Notes to Accounts of Sharda Ispat Ltd.

Mar 31, 2024

b) Terms / rights attached to Equity Shares:

i. The company has only one class of equity shares having a par value of Rs.10/- per share. Each shareholder is entitled to one vote per share held. In the event of liquidation of the company, the equity shareholders are eligible to receive the remaining assets of the company, in proportion to their shareholding.

Trade payables are non interest bearing and normally settled on 30 to 90 days

Dues to Micro & Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditor. Moreoverthe Company is in the process of updating its suppliers data, as tothe status as a Micro Small &Medium Enterprise with a copy ofthe Memorandum filed as per the provisions of Section 8 of the Micro Small & Medium Enterprises Development Act, 2006.

The credit period on sales of goods ranges from 90 days with or without security.

As at 31 March 2024, ^ 1.50 lakh (As at 31 March 2023 ^ 2.14) was recognised as provision for allowance for doubtful debts on trade receivables.

Out of the total contract liabilities outstanding as on 31 March 2024, ^ 0.15 Lakhs will be recognized by 31 March, 2025.

Notes-During the Financial year 2021-22, the Company did not have Networth of more than ^ 500 crores or more, Turnover was also less than ^ 1,000 crore and Net profit before tax was also less than ^ 5 crore.As the provisions of Section 135 (1) read with the Companies (Corporate Social Responsibility) Rules was not applicable to the Company. Hence, during the financial year 2022-23, the Company was not required to spend any amount towards the Corporate Social Responsibility.

Sensitivity Analysis:

As of 31st March, 2024, every percentage point increase in discount rate will affect our gratuity benefit obligation Rs.51.59 Lakhs

As of 31st March, 2024, every percentage point decrease in discount rate will affect our gratuity benefit obligation Rs.53.08 Lakhs

As of 31st March, 2024, every percentage point increase in salary escalation rate will affect our gratuity benefit obligation Rs.53.03 Lakhs

As of 31st March, 2024, every percentage point decrease in salary escalation rate will affect our gratuity benefit obligation Rs.51.62 Lakhs

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by one percentage, keeping all other actuarial assumptions constant.

Narrations:

1 Analysis of Defined Benefit Obligation

The number of members under the scheme have increased by 3.45%%. The total salary has increased by 3.66% during the accounting period. The resultant liability at the end of the period over the beginning of the period has increased by 2.69%.

2 Expected rate of return basis:

Scheme is not funded EORA is not applicable.

3 Description of Plan Assets and Reimbursement Conditions Not applicable

4 Investment / Interest Risk

Since the scheme is unfunded the Company is not exposed to Investment / Interest risk.

5 Longevity Risk

The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee separating from the employer for any reason.

6 Salary Escalation Rate

The salary escalation rate has remain unchanged and hence there is no change in liability resulting in no actuarial gain or loss due to change in salary escalation rate.

7 Discount Rate

The discount rate has decreased from 7.10% to 6.94% and hence there is an decrease in liabilty leading to acturial loss due to change in discount rate.

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

1) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument which fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk include loans and borrowings and investment in equity oriented mutual fund.

a) Interest rate risk

Majority of the long-term borrowings of the Company bear fixed interest rate, thus interest rate risk is limited for the Company.

b) Foreign currency risk

The company imports certain material against Letter of Credit for which hedging instruments are not required.

c) Equity price risk

The Company''s equity securities are not majorly susceptible to market price risk. However, the company''s board of directors reviews and approves all equity investment decisions after taking due diligence which may affect the market related risk.

2) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

Trade and other Receivables

The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Based on the historical data and financial position of party and chances of recovery, provision has been considered and created, wherever necessary.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.

3) Liquidity risk

Liquidity risk is the risk that the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial assets. The Company''s principal source of liquidity are cash and cash equivalents and the cash flow that is generated from operations. the Company believes that cash and cash equivalents is sufficient to meet its current requirements.

Forthe purpose ofthe Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders ofthe Company. The primary objective ofthe company''s management is to maximise shareholders value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may issue new shares. Consistent with others in the industry, the Company monitors its capital using the gearing ratio which is total net debt (borrowings offset by cash and cash equivalents) divided by total capital of the company.

