NOTES:

a Capitalized borrowing costs

Adjustment during the year 2017 Rs. 3,675.89 lakhs ,2016 Rs. 65,676.77 lakhs includes on account of borrowing costs/exchange fluctuation capitalized during the installation period, b Fair valuation is taken as deemed cost as on 1st April 2015 in certain items of Land, Building, Plant & Machinery and Railway Sidings.

Fair value of the properties was determined by using the market comparable method. This means that valuations performed by the valuer are based on active market prices, significantly adjusted for difference in the nature, location or condition of the properties.

As at the date of revaluation 1st April 2015, the properties fair values are based on valuations performed by Ranjan Structomech Pvt. Ltd., Gurgaon an accredited independent valuer who has relevant valuation experience, c Certain building under possession of the Company are pending registrations in the name of the Company, d For details of assets given on operating lease, refer note 42A

e "Certain property, plant and equipment are pledged against borrowings ,the details relating to which have been described in Note 14A pertaining to borrowings."

f Refer note 38 for impact of fair valuation on transition date financials and the subsequent impact on profit and loss thereon.

* Including Rs, 2,979.72 Lakhs (31st March 2016: Rs, 13,128.60 Lakhs; 1st April 2015 Rs, 980.25 Lakhs) under bank lien.

Short-term deposits are made for varying periods between 3 to 12 months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates.

Specified Bank Notes (SBN) disclosure

Disclosure related to details of Specified Bank Notes (SBN) held and transacted during the period 8th November 2016 to 30th December 2016:

For the purpose of this clause, the term 'Specified Bank Notes'(SBN) shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O.3407 ( E ) dated the 8th November, 2016.

e) Rights, preferences and restrictions attached to the equity shares

The Company has only one class of Issued, subscribed and paid up equity shares having a par value of ' 2/- each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the share holders.

Note

1) 12.00% Redeemable Non-Convertible 250 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 2500 Lacs (Previous Year 12.00% Redeemable Non-Convertible 250 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 2500 Lacs; Financial Year 2014-15 12.00% Redeemable Non-Convertible 250 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 2500 Lacs). Debentures are redeemable at par in one bullet payment at the end of 10th year from the date of allotment i.e 31.08.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Asset Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Sh. B.B.Singal & Sh. Neeraj Singal.

2) 12.50% Redeemable Non-Convertible 2000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 20000 Lacs (Previous Year 12.50% Redeemable Non-Convertible 2000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 20000 Lacs ; Financial Year 2014-15 12.50% Redeemable Non-Convertible 2000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 20000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 30.08.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

3) 12.00% Redeemable Non-Convertible 100 Debentures of Rs, 100 Lacs each outstanding on 31st March 2017 Rs, NIL (Previous Year 12.00% Redeemable Non-Convertible 100 Debentures of Rs, 100 Lacs each outstanding on 31st March 2016 Rs, NIL; Financial Year 2014-15 12.00% Redeemable Non-Convertible 100 Debentures of Rs, 100 Lacs each outstanding on 31st March 2015 Rs, 10000 Lacs) (Subordinate Debt).

4) 11.50% Redeemable Non-Convertible 3500 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 35000 Lacs (Previous Year

11.50% Redeemable Non-Convertible 3500 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 35000 Lacs; Financial Year 2014-15 11.50% Redeemable Non-Convertible 3500 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 35000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 04.01.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

5) 12.00% Redeemable Non-Convertible 1050 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 10327 Lacs (Previous Year 12.00% Redeemable Non-Convertible 1050 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 10500 Lacs; Financial Year 2014-15 12.00% Redeemable Non-Convertible 1050 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 10500 Lacs) are redeemable at the end of 4th,5th and 6th year in installments 35%,35% & 30% respectively commencing from the end of 4th year from the date of allotment i.e 28.03.2013 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

6) 11.75% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 30000 Lacs (Previous Year

11.75% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 30000 Lacs; Financial Year 2014-15 11.75% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 30000 Lacs) are redeemable in three equal annual installments commencing from the end of 5th year from the date of allotment i.e 02.02.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

7) 12.00% Redeemable Non-Convertible 4750 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 3729 Lacs (Previous Year 12.00% Redeemable Non-Convertible 4750 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 4000 Lacs; Financial Year 2014-15 12.00% Redeemable Non-Convertible 4750 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 47500 Lacs). Debentures are redeemable at the end of 4th, 5th and 6th year in installments 35%, 35% & 30% respectively commencing at the end of 4th year from the date of allotment i.e 31.08.2012 and are Secured by first charge on pari passu basis on the fixed assets of the Company offering minimum Fixed Asset Coverage Ratio of 1.25 times during the tenure of debentures and personal guarantee of Sh. B.B.Singal & Sh. Neeraj Singal. Out of the above Rs, 43500 Lacs have been paid during FY 2015-16.

