b) The Term Loans (Rupee and Foreign Currency) from Indian and Foreign Financial Institutions and Banks are secured by first mortgage on all the Company's immovable properties, both present and future and a first charge by hypothecation of all the movable assets of the Company, save and except book debts, but including movable machinery, machinery spares, tools and accessories, both present and future, subject to the prior charges created / to be created in favour of the Company's Bankers on the Company's stocks of raw materials, semi-finished and finished goods, consumable stores, book debts and such other movables as may be agreed by the Financial Institutions and Commercial Banks for securing borrowings for working capital requirements in the ordinary course of business of the Company ranking pari-passu inter se.

c) Working Capital Loans from Banks are secured by first charge by way of Hypothecation of all the stocks of the raw materials, semi finished and finished goods, consumable stores, spares, book debts etc. ranking pari-passu. There has been no balance of working capital loans since earlier years.

d) Soft Loan (including interest thereon) under Jharkhand Industries Rehabilitation Scheme, 2003 from the State Government of Jharkhand are secured by

(i) A mortgage of all immovable properties both present and future; and a charge by way of hypothecation in favour of the lender of all the movable, including movable machinery, machinery spares, tools and accessories, present and future, stock of raw materials, semi-finished goods, consumable stores and such other movables as may be agreed upon

(ii) Additionally secured by way of pledge of new equity share capital of Rs.325000 thousands allotted to the private promoter. (MLCSL)

The mortgage and charge referred to in (i) and (ii) mentioned above; shall be in terms of the Rehabilitation Scheme 2003 of the Government of Jharkhkand Sanctioned by the BIFR and be subject and subservient to the mortgages and charges created and / or to be created in favour of the secured creditors.

e) The amount of term loans (included foriegn currency loans )of Rs.700000 thousands as per BIFR scheme dated 29.04.2004 was repayble in 30 quarterly instalments of Rs.23333 thousands each commencing from 15th July 2004 to 30th Spetember, 2011 which has been fully repaid except the element of disputed liability on account of currency fluctation as stated (a) above. The modification / satisfaction of the charges to this extent is still in the process of filing.

f) As per para 8.4 of the sanctioned BIFR Scheme dated 29.07.2004, the interest on Soft loan under Rehabilitation Scheme, 2003 from Govt.of Jharkhand shall be funded over the entire rehabilitation period i.e. upto 30.09.2011. The Soft loan and the funded interest is repayable after 30.09.2011 and the defaulted amount of Principal and interst as on 31.03.2015 comes to Rs.325000 thousands and Rs.355950 thousands (p/y Rs. 325000 thousands and Rs. 305145 thousand) respectively, for which the company has approached Government of Jharkhand for reschedulement which has also been proposed in the Modified Draft Rehabitation Scheme filed before the BIFR.

g) A sum of Rs. 265980 thuosands payable against the acceptance as on 31-3-2013 has been transfered to long term borrowing and shown as loans and advances from a body corporate as per Party ledger wide dated 24.09.2013 which carry interest @ 8% p.a upto 09.08.2013. No interest has been accrued since the party has waived such interest due to uncertainty involved (i.e. shut down of the plant). Since there is no stipulation regarding repayment, no disclosure has been made for amount of instalments due for repayment.

h) There has been no stipulation for repayment of unsecured loans & advances from related parties and hence no disclosure has been made.

                                                            (Rs. 000')

                                                       As at     As at
                                                     31.3.15   31.3.14
     
2.   Contingent Liabilities:

(i)  Custom duty and interest on Imported Stores 
& Spares                                               15459     15459

(b) Central Sales Tax demand (including interest) under appeal before the Jt. Commissioner of Commercial Taxes (Appeals) 311 311 Jamshedpur for the Financial Year 2006-07

(c) Disputed demand for JVAT for the F.Y. 2010-11 u/s 70(5)(b) under appeal before the Jt. Commissioner of Commercial Taxes 5879 5879 (Appeals), Jsr. However stay has been granted on 20.01.2012 (Amount paid as advance on appeal Rs. 5.87 Lacs previous year Rs. 5.87 Lacs).

(d) Demand raised by DCCT, Jsr for tax due and penalty imposed or interest payable under JVAT Act 2005 of the F.Y. 2010-11 under 24786 24786 dispute before JCCT(Appeals), Jamshedpur.

Stay has been granted on 06-10-2012 till final disposal(Adv paid on appeal Rs.15 lacs on 19.10.2012)

(e) JVAT demand for the assessed tax and penalty vide demand notice No.18872 dt. 28.03.2014 (order dt.12.03.2014) for F.Y. 8140 - 2010-11 raised by the Dy. Commissioner of Commercial Taxes, Adityapur, JSR (net of amount paid Rs.13489 thousands) for which the Company is seeking details for examining the merits of demand in order to consider filing of appeal with the appellant authority.