Gearing Ratio

In orderto achieve this overall objective, the Company''s capital management, amongst otherthings, aimstoensurethat it meetsfinancial covenants attached tothe borrowings that definethe capital structure requirements. Breaches in meeting the financial covenants would permit the lenders to immediately call loans and borrowings.

The Company has used 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.

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 companies struck off.

iii) The Company does not have any charges or satisfaction which is 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.

The Company does not have any such transaction which is not recorded in the books of accounts that hasbeen surrendered or disclosed as income during the year in the tax assessments

v) under the Income Tax Act,1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

vi) The Company has not been declared as Wilful defaulter by any Banks, Financial institution or Other lenders.

|Note 43

The Company have not received anyfund from any person(s) or entity(ies), includingforeign entities (FundingParty) with the understanding (whether recorded in writing or otherwise) that the Company shall:

i)

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

ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Note 44

Previous period figures have been restated for prior period adjustments and regrouped / reclassified wherever necessary , to make them comparable with current period figures.

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Mar 31, 2023

XVI. Provisions, contingent liabilities and contingent assets

A provision is recognized when an enterprise has a present obligation (legal or constructive) as result of past event and it is probable that an outflow of embodying economic benefits of resources will be required to settle a reliably assessable obligation. Provisions are determined based on best estimate required to settle each obligation at each balance sheet date. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or nonoccurrence of one or more uncertain future events not whollywithin the control of the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognised because it cannot be measured reliably.

Contingent assets are neither recognised nor disclosed in the financial statements.

XVI. Leases

Measurement of Lease Liability

At the time of initial recognition, the Company measures lease liability as present value of all lease payments discounted using the Company''s incremental cost of borrowing and directly attributable costs. Subsequently, the lease liability is -

1) increased by interest on lease liability;

2) reduced by lease payments made; and

3) remeasured to reflect any reassessment or lease modifications specified in Ind AS 116 ''Leases'', or to reflect revised fixed lease payments.

Measurement of Right-of-use assets

At the time of initial recognition, the Company measures ''Right-of-use assets'' as present value of all lease payments discounted using the Company''s incremental cost of borrowing w.r.t said lease contract. Subsequently, ''Right-of-use assets'' is measured using cost model i.e. at cost less any accumulated depreciation and any accumulated impairment losses adjusted for any remeasurement of the lease liability specified in Ind AS 116 ''Leases''.

Depreciation on ''Right-of-use assets'' is provided on straight line basis over the lease period.

The exception permitted in Ind AS 116 for low value assets and short term leases has been adopted by Company.

Narrations:

1 Analysis of Defined Benefit Obligation

The number of members under the scheme have decreased by 9.38%%. The total salary has decreased by 6.71% during the accounting period. The resultant liability at the end of the period over the beginning of the period has increased by 2.80%.

2 Expected rate of return basis:

Scheme is not funded EORA is not applicable.

3 Description of Plan Assets and Reimbursement Conditions Not applicable

4 Investment / Interest Risk

Since the scheme is unfunded the Company is not exposed to Investment / Interest risk.

5 Longevity Risk

The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee separating from the employer for any reason.

6 Salary Escalation Rate

The salary escalation rate has remain unchanged and hence there is no change in liability resulting in no actuarial gain or loss due to change in salary escalation rate.

7 Discount Rate

The discount rate has increased from 5.15% to 7.10% and hence there is an decrease in liabilty leading to acturial loss due to change in discount rate.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2023 Note 35 - Related Parties Disclosures

A. Key Management Personnel

1 Shri Nandkishore Sarda

2 Smt. Poonam Sarda

B. Others (Firms, Company & Proprietorship Concern in which directors and their relatives have significant influence)

1 Asha Agriculture & Properties Pvt. Ltd

2 Navdeep Agriculture & Properties P Ltd

3 Kyoto Merchandise Pvt Ltd

4 Sharda Dharamkata

5 Sharda Ispat Industries Ltd.

6 Shardashree Ispat Ltd

7 Sharda Auto Industries Ltd

8 In Link Capital Services Pvt Ltd

9 Indigo Denim Pvt Ltd

SHARDA ISPAT LIMITED,NAGPUR.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2023 Note 36 - Financial Risk Management Objectives and Policies

The Company''s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

1) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument which fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk include loans and borrowings and investment in equity oriented mutual fund.

a) Interest rate risk

Majority of the long-term borrowings of the Company bear fixed interest rate, thus interest rate risk is limited for the Company.

b) Foreign currency risk

The company imports certain material against Letter of Credit for which hedging instruments are not required.

c) Equity price risk

The Company''s equity securities are not majorly susceptible to market price risk. However, the company''s board of directors reviews and approves all equity investment decisions after taking due diligence which may affect the market related risk.

2) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.

Trade and other Receivables

The Company measures the expected credit loss of trade receivables based on historical trend, industry practices and the business environment in which the entity operates. Based on the historical data and financial position of party and chances of recovery, provision has been considered and created, wherever necessary.

(A) CONSERVATION OF ENERGY:

The Company lays great emphasis on savings in the cost of energy consumption. Therefore, achieving reduction in per unit consumption of energy is an ongoing exercise in the Company. Effective measures such as improved operation and maintenance practices have been taken to minimize the loss of energy as far as possible.

(B) TECHNOLOGY ABSORPTION:

The technology used for the existing project is fully indigenous. The production department of the Company has been always in pursuit of finding ways and means to improve the performance, quality and cost effectiveness of products. The consistent efforts are made for the updation of technology being used by the Company as a continuous exercise. The Company does not have a separate Research & Development activity.

The below-mentioned benefits are derived.

• Reduction in cost of the process

• Product improvements

• Improvement in on stream line

• Improvement in reaction efficiency

• Conservation of base material

• Environment protection and effluent quality improvement

• Reheating of furnace modification

In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)-

a. The details of technology imported ^N° ^{technology imported}

b. The year of import during last three years.

c. Whether the technology been fully absorbed

d. If not fully absorbed, areas where absorption has not taken place and the reasons thereof

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

1. The company has not affected any import or export during the year ended 31.03.2023.

2. The inflow of foreign exchange is Nil.

3. The outflow of foreign exchange is Nil.

performance. There are no exceptional circumstances for increase in managerial remuneration.

6. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors key managerial personnel and other employees.

For and on behalf of the Board of Directors

Sd/-

Date: 11.08.2023 Nandkishore Sarda

Place: Nagpur Chairman & Managing Director

DIN:00229911 Address: Plot No. 32, Cement Road, Shivaji Nagar, Shankar Nagar, Nagpur-440010

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Mar 31, 2015

Contingent liabilities are disclosed in the Note No. 28

1. Related Party Disclosures

As required by Accounting Standard 18 "Related Party Disclosures” issued by the Institute of Chartered Accountants of India, the details are as follows:

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

Relationship Name of Related Party_

Key Managerial Personnel Shri N. K. Sarda

Smt. Poonam Sarda_

Relative of Key Managerial Personnel Smt. Ashadevi Sarda

Associates Asha Agriculture & Properties Pvt. Ltd.

Jaydeep Dealers Pvt. Ltd.

Kyoto Merchandise Pvt. Ltd.

Navdeep Agriculture & Properties Pvt. Ltd.

M/s. Sharda Dharamkanta Sharda Ispat Industries Ltd.

Sharda Shree Ispat Ltd.

Shree Surya Mining Co. Pvt. Ltd.

Sulakshana Trade Holdings Ltd.

have been identified on the 2) The above information has been determines of and relied upon by the auditors.

basis of information provided by the management o

2. Letters ot the confirmation of the Balancesnavy

correspond with the current year''s classification/ disclosure.

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions

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Mar 31, 2014

(a) The company has only one class of equity shares having a par value of Rs. 10/- per share. Each shareholder is entitled to one vote per share held. In the event of liquidation of the company, the equity shareholders are eligible to receive the remaining assets of the company, in proportion to their shareholding.

1 Working Capital Loan from Bank is secured against hypothecation of Stocks and Book Debts & Notarized Equitable Mortgage of House Property of one director and guaranteed by chairman cum Managing Director.