8) 10.50% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 30000 Lacs (Previous Year 10.50% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 30000 Lacs; Financial Year 2014-15 10.50% Redeemable Non-Convertible 3000 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 30000 Lacs) Debentures are redeemable at par in three equal annual installments commencing from the end of 6th year from the date of allotment

i.e 13.08.2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

9) 10.90% Redeemable Non-Convertible 1630 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 12597 Lacs (Previous Year 10.90% Redeemable Non-Convertible 1630 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 12850 Lacs; Financial Year 2014-15 10.90% Redeemable Non-Convertible 1630 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 16300 Lacs) are redeemable at par in four equal annual installments commencing from the end of 5th year from the deemed date of allotment i.e 26.08.2010 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

10) 10.90% Redeemable Non-Convertible 120 Debentures of Rs, 10 Lacs each outstanding on 31st March 2017 Rs, 1118 Lacs (Previous Year 10.90% Redeemable Non-Convertible 120 Debentures of Rs, 10 Lacs each outstanding on 31st March 2016 Rs, 1200 Lacs; Financial Year 2014-15 10.90% Redeemable Non-Convertible 120 Debentures of Rs, 10 Lacs each outstanding on 31st March 2015 Rs, 1200 Lacs) have been restructured during the year and are redeemable in 48 equated monthly installments commencing from 26th December 2016 and are Secured by first charge on pari passu basis on the fixed assets of the Company.

11) Secured by first mortgage charge on all of the company's immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created on favour of ECA Lenders), ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement, except Rs, NIL (Previous Year Rs, 26533 Lacs; Financial Year 2014-15 Rs, 25036 Lacs) secured by subsequent & subservient charge on movable assets. Out of the above, the ECA Loans of Rs, 245632 Lacs (Previous Year Rs, 265001 Lacs; Financial Year 2014-15 Rs, 239225 Lacs ) financed by ECA Lenders are secured by first exclusive charge on the assets financed & personal guarantee of two promoter directors 'Loans of Rs, 851855 Lacs (Previous Year Rs, 890522 Lacs; Financial Year 2014-15 Rs, 835469 Lacs) are guaranteed by the Personal Guarantee of two promoter directors.

12) Secured by first mortgage charge on all of the company's immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks, book debts etc. for securing borrowing for working capital requirement. Loans of Rs, 2335105 Lacs (Previous Year Rs, 2281459 lacs; Financial Year 2014-15 Rs, 1662104 Lacs) are guaranteed by the Personal Guarantee of two promoter directors & Loans of Rs, 52745 Lacs (Previous Year Rs, 53995 Lacs; Financial Year 2014-15 Rs, 410576 Lacs) are guaranteed by the Personal Guarantee of One Promoter Director. Apart from this, Loans of Rs, 429736 Lacs are secured by pledge of 26% shares of Bhushan Steel Limited and Loans of Rs, 1622045 Lacs are secured by pledge of 51% shares of Bhushan Steel Limited. Out of the above Loans sanctioned for Rs, 700000 Lacs are secured by pledge of the shares of Bowen Energy Limited held by Promoter/Promoter Group of Bhushan Steel Limited.

13) Secured by first mortgage charge on all of the company's immovable & movable properties both present and future including movable machinery, spares, tools & accessories (excluding specific charge created in favour of ECA Lenders) ranking pari passu inter-se, with the trustee of Debenture holders subject to prior charges created in favour of banks on stocks,book debts etc. for securing borrowing for working capital requirement, except Rs, 969 Lacs (Previous Year Rs, 931 Lacs; Financial Year 2014-15 Rs, 1345 Lacs) secured by subsequent

& subservient charge on movable assets. Loans of Rs, 61291 Lacs (Previous year Rs, 58722 Lacs; Financial Year 2014-15 Rs, 30000 Lacs) are guaranteed by the Personal Guarantee of Two Promoter Directors & Loans of Rs, NIL Lacs (Previous Year Rs, 1021 Lacs; Financail Year 201415 Rs, 2250 Lacs) are guaranteed by the Personal Guarantee of One Promoter Director. Apart from this,Loans of Rs, 31516 Lacs are secured by pledge of 51% shares of Bhushan Steel Limited.

