. Shailesh Bhandari and Mr. Avinash Bhandari) before the Debts Recovery Tribunal-1, Ahmedabad ("DRT") under
section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The Hon''ble DRT vide judgement
dated October 9, 2018 allowed the original application filed by the Bank and issued recovery certificate against the
Company and guarantors to the tune of Rs. 577.89 Crores and future interest on the amount due @10% p.a. with monthly
rests from the date of filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the
DRT has initiated recovery proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged
properties and for valuation of the said attached properties. Further as per the terms of settlement with Central Bank of
India dated June 28, 2022, on payment of the settlement amount along with interest, Central Bank of India has issued No
Due Letter dated February 7, 2025 and as no claims of Central Bank of India remains to be satisfied, the Hon''ble Recovery
Officer has disposed / closed the recovery proceedings by order dated February 28, 2025.

(ii) Rare Asset Reconstruction Limited (being assignee of debts of Indian Overseas Bank) ("Rare ARC") had filed Original
Application against the Company & its guarantors Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari
before the Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks
and Financial Institutions Act, 1993. The Hon''ble DRT vide judgment dated September 20, 2018 allowed the original
application filed by the Bank / Financial Institution and issued recovery certificate against the Company and Guarantors
to the tune of Rs. 315.64 Crore and future interest on the amount due @12.75% p.a. with monthly rests from the date of
filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the DRT has initiated recovery
proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged properties. The Hon''ble
Recovery Officer has passed order for release of Rs. 10 Crores from the account of company with Standard Chartered
Bank to Rare ARC, sale of shares of the guarantors and payment of Rs. 0.05 Crores by Mr. Avinash Bhandari for non¬
disclosure of assets to be adjusted towards the dues. Further action / hearing is pending before Hon''ble Recovery Officer.

(iii) In view of settlement / consent terms filed with DRT, the Original Application filed by Rare Asset Reconstruction Limited
(being assignee of debts of Dena Bank) has been disposed on October 15, 2018 and the recovery proceedings by the
Recovery Officer of the Hon''ble DRT were being adjourned. Thereafter, the Demand Notice dated August 3, 2021 is issued
by Recovery Officer and further action / hearing is pending before Hon''ble Recovery Officer.

(iv) In view of settlement / consent terms filed with DRT or otherwise after completion of pleadings and hearing, the Original
Application filed by Invent Assets Securitization and Reconstruction Private Limited (being assignee of debts of Allahabad
Bank) has been disposed on March 21, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT is
being adjourned.

(b) Willful Defaulter

(i) Central Bank of India has declared the Company as a willful defaulter on May 29, 2014 for outstanding default amount of
Rs. 436.13 Crores and reported the name of Company and its directors to the Reserve Bank of India and Credit Information
Bureau (India) Limited (CIBIL) as willful defaulter.

(ii) Dena Bank has declared the Company as a wilful defaulter on March 31, 2016 for outstanding amount of Rs. 51.44 Crores
and reported the name of the Company and its directors to the Reserve Bank of India and Credit Information Bureau (India)
Limited (CIBIL) as Wilful Defaulter. Rare Asset Reconstruction Limited (being assignee of debts of Dena Bank) has agreed
to withdraw the name of the Company and its directors from the defaulter''s list on receipt of entire settlement amount.

(c) Central Bureau of Investigation (CBI)

(i) The Central Bureau of Investigation (CBI) has conducted certain proceedings, on the basis of the complaint filed by
Central Bank of India with regard to the utilization of the loan disbursed by Central Bank of India. Central Bureau of
Investigation has filed a charge sheet and a CBI Special Case was registered against the Company and its directors i.e.
Mr. Mukesh Bhandari, Mr. Shailesh Bhandari, Mr. Avinash Bhandari and few officers of Central Bank of India before
the Hon''ble CBI Court, Ahmedabad on October 6, 2015 and the matter was pending before the Hon''ble CBI Court for
further proceedings. The Directorate of Enforcement, Ahmedabad has filed an application before the Hon''ble CBI Court,
Ahmedabad for transfer of CBI Case to the designated court of Prevention of Money Laundering (PMLA). The Hon''ble CBI
Court, Ahmedabad by order dated January 24, 2022 allowed the application and by further order dated March 29, 2022
disposed of the case for transfer to PMLA Court. The Principal District Court (PMLA Court) has registered the transferred
case as ACB - Special Case No. 15/2022 and the case is now pending for opening by prosecution.

(ii) Bank of India has filed a complaint dated December 29, 2021 under section 154(1) of the Criminal Procedure Code (Cr.P.C)
pertaining to fraud perpetrated by the Company, its directors, unknown public servants and other unknown persons with
intent to defraud Bank of India to the tune of Rs. 81.97 Crores, being the amount of difference between the outstanding
amount of Rs. 631.97 Crores and assignment amount of Rs. 550 Crores. The Central Bureau of Investigation, Banking
Securities Fraud Branch, Mumbai has registered a FIR on December 31, 2021. Central Bureau of Investigation (CBI) carried
out the search on January 4, 2022 and seized various documents and now the matter is under investigation. The Company
has filed a petition for quashing of FIR before Hon''ble Gujarat High Court in April 2024 and the Hon''ble Gujarat High Court
by order dated April 26, 2024 issued notice and notice as to interim relief. The said petition is pending for further hearing.

(d) Directorate of Enforcement (ED)

(i) In view of the registration of the FIR by the Central Bureau of Investigation related to loan of Central Bank of India for
scheduled offences, the Ahmedabad Zonal Office of the Directorate of Enforcement ("ED") has recorded a case under
the provisions of the Prevention of Money Laundering Act, 2002 ("PMLA") and during the course of investigation, ED
has passed an order dated March 28, 2018 under sub-section (1) of section 5 of the PMLA for provisional attachment
of certain properties to the extent of Rs. 179.80 Crores comprising Land having total area of 4,90,621 square meter
at Chhadavada and Samakhiyali of Steel Plant, Building and Plant & Machinery for a period of 180 days. Thereafter, a
complaint under sub-section (5) of section 5 of the PMLA was filed by ED before the Adjudicating Authority, New Delhi
and the Adjudicating Authority, New Delhi vide order dated September 5, 2018 confirmed the attachment of abovesaid
properties. The Company has filed an appeal before the Hon''ble Appellate Tribunal, PMLA, New Delhi and the Hon''ble
Appellate Tribunal, PMLA, New Delhi vide order dated December 10, 2018 passed an order for maintaining status quo and
no coercive action by ED. The ED has filed its reply and the matter is adjourned for filing of rejoinder. The ED has filed an
application for vacation of interim order. Edelweiss Asset Reconstruction Company Limited ("Edelweiss ARC"), a secured
financial creditor has filed impleadment application in July 2023 to participate in the proceedings, which was allowed on
July 9, 2024. Thereafter, the matter was adjourned from time to time for further hearing.

(ii) The Assistant Director, Directorate of Enforcement, Ahmedabad has filed a Complaint Under Section 45 of the Prevention
of Money Laundering Act,2002 on December 1, 2018 before Principal District Judge, Ahmedabad against the company,
Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari under section 3 and 4 of the PMLA related to loan
of Central Bank of India. The charge has been framed by the Hon''ble Court and now it is pending at the stage of evidence
of prosecution.

(iii) On January 10, 2025, Directorate of Enforcement (ED), Zonal Office, Ahmedabad has conducted search at the corporate
office & factory of the Company situated at Palodia and the residence of Mr. Shailesh Bhandari, Executive Vice Chairman
& Promoter of the Company under the provisions of Prevention of Money Laundering Act, 2002 ("PMLA"). During the
search, it was informed that the search is being carried out in relation to the registration of the FIR by the Central Bureau
of Investigation related to loan of Bank of India for schedule offences and a Enforcement Case Information Report ("ECIR")
has been registered by ED on March 31, 2022. ED has passed order under Section 17(1A) of the PMLA for (a) freezing
of the balances lying in 39 bank accounts of the Company alongwith interest accrued thereon as on January 10, 2025
and interest accrued subsequently from January 10, 2025 onwards (b) freezing of balances lying in two personal bank
accounts of Mr. Shailesh Bhandari, Executive Vice Chairman, alongwith interest accrued thereon as on January 11, 2025
and (iii) seized two cars found at the residence premises of Mr. Shailesh Bhandari, Executive Vice Chairman.

The Company and Mr. Shailesh Bhandari, Executive Vice Chairman challenged the action of ED dated 10^th / 11^th January,
2025 before the Hon''ble Gujarat High Court and the Hon''ble Gujarat High Court by interim order dated January 29, 2025,
till the pendency of the said petitions, inter alia, permitted the Company and Mr. Shailesh Bhandari to operate the bank
accounts in respect of the amount which is in excess of the amount freezed on January 10 / 11, 2025. Accordingly, an
amount of Rs. 34.29 Crores in two bank accounts of the Company and an amount of Rs. 0.83 Crores in one bank account
of Mr. Shailesh Bhandari has been lien marked in favour of ED and the said three accounts are being operated for the
amount in excess of the lien marked amount and all other bank accounts have been unfreezed by ED. The said petitions
are pending before Hon''ble Gujarat High Court for further hearing. ED has further removed the seizure of one car, being
owned by third party and the application for use / release of second car is pending before Hon''ble Gujarat High Court.

(iv) Based on the original application filed by Directorate of Enforcement (ED), Zonal Office, Ahmedabad before Ld.
Adjudicating Authority, PMLA, New Delhi related to search conducted on January 10, 2025 and January 11, 2025 for loan
of Bank of India, a show cause notice dated February 21, 2025 has been issued to the Company and Mr. Shailesh Bhandari
for allowing the retention of frozen accounts and seized vehicle. The Company and Mr. Shailesh Bhandari filed their
reply of the said original application and now it is pending for rejoinder and further hearing before the Ld. Adjudicating
Authority, PMLA, New Delhi.

(v) The Company and Mr. Shailesh Bhandari has filed a petition for quashing of Enforcement Case Information Report ("ECIR")
registered by ED on March 31,2022 related to loan of Bank of India before Hon''ble Gujarat High Court in March, 2025 and
the Hon''ble Gujarat High Court by order dated March 28, 2025 issued notice to respondents. The said petition is pending
for further hearing.

(e) Fraud Classification

(i) The Company had filed a Special Civil Application ("SCA") against Central Bank of India and Reserve Bank of India for
wrongfully declaring the account of the Company as fraud account on November 6, 2013 in breach of principles of natural
justice. The said petition was dismissed by the Hon''ble Gujarat High Court. The Company has filed a Letters Patent Appeal
(LPA) against the said order. The Hon''ble Gujarat High Court has issued Notice and notice as to interim relief. The Hon''ble
Gujarat High Court by interim order dated June 21, 2023 stayed the fraud classification and order passed by Hon''ble
single judge. In view of interim order passed by Hon''ble Gujarat High Court and request of the Company, Central Bank

of India has removed fraud flagging in the account. The said appeal is pending for further hearing before the Hon''ble
Gujarat High Court.

(ii) The Company had filed a Special Civil Application ("SCA") against Bank of India in July 2023 for wrongfully declaring the
account of the Company as fraud account on February 13, 2019 without any intimation and in breach of principles of
natural justice. The Hon''ble Gujarat High Court by order dated November 30, 2023 quashed and set aside the action of
classifying the account as fraud account and the matter was remitted to the bank leaving a liberty to take fresh steps
in accordance with the principles laid down by Hon''ble Apex Court. Bank of India has given a show cause notice and
copy of Forensic Audit Report to the Company to make representation / submission. The Company has made a detailed
representation / reply. Bank of India has again reclassified the account as fraud by letter dated August 7, 2024. The
Company has again filed Special Civil Application before Hon''ble Gujarat High Court against such reclassification of fraud
account and the Hon''ble Gujarat High Court by way of ad-interim relief dated September 24, 2024, passed order for no
coercive action. The said petition is pending for further hearing.

(iii) The Company had filed a Special Civil Application ("SCA") against Canara Bank (erstwhile Syndicate Bank) in December
2023 for wrongfully declaring the account of the Company as fraud account on May 4, 2018 without any intimation, in
breach of principles of natural justice and despite that the Company has repaid the settled loan amount and have received
No Due Certificate from the bank on May 27, 2019. The Hon''ble Gujarat High Court has issued notice on December 11,
2023 and now petition is pending for further hearing.

(iv) The Company had filed a Special Civil Application ("SCA") against ICICI Bank and Reserve Bank of India in April 2024 for
wrongfully declaring the account of the Company as fraud account without any intimation, in breach of principles of
natural justice and despite that the Company has repaid the settled loan amount and have received No Due Certificate
from the bank on July 4, 2016. The Hon''ble Gujarat High Court has issued notice on April 18, 2024 and ICICI Bank has filed
reply and now petition is pending for further hearing.

(f) Case under section 138 of the Negotiable Instruments Act, 1881:

Indian Overseas Bank had filed two criminal complaints against the Company and its directors / officers under section 138
of Negotiable Instruments Act, 1881 for dishonor of cheques of Rs. 103.00 Crore issued by the Company and the Company
is contesting both the said cases and both the matters are pending for further proceedings before the respective Hon''ble
Metropolitan Magistrates, Ahmedabad.

38 Non Provision of Interest

The Indian Overseas Bank had classified the loan account of the Company as non-performing assets during August 2011, which was
subsequently assigned to Rare Assets Reconstruction Limited ("Rare ARC"), but with whom the settlement terms have not been
entered into. Further, the Hon''ble Debt Recovery Tribunal (DRT), Ahmedabad has passed judgment against Company for recovery
along with future interest on the amount due @12.75% p.a. with monthly rests. As per the details available with the Company, the
amount of unprovided interest, on approximate basis, on the said loan is as under:-

39 Additional Disclosure

(a) The cost of material consumed includes freight, loading and unloading expenses, inspection fees, commission on purchase,
taxes & duties (to the extent of credit not available), rate difference and interest cost on purchase of raw material and ancillary
expenses thereof (including reversal of any claim).

(b) Few accounts of "Trade Receivables", "Trade payables", "Advances from Customer", "Advances Recoverable In Cash or Kind",
"Advance to Suppliers and Other Parties" including very old balances are subject to confirmation/ reconciliation/ supporting
documents and includes very old non-moving items therefore are subject to necessary adjustments for accounting or re¬
grouping / classification.

(c) Account of Receivables / Payables in respect of Goods and Service Tax, Service Tax, CENVAT, and Vat are subject to reconciliation,
submission of its return for its claim and/or its Audit/ Assessment/Settlement/ Payment, if any.

(d) The classification / grouping of items of the accounts are made by the management, based on the available data with the Company.

(e) On account of technicalities involved, the claim of Merchandise Exports from India ("MEIS") will be accounted for as and when
the claim will be admissible with the respective authority.

(f) During the year ended as at March 31, 2022 the business activity of Transmission Line Tower division (TLT) was temporarily
suspended in order to evaluate its further business viability. However, till March 31 2025 the operation of the TLT division has
not commenced. The management is of the opinion that the carrying value of the Inventory, Property Plant and Equipment and
Trade receivables represent net realizable value and therefore no provision for impairment/write off is required to be made.

(g) During the year, the Company has written off bad debts amounting to Rs.92.86 Crore pertaining to trade receivables from
customers, primarily due to disputes, inability to pay, or settlements/recoveries that resulted in partial or no payment.
Majority of the Trade Receivable balances had been previously provided for under the Expected Credit Loss (ECL) model, and
the corresponding ECL provisions have been reversed during the year.

(h) Audit Log: The Company has used an accounting software for maintaining its books of account which has a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the
software. Further, where audit trail (edit log) facility was enabled, no instance of the audit trail feature being tampered with.

(i) Hedging activity

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed using
derivative instruments are foreign currency risk. Following are the Derivative instruments at year end not designated as
hedging instrument:
*Pursuant to the revised reschedulement agreement dated May 31, 2024, entered into with Invent Assets Securitization and
Reconstruction Private Limited (assignee of Oriental Bank of Commerce, now merged with Punjab National Bank, Allahabad
Bank and Punjab National Bank), and based on the balance confirmation received from Invent ARC, an amount of Rs 41.93
Crores towards unpaid interest for the period from September 2020 till March 2024 has been recognized as Income under
Exceptional Items in the Statement of Profit and Loss for the year ended March 31, 2025.

40 Director''s Remuneration

Mr. Suraj Bhandari was re-appointed as a Whole-time Director for a period of three years w.e.f. November 13, 2022 to November
12, 2025 at a remuneration of Rs. 1,50,000/- per month as approved by the shareholders of the Company at 36^th Annual General
Meeting held on August 31, 2022. Mr. Shailesh Bhandari was re-appointed as a Managing Director for a period of three years
w.e.f. February 1, 2023 to January 31, 2026 at a remuneration of Rs. 2,00,000/- per month as approved by the shareholders of
the Company through Postal Ballot on March 28, 2023. Further, Mr. Shailesh Bhandari, Managing Director was re-designated as
Executive Vice Chairman and Mr. Suraj Bhandari was elevated and re-designated as a Managing Director with effect from February
9, 2024 with same terms & conditions of remuneration and the shareholders of the Company have also approved the same through
Postal Ballot on March 19, 2024.

This remuneration to both the Directors are subject to approval from banks and financial institutions as the Company has defaulted
in repayment of loans. In absence of such approval, no remuneration was paid to Mr. Shailesh Bhandari and Mr. Suraj Bhandari
during the financial year.

41 Other Legal Cases

(a) Some of the creditors have filed cases of recovery against the company before the various Civil Courts / Commercial Courts for
Rs 3.76 Crore (As at March 31, 2024 Rs 3.76 Crore). The said amounts are excluding interest.

(b) Some of the suppliers have filed complaints against the Company and its directors / officers under Section 138 of Negotiable
Instruments Act, 1881 for dishonor of cheques of Rs. 67.42 Crore (As at March 31, 2024 Rs. 66.17 Crore) issued by the Company
and the Company and its directors / officers are contesting the said cases and the same are pending before respective courts.

(c) The Company has filed recovery case against Victory Rich Trading Limited ("VRTL") & its director for non-payment of amount
in the High Court of Hong Kong and the High Court of Hong Kong has passed judgment for payment of recovery amount.
Thereafter, VRTL has challenged the said order and the same was pending before the High Court of Hong Kong for further
proceedings. As per the enquiry from High Court of Hong Kong, the cases have already been concluded with no written
judgement given. Further the Company has filed a winding up petition against VRTL before the High Court of Hong Kong and
the High Court of Hong Kong has passed the order for winding up of VRTL. However, in absence of any assets in the name of
VRTL, the liquidator has applied for release as liquidator and the dissolution of VRTL.

(d) Mr. Siddharth Bhandari, one of the Promoter group and erstwhile Whole-time Director and Dr. Rakesh Bhandari, one of the
Promoter group of the Company ("Petitioners") has filed two separate petitions (CP No. 93 / 2018 and CP No. 94 / 2018) before
the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 149, 150, 152, 159 and 176 of the Companies
Act, 2013 inter alia, for declaring the appointment of four independent directors as null and void from their respective dates
of appointment being violative of provisions of section 149 and 150 and other related provisions of the Companies Act, 2013
and the Companies (Appointment and Qualification of Directors) Rules, 2014. The interim order dated May 4, 2021 passed by
the Hon''ble NCLT, Ahmedabad for joint signature of Mr. Siddharth Bhandari in bank accounts, policy decisions affecting smooth
running of company as a going concern etc. was challenged by Mr. Shailesh Bhandari & Company before Hon''ble NCLAT and
thereafter, before Hon''ble Supreme Court of India. After granting stay on joint signature in bank accounts by the Hon''ble NCLAT
and Hon''ble Supreme Court of India, the appeals were finally disposed off. Therefore, there was joint signature of Mr. Siddharth
Bhandari in bank accounts during the interregnum period during the financial year 2022-23. The CP No. 93 / 2018 and CP No.
94 / 2018 was finally heard by the Hon''ble NCLT, Ahmedabad and the said petitions were disposed of on January 11, 2023 as
not maintainable and vacated all interim orders. The Petitioners have challenged the order dated January 11, 2023 before the
Hon''ble NCLAT and on August 23, 2024, the Appellants have withdrawn the appeals from the Hon''ble NCLAT.

(e) Mr. Siddharth Bhandari, Mr. Mukesh Bhandari and Dr. Rakesh Bhandari ("Petitioners") has filed a petition (CP No. 5/2022)
before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 241-242 of the Companies Act, 2013
against the Company, Mr. Shailesh Bhandari & Others. The Hon''ble NCLT has issued notice to respondents and directed to file
reply on interim relief and maintainability. The Company has filed its reply on interim relief and maintainability.

During the pendency of this petition, the Petitioners have filed an Interlocutory Application No. 55 / 2022 in CP No. 5/ 2022
to restrain the Company from holding Board Meeting dated August 2, 2022 and stay some of the agenda items. The Hon''ble
NCLT, Ahmedabad by order dated August 24, 2022 not granted any stay and rejected the application as misconceived and not
maintainable. The Petitioners have challenged the order dated August 24, 2022 before the Hon''ble NCLAT and the Hon''ble
NCLAT by order dated November 29, 2022 dismissed the appeal. The Petitioners have challenged the order dated November
29, 2022 before the Hon''ble Supreme Court of India and the civil appeal is pending for hearing before the Hon''ble Supreme
Court of India.

The Petitioners have also filed an Interlocutory Application No. 5 / 2024 in CP No. 5 / 2022 for various reliefs including joint
signature in bank accounts. The Hon''ble NCLT, Ahmedabad by order dated March 19, 2024 dismissed the application. The
Petitioners have also filed an Interlocutory Application No. 82 / 2024 for various relief to access the company premises and
books of accounts etc. The Petitioners have also filed an Interlocutory Application No. 91 / 2024 for various relief including to
maintain status quo of board of directors etc. The Hon''ble NCLT, Ahmedabad by order dated September 12, 2024 dismissed
the application. The Petitioners have filed appeal before Hon''ble NCLAT against order dated September 12, 2024, however
the same was disposed of on October 23, 2024 with direction to Ld. NCLT to dispose of main petition expeditiously, preferably
within 8 weeks after decision on maintainability.

The Hon''ble NCLT by order dated October 25, 2024 dismissed CP No. 5 / 2022 as not maintainable alongwith pending
Interlocutory Application.

(f) Ministry of Corporate Affairs, Office of the Regional Director, North-Western Region, Ahmedabad has in October, 2018 initiated
inspection of books of accounts and other records under section 206(5) of the Companies Act, 2013. Thereafter, the Regional
Director has issued letter for violations / irregularities of the Companies Act, 1956 / 2013 and the Company has replied to
the same. Based on the same, the Registrar of Companies, Gujarat has issued letter for violations of Section 128(1), 129(1),
129(5), 133 read with Schedule III of the provisions of the Companies Act, 2013 and initiated prosecution against Mr. Mukesh
Bhandari, Mr. Shailesh Bhandari, Mr. Avinash Bhandari, Mr. Siddharth Bhandari, Managing Directors / Whole-time Director &

Late Mr. Pawan Gaur, Chief Financial Officer of the Company. Mr. Shailesh Bhandari, Mr. Avinash Bhandari & Late Mr. Pawan
Gaur have challenged the said prosecution before the Hon''ble Gujarat High Court under section 463 of the Companies Act,
2013 and on October 29, 2024, the Hon''ble Gujarat High Court granted ad-interim relief of stay on the prosecution. The said
petition is pending for hearing before the Hon''ble Gujarat High Court.

Further the office of Regional Director vide letter / order dated December 24, 2019 informed the Company about investigation
into the affairs of the Company under section 210(1)(c) of the Companies Act, 2013. Thereafter, the Company was directed to
furnish documents / information and the Company has challenged the said investigation before the Hon''ble Gujarat High Court.
As the petition was rejected by the Hon''ble Gujarat High Court, the Company has challenged the same before division bench
by filing Letters Patent Appeal and the division bench of the Hon''ble Gujarat High Court has passed order for continuation of
investigation and that if the report recommends closure of the proceedings, no further orders may be necessary, however, if
the report recommends some coercive measures to be taken, then the Central Government or the competent authority may
not take any such decision without leave of the Court. The Letters Patent Appeal is pending awaiting the appropriate report of
investigation under Section 210 of the Companies Act, 2013.

Further with regard to the two prosecutions filed by Registrar of Companies, Gujarat against Mr. Mukesh Bhandari, Mr. Shailesh
Bhandari, Mr. Avinash Bhandari, Mr. Siddharth Bhandari, Managing Directors / Whole-time Director & Late Mr. Pawan
Gaur, Chief Financial Officer and Mr. Fageshkumar Soni, Company Secretary of the Company under section 447 - 448 of the
Companies Act, 2013 for failing to furnish material facts related to related party transactions for the financial year 2017 and
2018, Mr. Shailesh Bhandari, Mr. Avinash Bhandari & Mr. Fageshkumar Soni challenged the said prosecution before Hon''ble
Gujarat High Court and the Hon''ble Gujarat High Court by order dated December 12, 2024 and February 17, 2025 granted
interim relief of stay on the said two prosecutions qua the applicants. The said petitions are pending for further hearing before
the Hon''ble Gujarat High Court.

(g) Mr. Babu Devraj Badhiya has filed a Writ Petition in the nature of Public Interest Litigation (PIL) on February 4, 2019 before
the Hon''ble Gujarat High Court with prayer for direction for compliance of various approvals / permissions issued by various
authorities for the Samakhiyali Plant, Kutch, Gujarat. The Hon''ble Gujarat High Court has passed order for not to carry out any
further construction / development and the matter is pending before the Hon''ble Gujarat High Court.

Note: The financial implication of all this case is not ascertainable at this point of time.

42 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company
for holding any Benami property.

(ii) The Company does not have any transactions with the Companies which are struck off.

(iii) The Company does not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961).

(viii) The Company is in compliance with the number of layers prescribed under clause (87) of Section -2 of the Companies Act 2013
with Companies (Restriction of number of Layers) Rules, 2017.

43 Family Settlement Agreement ("FSA")

Mr. Mukesh Bhandari, Promoter & his family members and Mr. Shailesh Bhandari, Promoter & Executive Vice Chairman & his family
members vide letter dated March 29, 2025 ("Bhandari Family Letter") informed the Company about execution of Family Settlement
Agreement ("FSA") amongst the Bhandari Family. Pursuant to the realignment under the FSA: (a) the management rights and
control over the Electrotherm (India) Limited ("EIL" / ''Company") and all of its respective subsidiaries and joint venture company,
will be realignment in the manner contemplated under the FSA and shall continue to be with Mr. Shailesh Bhandari. Mr. Mukesh
Bhandari & his family members will exit from the Company including its respective subsidiaries and joint venture companies by
transferring shares to Mr. Shailesh Bhandari and tendering the resignation in the concerned companies; (b) To realign/transfer/
release/forgo certain individual properties, rights thereof and shareholdings in the various companies as prescribed in FSA; (c) The
equity shares of EIL held by Mr. Mukesh Bhandari will be transferred to Mr. Shailesh Bhandari, upon fulfilment of certain obligations
by Mr. Shailesh Bhandari, as contemplated in the FSA; (d) The equity shares of EIL held by Mrs. Jyoti Bhandari will be transferred
to Mrs. Reema Bhandari, by way of gift; (f) After completion of actual transfer of shares of Mr. Mukesh Bhandari to Mr. Shailesh

---

Mar 31, 2024

n. PROVISIONS:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

o. EARNINGS PER SHARE:

Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any.

p. CASH AND CASH EQUIVALENT:

Cash and cash equivalents in the Balance Sheet comprise cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of charges in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

q. CASH DIVIDEND:

The Company recognises a liability to make cash or non-cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Companies Act, 2013, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

r. CONTINGENT LIABILITIES:

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

2.2 SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company''s financial statements requires management to make judgements, estimates customer will be entitled. The Company determined that the expected value method is the appropriate method to use in estimating the variable consideration for revenue from contract with customer. The selected method that better predicts the amount of variable consideration was primarily driven by the number of volume thresholds contained in the contract with the customer. Before adjusting any amount of variable consideration in the transaction price, the Company considers whether the amount of variable consideration is constrained. The Company determined that the estimates of variable consideration are not constrained based on its historical experience, business forecast and the current economic conditions.

Judgements

In the process of applying the Company''s material accounting policies, management has made the following judgement, which have the most significant effect on the amounts recognised in the financial statements.

Determining the lease term of contracts with renewal and termination options - Company as lessee.

The Company determines the lease term as the noncancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

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. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. 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.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuation. 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 is 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 India. 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 India.

Further details about gratuity obligations are given in Note 33.

Useful Life of Property, Plant & Equipment and Intangible assets

Property, Plant and Equipment and Intangible Assets are depreciated / amortised over their estimated useful life, after taking into account estimated residual value. Management reviews the estimated useful life and residual values of the assets annually in order to determine the amount of depreciation / amortisation to be recorded during any reporting period. The useful life and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation / amortisation for future periods is revised if there are significant changes from previous estimates.

2.3 The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

(a) The Company holds investment in equity shares of Shree Ram Electrocast Limited as subsidiary company. Due to heavy losses and non operation of Shree Ram Electrocast Limited the amount of Investment of Rs. 78.68 Crore has been written off during the financial year 2015-2016. State Bank of India has conducted auction under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 & Movable & Immovable Property, Plant & Equipment and Inventory charged with the bank were sold during the year ended on March 31, 2020. In view of the said facts advances to the said subsidiary of Rs 1.78 Crore (March 31, 2023 Rs. 1.78 Crore), shown in Note no. 8, has been treated as Doubtful advance to the Subsidiary Company.