2 The Car Audi A6 (MH-49-B-2101) has been registered in the name of Chairman & Managing Director as the loan was obtained in personal capacity due to personal guarantee of the Chairman & Managing Director. The Company has issued post dated cheques to the Bank for the repayment of the loan made available to the Chairman & Managing Director. After repayment of the loan the car shall be transferred/registered in the name of the company. However finance charges and depreciation alongwith the running expenditure have been recorded in the books of the company as the absolute possession of car is with the company. The gross value of the Car is Rs. 48,59,598/- and the outstanding loan as on 31st March, 2014 is Rs. 25,98,214/- (Previous year Gross value of Rs. 48,59,598/-& Loan Outstanding of Rs. 39,33,291/-).



March 2014 March 2013

3. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are in respect of:

3.1 Claims not acknowledged as debts by the Company on account of:

a) Labourcases 233,816 929,669

3.2 Sales tax matters under appeal for which the Company denies liability.

Total liabilities are of Rs. 1,71,19,366/- (Previous year Rs. 1,71,19,366/-) forthe Company in total.

The allocation shall be made afterfinal computation in the demerged company and resultant companies.

3.3 Excise Duty matters under appeal for which the Company denies liability. 9,596,543 8,800,073

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

5. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprise Development Act, 2006 & hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid or payable as required under the said act have not been given.

6. Segment reporting:

The financial results relate to mainly "Iron & Steel Products" segment, in accordance with Accounting Standard -17 "Segment Reporting".

7. Letters of confirmation of balances have not been received from Sundry Creditors, Sundry debtors and persons from whom advances & deposits have been received or to whom advances and deposits have been given.

8. All Consumption of Stores & all Raw Material consumed are indigenous only.

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Mar 31, 2013

1. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are in respect of:

March 2013 March 2012

1.1. Claims not acknowledged as debts by the Company on account of:

a) Labour cases 9,29,669 9,29,669

1.2. Sales tax matters under appeal for which the Company denies liability.

Total liabilities are of Rs. 1,71,19,336/- (Previous year Rs. 1,71,19,336/-) for the Company in total.

The allocation shall be made after final computation in the demerged company and resultant companies.

1.3. Excise Duty matters under appeal for which the Company denies liability. 88,00,073 86,40,057

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

3. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprise Development Act, 2006 & hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid or payable as required under the said act have not been given.

4. Segment reporting:

The financial results relate to mainly "Iron & Steel Products" segment, in accordance with Accounting Standard -17 "Segment Reporting".

5. Letters of confirmation of balances have not been received from Sundry Creditors, Sundry debtors and persons from whom advances & deposits have been received or to whom advances and deposits have been given.

6. All Consumption of Stores & all Raw Material consumed (Including for Resale) are indigenous only.

7. Related Party disclosures:

As required by Accounting Standard - 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India, the details are as follows:

(a) Relationships:

(i) Associates

M/s Sharda Dharamkanta Sharda Shree Ispat Ltd. Sulakshana Trade Holdings Ltd. Prem Agriculture & Pro. Pvt. Ltd. R.R. Sarda&Co.

(ii) Key Management Personnel

Shri N. K. Sarda Chairman & Managing Director

Smt. Poonam Sarda Whole Time Director

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Mar 31, 2012

1. CONTINGENT LIABILITIES:

Contingent liabilities not provided for are in respect of:

March 2012 March 2011

1.1. Claims not acknowledged as debts by the Company on account of: a) Labour cases 9,29,669 8,96,533

1.2. Sales tax matters under appeal for which the Company denies liability.

Total liabilities are of Rs. 1,71,19,336/- (Previous year Rs. 1,71,19,336/-)for the Company in total.

The allocation shall be made after final computation in the demerged company and resultant companies.

1.2. Excise Duty matters under appeal for which the Company denies liability. 86,40,057 84,52,768

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

3. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprise Development Act, 2006 & hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid or payable as required under the said act have not been given.

4. Segment reporting:

The financial results relate to mainly " Iron & Steel Products" segment, in accordance with Accounting Standard -17 "Segment Reporting".

5. Letters of confirmation of balances have not been received from Sundry Creditors, Sundry debtors and persons from whom advances & deposits have been received or to whom advances and deposits have been given.

