CA

2021 ASSIGENMENT
III

SUBMITTED BY:
Name: Saroj kumar samantray
Reg No: 12017598
Roll No:RQ2018B43
Section: Q2018 B.Com.
GSAL

 GSAL (India) Limited manufactures and markets sponge iron. The company was
formerly known as Goldstar Steel & Alloy Ltd. and changed its name in February,
1995.
 GSAL (India) Limited was incorporated in 1986 and is based in Hyderabad, India. As
of August 7, 2010, GSAL (India) Limited operates as a subsidiary of Steel Exchange
India Ltd

STEEL EXCHANGE INDIA LTD. (STEELXIND) - COMPANY HISTORY

 Steel Exchange India Ltd is an India-based company. The company operates in six
divisions namely Trading Division Steel Melting Division Rolling Division Wire
Drawing and HC Wire Products & Galvanized Wire Division Pyxis Software Division
and Sponge Iron Division.
 The company's Trading Division deals with a range of products such as sponge iron
semi and finished steel products. They also deal with the products manufactured by
RINL (Vizag Steel) their own manufacturing divisions and other manufacturers for
special products.
 The Steel Melting Division manufactures ingots using sponge iron and scrap/ pig
iron. The Rolling Division of the company has two rolling units producing thousand
metric tons (TMT) bars and steel rebars.
 The two units of Wire Drawing and HC Wire Products & Galvanized Wire Division
produce wire products carbon steel wire products and galvanized wire products. The
company's Pyxis Software Division deals with the development of software and
software products. The Sponge Iron Division is located at Viziznagaram District
which is having a capacity of 225000 TPA.Steel Exchange India Ltd was incorporated
in the year 1999 as a public limited company.
 Steel Exchange India Limited acquired a well-established steel specific vertical B2B
portal www.steelexchangeindia.com which had been promoted and developed by its
holding company Pyxis Technology Solutions.As per the scheme of amalgamation
Steel Exchange India Ltd and Simhadri Steels Pvt Ltd were amalgamated with the
company and the name was changed to Steel Exchange India Ltd with effect from
April 2003.During the year 2006-07 the company entered a scheme of arrangement
with Vizag Profiles Ltd for transferring the Steel Division of Vizag Profiles Ltd to the
company.
 Vizag Profiles Ltd merged with the company with effect from April 1 2006.During the
year 2008-09 the company took on lease 225000 TPA Sponge Iron unit of GSAL
(India) Ltd with effect from October 1 2008. Also they decided to sell/ dispose off
the old Rolling Mill situated in Andhra Pradesh.
 Products vs Products
GSAL INDIA LIMITED
GSAL INDIA LIMITED is a manufacturer company based on the National Industrial
Classification (NIC) code of 28112 and it is involved in the business activities related to this
industry code such as Arches (structural) of iron or steel, manufacturing,Bridge parts
(structural) of iron or steel, manufacturing,Bridge (structural) of iron or steel,
manufacturing,Columns (structural) of iron or steel, manufacturing,Girders (structural) of
iron or steel, manufacturing,#Manufacture of fabricated structural products of iron or
steel#,Manufacturing of arches (structural) of iron or steel,Manufacturing of bridge
parts  (structural) of iron or steel,Manufacturing of bridge (structural) of iron or
steel,Manufacturing of columns (structural) of iron or steel,Manufacturing of girders
(structural) of iron or steel,Manufacturing of masts (structural) of iron or
steel,Manufacturing of piers & jetties (structural) of iron or steel,Manufacturing of sluice
gates (structural) of iron or steel,Manufacturing of trusses (structural) of iron or steel,Masts
(structural) of iron or steel, manufacturing,Piers & jetties (structural) of iron or steel,
manufacturing,Sluice gates (structural) of iron or steel, manufacturing,Trusses (structural)
of iron or steel, manufacturing.

STEEL EXCHANGE INDIA LTD.

I. TMT BARS
II. SPONGE IRON
III. STEEL BILLET

1. Reason of Merger
Steel Exchange India Ltd has submitted to BSE a copy of the notice published through News Paper
Ad for the information of shareholders of GSAL (India) Limited about the allotment of equity
shares of the Company (Steel Exchange India Limited) as per the Scheme of Merger duly approved
by the Honble BIFR vide its orders dated August 27, 2012

Accordingly every shareholder in GSAL, shall receive 1 (one) equity share of Rs. 10/- each in Steel
Exchange India Limited for every 10 (ten) equity shares of Rs. 10/- each held in the company
(GSAL).

Amalgamation and also comment with reason is it a ‘Good’, ‘Bad’ or ‘worst’

During the year under review, the total revenue of the company was Rs. 791.42 crores as against
the 1029.27 Crores.Net Profit recorded at 64.29 Crores as against Net Loss of (36.67) crores in the
Previous Year. The Manufacturing Sales including power sales were Rs. 693.22Crores in the current
year compared to Rs.880crores in the previous year. The trading sales during the year amounted
to Rs.87.20Crores compared to Rs.141.57Crores in the previous year.
Amalgamation (you can attach supporting proofs)

Any other major prospective of Merger/ Amalgamation partner with which merger
could have been done with reason.
Allotment of shares to the erstwhile shareholders of GSAL (India)

Steel Exchange India announced about the allotment of equity shares of the Company (Steel
Exchange India ) as per the Scheme of Merger duly approved by the Hon'ble BIFR vide its orders
dated 27 August 2012
Accordingly every shareholder in GSAL, shall receive 1 (one) equity share of Rs. 10/- each in Steel
Exchange India for every 10 (ten) equity shares of Rs. 10/- each held in the company (GSAL).