(b) The company holds an investment in equity shares of ET Elec-Trans Limited as subsidiary company and Bhaskarpara Coal Company Limited as a joint venture. These Companies have incurred heavy losses and / or are non-operating and therefore the fate of said Companies is uncertain. Provision for impairment of Rs. 2.13 Crore (March 31, 2023 Rs. 2.13 Crore) in the value of investment in joint ventures namely Bhaskarpara Coal Company Limited and in the value of investment in subsidiary namely ET Elec-Trans Limited Rs. 0.72 Crore (March 31, 2023 Rs. 0.72 Crore) has been provided as on April 1, 2016.

33.2 Risks associated with defined benefit plan

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of assets.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality Risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

The details related to gratuity is on the basis of the certificate issued by the acturial valuer.

36. Default in repayment of loans, its settlement terms and Accounting Treatment

The information / details as provided in the Financial Statements are for the disclosure purpose only as per the applicable Ind Accounting Standards (Ind AS) without prejudice to the rights of the Company and without any acknowledgement of the debts / liabilities of the Company under the applicable laws.

(i) Central Bank of India

(a) The company has defaulted in repayment of the loan taken from Central Bank of India in March 2012 of Rs. 436.13 Crore (Principal of Rs. 428.94 Crore and Interest of Rs. 7.19 Crore). The company on June 29, 2022 has accepted the compromise / One Time Settlement (OTS) letter of Central Bank of India dated June 28, 2022 for their outstanding loan / credit facility. As per the settlement terms and agreement the company need to pay Rs 22.50 Crore as upfront towards the repayment of loan and Rs 202.50 Crore in thirty instalment from July 2022 to December 2024 along with the interest @ 1 year MCLR on the outstanding settlement amount. The Company is regular in payment of instalment as per the settlement terms.

(b) The amount of repayment of debt to Central Bank of India, up to the balance sheet date is Rs. 192.74 Crore (March 31, 2023 is Rs. 84.33) which has been adjusted against the total outstanding loan liability.

(c) If all the terms and conditions of the settlements are fully complied, there would be a reduction in debt by Rs. 211.13 Crore.

(ii) Rare Asset Reconstruction Limited (being assignee of debts of Indian Overseas Bank)

(a) The company has defaulted in repayment of loan of Rs 189.96 Crore (after adjustment of repayment of Rs 10.05 Crore paid during the year ended as at March 31, 2020) (Principal of Rs. 189.95 Crore and Interest of Rs. 0.01 Crore) in August 2011. Indian Overseas Bank has assigned its debts to Rare Asset Reconstruction Limited on September 28, 2017. The company is in the process of entering into a settlement agreement with Rare Asset Reconstruction Limited. As on March 31, 2024, the Company have paid Rs. 6.00 Crore as upfront payment towards commitment to settlement.

(b) The company was informed vide letter dated October 12, 2017 of Indian Overseas Bank, that the bank has assigned debts to Rare Asset Reconstruction Limited. However considering pending settlement, the outstanding loan amount is treated as current maturities of long term borrowings.

(iii) Rare Asset Reconstruction Limited (being assignee of Debts of Dena Bank)

(a) The company has defaulted in repayment of loan of Rs 51.44 Crore (Principal of Rs 51.44 Crore) in September 2011. The bank has assigned this loan to Rare Asset Reconstruction Limited. The company has entered into a settlement agreement with Rare Asset Reconstruction Limited for the repayment of loan on June 28, 2018. As per the settlement agreement the company has agreed to repay the loan by March 15, 2022. However, the company has again defaulted in repayment of loan of the instalment falling due from September 2021 till March 15, 2022 and interest. The company has submitted a revised repayment proposal to Rare Asset Reconstruction Limited which is pending for consideration.

(b) The repayment of debt to Rare Asset Reconstruction Limited, up to the balance sheet date of Rs. 23.00 Crore (March 31, 2023 is Rs. 19.00 Crore) has been adjusted against the total outstanding loan liability.

(c) If all the terms and conditions of the settlement are fully complied and subject to sanction of the revised repayment proposal, there will be reduction of debt by Rs. 23.44 Crore.

(iv) Corporation Bank (merged with Union Bank of India) and Union Bank of India

Union Bank of India (Corporation Bank merged with Union Bank of India)

(a) The company has defaulted in repayment of loan of Rs 116.73 Crore in April 2012. The company has entered into a settlement agreement for the repayment of loan on November 13, 2018. As per the settlement agreement the company has agreed to repay the loan by September 2021.

Union Bank of India

(b) The company has defaulted in repayment of Principal amount of Loan of Rs 49.40 Crore in May 2012. The company has entered into a settlement agreement with the bank for the repayment of loan in March 2017. As per the settlement agreement, the company has agreed to repay the loan by March 2023.

(c) With regard to the both the loan as stated in (a) and (b) the company has again defaulted in repayment of Installment due and interest of Rs 39.84 Crore. Thereafter the company has submitted revised repayment proposal to Union Bank of India. Based on the proposal of the Company, Union Bank of India on August 18, 2023 has approved condonation of delay in payment of OTS amount towards the outstanding due up to March 31, 2023 (both principal and Interest), where in company has agreed to pay Rs 45.00 Crore payable in seven instalments (from June 30, 2023 to December 31, 2023) and Interest is payable @ 1 year MCLR 2% on reducing balance from April 01, 2023. The company has paid all the instalments and interest due thereupon as per the OTS agreement and has received no due certificate from the bank.

(v) Edelweiss Asset Reconstruction Company Limited (being debt assignee of Bank of India, Bank of Baroda, State Bank of India,

Canara Bank and State Bank of Travancore)

(a) The company has defaulted in repayment of the loan from Bank of India in December 2012 of Rs. 628.04 Crore (Principal of Rs. 628.04 Crore), Bank of Baroda in September 2012 of Rs. 31.23 Crore (Principal of Rs. 31.23 Crore), Canara Bank in September 2012 of Rs. 232.97 Crore (Principal of Rs. 190.18 Crore and Interest of Rs. 42.79 Crore), State Bank of India in December 2011 of Rs. 323.27 Crore (Principal of Rs. 323.27 Crore) and State Bank of Travancore in September 2011 of Rs. 91.98 Crore (Principal of Rs. 85.04 Crore and Interest of Rs. 6.94 Crore). All these loans were assigned to Edelweiss Asset Reconstruction Company Limited. The company entered into a settlement agreement with Edelweiss Asset Reconstruction Company Limited on March 10, 2015. As per the settlement agreement the company has agreed to repay the loan by March 2023. However, the company has again defaulted in repayment of the instalment of the loan falling due from December 2020 till March 2023 and interest thereupon. Based on the proposal of the company, Edelweiss Asset Reconstruction Company Limited has approved the restructuring of the outstanding due, wherein the company is required to pay total amount of Rs 391 Crore, through 28 installments (from August 08, 2023 to March 31, 2026) along with Interest @ 11% p.a. and Default Interest @ 7% p.a.

(b) The Management is of the opinion that Fixed Deposit of Rs. 12.45 Crore appropriated by Bank of Baroda will be adjusted against the outstanding liability payable to Edelweiss Asset Reconstruction Company Limited, at the time of last installment.

The Company has filed a Special Civil Application ("SCA") before the Hon''ble Gujarat High Court to return back Rs. 12.45 crore to the company''s bank account which was adjusted against the outstanding loan. The said petition is admitted and is pending for further hearing.

(c) The amount of repayment of debt to Edelweiss Asset Reconstruction Company Limited, up to the balance sheet date of Rs. 528.34 Crore (March 31, 2023 is Rs. 484.34 Crore) has been adjusted against the total outstanding loan liability.

(d) If all the terms and conditions of settlement are fully complied upto March 2026, there will be reduction in debt by Rs. 403.55 Crore.

(vi) Invent Assets Securitization and Reconstruction Private Limited (being assignee of debts of Oriental Bank of Commerce, Punjab National Bank and Allahabad Bank)

(a) The company has defaulted in repayment of the loan from Oriental Bank of Commerce in June 2012 of Rs. 55.19 Crore (Principal of Rs. 42.64 Crore and Interest of Rs. 12.55 Crore), Punjab National Bank in October 2011 of Rs. 184.69 Crore (Principal amount of Rs. 184.69 Crore) and Allahabad Bank in July 2012 of Rs. 283. 62 Crore (Principal of Rs. 278.22 Crore and interest of Rs. 5.40 Crore). All these loans were assigned to Invent Assets Securitization and Reconstruction Private Limited in August 2015, July 2016 and July 2016 for Oriental Bank of Commerce, Allahabad Bank and Punjab National Bank respectively. As per the original settlement agreement the company has agreed to repay the loan by June 2020 for Oriental Bank of Commerce and March 2021 for Allahabad Bank &Punjab National Bank.

37. Details of cases of recovery / other proceedings by the Lenders

(a) Cases before Debts Recovery Tribunal (DRT):

(i) Central Bank of India has filed Original Application against the Company & its guarantors (Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari) before the Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The Hon''ble DRT vide judgement dated October 9, 2018 allowed the original application filed by the Bank and issued recovery certificate against the Company and guarantors to the tune of Rs. 577.89 Crores and future interest on the amount due @10% p.a. with monthly rests from the date of filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the DRT has initiated recovery proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged properties and for valuation of the said attached properties. Further action / hearing is pending before the Hon''ble Recovery Officer. As per the terms of settlement with Central Bank of India dated June 28, 2022, the amount of Rs. 10.75 Crores lying in ''No Lien" account has been adjusted against the upfront amount and the Bank has agreed to withdraw all the legal cases on payment of entire settlement amount.

In view of petitions under Section 95 of the Insolvency and Bankruptcy Code, 2016 filed by Central Bank of India against the personal guarantors before Hon''ble National Company Law Tribunal ("NCLT"), the proceedings against personal guarantors before the Hon''ble DRT are stayed. The Hon''ble NCLT has passed an order for appointment of Resolution Professional and filing of report by the Resolution Professional. In view of settlement with Central Bank of India, the Hon''ble NCLT has disposed of the petitions against Mr. Shailesh Bhandari, Mr. Avinash Bhandari and Mr. Mukesh Bhandari as withdrawn / infructuous.

(ii) Rare Asset Reconstruction Limited (being assignee of debts of Indian Overseas Bank) ("Rare ARC") had filed Original Application against the Company & its guarantors Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari before the Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The Hon''ble DRT vide judgment dated September 20, 2018 allowed the original application filed by the Bank / Financial Institution and issued recovery certificate against the Company and Guarantors to the tune of Rs. 315.64 Crore and future interest on the amount due @12.75% p.a. with monthly rests from the date of filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the DRT has initiated recovery proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged properties. The Hon''ble Recovery Officer has passed order for release of Rs. 10 Crores from the account of company with Standard Chartered Bank to Rare ARC, sale of shares of the guarantors and payment of Rs. 0.05 Crores by Mr. Avinash Bhandari for non-disclosure of assets to be adjusted towards the dues. Further in view of petition under Section 95 of the Insolvency and Bankruptcy Code, 2016 filed by Central Bank of India against the personal guarantors, there was moratorium against personal guarantors. Further action / hearing is pending before Hon''ble Recovery Officer.

(iii) In view of settlement / consent terms filed with DRT and after completion of pleadings and hearing, the Original Application filed by Corporation Bank has been disposed on August 25, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT was being adjourned. Thereafter, the Demand Notice dated June 22, 2021 and August 26, 2021 is issued by Recovery Officer. Based on the revised settlement terms and payment of One Time Settlement amount, the Recovery Officer by order dated February 29, 2024 closed the recovery certificate as satisfied under Bank One Time Settlement.

(iv) In view of settlement / consent terms filed with DRT and after completion of pleadings and hearing, the Original Application filed by Union Bank of India has been disposed on April 27, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT was being adjourned. Thereafter, the Demand Notice dated June 22, 2021 and August 26, 2021 is issued by Recovery Officer. Based on the revised settlement terms and payment of One Time Settlement amount, the Recovery Officer by order dated March 7, 2024 closed the recovery certificate as satisfied under Bank One Time Settlement.

(v) In view of settlement / consent terms filed with DRT, the Original Application filed by Rare Asset Reconstruction Limited (being assignee of debts of Dena Bank) has been disposed on October 15, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT were being adjourned. Thereafter, the Demand Notice dated August 3, 2021 is issued by Recovery Officer and further action / hearing is pending before Hon''ble Recovery Officer.

(vi) In view of settlement / consent terms filed with DRT or otherwise after completion of pleadings and hearing, the Original Application filed by Invent Assets Securitization and Reconstruction Private Limited (being assignee of debts of Allahabad Bank) has been disposed on March 21, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT is being adjourned.

(b) Willful Defaulter

(i) Central Bank of India has declared the Company as a wilful defaulter on May 29, 2014 for outstanding default amount of Rs. 436.13 Crores and reported the name of Company and its directors to the Reserve Bank of India and Credit Information Bureau (India) Limited (CIBIL) as wilful defaulter.

(ii) Dena Bank has declared the Company as a wilful defaulter on March 31, 2016 for outstanding amount of Rs. 51.44 Crores and reported the name of the Company and its directors to the Reserve Bank of India and Credit Information Bureau (India) Limited (CIBIL) as Wilful Defaulter. Rare Asset Reconstruction Limited (being assignee of debts of Dena Bank) has agreed to withdraw the name of the Company and its directors from the defaulter''s list on receipt of entire settlement amount.

(c) Central Bureau of Investigation (CBI)

(i) The Central Bureau of Investigation (CBI) has conducted certain proceedings, on the basis of the complaint filed by Central Bank of India with regard to the utilization of the loan disbursed by Central Bank of India. Central Bureau of Investigation has filed a charge sheet and a CBI Special Case Number 27 of 2015 was registered against the Company and its directors i.e. Mr. Mukesh Bhandari, Mr. Shailesh Bhandari, Mr. Avinash Bhandari and few officers of Central Bank of India before the Hon''ble CBI Court, Ahmedabad on October 6, 2015 and the matter was pending before the Hon''ble CBI Court for further proceedings. The Directorate of Enforcement, Ahmedabad has filed an application before the Hon''ble CBI Court, Ahmedabad for transfer of CBI Case to the designated court of PMLA. The Hon''ble CBI Court, Ahmedabad by order dated January 24, 2022 allowed the application and by further order dated March 29, 2022 disposed of the case for transfer to PMLA Court. The Principal District Court (PMLA Court) has registered the transferred case as ACB - Special Case No. 15 / 2022 and the case is now pending for opening of case by prosecution.

(ii) Bank of India has filed a complaint under section 154(1) of the Criminal Procedure Code (Cr.P.C) pertaining to fraud perpetrated by the Company, its directors, unknown public servants and other unknown persons with intent to defraud Bank of India to the tune of Rs. 81.97 Crores. The Central Bureau of Investigation, Banking Securities Fraud Branch, Mumbai has registered a FIR on December 31, 2021. Central Bureau of Investigation (CBI) carried out the search on January 4, 2022 and seized various documents and now the matter is under investigation. The Company has filed a petition for quashing of FIR before Hon''ble Gujarat High Court in April 2024 and the Hon''ble Gujarat High Court by order dated April 26, 2024 issued notice and notice as to interim relief. The said petition is pending for further hearing.

(d) Petition under Insolvency and Bankruptcy Code (IBC)

(i) Union Bank of India, a financial creditor has filed a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT), Ahmedabad for initiating Corporate Insolvency Resolution Process (CIRP) against the Company for an default amount of Rs. 305.38 Crores in respect of outstanding dues. In view of revised settlement terms with Union Bank of India and repayment of entire loan, the petition was disposed of by Hon''ble NCLT, Ahmedabad as withdrawn on January 18, 2024.

(ii) Edelweiss Asset Reconstruction Company Limited ("EARC"), a financial creditor has filed a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT), Ahmedabad for initiating Corporate Insolvency Resolution Process (CIRP) against the Company for an default amount of Rs. 1900.56 Crores in respect of outstanding dues of Bank of India, the original lender only. In view of the restructure of the loan in November 2023, the Hon''ble NCLT, Ahmedabad has dismissed the petition alongwith Interlocutory Applications as settled out of Court by order dated November 22, 2023.

(e) Fraud Classification

(i) The Company had filed a Special Civil Application ("SCA") against Central Bank of India and Reserve Bank of India for wrongfully declaring the account of the Company as fraud account on November 6, 2013 in breach of principles of natural justice. The said petition was dismissed by the Hon''ble Gujarat High Court. The Company has filed a Letters Patent Appeal (LPA) against the said order. The Hon''ble Gujarat High Court has issued Notice and notice as to interim relief. The Hon''ble Gujarat High Court by interim order dated June 21, 2023 stayed the fraud classification and order passed by Hon''ble single judge. In view of interim order passed by Hon''ble Gujarat High Court and request of the Company, Central Bank of India has removed fraud flagging in the account. The said appeal is pending for further hearing before the Hon''ble Gujarat High Court.

(ii) The Company had filed a Special Civil Application ("SCA") against Bank of India in July 2023 for wrongfully declaring the account of the Company as fraud account on February 13, 2019 without any intimation and in breach of principles of natural justice. The Hon''ble Gujarat High Court by order dated November 30, 2023 quashed and set aside the action of classifying the account as fraud account and the matter was remitted to the bank leaving a liberty to take fresh steps in the accordance with the principles laid down by Hon''ble Apex Court. Bank of India has given a show cause notice and copy of Forensic Audit Report to the Company to make representation / submission. The Company is in process to make appropriate representation / submission.

(iii) The Company had filed a Special Civil Application ("SCA") against Canara Bank (erstwhile Syndicate Bank) in December 2023 for wrongfully declaring the account of the Company as fraud account on May 4, 2018 without any intimation, in breach of principles of natural justice and despite that the Company has repaid the settled loan amount and have received No Due Certificate from the bank on May 27, 2019. The Hon''ble Gujarat High Court has issued notice on December 11, 2023 and now petition is pending for further hearing.

(iv) The Company had filed a Special Civil Application ("SCA") against ICICI Bank and Reserve Bank of India in April 2024 for wrongfully declaring the account of the Company as fraud account without any intimation, in breach of principles of natural justice and despite that the Company has repaid the settled loan amount and have received No Due Certificate from the bank on July 4, 2016. The Hon''ble Gujarat High Court has issued notice on April 18, 2024 and now petition is pending for further hearing.

(f) Case under section 138 of the Negotiable Instruments Act, 1881:

Indian Overseas Bank had filed two criminal complaints against the Company and its directors / officers under section 138 of Negotiable Instruments Act, 1881 for dishonor of cheques of Rs. 103.00 Crore issued by the Company and the Company is contesting both the said cases and both the matters are pending for further proceedings before the respective Hon''ble Metropolitan Magistrates, Ahmedabad.

(g) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI")

Edelweiss Asset Reconstruction Company Limited has issued statutory demand notice dated July 13, 2022 under section 13(2) of Securitisation and Reconstruction of Financial Asset and Enforcement of Security Interest Act, 2002 ("SARFAESI") read with Security Interest (Enforcement) Rules, 2002 to the Company and personal guarantors to discharge the liabilities within sixty days from the date of notice. The Company was yet to reply / comply, to the said notice and there was no further communication from Edelweiss Asset Reconstruction Company Limited. In view of the restructuring of the loan in November 2023, the demand notice has become infructuous.

38. (a) During the financial year ended on March 31, 2019, Goods and Service Tax Department of Maharashtra has re-determined Value Added Tax liability (including interest and penalty) of Rs. 6.28 Crore for the financial year 2009-10 and Rs. 23.93 Crore for the financial year 2010-11 after adjustment of Rs. 4.00 Crore paid by the company under protest. The company has paid Rs 1.07 Crore during the year ended as at March 31, 2020 and have filed an appeal before the Deputy Commissioner of State Tax, Mumbai. On account of the said order presently the liability of the company is of Rs. 29.15 Crore (March 31, 2023: Rs. 29.15 Crore). The provision for impugned disputed tax liability has not been made for as the company is hopeful of matter being decided in its favor by appellate authority.

(b) The Indian Overseas Bank had classified the loan account of the Company as non-performing assets during August 2011, which was subsequently assigned to Rare Assets Reconstruction Limited ("Rare ARC"), but with whom the settlement terms have not been entered into. Further, the Hon''ble Debt Recovery Tribunal (DRT), Ahmedabad has passed judgment against Company for recovery along with future interest on the amount due @12.75% p.a. with monthly rests. As per the details available with the company, the amount of unprovided interest, on approximate basis, on the said loan is as under:-

39. Additional Disclosure

(a) The cost of material consumed includes freight, loading and unloading expenses, inspection fees, commission on purchase, taxes & duties (to the extent of credit not available), rate difference and interest cost on purchase of raw material and ancillary expenses thereof (including reversal of any claim).

(b) Few accounts of "Trade Receivables", "Trade payables", "Advances from Customer", "Advances Recoverable In Cash or Kind", "Advance to Suppliers and Other Parties" including very old balances and some of the Journal entries passed therein, are subject to confirmation / reconciliation / supporting documents and includes very old non-moving items therefore are subject to necessary adjustments for accounting or re-grouping / classification.

(c) Account of Receivables / Payables in respect of Goods and Service Tax, Service Tax, CENVAT, and Vat are subject to reconciliation, submission of its return for its claim and / or its Audit / Assessment / Settlement / Payment, if any.

(d) The classification / grouping of items of the accounts are made by the management, based on the available data with the company.

(e) The amount of inventory has been taken by the management based on information available with the company and without conducting physical verification of the slow-moving inventory. The slow-moving inventories have been valued by the management on estimated net realizable values.

(f) In the Capital Work in Progress of Rs 44.10 Crore (March 31, 2023 Rs. 26.08 Crore) the management believes that the uncompleted projects of Rs. 1.42 Crore (March 31, 2023: Rs. 1.37 Crore;) requires some further investment to bring them into commercial use and the company desires to complete the project, therefore these are not treated as impaired assets and treated as temporarily suspended.

(g) On account of technicalities involved, the claim of MEIS will be accounted for as and when the claim will be admissible with the respective authority.

(h) During the year ended as at March 31, 2022 the business activity of Transmission Line Tower division (TLT) was temporarily suspended in order to evaluate its further business viability. However, till March 31, 2024 the operation of the TLT division has not commenced. The management is of the opinion that the carrying value of the Inventory, Property, Plant and Equipment and Trade receivables represent net realizable value and therefore no provision for impairment / write off is required to be made.

(i) In absence of confirmation from the lenders, during the year the company has adjusted the repayment of the loan towards the principal loan outstanding. Further in case of Central Bank of India, there is non-stipulation about the date of payment of interest and therefore the same has been shown as Interest accrued but not due.

(j) Audit Log: The Company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, where audit trail (edit log) facility was enabled, no instance of the audit trail feature being tampered with.

40. DIRECTOR''S REMUNERAITON

Mr. Suraj Bhandari was re-appointed as a Whole-time Director for a period of three years w.e.f. November 13, 2022 to November 12, 2025 at a remuneration of Rs. 1,50,000 / - per month as approved by the shareholders of the Company at 36^th Annual General Meeting held on August 31, 2022. Mr. Shailesh Bhandari was re-appointed as a Managing Director for a period of three years w.e.f. February 1, 2023 to January 31, 2026 at a remuneration of Rs. 2,00,000 / - per month as approved by the shareholders of the Company through Postal Ballot on March 28, 2023. This remuneration to both the Directors are subject to approval from banks and financial institutions as the company has defaulted in repayment of loans.

Further, Mr. Shailesh Bhandari, Managing Director was re-designated as Executive Vice Chairman and Mr. Suraj Bhandari was elevated and re-designated as a Managing Director with effect from February 9, 2024 with same terms & conditions of remuneration and the shareholders of the Company has also approved the same through Postal Ballot on March 19, 2024.

41. OTHER LEGAL CASES:

(a) Some of the creditors have filed cases of recovery against the company before the various Civil Courts / Commercial Courts for Rs 3.76 Crore (Previous Year Rs 1.30 Crore). The said amounts are excluding interest.

(b) Some of the suppliers have filed complaints against the Company and its directors / officers under Section 138 of Negotiable Instruments Act, 1881 for dishonor of cheques of Rs. 66.17 Crores issued by the Company and the Company and its directors / officers are contesting the said cases and the same are pending before respective courts.

(c) In view of the registration of the FIR by the Central Bureau of Investigation related to loan of Central Bank of India for scheduled offences, the Ahmedabad Zonal Office of the Directorate of Enforcement ("ED") has recorded a case under the provisions of the Prevention of Money Laundering Act, 2002 and during the course of investigation, the ED has passed an order dated March 28, 2018 under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 for provisional attachment of certain properties to the extent of Rs. 179.80 Crores comprising Land having total area of 4,90,621 square meter at Chhadavada and Samakhiyali of Steel Plant, Building and Plant & Machinery for a period of 180 days. Thereafter, a complaint under sub-section (5) of section 5 of the Prevention of Money Laundering Act, 2012 was filed by ED before the Adjudicating Authority, New Delhi and the Adjudicating Authority, New Delhi vide order dated September 5, 2018 confirmed the attachment of abovesaid properties. The Company has filed an appeal before the Hon''ble Appellate Tribunal, PMLA, New Delhi and the Hon''ble Appellate Tribunal, PMLA, New Delhi vide order dated December 10, 2018 passed an order for maintaining status quo and no coercive action by ED. The ED has filed its reply and the matter is adjourned for filing of rejoinder. The ED has filed an application for vacation of interim order. Edelweiss Asset Reconstruction Company Limited, a secured financial creditor has filed impleadment application in July 2023 to participate in the proceedings. Thereafter, the matter was adjourned from time to time for further hearing.

(d) The Assistant Director, Directorate of Enforcement, Ahmedabad has filed a PMLA - Special Case No. 20 / 2018 on December 1, 2018 before Principal District Judge, Ahmedabad against the company, Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari under section 3 and 4 of the Prevention of Money Laundering Act, 2002. During the year 2023, the charge has been framed by the Hon''ble Court and now it is pending at the stage of evidence of prosecution.

(e) The Company has filed recovery case against Victory Rich Trading Limited ("VRTL") & its director for non-payment of amount in the High Court of Hong Kong and the High Court of Hong Kong has passed judgment for payment of recovery amount. Thereafter, VRTL has challenged the said order and the same is pending before the High Court of Hong Kong. Further the Company has filed a winding up petition against VRTL before the High Court of Hong Kong and the High Court of Hong Kong has passed the order for winding up of VRTL.

(f) Mr. Siddharth Bhandari, one of the Promoter group and erstwhile Whole-time Director and Dr. Rakesh Bhandari, one of the Promoter group of the Company ("Petitioners") has filed two separate petitions (CP No. 93 / 2018 and CP No. 94 / 2018) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 149, 150, 152, 159 and 176 of the Companies Act, 2013 inter alia, for declaring the appointment of four independent directors as null and void from their respective dates of appointment being violative of provisions of section 149 and 150 and other related provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014. The interim order dated May 4, 2021 passed by the Hon''ble NCLT, Ahmedabad for joint signature of Mr. Siddharth Bhandari in bank accounts, policy decisions affecting smooth running of company as a going concern etc. was challenged by Mr. Shailesh Bhandari & Company before Hon''ble NCLAT and thereafter, before Hon''ble Supreme Court of India. After granting stay on joint signature in bank accounts by the Hon''ble NCLAT and Hon''ble Supreme Court of India, the appeals were finally disposed of. Therefore, there was joint signature of Mr. Siddharth Bhandari in bank accounts during the interregnum period. The CP No. 93 / 2018 and CP No. 94 / 2018 was finally heard by the Hon''ble NCLT, Ahmedabad and the said petitions were disposed of on January 11, 2023 as not maintainable and vacated all interim orders. The Petitioners have challenged the order dated January 11, 2023 before the Hon''ble NCLAT and the appeals are pending before the Hon''ble NCLAT for hearing.

(g) Mr. Siddharth Bhandari - erstwhile Whole-time Director & Promoter group, Dr. Rakesh Bhandari, Promoter group and Mr. Mukesh Bhandari - erstwhile Chairman & Promoter and currently Non-Executive Director of the Company has filed a petition (CP No. 89 / 2019) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 222 of the Companies Act, 2013 against the Company and three shareholders for suspension of their voting rights and non-participation in voting at the 33^rd Annual General Meeting of the Company and for maintaining the existing status of Petitioner No. 1 Mr. Siddharth Bhandari. The Hon''ble NCLT vide order dated September 27, 2019 allowed the Company to go ahead with the 33^rd Annual General Meeting and e-voting process, however, the agenda Item No. 2 of the AGM shall be subject to final outcome of the petition. Thereafter, the Hon''ble NCLT, Ahmedabad by order dated January 11, 2024 dismissed CP No. 89 / 2019 as infructuous.

(h) Mr. Siddharth Bhandari, Mr. Mukesh Bhandari and Dr. Rakesh Bhandari ("Petitioners") has filed a petition (CP No. 5 / 2022) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 241-242 of the Companies Act, 2013 against the Company, Mr. Shailesh Bhandari & Others. The Hon''ble NCLT has issued notice to respondents and directed to file reply on interim relief and maintainability. The Company has filed its reply on interim relief and maintainability. The petition is pending for further hearing.

During the pendency of this petition, the Petitioners have filed an Interlocutory Application No. 55 / 2022 in CP No. 5 / 2022 to restrain the Company from holding Board Meeting dated August 2, 2022 and stay some of the agenda items. The Hon''ble NCLT, Ahmedabad by order dated August 24, 2022 not granted any stay and rejected the application as misconceived and not maintainable. The Petitioners have challenged the order dated August 24, 2022 before the Hon''ble NCLAT and the Hon''ble NCLAT by order dated November 29, 2022 dismissed the appeal. The Petitioners have challenged the order dated November 29, 2022 before the Hon''ble Supreme Court of India and the civil appeal is pending for hearing before the Hon''ble Supreme Court of India.

The Petitioners have also filed an Interlocutory Application No. 5 / 2024 in CP No. 5 / 2022 for various reliefs including joint signature in bank accounts. The Hon''ble NCLT, Ahmedabad by order dated March 19, 2024 dismissed the application.

