A. Balance sheet Disclosures
 
 1.  Preference Shares
 
 a) 12% Redeemable Preference shares of Rs. 692400 thousands are
 redeemable at the end of 20 years from the date of allotment (Rs.
 580000 thousands allotted on 10.09.99 and Rs. 112400 thousands allotted
 on 31.03.02)
 
 b) 12% Cumulative Redeemable non-convertible preference shares of
 Rs,15000 thousands were due for redemption on 06.02.01, whereas the
 company has requested for an extension to redeem the same from the
 investors.
 
 c) 12% Cumulative Redeemable Preference shares of Rs. 56726 thousands
 are redeemable in 3 equal installments in the years from 2008-09 to
 2010 -11. First installment is due for redemption during the year,
 which is not yet redeemed.
 
 d) The Company has allotted 8,20,15,000 nos. of 14% cumulative
 redeemable preference shares of Rs. 10 each amounting to Rs.820150
 thousands as against the Term Loans and other facilities provided by
 IDBI and IIBI, as per their restructuring package dated 31.03.2002.
 
 2.  Security on Loan Funds
 
 i The secured loans from IDBI, IFCI, IIBI, Exim Bank & ARCIL Included
 under Schedule 3 are secured by:-
 
 a.  First charge on all present and future movable and immovable assets
 of the company in favour of the above institutions/ banks and the
 Debenture Trustees ranking pari passu subject to prior charge on
 current assets in favour of banks for securing working capital
 requirements;
 
 b.  Equitable mortgage of Companys lands at Bellary;
 
 c.  Personal guarantee of some of the Directors of the Company and
 their relatives.
 
 ii. The Short term loan (working Capital) from Central Bank of India,
 Indian Bank, HDFC Bank Ltd., The Dhanalashmi Bank Ltd., & ARCIL have
 been secured by:-
 
 a.  Hypothecation of Stock-in-trade, Stores and Receivables;
 
 b.  Joint and several guarantees of some of the Directors of the
 Company;
 
 c.  Pari Passu second charge on the immovable assets of the Company.
 
 iii.  Debentures
 
 21 % Non-Convertible Debenture of Rs. 11600 thousand (Previous year Rs.
 11600 thousand) is secured by second charge on the movable Current
 assets of the company and the same are redeemable at par at the end of
 2nd, 3rd, 4th & 5th year from the date of allotment (12.07.96)
 
 iv.  In case of Vehicle loans, the respective vehicles are hypothecated
 to the lendor.
 
 3.  As on 31.03.2009, the company owes a sum of Rs.4921 thousands to
 Micro Small and Medium Enterprises including SSI defined under Clause
 (j) of sec. 3 of the Industrial (Development & Regulation) Act, 1951.
 No interest has been charged by these enterprises for delay in payment
 as there is regular trading taken place throughout the year.
 
 4.  Contingent liabilities
                                                   (Rs. in thousands)
 
 Particulars                    For the year Ending   For the year Ending
                                31.03.2009            31.03.2008
 
 Claims against the Company 
 not acknowledged as debts,
 excluding interest from the 
 date of filing till the 
 balance sheet date                10,59,607               10,59,607
 
 Bank Guarantees and other 
 guarantees given but not 
 invoked                            2,60,699                2,60,000
 
 Arrears of cumulative dividends 
 on Preference shares (Refer Note) 13,31,260               11,24,745 
 
 Estimated amount ot contracts
 remaining to beexecuted on 
 capital account and not 
 provided for (net of Advances
 received)                         49,27,500               49,27,500
 
 Note: The Company has not provided for dividend on cumulative
 preference shares as there are no sufficient profits.
 
 5.  In respect of sundry debtors outstanding, the company does not have
 any security other than the personal security of the respective
 debtors.
 
 6. Except for balances of 6 bank current accounts, which were active
 during the year, all other banks balances are subject to confirmation
 and reconciliation.
 
 7.  Balance confirmation and reconciliations in case of Sundry
 Debtors, Sundry Creditors/other loans and Advances, Investments and
 Deposits are pending.
 
