1. Due to losses, the Company has decided to defer amortisation of
 Preliminary Expenses, Rights Issue Expenses, Deferred Revenue
 Expenditure and Trial Run & Start-up Cost to future years.
 
 2.  In case where balance confirmations ( including from financial
 institutions and banks) have not been v received, book balances have
 been taken. In respect of some banks reconciliation work has been
 completed but the differences arising have not been agreed to by the
 Company / Banks. Hence, pending final settlement, book balances have
 been taken.
 
 3.  The Company had purchased the assets of Indian Metals & Ferro
 Alloys Limited (IMFA) located at Choudwar in the year \ 986 for a total
 consideration of Rs.8.70 crores which has been paid by allotment of
 shares to IMFA. Accounting entries have been passed pending execution
 and registration of the sale deed. The same are, however, being shown
 as the assets of the Company and mortgaged by the seller in favour of
 Companys term lenders.   .
 
 4. In respect of various disputes with Gridco, including those relating
 to back up power drawn during periods of grid disturbances, which had
 been referred to Orissa Electricity Regulatory Commission (OERC) by the
 Honble Supreme Court and in respect of other claims of the Company on
 Gridco, OERC terminated the proceedings in view of the settlement
 arrived at between the Company and Gridco with the mediation of the
 Govt. of Orissa. The terms of settlement were conveyed to the Company
 by the State Government vide its fetter dated 8th December, 1998 and
 accordingly the accounts were settled. This final settlement was
 arrived at after considering the backup power dues, etc. payable by the
 Company and Companys dues receivable from Gridco up to 31 st October,
 1998. However, a sum of Rs. 150.00 lakhs included in the said
 settlement as payable by the Company during periods Of non-availability
 of the Companys power plant due to shut down or maintenance etc. was
 kept provisional and subject to joint checking of the log sheets to
 determine the actual power drawn from Gridco. On reconciliation
 subsequently., while the Company has accepted a liability of Rs.53.43
 lakhs over and above Rs.150 lakhs already paid on this account, Gridco
 has determined a sum of Rs.324.34 lakhs as payable by the Company.
 Further, Gridco has raised additional demands on issues already settled
 and included in the Government order dated 8th December, 1998. The
 Company has contended that issues already settled are binding on both
 parties and cannot be reopened. As such the Company accepts a further
 liability of only Rs.53.43 lakhs as against.  overall demand of Rs.
 1263.05 lakhs raised by Gridco.
 
 Surprisingly, Gridco on 6th August, 2004 sent a disconnection notice
 for non-payment of balance amount of Rs. 19.27 crores in terms of the
 judgement dated 13th May, 1998 of Honble Supreme Court of India after
 adjusting a sum of Rs. 20 crores already paid by the Company. The
 Company challenged the said notice before OERC that the notice is
 illegal, arbitrary and malafide. OERC vide its interim order dated 19th
 August, 2004 directed for payment of Rs. 19.27 crores in four
 instalments. The Company challenged the said interim order of OERC
 before the Honble High Court of Orissa as both the parties arrived at
 a compromise and Gridco was barred by limitation.The Company received
 yet another disconnection notice dated 25th January, 2005 demanding
 balance amount of Rs. 18.38 crores for the period from April, 1998 to
 November, 2004 towards recurring monthly energy charges. The Company
 challenged the said disconnection notice before the Honble High Court
 of Orissa. The Honble High Court directed the Company to pay a sum of
 Rs. 5 crores in respect of both the Notices, which has since been paid,
 and finally remanded the matter to OERC for arbitration and directed
 OERC for adjudication of all disputes.  The Company is hopeful of a
 favourable decision and hence no provision has been made for the
 balance disputed amount of Rs.32.65 crores.
 