(i) Ministry of Corporate Affairs, Office of the Regional Director, North-Western Region, Ahmedabad has in October, 2018 initiated inspection of books of accounts and other records under section 206(5) of the Companies Act, 2013. Thereafter, the Regional Director has issued letter for violations / irregularities of the Companies Act, 1956 / 2013 and the Company has replied to the same. Based on the same, the Registrar of Companies, Gujarat has issued letter for violations of Section 128(1), 129(1), 129(5), 133 read with Schedule III of the provisions of the Companies Act, 2013 and initiated prosecution against Mr. Mukesh Bhandari, Mr. Shailesh Bhandari, Mr. Avinash Bhandari, Mr. Siddharth Bhandari, Managing Directors / Whole-time Director & Late Mr. Pawan Gaur, Chief Financial Officer of the Company. Mr. Shailesh Bhandari, Mr. Avinash Bhandari & Late Mr. Pawan Gaur have challenged the said prosecution before the Hon''ble Gujarat High Court under section 463 of the Companies Act, 2013 and the said petition is pending for hearing before the Hon''ble Gujarat High Court.

Further the office of Regional Director vide letter / order dated December 24, 2019 informed the Company about investigation into the affairs of the Company under section 210(1)(c) of the Companies Act, 2013. Thereafter, the Company was directed to furnish documents / information and the Company has challenged the said investigation before the Hon''ble Gujarat High Court. As the petition was rejected by the Hon''ble Gujarat High Court, the Company has challenged the same before division bench by filing Letters Patent Appeal and the division bench of the Hon''ble Gujarat High Court has passed order for continuation of investigation and that if the report recommends closure of the proceedings, no further orders may be necessary, however, if the report recommends some coercive measures to be taken, then the Central Government or the competent authority may not take any such decision without leave of the Court. The Letters Patent Appeal is pending awaiting the appropriate report of investigation under Section 210 of the Companies Act, 2013.

(j) Mr. Babu Devraj Badhiya has filed a Writ Petition in the nature of Public Interest Litigation (PIL) on February 4, 2019 before the Hon''ble Gujarat High Court with prayer for direction for compliance of various approvals / permissions issued by various authorities for the Samakhiyali Plant, Kutch, Gujarat. The Hon''ble Gujarat High Court has passed order for not to carry out any further construction / development and the matter is pending before the Hon''ble Gujarat High Court.

Note: The financial implication of all this case is not ascertainable at this point of time.

42. OTHER STATUTORY INFORMATION

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

(ii) The Company does not have any transactions with the Companies which are struck off.

(iii) The Company does not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

ii) Valuation technique used to determine fair value

Financial instruments are initially recognized and subsequently re-measured at fair value as described below :

- The fair value of investment in quoted Mutual Funds is measured at quoted price or NAV.

iii) Valuation process

The Company obtains valuation results from external / internal valuers for level 2 measurements. Inputs to level 2 measurements are verified by the Company''s treasury department.

iv) Fair value of financial assets and liabilities measured at amortized cost

The management assessed that cash and cash equivalents, Bank Balance other than cash and cash equivalents, trade receivables, trade payables, investments in unquoted equity of joint venture / subsidiary company and government securities, other financial assets, short term borrowings, non current borrowings and other current financial liabilities approximate their carrying amounts.

45 Financial Instrument Risk, Management, Objectives & Policies

45.1 Financial risk management

The management of the Company has implemented a risk management system that is monitored by the Board of Directors. The general conditions for compliance with the requirements for proper and future-oriented risk management within the Company are set out in the risk management principles. These principles aim at encouraging all members of staff to responsibly deal with risks as well as supporting a sustained process to improve risk awareness. The guidelines on risk management specify risk management processes, compulsory limitations, and the application of financial instruments. The risk management system aims at identifying, analyzing, managing, controlling and communicating risks promptly throughout the Company. Risk management reporting is a continuous process and part of regular company reporting.

The Company is exposed to credit, liquidity and market risks (interest rate risk, foreign currency risk and other price risk) during the course of ordinary activities. The aim of risk management is to limit the risks arising from operating activities and associated financing requirements.

45.2 Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks. The balances with banks and security deposits are subject to low credit risk since the counterparty has strong capacity to meet the obligations and where the risk of default is negligible or nil.

Trade receivables, Loans and Advances to Suppliers & Others

Credit risk arises from the possibility that customer / borrowers will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers and the brorrowers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information.

The provision on trade receivables for expected credit loss is recognized on the basis of life-time expected credit losses (simplified approach). Trade receivables are evaluated separately for balances towards progress billings and retention money due from customers. An expected loss rate is calculated at each year-end, based on combination of rate of default and rate of delay. The Company considers the rate of default and delay upon initial recognition of asset, based on the past experience and forwardlooking information, wherever available. The provision on loans for expected credit loss is recognized on the basis of 12-month expected credit losses and assessed for significant increase in the credit risk.

Concentrations of Credit Risk form part of Credit Risk

During the year ended March 31, 2024, the company has made sale of Rs 901.96 Crore (or 21.12% of Revenue from operation) to two Customer which exceeds 10% of its Revenue from Operation and during the year ended March 31, 2023, the company did not have sales to a single customer exceeding 10% of the Revenue from operation. Accounts receivable from such customer approximated Rs Nil as at March 31, 2024 and Rs Nil as at March 31, 2023. A loss of this customer could adversely affect the operating results or cash flows of the Company.

i) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market rates. Since the borrowing of the company are classified as non performing assets or are transferred to assets reconstruction company or the settlement agreement have been executed and few lenders are charging interest at fix rate of interest, therefore the exposure to risk of changes in market interest rates is minimal. However the Company is liable for the payment of interest to Union Bank of India and Central Bank of India @ 1 Year MCLR on the Outstanding amount & it''s sensitivity analysis is as under:-

51 Events occurred after the Balance Sheet Date

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and / or reporting of any of these events and transactions in the financial statements. As of May 20, 2024, there were no subsequent events to be recognized or reported that are not already disclosed elsewhere in the financial statements.

52 Previous year amount has been regrouped / re-casted / re-arranged / re-classified / re-determined, wherever necessary, to make the figure of the current year comparable with the previous year.

As per our report of even date For and on behalf of the Board of Directors of

For Hitesh Prakash Shah & Co. Electrotherm (India) Limited

Chartered Accountants Firm Registration No: 127614W

Hitesh Shah Shailesh Bhandari Suraj Bhandari

Partner Executive Vice Chairman Managing Director

Membership No. 124095 DIN:- 00058866 DIN:- 07296523

UDIN: 24124095BKAYTE4681

Fageshkumar R. Soni

Company Secretary

Place : Ahmedabad Place : Ahmedabad

Dated: May 20, 2024 Dated: May 20, 2024

---

Mar 31, 2023

(a) The Company holds investment in equity shares of Shree Ram Electrocast Limited as subsidiary company. Due to heavy losses and non operation of Shree Ram Electrocast Limited the amount of Investment of Rs. 78.68 Crore has been written off during the financial year 2015-2016. State Bank of India has conducted auction under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 & Movable & Immovable Property, Plant & Equipment and Inventory charged with the bank were sold during the year ended on March 31, 2020. In view of the said facts advances to the said subsidiary of Rs 1.78 Crosre (March 31, 2022 Rs. 1.78 Crore), shown in Note no. 8 , has been treated as Doubtful advance to the Subsidiary Company.

(b) The company holds an investment in equity shares of ET Elec-Trans Limited as subsidiary company and Bhaskarpara Coal Company Limited as a joint venture. These Companies have incurred heavy losses and/or are non-operating and therefore the fate of said Companies is uncertain. Provision for impairment of Rs. 2.13 Crore (March 31, 2022 Rs. 2.13 Crore) in the value of investment in joint ventures namely Bhaskarpara Coal Company Limited and in the value of investment in subsidiary namely ET Elec-Trans Limited Rs. 0.72 Crore (March 31, 2022 Rs. 0.72 Crore) has been provided as on April 1, 2016.

(b) The settlement of loans and advances to subsidiary is neither planned nor likely to occur in the next twelve months and are given as interest free.

(c) Loans and advances to subsidiary is given for business purpose.

(d) Due to uncertainty of recovery, impairment allowance (allowance for bad and doubtful debts) of the amount recoverable of Rs. 4.18 Crore (March 31, 2022 Rs. 4.18 Crore) from Electrotherm Services Limited has been made as on April 1, 2016.

(c) The settlement of advances to subsidiaries and related parties are not planned and is not likely to occur with in twelve months

(d) “ The Company holds investment in equity shares of Hans Ispat Limited (Wholly Owned Subsidiary Company). Bank of Baroda had filed Original Application against said Wholly Owned Subsidiary Company & its guarantors (i.e. Mr. Shailesh Bhandari and Mr. Mukesh Bhandari) before Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act 1993. The Hon''ble DRT vide judgement dated April 15, 2019 allowed the original application

filed by the Bank of Baroda and for issue of recovery certificate against the Wholly Owned Subsidiary Company and guarantors to the tune of Rs. 50.74 Crores and future interest on the amount due @12.00% p.a. with monthly rests from the date of filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the DRT has initiated recovery proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged properties. Thereafter, the Hon''ble Recovery Officer has put the properties for e-auction on November 22, 2019, April 29, 2020, September 24, 2021 and November 18, 2021. On November 18, 2021 the bid offer of Rs. 33.03 Crores from Kemo Steel Industries Private Ltd was successful. The Ld. Recovery Officer, DRT-I Ahmedabad confirmed the sale and handed over the possession on April 6, 2022 to the auction purchaser. Sale Certificate was issued on April 7, 2022 in favour of the auction purchaser.

However, Invent Assets Securitisations & Reconstruction Private Limited (assignee of debts of State Bank of India for Wholly Owned Subsidiary Company) has filed an appeal in DRAT, Mumbai. The Hon''ble DRAT has passed an order on April 19, 2022 that further proceeding consequent to the sale which has already been confirmed and possession handed-over be stalled and stayed further proceedings and status-quo to be maintained. Thereafter, by order dated August 10, 2022, the Hon''ble DRAT by way of an interim arrangement, permitted the auction purchaser to run the factory, subject to the certain condition and to the ultimate decision to be taken in the Appeal. Invent Assets Securitisations & Reconstruction Private Limited has filed a Writ Petition before the Bombay High Court challenging this order of the DRAT. Hans Ispat Limited has also filed an appeal in the DRAT against the order of the Recovery officer, DRT Ahmedabad finalising the sale of the mortgaged property. The said appeals are pending for further hearing.

As on March 31, 2023 the company had Trade Receivable of Rs 27.39 Crore (as at March 31, 2022 Rs 27.30 Crore), Advances of Rs 63.25 Crore (as at March 31, 2022 Rs 62.06 Crore) and investment of Rs 36.46 Crore (as at March 31, 2022 Rs 36.46 Crore) and against which on considering all the facts as stated above, during the year ended March 31, 2023, the company has provided expected credit loss / Provision for doubtful amount of Rs 20.57 Crore (as at March 31, 2022 Rs 6.82 Crore) on trade receivable, Rs 47.73 Crore (as at March 31, 2022 Rs 15.51 Crore) on advances and impairment on investment in subsidiary of Rs 36.46 Crores respectively and which had been considered as Exceptional items and the cumulative provision for expected credit loss / Provision for doubtful debt / Impairment upto March 31, 2023 on trade receivable is Rs 27.39 Crore (as at March 31, 2022 Rs 6.82 Crore), on Advances Rs 63.24 Crores (as at March 31, 2022 Rs 15.51 Crore) and impairment of investment is Rs 36.46 Crore.

b) Rights, preference and restriction attached to Equity Shares

The face value of the Equity shares is Rs 10/- per share . Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. During the year, the company has not declared any dividend.

The shareholders are not entitled to exercise any voting right either personally or proxy at any meeting of the Company in cases of calls or other sums payable have not been paid.

In the event of liquidation of the company, holder 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 shareholders.

c) Rights, preference and restriction attached to Preference Shares

- The face value of the Preference shares is Rs 10/- per share . The Preference share holder have voting right in their meeting. During the year, the company has not declared any dividend.

- In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital.

d) Rights, preference and restriction attached to Partially Convertible Partially Redeemable Preference Shares (PCPRPS)

- The face value of the PCPRPS is Rs 10/- per share . The preference share holder have voting right in their meeting. During the year, the company has not declared any dividend.

- In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital.

- The Equity Shares arising upon conversion of the PCPRPS shall rank pari passu with the existing Equity Shares of the Company in all respects, including dividend.

g) As per Records of the Company, including its register of Shareholder/members and other declaration received from shareholders regarding beneficial interest, the above shareholding represent legal ownership of shares.

h) The Company has calls in arrears / unpaid calls of Rs. Nil (March 31, 2022: Nil)

i) Details of Shares allotted as fully paid up pursuant to contract(s) without payment being received in cash. ( during 5 years immediately preceding March 31, 2023).

Nil

j) As per the terms and conditions of the settlement with Edelweiss Asset Reconstruction Company Limited (EARC), the company has allotted 2,85,90,000 Partially convertible and Partially Redeemable Preference Shares (PCPRPS) of Rs.10 Each of amounting to Rs 28.59 Crore on August 22, 2015 and against the said PCPRPS, 12,66,440/- Equity shares of Rs. 10/- each at the price of Rs. 225.75 per equity share (inclusive of Share premium amount of Rs. 215.75 per equity share) were allotted during F.Y. 2016-17. As equity shares were allotted against such PCPRPS the entire amount of preference Share Capital of Rs. 28.59 Crore has been treated as part of Equity Share Capital as on April 1, 2016

a. Capital Reserve

Capital reserve includes amount of debt reduction and is not availiable for distrubution of proifts.

b. Securities Premium

Securities Premium is used to record the premium on issue of shares and is utilized in accordance with the provisions of the Companies Act, 2013.

c. General Reserve

General Reserve is used from time to time to transfer profits to/from Retained Earnings for appropriation purposes including the amount arising due to past revaluation of land and building under previous GAAP. The general reserve is created by a transfer from one component of equity to another and Is not an item of other comprehensive income.

d. Retained Earnings

Retained Earnings are the profits / (loss) of the Company earned till date and net of appropriations.

(a) Security given

Rupee term loan are secured by first Charge / sub-servient charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of the Directors of the Company.

(c) Company has defaulted in repayment of borrowings from Lenders. Details of the defaults are as follows:

The company has not paid major of the instalments due from June 30, 2020 to March 31, 2023 and major of the interest due thereon for the period from September 30, 2020 to March 31, 2023 (included in interest accrued in current Other financial liability). The company has requested respective lenders/ARCs to revise repayment schedule and which is yet to be confirmed by the respective lenders/ARCs and is further subject to the outcome of notice issued under SARFAESI Act by the lender ARC.

(f) The Company has also defaulted in complying with the terms and conditions of settlement entered with the Banks / ARCs (other than Central Bank of India) and as per the settlement terms, in case of default, the agreement stands withdrawn and all the dues & liabilities as per original terms shall be restored. However, the company is in negotiation with the respective lenders for rescheduling / restructuring of the said loan and the company is hopeful for no further liability on the company and therefore, the final amount of liability to be paid is not ascertainable and which has not been accounted for. With regard to Central Bank of India the impact of Settlement with Banker, will be given on the final compliance of all the terms and conditions of the agreements.

32 Contingent Liabilities and Other Commitments (a) Claims against the Company not acknowledged as debts towards:		(Rs In Crore)
Particulars	As at March 31, 2023	As at March 31, 2022
i) VAT & CST	29.15	29.15
ii) Service Tax	1.84	1.84
iii) Custom Duty	8.12	8.12
iv) Excise Duty	342.00	342.00
v) Income Tax	21.37	21.37
vi) Goods and Service Tax	2.13	2.13
vii) Estimated amount of contracts remaining to be executed on capital account (net off advances) and not provided for	11.40	15.48
viii) Guarantees / Counter Guarantees	5.97	12.94

ix) There was proceedings of Inspection & Search by the State Goods and Service tax authorities, at the various places of the company and its subsidiary Company Hans Ispat Limited, during January 18, 2021 to February 3, 2021 and during the course of said proceedings, as determined by the authorities on various points, the company has voluntarily paid total amount of Rs 9.57 Crore towards tax, Interest and Penalty, on February 3, 2021. The company has accounted Rs 6.69 Crore as expenses and Rs 2.88 Crore has been shown as recovery from suppliers. In the opinion of the Company, there will not be any further additional liability with regard to said proceedings. Thereafter, certain other documents as informed by GST authorities, related to the company has been seized and verification of the same is in process by the said authorities.

x) Claims against the Company not acknowledged as debts amounting to Rs.1.11 Crore (As at March 31, 2022: Rs.1.11 Crore), are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc.

Note

i. Future cash flows in respect of above, if any, is determinable only on receipt of judgment/ decisions pending with relevant authorities.

ii. The above amounts are without the amount involved in the appeal preferred by the Department, if any, and further applicable Interest on the demand

(iv) Short Term Lease

(a) The Company has certain operating leases for office premises (short term leases) and low value lease. Such leases are generally with the option of renewal against increased rent and premature termination of agreement on mutual consent of both the parties. Rental expenses of Rs 2.60 Crore (March 31, 2022: Rs 1.26 Crore) in respect of obligation under operating leases have been recognised in the Statement of Profit and Loss.

II Defined Benefit Plans

The Company operates gratuity plan in the nature of defined benefit plan wherein every employee is entitled to the benefit as per scheme of the Company, for each completed year of service. The same is payable on retirement or termination whichever is earlier. The benefit vests only after five years of continuous service. The gratuity plan is governed by the payment of Gratuity Act,1972. Company''s Engineering & Technologies and Electric Vehicle Division having a gratuity plan is funded with Life Insurance Corporation of India and HDFC Bank while Special Steel Division is not maintaining such fund in any gratuity scheme.

i. The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

ii. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

iii. Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the defined benefit obligation as recognised in the balance sheet.

iv. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

33.2 Risks associated with defined benefit plan

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

Interest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of assets.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan''s liability.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality Risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

The details related to gratuity is on the basis of the certificate issued by the acturial valuer.

34 Segment Reporting

The segment report is given in consolidated financial statements.

36. Default in repayment & recovery and / or recovery proceedings by the Lenders against the company:

The information / details as provided in the Financial Statements are for the disclosure purpose only as per the applicable Ind Accounting Standards (Ind AS) without prejudice to the rights of the Company and without any acknowledgement of the debts / liabilities of the Company under the applicable laws.

(a) Default in repayment of loan, its settlement terms, accounting treatments, Cases before Debts Recovery Tribunal (DRT) / Hon''ble Metropolitan Magistrates, declaring the company and directors as willful defaulter by the bankers i. Central Bank of IndiaDefault in Repayment of Loan and its settlement terms and conditions:

(a) The company has defaulted in repayment of the loan taken from Central Bank of India in March 2012 of Rs. 436.13 Crore (Principal of Rs. 428.94 Crore and Interest of Rs. 7.19 Crore). The company on June 29, 2022 has accepted the compromise / One Time Settlement (OTS) letter of Central Bank of India dated June 28, 2022 for their outstanding loan/credit facility. As per the settlement terms and agreement the company need to pay Rs 22.50 Crore as upfront towards the repayment of loan and Rs 202.50 Crore in thirty instalment from July 2022 to December 2024 along with the interest @ 1 year MCLR on the outstanding settlement amount.

Accounting Treatment in Books

(b) The amount of repayment of debt to Central Bank of India, up to the balance sheet date is Rs. 84.33 Crore (March 31, 2022 is Rs. Nil) which has been adjusted against the total outstanding loan liability.

(c) If all the terms and conditions of the settlements are fully complied, there would be a reduction in debt by Rs. 211.13 Crore.

(d) Central Bank of India has filed Original Application against the Company & its guarantors (Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari) before the Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The Hon''ble DRT vide judgement dated October 9, 2018 allowed the original application filed by the Bank and issued recovery certificate against the Company and guarantors to the tune of Rs. 577.89 Crores and future interest on the amount due @10% p.a. with monthly rests from the date of filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the DRT has initiated recovery proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged properties and for valuation of the said attached properties. Further action / hearing is pending before the Hon''ble Recovery Officer. As per the terms of settlement with Central Bank of India dated June 28, 2022, the amount of Rs. 10.75 Crores lying in ''No Lien" account has been adjusted against the upfront amount and the Bank has agreed to withdraw all the legal cases on payment of entire settlement amount.

(e) In view of petitions under Section 95 of the Insolvency and Bankruptcy Code, 2016 filed by Central Bank of India against the personal guarantors before Hon''ble National Company Law Tribunal ("NCLT"), the proceedings against personal guarantors before the Hon''ble DRT are stayed. The Hon''ble NCLT has passed an order for appointment of Resolution Professional and filing of report by the Resolution Professional. In view of settlement with Central Bank of India, the Hon''ble NCLT has disposed of the petitions against Mr. Shailesh Bhandari and Mr. Avinash Bhandari as withdrawn, while the petition against Mr. Mukesh Bhandari is pending.

Willful Defaulter

(f) Central Bank of India has declared the Company as a wilful defaulter on May 29, 2014 for outstanding default amount of Rs. 436.13 Crores and reported the name of Company and its directors to the Reserve Bank of India and Credit Information Bureau (India) Limited (CIBIL) as wilful defaulter.

Central Bureau of Investigation (CBI)

(g) The Central Bureau of Investigation (CBI) has conducted certain proceedings, on the basis of the complaint filed by Central Bank of India with regard to the utilization of the loan disbursed by Central Bank of India. Central Bureau of Investigation has filed a charge sheet and a CBI Special Case Number 27 of 2015 was registered against the Company and its directors i.e. Mr. Mukesh Bhandari, Mr. Shailesh Bhandari, Mr. Avinash Bhandari and few officers of Central Bank of India before the Hon''ble CBI Court, Ahmedabad on October 6, 2015 and the matter was pending before the Hon''ble CBI Court for further proceedings. The Directorate of Enforcement, Ahmedabad has filed an application before the Hon''ble CBI Court, Ahmedabad for transfer of CBI Case to the designated court of PMLA. The Hon''ble CBI Court, Ahmedabad by order dated January 24, 2022 allowed the application and by further order dated March 29, 2022 disposed of the case for transfer to PMLA Court. The Principal District Court (PMLA Court) has registered the transferred case as ACB - Special Case No. 15/2022 and the case is now pending for opening of case by prosecution.

Petition under Insolvency and Bankruptcy Code (IBC)

(h) Central Bank of India, a financial creditor has filed a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT), Ahmedabad for initiating Corporate Insolvency Resolution Process (CIRP) against the Company for an amount of Rs. 1059.59 Crores. The Company has filed its affidavit of objection and the Bank has filed rebuttal affidavit. The matter was lastly heard by the Hon''ble NCLT on May 4, 2022 and reserved for order. In view of settlement with Central Bank of India, the Hon''ble NCLT has not pronounced the order and finally on November 16, 2022, the Central Bank of India has withdrawn the petition.

Other Case

(i) The Company had filed a Special Civil Application ("SCA") against the Central Bank of India and Reserve Bank of India for wrongfully declaring the account of the Company as "fraud" account on November 6, 2013 in breach of principles of natural justice. The said petition was dismissed by the Hon''ble Gujarat High Court. The Company has filed a Letters Patent Appeal (LPA) against the said order. The Hon''ble Gujarat High Court has issued Notice and notice as to interim relief. The said petition is pending for further hearing before the Hon''ble Gujarat High Court.

ii. Rare Asset Reconstruction Limited (being assignee of debts of Indian Overseas Bank)Default in Repayment of Loan and its settlement terms and conditions:

(a) The company has defaulted in repayment of loan of Rs 189.96 Crore (after adjustment of repayment of Rs 10.05 Crore paid in during the year ended as at March 31, 2020) (Principal of Rs. 189.95 Crore and Interest of Rs. 0.01 Crore) in August 2011. Indian Overseas Bank has assigned its debts to Rare Asset Reconstruction Limited on September 28, 2017. The company is in the process of entering into a settlement agreement with Rare Asset Reconstruction Limited.

Accounting Treatment in Books

(b) The company was informed vide letter dated October 12, 2017 of Indian Overseas Bank, that the bank has assigned debts to Rare Asset Reconstruction Limited. However considering pending settlement, the outstanding loan amount is treated as current maturities of long term borrowings.

Case before Debts Recovery Tribunal (DRT):

(c) Rare Asset Reconstruction Limited (being assignee of debts of Indian Overseas Bank) ("Rare ARC") had filed Original Application against the Company & its guarantors Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari before the Debts Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The Hon''ble DRT vide judgment dated September 20, 2018 allowed the original application filed by the Bank / Financial Institution and issued recovery certificate against the Company and Guarantors to the tune of Rs. 315.64 Crore and future interest on the amount due @12.75% p.a. with monthly rests from the date of filing of Original Application till the recovery of amount. The Hon''ble Recovery Officer of the DRT has initiated recovery proceedings and passed order / issued warrant for attachment of hypothecated / mortgaged properties. The Hon''ble Recovery Officer has passed order for release of Rs. 10 Crores from the account of company with Standard Chartered Bank to Rare ARC, sale of shares of the guarantors and payment of Rs. 0.05 Crores by Mr. Avinash Bhandari for non-disclousre of assets to be adjusted towards the dues. Further in view of petition under Section 95 of the Insolvency and Bankruptcy Code, 2016 filed by Central Bank of India against the personal guarantors, there was moratorium against personal guarantors. Further action / hearing is pending before Hon''ble Recovery Officer.

Case under section 138 of the Negotiable Instruments Act, 1881:

(d) Indian Overseas Bank had filed two criminal complaints against the Company and its directors / officers under section 138 of Negotiable Instruments Act, 1881 for dishonor of cheques of Rs. 103.00 Crore issued by the Company and the Company is contesting both the said cases and both the matters are pending for further proceedings before the respective Hon''ble Metropolitan Magistrates, Ahmedabad.

iii. Union Bank of India (Corporation Bank merged with Union Bank of India)

Default in Repayment of Loan and its settlement terms and conditions

(a) The company has defaulted in repayment of loan of Rs 116.73 Crore in April 2012. The company has entered into settlement agreement for the repayment of loan on November 13, 2018. As per the settlement agreement the company has agreed to make the repayment of loan by September 2021. However, company has again defaulted in repayment of the instalment of the loan falling due from March 2021 till September 2021 and interest thereupon. The company has submitted revised repayment proposal to Union Bank of India which is pending for consideration.

Accounting treatment in Books

(b) The amount of repayment of debt to Union Bank of India, up to the balance sheet date of Rs. 96.58 Crore (March 31, 2022: Rs. 90.08 Crore) has been adjusted against the total outstanding loan liability.

Case before Debts Recovery Tribunal (DRT):

(c) In view of settlement / consent terms filed with DRT or otherwise after completion of pleadings and hearing, the Original Application filed by Union Bank of India has been disposed on August 25, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT was being adjourned. Thereafter, the Demand Notice dated June 22, 2021 and August 26, 2021 is issued by Recovery Officer and further action / hearing is pending before Hon''ble Recovery Officer.

iv. Rare Asset Reconstruction Limited (being assignee of Debts of Dena Bank)

Default in Repayment of Loan and its settlement terms and conditions:

(a) The company has defaulted in repayment of loan of Rs 51.44 Crore (Principal of Rs 51.44 Crore) in September 2011. The bank has assigned this loan to Rare Asset Reconstruction Limited. The company has entered into settlement agreement with Rare Asset Reconstruction Limited for the repayment of loan on June 28, 2018. As per the settlement agreement the company has agreed to make the repayment of loan by March 15, 2022. However, company has again defaulted in repayment of loan of the instalment falling due from December 2020 till March 15, 2022 and interest thereupon. The company has submitted revised repayment proposal to Rare Asset Reconstruction Limited which is pending for consideration.

Accounting Treatment in Book

(b) The repayment of debt to Rare Asset Reconstruction Limited, up to the balance sheet date of Rs. 19.00 Crore (March 31, 2022 is Rs. 19.00 Crore) has been adjusted against the total outstanding loan liability.

(c) In view of settlement / consent terms filed with DRT, the Original Application filed by Rare Asset Reconstruction Limited (being assignee of debts of Dena Bank) has been disposed on October 15, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT were being adjourned. Thereafter, the Demand Notice dated August 3, 2021 is issued by Recovery Officer and further action / hearing is pending before Hon''ble Recovery Officer.

Wilful Defaulter:

(d) Dena Bank has declared the Company as a wilful defaulter on March 31, 2016 for outstanding amount of Rs. 51.44 Crores and reported the name of the Company and its directors to the Reserve Bank of India and Credit Information Bureau (India) Limited (CIBIL) as Wilful Defaulter. The Company has challenged the said action before the Hon''ble Gujarat High Court and the said petition was pending for further hearing. However, Dena Bank has assigned the debt associated with the Company to Rare Asset Reconstruction Limited ("Rare ARC") and the Company has entered into settlement with Rare ARC and Rare ARC has agreed for withdrawal of wilful defaulter on receipt of entire settlement amount. Based on the settlement terms, the Hon''ble Gujarat High Court by order dated February 8, 2022 has disposed of the petition as withdrawn.

v. Union Bank of India

Default in Repayment of Loan and its settlement terms and conditions:

(a) The company has defaulted in repayment of Principal amount of Loan of Rs 49.40 Crore in May 2012. The company has entered into settlement agreement with the bank for the repayment of loan in March 2017. As per the settlement agreement, the company has agreed to make the repayment of loan by March 2023. However, company has again defaulted in repayment of the instalment of the loan falling due from December 2021 till March 2023 and interest thereupon. The company has submitted revised repayment proposal to Union Bank of India which is pending for consideration.