14) Out of these Loans of Rs, 270 Lacs (Previous Year Rs, 293 Lacs; Financial Year 2014-15 Rs, 263 Lacs) are guaranteed by the Personal Guarantee of Two Promoter Directors.

15) Foreign Currency Loans for Phase I & II of Orissa project was sanctioned at interest rate of EURIBOR 0.45% (Presently 0.45% p.a.) repayable in 20 Half Yearly Installments commencing from six Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

16) Domestic Loans sanctioned by SBI Syndication for Phase III of Orissa project was sanctioned at rate of interest of SBI Base Rate 2.50% and repayable in 17 quarterly installments commencing from 18 months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ SBI Base Rate 2.50% p.a (presently 11.60% p.a.).

17) Foreign Currency Loans for Phase III of Orissa project was sanctioned at interest rate of EURIBOR 1.50% ( Presently 1.287% p.a.) repayable in 20 half yearly installments commencing from 6 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

18) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of USD LIBOR 3.95% . Out of this Loan of US$ 240 Million has been structured under 5/25 flexible structuring scheme of RBI upto 25 years.Remaining US$ 60 Million is repayable in 4 annual installments commencing from 36 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.

19) Another Foreign Currency Loan sanctioned for Phase III of the Orissa Project at interest rate of Euribor 1.75% (Presently 1.529% p.a.) repayable in 15 half yearly installments commencing from HY2 of FY 2018-19 in 15 equal semi annual installments.

20) Domestic Loans sanctioned for Coke Oven 2 of Orissa project was sanctioned at rate of interest of Base Rate 2.50% and repayable in

24 quarterly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ Base Rate 1.75% p.a (presently 10.90% p.a.).

21) Foreign Currency Loans for Coke Oven 2 of Orissa Project was sanctioned at interest rate of USD LIBOR 4.50% repayable in 12 half yearly installments commencing from 15 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years.

22) Domestic Loans sanctioned for CRCA & CRNGO Project of Orissa project was sanctioned at rate of interest of Base Rate 2.25% and repayable in 24 quarterly installments commencing from 12 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s.Now these loans are being considered in 5/25 flexible structuring scheme of RBI upto 25 years.Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ Base Rate 2.00% p.a. (11.15% p.a. at present).

23) Domestic Loans sanctioned for Addition,Modification & Replacement Project at Orissa Site was sanctioned at rate of interest of Base Rate TP 1.25% and repayable in 32 quarterly installments commencing from 3 Months after completion of the project as per terms stipulated in respective loan/facility agreement/s. Now these loans have been structured under 5/25 flexible structuring scheme of RBI upto 25 years @ SBI Base Rate 2.50% p.a. (11.60% p.a. at present).

24) Domestic Loans sanctioned for shoring up of Net Working Capital/Normal Capital Expenditure was sanctioned at rate of interest of SBI Base Rate 2.50% (Presently 11.60% p.a.) and repayable in 40 quarterly installments commencing from 30th June 2016/as per terms stipulated in respective loan/facility agreement/s.

Rate of interests of other Term Loans/Foreign Currency Loans are linked with the Base Rate/LIBOR of the respective lenders

25) 10% 366667 Redeemable Cumulative Preference Shares of Rs, 100 each are allotted at a price of Rs,3000/- per share during the financial year 2011-12 on private placement basis. The preference shares are redeemable at a premium of Rs, 2900/- in two equal installments at the end of 3rd and 4th year i.e. on 4th March 2015 and 4th March 2016 respectively. However due to non submission of preference share certificate by the shareholder, M/s Robust Transportation Pvt Ltd., preference shares could not be redeemed. M/s Robust Transportation Pvt Ltd., vide their letter dated 1st March 2015 and 1st March 2016 has requested to defer the redemption of the preference shares as the same has been pledged with banker as security against the loan taken by it.

