Notes to Accounts of Chennai Ferrous Industries Ltd.

Mar 31, 2024

2.13 Provisions and Contingencies:

Provisions involving a substantial degree of estimation in measurement are recognized when there is a
present obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the accounts by way of a note. Contingent
assets are neither recognized nor disclosed in the financial statements contingencies are recorded when
it is probable that a liability will be incurred and the amounts can reasonably be estimated.

Differences between the actual results and estimates are recognized in the year in which the results are
known materialized.

3 Financial Instruments

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial assets and financial liabilities are recognized when the
Company becomes a party to the contractual provisions of the relevant
instrument and are initially measured at fair value.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added
to or deducted from the fair value of the financial assets or financial liabilities at fair value through profit
or loss are recognized immediately in profit or loss.

3.1 Financial Asset

i) Financial assets comprise of investments in Equity, Trade Receivables, Cash and Cash
Equivalents and Other Financial Assets.

ii) Depending on the business model (i.e) nature of transactions for managing those financial
assets and its contractual cash flow characteristics, the financial assets are initially
measured at fair value and subsequently measured and classified at:

a) Amortized cost; or

b) Fair value through Other Comprehensive Income (FVTOCI); or

c) Fair value through Profit or Loss (FVTPL)

d) Amortized cost represents carrying amount on initial recognition at fair value plus or
minus transaction cost.

iv) The company derecognises a financial asset when the contractual rights to the cash flows
from the asset expire, or when it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another party. On de-recognition of a financial
asset or part thereof, the difference between the carrying amount measured at the date of
recognition and the consideration received including any new asset obtained less any new
liability assumed shall be recognized in the statement of profit and Loss.

v) The company assesses at each balance sheet date whether the financial asset or group of
financial assets is impaired. IND AS 109 requires expected credit losses to be measured
through a loss allowance. The company recognizes lifetime expected losses for trade
receivables that do not constitute a financing transaction. For all other financial assets,
expected credit losses are measured at an amount equal to 12 month expected credit losses
or at an amount equal to lifetime expected losses, if the credit risk on the financial asset has
increased significantly since initial recognition.

iii) Financial liabilities are derecognised when and only when it is extinguished (i.e.) when the
obligation specified in the contract is discharged or cancelled or expired.

iv) Upon de-recognition of its financial liabilities or part thereof, the difference between the
carrying amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid including any non-cash assets transferred or liabilities assumed
is recognized in the Statement of Profit and Loss.

4. Fair value measurement

i) Fair value is the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement date.

ii) The fair value of an asset or a liability is measured / disclosed using the assumptions that
the market participants would use when pricing the asset or liability, assuming that the
market participants act in the economic best interest.

iii) All assets and liabilities for which fair value is measured are disclosed in the financial
statements are categorised within fair value hierarchy based on the lowest level input that
is significant to the fair value measurement as a whole. The fair value hierarchy is described
as below:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level inputs that are significant to the
fair value measurement are directly or indirectly observable.

Level 3: Valuation techniques for which the lowest level inputs that are significant to the
fair value measurement are unobservable.

iv) For assets and liabilities that are recognised in the Balance sheet on a recurring basis, the
company determines whether transfers have occurred between levels in the hierarchy by
reassessing categorisation at the end of each reporting period (i.e) based on the lowest level
input that is significant to the fair value measurement as a whole.

v) For the purpose of fair value disclosures, the company has determined the classes of assets
and liabilities based on the nature, characteristics and risks of the assets or liabilities and
the level of the fair value hierarchy as explained above.

vi) The basis for fair value determination for measurement and / or disclosure purposes is
detailed below:

a. Investments in Equity

The fair value is determined by reference to their quoted prices at the reporting date. In the absence of
the quoted price, the fair value of the equity is measured using generally accepted valuation techniques.

b. Forward exchange contracts

The fair value of forward exchange contracts is based on the quoted price if available; otherwise, it is
estimated by discounting the difference between contractual forward price and current forward price
for the residual maturity of the contract using government bond rates.

c. Non-derivative financial liabilities

The fair value of non-derivative financial liabilities viz, borrowings are determined for disclosure
purposes calculated based on the present value of future principal and interest cash flows, discounted
at the market rate of interest at the reporting date.

(i) Contingent liability not provided for:

- Counter Guarantees furnished to the bank Rs.5,99,825/- (Previous year Rs.5,99,825 /-)

- Towards outstanding Letter of Credit Nil (Previous year Nil) on account of import of raw
materials.