Accounting Treatment in Books:

(b) The repayment of debt to Union Bank of India, up to the balance sheet date of Rs. 40.39 Crore (March 31, 2022: Rs. 32.98 Crore), has been adjusted against the total outstanding loan liability.

Case before Debts Recovery Tribunal (DRT):

(c) In view of settlement / consent terms filed with DRT or otherwise after completion of pleadings and hearing, the Original Application filed by Union Bank of India has been disposed on April 27, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT was being adjourned. Thereafter, the Demand Notice dated June 22, 2021 and August 26, 2021 is issued by Recovery Officer and further action / hearing is pending before Hon''ble Recovery Officer.

vi. Edelweiss Asset Reconstruction Company Limited (being debt assignee of Bank of India, Bank of Baroda, State Bank of

India, Canara Bank and State Bank of Travancore)

Default in Repayment of Loan and its settlement terms and conditions:

(a) The company has defaulted in repayment of the loan from Bank of India in December 2012 of Rs. 628.04 Crore (Principal of Rs. 628.04 Crore), Bank of Baroda in September 2012 of Rs. 31.23 Crore (Principal of Rs. 31.23 Crore), Canara Bank in September 2012 of Rs. 232.97 Crore (Principal of Rs. 190.18 Crore and Interest of Rs. 42.79 Crore), State Bank of India in December 2011 of Rs. 323.27 Crore (Principal of Rs. 323.27 Crore) and State Bank of Travancore in September 2011 of Rs. 91.98 Crore (Principal of Rs. 85.04 Crore and Interest of Rs. 6.94 Crore). All these loans were assigned to Edelweiss Asset Reconstruction Company Limited. The company has entered into settlement agreement with Edelweiss Asset Reconstruction Company Limited on March 10, 2015. As per the settlement agreement the company has agreed to make the repayment of loan by March 2023. However, company has again defaulted in repayment of the instalment of the loan falling due from December 2020 till March 2023 and interest thereupon. The company is in process of submitting revised repayment proposal.

Accounting treatment in books:

(b) The Management is of the opinion that Fixed Deposit of Rs. 12.45 Crore held by Bank of Baroda will be adjusted against the outstanding liability payable to Edelweiss Asset Reconstruction Company Limited, at the time of last installment.

The Company has filed a Special Civil Application ("SCA") before the Hon''ble Gujarat High Court to return back Rs. 12.45 crore to the company''s bank account which was adjusted against the outstanding loan. The said petition is admitted and is pending for further hearing.

(c) The amount of repayment of debt to Edelweiss Asset Reconstruction Company Limited, up to the balance sheet date of Rs. 484.34 Crore (March 31, 2022 is Rs. 484.34 Crore) has been adjusted against the total outstanding loan liability.

(d) Further, the company has allotted 2,85,90,000 Partially Convertible and Partially Redeemable Preference Shares (PCPRPS) of Rs. 10 each amounting to Rs 28.59 Crore on August 22, 2015 and against the said PCPRPS, 12,66,440 Equity Shares of Rs. 10/- each at the price of Rs. 225.75 per equity share (inclusive of Share premium amount of Rs. 215.75 per equity share) were allotted during the year ended as at March 31, 2017.

Central Bureau of Investigation (CBI)

(e) Bank of India has filed a complaint under section 154(1) of the Criminal Procedure Code (Cr.P.C) pertaining to fraud perpetrated by the Company, its directors, unknown public servants and other unknown persons with intent to defraud Bank of India to the tune of Rs. 81.97 Crores. The Central Bureau of Investigation, Banking Securities Fraud Branch, Mumbai has registered a FIR on December 31, 2021. Central Bureau of Investigation (CBI) carried out the search on January 4, 2022 and seized various documents and now the matter is under investigation.

Petition under Insolvency and Bankruptcy Code (IBC)

(f) Edelweiss Asset Reconstruction Company Limited ("EARC"), a financial creditor has filed a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal (NCLT), Ahmedabad for initiating Corporate Insolvency Resolution Process (CIRP) against the Company for an default amount of Rs. 1900.56 Crores in respect of outstanding dues of Bank of India, the original lender only. The Company has filed its affidavit in reply and the EARC has filed its affidavit in rejoinder. The Company has filed two Interlocutory Applications related to company being a going concern & solvent and non-submission of record of default with information utility by EARC. The petition alongwith Interlocutory Applications are pending for further hearing before the Hon''ble NCLT, Ahmedabad.

Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI")

(g) Edelweiss Asset Reconstruction Company Limited has issued statutory demand notice dated July 13, 2022 under section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI") read with Security Interest (Enforcement) Rules, 2002 to the Company and personal guarantors to discharge the liabilities within sixty days from the date of notice. The Company is yet to reply/comply, to the said notice and there is no further communication from the Edelweiss Asset Reconstruction Company Limited.

vii. Invent Assets Securitization and Reconstruction Private Limited (being assignee of debts of Oriental Bank of Commerce,

Punjab National Bank and Allahabad Bank)

Default in Repayment of Loan and its settlement terms and conditions:

(a) The company has defaulted in repayment of the loan from Oriental Bank of Commerce in June 2012 of Rs. 55.19 Crore (Principal of Rs. 42.64 Crore and Interest of Rs. 12.55 Crore), Punjab National Bank in October 2011 of Rs. 184.69 Crore (Principal amount of Rs. 184.69 Crore) and Allahabad Bank in July 2012 of Rs. 283. 62 Crore (Principal of Rs. 278.22 Crore and interest of Rs. 5.40 Crore). All these loans were assigned to Invent Assets Securitization and Reconstruction Private Limited in August 2015, July 2016 and July 2016 for Oriental Bank of Commerce, Allahabad Bank and Punjab National Bank respectively. As per the original settlement agreement the company has agreed to make the repayment of loan by June 2020 for Oriental Bank of Commerce and March 2021 for Allahabad Bank and Punjab National Bank.

(b) On June 18, 2019, the company has been allowed following revised schedule of repayment of dues of Invent Assets Securitization and Reconstruction Private Limited:-
Sr No	Bank Name	Rescheduled Amount (Rs. in Crore)	Original Last Date of Payment	Revised Last Date of Payment
1	Oriental Bank of Commerce	15.25	30.06.2020	30.06.2023
2	Punjab National Bank	63.09	15.03.2021	31.12.2023
3	Allahabad Bank	95.51	15.03.2021	31.12.2023

(c) However, company has again defaulted in repayment of the instalment of the loan falling due from June 2020 till March 2023 and interest thereupon. The company is in process of submitting revised repayment proposal.

Accounting Treatment in Books

(d) The amount of repayment of debt to Invent Assets Securitization and Reconstruction Private Limited, up to the balance sheet date of Rs. 47.30 Crore (March 31, 2022 is Rs. 45.80 Crore) has been adjusted against the total outstanding loan liability.

(e) If all the terms and conditions of the settlements are fully complied, there would be a reduction in debt by Rs. 325.01 Crore.

(f) In view of settlement / consent terms filed with DRT or otherwise after completion of pleadings and hearing, the Original Application filed by Invent Assets Securitization and Reconstruction Private Limited (being assignee of debts of Allahabad Bank) has been disposed on March 21, 2018 and the recovery proceedings by the Recovery Officer of the Hon''ble DRT is being adjourned.

37. Non Provisions of Disputed Advances and Claims/Liability

(a) During the financial year ended on March 31, 2019, Goods and Service Tax Department of Maharashtra has re-determined Value Added Tax liability (including interest and penalty) of Rs. 6.28 Crore for the financial year 2009-10 (March 31, 2022 Rs. 6.28 Crore) and Rs. 23.93 Crore for the financial year 2010-11 (March 31, 2022 Rs. 23.93 Crore) after adjustment of Rs. 4.00 Crore (March 31, 2022 Rs. 4.00 Crore) paid by the company under protest. The company has paid Rs 1.07 Crore during the year ended as at March 31, 2020 and have filed an appeal before the Deputy Commissioner of State Tax, Mumbai. On account of the said order presently the liability of the company is of Rs. 29.15 Crore (March 31, 2022: Rs. 29.15 Crore). The provision for impugned disputed tax liability has not been accounted for as the company is hopeful of matter being decided in its favor by appellate authority.

(b) Loan accounts of the company have been classified as Non-Performing Assets by the Central Bank of India and Rare Asset Reconstruction Limited (being debt assignee of Indian Overseas Bank). The Bankers have not charged interest on the said Loans and therefore provision for Interest (other than upfront charges) has not been provided in the books of accounts and to that extent loss has been understated and bankers loan liability has been understated. The extent of exact amount is under determination and reconciliation with the banks. The company has entered into OTS with Central Bank of India on June 28, 2022 and therefore the unprovided interest on the said loan has been reversed. However as per the details available with the company, the amount of unprovided interest, on approximate basis, on the said loans is as under:-

38. Additional Disclosure

(a) The cost of material consumed includes freight, loading and unloading expenses, inspection fees, commission on purchase, taxes & duties (to the extent of credit not available), rate difference and interest cost on purchase of raw material and ancillary expenses thereof (including reversal of any claim).

(b) Few accounts of "Trade Receivables", "Trade payables", "Advances from Customer", "Advances Recoverable In Cash or Kind", "Advance to Suppliers and Other Parties" including very old balances and some of the Journal entries passed therein, are subject to confirmation/ reconciliation/ supporting documents and includes very old non-moving items therefore are subject to necessary adjustments for accounting or re-grouping / classification.

(c) Account of Receivables / Payables in respect of Goods and Service Tax, Service Tax, CENVAT, and Vat are subject to reconciliation, submission of its return for its claim and/or its Audit/ Assessment/Settlement/ Payment, if any.

(d) The classification / grouping of items of the accounts are made by the management, on the basis of the available data with the company.

(e) The amount of inventory has been taken by the management on the basis of information available with the company and without conducting physical verification of the slow moving inventory. The slow moving inventories have been valued by the management on estimated net realizable values.

(f) In the Capital Work in Progress of Rs. 26.08 Crore (March 31, 2022 Rs. 32.68 Crore) the management believes that the uncompleted projects of Rs. 1.37 Crore (March 31, 2022: Rs. 1.37 Crore;) requires some further investment to bring them into commercial use and the company desire to complete the project, therefore these are not treated as impaired assets and treated as temporarily suspended.

(g) On account of technicalities involved the claim of MEIS will be accounted for as and when the claim will be admissible with the respective authority.

(h) During the previous year the business activity of Transmission Line Tower division (TLT) was temporary suspended in order to evaluate its further business viability. However till March 31 2023 the operation of the TLT division has not commenced. The management is of the opinion that the carrying value of the Inventory, Property Plant and Equipment and Trade receivables represent net realizable value and therefore no provision for impairment/write off is required to be made.

(i) In absences of the confirmation from the lenders, during the year the company has adjusted the repayment of the loan towards the principal loan outstanding. Further, in case of Central Bank of India, there is non-stipulation with regard to the date of payment of interest and therefore the same has been shown as Interest accrued but not due.

(j) There has been reduction in Depreciation amounts as compared to previous year as the life of the majority of the assets have been completed and are valued at residual value.

39. DIRECTOR''S REMUNERAITON

Mr. Shailesh Bhandari was re-appointed as a Managing Director for a period of three years w.e.f. February 1, 2020 at a remuneration of Rs. 2,00,000/- per month and Mr. Suraj Bhandari was appointed as a Whole-time Director for a period of three years w.e.f. November 13, 2019 at a remuneration of Rs. 1,50,000/- per month as approved by the shareholders of the Company at 34th Annual General Meeting held on August 17, 2020. The above remuneration to both the Directors are subject to approval from banks and financial institutions as the company has defaulted in repayment of loans.

Further, Mr. Suraj Bhandari was re-appointed as a Whole-time Director for a further period of three years w.e.f. November 13, 2022 to November 12, 2025 at a remuneration of Rs. 1,50,000/- per month as approved by the shareholders of the Company at 36th Annual General Meeting held on August 31, 2022. Mr. Shailesh Bhandari was re-appointed as a Managing Director for a further period of three years w.e.f. February 1, 2023 to January 31, 2026 at a remuneration of Rs. 2,00,000/- per month as approved by the shareholders of the Company through Postal Ballot on March 28, 2023. This remuneration to both the Directors are subject to approval from banks and financial institutions as the company has defaulted in repayment of loans.

40. OTHER CASES:

(a) Some of the creditors have filed cases of recovery against the company before the various Civil Courts / Commercial Courts for Rs 1.30 Crore (Previous Year Rs 1.30 Crore). The said amounts are excluding interest.

(b) The Ahmedabad Zonal Office of the Directorate of Enforcement ("ED") has recorded a case under the provisions of the Prevention of Money Laundering Act, 2002 and during the course of investigation, the ED has passed an order dated March 28, 2018 under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2002 for provisional attachment of certain properties comprising Land having total area of 4,90,621 square meter at Chhadavada and Samakhiyali of Steel Plant, Building and Plant & Machinery for a period of 180 days. Thereafter, a complaint under sub-section (5) of section 5 of the Prevention of Money Laundering Act, 2002 was filed by ED before the Adjudicating Authority, New Delhi and the Adjudicating Authority, New Delhi vide order dated September 5, 2018 confirmed the attachment of abovesaid properties. The Company has filed an appeal before the Hon''ble Appellate Tribunal, PMLA, New Delhi and the Hon''ble Appellate Tribunal, PMLA, New Delhi vide order dated December 10, 2018 passed an order for maintaining status quo and no coercive action by ED. The ED has filed its reply and the matter is adjourned for filing of rejoinder. The ED has filed an application for vacation of interim order. Thereafter, the matter was adjourned from time to time for further hearing.

(c) The Assistant Director, Directorate of Enforcement, Ahmedabad has filed a PMLA - Special Case No. 20/2018 on December 1, 2018 before Principal District Judge, Ahmedabad against the company, Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari under section 3 and 4 of the Prevention of Money Laundering Act, 2002. During the year, the charge has been framed by the Hon''ble Court and now it is pending at the stage of evidence of prosecution.

(d) The Company has filed recovery case against Victory Rich Trading Limited ("VRTL") & its director for non-payment of amount in the High Court of Hong Kong and the High Court of Hong Kong has passed judgment for payment of recovery amount. Thereafter, VRTL has challenged the said order and the same is pending before the High Court of Hong Kong. Further the Company has filed a winding up petition against VRTL before the High Court of Hong Kong and the High Court of Hong Kong has passed the order for winding up of VRTL.

(e) The Special Director, Directorate of Enforcement, Mumbai has issued a show cause notice dated September 26, 2018 to the Company and Mr. Shailesh Bhandari based on complaint under section 16(3) of Foreign Exchange Management Act, 1999 and for holding adjudicating proceedings as contemplated under Rule 4(1) of Foreign Exchange Management (Adjudicating Proceedings and Appeal) Rules, 2000. The Company has replied to the said show cause notice. No further communication in this regard has been received till date.

(f) Mr. Siddharth Bhandari, one of the Promoter group and erstwhile Whole-time Director and Dr. Rakesh Bhandari, one of the Promoter group of the Company ("Petitioners") has filed two separate petitions (CP No. 93 / 2018 and CP No. 94 / 2018) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 149, 150, 152, 159 and 176 of the Companies Act, 2013 inter alia, for declaring the appointment of four independent directors as null and void from their respective dates of appointment being violative of provisions of section 149 and 150 and other related provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014. All the parties have filed their reply / rejoinder. In the Interlocutory Applications filed by Petitioners, the Hon''ble NCLT has inter alia, passed various orders related to certain agenda

of Board Meetings, joint signatory in bank accounts, policy decisions affecting smooth running of company as a going concern etc. The Company and Mr. Shailesh Bhandari challenged the order dated May 4, 2021 before the Hon''ble National Company Law Appellate Tribunal ("NCLAT") and the Hon''ble NCLAT has stayed the further Board Meetings of the Company by order dated May 24, 2021 and stayed the joint signatory by order dated June 17, 2021. Thereafter, the Hon''ble NCLAT has upheld the order dated May 4, 2021 and disposed of the appeals with certain directions on January 28, 2022. The Company and Mr. Shailesh Bhandari has challenged the said order dated January 28, 2022 before the Hon''ble Supreme Court of India and the Hon''ble Supreme Court of India by order dated February 25, 2022 continued the stay order on joint signatory dated June 17, 2021 passed by Hon''ble NCLAT. The Hon''ble Supreme Court of India dismissed the appeals by order dated October 11, 2022. Thereafter, the CP No. 93 / 2018 and CP No. 94 / 2018 was heard by the Hon''ble NCLT, Ahmedabad and the said petitions were disposed off on January 11, 2023 as not maintainable and vacated all interim orders. The Petitioners have challenged the order dated January 11, 2023 before the Hon''ble NCLAT and the appeals are pending before the Hon''ble NCLAT for hearing.

(g) Mr. Mukesh Bhandari - erstwhile Chairman & Promoter and currently Non-Executive Director, Mr. Siddharth Bhandari - erstwhile Whole-time Director & Promoter group and Dr. Rakesh Bhandari, Promoter group of the Company ("Petitioners") have filed petition (CP No. 38 / 2019) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 241242 of the Companies Act, 2013 against the Company, Mr. Shailesh Bhandari & Others inter alia, for removal of Mr. Shailesh Bhandari from the Board and investigation into the ownership of shares by some of the shareholders. The petition was pending before the Hon''ble NCLT for admission as well as on maintainability. Petitioners have filed interim application seeking waiver of the mandatory requirement of section 244(1)(a) of the Companies Act, 2013 and the Hon''ble NCLT vide order dated April 8, 2021, rejected the said interim application of waiver. Some of the Respondents have filed Interlocutory Applications for their discharge and the same were pending for hearing. The Petitioners have filed appeal before the Hon''ble National Company Law Appellate Tribunal ("NCLAT") against the order dated April 8, 2021 passed by Hon''ble NCLT, however the same was withdrawn on September 27, 2021. The financial implication of this petition was not ascertainable at that point of time. Thereafter, the Hon''ble NCLT, Ahmedabad by order dated November 15, 2022 disposed of the CP No. 38 / 2019 alongwith all Interlocutory Applications.

(h) Mr. Siddharth Bhandari - erstwhile Whole-time Director & Promoter group, Dr. Rakesh Bhandari, Promoter group and Mr. Mukesh Bhandari - erstwhile Chairman & Promoter and currently Non-Executive Director of the Company have filed a petition (CP No. 89 / 2019) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 222 of the Companies Act, 2013 against the Company and three shareholders for suspension of their voting rights and non-participation in voting at the 33^rd Annual General Meeting of the Company and for maintaining the existing status of Petitioner No. 1 Mr. Siddharth Bhandari. The Hon''ble NCLT vide order dated September 27, 2019 allowed the Company to go ahead with the 33^rd Annual General Meeting and e-voting process, however, the agenda Item No. 2 of the AGM shall be subject to final outcome of the petition. The petition Is pending for further hearing.

(i) Mr. Siddharth Bhandari, Mr. Mukesh Bhandari and Dr. Rakesh Bhandari ("Petitioners") has filed a petition (CP No. 5/2022) before the Hon''ble National Company Law Tribunal, Ahmedabad ("NCLT") under section 241-242 of the Companies Act, 2013 and other issues against the Company, Mr. Shailesh Bhandari & Others. The Hon''ble NCLT has issued notice to respondents and directed to file reply on interim relief and maintainability. The Company has filed its reply on interim relief and maintainability. The petition Is pending for further hearing.

During the pendency of this petition, the Petitioners have filed an Interlocutory Application No. 55 / 2022 in CP No. 5/ 2022 to restrain the Company from holding Board Meeting dated August 2, 2022 and stay some of the agenda items. The Hon''ble NCLT, Ahmedabad has by order dated August 24, 2022 rejected the application as misconceived and not maintainable. The Petitioners have challenged the order dated August 24, 2022 before the Hon''ble NCLAT and the Hon''ble NCLAT by order dated November 29, 2022 dismissed the appeal. The Petitioners have challenged the order dated November 29, 2022 before the Hon''ble Supreme Court of India and the civil appeal is pending for hearing before the Hon''ble Supreme Court of India.

(j) Ministry of Corporate Affairs, Office of the Regional Director, North-Western Region, Ahmedabad has in October, 2018 initiated inspection of books of accounts and other records under section 206(5) of the Companies Act, 2013. Thereafter, the Regional Director has issued letter for violations / irregularities of the Companies Act, 1956 / 2013 and the Company has replied to the same. Based on the same, the Registrar of Companies, Gujarat has issued letter for violations of the provisions of the Companies Act, 2013 and initiated prosecution against some of the directors / officers of the Company. Some of the directors / officer have challenged the said prosecution before the Hon''ble Gujarat High Court under section 463 of the Companies Act, 2013 and the said petition is pending for hearing before the Hon''ble Gujarat High Court.

Further the office of Regional Director vide letter / order dated December24, 2019 informed the Company about investigation into the affairs of the Company under section 210(1)(c) of the Companies Act, 2013. Thereafter, the Company was directed to furnish documents / information and the Company has challenged the said investigation before the Hon''ble Gujarat High Court. As the petition was rejected by the Hon''ble Gujarat High Court, the Company has challenged the same before division bench by filing Letters Patent Appeal and the division bench of the Hon''ble Gujarat High Court has passed order for continuation of investigation and that if the report recommends closure of

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Mar 31, 2018

1. CORPORATE INFORMATION:

Electrotherm (India) Limited (the “Company”) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The registered office of the Company is located at A-1, Skylark Appartment, Satellite Road, Satellite, Ahmedabad, Gujarat. The Company is engaged in the manufacturing of Electronic Furnace, Sponge and Pig Iron, Ferrous and Non-Ferrous Billets/ bars/ Ingots, Duct Iron Pipes, Battery Operated Vehicles and Services relating to Electric Furnace and Other Capital equipment and battery operated vehicles.

The financial statements were authorized for issue in accordance with a resolution passed in Board Meeting held on 25th May 2018.

2. BASIS OF PREPARATION:

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015.

For all periods up to and including the year ended March 31, 2017, the company prepared its financial statements in accordance with Accounting Standards notified under Section 133 of the Companies Act, 2013 (the “Act”) read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS.

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities which have been measured at fair value. Refer accounting policy regarding financial instruments.

The financial statements are presented in Rupees in crore and all values are rounded to the nearest Crore, except where otherwise indicated.

2.1 SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS:

The preparation of the Company’s financial statements requires management to make judgements, 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.

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. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. 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.

(a) Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuation. 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 is 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 India. 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 India.

(b) Fair value measurement for 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 judgement is required in establishing fair values. Judgements 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.

(a) The Company holds investment in equity shares of Shree Ram Electrocast Limited and in Electrotherm Mali SARI as subsidiary company. Due to heavy losses and non operation of Shree Ram Electrocast Limited the amount of Investment of Rs. 78.68 Crore has been written off during the financial year 2015-2016 and Electrotherm Mali SARI ceases to the subsidary of the company on 27th March 2017, as the company has been wound up and therefore the company has written off its investment of Rs. 0.01 Crore

(b) The company holds an investment in equity shares of ET Elec-Trans Limited as subsidary company and Bhaskarpara Coal Company Limited as a joint venture. These Companies have incurred heavy losses and/or are non-operating and therefore the fate of said Companies is uncertain. Provision for impairement of Rs. Nil (March 31, 2017 Rs. Nil and on April 1, 2016 Rs. 2.13 Crore) in the value of investment in joint ventures namely Bhaskarpara Coal Company Limited and in the value of investment in subsidiary namely ET Elec-Trans Limited Rs. Nil (March 31, 2017 Rs. Nil and on April 1, 2016 Rs. 0.72 Crore) has been provided.

(b) The settlement of loans and advances to subsidiaries is neither planned nor likely to occur in the next twelve months and are given as interest free.

(c) Loans and advances to subsidiaries are given for business purpose.

(d) Provision for the Expected Credit Loss on amount recoverable from Shree Hans Papers Limited has been made of as at March 31, 2018 Rs. Nil (As at March 31, 2017 Rs. Nil and on April 1, 2016 Rs. 4.18 Crore) due to uncertainity of it’s recovery.

(b) The settlement of loans and advances to subsidiaries and related parties is not planned but is likely to occur with in twelve months and are given interest free.

(c) Loans and advances to subsidiaries are given for the business purpose.

A formal credit policy has been framed and credit facilities are given to customer within the framework of the credit policy. As per credit risk management mechanism, a policy for doubtful debt has been formulated and risk exposure related to receivables are identified based on criteria mentioned in the policy and provided for credit loss allowance.

b) Rights, preference and restriction attached to Equity Shares

The face value of the Equity shares is Rs 10/- per share . Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. During the year, the company has not declared any dividend.

The shareholders are not entitled to exercise any voting right either personally or proxy at any meeting of the Company in cases of calls or other sums payable have not been paid.

In the event of liquidation of the company, holder 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 shareholders.

c) Rights, preference and restriction attached to Preference Shares

- The face value of the Preference shares is Rs 10/- per share . The Preference share holder have voting right in their meeting. During the year, the company has not declared any dividend.

- In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital .

d) Rights, preference and restriction attached to Partially Convertible Partially Redeemable Preference Shares (PCPRPS)

- The face value of the PCPRPS is Rs 10/- per share . The preference share holder does not have any voting right in their meeting. During the year, the company has not declared any dividend.

- In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital.

- The Equity Shares arising upon conversion of the PCPRPS shall rank pari passu with the existing Equity Shares of the Company in all respects, including dividend.

f) The Company has calls in arrears / unpaid calls of Rs. Nil (March 31, 2017: Nil and April 1, 2016: Nil)

g) Details of Shares alloted as fully paid up persuant to contract(s) without payment being received in cash. ( during 5 years immediately preceeding March 31, 2018).

As per the terms and conditions of the settlement with Edelweiss Asset Reconstruction Company Limited (EARC), the company has issued and alloted 2,85,90,000 partially redeemable preference shares (PCPRPS) to EARC on 22nd August 2015.

h) As per the terms and conditions of the settlement with Edelweiss Asset Reconstruction Company Limited (EARC), the company has allotted 2,85,90,000 Partially convertible and Partially Redeemable Preference Shares (PCPRPS) of Rs.10 Each of amounting to Rs 28.59 Crore on August 22, 2015 and against the said PCPRPS, 12,66,440/- Equity shares of Rs. 10/- each at the price of Rs. 225.75 per equity share (inclusive of Share premium amount of Rs. 215.75 per equity share) were allotted during F.Y. 2016-17. As equity shares were allotted against such PCPRPS the entire amount of preference Share Capital of Rs. 28.59 Crore has been treated as part of Equity Share Capital as on April 1, 2016

a. Capital Reserve

Capital Reserve is not available for distribution of profits.

b. Securities Premium

Securities Premium is used to record the premium on issue of shares and is utilised in accordance with the provisions of the Companies Act, 2013.

c. General Reserve

General Reserve is used from time to time to transfer profits to/from Retained Earnings for appropriation purposes including the amount arising due to past revaluation of land and building under previous GAAP. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income.

d. Retained Earnings

Retained Earnings are the profits of the Company earned till date and net of appropriations.

(a) Rupee term loan and foreign currency loan are secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of the Directors of the Company.

(b) External Commercial Borrowings is secured by Pari Passu Charge over the movable assets and first Pari Passu Charge on immovable assets of the company.

(a) Secured by first charge by way of hypothecation of all stocks of raw material, packing materials, fuel, stock in process, semi finished and finished goods, stores and spares not relating to the plant and machinery and stock in trade & receivables and second charge on all movable fixed assets & second and subservient charge by way of equitable mortgage of all immovable properties situated at Vatva, Palodia, Dhank, Samakhyali- Kutch and Chhadawada -Bhachau. Further the loans are guaranteed by the personal guarantees of some of the Directors of the company.

The revenue from operations for the year ended March 31, 2017 and part of the financial year ended March 31, 2018 (upto June 30, 2017) are inclusive of excise duty. As the Goods and Service Tax (“GST”) has been implemented with effect from July 1, 2017 and which replaced excise duty and other input taxes. In view of the said fact the revenue for the part of the year ended March 31, 2018 is reported net of GST and accordingly, is not comparable with earlier year.

viii) Claims against the Company not acknowledged as debts amounting to Rs.0.70 Crore (As at March 31, 2017: Rs.0.70 Crore and on April 1, 2016: Rs. 0.70 Crore), are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc. Further during the year, in respect of one pending arbitration matter, the Company has claimed an amount of Rs.1.06 Crore (As at March 31, 2017: Rs. 1.06 Crore)and the counter claim of the respondent is Rs.0.72 Crore (As at March 31, 2017: Rs.0.72 Crore).

ix) The company has used advanced license for import of certain raw material against which company was under an obligation to export certain pre-determined quantity of finished goods within specified time period. However, there was a shortage in the goods exported by the company against its export obligation. Accordingly, in the opinion of the management, the company may be liable to pay Rs.5.37 Crore (including interest) (As at March 31, 2017: Rs.5.02 Crore and on April 1, 2016: Rs. 4.66 Crore) as import duty.

Note:-

i. Future cash flows in respect of above, if any, is determinable only on receipt of judgement/ decisions pending with relevant authorities.

ii. The above amounts are without the amount involved in the appeal preferred by the Department, if any, and further applicable interest on the demand

3 Employee benefit obligations

The Company has classified the various employee benefits provided to employees as under:

I Defined Contribution Plans

During the year, the Company has recognised the following amounts in the Statement of Profit and Loss-

The above sensitivity analysis is based on a change in assumption while holding all other assumptions constant. In practice, this is unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation calculated with the Projected Unit Credit Method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

i. The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

ii. The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

iii. Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet.

iv. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

3.1 Risks associated with defined benefit plan

Gratuity is a defined benefit plan and company is exposed to the Following Risks:

I nterest rate risk: A fall in the discount rate which is linked to the G.Sec. Rate will increase the present value of the liability requiring higher provision. A fall in the discount rate generally increases the mark to market value of the assets depending on the duration of assest.