6. The following expenses are related to earlier years for the following heads & shown as Prior Year Adjustments in the Profit & Loss Account :-

March 2012 March 2011

i)Rent - 12,000

7. All Consumption of Stores & all Raw Material consumed (Including for Resale) are indigenous only.

8. Related Party disclosures:

As required by Accounting Standard - 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India, the details are as follows:

(a) Relationships:

(i) Associates

M/s Sharda Dharamkanta Sharda Shree Ispat Ltd. SulakshanaTrade Holdings Ltd. Prem Agriculture & Pro. Pvt. Ltd. R.R.Sarda & Co.

(ii) Key Management Personnel

Shri N. K. Sarda Chairman & Managing Director

Notes:

1) The Figures in the brackets are related with the previous year.

2) The above information has been determined to the extent such parties have been identified on the basis of information provided by the company which has been relied upon by the auditor

NOTES:

1) The above Cash flow statement has been prepared under "Indirect Method" as set out in the Accounting Standard '3'.

2) Cash and Cash equivalents consist of cash, cheques in hand, balances with banks including fixed deposit receipts.

3) The previous year's figures have been regrouped whenever necessary.

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Mar 31, 2011

1. Contingent liabilities not rejoiced for are in respect of :

March 2011 March 2010

i) Claims not acknowledged as de debits by the Company on account of : a) Labor cases 8,96,533 8,96,133

ii)Sales tax matters under appeal or which the Company denies liability. Total liabilities are of Rs.1171,15 ,336/- (Previous year Rs.1,71,19(336/ -)for the Company in total.

The allocation shall be made are final computation in the demerged company and resultant companies.

iii)Excise Duty matters under appeal for which the Company denies liability. 8452768 41,08,918

2. The figure of the previous year have been regrouped wherever necessary.

3. The Company has not receive any intimation from suppliers regarding the status under the Micro, Small & Medium Enterprise Development Act, 2006 & hence discloser, if any relating to amounts unpaid as at the year end together with interest paid < )r payable as required under the said act have not been given.

4. The company is entitled to ever its liability to pay sales Tax (Including a portion of Purchase Tax ) for a period )f 10 Years and is liable to pay the same in five annual installments thereafter in respite :ct of its one unit at Kamptee Road. The liability under the Package Scheme of Incentive Rs.88 as on 31st March 2011 is Rs.12,447,153/* (: 'previous Year is Rs.12,447,153/-) which is provided for on the basis of its net present value of Rs. 10,963,158/-(Previous year Rs.)8,96,999/-)

5. Segment reporting:

The financial results relate to mainly " Iron & Steel Products" segment, in accordance with Accounting Standard -17 Segment Reporting" .

6. Deferred Tax :

As required by the Actor ting Standard-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, which is mandatory in nature the company leas recognised deferred taxes which results from timing difference between the book pr< )fits and the tax profits in the year 2011 first time.

Deferred Tax Assets for current year aggregating of Rs. 16,07,726/-(previous year Rs Nil/-) has been rejoined in the Profit and Loss Account.

The Opening recognition of deferred tax liabilities (net) as on 01.04.2010 Rs.1,57,99,977/- has been adjusted in balance of P / L Account as shown in Be lance Sheet.

7. Letters of confirmation of basis have not been received from Sundry Creditors, Sundry debtors and persons from whom advances & deposits have been received or to whom advances & deposits have b :en received or to whom advances and deposits have been given.

8. Related Party disclosure :

As required by Accounting Standard -18 " Related Party Disclosures" issued by the Institute of Chartered Account of India, the details are as follows:

Notes:

1) The Figures in the brackets ; re related with the previous year.

2) The above information has been determined to the extent such parties have been identified on the basic of information provided by the company which has been relied upon by the auditors.

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Mar 31, 2010

I. CONTINGENT LIABILITIES :

1. Contingent liabilities not provided for are in respect of:

March 2010 March 2009

i) Claims not acknowledged as debts by the Company on account of: Labour cases 8,96,533 13,76,374

ii) Sales tax matters under appeal for which the Company denies liability. Total liabilities are of Rs.1,71,19,366/- (Previous year Rs. 19,40/861/-) for the company in total. The allocation shall be made after final computation in the demerged company and resultant companies

iii) Excise Duty matters under appeal for which the Company denies liability. 41,08,918 17,12,201

2. The figures of the previous year have been regrouped wherever necessary.

3. The Rehabilitation scheme sanctioned to Sharda Ispat Ltd (SIL) by the Honble BIFR on 21.01.2010 and approved by it on 1?:03.2010 for implementation inter-alia provides for trifurcation of various units of the company into three different entities. The implementation of various provisions of the scheme is in progress.