For computing deferred tax liability, the amount of business and depreciation loss as allowable in income tax returns has been considered for recognising deferred tax assets. On the basis of future projections taken on record by the management after considering improved performance of the company in last quarter, the board is confident that there is a virtual certainty that sufficient taxable income will be available in the future against which, the deferred tax assets can be realised in the normal course of business of the company.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

27EMPLOYEE BENEFITS

Defined Contribution Plans - General Description

Provident Fund:During the year, the company has recognized Rs, 592.53 lakhs (2015-16: Rs, 573.82 lakhs) as contribution to Employee Provident Fund in the Statment of Profit and Loss (Refer Note 24)

Defined Benefit Plans - General Description

Gratuity: Each employee rendering continuous service of 5 years or more is entitled to receive gratuity amount equal to 15/26 of the monthly emoluments for every completed year of service subject to maximum of 10 Lakhs at the time of separation from the company.

Other long-term employee benefits - General Description

Leave Encashment: Each employee is entitled to get 15 earned leaves for each completed year of service. Encashment of earned leaves is allowed during service leaving a minimum balance of 60 days subject to maximum accumulation up to 60 days. In addition, each employee is entitled to get 7 sick leaves at the end of every year.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

28 SEGMENT REPORTING

The business activity of the company falls within one broad business segment viz. "Steel" and substantially sale of the product is within the country. The Gross income and profit from the other segment is below the norms prescribed in Ind AS 108. Hence the disclosure requirement of Indian Accounting Standard 108 of "Segment Reporting" issued by the Institute of Chartered Accountants of India is not considered applicable.

29 RELATED PARTY DISCLOSURES

Names of related parties and description of relationship (A) Relationship

i) Subsidiary Companies:

Bhushan Steel (Orrisa) Ltd. Bhushan Steel (Australia) PTY Ltd.

Bhushan Steel Madhya Bharat Ltd. - Bowen Energy PTY Ltd., Australia

Bhushan Steel (South) Ltd. - Kondor Holdings PTY Ltd, (deregistered on 24.09.2015)

- Bowen Coal PTY Ltd.

- Golden Country Resources (Australia) PTY Ltd. ( deregistered on 24.09.2015)

- Bowen Consolidated PTY Ltd.

ii) Joint Venture

Andal East Coal Company Pvt Ltd.

iii) Associate Company:

Angul Sukinda Railway Ltd. (Shares forfeited, no more associate) Bhushan Capital & Credit Services Pvt. Ltd.

Bhushan Energy Ltd. Jawahar Credit & Holdings Pvt. Ltd.

iv) Key Managerial Personnel

Shri Neeraj Singal Vice Chairman and Managing Director Shri M V Suryanrayana Independent Director

Shri Nittin Johari Whole time Director Smt. Monica Aggarwal Independent Director

Shri P.K. Aggarwal Whole time Director Shri Pankaj Sharma Independent Director

Shri Rahul Sengupta Whole time Director Dr.Rajesh Yaduvanshi (PNB) Independent Director

Shri Ajoy Kumar (SBI) Independent Director Shri Pradeep Patni Independent Director

Shri Ashwani Kumar Independent Director Smt. Promila Bhardwaj Independent Director

Shri B.B.Tandon Independent Director Shri Rakesh Singhal Independent Director

Shri Kapil Vaish Independent Director Shri Sahil Goyal Independent Director

Shri Vipin Anand (L.I.C.) Independent Director Smt Sunita Sharma (L.I.C.) Independent Director

v) Relatives of Key Management Personnel

Shri B.B. Singal Non Executive Chairman & Father of Vice Chairman & Managing

Director

Smt. Ritu Singal Wife of Vice Chairman & Managing Director

vi) Enterprises over which Key Management Personnel are able to exercise significant influence Bhushan Aviation Ltd. Bhushan Infrastructre Pvt. Ltd.

vii) Enterprises over which relatives of Key Management Personnel are able to exercise significant influence

Bhushan Power & Steel Limited

Disclosure in Respect of Material Related Party Transactions during the year :

1. Remuneration & Perks include payment to Shri Neeraj Singal Rs, 145.83 Lakhs (31st March 2016: Rs, 146.07 Lakhs), Shri P.K.Aggarwal Rs,99.62 Lakhs (31st March,2016: Rs,95.92 Lakhs), Shri Nittin Johari Rs,141.40 Lakhs (31st March 2016: Rs,138.78 Lakhs), Shri Rahul Sengupta Rs,99.40 Lakhs (31st March 2016: Rs, 95.70 Lakhs), and Smt. Ritu Singal Rs,101.46 Lakhs (31st March 2016: Rs, 95.31 Lakhs).