Salary Risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan’s liability.

Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. If the return on plan asset is below this rate, it will create a plan deficit. Currently, for the plan in India, it has a relatively balanced mix of investments in government securities, and other debt instruments.

Asset Liability Matching Risk: The plan faces the ALM risk as to the matching cash flow. Since the plan is invested in lines of Rule 101 of Income Tax Rules, 1962, this generally reduces ALM risk.

Mortality Risk: Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

Concentration Risk: Plan is having a concentration risk as all the assets are invested with the insurance company and a default will wipe out all the assets. Although probability of this is very less as insurance companies have to follow regulatory guidelines.

4 Segment Reporting

The segment report is given in consolidated financial statements.

5. Details of the Cases of Winding Up of the Company, Recovery by the Lenders / Creditors against the company

(a) Winding Up Petitions:

Shiv Sales Industries and Shiv Metal Industries have filed winding up petitions under section 433 and 434 of the Companies Act, 1956 against the company before the Hon’ble Gujarat High Court and which are pending before them. Winding up petition by UCO Bank and Syndicate bank has been withdrawn/ disposed off.

(b) Cases before Debt Recovery Tribunal (DRT)/DRAT Cases:

(i) Syndicate Bank, Central Bank of India, Corporation Bank and Vijaya Bank had filed Original Applications against the Company before the Hon’ble Debt Recovery Tribunal-1, Ahmedabad (“DRT”) under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The DRT has granted ad-interim injunction orders against transfer of certain properties. Syndicate Bank has filed an appeal before DRAT, Mumbai against the order of DRT for modification of ex-parte adinterim injunction order. The Company had filed its reply/written statement/interim application and the said matters are pending for judgment/further hearing before DRT/DRAT.

(ii) In view of settlement/consent terms filed with DRT, the original application filed by Invent asset securitization and reconstruction Private Limited (being the assignee of debts of Allahabad Bank) was disposed of on 21^st March 2018.

(iii) In view of settlement/consent terms filed with DRT, the original application filed by Union Bank of India of India was disposed of on 28^th April 2018.

(iv) Subject to final terms to be agreed upon and provisional settlement with Vijaya Bank, the bank has agreed to withdrawn the original application filed with DRT.

(v) The Indian Overseas Bank and Dena Bank have assigned the debts associated with the company to Rare Asset Reconstruction Private Limited (formerly known as Raytheon Asset Reconstruction Private Limited) and the original application filed by them are pending before DRT, with some ad-interim injunction order in the matter of India Overseas Bank.

(c) Cases Under section 138 of the Negotiable Instruments Act,1881

Syndicate Bank, Indian Overseas Bank and Vijaya Bank had filed criminal complaints against the company and its Directors/officers under section 138 of Negotiable Instruments Act, 1881 for dishonor of various cheques issued by the Company and the Company is contesting all the said cases and all the matters are pending for further hearing before the respective Hon’ble Metropolitan Magistrates, Ahmedabad.

(d) Wilful Defaulters:

(i) Central Bank of India has declared the Company as a wilful defaulter and reported the name of Company and its directors to the Reserve Bank of India and Credit Information Bureau (India) Limited (CIBIL) as wilful defaulter.

(ii) Dena Bank has declared the Company as a wilful defaulter and reported the name of Company and its directors to the Reserve Bank of India and Credit Information Bureau (India) Limited (CIBIL) as Wilful Defaulter. The Company has challenged the said action before the Hon’ble Gujarat High Court and the said petition is pending for further hearing. Dena Bank has assigned the debt associated with the company to Rare Asset Reconstruction Private Limited (formerly known as Raytheon Asset Reconstruction Private Limited).

(e) Notice under SARFAESI Act, 2002

Vijaya Bank had issued notices under section 13(2) of Chapter III of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (“SARFAESI Act, 2002”) for assets of Transmission Line Tower (TLT) Division of the Company situated at Village : JuniJithardi, Tal : Karjan, Dist : Vadodara on 08/05/2012, 19/03/2015 and 04/11/2015. The company has filed its reply in respect of all the notices issued by the bank. Vijaya Bank has withdrawn its notice dated 19/03/2015.

Vijaya Bank vide possession notice dated 02.03.2017 taken the symbolic possession of the movable and immovable properties of TLT division of the Company. The Company has filed Securitization Application before DRT-1, Ahmedabad against the said action of symbolic possession and the matter is pending before DRT-1 Ahmedabad for further hearing.

6. Non Provisions of Disputed Advances and Claims/Liability

(a) The Company has VAT tax liability (including interest) of Rs. Nil (March 31, 2017: Rs.35.84 Crore) under Maharashtra Sales Tax Act (Rs. 9.25 Crore for the financial year 2009-10 and Rs.26.59 Crore for the financial year 2010-11) out of which the company had paid Rs. 4.00 Crore, under protest and the same has been shown as Balance with Revenue authority under the head Other Current Asset. The company has filed an appeal against the said order before the Appellate Authority and the appellate Authority has set aside the matter for fresh assessment. On account of the said order presently the liability of the company has become Rs. Nil (March 31, 2017: Rs. 35.84 Crore).

(b) During the Previous Year, VAT/CST Assessment for the financial year 2010-11 was completed and assessing officer has determined the tax liability of Rs.20.95 Crore of VAT and Rs.11.15 Crore of CST. The company has made part payment of Rs. 3.25 Crore for VAT and Rs. 1.50 Crore for CST under protest and the same has been shown as Balance with Revenue authority under the head Other Current Asset. Provision for the impugned disputed tax liability has not been made as the company is hopeful of matter being decided in its favor by the appellate authority. With regard to the payment of balance amount the company has been granted stay up to 30.09.2018. The Appellate Authority vides order dated 27.04.2018 has passed the refund order of Rs. 7.35 Crore for financial year 2009-10 and ordered for adjustment against demand for next financial year. On account of the said order the VAT liability for financial year 2010-11 has reduced to Rs. 13.60 Crore and is subject to order of the Appellate Authority.

(c) In current year VAT/CST assessment for financial year 2013-14 was completed and the assessing officer has determined the tax liability of Rs. 6.13 Crore and against the said order company is under the process of filling appeal before the Appellate Authority.

(d) In view of the non-provision of the above items 34(a), 34(b) and 34(c) the Profit of the company are overstated by Rs. 30.88 Crore (Losses as on March 31, 2017 of Rs. 67.94 Crore are understated) and to that extent advances are overstated or the respective liabilities are understated.

(e) Loan accounts of the company have been classified as Non- Performing Assets by the Bankers and some of the bankers has not charged interest on the said accounts and therefore provision for Interest (Other than upfront charges) has not been made in the books of accounts and to that extent profit has been overstated and bankers loan liability has been understated. The extent of exact amount is under determination and reconciliation with the banks, however as per the details available with the company, the amount of unprovided interest, on approximate basis, on the said loans (Other than the loans of International Finance Corporation {Refer Note No. 35(h)}, Union Bank of India, UCO Bank, Vijaya Bank and loans which are assigned to Edelweiss Assets Reconstruction Company Limited (EARC), Invent Assets Securitization & Reconstruction Private Limited (Invent) and Rare Asset Reconstruction Private Limited (formerly known as Raytheon Asset Reconstruction Private Limited) is as under:-

7. Additional Disclosures

(a) Power and Fuel expenses are inclusive of duties and taxes of Rs. 14.91 Crore (March 31, 2017: Rs. 12.45 Crore) paid towards power generation.

(b) During the year, old non-recoverable amount of Rs. 18.96 Crore {which includes an amount of Rs. 5.61 Crore pertaining to related party} (March 31, 2017: Rs. 7.27 Crore) and the unclaimed amount of Rs. 3.45 Crore (March 31, 2017: Rs. 3.18 Crore) have been written off/ back on account of non-realization and payment. Its’ net balance of Rs. 15.51 Crore (March 31, 2017: Rs. 4.09 Crore) has been charged to the Statement of Profit and loss.

(c) During the previous year, the settlement amount of ICICI Bank, as per settlement agreement, has been fully paid by the company. After repayment of the settlement amount, there has been net reduction in debt by Rs. 43.47 Crore which has been accounted for as under:

(d) Product Development Cost includes total Research and Development expenses of Rs. 14.66 Crore (March 31, 2017: Rs. 14.38 Crore) incurred on development of CONTIFUR Project, which is still in progress and said expenses, would be written off in five years from the year of completion of the projects. During the previous year, product hybrid bus and T-Cab were subject to research but due to some technical reason/ non-performance up to the expected level, the product could not be launched in market. Accordingly management has decided to abandon the project and during the year the company has written off the research cost of Rs. Nil (March 31, 2017: Rs.17.81 Crore) incurred on the said project.

(e) The cost of material consumed includes freight, loading and unloading expenses, inspection fees, commission on purchase, taxes & duties (to the extent of credit not available),rate difference and interest cost on purchase of raw material and ancillary thereof (including reversal of any claims).

(f) In view of heavy accumulated losses and uncertainty of its realization/payment of taxes in near future, no provision for Deferred Tax Asset/liability has been made by the company.

(g) Some of the creditors have filed cases of recovery against the company before the various Hon’ble Courts/Forums for Rs. 1.92 Crore (March 31, 2017 Rs. 2.04 Crore). The said amounts are excluding interest.

(h) Assignment /Settlement of Loans Taken Accounts and its Accounting Treatment

- Bank of India, Bank of Baroda, State Bank of India, Canara Bank and State Bank of Travancore have assigned their debts to Edelweiss Asset Reconstruction Company Limited. The Company has entered into settlement agreement on 10th March 2015 for the repayment of the Debts of the said Banks to Edelweiss Asset Reconstruction Company Limited. In terms of settlement agreement, if all the terms and conditions are fully complied by the company upto the March 2023, there will be reduction in debt, as per Books of accounts of the Company, by Rs. 403.90 Crore.

The Management is of the opinion that Fixed Deposit of Rs. 12.45 Crore held by Bank of Baroda will be adjusted against the outstanding liability payable to Edelweiss Asset Reconstruction Company Limited at the time of last installment. Accordingly, the said amount has been shown as advance recoverable in cash or kind under the head Other Current Asset.

- The amount of installments paid to Edelweiss Asset Reconstruction Company Limited, up to the balance sheet date are shown as part of other current asset and to that extent the amount of Loans from Asset Reconstruction Companies (Current Maturity of Long term Borrowings of Rs. 179.50 Crore and Non-Current Borrowings of Rs. 12.45 Crore)(March 31, 2017: Current Maturity of Long term Borrowings of Rs. 114.50 Crore and Non-Current of Rs. 12.45Crore) and the amount of advance recoverable in cash or kind are overstated by Rs. 191.95 Crore (March 31, 2017: Rs. 126.95 Crore).

- Oriental Bank of Commerce, Punjab National Bank and Allahabad Bank have assigned their debts to Invent Assets Securitization and Reconstruction Pvt. Ltd. vide settlement agreement for the repayment of debts of the said banks to Invent Assets Securitization and Reconstruction Pvt. Ltd. In terms of settlement, if all the terms and conditions are fully complied by the company, there would be a reduction in debt, as per books of accounts of the company by Rs. 325.01 Crore.

Further the amount of installments paid to Invent Assets Securitization and Reconstruction Pvt. Ltd., up to the balance sheet date are shown as part of other current asset and to that extent the amount of current maturities of long term borrowings from Invent Assets Securitization and Reconstruction Pvt. Ltd. and the amount of advance recoverable in cash or kind are overstated by Rs.13.14 Crore (March 31, 2017: Rs. 5.89 Crore).

- The company, subject to some terms, agreed for repayment of debts of Union Bank of India and in pursuance to the same, the company has made payment of Rs. 12.35 Crore (March 31, 2017: Rs. 1.50 Crore) and the said amount has been shown as part of other current asset and to that extent the amount of current maturities of long term borrowings from Union Bank of India and the amount of advance recoverable in cash or kind are overstated by Rs.12.35 Crore (March 31, 2017: Rs. 1.50 Crore).

- The company was informed vide letter dated 7^th April 2017 of Dena Bank and letter dated 27^th March 2017 of Rare Asset Reconstruction Pvt. Ltd. (formerly known as Raytheon Asset Reconstruction Private Limited), Dena Bank has assigned debt to Rare Asset Reconstruction Pvt. Ltd. on 18^th March 2017. However on account of non-finalization of repayment terms and condition the entire loan amount has been shown as current maturities of long term borrowings.

- The company was informed vide letter dated 12^th October 2017 of Indian Overseas Bank, that the bank has assigned debt to Rare Asset Reconstruction Pvt. Ltd. (formerly known as Raytheon Asset Reconstruction Private Limited). However on account of non-finalization of repayment terms and condition the entire loan amount has been shown as current maturities of long term borrowings.

- During the year the Company has deposited Rs. 7.70 Crore in corporation bank and Rs. 7.25 Crore in Central Bank of India subject to settlement with the banks which is shown under the head Cash and Cash Equivalents.

- The company, subject to some terms, agreed for repayment of debts of Vijaya Bank and in pursuance to the same, the company has made payment of Rs. 10.00 Crore (March 31, 2017: Rs. Nil) and the said amount has been shown as part of other current asset and to that extent the amount of current maturities of long term borrowings from Vijaya Bank and the amount of advance recoverable in cash or kind are overstated.

- The company has received and accepted settlement terms with International Finance Corporation. But the payment schedule has been revised due to delay in obtaining required RBI permission for restructuring of External Commercial Borrowings and Foreign Currency Convertible Bonds. The company has been informed by Bank of India [Authorized Dealer] vide letter dated April 16, 2018 that required RBI permission has been received. Final terms of settlement agreement with IFC is in process and company expect it to be signed in the month of June-2018.

(i) The balances of Central Bank of India, Syndicate Bank, Indian Overseas Bank and International Financial Corporation are not being confirmed / reconciled by the borrowers, as these borrowers have treated the loan accounts as non performing assets account. (j) In view of the commercial prudence, during the year, the company has not restated the long outstanding export trade receivables and foreign currency loan at the rate prevailing as on March 31, 2018.

(k) Dispute with Micro, Small & Medium Enterprise

(i) There was dispute with Supreme Metallurgical Services Pvt. Ltd. (“Supreme Metallurgical”) in relation to material supplied by the said party and there was litigation pending before Hon’ble Gujarat High Court. However, the company entered into settlement with Supreme Metallurgical and it has agreed to withdraw the pending litigation from Hon’ble Gujarat High Court.

(ii) There is dispute with Prima Automation (India) Private Limited (a Micro, Small and Medium Enterprise) in relation to material supplied by the said party and for which the said party has filed an application before Gujarat State Level Industry Facilitation Council (“SLIFC”). In view of settlement with Prime Automation, they have withdrawn its application from SLIFC on 1^st November 2017.

(l) The Central Bureau of Investigation (CBI) has conducted certain proceedings, on the basis of the complaint filed by Central Bank of India with regard to the utilization of the loan disbursed by Central Bank of India. Central Bureau of Investigation has filed a charge sheet and a CBI special case number 27 of 2015 was registered against the company and its few Directors before the Hon’ble CBI Court, Ahmedabad on 6th October 2015 and now the matter is pending before Hon’ble CBI Court for hearing.

(m) The Ahmedabad Zonal Office of the Directorate of Enforcement (“ED”) has recorded a case under the provisions of the Prevention of Money Laundering Act, 2002 and during the course of investigation, the ED has passed an order dated 28^th March, 2018 under sub-section (1) of section 5 of the Prevention of Money Laundering Act, 2012 for provisional attachment of certain properties comprising Land having total area of 4,90,621 square meter at chhavada and samkhiyali of steel Plant, Building and Plant & Machinery for a period of 180 days. Thereafter, a complaint under sub-section (5) of section 5 of the Prevention of Money Laundering Act, 2012 was filed by ED before the Adjudicating Authority, New Delhi and the same is pending for hearing.

(n) The Company has filed recovery case against Victory Rich Trading Limited (“VRTL”) & its director for non-payment of amount in the High Court of Hong Kong and the High Court of Hong Kong has passed judgment for payment of recovery amount. Thereafter, VRTL has challenged the said order and the same is pending before the High Court of Hong Kong.

8. DIRECTOR’S REMUNERATION:

As per the approval of shareholders of the company at the 30^th annual general meeting held on 30^th September 2016 and approval of Central Government vide letter dated 21^st November 2017, the company has paid remuneration of Rs. 1,50,000/- per month to Mr. Mukesh Bhandari, Mr. Shailesh Bhandari and Mr. Avinash Bhandari with effect from 1^st February 2017. The central government has approved the remuneration of Rs.1,50,000/- per month for the said three appointees for a period from 1^st February 2017 to 31^st January 2020.

9. Account of Receivables / Payables in respect of Goods and Service Tax, Service Tax, CENVAT, and Vat are subject to reconciliation, submission of its return for its claim and/or its Audit/ Assessment, if any.

10. RELATED PARTY DISCLOSURE

As required by Indian Accounting Standard-24 “RELATED PARTY DISCLOSURE”, the disclosure of transaction with related parties are given below (with whom transaction taken place during the year):-A. List of Related Parties

I) SUBSIDIARY COMPANIES

1. Jinhua Indus Enterprises Limited

2. Jinhua Jahari Enterprises Limited

3. ET Elec-Trans Limited

4. Hans Ispat Limited

5. Shree Ram Electro Cast Limited

6. Shree Hans Papers Limited

II) JOINT VENTURE COMPANY

1. Bhaskarpara Coal Company Limited

III) Enterprises owned or significantly influenced by key management personnel or their relatives*(Except foreign companies)

1. EIL Software Services Offshore Pvt. Ltd.

2. Etain Electric Vehicles Limited

3. ETAIN Renewables Ltd.

4. Electrotherm Solar Ltd.

5. Bhandari Charitable Trust

IV) Key Management Personnel/Director of Companies

1. Mr. Mukesh Bhandari (Chairman & Managing Director)

2. Mr. Shailesh Bhandari (Managing Director)

3. Mr. Avinash Bhandari (Joint Managing Director & CEO)

4. Mr. Siddharth Bhandari (Whole time Director)

5. Mr. Pawan Gaur (Chief Financial Officer)

6. Mr. Fagesh R Soni (Company Secretary)

V) Relatives of Key Management Personnel

1. Mrs. Indubala Bhandari (Mother of Director)

2. Mrs. Jyoti Bhandari (Wife of Director)

3. Mr. Rakesh Bhandari (Brother of Director)

4. Mr. Anurag Bhandari (Son of Director)

5. Mrs. Shivani Bhandari (Daughter of Director)

6. Mrs. Panna Bhandari (Daughter of Director)

11. (a) In the opinion of the Management, the Other Assets and Financial Assets are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known Liabilities are adequate.

(b) (i) The account of “Trade Receivables”, “Borrowings”, “Trade payables”, “Advances from Customer”, “Advances Recoverable In Cash or Kind”, “Advance to Suppliers and Other Parties” and some Bank Balances are subject to confirmation / reconciliation and the same includes very old non-moving items and therefore the same are subject to necessary adjustments for accounting or re-grouping /classification.

(ii) The amount of “Advance from Customers” includes Rs.0.72 Crore (March 31, 2017: Rs.0.89 Crore) (net of receipts and payments) of the parties in the bank accounts of which names are not readily available with the company and which are to be accounted under the correct account head on receipt of accurate information from the Banker/parties.

(iii) The amount of account of some of the same party under the Head “Advance from customers”, “Trade Payable”, “Advance to Suppliers and Others”, “Trade Receivables” appearing under more than one head are shown on gross basis and same are not netted off as its reconciliation and confirmations are pending.

12. (a) The amount of current maturity of Long Term Liability of Rs. 1168.04 Crore (March 31, 2017: Rs.959.54 Crore) shown under the head “Other Financial Liabilities” has been determined on the basis of the data available with the company and on the assumption that it is payable within one year.

(b) The amount of inventory has been taken by the management on the basis of information available with the company and without conducting physical verification of the slow moving inventory. The slow moving inventories have been valued by the management on estimated net realizable value.

(c) The classification/grouping of items of the accounts are made by the management, on the basis of the available data with the company.

(d) The management is of the opinion that the uncompleted projects shown as Capital Work in Progress of Rs.10.45 Crore (March 31, 2017: Rs. 10.45 Crore) requires some further investment to bring them into commercial use and the company desire to complete the project, therefore these are not treated as impaired assets.

(e) Account of “Advance to staff” is under confirmation, reconciliation and subject to the settlement of the accounts with the respective employees (including ex-employees) of the Company.

12.2 Category-wise Classification of Financial Instruments

i) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.

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

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

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.

ii) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

iii) Valuation process

The Company obtains valuation results from external valuers for level 2 measurements. Inputs to level 2 measurements are verified by the Company’s treasury department

iv) Fair value of financial assets and liabilities measured at amortised cost

The carrying amounts of trade receivables, security deposits, cash and cash equivalents, interest accrued on fixed deposits, loans, unbilled revenue and trade payables are considered to be the same as their fair values, due to their short-term nature.

13 Financial Instrumet Risk, Management, Objectives & Policies

13.1 Financial risk management

The management of the Company has implemented a risk management system that is monitored by the Board of Directors. The general conditions for compliance with the requirements for proper and future-oriented risk management within the Company are set out in the risk management principles. These principles aim at encouraging all members of staff to responsibly deal with risks as well as supporting a sustained process to improve risk awareness. The guidelines on risk management specify risk management processes, compulsory limitations, and the application of financial instruments. The risk management system aims at identifying, analyzing, managing, controlling and communicating risks promptly throughout the Company. Risk management reporting is a continuous process and part of regular Group reporting. In addition, our Corporate Function Internal Auditing regularly checks whether Company complies with risk management system requirements.

The Company is exposed to credit, liquidity and market risks (interest rate risk, foreign currency risk and other price risk) during the course of ordinary activities. The aim of risk management is to limit the risks arising from operating activities and associated financing requirements by applying selected derivative and non-derivative hedging instruments.

13.2 Credit risk

The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments. The balances with banks and security deposits are subject to low credit risk since the counter-party has strong capacity to meet the obligations and where the risk of default is negligible or nil. Trade receivables, Loans and Advances to Suppliers & Others

Credit risk arises from the possibility that customer/borrowers will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers and the borrowers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information.

The provision on trade receivables for expected credit loss is recognised on the basis of life-time expected credit losses (simplified approach). Trade receivables are evaluated separately for balances towards progress billings and retention money due from customers. An expected loss rate is calculated at each year-end, based on combination of rate of default and rate of delay. The Company considers the rate of default and delay upon initial recognition of asset, based on the past experience and forward-looking information, wherever available. The provision on loans for expected credit loss is recognised on the basis of 12-month expected credit losses and assessed for significant increase in the credit risk.

13.3 Liquidity risk

Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses. In doing this, management considers both normal and stressed conditions.

The Company maintained a cautious liquidity strategy, with a positive cash balance throughout the year ended March 31, 2018 and March 31, 2017. Cash flow from operating activities provides the funds to service the financial liabilities on a day-to-day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and mutual funds with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

The following table shows the maturity analysis of the Company’s financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.

Maturities of financial liabilities

The table below analyse the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities:

13.4 Market risk

Market risk is the risk that the fair value of the 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, foreign currency risk and other price risk. Financial instruments affected by market risk includes borrowings, deposits, investments, trade and other receivables, trade and other payables and derivative financial instruments.

The potential economic impact, due to these assumptions, is based on the occurrence of adverse / inverse market conditions and reflects estimated changes resulting from the sensitivity analysis. Actual results that are included in the Statement of Profit and Loss may differ materially from these estimates due to actual developments in the global financial markets. The company is mainly exposed to interest rate risk and foreign currency risk.

i) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in the market rates. Since the borrowing of the company are classified as non performing assets or are transfer to assets reconstruction company or the settlement agreement have been executed, the borrowers are not charging interest, therefore the exposure to risk of changes in market interest rates is minimal.

ii) Foreign currency risk

The international nature of the Company’s business activities generates numerous cash flows in different currencies -especially in USD and EURO. To contain the risks of numerous payment flows in different currencies- in particular in USD and EURO- the Company follows groupwide policies for foreign currency management.

The above table represent only total major exposure of the company towards foreign exchange denominated trade receivables and trade payables.

The company is mainly exposed to change in USD and Euro. The below table demonstrates the sensitivity to a 5% increase or decrease in the USD and Euro against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management’s assessment of resonably possible change in foreign exchange rate.

14 Capital Management:

The Company’s objectives when managing capital are to:

- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- maintain an optimal capital structure to reduce the cost of capital.

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders. The Capital structure of the Company is as follows:

15 First-time adoption of Indian Accounting Standards (IND AS)

Transition to Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of the opening Ind AS balance sheet at April 1, 2016 (the Company’s date of transition) subject to certain exemptions and exceptions provided in Ind AS 101 with respect to transition date (refer note below). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

I Exemptions availed

a) The Company has elected to measure investments in subsidiaries as per the statement of financial position prepared in accordance with previous GAAP as a deemed cost (Net off Impariment) at the date of transition as per exemption available under Ind AS 101

b) Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of its Property, plant and equipment and Intangible assets as recognised in its Indian GAAP financial as deemed cost at the transition date.

II Exceptions applied

a) Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.

b) De-recognition of financial assets and liabilities

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

c) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

Notes to First time adoption:-a Expected credit loss provision

As per Ind AS 109, the Company is required to apply expected credit loss model for recognising the allowance for doubtful debts on financial assets. b Reclassification of Redeemable Preference Shares

As per Ind AS, redeemable preference shares are classified as financial liabilties. c Deferral of Sales and related costs

Under Ind AS 18, revenue and related costs are recognised when the risks and rewards are passed to the customers and the Company retains no continuing managerial involvement. d Fair Valuation/ Impariment adjustment under Ind AS

Under Ind AS, investments in units of mutual funds are measured at fair value and Impariment of the Investment of the subsidaries due to heavy losses and/or are non-operating. e Remeasurement of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability, are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. f Material Adjustment to Statement of Cash flow

No material adjustments have been identified to the Statement of Cash flows on account of transition to Indian Accounting Standards. g Bhaskarpara Coal Company Limited considered as Joint Venture Bhaskarpara Coal Company Limited is Jointly control by two different entities having the same power, exposure, rights, returns, etc.

16 Events occurred after the Balance Sheet Date

The Company evaluates events and transactions that occur subsequent to the Balance Sheet date but prior to the approval of the financial statements to determine the necessity for recognition and/or reporting of any of these events and transactions in the financial statements. As of 25th May 2018, there were no subsequent events to be recognized or reported that are not already disclosed elsewhere in the financial statements.

17 Previous year amount has been regrouped/re-casted/re-arranged/ re-classified/re-determined, wherever necessary, to make the figure of the current year comparable with the previous year.

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Mar 31, 2016

(c) Rights, preference and restriction attached to Equity Shares

(i) The face value of the Equity shares is Rs 10/- per share . Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. During the year, the company has not declared any dividend.

(ii) The shareholders are not entitled to exercise any voting right either personally or proxy at any meeting of the Company in cases calls or other sums payable have not been paid.

(iii) In the event of liquidation of the company, holder 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 shareholders.

(d) Rights, preference and restriction attached to Preference Shares

(i) The face value of the Preference shares is Rs. 10/- per share. The Preference share holder does not have any voting rights. During the year, the company has not declared any dividend.

(ii) In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital.

(e) Rights, preference and restriction attached to Partially Convertible Partially Redeemable Preference Shares(PCPRPS)

(i) The face value of the Preference shares is Rs. 10/- per share. The Preference share holder does not have any voting rights. During the year, the company has not declared any dividend.

(ii) In the event of liquidation of the company, the preference share holders will have priority over equity shares in repayment of capital.

(iii) The Equity Shares arising upon conversion of the PCPRPS shall rank pari passu with the existing Equity Shares of the Company in all respects, including dividend.

(f) There were no shares reserved at the year-end for issue under options and contracts / commitments for the sale of shares / disinvestment.

(g) Shareholders holding more than 5% of the Shares in the Company :

Equity Shares

(a) Secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of Directors.

(b) ECB Loan is secured by Pari Passu Charge over the movable assets and first Pari Passu Charge on immovable assets of the company.

(a) Secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movab assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadoda and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by t personal guarantees of some of Directors.

(b) Secured by first charge by way of hypothecation of all stocks of raw material, packing materials, fuel, stock in process, sei finished and finished goods, stores and spares not relating to the plant and machinery and stocks in trade & receivables ai second charge on all movable fixed assets & second and subservient charge by way of equitable mortgage of all immovab properties situated at Vatva, Palodia, Dhank, Samakhyali- Kutch and Chhadawada -Bhachau. Further the loans are guarantee by the personal guarantees of some of the Directors of the company.

Note: (1) During the Financial Year 2009-10, in pursuance of the Scheme of Arrangement approved by the Hon''ble High Court of Gujarat vide its order dated November 30,2009 the immovable assets of the Company, namely Land and Building, on the basis of Revaluation report of the Government approved competent Valuer appointed by the Company were recorded at their respective fair values and resulting increase over Book Value, of Rs. 248.20 Crore was transferred to General Reserve Revaluation Account. Accordingly, the depreciation for the current year includes depreciation of Rs. 3.23 Crore ( Previous Period Rs. 3.26 Crore) on account of the said revaluation, and which has been charged to Statement of Profit & Loss.

2. The account under consideration is for the Financial year 2015-16 commencing from 1^st April 2015 to 31^st March 2016 (Referred as "Current year") and the previous financial year commencing from 1^stApril 2014 to 31^st March 2015 (Referred as "Previous Year ").

3. Details of the Cases of Winding Up of the Company, Recovery by the Lenders / Creditors against the company

(a) Winding Up Petitions:

UCO Bank, Syndicate Bank, Shiv Sales Industries and Shiv Metal Industries have filed winding up petitions under section 433 and 434 of the Companies Act, 1956 against the company before the Hon''ble Gujarat High Court.