 5.The arbitration proceedings initiated consequent upon TISCOs
 reneging on the conversion contract were concluded with a split award
 between the two arbitrators. Hence, the matter was referred to an
 umpire. The arguments in the arbitration proceedings before the umpire
 have concluded. The Company has received the interim award-in January,
 2003 from the umpire upholding all issues in the Companys favour
 without quantification of the damages payable to the Company which is
 to be determined by the appointment of a Chartered Accountant or other
 expert. Further, the umpire has dismissed the counter claims made by
 TISCO on the Company except for rendition of accounts in relation to
 material. While TISCO has filed a petition before the Honble High
 Court of Kolkata praying stay of the interim award of the Umpire, the
 Company has prayed for making the interim award of the Umpire as the
 rule of the Honble High Court. The matter is pending for decision by
 the said Honble High Court.
 
 6.  Sundry Debtors include withheld amount of Rs. 150.00 lakhs by
 GRIDCO (formerly OSEB) and Rs. 988.63 lakhs by The Tata Iron and Steel
 Company Limited pending settlement of their disputes as detailed in
 Note 4 and Note 5 herein above.
 
 7.  The Company has availed loans from a consortium of financial
 institutions and banks in respect of which Indian Metals & Ferro Alloys
 Limited (the Promoter Company) has extended corporate guarantees. In
 view of the Companys inability to repay the loans, the financial
 institutions and some of the banks recalled the loans and also invoked
 the said corporate guarantees. Subsequently, the three financial
 institutions and,some of the banks filed recovery suits against the
 Company in the Debt-Recovery Tribunals. In the meantime, with the
 improvement in its operations, the Company started discussions with
 IDBI and the other financial institutions and consortium of banks for
 arriving at a structured settlement.  After detailed and protracted
 discussions and negotiations, the last proposal submitted to IDBI was
 accepted by the financial institutions and a structured settlement was
 arrived at with them. IDBI, IFCI and* ICICI Bank thereupon filed the
 consent terms before DRT, Mumbai and a consent decree has been passed.
 
 In so far as the consortium of banks is concerned, pending the sanction
 of the latest proposal by IDBI as aforesaid, a settlement proposal
 exclusively meant for banks was given to all banks. One bank, viz.
 Union Bank of India, accepted the said proposal and a structured
 settlement was arrived at on the basis of which a consent decree was
 obtained from the DRT, Mumbai. None of the other banks accepted the
 proposal.  However, consequent upon the proposal submitted to IDBI and
 accepted by IDBI, IFCI and ICICI Bank, the proposal submitted
 exclusively to the consortium of banks was withdrawn.The settlement
 arrived at with Union Bank of India, however, continues and payments to
 it are. being made in terms of the settle- ment. Since a majority in
 number representing more than three-fourths in value of the creditors
 agreed for the settlement, the Company moved the Honble. High Court of
 Orissa for sanction of the scheme to be binding on all the secured
 creditors u/s 391 of the Companies Act, 1956, which is pending before
 the said Honble High Court.  
 
 As regards the other members of the consortium of Banks; three banks,
 viz. Indian Overseas Bank, Punjab National Bank and Andhra Bank have
 accepted the settlement during the financial year 2003-04 .  on the
 same basis as the three financial institutions. Further during the
 current financial year, two more Banks viz. Canara Bank and Vijaya Bank
 have accepted the settlement on the same basis as the three financial
 institutions and three other banks who had accepted the proposal
 earlier.
 
 The Company has provided/making payment of interest commencing from 1st
 April, 2003 in respect of the three financial institutions and the five
 banks who have accepted the settlement on the basis of the settlement
 terms. As far as Union Bank of India is concerned, no interest is
 payable to it in terms of the settlement with them. For the remaining
 one bank that is yet to accept the settlement proposal, interest has
 been provided on the basis of the contracted rates as provided in the
 original sanction of the respective bank.
 
