ISMT

1) Contingent Liabilities not provided for in respect of
 
                                                        Rs. in Crore
                                         As on                 As on
                               31st Mach, 2008      31st March, 2007
 
 a) Counter Guarantees given to Banks
 
 i) Performance Guarantees                4.27                 18.50
 
 ii) Others                              17.53                  1.57
 
 b)  Claims against the Company 
 not acknowledged as debt
 
 i)  Sales Tax                           13.39                 13.34
 
 ii) Income Tax - disputed 
 by the company                           0.20                  0.99
 
 - disputed by the Tax Dept.                 -                  1.69
 
 iii)  Excise Duty                       13.92                 17.18
 
 iv) Others                               3.60                  3.35
 
 c)  Guarantees given to the 
 lenders of third party                   9.70                 18.54
 
 d)  Assignment of Liabilities           99.39                 98.59
 
 e)  Estimated amount of contracts
 remaining to be executed               121.86                176.77
 on Capital Accounts (Net of advances)
 
 2) Gross sales include Conversion Charges of Rs.0.03 Crore, Ta x
 Deducted at Source Nil (Previous Year Rs.2.17 Crore, Tax Deducted at
 Source Rs.0.03 Crore).
 
 3) Loans and Advances include interest free advances given by the
 Company in earlier years to Employees Welfare Funds aggregating to
 Rs.4.85 Crore (previous year 5.50 Crore), for the benefit of designated
 employees pursuant to the proviso (b) to Section 77 (2) of the
 Companies Act, 1956.
 
 4) Advances include loans to officers of the Company Rs.59,500/-
 (Previous Year Rs.72,100/-), (Maximum amount outstanding during the
 year Rs.72,100/-, Previous Year Rs.84,690/-).
 
 5) Considering the uncertainty related to realisation, the following
 items are not considered to accrue till they are settled / sanctioned /
 received as the case may be : a)Insurance claims b) Interest on
 receivables.
 
 6) The Company belongs to Engineering Segment being a Seamless Tube
 producer with captive Steel making facilities. Since the present steel
 production is in excess of the Steel required for Tube making, the
 surplus steel is sold to external customers. The Company has, thus, two
 reportable segments viz. Tube and Steel.
 
 a) Revenue and expenses have been identified to a segment on the basis
 of relationship to operating activities of the segment.  Revenue and
 expenses which relate to enterprise as a whole and are not allocable to
 a segment on reasonable basis have been disclosed as unallocable.
 
 b) Segment assets and segment liabilities represent assets and
 liabilities in respective segments. Investments, tax related assets and
 other assets and liabilities that can not be allocated to a segment on
 a reasonable basis have been included under Unallocable Assets /
 Liabilities.
 
 7) a) Cash and Bank balances includes current account with Deogiri
 Nagari Sahakari Bank Ltd (Non- Scheduled Bank), Nil
 
 (Previous year Rs.27,635/-). (Maximum balance during the year
 Rs.27,635/-, Previous Year Rs.27,635/-).  b) Deposit with Scheduled
 Banks includes Rs.14.21 Crore towards margin money on capital accounts.
 
 8) The Company had issued 0% Foreign Currency Convertible Bonds (FCCB)
 aggregating to US $ 20 Million as detailed hereunder to finance
 inter-alia capital expenditure, repayment of foreign currency loan and
 acquisitions.
 
 Each Bond in Series A and Series B would be convertible into one Equity
 Share of Rs.5/- each fully paid any time until redemption i.e. after
 five years and one day from the date of allotment subject to terms and
 conditions of the Subscription. Unless previously redeemed or converted
 or purchased and cancelled as herein provided, the Company will redeem
 the Series A Bond and the Series B Bond along with the premium
 calculated at the rate of six months LIBOR plus 2% p.a. of their
 principal amount (the Redemption Amount ) at the end of five years
 and one day from the date of issue and allotment of the said Series A
 Bonds and Series B Bonds.
 
 Expenses incurred in connection with the above issue of FCCB have been
 adjusted against the Securities Premium Account.  Out of the proceeds
 of the FCCB, the Company has utilised Rs.76.91 Crore towards the object
 of the issue and the balance Rs.9.84 Core are lying in the Fixed
 Deposit Accounts with Bankers.
 