The winding up petition filed by UCO Bank, was admitted on March 7, 2012 and the Hon''ble Gujarat High Court has passed an order for advertisement of petition and appointment of Official Liquidator. The Company has challenged the said orders before Hon''ble Division Bench of Hon''ble Gujarat High Court by filing an appeal and the Hon''ble Division bench vide order dated August 13, 2013 has granted the stay against the said orders. Further in view of the reference of the company registered with the Hon''ble BIFR Board (governed by the Sick Industrial Companies (Special Provisions) Act, 1985), the Hon''ble Gujarat High Court vide order dated August 19, 2015 has adjourned the matter sine die until the proceedings before the Hon''ble BIFR Board are completed.

Winding up petition filed by Syndicate Bank, Shiv Sales Industries and Shiv Metals Industries are pending before Hon''ble Gujarat High Court.

(b) Cases before Debt Recovery Tribunal (DRT)/DRAT Cases:

(i) UCO Bank, Syndicate Bank, ICICI Bank Limited, Allahabad Bank, Central Bank of India, Dena Bank, and Corporation Bank had filed Original Applications against the Company before the Debt Recovery Tribunal-1, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The DRT has granted ad-interim injunction orders against transfer of certain properties. The Company had filed its reply / application in all the matters and has requested the DRT to suspend the proceedings in view of registration of reference before the Hon''ble BIFR Board.

The Company has filed an appeal before Debt Recovery Appellate Tribunal, Mumbai ("DRAT") in the matter of UCO Bank against the order of DRT for rejection of application of cross examination. Syndicate Bank has also filed an appeal before DRAT, Mumbai against the order of DRT for modification of ex-parte ad-interim injunction order.

During the current year Allahabad Bank has assigned the debt associated with the company to Invent Assets Securitization & Reconstruction Private Limited (ARC). Company has settled its debt with ICICI Bank in OTS (one time settlement) and on complying with the repayment as per the settlement agreement; the matter will be withdrawn from the Hon''ble DRT.

Accordingly, all the aforesaid original applications / appeal are now pending for further hearing before DRT/DRAT.

(c) Cases Under section 138 of the Negotiable Instruments Act,1881

UCO Bank, Syndicate Bank, Vijaya Bank, ICICI Bank Limited and Indian Overseas Bank had filed criminal complaints against the company and its Directors/ officers under section 138 of Negotiable Instruments Act, 1881 for dishonor of various cheques issued by the Company and the Company has contested all the said cases and all the matters are pending for further hearing before the respective Hon''ble Metropolitan Magistrates, Ahmedabad.

(d) Willful Defaulters:

(i) UCO Bank had declared the Company and its guarantors as willful defaulter. The action of declaring the company and its guarantors as willful defaulter by UCO Bank has been challenged in the Hon''ble Gujarat High Court and the said matter is pending for further hearing.

(ii) Central Bank of India and Corporation Bank has declared the Company as willful defaulter and reported the name of Company and its directors to the Reserve Bank of India, Credit Information Bureau (India) Limited (CIBIL) as Willful Defaulter.

(iii) Allahabad Bank, Dena Bank, Punjab National Bank and Union Bank of India had written a letter to the Company for declaring the company and its directors as willful defaulter. The company has filed its reply with all the banks. After receiving the letter for personal hearing before Grievance Redressal Committee, company has not received any further communication in respect of these cases.

(e) Notice under SARFAESI Act, 2002

(i) Vijaya Bank had issued notices under section 13(2) of Chapter III of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act, 2002") for assets of Transmission Line Tower Division of the Company situated at Village : Juni Jithardi, Tal : Karjan, Dist : Vadodara on 8/05/2012, 19/03/2015 and 04/11/2015. Company has filed its reply in respect of all the notices issued by the bank. Vijaya Bank has withdrawn its notice dated 19/03/2015. No further action has been taken by the Vijaya Bank.

(ii) Allahabad Bank and Corporation Bank has issued a notice under Section 13(2) of SARFAESI Act, 2002 vide letter dated 23^rd February, 2016 and 27^th May, 2015 respectively and the company has filed reply against the said notices on 12^th April,2016 and 27^th July,2015 respectively.

4. Net Worth and filing of Reference to the Hon''ble BIFR Board:-

The net worth of the Company is fully eroded and therefore the company has filed Reference to Hon''ble BIFR Board (governed by the Sick Industrial Companies (Special Provisions) Act, 1985) on February 28, 2014 and the same has been registered on June 27, 2014 as Case No. 29/2014. Further company has filed various Miscellaneous Applications to seek protection under section 22 of SICA 1985, in respect of disputed matters of tax & duty liability.

5. Non Provisions of Disputed Advances and Claims/Liability/Impairment of Assets

(a) The Company has VAT tax liability (including interest) of Rs. 35.84 Crore (Previous Year Rs. 21.94 Crore) under Maharashtra Sales Tax Act (Rs. 9.25 Crore for financial year 2009-10 and ''26.59 Crore for financial year 2010-11) out of which the company had paid Rs. 4.00 Crore, under protest and the same has been shown as Loans and Advances. The company has filed appeal against the said order before Appellate Authority. Provision for the impugned disputed tax liability of Rs. 35.84 Crore (Previous Year Rs. 21.94 Crore) has not been made as the company is hopeful of matter being decided in its favor by the appellate authority.

(b) During the Previous Year, VAT/CST Assessment for the financial year 2010-11 was completed and assessing officer has determined the tax liability of Rs. 20.95 Crore of VAT and Rs. 11.15 Crore of CST. The company has made part payment of Rs. 3.25 Crore for VAT and Rs. 1.50 Crore for CST under protest and the same has been shown as Loans and Advances. Provision for the impugned disputed tax liability has not been made as the company is hopeful of matter being decided in its favor by the appellate authority.

(c) The company has filed an application for refund of Excise Duty of Rs. Nil (Previous Year Rs. 12.23 Crore) and in the earlier year has treated the said amount as recoverable and has been shown as recoverable but during the year under consideration, company has written off the said amount as non recoverable and has been charged to Cost of Materials consumed.

(d) In view of the non-provision of the above items 2.29(a) to 2.29(c), the losses of the company are under stated by Rs. 67.94 Crore (Previous Year Rs. 66.29 Crore) and to the extent advances are overstated or the respective liabilities are understated.

(e) Loan accounts of the Bank of the company have been classified as Non Performing Assets by the Bankers and some of the bankers has not charged interest on the said accounts and therefore provision for Interest (Other than upfront charges) has not been made in the books of accounts and to that extent loss and bankers loan liability has been understated. The extent of exact amount is under determination and reconciliation with the banks, however as per the details available with the company, the amount of un-provided interest, on approximate basis, on the said loans {(Other than the loans of ICICI Bank and loans which are assigned to Edelweiss Assets Reconstruction Company Limited (EARC), Invent Assets Securitization & Reconstruction Private Limited (Invent)} is as under:-

(f) A Special Civil Application in the nature of Public Interest Litigation was filed in the year 2010, inter alia, against the Company before the Hon''ble Gujarat High Court challenging the environment clearance for expansion of steel plant and No Objection Certificate (NOC) & Consolidated Consent and Authorization. The Gujarat High Court by its order dated May 11, 2012 set aside the environment clearance with liberty to the Company to apply once again and to stop the operation of the steel plant. The Company has filed a Special Leave Petition (SLP) before the Hon''ble Supreme Court of India, challenging the impugned order of Hon''ble Gujarat High Court. After hearing, the Hon''ble Supreme Court of India on May 18, 2012 stayed the order passed by the Hon''ble Gujarat High Court. As per the direction of the Hon''ble Supreme Court of India, the Central pollution Control Board and Gujarat Pollution Control Board has carried out the joint inspection and submitted its report to Hon''ble Supreme Court of India. The Company has filed its compliance status report and the final hearing has been concluded before the Hon''ble Supreme Court of India. The arguments are concluded on 8th April, 2016 and the judgment is reserved.

6. Additional Disclosures

(a) Power and Fuel expenses are inclusive of duties and taxes of Rs. 12.40 Crore (Previous Year Rs. 11.15 Crore) paid towards power generation.

(b) During the year old non recoverable amount of Rs. 47.50 Crore (Previous Year Rs. 113.19 Crore) and unclaimed amount of Rs 9.59 Crore (Previous Year Rs. 16.77 Crore) have been written off/ back on account of non realization and payment. Its'' net balance of Rs. 37.91 Crore (Previous Year Rs. 96.42 Crore) has been charged to the Statement of Profit and loss.

(c) During the year, on account of non admission of claim of Excise Duty Refund of Rs. 12.23 Crore (''Nil), the company has written off the said amount by charging it to the Cost of Materials Consumed.

(d) During the year, the Terminal Excise Duty of Rs. Nil (Previous Year Rs. 1.58 Crore) has been written off considering its realizability as doubtful and has been debited to cost of Material consumed.

(e) During the year, Old Vat Input Credit Receivable of Rs. Nil (Previous Year Rs. 69.13 Crore) has been written off, by debiting it to cost of Material consumed, as company is not hopeful of its realization.

(f) During the FY 2013-14, VAT Assessment for financial year 2009-10 was completed and the competent Authority has determined the tax liability of Rs. 5.94 crore and against this demand the company has filed an appeal before the Appellate Authority and on 29/5/2014 the Appellate Authority has deleted the said demand and has determined refund of Rs. 9.50 Crore vide order dated 29/05/2014 but till the end of the year, the said refund has not been received by the company and it will be accounted on its receipt.

(g) The cost of Material consumed includes freight, Loading and Unloading Expenses, inspection fees, commission on purchase, taxes & duties (to the extent of credit not available), rate difference and interest cost on purchase of raw material and ancillary thereof (including reversal of any claims).

(h) In view to heavy accumulated losses and uncertainty of its realization/ payment of taxes in near future, no provision for Deferred Tax Asset/liability has been made by the company.

(i) Product Development Cost includes total Research and Development expenses of Rs 32.19 Crore (Previous Year Rs. 32.11 Crore) incurred on development of Hybrid Bus/T-Cab/project and CONTIFUR Project, which is still in progress and said expenses, would be written off in five years from the year of completion of the projects.

(j) Some of the creditors have filed cases of recovery against the company before the various Hon''ble Courts/Forums for Rs 1.86 Crore (Previous Year Rs 1.96 Crore).

(k) Bank of India, Bank of Baroda, State Bank of India, Canara Bank and State Bank of Travancore has assigned their debt to Edelweiss Asset Reconstruction Company Limited (EARC). The Company has entered into settlement agreement on 10th March 2015 for the repayment of the Debts of the said Bank to EARC. In terms of settlement agreement, if all the terms and conditions are fully complied by the company up to the March 2023, there will be reduction in debt, as per Books of accounts of the Company, by Rs. 391.50 Crore. The amount of said debt reduction is after adjustment of FDRs of Rs. 12.39 Crore held by Bank of Baroda and the company is in process to recover the said amount and accordingly there is possibility of refinement in debt reduction.

(l) During the year, Oriental Bank of Commerce, Punjab National Bank and Allahabad Bank has assigned its debt to Invent Assets Securitization & Reconstruction Pvt. Ltd. (ARC) vide settlement agreement for the repayment of debts of the said bank to ARC. In terms of settlement, if all the terms and conditions are fully complied by the company, there would be a reduction in debt, as per books of accounts of the company by Rs. 325.01 Crore. In the case of Punjab National Bank and Allahabad Bank, settlement agreement is yet to be executed.

(m) During the year, Company has settled debts of ICICI Bank vide settlement agreement dated 1st September 2015 for the repayment of debts to ICICI Bank. In terms of settlement, if all the terms and conditions are fully complied by the company up to the July 2016, there will be reduction in debt, as per books of accounts of the company by Rs. 43.47 Crore.

(n) During the year, in view of non realisability / non usability of stock of book value of Rs. 2.88 Crore (Previous Year Rs. 162.91 Crore), the company has not considered the said stock for the purpose of stock valuation and accordingly it has been written off.

(o) The balances of Central Bank of India, UCO Bank are not being properly confirmed/ reconciled by the bank as these banks have treated the loan accounts as NPA Account. Similarly International Financial Corporation has not issued loan balance confirmation certificate.

(p) In view of the commercial prudence, during the year, the company has not restated the long outstanding export trade receivables and foreign currency loan at the rate prevailing as on 31st March 2016.

(q) There is dispute with the Supreme Metallurgical Services (P) Ltd. (a Micro, Small and Medium Enterprise) in relation to material supplied by the said party and for which the said party has filed a case before the Hon''ble Madhya Pradesh Micro and Small Facilitation Council, Bhopal for the recovery of the principal amount and interest thereon. The Hon''ble Council has passed the order dated August 12, 2013 and has ordered to the Company to pay Rs. 0.91 Crores (including interest up to July 31, 2013). The Company had filed appeal before District Court, Bhopal under Section 34 of Arbitration and Reconciliation Act, 1996 against the order passed by Hon''ble Madhya Pradesh Micro and Small Facilitation Council, Bhopal. The said appeal was not entertained by the Court in view of Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006. The Company is exploring various other legal options to challenge the said order.

(r) The company holds investment in Shree Ram Electrocast Limited, Electrotherm Mali SARL and Bhaskarpara Coal Company Limited (Subsidiaries of the Company). These Companies have incurred heavy losses and/or are non operating and therefore the fate of said Companies is uncertain. Provision for the diminution in the value of investment in subsidiary companies namely Electrotherm Mali SARL and Bhaskarpara Coal Company Limited has not been made as the Company treat this diminution as temporary in nature. However during the year company has written off Rs 78.68 Crores representing Shree Ram Electrocast Limited, in its books, treating it as operating loss of the company.

(s) The Central Bureau of Investigation (CBI) has conducted certain proceedings, on the basis of the complaint filed by Central Bank of India with regard to the utilization of the loan disbursed by Central Bank of India. Central Bureau of Investigation has filed charge sheet and a CBI special case number 27 of 2015 was registered against the company and its few Directors before the Hon''ble CBI court Ahmedabad on 6th October, 2015 and now the matter is pending before Hon''ble CBI court for hearing.

(t) The amount of Income tax receivable shown under the head "Balance with revenue authority in Short Term Loans and Advances'''' is subject to reconciliation as the refund amount of earlier years has been adjusted against outstanding Income Tax liability.

(u) The company has used advance license for import of certain raw material against which company was under an obligation to export certain pre-determined quantity of finished goods within specified time period. However there was shortage in the goods exported by the company against its export obligation. Accordingly in the opinion of the management, the company may be liable to pay Rs. 4.66 Crore (including interest) (Previous Year Rs. 4.31 Crore) as import duty.

7. The company is contingently liable for the following

(a) Claims against the Company not acknowledged as debts amounting to Rs. 0.70 Crore (Previous Year Rs. 0.70 Crore), are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc.

(b) Guarantees / Counter Guarantees (including un-utilized Letters of Credit) issued Rs. 26.96 Crore (Previous Year Rs. 7.47 Crore).

(c) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect,

i) Excise Duty Liability of Rs 338.64 Crore (Previous Year Rs. 295.61 Crore),

ii) Service Tax Liability of Rs. 2 Crore (Previous Year Rs. 5.41 Crore),

iii) Custom Duty Liability of Rs. 20.31 Crore (Previous Year Rs 20.31 Crore),

iv) Income Tax liability of Rs 31.55 Crore (Previous Year Rs. 31.55 Crore),

v) VAT and CST Liability of Rs. 59.19 Crore (Previous Year Rs. 50.04 Crore) against the outstanding liability company has paid Rs. Nil (Previous Year Rs. 4.75 Crore) and total affiliated amount paid by the company against the said liability Rs. 8.75 Crore (Previous Year Rs. 8.75 Crore) till 31^st March, 2016.

Note: The above amounts are without the amount involved in the appeal preferred by the Department, if any, and further applicable interest on the demand.

8. FOREIGN EXCHANGE EARNING & OUTGO (on Cash basis):

(a) Earning in Foreign Exchange for Export of Goods & Services Rs. 93.07 Crore (Previous Year Rs. 112.70 Crore).

(b) Expenditure in Foreign Currency for Import of Materials, Traveling & Others is Rs. 70.96 Crore (Previous Year Rs. 58.65 Crore).

9. DIRECTOR''S REMUNERATION :

In view of loss during the year no payment of Remuneration to the Directors of the Company has been made.

10. Previous Year amount has been regrouped/re-casted/re-arranged/ re-classified/re-determined, wherever necessary, by the company on the basis of data available with the company, to make the figure of the current year with the Previous Year comparable. In some case Previous Year amount has not been stated, if there is Nil amount for the current year.

11. SEGMENT REPORTING UNDER ACCOUNTING STANDARD

(A) Business Segment

Based on the guiding principles given as per Accounting Standard on "Segment Reporting" (AS-17) issued by The Institute of Chartered Accountants of India, the Company''s primary business is manufacturing and marketing of Induction Furnaces, Steel items and Battery Operated Vehicles.

* The Rate of Discounting for Leave Encashment Undfunded is taken as average of Divisions.

12. (a) In the opinion of the Management, the current assets, Trade Receivables, Loans &Advances are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known Liabilities are adequate.

(b) (i) The account of "Trade Receivables","Borrowings","Trade payables","Advances from Customer","Short Term Loans and Advances" and some Bank Balances are subject to confirmation / reconciliation and the same includes very old non moving items and therefore the same are subject to necessary adjustments for accounting or re-grouping /classification.

(ii) The amount of "Advance from Customers" includes, Rs. 0.98 Crore (Previous Year Rs. 1.91 Crore)(net of receipts and payments) of the parties in the bank accounts of which names are not readily available with the company and which are to be accounted under the correct account head on receipt of accurate information from the Banker/parties.

(iii) The amount of account of some of the major single party under the Head "Advance from customers", "Trade Payable", "Advance to Suppliers and Others", "Trade Receivables" are shown on gross basis and in the opinion of the Company same are not netted off and which has resulted in overstatement of two account Heads and in the opinion of the company, the amount is not significant.

13. (a) The amount of current maturity of Long Term Liability of Rs. 975.04 Crore (Previous Year Rs. 1374.17 Crore) has been determined on the basis of the data available with the company and has been treated as short term Borrowings.

(b) The amount of inventory has been taken by the management on the basis of information available with the company and without conducting physical verification of the slow moving inventory. The slow moving inventories have been valued by the management on estimated net realizable value.

(c) The classification/grouping of items of the accounts are made by the management, on the basis of the available data with the company.

(d) Account of Service Tax Receivables, CENVAT Receivables and Vat input credit Receivables is subject to reconciliation, submission of its return for its claim and/or its assessment, if any.

(e) The management is of the opinion that the uncompleted projects shown as Capital Work in Progress of Rs. 10.45 Crore (Previous Year Rs. 10.45 Crore) requires some further investment to bring them into commercial use and the company desire to complete the project, therefore these are not treated as impaired assets.

(f) In view of the non recovery of the amounts or non settlement of the accounts, the company has determined Rs. 63.26 Crore as doubtful Trade Receivables and Rs. 28.78 Crore as doubtful Advance to Suppliers and in view of business prudence, during the year the company has made provision of Rs. 34.79 crore (Previous Year Rs. 28.47 Crore) for doubtful Trade Receivables and Rs. 16.50 crore (Previous Year Rs. 12.28 Crore) for doubtful Advance to Suppliers.

(g) Account of "Advance to staff" is under confirmation, reconciliation and subject to the settlement of the accounts with the respective employees (including ex-employees) of the company.

14. Signed Notes No.1 and 2 forms part of the Annexed account of the Company

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Mar 31, 2015

1. CORPORATE INFORMATION

Electrotherm (India) Limited (the Company) is a listed public company domiciled in India and incorporated under the provisions of the Companies Act, 1956.The Company is engaged in the Manufacturing of Electronic furnaces and other capital equipments, Sponge and PIG Iron, Ferrous and Non-ferrous Billets/Bars/Ingots, Duct Iron Pipes, Battery operated vehicles, Electric Power Generation and services relating to Electric furnaces, other capital equipments and battery operated vehicles.

2. Rights, preference and restriction attached to Equity Shares

(i) The face value of the Equity shares is ' 10/- per share . Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. During the year, the company has not declared any dividend.

(ii) The shareholders are not entitled to exercise any voting right either personally or proxy at any meeting of the Company in cases calls or other sums payable have not been paid.

(iii) In the event of liquidation of the company, holder 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 shareholders.

3. Rights, preference and restriction attached to Preference Shares

(i) The face value of the Preference shares is Rs. 10/- per share . The Preference share holder does not have any voting rights. During the year,the company has not declared any dividend.

(ii) In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital .

4. There were no shares reserved at the year-end for issue under options and contracts / commitments for the sale of shares / disinvestment.

5. The Company have calls in arrears / unpaid calls of Rs. Nil (Previous Year Nil)

(a) Secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of Directors.

(b) ECB Loan is secured by Pari Passu Charge over the movable assets and first Pari Passu Charge on immovable assets of the company.

(a) Secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of Directors.

(b) Secured by first charge by way of hypothecation of all stocks of raw material, packing materials, fuel, stock in process, semi finished and finished goods, stores and spares not relating to the plant and machinery and stocks in trade & receivables and second charge on all movable fixed assets & second and subservient charge by way of equitable mortgage of all immovable properties situated at Vatva, Palodia, Dhank, Samakhyali- Kutch and Chhadawada -Bhachau. Further the loans are guaranteed by the personal guarantees of some of the Directors of the company.

6. As per the requirement of the "The Companies Act 2013" , the Company has evaluated the useful lives of its fixed Asstes and has computed depreciation according to the provisions of Schedule II of the Act. Consequently, in the financial results of the company, the depreciation charge for the year ended 31 March 2015 is higher by Rs. 3.63 Crore (Previous Period Rs.Nil)

7. During the Financial year 2009-10, in pursuance of the Scheme of Arrangement approved by the Hon'ble High Court of Gujarat vide its order dated November 30,2009 the immovable assets of the Company, namely Land and Building, on the basis of Revaluation report of the Government approved competent Valuer appointed by the Company were recorded at their respective fair values and resulting increase over Book Value of Rs. 248.20 Crore was transferred to General Reserve Revaluation Account. Accordingly, the depreciation for the Current Year includes depreciation of Rs.3.26 Crore on account of the said revaluation and which has been charged to Statement of Profit & Loss. However during the previous period the depreciation on account of revaluation of Rs. 1.73 Crore has been reduced from the balance of General Reserve.

8. The account under consideration is for the financial year 2014-15 commencing from 1st April 2014 to 31st March 2015 (Referred as "Current year") and the previous period is for the Six months commencing from 1st October 2013 to 31st March 2014 (Referred as "Previous Period") and therefore figures of the Current Year and Previous Period are not comparable.

9. Details of the Cases of Winding Up of the Company, Recovery by the Lenders / Creditors against the company

(a) Winding Up Petitions:

UCO Bank, Syndicate Bank, Shiv Sales Industries and Shiv Metal Industries have filed winding up petitions under section 433 and 434 of the Companies Act, 1956 against the company before the Hon'ble Gujarat High Court.

The winding up petition filed by UCO Bank, was admitted on March 7, 2012 and the Hon'ble Gujarat High Court has passed an order for advertisement of petition and appointment of Official Liquidator. The Company has challenged the said orders before Hon'ble Division Bench of Hon'ble Gujarat High Court by filing an appeal and the Division bench vide order dated August 13, 2013 has granted the stay against the said orders.

Winding up petition filed by Syndicate Bank, Shiv Sales Industries and Shiv Metals Industries are pending before with Hon'ble Gujarat High Court.

(b) DRT/DRAT Cases:

(i) UCO Bank, Syndicate Bank and ICICI Bank Limited had filed original applications against the Company before the Debt Recovery Tribunal, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The company has filed its reply / application in all the three matters and the Ex-parte ad-interim injunction orders has been passed in the matter of UCO Bank and Syndicate Bank. The Company has got ad-interim injunction orders against transfer of certain properties in the matter of UCO Bank and Syndicate Bank. No order has been passed in the matter of ICICI Bank Limited. The company has filed an appeal before Debts Recovery Appellate Tribunal, Mumbai ("DRAT") in the matter of UCO Bank against the order of DRT for rejection of application of cross examination. Syndicate Bank has also filed an appeal before DRAT, Mumbai against the order of DRT for modification of ex-parte ad-interim injunction order.

(ii) Further, Allahabad Bank has filed an original application before Debt Recovery Tribunal, Ahmedabad and the DRT has passed an ex-party ad-interim injection order and the Company is in process of contesting the said order.

(iii) Central Bank of India and Dena Bank has filed original application against the Company before the Debt Recovery Tribunal, Ahmedabad ("DRT") under Section 19 of the recovery of Debt due to Banks/Financial Institution Act, 1993. DRT has passed an ex-party ad-interim injunction order in both the cases. In the matter of Central Bank of India, the Company has filed rejoinder and other submission in the DRT for the same and which is pending for further hearing before DRT.

Accordingly, all the aforesaid original applications / appeal are pending for further hearing before DRT/DRAT or appeal/ Application.

(c) Cases Under section 138 of the Negotiable Instruments Act,1881

UCO Bank, Syndicate Bank, Vijaya Bank, ICICI Bank and Indian Overseas Bank had filed criminal complaints against the company and its Directors/ officers under section 138 of Negotiable Instruments Act, 1881 for dishonor of various cheques issued by the Company and the Company has contested all the said cases and all the matters are pending for further hearing before the respective Hon'ble Metropolitan Magistrate, Ahmedabad.

(d) Willful Defaulters:

(i) UCO Bank had declared the Company and its guarantors as willful defaulter. The action of declaring the company and its guarantors as willful defaulter by UCO Bank has been challenged in the Hon'ble Gujarat High Court and the matter is pending for further hearing.

(ii) State Bank of Travancore, Central Bank of India and Oriental Bank of Commerce had written a letter to the Company for declaring the company & its guarantor as willful defaulter. The company has filed reply of the same. No further communication has been received thereafter.

(e) Notice under SARFAESI Act, 2002

Vijaya Bank had issued a notice under section 13(2) of Chapter III of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act, 2002") for assets of Transmission Line Tower Division of the Company situated at Village : Juni Jithardi, Tal : Karjan, Dist : Vadodara on 19/03/2015 and the bank has not taken any further action. The company has given its reply vide its letter dated 18/05/2015.

9. Net Worth and filing of Reference to BIFR:

As per CDR directives as described in Letter of Approval under the head of "critical conditions" and since the net worth of the

Company is fully eroded the company has filed Reference to BIFR on February 28, 2014 and the same has been registered on June

27, 2014 as Case No. 29/2014.

10. Non Provisions of Disputed Advances and Claims/Liability/Impairment of Assets

(a) The Company has VAT tax liability (including interest) of Rs.21.94 Crore (Previous period Rs. 21.94 Crore) under Maharashtra Sales tax Act and out of which the company had paid Rs. 4.00 Crore on 22.07.2011, under protest and the same has been shown as Loans and Advances. Provision as expenditure for the impugned disputed tax liability of Rs. 21.94 Crore (Previous period Rs. 21.94 Crore) has not been made as the company is hopeful of matter being decided in its favor by the appellate authority.

(b) During the current year, VAT/CST Assessment for the financial year 2010-11 was completed and competent authority (DCCT, Rajkot) has determined the tax liability of Rs.20.95 Crore against VAT and Rs.11.15 Crore against CST. The company has made part payment of Rs. 1.50 Crore for CST on 12/05/2015 and Rs.25 Crore for VAT on 09/05/2015 and company has filed an appeal and the stay for payment of demand has been granted till 14.08.2015.

(c) The Company had filed application for refund of Excise Duty of Rs.12.23 Crore (Previous period Rs. 12.23 Crore) and the same has been treated as recoverable and has been shown as Short Term Loans and Advances. The said claim has been rejected by the Department but the Management is of the opinion that the company will receive the claim on resolution of the dispute on submission of further documents, and therefore the same is treated as good for its realization and not provided for as expenses.

(d) In view of the non-provision of the above items 2.29(a) to 2.29(c), the losses of the company are under stated by Rs. 66.29 Crore and to the extent advances are overstated or the respective liabilities are understated.

(e) During the previous period, VAT Assessment for financial year 2009-10 was completed and the competent Authority has determined the tax liability of Rs. 5.94 crore and against this demand the company has filed an appeal before the Joint Commissioner, Rajkot and during the year, the Learned Joint Commissioner, Rajkot has deleted the said demand and has determined refund of Rs. 9.50 Crore. The said amount of refund will be accounted on its actual receipt of the refund.

(f) Loan accounts of the Bank of the company have been classified as Non Performing Assets by the Bankers and some of the bankers has not charged interest on the said accounts and therefore provision for Interest (Other than upfront charges) has not been made in the books of accounts and to that extent loss and bankers loan liability has been understated. The extent of exact amount is under determination and reconciliation with the banks, however as per the details available with the company, the amount of un-provided interest, on approximate basis, on the said loans {(Other than the loans which are assigned to Edelweiss Assets Reconstruction Company Limited (EARC)} is as under:-

(Rs. In Crore)

Particulars Up to From April 14 Up to 31st March 2014 to March 15 March 2015

Interest on Corporate 698.66 234.35 933.01 Loan and working Capital Loan

11. A Special Civil Application in the nature of Public Interest Litigation was filed in the year 2010, inter alia, against the Company before the Hon'ble Gujarat High Court challenging the environment clearance for expansion of steel plant and No Objection Certificate (NOC) & Consolidated Consent and Authorization. The Gujarat High Court by its order dated May 11, 2012 set aside the environment clearance with liberty to the Company to apply once again and to stop the operation of the steel plant. The Company has filed a Special Leave Petition (SLP) before the Hon'ble Supreme Court of India, challenging the impugned order of Hon'ble Gujarat High Court. The Hon'ble Supreme Court of India stayed the order passed by the Hon'ble Gujarat High Court. The Hon'ble Supreme Court of India directed the Central pollution Control Board and Gujarat pollution Control Board to make a joint inspection and submit its report to Hon'ble Supreme Court. Central pollution Control Board and Gujarat pollution Control Board have submitted their joint report before the Hon'ble Supreme Court on 7th July 2014, regarding compliance of jobs done by the company and its next hearing has been fixed on 7th July 2015.