According to said Scheme, the Old unit at kamptee Road, Nagpur & Unit at Hingna, Nagpur shall stand transferred to Sharda Ispat Industries Ltd (SIIL) & Hytech Ispat Ltd (HIL) (Now known as Sarda Ispat Ltd) respectively w.e.f. appointed date 01.04.08. Hence the New Unit at Kamptee Road remain with Sharda Ispat Ltd. (SIL).

Sharda Ispat Industries Ltd. (SIIL) and Hytech Ispat Ltd (HIL) (Now known as Sarda Ispat Ltd) are deemed to have carried on business of respective units w.e.f the aforesaid appointed date as per the Sanctioned Scheme even though the business of the said units was carried on by the Sharda Ispat Ltd (SIL).

In terms of the Sanctioned Scheme, the following assets and the liabilities as on 31.03.2008 pertaining to OLD Unit at kamptee Road and Unit at Hingna, Nagpur have been transferred by this company on 01.04,2008 and the accounts for the year ended 31.03.2010 have been prepared accordingly.

4. These accounts relate to the operations of New Unit at Kamptee Road, Nagpur only, which remains in this company w.e.f. 01.04.2008.

5. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprise Development Act, 2006 & hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid or payable as required under the said act have not been given.

6. The company is entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) for a period of 10 years and is liable to pay the same in five annual equal installments thereafter in respect of its one unit at Kamptee Road. The liability under the Package Scheme of Incentive, 1988 as on 31st March 2010 is Rs. 12,447,153/- ( previous year Rs. 12,447,153/- ) which is provided for on the basis of its net present value of Rs. 98,96,999/- (previous year Rs. 86,24,322/-

7. Segment reporting:

The financial results relate to mainly " Iron & Steel Products" segment, in accordance with Accounting Standard -17 "Segment Reporting"

8. Deferred Tax:

In accordance with Accounting Standard - 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has not accounted for deferred taxes. The Company has significant amount of carried forward losses and unabsorbed depreciation under Income Tax Act and there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

9. Letters of confirmation of balances have not been received from Sundry Creditors, Sundry debtors and persons from whom advances & deposits have been received or to whom advances & deposits have been given.

10. All Consumption of Stores & all Raw Material consumed (Including for Resale) are indigenous only.

11. Related Party disclosures:

As required by Accounting Standard -18 " Related Party Disclosures" issued by the Institute of Chartered Accountants of India, the details are as follows:

(a) Relationships:

(i) Associates

M/s Sharda Dharamkanta.

(ii) Key Management Personnel

Shri N. K. Sarda Joint Managing Director

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Mar 31, 2009

1. Contingent liabilities not provided for are in respect of:

March 2009 March 2008

i) Letters of Bank guarantee 3,85,600 3,85,600

ii) Claims not acknowledged as debts by the Company on account of:

a) Labour Cases 13,76,374 13,48,898

b) Interest on unpaid Lease Rent 733,185 733,185

c) Various claims made by customers 1,165 1,165

d) Gram Panchayat Tax 659,380 551,206

e) Water Charges 21,98,076 -

iii) Sales Tax matters under appeal for

which the Company denies liability. 19,74,376 19,40,861

iv) Excise Duty matters under appeal

for which the Company denies liability. 42,95,302 35,60,436

2. ONE TIME SETTLEMENT WITH FINANCIAL INSTITUTIONS AND BANKER

i) Industrial Development Bank Of India

The Management has made one time settlement with IDBI Bank Ltd. by making payment in installments. The total amount which was payable to aforesaid financial institution as per books was Rs. 1204 Lacs which includes Rs. 801 Lacs towards principal and balance Rs. 404 Lacs for interest. The principal account is settled by payment of Rs. 525 Lacs. Therefore, the waiver of loan of Rs. 276 Lacs has been credited to Capital Reserve Account and Rs. 404 Lacs has been credited to profit & loss account as "Extra Ordinary Items", for which provision had been made in the accounts. The no dues certificate from the financial institution is in process.

ii) Industrial Finance Corporation of India Ltd.