(f) CST Demand for assessed tax and penalty vide demand notice dt.28.03.2014 for the F.Y.2010-11 (vide order dt.12.03.2014) raised 3096 - by the Dy. Commissioner of Commercial Taxes, Adityapur, JSR (net of amount paid Rs.3055 thousands) for which the Company is seeking details for examining the merits of demand in order to consider filing of appeal with the appellant authority.

(g) CST Demand for assessed tax and penalty vide demand notice dt.24.03.2015 for the F.Y. 2011-12 vide order dt.20.03.2015 by the 70549 - Dy. Commissioner of Commercial Tax, JSR is (net of amount paid Rs.2353 thousands for which the Company is seeking details for examining the merits of demand in order to consider filing of appeal with the appellant authority.

(h) JVAT Demand for assessed tax and penalty vide demand notice dt.24.03.2015 for the F.Y. 2011-12 vide order dt.20.03.2015 by 13977 - Dy. Commissioner of Commercial Tax, JSR (net of amount paid Rs.3060 thousands) for which the Company is seeking details for examining the merits of demand in order to consider filing of appeal with the appellant authority.

(i) Demand for electricity duty raised by the Dy. Commissioner / Asstt. Commissioner under Electricity Duty Rules (Rule 14) vide 2281 - Order No.18431 dt.18.03.2014 for Rs.1271 thousands (F.Y. 2012-13) for Rs.1011 thousands (FY) 2011-12 the Company is seeking details for examining the merits of demand in order to consider filing of appeal with the appellant authority.

(iii) Demand for water charges and interest thereon disputed under writ petition before Jharkhand High Court, Ranchi 250947 211975

(iv) Railway Authorities has imposed penalty on the Company earlier which was dismissed by the Jharkhand High Court, Ranchi. Railway 5600 5600 Authority has now filed a petition before Supreme Court, Delhi.

(v) (a) Disputed liability on account of currency fluctuation on foreign currency loans and interest thereon, pending before the 232381 275409 Hon'ble High Court, Jharkhand, Ranchi.

(b)Liability on account of currency fluctuation on upfront payment of foreign currency loan and additional 2% interest rate in lieu of 263714 279753 guarantee of Govt. of Jharkhand matter pending in SLP before the Hon'ble Supreme Court, Delhi

(vi) Disputed Income Tax demand including interest and penalty for short deduction/ collection or Tax at source based on NSDL 8334 8334 report for the F.Y. 2004-05 to 2008-09 u/s 156 raised by DCIT, JSR under appeal before the CIT (Appeal), JSR under section 246A (1) Of the Income Tax Act,1961.

(vii) Liability for price difference / other claims net of counter claims, if any, arising Not Not on account of procurement of raw materials ascer- ascer- under a contract (since terminated) pending tained tained before an Arbitrator / High Court.

(viii) (a) The company has received a show cause notice to explain as to why the production of Sponge Iron was low in comparison Not Not to iron ore consumed. The company has furnished ascer- ascer- its reply, justifying consumption of iron ore tained tained viz a viz Sponge iron production. The Matter is still pending.

(b) Demand for recovery of irregular Cenvat Credit for Service Tax and education cess for F.Y. 2010-11 under Rule 15(4) of CCR 2004 read 123 123 with section 78 of the Finance Act 1994 under appeal before The Appellate Tribunal Central Excise & Service Tax, Kolkata

(ix) Disputed penalty recovered by SECL for short lifting of Coal quantity as per Linkage. The matter pending under Writ Petition filed 21528 21528 by the Company before the Hon'ble High Court of Chattisgarh, Bilaspur.

(x)  Liability on account of Bank Gurantees            96175     97675

3.1 Capital Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 4856 thousand (Previous Year Rs. 4856 thousand).

3.2. Other Commitments: Rs. Nil (P.Y.Nil)

4. Rehabilitation Scheme:

(I) The company was declared a Sick Industrial Company within the meaning of clause (0) of Sub-Section (1) of Section 3 of the Sick Industrial Companies (Special Provision) Act, 1985 by the Hon'ble BIFR vide its order dated 19.12.1996. The Hon'ble BIFR vide its order dated 29th July, 2004 had sanctioned the Rehabilitation Scheme. The said scheme envisaged a total payment of Rs. 1350000 Thousands, Rs.650000 Thousands was to be paid as upfront payment and the balance Rs. 700000 Thousands was to be paid in 30 quarterly installments effective from 15th July, 2004.