12. Additional Disclosures

(a) Power and Fuel expenses are inclusive of duties and taxes of Rs.11.15 Crore (Previous Period Rs. 3.25 Crore) paid towards power generation.

(b) During the year, the Terminal Excise Duty of Rs. 1.58 Crore (Previous Period Rs. Nil) has been written off considering its reliability as doubtful and has been debited it to cost of Material consumed. During the previous period Terminal Excise Duty of Rs. 1.58 Crore was included in Short Term Loan and Advance.

(c) During the year, Old Vat Input Credit Receivable of Rs. 69.13 Crore (Previous Period Rs. Nil) has been written off, by debiting it to cost of Material consumed, as company is not hopeful of its realization. During the previous period Old Vat Input Credit Receivable of Rs. 69.13 Crore was included in Short Term Loan and Advance.

(d) The cost of Material consumed includes freight, Loading and Unloading Expenses, inspection fees, Balance written off, commission, taxes & duties, and ancillary thereof (including reversal of any claims).

(e) In view to heavy accumulated losses and uncertainty of its realization/ payment of taxes in near future, no provision for Deferred Tax Asset/liability has been made by the company.

(f) Product Development Cost includes total Research and Development expenses of Rs. 32.11 Crore (Previous Period Rs. 31.70 Crore) incurred on development of Hybrid Bus/T-Cab/project and CONTIFUR Project, which is still in progress and said expenses, would be written off in five years from the year of completion.

(g) Some of the creditors have filed cases of recovery against the company before the various Hon'ble Courts/Forums for Rs. 1.96 Crore (Previous Period Rs. 1.96 Crore).

(h) During the year old non recoverable amount of Rs.158.15 Crore (Previous Period Rs. 19.57 Crore) and unclaimed amount of Rs. 16.77 Crore (Previous Period Rs. 9.33 Crore) have been written off/ back on account of non realization and payment. Its' net balance of Rs. 141.38 Crore (Previous period Rs. 10.24 Crore) has been charged to the Statement of Profit and loss.

(i) During the previous period, the company has paid Rs. 2.00 Crore to Allahabad Bank which has been adjusted by Bank against un- provided interest, but the company has adjusted the same against the existing liability as appearing in the books of the Company.

(j) Bank of India, the Lead bank of the consortium, Bank of Baroda, State Bank of India, Canara Bank and State Bank of Travancore has assigned their debt to Edelweiss Asset Reconstruction Company Limited (EARC). The Company has entered into settlement agreement on 10th March 2015 for the repayment of the Debts of the said Bank to EARC. In terms of settlement agreement, if all the terms and conditions are fully complied by the company upto the March 2023, there will be reduction in debt, as per Books of accounts of the Company by Rs.403.90 Crore.

(k) During the year, in view of non reliability/ non usability of stock of book value of Rs. 162.91 Crore (previous period Rs. 145.42 Crore), the company has not considered the said stock for the purpose of stock valuation and accordingly it has been written off.

(l) The Balances of Dena Bank, UCO Bank and Central Bank of India are not being properly confirmed / reconciled by the bank as these banks treated the loan account as NPA Account. Similarly, International Financial Corporation has not issued loan balance confirmation certificate.

(m) In view of the commercial prudence, during the year, the company has not restated the long outstanding export trade receivable at the rate prevailing as on 31st March 2015.

(n) There is dispute with the Supreme Metallurgical Services (P) Ltd (a Micro, Small and Medium Enterprise) in relation to material supplied by the said party and for which the said party has filed a case before the Hon'ble Madhya Pradesh Micro and Small Facilitation Council, Bhopal for the recovery of the principal amount and interest there on. The Hon'ble Council has passed the order dated August 12, 2013 and has ordered to the company to pay Rs. 0.91 Crore (Including interest upto July 31, 2013). The company has filed appeal before District Court Bhopal under Section 34 of Arbitration and Reconciliation Act 1996 against the order passed by Hon'ble Madhya Pradesh Micro and Small Facilitation Council, Bhopal.

(o) The company holds investment in Shree Ram Electrocast Limited, Electrotherm Mali SARL and Bhaskarpara Coal Company Limited (Subsidiaries of the Company).These Companies have incurred heavy losses and/or non operating and therefore the fate of said Companies are uncertain but Provision for the diminishing in the value of investment in subsidiary has not been made, as the Company treat it as temporary nature.

(p) The Central Bureau of Investigation has conducted certain proceedings, on the basis of the complaint filed by Central Bank of India with regard to the utilization of the loan disbursed by Central Bank of India. At present, the said matter is pending before the Central Bureau of Investigation for the investigation and the company is supporting them at various stages.

13. The company is contingently liable for the following

(a) Claims against the Company not acknowledged as debts amounting to Rs. 0.70 Crore (Previous Period Rs. 0.70 Crore), are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc.

(b) Guarantees / Counter Guarantees (including un-utilized Letters of Credit) issued Rs.7.47 Crore (Previous Period Rs. 19.50 Crore).

(c) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect,

(i) Excise Duty Liability of Rs. 295.61 Crore (Previous period Rs. 296.97 Crore) and Service Tax Liability of Rs.5.41 Crore (Previous period Rs. 1.84 Crore),

(ii) Custom Duty Liability of Rs.20.31Crore (Previous period Rs. 21.05 Crore),

(iii) Income Tax liability of Rs. 31.55 Crore (Previous period Rs. 25.17 Crore),

(iv) VAT AND CST Liability of Rs. 50.04 Crore against the outstanding liability company has paid the Rs. 4.75 Crore subsequently there of (Previous Period ' 17.94 Crore),

(The above amounts (except where specifically stated)are excluding the amount of additional Interest payable and of the amount involved in appeal preferred by the department, if any.)

14. FOREIGN EXCHANGE EARNING & OUTGO (on Cash basis):

(a) Earning in Foreign Exchange for Export of Goods & Services Rs. 112.70 (Previous period Rs. 85.55 Crore).

(b) Expenditure in Foreign Currency for Import of Materials, Traveling & Others is Rs. 58.65 Crore (Previous period Rs. 22.45 Crore).

In view of loss during the year and non-payment of any Remuneration to the Directors of the Company, computation of Net Profit in accordance with the Companies Act, 2013, is not required to stated.

15. Previous Period amount has been regrouped / re-casted / re-arranged / re-classified / re-determined, wherever necessary, by the company on the basis of data available with the company, to make the figure of the current year with the previous period comparable.

16. RELATED PARTY (AS IDENTIFIED AND DETERMINED BY THE COMPANY) DISCLOSURES UNDER ACCOUNTING STANDARD 18:- A. List of Related Parties

I) SUBSIDIARY COMPANIES

1. Jinhua Indus Enterprises Limited

2. JinhuaJahari Enterprises Limited

3. Bhaskarpara Coal Company Limited

4. ET Elec-Trans Limited

5. Hans Ispat Limited

6. Shree Ram Electro Cast Limited

7. Shree Hans Paper Limited

8. Electrotherm Mali SARL

II) Enterprises owned or significantly influenced by key management personnel or their relatives*(Except foreign companies)

1. Ahmedabad Aviation and Aeronautics Ltd.

2. Western India Speciality Hospital Ltd.

3. E-Motion Power Ltd.

4. Indus Elec-Trans Pvt. Ltd.

5. Jayshri Petro-Yarn Pvt. Ltd.

6. Adroit Trading and Investment Co.

7. EIL Hospitality Pvt. Ltd.

8. EIL Software Services Offshore Pvt. Ltd.

9. EIL Technology Pvt. Ltd.

10. Electrotherm Engineering & Projects Ltd.

11. Kappa Consultancy Pvt. Ltd.

12. Electrotherm Foundation.

13. Gujarat Mint Alloys Ltd.

14. Etain Electric Vehicles Limited (Formerly Known as Electra Transformer Private Limited)

15. Airfones Innovatives Private Limited

16. BNB Real Estate Private Limited

17. ETAIN Energy Holdings Limited (Formerly Known as Electrotherm Energy Holdings Ltd.)

18. Electrotherm Solar Limited

19. Palace Solar Energy Pvt. Ltd.

20. SBRB Real Estate Pvt. Ltd.

21. Bhandari Real Estate Pvt. Ltd.

22. ETAIN Immodo Renewables Ltd.

23. Arjun Ceramics & Carbon Pvt. Ltd.

24. Indus Chargers & Controllers Pvt. Ltd.

25. Arjun Solar One Pvt. Ltd.

26. Arjun Green Power Pvt. Ltd.

27. Arjun Raj Solar One Pvt. Ltd.

28. Bhandari Charitable Trust

29. Arjun Raj Solar Five Pvt. Ltd

III) Key Management Personnel (Other than Nominee & Independent Director)

1. Mr. Mukesh Bhandari (Chairman)

2. Mr. Shailesh Bhandari (Managing Director)

3. Mr. Avinash Bhandari (Joint Managing Director & CEO)

4. Mr. Ram Singh (Independent Director)

5. Mr. Chaitnya Sharma (Independent Director)

IV) Relatives of Key Management Personnel (With whom transaction has taken place during the year)

1. Mrs. Indubala Bhandari

2. Mrs. Jyoti Bhandari

3. Mr. Rakesh Bhandari

4. Mr. Anurag Bhandari

5. Mr. Siddharth Bhandari

6. Ms. Shivani Bhandari

7. Mrs. Panna Bhandari

8. Ms. Radhika Bhandari

17. SEGMENT REPORTING UNDER ACCOUNTING STANDARD (A) Business Segment

Based on the guiding principles given as per Accounting Standard on "Segment Reporting" (AS-17) issued by The Institute of Chartered Accountants of India, the Company's primary business is manufacturing and marketing of Induction Furnaces, Steel items and Battery Operated Vehicles.

18. (a) In the opinion of the Management, the current assets, Trade Receivable, Loans & Advances are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known Liabilities are adequate.

(b) (i) The account of "Trade Receivables", "Borrowings", "Trade payables", "Advances from Customer", "Short Term Loans and Advances" and some Bank Balances are subject to confirmation / reconciliation and the same includes very old non moving items and therefore the same are subject to necessary adjustments for accounting or re-grouping /classification.

(ii) The amount of "Advance from Customers" includes, Rs. 1.91 Crore (Previous Period Rs.2.06Crore) (net of receipts and payments) of the parties in the bank accounts of which names are not readily available with the company and which are to be accounted under the correct account head on receipt of accurate information from the Banker/parties.

(iii) During previous period the amount of account of some of the major single party under the Head "Advance from customers", "Trade Payable", "Advance to Suppliers and Others", "Trade Receivables" are shown on gross basis and the same are not netted off and which has resulted in overstatement of two account heads.

(c) The amount of current maturity of Long Term Liability of Rs.1374.17 Crore (Previous Period Rs. 1919.37 Crore) has been determined on the basis of the data available with the company and has been treated as short term Borrowings.

(d) The classification/grouping of items of the accounts are made by the management, on the basis of the available data with the company and which has been relied upon by the auditors.

(e) The amount of inventory has been taken by the management on the basis of information available with the company and without conducting physical verification of the slow moving inventory. The slow moving inventories have been valued by the management on estimate net realizable value and which has been relied upon by the auditors.

(f) Account of Service Tax Receivables, CENVAT Receivables and Vat input credit Receivables is subject to reconciliation, submission of its return for its claim and/or its assessment, if any.

(g) The management is of the opinion that the uncompleted projects shown as Capital Work in Progress of Rs. 10.45 Crore (Previous Period Rs. 10.45 Crore) require some further investment to bring them into commercial use and therefore these are not treated as impaired assets.

(h) In view of the non recovery of the amounts or non settlement of the accounts, the company has determined Rs. 63.26 Crore as doubtful Trade Receivable and Rs.28.78 Crore of Advance to Suppliers and in view of business prudence, the company has made provision of Rs. 28.47 Crore for said doubtful Trade Receivables and Rs.16.50 Crore for said doubtful Advance to Suppliers.

(i) Account of "Advance to staff" is under confirmation, reconciliation and subject to the settlement of the accounts with the respective employees (including ex-employees) of the company.

19. EARNINGS PER SHARE (EPS):

The basic Earnings per Share is calculated by dividing the profit/ loss attributable to the existing Equity Shares outstanding and in view of losses during the year, EPS has not been calculated.

20. Signed Notes No.1 and 2 forms part of the Annexed account of the Company

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Mar 31, 2014

1. CORPORATE INFORMATION

Electrotherm (India) Limited (the Company) is a listed public company domiciled in India and incorporated under the provisions of the Companies Act, 1956.The Company is engaged in the Manufacturing of Electronic furnaces and other capital equipments, Sponge and PIG Iron, Ferrous and Non-ferrous Billets/Bars/Ingots, Duct Iron Pipes, Battery operated vehicles, Electric Power Generation and services relating to Electric furnaces, other capital equipments and battery operated vehicles.

2.(a) Rights, preference and restriction attached to Equity Shares

(i) The face value of the Equity shares is Rs. 10/- per share . Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. During the period, the company has not declared any dividend.

(ii) The shareholders are not entitled to exercise any voting right either personally or proxy at any meeting of the Company in cases calls or other sums payable have not been paid.

(iii) In the event of liquidation of the company, holder 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 shareholders.

(b) Rights, preference and restriction attached to Preference Shares

(i) The face value of the Preference shares is Rs. 10/- per share . The Preference share holder does not have any voting rights. During the period, the company has not declared any dividend.

(ii) In the event of liquidation of the company, the preference share holders will have priority over equity shares in the payment of dividend and repayment of capital .

(c) There were no shares reserved at the year-end for issue under options and contracts / commitments for the sale of shares / disinvestment.

3.(a) Secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of Directors.

(b) ECB Loan is secured by Pari Passu Charge over the movable assets and first Pari Passu Charge on immovable assets of the company.

4.(a) Secured by first Charge by way of Equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at Vatva, Palodia, Dhank, Samakhiyali - Kutch, and Chhadawada -Bhachau and Juni Jithardi, Karjan, Vadodara and Bank Fixed Deposits & as second charge on all Stock-in-Trade & Receivables. Further the loans are guaranteed by the personal guarantees of some of Directors.

(b) Secured by first charge by way of hypothecation of all stocks of raw material, packing materials, fuel, stock in process, semi finished and finished goods, stores and spares not relating to the plant and machinery and stocks in trade & receivables and second charge on all movable fixed assets & second and subservient charge by way of equitable mortgage of all immovable properties situated at Vatva, Palodia, Dhank, Samakhyali- Kutch and Chhadawada -Bhachau. Further the loans are guaranteed by the personal guarantees of some of the Directors of the company.

5. In view of common financial year under the Companies Act, 2013, the company has changed the accounting year and accordingly, the account under consideration is for the period of Six months commencing from 1st October 2013 to 31stMarch 2014 (Referred as "Current Period") and the previous year is for the Twelve months commencing from 1st October 2012 to 30th September 2013 (Referred as "Previous Year"), and therefore figures of the Current Period and Previous Year are not comparable.

6. Details of the Cases of Winding Up of the Company, Recovery by the Lenders / Creditors against the company

(a) UCO Bank, Syndicate Bank, Shiv Sales Industries and Shiv Metal Industries have filed winding up petitions under section 433 and 434 of the Companies Act, 1956 against the company before the Hon''ble Gujarat High Court. The winding up petition filed by UCO Bank, was admitted on March 7, 2012 and the Hon''ble Gujarat High Court has passed an order for advertisement of petition and appointment of Official Liquidator. The Company has challenged the said orders before Division bench of Hon''ble Gujarat High Court by filing an appeal and the Division bench vide order dated August 13, 2013 has granted the stay against the said orders and accordingly, all the aforesaid windings up petitions / appeal are now pending for further hearing before Hon''ble Gujarat High Court.

(b) (i) UCO Bank, Syndicate Bank and ICICI Bank Limited had filed original applications against the Company before the Debt Recovery Tribunal, Ahmedabad ("DRT") under section 19 of the Recovery of Debts due to Banks and Financial Institutions Act, 1993. The company has filed its reply / application in all the three matters and the Ex-parte ad-interim injunction orders passed in the matter of UCO Bank and Syndicate Bank were partly modified. Further, Allahabad Bank has filed an original application before Debt Recovery Tribunal, Ahmedabad. There are some ad-interim injunction orders against transfer of certain properties in the matter of UCO Bank, Syndicate Bank and Allahabad Bank. No order was passed in the matter of ICICI Bank Limited. The company has filed an appeal before Debts Recovery Appellate Tribunal, Mumbai ("DRAT") in the matter of UCO Bank against the order of DRT for rejection of application of cross examination. Syndicate Bank has filed an appeal before DRAT against the order of DRT for modification of ex-parte ad-interim injunction order. All the aforesaid original applications / appeal are now pending for further hearing before DRT / DRAT.

(ii) During the period Central Bank of India had filed Original application against the Company before the Debt recovery Tribunal, Ahmedabad ("DRT") under Section 19 of the recovery of Debt due to Banks/Financial Institution Act, 1993. DRT passed a ex-party ad-interim injunction order.

(c) UCO Bank, Syndicate Bank, Vijaya Bank, ICICI Bank and Indian Overseas Bank had filed criminal complaints against the company and its directors / officers under section 138 of Negotiable Instruments Act, 1881 for dishonor of various cheques issued by the Company and the Company has contested all the said cases and all the matters are pending for further hearing before the respective Hon''ble Metropolitan Magistrate, Ahmedabad.

(d) UCO Bank had declared the Company and its guarantors as willful defaulter, which was subsequently withdrawn by the UCO Bank in a petition filed by the Company with Hon''ble Gujarat High Court. During the previous year, the action of once again declaring the company and its guarantors as willful defaulter by UCO Bank has been challenged in the Hon''ble Gujarat High Court and the matter is pending for further hearing. State Bank of Travancore has not taken any further action after issuing a letter to classify the company as willful defaulter. Central Bank of India has issued a letter for classification of company and its guarantors as Willful Defaulter and the company has replied to the said letter.

(e) Vijaya Bank had issued a notice under section 13(2) of Chapter III of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act, 2002") for assets of Transmission Line Tower Division of the Company situated at Village : Juni Jithardi, Tal : Karjan, Dist : Vadodara and the bank has not taken any further action. The said Bank has given positive mandate for restructuring of the Debt under CDR scheme.

7. Corporate Debt Restructuring, Net Worth and filing of Reference to BIFR:

(a) The Empowered Group (EG) of CDR Cell has approved CDR package of the company on November 14, 2013 and issued letter conveying approval on February 03, 2014. However, the Monitoring Institution i.e. Bank of India has informed the Company vide their letter dated 24th April 2014 that they have decided, the withdrawal of the case under CDR mechanism and therefore, as on date the Company is out of CDR.

(b) As per CDR directives as described in Letter of Approval under the head of "critical conditions" and the since the net worth of the Company is fully eroded the company has filed Reference to BIFR on February 28, 2014.

8. Non Provisions of Disputed Advances and Claims/Liability/Impairment of Assets

(a) The Company has filed an application for refund of Terminal Excise Duty of Rs. 1.58 Crore (Previous year Rs. 1.58 Crore) and the same is included in Loans and Advances Balances. The said claim is under dispute and has been rejected by the Department but the Management is of the opinion that the company will receive the claim on submission of the further required documents and therefore the same is treated as good for its realization and not provided for as expenses.

(b) The Company has VAT tax liability (including interest of Rs. 21.94 Crore (Previous year Rs. 21.94 Crore) under Maharashtra Sales tax Act and out of which the company had paid Rs. 4.00 Crore in Previous year, under protest and the same has been shown as Loans and Advances. Provision for the impugned disputed liability of Rs. 21.94 Crore (Previous year Rs. 21.94 Crore) has not been made as the company is hopeful of matter being decided in its favor by the appellate authority.

(c) Old Vat Input Credit Receivable of Rs. 69.13 Crore (Previous year Rs. 69.13 Crore) is subject to approval / sanction from the respective Government authority and the company is hopeful of its realisability.

(d) During the current financial period VAT Assessment for financial year 2009-10 was completed and the competent Authority has determined the tax liability of Rs. 5.94 crore and against this demand the company has filed an appeal and the same is pending before the appellate Authority and the company is hopeful for favorable decision in the appeal and therefore the said amount has not been provided as expenses.

(e) The Company had filed application for refund of Excise Duty of Rs. 12.23 Crore (Previous year Rs. 12.23Crore) and the same has been shown as Loans and Advances Balances. The said claim has been rejected by the Department but the Management is of the opinion that the company will receive the claim on resolution of the dispute on submission of further documents and therefore the same is treated as good for its realization and not provided for as expenses.

(f) In view of the non-provision of the above items 2.29(a) to 2.29(e), the losses of the company are under stated and to the extent advances are overstated or the liabilities are understated.

9. A Special Civil Application in the nature of Public Interest Litigation was filed in the year 2010, inter alia, against the Company before the Hon''ble Gujarat High Court challenging the environment clearance for expansion of steel plant and No Objection Certificate (NOC) & Consolidated Consent and Authorization. The Gujarat High Court by its order dated May 11, 2012 set aside the environment clearance with liberty to the Company to apply once again and to stop the operation of the steel plant. The Company has filed a Special Leave Petition (SLP) in the Hon''ble Supreme Court of India challenging the impugned order of Hon''ble Gujarat High Court dated May 11, 2012. After hearing, the Hon''ble Supreme Court of India on May 18, 2012 stayed the order passed by the Hon''ble Gujarat High Court. All the parties to the petition have filed their reply before the Hon''ble Supreme Court of India and now the Hon''ble Supreme Court of India directed the Central pollution Control Board and Gujarat pollution Control Board to make a joint inspection in 3rd week of June, 2014 & to submit the report before 5th July 2014 and matter has been listed for the consideration of the said report on 15th July 2014, before the Hon''ble Supreme Court.

10. Additional Disclosures

(a) Power and Fuel expenses are inclusive of duties and taxes of Rs. 3.25 Crore (Previous year Rs. 3.38 Crore) paid towards power generation.

(b) During the period Foreign Exchange Fluctuation Loss of Rs. Nil (Previous year Loss of Rs. 0.29 Crore) has been adjusted to Material Cost and Loss of Rs. 0.55 Crore (Previous year Loss of Rs. 7.78 Crore) has been charged to Finance Cost.

(c) The cost of Material consumed includes freight, taxes and inspection fees.

(d) In view to heavy accumulated losses and uncertainty of its realization/ payment in near future, no provision for Deferred Tax Asset/liability has been made by the company.

(e) Miscellaneous expenditure includes total Research and Development expenses of Rs. 31.70 Crore (Previous year Rs. 30.82 Crore) incurred on development of Hybrid Bus/T-Cab/project and CONTIFUR Project, which is still in progress and said expenses, would be written off in five years from the year of completion.

(f) Some of the creditors have filed cases of recovery against the company before the various Hon''ble Courts/ Forums for Rs. 1.96 Crore (Previous year '' 1.97 Crore).

(g) During the period old non recoverable amount of Rs. 19.57 Crore and unclaimed amount of Rs. 9.33 Crore have been written off/ back and the net balance of Rs. 10.24 Crore has been charged to the Statement of Profit and loss.

(h) During the period, the company has paid Rs 2.00 Crore to Allahabad Bank which has been adjusted by Bank against un- provided interest, but the company has adjusted the same against the existing liability as appearing in the books of the Company.

(i) Bank of Baroda has informed to the company and other participating consortium lenders vide letter dated May 01, 2014 that bank has sold out its debt to Edelweiss Asset Reconstruction Company Limited (EARC) on March 26, 2014. Bank of Baroda has also mentioned that EARC has become secured lender and all the rights, title and interests of Bank of Baroda have vested in EARC. Edelweiss Asset Reconstruction Company Limited has confirmed the aforesaid transaction vide letter dated May 08, 2014.

(j) During the period, in view of non realisability/ non usability of work in process of book value of Rs. 145.42 Crore, the company has not considered the said work in process for the purpose of stock valuation.

(k) Central bank of India, Dena Bank, and State bank of Travancore has written off the loan given to the company of Rs. 4.17 Crore, Rs. 22.64 Crore and Rs. 6.92 Crore respectively, by debiting to suspense account and therefore the balance is not confirmed by the respective Bankers. However, the company has shown the said loans from the respective banks in its books of account, as the said liabilities has not been waived by the respective bankers.

(l) The company had acquired some Computer Servers and other related accessories on lease basis and made payments of Rs. 1.34 Crore to the lessor on regular basis in earlier years. During the period the lease period is over and accordingly the total payments of Rs. 1.34 Crore made by the Company, has been capitalized under the head Computer in Fixed Asset.

(m) In view of the commercial prudence, during the period, the company has restated, the amount of long outstanding Export Sales, at the Foreign Exchange Rate prevailing at the time of Export made and the Foreign exchange gain of Rs. 27.54 Crore accounted thereon, in earlier year(s) has been reversed under the head "Exceptional and Extra Ordinary item", as the amount has not been realized.

(n) There is dispute with the Supreme Metallurgical Services (P) Ltd (a Micro, Small and Medium Enterprise) in relation to material supplied by the said party and for which the said party has filled a case before the Hon''ble Madhya Pradesh Micro and Small Facilitation Council, Bhopal for the recovery of the principal amount and interest there on. The Hon''ble Council has passed the order dated August 12, 2013 and has ordered to the company to pay Rs. 0.91 Crore (Including interest upto July 31, 2013) and for which the company is in process of taking appropriate action against the said party and the order of the said Council.

(o) During the period, the company has amortized Deferred Advertisement expenses of Rs. 0.65 Crore relating to earlier year, under the head "Advertisement Expenses"

11. The company is contingently liable for the following :-

(a) Claims against the Company not acknowledged as debts amounting to Rs. 0.70 Crore (Previous year Rs. 0.70 Crore), are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc.

(b) Guarantees / Counter Guarantees (including un-utilized Letters of Credit) issued Rs. 19.50 Crore (Previous year Rs. 12.19 Crore).

(c) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect, Excise Liability of Rs. 298.81 Crore (Previous year Rs. 299.35 Crore) and Custom Duty Liability of Rs. 21.05 Crore (Previous year Rs. 26.29 Crore) and Income Tax liability of Rs. 25.17 Crore (including interest) (Previous year Rs. Nil.)

(The above amounts (except where specifically stated) are excluding the amount of Interest payable and of the amount involved in appeal preferred by the department, if any.)

(d) The company has executed Legal Undertaking Bond to pay Central Excise Duty (Terminal Excise Duty), levies and liquidated damages payable, if any, in respect of imported and indigenous capital goods and stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. In this regard aggregate duty liability amounts to Rs. 1.68 Crore (Previous year Rs. 16.38 Crore approx.) as at March 31, 2014. Against these, exports amounting to Rs. 7.24 Crore (approx.) (Previous year Rs. 70.46 Crore (approx.)) will have to be made within next 8 years from the date of issue of license.

12. FOREIGN EXCHANGE EARNING & OUTGO:

(a) Earning in Foreign Exchange for Export of Goods & Services Rs. 85.55 Crore. (Previous year Rs. 129.82 Crore).

(b) Expenditure in Foreign Currency for Import of Materials, Traveling & Others is Rs. 22.45 Crore (Previous year Rs. 66.11 Crore).

13. Previous year amount has been regrouped/re-casted/re-arranged/ re-classified/re-determined, wherever necessary, by the company on the basis of data available with the company, to make the figure of the current period with the previous year comparable.

14. RELATED PARTY (AS IDENTIFIED AND DETERMINED BY THE COMPANY) DISCLOSURES UNDER ACCOUNTING STANDARD 18:-

A. List of Related Parties

I) SUBSIDIARY COMPANIES

1. Jinhua Indus Enterprises Limited

2. Jinhua Jahari Enterprises Limited

3. Bhaskarpara Coal Company Limited

4. ET Elec-Trans Limited

5. Hans Ispat Limited

6. Shree Ram Electro Cast Limited

7. Shree Hans Papers Limited

8. Electrotherm Mali SARL

II) Enterprises owned or significantly influenced by key management personnel or their relatives*(Except foreign companies)

1. Ahmedabad Aviation and 2. Western India Speciality Aeronautics Ltd. Hospital Ltd.

3. E-Motion Power Ltd. 4. Indus Elec-Trans Pvt. Ltd. *

5. Jayshri Petro-Yarn Pvt. Ltd. 6. Adroit Trading and Investment Co.

7. EIL Hospitality Pvt. Ltd. 8. EIL Software Services Offshore Pvt. Ltd.

9. EIL Technology Pvt. Ltd. 10. Electrotherm Engineering & Projects Ltd.

11. Kappa Consultancy Pvt. Ltd. 12. Electrotherm Foundation.

13. Gujarat Mint Alloys Ltd. 14. Electra Transformer Ltd. (Formerly Known as Electra Transformer Pvt. Ltd.)

15. Airfones Innovatives 16. BNB Real Estate Private Private Limited Limited

17. ETAIN Energy Holdings Limited 18. Electrotherm Solar Limited (Formerly Known as Electrotherm Energy Holdings Ltd.)

19. Palace Solar Energy Pvt. Ltd. 20. SBRB Real Estate Pvt. Ltd.

21. Bhandari Real Estate Pvt. Ltd. 22. ETAIN Immodo Renewables Ltd.

23. Arjun Ceramics & Carbon 24. Indus Chargers & Controllers Pvt. Ltd. Pvt. Ltd.

25. Arjun Solar One Pvt. Ltd. 26. Arjun Green Power Pvt. Ltd.

27. Arjun Raj Solar One Pvt. Ltd. 28. Bhandari Charitable Trust

29. Arjun Raj Solar Five Pvt. Ltd

* Enterprises namely Palace Tours and Air Charters Pvt. Ltd., Crystal Real Estate Pvt. Ltd., Afghan Trading Pvt. Ltd., Bhandari Brothers Commercial Pvt. Ltd., EIL Realty Pvt. Ltd., EIL Software Pvt. Ltd., Indus Real Estate Pvt. Ltd., New Delhi Real Estate Pvt. Ltd., Palace Infrastructure Pvt. Ltd., S N Advisory Pvt. Ltd., Suraj Real Estate Pvt. Ltd. and Suraj Advisory Services Private Limited have amalgamated with Indus Elec-Trans Pvt. Ltd. in pursuance to Scheme of Amalgamation vide the order dated September 13, 2013 of Hon''Ble Gujarat High Court.