(ii) Claims against the Company not acknowledged as Debt Rs. Nil. Estimated amount of contracts
remaining to be executed on capital account and not provided for Rs. Nil. Contingent liabilities not
provided for: Nil

(iii) Employee Benefits:

a) Defined Contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2023-24
accordingly an amount of Rs.1,99,106/- (previous year Rs.1,89,014/-) is debited towards
contribution to PF & ESI.

b) Defined Benefit plan:

As per the explanations given by the management of the company except for gratuity there are
no other plans for the employees of the company. The present value of gratuity obligation is
determined during the year based on actuarial valuation using projected unit credit method.
Accordingly, provision of Rs. NIL has been made.

iii) There are no dues to enterprises as defined under Micro, Small and Medium Enterprises
Development Act, 2006, as at March 31, 2024 which is on the basis of such parties having been
identified by the management and relied upon by the auditors.

iv) Company has sought confirmation of balance letters to/from sundry debtors & advance parties
sundry creditors. In the absence of negation, the balances appearing the books are taken as
confirmed.

v) CIF Value of Imports: Nil (Previous year: Rs. Nil)

vi) Earnings in Foreign Currency Rs. Nil (Previous year Rs. Nil) Expenditure in Foreign Currency Rs.
Nil (Previous year Nil)

vii) The Company has opted for payment of income-tax under Section 115BAA of the Income-tax
Act, 1961, which provides for taxation at lower rates upon foregoing certain deductions. The tax
for the current year has been calculated accordingly.

viii) RELATED PARTY DISCLOSURES

Details of related parties including summary of transactions entered into by the Branch during
the year ended 31 March 2024 are summarized below:

(x) The Company do not have any parent company and accordingly, compliance with the number of
layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number
of Layers) Rules, 2017 is not applicable for the year under consideration.

(xi) Financial Ratios: As per the Attachment

(xii) Previous year figures:

Previous year''s figures have been regrouped /reclassified wherever necessary to correspond with the
current year''s classification / disclosure.

As per books of accounts produced For Chennai Ferrous Industries Limited

For S.K. Gulecha & Associates
Chartered Accountants
Firm Registration.No.013340S

R Natarajan Nagarajan Ramakrishnan

Managing Director Director

DIN:00595027 DIN:08315738

Sandeep Kumar Gulecha
Membership.No: 226263
UDIN No: 24226263BKBNOH4078

Place: Chennai K.Karthikeyan Babu Kumaran

Date: 16.05.2024 Chief Financial Officer Company Secretary

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Mar 31, 2015

1. SHARE CAPITAL

a) Movement of Shares

There is no movement of shares outstanding at the beginning and at the end of the reporting period

b) Terms / rights attached to equity shares:

The company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive the assets of the company, in proportion to the number of equity shares held by the shareholders.

2. Company overview:

Chennai Ferrous Industries Limited (the company) incorporated under the Companies Act, 1956, in the year 2010, is manufacturer of Sponge Iron and allied products. The company's shares are listed on the Bombay Stock Exchange Limited and the shares are traded regularly.

3. Additional Information to the Financial Statements

(i) Contingent liability not provided for:

(a) Counter Guarantees furnished to the bank Rs.4,04,640/- (Previous year Rs.2,82,350/-)

(b) Towards outstanding Letter of Credit Nil (Previous year Nil) on account of import of raw materials.

(ii) Estimated amount of contracts remaining to be executed on capital accounts and not provided for Rs.13,59,00,000/- (Previous year Rs.13,59,00,000/- pertaining to resulting company) and for others is nil.

(iii) Claims against the Company not acknowledged as Debt Rs. Nil. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. Nil. Contingent liabilities not provided for: Nil

(iv) Employee Benefits :

a) Defined Contribution plan:

Contribution to defined contribution plan recognized as expenses for the year 2015-16 accordingly an amount of Rs.6,54,529/-(previous year Rs.5,55,442/-) is debited towards contribution to PF & ESI.

b) Defined Benefit plan:

As per the explanations given by the management of the company except for gratuity there are no other plans for the employees of the company. The present value of gratuity obligation is determined during the year based on actuarial valuation using projected unit credit method. Accordingly, provision of Rs.109715/- has been made.

(v) There are no dues to enterprises as defined under Micro, Small and Medium Enterprises Development Act, 2006, as at March 31, 2015 which is on the basis of such parties having been identified by the management and relied upon by the auditors.

(vi) Company has circularized/sought confirmation of balance letters to/from sundry debtors & advance parties / sundry creditors. In the absence of negation, the balances appearing the books are taken as confirmed.

(vii) CIF Value of Imports: Nil (Previous year: Rs. Nil)

(viii) Remittance in Foreign Currency towards Dividend Nil

(ix) Earnings in Foreign Currency Rs. Nil (Previous year Rs. Nil) Expenditure in Foreign Currency Rs. Nil (Previous year Nil)

(x) RELATED PARTY DISCLOSURES

Details of related parties including summary of transactions entered into by the Branch during the year ended 31 March 2015 are summarized below:

Names of related parties and description of relationship:

Key management personnel Mr. R Natarajan

Other Related Party Kanishk Steel Industries Limited & Gita Renewable Energy Limited

Note: Related party relationship is as identified by the Company and relied upon by the Auditors

(xi) SEGMENT INFORMATION FOR THE YEAR ENDED 31st MARCH 2015.

(a) Business Segment:

The Company operates in Single Business Segment of 'Sponge Iron'. Therefore, the Company is of the view that the disclosure requirement of Accounting Standard AS-17 issued by the Institute of Chartered Accountants of India is not applicable to the Company.

(b) The Company has not yet been successful in its efforts to appoint a Company Secretary to fulfill the requirements of Section 203 of the Companies Act, 2013.

(xii) Previous year figures:

Previous year's figures have been regrouped /reclassified wherever necessary to correspond with the current year's classification / disclosure.