2. Directors sitting fees is paid to Shri B.B.Singal Rs, 6.25 Lakhs (31st March 2016: Rs, 8.82 Lakhs ), Shri Ajoy Kumar (SBI) Rs, 1.01 Lakhs (31st March 2016: Rs, 1.00 Lakhs), Shri Ashwani Kumar Rs, 2.22 Lakhs (31st March 2016: Rs, 1.80 Laks ), Shri B. B. Tondon Rs, 2.82 Lakhs (31st March 2016: Rs, 2.00 Laks), Shri Kapil Vaish Rs, 0.81 Lakhs (31st March 2016: Rs, 1.0 Lakhs), Shri Vipin Anand(LIC) Rs, 0.61 Lakhs (31st March 2016: Rs, 0.60 Lakhs), Shri M V Suryanarayana Rs,2.62 Lakhs (31st March 2016: Rs, 2.40 Lakhs), Smt. Monica Aggarwal Rs, 0.40 Lakhs (31st March 2016: Rs, Nil), Shri Pankaj Sharma Rs, 0.81 Lakhs (31st March 2016: Rs, 1.0 Lakh),i Dr. Rajesh Yaduvanshi (PNB) Rs, 0.61Lakhs (31st March 2016: Rs, 0.80 Lakhs), Shri Pradeep Patni Rs, 0.40 Lakhs (31st March 2016: Rs, 0.20 Lakhs), Smt. Promila Bhardwaj Rs, 0.20 Lakhs (31st March 2016: Rs, Nil), Shri Rakesh Singhal Rs, 1.21 Lakhs (31st March 2016: Rs, 1.0 Lakh) and Shri Sahil Goyal Rs, 1.21 Lakhs (31st March 2016: Rs, 0.80 Lakh).

3. Investment in Share Application Money include Andal East Coal Company Pvt. Ltd. Rs, Nil (31st March 2016: Rs, 3.25 Lakhs ).

4. Redemption of Preference Share Capital includes Bhushan Infrastructure Private Limited Rs, 2133.00 Lakhs (31st March 2016: Rs, 2088.00 Lakhs), Shri Neeraj Singal Rs, Nil (31st March 2016: Rs, 11022.03 Lakhs) and Shri Brij Bhushan Singal Rs, Nil (31st March 2016 Rs, 6654.00 Lakhs)

5. Purchase of Goods/Services is from Bhushan Energy Ltd. Rs, 60435.38 Lakhs (31st March 2016: Rs, 62172.38 Lakhs ), Bhushan Aviation Ltd. Rs, 1470.00 Lakhs (31st March 2016: Rs, 1512.00 Lakhs ) and Bhushan Power & Steel Limited Rs, Nil (31st March 2016: Rs, 341.00 Lakhs).

6. Sale of Goods/Services to Bhushan Energy Ltd. Rs, Nil (31st March 2016: Rs,7031.28 Lakhs) and Bhushan Power & Steel Limited Rs, 1.12 Lakhs (31st March 2016: Rs, 3918.62 Lakhs).

7. Provision for dimunition of investment / advance made in case of Andal East Coal company Private Limited of Rs, 669.25 Lakhs (31st March 2016: : Nil)

8 . Investment written off in case of Angul Sukinda Railway Ltd. Amounting of Rs, Nil (31st March 2016: Rs, 1000.00 Lakhs).

9. Payment made by Bhushan Steel Australia Pty Ltd. amounting of Rs, Nil (31st March 2016: Rs, 1321.97 Lakhs) on behalf of co.

Terms and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm's length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31st March 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31st March 2016: Nil, 1st April 2015: Nil). This assessment is undertaken in each financial year through examining the financial position of the related party and the market in which the related party operates.

30 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the company's financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

JUDGEMENTS

In the process of applying the company's accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the financial statements.

Contingencies

Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgment and the use of estimates regarding the outcome of future events.

ESTIMATES AND ASSUMPTIONS

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumptions when they occur.

Impairment of non-financial asset

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm's length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a discounted cash flow (DCF) model.

Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

Defined benefit plans and other long term benefit plan (gratuity benefits and leave encashment)

The cost and present value of the defined benefit gratuity plan and leave encashment (other long term benefit plan) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation and other long term benefits are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.

Further details about gratuity obligations and leave encashment are given in Note 32.

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 38 and 39 for further disclosures.