 While according sanction to the debt restructuring proposal of the
 Company, the financial institutions and banks have imposed certain
 conditions. Some of the important conditions are derating of the
 Companys shares by 95 percent, conversion of the advances received
 from Indian Metals & Ferro Alloys Limited (1MFA) into equity and merger
 of 1CCL and IMFA. Steps in regard thereto would betaken after the debt
 restructuring is sanctioned by the remaining one bank which is yet to
 accept the proposal and subject to approval of the shareholders where
 necessary. In view of the above, the adjustment relating to the period
 prior to 31 st March. 2003 shall1 materialise only on compliance with
 the conditions of the settlement stipulated by the Financial
 Institutions/Banks.
 
 8.  The Company has been calculating and paying electricity duty on a
 provisional basis at the rate of 12 paise per unit. However, the
 Government of Orissa has been demanding such duty at the rate of 20
 paise per unit. The difference upto 31 st March, 2005 aggregating to
 Rs. 2665.86 lacs has been fully provided for in the accounts. In fact,
 the Company has been advised that as per the classification it is
 liable for payment of duty at the rate of 6 paise per unit.  The
 Company made representation in this regard to the Govt. Of Orissa.
 Surprisingly, the Company received a notice dated 10th December, 2004
 from the Superintending Engineer (Projcct)-cum-Elcctrical
 lnspector(Generation) demanding a sum of Rs.43.59 crores upto 30th
 October, 2004 towards Electricity Duty worked out at 20 paise per unit
 inclusive of interest @ 18% per annum after appropriating the
 provisional payments made by the company towards interest & thereafter
 towards principal. The Company challenged the said demand and refuted
 liability to pay interest and filed a petition before the Honble High
 Court of Orissa, challenging the notice issued by the said authority.
 The Honble High Court directed payment of electricity duty at 6 paise
 per unit to the Govt. of Orissa and to keep the additional amount of 14
 paise per unit in a separate no lien account* till the case is further
 heard & decided. Accordingly, the Company is paying electricity duty at
 6 paise per unit effective 1st April. 2005 and maintaining the balance
 at 14 paise per unit in a no lien account with State Bank of India.
 Inasmuch as the Company has paid the electricity duty at higher rates
 on provisional basis well before the due date, the question of payment
 of interest does not arise and hence no additional provision is
 considered necessary.
 
 9.  The names of small scale industries to whom the Company owes dues
 outstanding for more than 30 days at the Balance Sheet date are : Alok
 Tyre retreading Co, Sis Tyre Retraders, Chemflow Industries (I) Pvt
 Ltd, Eastern Mechanical Industries, Lyko Engineering Works, Laxmi Gas
 Pvt Ltd, Metal Engineering & Treatment Co. P Ltd,NGT Engineering Pvt
 Ltd,Navrang Lime Industries, Nakoda Industrial Corpn, Paradeep Oxygen P
 Ltd, Pauls Engg. Enterprises, Premier Impex Ltd, Ritika Engineering Pvt
 Ltd, Super Engineering Corpn., Shakti pack Pvt. Ltd, Spark Enterprises,
 Sri Raviteja Indutries, Trelco, U Tech Indutries.  The above
 information and that given in Schedule E Current Liabilities &
 Provisions regarding small scale industries has been determined to the
 extent such parties have been identified on the basis of information
 available with the Company.
 
 10.  Contingent liabilities not provided for as at 31st March,2005 as
 estimated by the Company.
 
 (Rs.in lakhs)
 
                                                As at             As at
                                           31.03.2005        31.03.2004
 
 (a)    Claims against Company not
 acknowledged as debts.                       7733.23           2936.42
 
 (b)   Guarantees issued by Bank ( margin against
 above Rs. 23.46 lakhs - previous year
 Rs. 22.21 lakhs)                               39.07             34.07
 
 (c)    Provisional duty bonds to 
 customs authorities                       Amount not        Amount not
 applicable to 100% EOU.                 quantifiable      quantifiable
 
 11.  Schedules A to N form an integral part of the Balance Sheet
 and Profit and Loss Account and have been duly authenticated.  ,
 
 12.  Previous years figures have been regrouped /recast wherever
 considered necessary.