(II) In the review hearing held on 3rd September, 2007 & 22nd September, 2010, the BIFR, by exercising powers under Section 18 (5) and 18 (9) of the SICA, clarified / directed that the Company shall make payment of the due installments to its foreign lenders in 'Euro' as per the amount reflected in Euro in the statement annexed to the sanctioned scheme along with the applicable interest i.e. LIBOR plus 1% per annum (LIBOR 3% in case of delay/ default in payment of installments).

The Company has filed appeal before the Appellate Tribunal for Industrial and Financial Reconstruction (AAIFR) challenging the above said order. AAIFR in its order dated 23-12-2011 has dismissed the appeal. The above order of AAIFR was challenged by the Company by filling Writ Petition in Jharkhand High Court on 06.02.2012. In the hearing held on 22nd February, 2012, the Appeal was dismissed.

The Company has not recognized Rs.232381 Thousands (P.Y. 275409 Thousands) the liability on account of foreign currency fluctuation in Euro on foreign currency loans installments and interest thereon as per the BIFR Scheme. The Company has filed a Letters Patent Appellate Jurisdiction (LPA) on 27th July, 2012 before the higher bench in the High Court of Jharkhand, Ranchi against the order of the Single Judge which is still pending.

(III) The Net worth of the Company could not become positive during the implementation of BIFR Scheme till 30-09-2011. As per Order date 5th May 2012, BIFR directed to the company to submit Modified Draft Rehabilitation Scheme (MDRS) within four months for the rehabilitation of the Company.

(IV) The Modified Draft Rehabilitation Scheme of the company was filed before the Hon'ble BIFR on 3rd December 2012. The modified scheme is under consideration of the BFIR for which last hearing was held on 20.01.2014 in which the BIFR has made the following direction.

(i) Ministry of Coal, Government of India, Central Coalfields Limited and Coal India Limited to extend regular supply of coal as per the existing coal linkage with CCL, as envisaged in the sanctioned scheme and submit its report to the Board with a copy to IFCI (MA), within a month.

(ii) The Company to update the status of the writ petition /IA filed before the Hon,ble High Court of Jharkhand, Ranchi as and when the final decision is arrived at.

The Company has made an interlocutor application for the withdrawal of the Writ Petition before the Hon'ble High Court of Jharkhand, Ranchi and it is expected that on withdrawal of the said Writ Petition the Fuel Supply Agreement (FSA) would be entered into for the regular supply of the Coal. This would expedite the process of finalization and sanction of the Draft Modified Rehabilitation Scheme with the grant of reliefs and concessions, the restructuring of the soft loan and other measures for the fresh induction of fund etc. for making the unit viable as a going concern.

5. The demand of water charges Rs. 250947 thousands (inclusive of interest on arrear of water bills of Rs.23103 thousands) as on 31.03.2015 (P.Y. Rs.231494 thousands inclusive of interest of Rs.20528 thousands as on 31.3.2014) raised by Chief Engineer, Subernarekha Multipurpose Project, Chandil has been disputed by the company under a Writ Petition with Jharkhand High Court, Ranchi. However, pending disposal of Writ Petition, the company based on its own estimate of liability has made total provision for Rs. 13869 thousands up to 31st March, 2015, (Rs.13869 thousands as on 31.3.2014.)

6. South Eastern Coalfield Ltd. has imposed a penalty of Rs.21528 Thousands in 2011-12 on account of short lifting of coal quantity in terms of Fuel Supply Agreement (FSA) dated 02.05.2008 and recovered the same by encashment of the bank guarantee. The Company has taken up the matter with Coal India Limited/ South Eastern Coalfield Ltd. for refund of the said amount as settlement of dispute under clause 15.3 of the FSA. No provision has been made for penalty recovered since the matter is pending under writ petition filled by the Company before the Hon'ble High Court of Chattisgarh, Bilaspur.

7. The company was allocated for captive use a Coal Block in the Macherkunda Coal Block in the State of Jharkhand on 5th August 2008 by the Ministry of Coal, Government of India. The Ministry of Coal vide letter date 20.11.2012 deallocated the above coal block on the ground that the company has failed to develop the coal block allotted within the prescribed milestone/time frame.

On being aggrieved with the above order, the company has filled a Writ Petition before the Jharkhand High Court, challenging the decision of the Ministry of Coal to de-allocate the Coal block. The matter was transferred to Hon'ble Supreme Court of India, and the said court vide its order dated 24.09.2014 has cancelled all coal blocks allotted on and after 2003. In view of the above Rs. 894 Thousands incurred by the company on this account appearing under CWIP Coal block has been written off during the year and shown under the head of exceptional item.

8. The Central Coalfield Limited has recovered a penalty of Rs 5468 Thousands on account of short lifting of coal quantity in terms of fuel supply agreements (FSA) during the Financial Year 2012-13 and F.Y. 2013-14(April 2013) and Rs.5263 Thousands for rate differences. These amounts has been shown as exceptional items.