The management assessed that cash and cash equivalents, other bank balances, trade receivables and trade payables approximate their carrying amounts largely due to the short-term maturities of these instruments.

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions were used to estimate the fair values:

- Long-term fixed-rate and variable-rate receivables/Borrowings are evaluated by the company based on parameters such as interest Rates, specific country risk factors, individual credit worthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

- The fair values of the Company's interest-bearing borrowings and loans are determined by using DCF method using discount rate that reflects the issuer's borrowing rate as at the end of the reporting period.

31 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Financial Risk Management Framework

The Company's principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.

The Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations in foreign currency exchange rates and interest rate), which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A. Credit Risk

Credit risk is the risk or potential of loss that may occur due to failure of borrower/counterparty to meet the obligation on agreed terms and conditions of the financial contract. Credit risk arises from financial assets such as cash and cash equivalents, loans, trade receivables, derivative financial instruments and financial guarantees. The company have a credit risk management policy in place to limit credit losses due to non-performance of financial counterparties and customers. We monitor our exposure to credit risk on an ongoing basis at various levels. We only deal with financial counterparties that have a sufficiently high credit rating.

Trade receivables:

The Company routinely assesses the financial strength of its customers and, as a consequence, believes that its trade receivable credit risk exposure is limited. The management of the company regularly evaluate the individual customer receivables. This evaluation takes into consideration a customer's financial condition and credit history, as well as current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. Further the company also mitigate the risk of trade receivables by taking letter of credit and bank guarantees from the banks. The company regularly track the outstanding trade receivables and proper action is taken by the company for collection of overdue trade receivables.

Cash and cash equivalents, derivatives and financial guarantees

All of our cash equivalents and short-term available-for-sale investments are carried at fair value. Cash and cash equivalents are deposited with financial institutions that management believes are of high credit quality and accordingly, minimal credit risk exists. The company mitigates the credit risk of its derivative and financial instruments by dealing with nationalized banks and reputed private banks with high credit rating.

B. Liquidity Risk

Liquidity risk refers to the probability of loss arising from a situation where there will not be enough cash and/or cash equivalents to meet the needs of depositors and borrowers, sale of illiquid assets will yield less than their fair value and illiquid assets will not be sold at the desired time due to lack of buyers. The primary objective of liquidity management is to provide for sufficient cash and cash equivalents at all times and any place in the world to enable us to meet our payment obligations. Currently the company is facing liquidity crises due to huge interest cost.

C. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will 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 and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at 31st March 2017 and 31st March 2016.

The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant and on the basis of hedge designations in place at 31st March 2017.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets.

The following assumptions have been made in calculating the sensitivity analyses:

- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March 2017 and 31st March 2016: including the effect of hedge accounting

Interest rate risk

The company is financed by both the fixed and floating interest rate debt in order to obtain more efficient leverage. Fixed rate debt results in fair value interest rate risk. Floating rate debt results in cash flow interest rate risk. The company has open to interest rate risk with changes in LIBOR and lending base rate of the banks. The company has taken both interest rate risk debts for managing its liquidity and day to day requirement of the funds.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a foreign currency). The exposure of entity to foreign currency risk is very limited on account of limited transactions in foreign currency.

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, EURO, GBP and JPY exchange rates, with all other variables held constant. The impact on the Company's profit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The impact on the Company's pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges and net investment hedges. The Company's exposure to foreign currency changes for all other currencies is not material.

Commodity price risk

Commodity price risk is the threat that a change in the price of a production input will adversely impact a producer who uses that input. Factors that can affect commodity prices include political and regulatory changes, seasonal variations, weather, technology and market conditions.

Our company is basically engaged in primary and secondary steel market and the company's turnover depends on the market risk of price volatility of the steel products. The prices of the steel are determined by the market factors. The revenue/price of the steel products of the company are basically impacted by the cost of raw material inputs, production cost, demand & supply of the steel products and international and regional markets conditions. Any positive and negative changes in any of the above factors can increase and reduce the revenue of the company generating from the steel products

Further all the raw material inputs like coking coal, iron ore etc. are subject to fluctuations in prices because majority of the raw materials are procured from the third party in the open markets.

The company sell its steel products at the current market prices and the prices can be up and down depends on the market scenario and demand and supply of the steel products. The prices of the raw material also depend on the market forces. Mostly the sale prices of the steel and cost of raw material moves in the same direction.

