Tata Steel BSL Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

1. The above financial results for the quarter and nine months ended December 31, 2018 have been reviewedby the Audit Committee and were approved by the Board of Directors of Tata Steel BSL Limited (formerlyBhushan Steel Limited ("the Company" or "TSBSL")) at their respective meetings held on January 29, 2019.The statutory auditors of the Company have carried out audit of these financial results pursuant to therequirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015.

2. On May 15, 2018, the NCLT has approved the terms of the Resolution Plan submitted by Tata Steel Limited("TSL"), which provides, inter alia, the acquisition of the Company by TSL, through its wholly owned subsidiaryBamnipal Steel Limited ("BNPL").

Pursuant to the Resolution Plan, BNPL subscribed to 72.65% of the equity share capital of TSBSL for anaggregate amount of Rs. 158.89 crores and provided additional funds aggregating to Rs. 35,073.69 crores toTSBSL by way of debt/convertible debt. The remaining 27.35% of TSBSL's share capital will be held byTSBSL's existing shareholders and the financial creditors who received shares in exchange for the debt owedto them. The funds received by TSBSL as debt and equity have been used to settle the sustainable debtsowed to the existing financial creditors of TSBSL, CIRP costs and employee dues, by payment of Rs.35,232.58 crores. The remaining unsustainable debts of Rs. 25,285.46 crores were novated by the financialcreditors to BNPL for a consideration of Rs.100 crores. BNPL, in its capacity as the promoters of TSBSL, haswaived off the unsustainable debts less cost of novation and the same has been recognised as equitycontribution during the nine months ended December 31, 2018.

10% Redeemable Cumulative Preference shares of Rs. 100 each amounting to Rs. 2,425.57 crores wereredeemed for a total sum of Rs. 4,700/-. Gain arising out of redemption was recorded as exceptional item inthe financial results of quarter ended June 30, 2018.

As per the Resolution Plan approved by the NCLT, settlement of operational creditors will be done over a period of 12 months from the Closing Date, as defined in the Resolution Plan. Further, as per the ResolutionPlan, the contingent liabilities and commitments, claims and obligations, stand extinguished and accordinglyno outflow of economic benefits is expected in respect thereof.

3. The statutory auditors of the Company had expressed a qualified opinion on the standalone and consolidatedfinancial results of the Company for the year ended March 31, 2018. As the subject matter of qualificationpertained to adjustments of certain prior period items (included under exceptional items) in the financialresults for the year then ended with no corresponding impact on the balance sheet as at that date, the subjectmatter of qualification has been resolved. Owing to such prior period adjustments, the financial results for thequarter and nine months ended December 31, 2018 are not comparable with the financial results for the yearended March 31, 2018.

4. Post implementation of Goods and Service Tax ("GST") with effect from July 1, 2017 revenue from operationsfor the nine months ended December 31, 2018 is not comparable to the revenue from operations for the ninemonths ended December 31, 2017.

5. Contractual manpower costs in quarters ended September 30, 2018 and December 31, 2017, nine monthsended December 31, 2017 and year ended March 31, 2018 amounting to Rs. 73.26 crores, Rs. 55.95 crores,Rs. 170.69 crores and Rs. 235.72 crores respectively have been regrouped from employee benefits expenseto other expenses to provide more relevant information.

6. The Company is in the business of manufacturing of steel products and hence has only one reportableoperating segment as per Ind AS 108 "Operating Segments".