9. In accordance with the Companies Act, 2013 the Company has revised the useful life of the fixed assets during the current year to comply with the useful / remaining useful life of assets as mentioned under Schedule II of the Act. As per the transitional provision the company has adjusted Rs. 126918 thousands net of deferred tax (including Rs.124981 thousands for depreciation on revaluation reserve) with the opening balance of retained earning (i.e., deficit in the statement of Profit and Loss on April 01,2014). Had the Company continued to follow the earlier life, the depreciation expense for the year ended on 31.03.2015 would have been higher by 10438 Thousands(excluding depreciation on revaluation reserve), and the loss before tax increased with that amount.

10. (a) Shri Satish Kumar Gupta, has been appointed as Additional Director and then Whole Time Director w.e.f. 13.12.2013. During the F.Y. 2013-14 a sum of Rs. 325 Thousands has been provided as remuneration as a Whole time director which was subject to the approval of shareholders of the Company in the ensuing general meeting (32nd AGM) and the approval of the Central Govt. in terms of the provisions of section 198, 269,309 & Schedule XIII as amended from time to time & other applicable provisions, if any of the Companies Act, 1956. The Shareholders has approved the payment of aforesaid remuneration by way of special resolution in the said Annual General Meeting (AGM).

Since, Shri S. K. Gupta vide letter dated 13.11.2014 has voluntarily waived off his entire remuneration for the period 13.12.2013 to 12.12.2014, the provision for remuneration made in earlier year has been reversed & not paid to him and hence no Central Govt, approval has been sought.

(b) The remuneration to the whole tine director has been paid /provided w.e.f. 13-12-2014 to 31-03-2015 is in compliance of Section 197 and Schedule V of the ACT.

11. Shut down of Plant and suspension of operations.

Central Coalfields Ltd has stopped supply of linkage coal as per existing Fuel Supply Agreements to the Company w.e.f. 5th February 2013 for reason stated at para 7 above. Due to non-supply of Coal by CCL, the operations of the company has been shutdown and operation suspended w.e.f. 9th August 2013. The aforesaid action of Coal India Ltd, Central Coalfields Ltd and the Ministry of Coal, GOI. has been challenged by the company by way of Writ Petition (C) vtde No. 1660 of 2013 before the Hon'ble Jharkhand High Court and the same is still pending.

In view of the above, provision for the undernoted items of expense have not been made in the accounts for the period from 10th August, 2013 to 31st March. 2015:

(a) Interest on Unsecured Loans of Rs. 686001 thousands taken from Promoters and other Parties (amounts unascertained),

(b) Interest on Soft Loan from Government of Jharkhand under Jharkhand Industrial Rehabilitation Scheme 2003 amounting to Rs. 81331 Thousands (Rs. 30526 thousands upto March 2014) which is subject to representations for waiver, and

(c) Salaries, Wages and allowances, provident fund including as well as employee benefits expense (amount unascertained) except for KMP.

12. Related Party Transaction (RPT) in respect of renting of the office of the Company is Rs. 6146 thousands and the availing or rendering of services amounting to Rs. 6788 thousands as covered under section 188 (1) (c) and (d) respectively and Rules made thereunder and is within the overall limits of Rule 15 of the Companies (Meetings of Board and its Power) Rules, 2014.

13. Income Tax assessment of the Company for the Asstt. Year 2012-13 has been completed under Section 143 (3) of the Act vide order dt.24.03.2015 by the Asstt. Commissioner of Income Tax, JSR. The Assessing Officer has disallowed the Returned loss on the ground that the company has not furnished the required information, documents, books of accounts and records inspite of questionnaire & the various reminders show cause notice given to the assessee. Since the plant was under shut down and laborers did not allow the entry of staff and officer to factory premises and hence the information / documents / papers were produced to the extent possible. On being aggrieved with the said order, the Company has filed an appeal before the CIT (Appeal-3), Patna on 27.04.2015.

14. Credit/Debit balances of the Creditors, Lenders, Debtors and Advances are subject to reconciliation/confirmation at the year end.

15. Earning in Foreign Currency: Nil

16. Subsidiary Company:

Chandil Power Limited (CPL) has become Subsidiary of the Company under Section 4(1)(a) of the Companies Act 1956 and Section 2 (87) of the Companies Act, 2013 w.e.f 17th August 2011 and ceased to be subsidiary from 29.09.2014 with the termination of Supplemental Agreement dated 15.06.2010.

17. Previous year figures have been recast / restated to conform to the classification required by the Revised Schedule VI Notes 1 to 29 and Annexure - I containing Accounting Policies and General Notes form part of the Financial Statements.