The Management has made one time settlement with IFCI Ltd. by making payment in installments. The total amount which was payable to aforesaid financial institution as per books was Rs. 135 Lacs which includes Rs. 88 Lacs towards principal and balance Rs. 47 Lacs for interest. The principal account is settled by payment of Rs. 88 Lacs. Therefore, the waiver of Rs. 47 Lacs has been credited to profit & loss account as "Extra Ordinary Items", for which provision had been made in the accounts.

iii) State Bank of India

The Management has made one time settlement with SBI by making payment in installments. The total amount which was payable to aforesaid financial institution as per books was Rs. 3024 Lacs which includes Rs. 1203 Lacs towards principal and balance Rs. 1821 Lacs for interest. The principal account is settled by payment of Rs. 900 Lacs. Therefore, the waiver of loan of Rs. 303 Lacs has been credited to Capital Reserve Account and Rs. 1786 Lacs (Net) has been credited to profit & loss account as "Extra Ordinary Items", for which provision had been made in the accounts.

3. Secured Loans:

Shri J.K. Sarda, Shri. N.K. Sarda, Shri Ghanshyam Sarda and Shri A. Mukherjee, Directors have executed personal guarantees in favour of State Bank of India, Industrial Financial Branch, Nagpurand Financial Institutions, i.e. IDBI and IFCI for the amounts advanced. The Directors of the company have also pledged their equity shares held in company to the aforesaid financial institutions for advance under common loan agreement.

4. The Company has agreed to purchase 4.98 acres of Land on terms and conditions that the principal amount shall be paid along with 11 % interest per annum. Out of the above land agreed to be purchased, 2.48 acres of Land has yet to be registered in the name of the Company (for value of Rs. 1,86,750/-). The value of the land shall be adjusted in the fixed assets at the time of execution of sale-deed. Company has advanced to the Seller an amount of Rs. 1,49,400/- till 31 st March, 2009 but no provision for interest has been made.

5. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprise Development Act, 2006 & hence disclosures, if any relating to amounts unpaid as at the year end together with interest paid or payable as required under the said act have not been given.

6. The company is entitled to defer its liability to pay Sales Tax (including a portion of Purchase Tax) for a period of 10 years and is liable to pay the same in five annual equal installments thereafter in respect of its one unit at Kamptee Road. The liability under the Package Scheme of Incentive, 1988 as on 31st March, 2009 is Rs. 12,447,153/- (previous year Rs. 12,447,153/-) which is provided for on the basis of its net present value of Rs. 86,24,321/- (previous year Rs. 73,08,582/-).

7. The company had incurred substantial losses since past few years and had registered as a Sick Industrial Company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The matter was remanded back by Appellate Authority under The Sick Industrial Companies (Special Provisions) Act, 1985 to Board. The proceedings before Board are in progress.

The accounts have been prepared on going concern basis as the Company is taking all measures practicable in the circumstances and efforts are on towards continuity of the company and revival of its operations. Further, the company is carrying on manufacturing activities at all the units.

8. Segment Reporting:

The financial results relate to mainly "Iron & Steel Products" segment, in accordance with Accounting Standard -17 "Segment Reporting".

9. Deferred Tax:

In accordance with Accounting Standard - 22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has not accounted for deferred taxes. The Company has significant amount of carried forward losses and unabsorbed depreciation under Income Tax Act and there is no virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

10. Letters of confirmation of balances have not been received from Sundry Creditors, Sundry Debtors and Persons from whom advances & deposits have been received or to whom advances and deposits have been given.

11. Previous years figures have been regrouped wherever necessary.

The following expenses are related to earlier years for the following heads & shown as Prior Year Adjustments in the Profit & Loss Accounts:-

12. Related Party Disclosures:

As required by Accounting Standard -18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India, the details are as follows:

(a) Relationships:

(i) Associates

M/s Sharda Dharamkanta.

(ii) Key Management Personnel

Shri J.K. Sarda Managing Director

Shri N.K. Sarda Joint Managing Director

Shri Ghanshyam Sarda Director (Whole Time)

Notes: (1) The Figures in the brackets are related with the previous year.

(2) The above information has been determined to the extent such parties have been identified on the basis of information provided by the company which has been relied upon by the auditors.