Which method of Amalgamation

1.1 The reference filed by M/s G.S.A.L. (India) Ltd. (hereinafter referred to as the company)
under Section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985
(hereinafter referred to as the 'Act) was considered in the hearing held on 06.07.1999 when
the company was declared a sick industrial company in terms of Section 3(1)(o) of the Act
and Industrial Development Bank of India IDBI) was appointed as the Operating Agency
(OA) u/s 17(3) of the Act to formulate a rehabilitation scheme based on the company's
proposal and keeping in view the provisions of Sec 18 of the Act and the guidelines given by
the Board.

Subsequently, three years later, the Board concluded that the company was not likely to
make its net worth exceed its accumulated losses within a reasonable time, and vide order
dated 27.9.2002 confirmed its prima facie opinion that it would be just, equitable and in
public interest that the company be wound up u/s 2011) of SICA. Thereafter, on an appeal
filed by the Company against the above BIFR order, Hon'ble AAIFR vide order dated
10.8.2005 abserved that in the light of certain positive developments there was a fair
possibility of reviving the company, Hon'ble AAIFR, accordingly directed the company to
formulate a draft rehabilitation

1.3 In order to comply with the AAIFR orders, IDBI(OA) was directed vide fax dated
20.9.2005 & 8.3.2006 to expedite formulation of DRS. IDBI vide its letters 10.11.2005,
9.1.2006 & 23.3.2006 submitted that a DRS base on restructuring/settlement of dues to the
secured creditors was submitted to AAIFR in May 2005. The DRS was subsequently
discussed in a joint meeting on 18.7.2005 when all the secured creditors had conveyed their
consent to the reliefs and con envisaged in the scheme which included writing down of
equity capital by 85%, allotment of equity shares on preferential basis and allotment of
0.1% optionally convertible cumulative redeemable preferential shares (OCCRPS) in lieu of
simple interest, deferred interest and funded interest dues to Fls. In order to give effect to
restructuring of the debt and equity, company vide its letter dated 1.4.2006 stated that
they have brought in Rs.10 crore as their contribution and sought Bench approval to issue
preferential equity shares worth Rs.1826 lakh and 0.1% OCCRPS worth Rs.9836 lakh to Fls in
order to implement. the restructuring package sanctioned by Fls and also prayed to exempt
them from the compliance of the provisions of the Companies Act, 1956 and also SEBI
guidelines or any other applicable provision/guidelines in the matter.

14 On consideration of the facts on record, the submissions made by IDBI and the company,
the Bench had granted its approval to the company to issue preferential equity shares
worth Rs.1826 lakh and 0.1% OCCRPS worth Rs.9836 lakh in terms of section 32(1) of the
Act. The OA was also directed to expedite the DRS immediately on completion of the above
process.

1.5 IDBI(OA) vide its letter dated 20.5.2006 submitted that the company continues to be in
default in payment of dues to institutions and has not submitted any alternate proposal
acceptable to the secured lenders/all other involved parties. Therefare, in the absence
of a fully tied up rehabilitation
1.6 The Board noted that there was no rehabilitation proposal, with means of finance fully
tied up, available for its consideration despite ample opportunities having been given to
all concerned. The Board, therefore, concluded that the present promoters were neither
serious nor resourceful enough to revive the company and also that no useful purpose
would be served even if change of management was ordered. The Board formed a prima
facie opinion that GSAL was not likely to make its networth exceed its accumulated
losses within a reasonable time, while meeting all its due financial obligations, and that
the company, as result thereof, was not likely to become viable in future and that it
would be just, equitable and in public interest that it be wound up u/s 2011) of SICA. In
compliance of the Board's order dated 6.7.2006, a show cause notice was issued to the
company and a gist thereof was published in newspapers for the information of the
shareholders, workers, creditors, customers and others etc.
1.7 1.7 Simultaneously, as a final opportunity, the company, the present promoters or a
registered WICS or any outside promoter, were permitted to submit a fully tied up
proposal to the OA within 30 days from the date of the order/publication in newspaper,
alongwith a deposit of 25% of the promoters' contribution towards the cost of
rehabilitation of the company as per their proposal, to establish their seriousness and
resourcefulness, in an interest bearing 'no lien account' (NLA) with the OA. The OA was
directed to consider the proposal only if it was accompanied with the deposit in NLA.
then hold a joint meeting (JM) and submit an acceptable and viable DRS along with the
minutes of JM, well before the scheduled hearing
1.8 1.8 At the hearing held on 16.10.2006, the Bench adjourned the hearing and directed
the company to submit a certified copy of AAIFR's order dated 22.9.2006. Hon'ble AAIFE
hatt stayed the operations of Board's order dated 6.7.2006 wherein the Bench had
directed that show cause notice for winding-up may be issuedve
Impact of Merger with proof of screenshots.

GSAL INDIA LIMITED

Which provision of AS 14 followed (explain in bullet points)

1. This Standard is directed principally to companies although some of its
requirements also apply to financial statements of other enterprises.
2. This standard does not deal with cases of acquisitions that arise when there is a
purchase by one company (referred to as the acquiring company) of the whole or
part of the shares, or the whole or part of the assets, of another company
(referred to as the acquired company) in consideration for payment in cash or by
the issue of shares or other securities in the acquiring company or partly in one
form and partly in the other. The distinguishing feature of an acquisition is that the
acquired company is not dissolved and its separate entity continues to exits.