 8.  Secured and unsecured loan liabilities availed from banks and
 financial Institutions in the nature of term loans, working capital
 loans, bills discounting, interest accruals, financial leases, lease
 rentals and letter of credits are subject to confirmations and
 reconciliations.
 
 9.  The Authorised share capital of the Company as per the Balance
 Sheet is Rs. 5700000 thousands. However, as per the records of the
 Registrar of Companies, Kamataka, the authorized share capital is Rs.
 500000 thousands. The company is yet to reconcile this difference.
 
 B.  Profit & Loss Account disclosures
 
 
 10.  The interest on working capital loans ot Rs.12,07,454 thousands
 (Previous year Rs.10,23,213 thousands), is provided on quarterly
 compounded basis as per the prevailing bank lending rates. There is no
 confirmation available from the bank on this matter.
 
 C.  Accounting Standards Disclosures
 
 11.  Investments
 
 Documentary evidences for investments held in the name of the company,
 except shares of odyssey Corporation Ltd., (Formarly known as Odyssye
 Financial Services ltd) are in possession either with ARCIL or with
 Sales tax department.
 
 12.     Accounting for Retirement Benefits.
 
 The amount of leave encashment and gratuity liability for the year are
 determined and accounted on accrual basis as estimated by the company.
 The company further informs that no Actuarial Valuation has been
 carried out in respect of Leave encashment and Gratuity liability as
 spelt out in AS-15 issued by the Institute of Chartered Accountants of
 India.
 
 13.     Borrowing Costs
 
 a) During the year the company has capitalized interest and other
 finance charges in respect of certain borrowings, which are exclusively
 attributable to Integrated Steel Plant (ISP) division amounting to Rs.
 2084066 (Previous year Rs. 1811669 thousands)
 
 b) Though the company has been continuously capitalizing the borrowing
 & other related costs of the ISP division, no tangible activities are
 being undertaken. The management informs that the activity of
 construction of this division is interrupted because of non-closure of
 financial mandates. The management is of the view that the interruption
 is beyond its control and is on account of unavoidable circumstances.
 
 c) The total amount of borrowing costs capitalized along with the
 capital work-in-progress of ISP division as on 31 st March 2009 is Rs.
 20603336 thousands (previous year Rs. 18164984 thousands).
 
 d) Interest on other loans consists of interest on working capital
 meant for all production facilities like SMS, Sponge Iron Plant and
 Rolling Mills. Where as Income from operation is in respect of Sponge
 Iron Plant only. Due to this reason interest cost is not reflecting to
 the operations.
 
 14.  Segmental Reporting
 
 The company during the financial year has dealt only a single product
 called Sponge Iron. As the other division viz., Integrated Steel Plant
 division which is in the construction stage does not have any active
 development during the financial year. Therefore, it cannot be
 identified as a division engaged in providing an individual product or
 a group of related products that are subject to risks and returns to be
 reported as an individual division.
 
 15.  Lease Accounting
 
 During the year, the company has not provided any amount towards lease
 transactions. All the leases during previous years are Operating
 leases. The company is of the view that all operating lease commitments
 are already provided for in the earlier years, except I nterest on
 delayed or defaults in payments of lease charges.
 
 16.  Deferred Taxes
 
 a.  Deferred tax is recognized on timing differences between the
 accounting income and the taxable income for the year, and quantified
 using the tax rates and laws enacted or substantively enacted as on the
 Balance Sheet date.
 
 b.  Deferred tax assets are recognized and carried forward to the
 extent there is a reasonable certainty that sufficient future taxable
 income will be available against which such deferred tax assets can be
 realized.
 
 c.  Additional deferred tax asset / liability for the year as per the
 Accounting Standard 22 is not reviewed as there is virtual uncertainty
 of future income.
 
 17.  Impairment of Assets
 
 The company has not determined and provided in the accounts, the value
 of impairment of assets as on 31.03.09 in accordance with Accounting
 Standard - 28 issued by Institute of Chartered Accountants of India.
 
 18.  Previous period figures have been regrouped and rearranged
 wherever necessary to make them comparable with those of the current
 year.
 
 19.  Figures have been rounded off to Thousands