III) Key Management Personnel (Other than Nominee & Independent Director)

1. Mr. Mukesh Bhandari (Chairman)

2. Mr. Shailesh Bhandari (Managing Director)

3. Mr. Avinash Bhandari (Joint Managing Director & CEO)

4. Mr. Nilesh Desai (Non-Executive Director)

5. Mr. Ram Singh (Non-Executive Director)

6. Mr. Pradeep Krishna Prasad (Non-Executive Director)

IV) Relatives of Key Management Personnel (With whom transaction has taken place during the year)

1. Mrs. Indubala Bhandari

2. Mrs. Jyoti Bhandari

3. Mr. Rakesh Bhandari

4. Mr. Anurag Bhandari

5. Mr. Siddharth Bhandari

6. Ms. Shivani Bhandari

15. (a) In the opinion of the Management, the current assets, loans & Advances are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known Liabilities are adequate.

(b) (i) The account of "Trade Receivables", "Borrowings", "Trade payables", "Advances from Customer", "Short Term Loans and Advances" and some Bank Balances are subject to confirmation / reconciliation and the same includes very old non moving items and therefore the same are subject to necessary adjustments for accounting or re-grouping /classification.

(ii) The amount of "Trade receivable", "Advances Recoverable In cash or Kind", and "Advances to suppliers/Other Parties", includes very old Trade receivables and/or payments made and the management is hopeful of the recovery and therefore these are not treated as doubtful for the recovery and not provided for.

(iii) The amount of "Advance from Customers" includes, Rs. 2.06 Crore (Previous Year Rs. 6.92 Crore) (net of receipts and payments) of the parties in the bank accounts of which names are not readily available with the company and which are to be accounted under the correct account head on receipt of accurate information from the Banker/parties.

(iv) During previous year the amount of account of some of the major single party under the Head "Advance from customers", "Trade Payable", "Advance to Suppliers and Others", "Trade Receivables" are shown on gross basis and the same are not netted off and which has resulted in overstatement of two account Heads and the determination of the exact amount of the said overstatement is in progress.

(v) The account of the stale cheques of Rs. 0.30 Crore Credit balance (Previous Year Rs. 0.56 Crore Debit Balance) shown under the head Trade Payable (Previous Year "Advance to Suppliers and Others") is subject to reconciliation and proper accounting.

16. (a) The classification/grouping of items of the accounts are made by the management, on the basis of the available data with the company and which has been relied upon by the auditors.

(b) The amount of inventory has been taken by the management on the basis of information available with the company and without conducting physical verification of the slow moving inventory. The slow moving inventories have been valued by the management on estimate net realizable value and which has been relied upon by the auditors.

(c) Account of Service Tax Receivables is subject to reconciliation, submission of its return for its claim and/or its assessment, if any.

(d) The management is of the opinion that the uncompleted projects shown as Capital Work in Progress require some further investment to bring them into commercial use and therefore these are not treated as impaired assets.

(e) Account of "Advance to staff" is under confirmation, reconciliation and subject to the settlement of the accounts with the respective employees (including ex-employees) of the company.

17. Signed Notes No.1 and 2 forms part of the Annexed account of the Company.

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Sep 30, 2013

CORPORATE INFORMATION

Electrotherm (India) Limited (the Company) is a listed public company domiciled in India and incorporated under the provisions of the Companies Act, 1956.The Company is engaged in the Manufacturing of Electronic furnaces and other capital equipments, Sponge and PIG Iron, Ferrous and Non ferrous Billets/Bars/Ingots, Duct Iron Pipes, Battery operated vehicles, Electric Power Generation and services relating to Electric furnaces, other capital equipments and battery operated vehicles.

1.1 Additional Disclosures

(a) Power and Fuel expenses are inclusive of duties and taxes of Rs. 33.83 Million (Previous Period Rs. 79.73 Million) paid towards power generation.

(b) During the year Foreign Exchange Fluctuation Loss of Rs. 2.96 Million (Previous Period Gain of Rs. 11.98 Million) has been adjusted to Material Cost and Loss of Rs. 77.81 Million (Previous Period Loss Rs. 454.26 Million) has been charged to Finance Cost.

(c) The cost of material consumed includes freight, taxes and inspection fees.

(d) During the year the company has reversed interest provision of Rs. 198.85 Million by crediting it to interest expenses account as the bank has reversed the amount classifing the account as non performing assets.

(e) In view to heavy accumulated losses incurred by the company and no certinity of its realisation/payment of tax in near future no provision for Deferred Tax Asset/liability has been made.

(f) Miscellaneous expenditure includes total Research and Development expenses of Rs. 308.15 Million (Previous Period Rs. 237.99 Million) incurred on development of Hybrid Bus/T Cab/project and CONTIFUR Project, which is still in progress and said expenses, would be written off in five years from the year of completion.

(g) On account of non payment of duties and other taxes, the company could not lift the material lying with custom authority and shown as goods in transit in earlier year of Rs. 318.00 Million (Previous Period Rs. Nil) has been written off during the current year, by debting to cost of material consumed.

(h) Advance Custom Duty of Rs. 29.75 Million (Previous Period Rs. Nil), shown under the head Loans & Advances in the previous period, has been charged under the head Cost of Material Consumed.

(i) Some of the creditors has filed cases of recovery against the company before the various Hon''ble Courts/ Forums Rs. 19.74 Million (Previous Year Rs. 18.51 Million) (j) In view of the various circumstances and factors, beyond the control of the company,the Steel division & Heavy Electric Vehicle division of the Company are not working on full capacity of the production.

1.2 The company is contingently liable for the following :

(a) Claims against the Company not acknowledged as debts amounting to Rs. 6.99 Million (Previous Period Rs. 25.50 Million), are pending before various courts, authorities, arbitration, Consumer Dispute Redressal Forum etc.

(b) Guarantees / Counter Guarantees (including un utilized Letters of Credit) issued Rs. 121.97 Million (Previous Period Rs. 309.82 Million).

(c) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect, Excise Liability of Rs. 2993.51 Million (Previous Period Rs. 2746.59 Million) and Custom Duty Liability of Rs. 262.90 Million (Previous Period Rs. 70 Million).

(The above amounts are excluding the amount of Interest payable and of the amount involved in appeal preferred by the department, if any.)

(d) The company has executed Legal Undertaking Bond to pay Central Excise Duty (Terminal Excise Duty), levies and liquidated damages payable, if any, in respect of imported and indigenous capital goods and stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. In this regard aggregate duty liability amount of Rs. 163.89 Million (approx.) as at September 30, 2013 (Previous Period: Rs. 261.32 Million (approx.)). Against these, exports amounting to Rs. 704.67 Million (approx.) (Previous Period Rs. 1285.17 Million (approx.)) will have to be made within next 8 years from the date of issue of license.

(e) The company has received show cause notice for non compliance of some of export obligations, raised due to usage of license for payment of custom duty. In this regards the company has paid custom duty and has replied to those show cause notices. However the exact remaining liability of the said is unquantifiable.

1.3 FOREIGN EXCHANGE EARNING & OUTGO:

(a) Earning in Foreign Exchange for Export of Goods & Services Rs.1298.15Million. (Previous Period Rs. 1389.63 Million).

(b) Expenditures in Foreign Currency for Import of Materials, Traveling & Others is Rs. 661.13Million (Previous Period Rs. 3337.38 Million).

1.4 Previous period amount has been regrouped/re casted /re arranged/ re classified/re determined, wherever necessary, by the company on the basis of data available with the company, to make the figure of the current year with the previous year comparable.

1.5 RELATED PARTY (AS IDENTIFIED AND DETERMINED BY THE COMPANY) DISCLOSURES UNDER ACCOUTING STANDARD 18: A. List of Related Parties

I) SUBSIDIARY COMPANIES

1. Jinhua Indus Enterprises Limited

2. Jinhua Jahari Enterprises Limited

3. Bhaskarpara Coal Company Limited

4. ET Elec Trans Limited

5. Hans Ispat Limited

6. Shree Ram Electro Cast Limited

7. Shree Hans Papers Limited

8. Electrotherm Mali SARL

II) Enterprises owned or significantly influenced by key management personnel or their relatives*(Except foreign companies)

I. Ahmedabad Aviation and Aeronautics Ltd. 2. Crystal Real Estate Pvt. Ltd.

3. Palace Tours and Air Charters Pvt. Ltd. 4. Western India Speciality Hospital Ltd.

5. E Motion Power Ltd. 6. Indus Elec Trans Pvt. Ltd.

7. Afghan Trading Pvt. Ltd. 8. Bhandari Brothers Commercial Pvt. Ltd.

9. Jayshri Petro Yarn Pvt. Ltd. 10. Adroit Trading and Investment Co.

II. EIL Hospitality Pvt. Ltd. 12. EIL Realty Pvt. Ltd.

13. EIL Software Pvt. Ltd. 14. EIL Software Services Offshore Pvt. Ltd.

15. EIL Technology Pvt. Ltd. 16. Electrotherm Engineering & Projects Ltd.

17. Kappa Consultancy Pvt. Ltd. 18. Electrotherm Foundation.

19. Gujarat Mint Alloys Ltd. 20. Indus Real Estate Pvt. Ltd.

21. Electra Transformer Ltd. 22. New Delhi Real Estate Pvt. Ltd.

(Formerly Known as Electra Transformer Private Limited) 23. Palace Infrastructure Pvt. Ltd. 24. Suraj Real Estate Pvt. Ltd.

25. S N Advisory Pvt. Ltd. 26. Suraj Advisory Services Pvt. Ltd.

27. Airfones Innovatives Private Limited 28. BNB Real Estate Private Limited

29. ETAIN Energy Holdings Limited 30. Electrotherm Solar Limited

(Formerly Known as Electrotherm Energy Holdings Ltd.) 31. Palace Solar Energy Pvt. Ltd. 32. SBRB Real Estate Pvt. Ltd.

33. Bhandari Real Estate Pvt. Ltd. 34. ETAIN Immodo Renewables Ltd.

35. Arjun Ceramics & Carbon Pvt. Ltd. 36. Indus Chargers & Controllers Pvt. Ltd.

37. Arjun Solar One Pvt. Ltd. 38. Arjun Green Power Pvt. Ltd.

39. Arjun Raj Solar One Pvt. Ltd. 40. Bhandari Charitable Trust

41. Arjun Raj Solar Five Pvt. Ltd.

III) Key Management Personnel (Other than Nominee & Independent Director)

1. Mr. Mukesh Bhandari (Chairman)

2. Mr. Shailesh Bhandari (Managing Director)

3. Mr. Narendra Dalal (Whole Time Director)*

4. Mr. Avinash Bhandari (Joint Managing Director & CEO)

5. Mr. Nilesh Desai (Non Executive Director)

6. Mr. Ram Singh (Non Executive Director)

7. Mr. Pradeep Krishna Prasad (Non Executive Director) *Has ceased to be Director of the Company during the year.

IV) Relatives of Key Management Personnel (With whom transaction has taken place during the year)

1. Mrs. Indubala Bhandari

2. Mrs. Jyoti Bhandari

3. Mr. Rakesh Bhandari

4. Mr. Anurag Bhandari

5. Mr. Siddharth Bhandari

6. Mrs. Shivani Bhandari

1.6 (a) In the opinion of the Management, the current assets, loans & Advances are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known Liabilities are adequate.

(b) (i) The account of "Trade Receivables","Borrowings","Trade payables","Advances from Customer", "Short Term Loans and Advances" and some Bank Balances are subject to confirmation / reconciliation and the same includes very old non moving items and therefore the same are subject to necessary adjustments for accounting or re grouping /classification.

(ii) The amount of "Trade receivable", "Advances Recoverable In cash or Kind", and "Advances to suppliers/Other Parties",includes very old Trade receivables and/or payments made and the management is hopeful of the recovery and therefore these are not treated as doubtful for the recovery and not provided for.

(iii) The Balance of "Trade Payable Others" of Rs. 1999.01 Million includes Rs.10.46 Million payable and similarly,the amount of "Trade Receivable" includes Rs. 6.67 Million, of Inter Departmental amount (Steel Division) for transfer of the material. The said amount is under reconciliation and it may affect the net result of the company by Rs.3.79 Million and accordingly "Trade Payable Others" and "Trade Receivable"are overstated by Rs.10.46 Million and Rs.6.67 Million, respectively.

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Mar 31, 2011

1 (a) In the opinion of the Management, the current assets, loans & advances are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known liabilities are adequate.

(b) The account of Debtors, Loans, Creditors and Loans & advances are subject to confirmation / reconciliation and the amounts of Sundry Debtors, Creditors and Advances are stated on net basis, on the basis of control account, and accordingly the same are subject to necessary adjustments or re-grouping /classification. In this process, the previous year figures of loans have been re- grouped and reclassified.

(c) Sales include Export Sales of Rs. 219.70 Million of which shipment has taken place in next Financial Year.

(d) Power and Fuel expenses are inclusive of duties and taxes of Rs. 53.32 Millions(Previous year Rs. Nil) paid towards power generation.

(e) During the year Foreign Exchange Fluctuation loss of Rs. 308.10 Million has been charged to Material Cost and Rs. 157.95 Million to Interest Expenses.

(f) The Company has filed application for refund of Terminal Excise Duty of Rs. 15.7 Million and the same is included in Loans and Advances Balances. The said claim is under dispute and has been rejected by the Department but the Management is of the opinion that the company will receive the claim; therefore the same is treated as good for its realization and not provided for as expenses.

(g) During the year foreign interest hedging expenses of Rs. 89.91 Millions paid towards settlement has been deferred over the entire period of the forward contract.

(h) Company is recognizing the exchange rate difference on settlement or restatement of foreign currency monetary assets and liabilities in the profit & loss account as per the pre-revised Accounting Standard -11 'Accounting for effects of changes in foreign exchange rates' issued by The Institute of Chartered Accountants of India. By exercising the option related to amortization of foreign exchange fluctuation differences as per the notification dated March 31, 2009 issued by the Ministry of Corporate Affairs the exchange difference arising on restatement or settlement of long term foreign currency monetary items in so far as they relate to acquisition of a depreciable capital asset are adjusted to the cost of such asset and depreciated over the balance life of the asset. Accordingly, in the Financial Year 2009-10, on the full payment of the loan, foreign exchange gain of Rs. 145.25 Millions has been reduced from the cost of fixed assets and consequently depreciation thereon for the current year is provided on the balance value of the assets.

2. Miscellaneous expenditure includes total Research and Development expenses of Rs. 176.07 Million (Previous Year Rs. 152.02) incurred on development of Hybrid Bus/T-Cab/project, which is still in progress and said expenses would be written off in five years from the year of completion.

3. SEGMENT REPORTING UNDER ACCOUNTING STANDARD 17 :

(A) Business Segment

Based on the guiding principles given as per Accounting Standard on "Segment Reporting" (AS-17) issued by The Institute of Chartered Accountants of India, the Company's primary business is manufacturing and marketing of Induction Furnaces, Steel items and Battery Operated Vehicles.

4. RELATED PARTY (AS IDENTIFIED BY THE COMPANY) DICLOUSURES UNDER ACCOUNTING STANDARD 18:-

A. List of Related Parties

I) SUBSIDIARY COMPANIES

1. Jinhua Indus Enterprises Limited.

2. Jinhua Jahari Enterprises Limited.

3. Bhaskarpara Coal Company Limited

4. ET Elec-Trans Limited

5. Hans Ispat Limited

6. Shree Ram Electrocast Private Limited

7. Shree Hans Papers Limited

8. Electrotherm Mali SARL

II) ASSOCIATES:

I. Ahmedabad Aviation and Aeronautics Limited

2. Crystal Real Estate Pvt. Limited

3. Palace Tours and Air Charters Pvt. Limited

4. Western India Speciality Hospital Limited

5. Mangalam Information Technologies Pvt. Limited

6. Liberty Finance and Leasing Co. Pvt. Limited

7. E-Motion Power Limited

8. Indus Elec-Trans Pvt. Limited

9. Magnum Limited.

10. Alwar Trading and Investment Company

11. Afghan Trading Pvt. Limited

12. Bhandari Brothers Commercial Pvt. Limited

13. Palanpur Reality Developers Pvt. Limited

14. Jayshri Petro-Yarn Pvt. Limited

15. Adroit Trading and Investment Co.

16. EIL Hospitality Pvt. Limited

17. EIL Realty Pvt. Limited

18. EIL Software Pvt. Limited

19. EIL Software Services Offshore Pvt. Limited

20. EIL Technology Pvt. Limited

21. Electrotherm Engineering & Projects Limited

22. Electrotherm Infrastructure Pvt. Limited

23. Electrotherm Renewables Pvt. Limited

24. Electrotherm Foundation.

25. Gujarat Mint Alloys Limited

26. Indus Real Estate Pvt. Limited

27. ICS Commercial Pvt. Limited

28. New Delhi Real Estate Pvt. Limited

29. Palace Infrastructure Pvt. Limited

30. S B Realty Developers Pvt. Limited

31. Sun Infrapower Pvt. Limited

32. Sun Residency Pvt. Limited

33. Suraj Real Estate Pvt. Limited

34. S N Advisory Pvt. Limited

35. Suraj Advisory Services Pvt. Limited

36. Bhandari Charitable Trust.

37. Airfones Innovatives Pvt. Limited

38. BNB Real Estate Pvt. Limited

39. Electrotherm Energy Holdings Limited

40. Electrotherm Solar Limited

41. Firefly Energy Limited

42. Indus Coils & Plates Limited

43. Inspira Solar Energy Limited

44. NET Architectures Pvt. Limited

45. Bhandari Real Estate Pvt. Limited

III) KEY MANAGEMENT PERSONNEL: (Other than Nominee & Independent Director)

1. Mr. Mukesh Bhandari (Chairman & Chief Technology Officer)

2. Mr. Shailesh Bhandari (Managing Director)

3. Mr. Narendra Dalal (Whole-time Director)

4. Mr. Avinash Bhandari (Joint Managing Director & CEO)

IV) RELATIVES OF KEY MANAGEMENT PERSONNEL: (With whom Transaction has taken Place during the year)

1. Mrs. Indubala Bhandari

2. Mrs. Jyoti Bhandari

3. Mr. Rakesh Bhandari

5. The Company has determined Pre-Operative Expenditure (including borrowing cost) of Rs. 260.09 Millions (Previous year: Rs. 388.66 Millions) and the same have been allocated towards the respective fixed assets.

6. In compliance of Accounting Standard 22 issued by Institute of Chartered Accountants of India, Deferred Tax liability mainly arising on account of difference between book and income tax written down value of fixed assets, after adjusting unabsorbed depreciation, during the year deferred tax liability of Rs. 50.63 Millions (Rs. 120.39 Millions) has been provided.

7. CONTINGENT LIABILITIES/ UNPROVIDED LIABILITY:-

(A) The Company is liable for following contingent liabilities:-

(i) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect of Income Tax liability of Rs. 1.42 Millions (Previous Year Rs. 1.42 Millions), VAT liability of Rs. 0.61 Millions (Previous Year Nil), Excise Liability of Rs. 2788.40 Millions (Previous Year Nil). The above amounts are excluding the amount of Interest payable and of the amount involved in appeal preferred by the department, if any.

(ii) Guarantees / Counter Guarantees (including un-utilized Letters of Credit) issued Rs. 2808.86 Millions (Rs. 362.49 Millions in Previous year).

(iii) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 40.00 Millions. (Previous Year Rs. 58.73 Millions.).

(iv) The company is contingently liable for the pending disputed labour and other matters, approximately amounting to Rs. 1.00 Millions (Previous Year Rs. 2.28 Millions).

(v) The company has executed Legal Undertaking Bond to pay Central Excise Duty (Terminal Excise Duty), levies and liquidated damages payable, if any, in respect of imported and indigenous capital goods and stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. In this regard aggregate duty liability amount of Rs. 271.05 Millions as at March 31, 2011 (Previous Year: Rs. 299.57 Millions). Against these, exports amounting to Rs. 1972.76 Millions (previous year Rs. 2396.56 Millions) will have to be made within next 8 years from the date of issue of license.

(vi) The amount of sundry debtors is net of Bills discounted of Rs. 34.99 Million with bankers (Previous year Rs. Nil).

(B) The Company is liable for Un-provided liabilities of VAT of Rs. 0.39 Million(Previous Year Rs.Nil).

(C) The Claim for Input Vat Credit receivable of Rs.691.67Millions is subject to the sanction of the additional amount of Incentive of VAT, by Industries Commissioner.

8. During the Financial year 2009-10, in pursuance of the Scheme of Arrangement approved by the Hon'ble High Court of Gujarat vide its order dated November 30, 2009, the financial statements of the company were restated as under:-

i. Immovable assets of the Company, namely Land and building, on the basis of Revaluation report of the Government approved competent Valuer appointed by the Company were recorded at their respective fair values and resulting increase over Book Value, of Rs. 2481.95 million, was transferred to General Reserve Revaluation Account.

ii. Rs. 500 million was transferred from Share Premium Account to Business Development Reserve (BDR) Account and entire BDR Account had been utilized for writing off obsolete or unrealizable assets, unrealizable loans and/or advances etc.

9. Previous year's figures have been re-arranged/ regrouped /reclassified/Re-casted wherever necessary.

10. Signed Schedule No.1 to 21 forms part of the Annexed account of the Company.

---

Mar 31, 2010

1 (a) In the opinion of the Directors, the current assets, loans & advances are realizable at the values stated, if realized in the ordinary course of business and the provisions for all known liabilities are adequate. (b) The account of debtors, creditors and loans & advances are subject to confirmation / reconciliation and the amounts of Sundry Debtors, Creditors and Advances are stated on net basis, on the basis of control account, and accordingly the same are subject to necessary adjustments or re-grouping / classification.

2. Company is recognizing the exchange rate difference on settlement or restatement of foreign currency monetary assets and liabilities in the profit & loss account as per the pre-revised Accounting Standard -11 Accounting for effects of changes in foreign exchange rates issued by The Institute of Chartered Accountants of India. By exercising the option related to amortization of foreign exchange fluctuation differences as per the notification dated March 31, 2009 issued by the Ministry of Corporate Affairs the exchange difference arising on restatement or settlement of long term foreign currency monetary items in so far as they relate to acquisition of a depreciable capital asset are adjusted to the cost of such asset and depreciated over the balance life of the asset. In view of the above Rs. 145.25 Millions has been reduced from the cost of fixed assets and Rs. 0.90 Millions of depreciation thereon.

3. Miscellaneous expenditure includes total Research and Development expenses of Rs. 152.02 Millions (Previous Year Rs. 124.34 Millions) incurred on development of Hybrid Bus/T-Cab/project, which is still in progress and said expenses would be written off in five years from the year of completion.

4. RELATED PARTY (AS IDENTIFIED BY THE COMPANY) DICLOUSURES UNDER ACCOUNTING STANDARD 18

A. List of Related Parties

(I) Subsidiary Companies

1. Jinhua Indus Enterprises Ltd.

2. Jinhua Jahari Enterprises Ltd.

3. Bhaskarpara Coal Company Ltd.

4. ET Elec-Trans Ltd.

(II) Associates

I. Ahmedabad Aviation and Aeronautics Ltd.

2. Crystal Real Estate Pvt. Ltd.

3. Palace Tours and Air Charters Pvt. Ltd.

4. Western India Speciality Hospital Ltd.

5. Mangalam Information Technologies Pvt. Ltd.

6. Liberty Finance and Leasing Company Pvt. Ltd.

7. E-Motion Power Ltd.

8. Indus Elec-Trans Pvt. Ltd.

9. Magnum Ltd.

10. Alwar Trading and Investment Company

II. Afghan Trading Pvt. Ltd.

12. Bhandari Brothers Commercial Pvt. Ltd.

13. Palanpur Reality Developers Pvt. Ltd.

14. Jayshri Petro-Yarn Pvt. Ltd.

15. Adroit Trading and Investment Co.

16. EIL Hospitality Pvt. Ltd.

17. EIL Realty Pvt. Ltd.

18. EIL Software Pvt. Ltd.

19. EIL Software Services Offshore Pvt. Ltd.

20. EIL Technology Pvt. Ltd.

21. Electro Salt & Water Ltd.

22. Electrotherm Engineering & Projects Ltd.

23. Electrotherm Infrastructure Pvt. Ltd.

24. Electrotherm Renewables Ltd.

25. Electrotherm Foundation

26. Global Avianautics Ltd.

27. Gujarat Mint Alloys Ltd.

28. Indus Real Estate Pvt. Ltd.

29. ICS Commercial Pvt. Ltd.

30. New Delhi Real Estate Pvt. Ltd.

31. Palace Infrastructure Pvt. Ltd.

32. S B Realty Developers Pvt. Ltd.

33. Sun Infrapower Pvt. Ltd.

34. Sun Residency Pvt. Ltd.

35. Suraj Real Estate Pvt. Ltd.

36. S N Advisory Pvt. Ltd.

37. Suraj Advisory Services Pvt. Ltd.

38. Bhandari Charitable Trust

(III) Key Management Personnel (Other than Nominee & Independent Director)

1. Mr. Mukesh Bhandari (Chairman & Chief Technology Officer)

2. Mr. Shailesh Bhandari (Managing Director)

3. Mr. Narendra Dalal (Whole-Time Director)

4. Mr. Avinash Bhandari (Joint Managing Director & CEO)

(IV) Relatives of Key Management Personnel (With whom Transaction has taken Place during the year)

1. Mrs. Indubala Bhandari

2. Mrs. Jyoti Bhandari

3. Mrs. Siddhi Bhandari

5. The Company has determined Pre-Operative Expenditure (including borrowing cost) of Rs. 388.66 Millions (Previous year: Rs. 468.79 Millions) and the same have been allocated towards the respective fixed assets.

6. In compliance of Accounting Standard 22 issued by Institute of Chartered Accountants of India, Deferred Tax liability mainly arising on account of difference between book and income tax written down value of fixed assets, after adjusting unabsorbed depreciation, during the year deferred tax liability of Rs. 120.39 Millions (Rs. 172.56 Millions) has been provided.

7. Contingent Liabilities

The Company is liable for following contingent liabilities:- (i) Disputed Statutory Claims/Levies for which the company has preferred appeal in respect of Income Tax liability (excluding interest leviable, if any) of Rs. 1.42 Millions (Previous Year Rs. 1.42 Millions).

(ii) Guarantees / Counter Guarantees (including un-utilized Letters of Credit) issued Rs. 362.49 Millions (Rs. 297.29 Millions in Previous year).

(iii) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 58.73 Millions (P.Y. Rs. 100.13 Millions).

(iv) The company is contingently liable for the pending disputed labour and other matters, amount is Rs. 2.28 Millions (P.Y. Rs. 7.76 Millions).

(v) The company has executed Legal Undertaking Bond to pay Central Excise Duty (Terminal Excise Duty), levies and liquidated damages payable, if any, in respect of imported and indigenous capital goods and stores and spares consumed duty free, in the event that certain terms and conditions are not fulfilled. In this regard aggregate duty liability amount of Rs. 299.57 Millions as at March 31, 2010 (Previous Year Rs. 374.65 Millions). Against these, exports amounting to Rs. 2396.56 Millions (Previous Year Rs. 2997.21 Millions) will have to be made within next 8 years from the date of issue of license.

8. Under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The company has not received intimation from vendors regarding their status under MSMED Act, 2006 and hence disclosures relating to amount unpaid as at the year end under this Act have not been given.

9. The Company has filed a Scheme of Arrangement (the “Scheme”) envisaging the utilization of share premium account against the expenses as provided in the scheme and transfer to a Business Development Reserve Account and also provide for recording of immovable assets at their respective fair value, between the Company and its equity shareholders under section 391 and section 78 read with section 100, 102 and 103 of the Companies Act, 1956. The said Scheme was approved by the Board of Directors vide its resolution dated April 13, 2009, by the shareholders in their Court convened meeting held on June 16, 2009 and by the Honble High Court of Gujarat vide its order dated November 30, 2009. The Company has filed the Order with the Registrar of Companies, Gujarat on December 21, 2009. The financial statements of the Company are based on the Scheme of Arrangement approved by the Honble Gujarat High Court and its effects on the financial accounts are as under:- i. Immovable assets of the Company, namely Land and Building, on the basis of Revaluation report of the Government approved competent Valuer appointed by the Company have been recorded at their respective fair values and resulting increase over Book Value of Rs. 2481.95 Millions, has been transferred to General Reserve Account.

ii. Rs. 500 Millions has been transferred from Share Premium Account to Business Development Reserve (BDR) Account and entire BDR Account has been utilized for writing off obsolete or unrealizable assets, unrealizable loans and/or advances etc.

10. Previous years figures have been re-arranged/ regrouped /reclassified/re-casted wherever necessary.

11. Signed Schedule No.1 to 21 forms part of the Annexed account of the Company.