 9) Security and other particulars of Secured Loans
 
 a) i) Term Loans of Rs. 241.66 Crore are stipulated to be secured by a
 first charge ranking pari passu on the Companys immovable properties
 and movable fixed assets both present and future with other term
 lenders. These loans are further stipulated to be secured by a second
 charge ranking pari passu by way of hypothecation with other term
 lenders on the current assets of the company on which the first pari
 passu charge is stipulated to be created in favour of the Consortium
 Banks as mentioned in Clause (iii) below.
 
 ii) Term Loans of Rs. 227.97 Crore are stipulated to be secured by a
 first charge ranking pari passu on the Companys immovable properties
 and movable fixed assets both present and future with other term
 lenders.
 
 iii) Working Capital borrowings from the Consortium Banks are
 stipulated to be secured by a first charge ranking pari passu by
 hypothecation in respect of the current assets of the company and are
 further stipulated to be secured by a second pari passu charge on the
 Companys immovable properties and all the movable fixed assets both
 present and future.
 
 iv) The Term Loans of Rs. 62.87 Crore and Working Capital Loans of Rs.
 7.32 Crore are further stipulated to be secured by Corporate Guarantee
 of M/s Indian Seamless Enterprises Limited and the Personal Guarantee
 of Mr. B.R.Taneja.
 
 v) Foreign Currency Term Loan of Rs. 79.91 Crore availed during the
 financial year is stipulated to be secured by an exclusive charge on
 the equipment financed together with the land appurtenant there to.
 
 vi) Out of the total borrowings against buyers credit - capital of Rs.
 58.68 Crore, Rs. 11.12 Crore is stipulated to be secured by exclusive
 charge on assets purchased out of the said facility, Rs. 40.78 Crore is
 stipulated to be secured by exclusive charge on assets purchased out of
 the said facility and is further stipulated to be secured by a second
 charge ranking pari passu by way of hypothecation with other term
 lenders on the current assets of the company on which the first pari
 passu charge is stipulated to be created in favour of the Consortium
 Banks as mentioned in Clause (iii) above and by a corporate guarantee
 of M/s Indian Seamless Enterprises Limited, and the balance Rs. 6.78
 Crore is secured as per clause (iii) above.
 
 vii) Term Loan installments falling due within one year is Rs. 120.19
 Crore (Previous Year Rs. 68.87 Crore).
 
 b) Interest accured and due on the loans have been included under
 appropriate heads.
 
 10) Provision for Taxation
 
 b) Provision of Income Tax is made based on the provisions of Section
 115 JB of the Income Tax Act, 1961.
 
 c) The Company (earlier Jejuri Steels & Alloys Ltd., before
 amalgamation of Indian Seamless Steels and Alloys Limited with it) had
 created  Deferred Tax Asset  in respect of unabsorbed losses,
 allowances, etc., of Indian Seamless Steels & Alloys Ltd., by
 corresponding credit to  General Reserve , in the first year after
 amalgamation and reflected in its first Balance Sheet as on 30th
 September, 2001, thereafter, pursuant to the amalgamation and in terms
 of the Scheme as well as relevant Accounting Standard, the assets and
 liabilities vested in the Company were accounted on  Purchase Method
 .  Upon the review of the said  Deferred Tax Asset  on the balance
 sheet date, in terms of the applicable Accounting Standards or
 otherwise, the amount as required is charged on reversal of the said
 amount of Deferred Tax Asset, which necessitates equivalent write-down
 of the said General Reserve. The Deferred Tax charge arising as
 aforesaid has been disclosed in the Profit and Loss Account and the
 corresponding withdrawal from the said General Reserve has also been
 disclosed in the Profit and Loss Account.
 
 11) In absence of any intimation received from vendors regarding the
 status of their registration under the  Micro, Small and Medium
 Enterprises Development Act, 2006  the Company is unable to comply
 with the disclosures required to be made under the said Act.
 
 12) The Company has allotted 57,50,000 Optional Convertible Warrant by
 way of a preferential allotment to the promoters on the conversion
 terms of one equity share of Rs. 5/-each at premium of Rs. 86.80 per
 Equity Share. The option to exercise the right for conversion shall be
 available to the holder not later than 18 months from the date of
 allotment. As per the terms of warrants, 10% of the total issue price
 Rs. 9.20 per warrant amounting to Rs. 5.29 Crore are received from the
 allottees. None of the allottees have exercised the option till the
 date of Balance Sheet. The amount of Rs. 5.29 Crore has been used for
 the object of the issue.
 
 13) The Accounting Standard 15 (Revised 2005) on Employee Benefits
 has been adopted by the company effective from April 1, 2007.
 
 During the year, Company has recognised the following amounts in the
 financial statements.
 
 a) Defined Contribution Plan:
 
 The Company has recognized the following amounts as an expense and
 included under the head Personnel Cost - contribution to Provident and
 other Fund.
 
 14) The Company has charged expenses incidental to the merger being
 compensation for loss of interest paid and merger expenses amounting to
 Rs. 1.51 Crore and Rs. 2.69 Crore respectively to Amalgamation Reserve
 and Restructuring Reserve in terms of the Scheme of Arrangement. No
 provision has been made for further compensation for loss of interest
 as the same is not ascertainable.
 
 15 ) Previous year figures have been regrouped and reclassified
 wherever necessary to conform to the current years classification.