The below table represents the sensitivity to 5% movement in the prices of iron ore and coking coal. The sensitivity analysis includes 5% change in input prices for raw material consumed during the years when all other variable factors remain constant. In the below table negative number shows decrease in cost and positive number shows increase in cost.

32 CAPITAL MANAGEMENT

For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company's capital management is to maximize the shareholder 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 adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31st March 2017 and 31st March 2016.

33 In compliance of amended clause 32 of the Listing Agreement with the Stock Exchanges, the required information is given as under:

34 COMMITMENTS AND CONTINGENCIES A. Leases

Operating lease- As a less or

The Company has entered into lease agreements, for renting:

- Roof area at Khopoli plant for Cellphone rooftop tower. Rent received wrt same amounts to ' 4.14 Lakhs for the year ended 31st March 2017 ( 31st March 2016: Rs, 3.81 Lakhs)

- Others (including factory premises let for ATM, convinience store) amounts to Rs, 10.61 Lakhs for the year ended 31st March 2017 (31st March 2016: Rs, 7.90 Lakhs)

35FIRST TIME ADOPTION OF IND AS

With effect from April 1, 2016, the Company is required to prepare its financial statements under the Indian Accounting Standards ('Ind AS") prescribed under section 133 of the Companies Act, 2013 read together with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015.

These financial statements, for the year ended 31st March 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31st March 2016:, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March 2017, together with the comparative period data as at and for the year ended 31st March 2016:, as described in the summary of significant accounting policies. In preparing these financial statements, the Company's opening balance sheet was prepared as at 1st April 2015, the Company's date of transition to Ind AS. This note explains exemptions availed by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1st April 2016 and the financial statements as at and for the year ended 31st March 2017.

Exemptions applied:

Ind AS 101 allows first-time adopters certain mandatory and voluntary exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

1. Mandatory exemptions;

a) Estimates

The estimates at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:

- FVTOCI - Quoted and unquoted equity shares.

- Impairment of financial assets based on expected credit loss model.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1st April 2016, the date of transition to Ind AS and as of 31st March 2017.

b) Derecognition of financial assets:

The company has applied the de-recognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.

c) Classification and measurement of financial assets:

1. Financial Instruments: (Loan to employees, Security deposits received and security deposits paid) : Financial assets like loan to employees, security deposits received and security deposits paid, has been classified and measured at amortized cost on the basis of the facts and circumstances that exist at the date of transition to Ind ASs. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind As by applying amortized cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.

ii. Financial Instruments: (Equity shares (other than investment in subsidiary, associates and JVs): The Company has designated unquoted and quoted equity instruments held at 1st April 2015 as fair value through OCI investments

d) Impairment of financial assets: (Trade receivables and other financial assets)

At the date of transition to Ind ASs, the Company has determined that assessing whether there has been a significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, hence the Company has recognized a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognized (unless that financial instrument is low credit risk at a reporting date).

2. Optional exemptions;

a) Deemed cost-Previous GAAP carrying amount: (PPE and Intangible Assets)

The Company has elected to measure items of property, plant and equipment and intangible assets on its fair value as carrying value at the transition date except for certain class of assets which are measured at carrying value as deemed cost.

b) Arrangements containing a lease:-

Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS

17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.

c) Investment in subsidiaries and Joint Associates:

The Company has elected this exemption and opted to continue with the carrying value of investment in subsidiaries and associates, as recognized in its Indian GAAP financials, as deemed cost at the date of transition.

d) Designate of previously recognized financial instrument:

The Company has elected this exemption and opted to:

- Designate an investment in equity shares as FVOCI, as per Ind AS 109, based on facts and circumstances exist on transition date.

Footnotes to the reconciliation of equity and profit and loss: 1. Effect of change in operating assets and liabilities due to Ind AS 101

In accordance with Ind AS 101 "First Time Adoption of Indian Accounting Standards", the Company has elected to treat fair value as deemed cost for items of its property, plant and equipment and investments held in a subsidiary as at April 01, 2015 except certain items which are valued as carrying value as deemed cost. The Company has made a provision as per the expected credit model (ECL) for debtors and investment in a subsidiary and certain other items.

2. Reclassification of financial liabilities (preference share capital)

Under the previous GAAP, the preference share capital was classified as equity. However, as per Indian AS 32, on the basis of the terms and conditions of the preference shares, they qualify as debt. The impact of the same has been considered in equity as per Ind AS equity reconciliation.

3. Sales tax deferral

The Company has fair valued the grant received from government under the Sales tax deferral scheme and the same has been measured as the difference between proceeds received and the fair value of the loan based on the prevailing market interest rates.

4. Others

Other adjustments primarily comprise of:

a. Amortization of security deposits

b. De-capitalization of indirect expenses from capital work in progress.

5. Deferred tax

The impact of transition adjustments together with Ind-AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the Profit and Loss Account for the subsequent periods.

Deferred tax liability has not been provided on fair valuation of land as it is impracticable to determine the amount of income tax that would be payable when the temporary difference would be reversed.

6. Excise duty:

Under previous GAAP, revenue from sale of goods was presented net of excise duty whereas under IND AS the revenue from sale of goods is presented inclusive of excise duty. The excise duty is presented on the face of the Statement of Profit and Loss as part of expenses.

7. Defined benefit liabilities

Under IND AS, Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability, are recognized in other comprehensive income instead of statement of profit & loss in previous GAAP.

36 The Company, as per road map of the Ministry of Corporate Affairs, adopted Indian Accounting Standards (Ind AS) w.e.f. 1st April, 2016. In compliance of Ind AS, the preference share capital has been classified from share holders capital to borrowings. As a result of the same and due to high finance cost, the net worth as on 31.03.2017 has become negative as per these financial statements.

The company was under the process of discussing various resolution options including S4A / deep restructuring schemes of RBI with Joint Lenders Forum (JLF) of lender banks / institutions since June, 2016. In JLF meeting held in April 2017, lenders agreed to discuss restructuring option under S4A scheme of RBI. However, now as per circular dated 13.06.2017 issued by RBI, 12 companies including Bhushan Steel Ltd were identified by RBI for reference to National Company Law Tribunal (NCLT) for working out the resolutions plan for the company. The company has earned EBITDA about Rs,3,000 crores in Financial Year FY 16-17 and a long term resolution plan needs to be made.

Based on the above, management is quite confident to reach at some workable resolution to resolve financial position with the lenders within the prescribed time limit and to continue its business as a going concern. Accordingly, these financial statements have been prepared on that basis.

37 As per Companies (Share Capital and Debentures) Rules 2014, where in terms of Clause 18(7)(c ) of the rules, it is required by the company to create a fund before 30th April of each financial year, which shall not be less than 15% of the debentures maturing during the respective financial year ending on 31st March, by way of one or more methods i.e. through deposits with scheduled banks / investments in specified securities or bonds as indicated in the Clause 18(7) (c). However, the company could not create required fund due to losses incurred and financial constraints to the company.

38 The Supreme Court of India, vide its order dated 24/09/2014, cancelled number of coal blocks allocated to various entities which includes one coal block allocated to the company, which was under development. Subsequently, the Government of India has issued the Coal Mines (Special Provision) Act 2015, which inter-alia deal with the payment of compensation to the effected parties in regard to investment in coal blocks.

No effect has been taken on the value of investment made by the company in the de-allocated coal blocks amounting to Rs,562.90 crores (including Expenditure incurred of Rs, 135.46 crores and Advances given Rs, 427.44 crores) . In the opinion of the management, the company will receive back the payments/ expenditure paid/ made, including borrowing cost and other incidental expenditure, relating to de-allocated coal blocks. The Company has filed its claim for compensation with Govt. of India, Ministry of Coal. Subsiquently, the Company has filed a petition for recovery of the amount before the HonRs,ble Delhi High Court in which notice has been issued to Union of India and others.

39 The Nine Judges Bench of Hon'ble Supreme Court, vide its judgment dated 11.11.2016, has upheld the constitutional validity of levy of Entry Tax by the States and has laid down principles/tests on levy of Entry Tax in various States. The respective regular benches of the Court would hear the matters as per laid down principles. Pending decision by the regular benches of the Court on levy of entry tax in the States, the disputed entry tax demand has been treated as contingent liabilities.

40 Due to the loss incurred, the Company applied to the Central Government for the approval of managerial remuneration. The approval from Central Government has been received but clarification regarding Leave Encashment, PF and taxable Car perquisite has been sought by the Company. Hence, the payment of Leave Encashment, PF and taxable Car perquisite are subject to approval of Central Government.

41 Figures for the previous years have been reclassified to conform to current year's classifications.